<PAGE>
<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 10, 1998
REGISTRATION NO. 33-
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
EAGLE-PICHER INDUSTRIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
------------------------
<TABLE>
<S> <C> <C>
OHIO -- 31-0268670
(STATE OR OTHER JURISDICTION (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
SUITE 500
250 EAST FIFTH STREET
CINCINNATI, OHIO 45202
(513) 721-7010
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
SEE TABLE OF ADDITIONAL REGISTRANTS
------------------------
DAVID N. HALL
SENIOR VICE PRESIDENT -- FINANCE
EAGLE-PICHER INDUSTRIES, INC.
250 EAST FIFTH STREET, SUITE 500
CINCINNATI, OHIO 45202
(513) 721-7010
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING
AREA CODE, OF AGENT FOR SERVICE)
------------------------
WITH A COPY TO:
SCOTT F. SMITH, ESQ.
HOWARD, DARBY & LEVIN
1330 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(212) 841-1000
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.
------------------------
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ] ____________
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ] ____________
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM
PROPOSED MAXIMUM AGGREGATE
TITLE OF EACH CLASS OF SECURITIES AMOUNT OFFERING PRICE OFFERING AMOUNT OF
TO BE REGISTERED TO BE REGISTERED PER NOTE(1) PRICE(1) REGISTRATION FEE(2)
<S> <C> <C> <C> <C>
9 3/8% Senior Subordinated Notes due 2008..... $220,000,000 100% $220,000,000 $64,900
Guarantees of 9 3/8% Senior Subordinated Notes
due 2008.................................... -- -- -- (3)
Total.................................... $220,000,000 100% $220,000,000 $64,900
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee in
accordance with Rule 457(f)(2) under the Securities Act.
(2) Calculated pursuant to Rule 457(f)(2) under the Securities Act.
(3) Pursuant to Rule 457(n) under the Securities Act, no registration fee is
payable with respect to the Guarantees.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT THAT SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE
ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a), MAY
DETERMINE.
________________________________________________________________________________
<PAGE>
<PAGE>
TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
JURISDICTION OF PRIMARY STANDARD IRS EMPLOYER
INCORPORATION OR INDUSTRIAL CLASSIFICATION IDENTIFICATION
NAME ORGANIZATION CODE NUMBER NUMBER
<S> <C> <C> <C>
Eagle-Picher Holdings, Inc............................... Delaware 13-3989553
Daisy Parts, Inc......................................... Michigan 3714 38-1406772
Eagle-Picher Development Company, Inc.................... Delaware 6719 31-1215706
Eagle-Picher Far East, Inc............................... Delaware 5013 31-1235685
Eagle-Picher Fluid Systems, Inc.......................... Michigan 3089 31-1452637
Eagle-Picher Minerals, Inc............................... Nevada 1499 31-1188662
Eagle-Picher Technologies, LLC........................... Delaware 3691 31-1587660
Hillsdale Tool & Manufacturing Co........................ Michigan 3714 38-0946293
Michigan Automotive Research Corporation................. Michigan 8734 38-2185909
</TABLE>
<PAGE>
<PAGE>
CROSS-REFERENCE SHEET PURSUANT TO RULE 404(A) AND ITEM 501 OF REGULATION S-K,
SHOWING THE LOCATION IN THE PROSPECTUS OF THE INFORMATION
REQUIRED TO BE INCLUDED THEREIN IN ACCORDANCE WITH PART I OF FORM S-4
<TABLE>
<CAPTION>
ITEM NUMBER AND HEADING ON FORM S-4 CAPTION OR LOCATION IN PROSPECTUS
----------------------------------------------------------------- ------------------------------------------
<C> <S> <C>
1. Forepart of the Registration Statement and Outside Front Cover
Page of Prospectus............................................. Facing Page and Outside Front Cover Page
of the Prospectus
2. Inside Front and Outside Back Cover Pages of Prospectus.......... Inside Front and Outside Back Cover Pages
of the Prospectus; Available
Information; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Charges, and Other
Information.................................................... Forepart of Prospectus; Summary; Risk
Factors; Summary of Historical and Pro
Forma Condensed Consolidated Financial
Information; Selected Historical
Condensed Consolidated Financial
Information; The Notes Exchange Offer
4. Terms of the Transaction......................................... Summary; The Notes Exchange Offer;
Description of the Notes; Certain U.S.
Federal Income Tax Considerations
5. Pro Forma Financial Information.................................. Summary of Historical and Pro Forma
Condensed Consolidated Financial
Information; Unaudited Pro Forma
Consolidated Financial Statements;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations
6. Material Contacts with Company Being Acquired.................... *
7. Additional Information Required for Reoffering by Persons and
Parties Deemed to be Underwriters.............................. *
8. Interests of Named Experts and Counsel........................... *
9. Disclosure of Commission Position on Indemnification for
Securities Act Liabilities..................................... *
10. Information with Respect to S-3 Registrants...................... *
11. Incorporation of Certain Information by Reference................ *
12. Information with Respect to S-2 or S-3 Registrants............... *
13. Incorporation of Certain Information by Reference................ *
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
ITEM NUMBER AND HEADING ON FORM S-4 CAPTION OR LOCATION IN PROSPECTUS
----------------------------------------------------------------- ------------------------------------------
<C> <S> <C>
14. Information with Respect to Registrants Other Than S-3 or S-2
Registrants.................................................... Summary; Risk Factors; Summary of
Historical and Pro Forma Condensed
Consolidated Financial Information;
Selected Historical Condensed
Consolidated Financial Information;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Description of
Industrial Revenue Bonds; Description of
New Credit Agreement; Description of the
Notes; Description of Preferred Stock;
Description of Exchange Debentures;
Financial Statements
15. Information with Respect to S-3 Companies........................ *
16. Information with Respect to S-2 or S-3 Companies................. *
17. Information with Respect to Companies Other Than S-3 or S-2
Companies...................................................... *
18. Information if Proxies, Consents or Authorizations Are to be
Solicited...................................................... *
19. Information if Proxies, Consents or Authorizations Are Not to be
Solicited, or in an Exchange Offer............................. Management; Executive Compensation;
Security Ownership and Certain
Beneficial Owners and Management of
Parent; Certain Relationships and
Related Transactions; The Notes Exchange
Offer
</TABLE>
- ------------
* Item is inapplicable or response thereto is in the negative.
<PAGE>
<PAGE>
PROSPECTUS
EAGLE-PICHER INDUSTRIES, INC.
(AS SUCCESSOR BY MERGER TO E-P ACQUISITION, INC.)
OFFER TO EXCHANGE ITS
9 3/8% SENIOR SUBORDINATED NOTES DUE 2008
WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR ANY AND ALL OF ITS OUTSTANDING
9 3/8% SENIOR SUBORDINATED NOTES DUE 2008
THE NOTES EXCHANGE OFFER WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME,
ON , 1998, UNLESS EXTENDED
Eagle-Picher Industries, Inc., an Ohio corporation (the 'Company'), hereby
offers, upon the terms and subject to the conditions set forth in this
Prospectus (the 'Prospectus') and the accompanying Letter of Transmittal (the
'Letter of Transmittal'), to exchange (the 'Notes Exchange Offer') $1,000
principal amount of its 9 3/8% Senior Subordinated Notes due 2008 (the 'New
Notes') which have been registered under the Securities Act of 1933, as amended
(the 'Act') for each $1,000 principal amount tendered of its outstanding 9 3/8%
Senior Subordinated Notes due 2008 (the 'Old Notes' and, together with the New
Notes, the 'Notes'), of which $220 million aggregate principal amount is
outstanding. The form and terms of the New Notes are identical in all material
respects to the form and terms of the Old Notes, except for certain transfer
restrictions and registration and other rights relating to the exchange of Old
Notes for New Notes. The New Notes evidence the same debt as the Old Notes and
will be issued under the Indenture (as defined herein) governing the Old Notes.
See 'The Notes Exchange Offer' and 'Description of the Notes.' Concurrently with
the Notes Exchange Offer, Eagle-Picher Holdings, Inc., a Delaware corporation
('Parent'), which owns all of the capital stock of the Company, is offering to
exchange (the 'Preferred Stock Exchange Offer' and, together with the Notes
Exchange Offer, the 'Exchange Offers') shares of Parent's 11 3/4% Series B
Cumulative Redeemable Preferred Stock (the 'Series B Preferred Stock') for any
and all of its 14,191 outstanding shares of 11 3/4% Series A Cumulative
Redeemable Exchangeable Preferred Stock (the 'Series A Preferred Stock' and,
together with the Series B Preferred Stock, the 'Preferred Stock'). The Notes
and the Preferred Stock are referred to herein as the 'Securities.'
Interest on the New Notes is payable semi-annually on March 1 and September
1 of each year, commencing September 1, 1998. The Notes are redeemable at the
option of the Company, in whole or in part, at any time on or after March 1,
2003, at the redemption prices set forth herein. The Company may also redeem up
to 35% of the aggregate principal amount of the Notes at its option, at any time
on or prior to March 1, 2001, at a redemption price equal to 109.375% of the
principal amount thereof, plus accrued and unpaid interest and Special Interest
(as defined herein), if any, to the redemption date, with the net cash proceeds
of one or more Equity Offerings (as defined herein); provided, that at least
$100.0 million aggregate principal amount of Notes remains outstanding after
such redemption. Upon the occurrence of a Change of Control (as defined herein),
the Company will be required to offer to repurchase all or any part of each
holder's Notes at a price equal to 101% of the aggregate principal amount
thereof, plus accrued and unpaid interest and Special Interest, if any, to the
date of purchase.
The Notes are general unsecured obligations of the Company, subordinated in
right of payment to all existing and future Senior Indebtedness (as defined
herein) of the Company, including the borrowings under the New Credit Agreement
(as defined herein). The Notes are unconditionally guaranteed, on an unsecured
senior subordinated basis (the 'Note Guarantees'), by Parent and the Company's
domestic subsidiaries. As of February 28, 1998, the Company had approximately
$327.0 million of Senior Indebtedness outstanding (of which approximately $323.8
million was secured). The Indenture permits the Company to incur additional
indebtedness, including Senior Indebtedness, subject to certain limitations.
The Company will accept for exchange any and all Old Notes validly tendered
and not withdrawn prior to 5:00 p.m., New York City time, on ,
1998, unless extended (the 'Expiration Date'). Tenders of Old Notes may be
withdrawn at any time prior to 5:00 p.m., New York City time, on the Expiration
Date. The Notes Exchange Offer is subject to certain customary conditions. See
'The Notes Exchange Offer.'
(cover continued on next page)
------------------------
SEE 'RISK FACTORS' BEGINNING ON PAGE 15 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BEFORE TENDERING NOTES IN THE NOTES EXCHANGE OFFER.
------------------------
THE NOTES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURIITES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS IS , 1998
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 10, 1998
<PAGE>
<PAGE>
(cover continued)
Prior to this offering, there has been no public market for the Notes. The
Company does not intend to list the New Notes on any securities exchange or to
seek approval for quotation through any automated quotation system. The Notes
are expected to be eligible for trading in the Private Offerings, Resales and
Trading through Automated Linkages ('PORTAL') market of the National Association
of Securities Dealers, Inc. (the 'NASD'). There can be no assurance that an
active market for the New Notes will develop.
The New Notes are being offered hereunder in order to satisfy certain
obligations of the Company contained in the Registration Rights Agreement (as
defined herein). Based on interpretations by the staff of the Securities and
Exchange Commission (the 'Commission') set forth in no-action letters issued to
third parties, the Company believes the New Notes issued pursuant to the Notes
Exchange Offer in exchange for the Old Notes may be offered for resale, resold
and otherwise transferred by any holder thereof (other than Restricted Holders
(as defined herein) or Participating Broker-Dealers (as defined herein)) without
compliance with the registration and prospectus delivery requirements of the
Securities Act of 1933, as amended (the 'Securities Act'). Any holder who
tenders in the Notes Exchange Offer with the intention to participate, or for
the purpose of participating, in a distribution of the New Notes or who is an
affiliate of the Company may not rely upon such interpretations by the staff of
the Commission and, in the absence of an exemption therefrom, must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any secondary resale transaction. Holders of Notes wishing to
accept the Notes Exchange Offer must represent to the Company in the Letter of
Transmittal that such conditions have been met.
Each broker-dealer (other than a Restricted Holder) that receives New Notes
for its own account pursuant to the Notes Exchange Offer (a 'Participating
Broker-Dealer') must acknowledge that it will deliver a prospectus in connection
with any resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an 'underwriter' within the meaning of the Securities Act.
This Prospectus, as it may be amended or supplemented from time to time, may be
used by a broker-dealer in connection with resales of New Notes received in
exchange for Old Notes where such Old Notes were acquired by such broker-dealer
as a result of market-making activities or other trading activities. The Company
has agreed that, for a period of 180 days after the Expiration Date, it will
make this Prospectus available to any broker-dealer for use in connection with
any such resale. See 'Plan of Distribution.' Any broker-dealer who is an
affiliate of the Company may not rely on such no-action letters and must comply
with the registration and prospectus delivery requirements of the Securities Act
in connection with a secondary resale transaction.
The Company will not receive any proceeds from this Notes Exchange Offer.
No dealer-manager is being used in connection with this Notes Exchange Offer.
This Prospectus, as it may be amended or supplemented from time to time,
may be used by a broker-dealer in connection with resales of New Notes received
in exchange for Old Notes where such Old Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities. See 'Plan of Distribution.'
Interest on the New Notes shall accrue from the last March 1 or September 1
on which interest was paid on the Old Notes so surrendered.
2
<PAGE>
<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Commission a Registration Statement on Form
S-4 (together with any amendments, exhibits, annexes and schedules thereto, the
'Registration Statement,') under the Securities Act of 1933, as amended (the
'Securities Act'), with respect to the New Notes being offered by this
Prospectus. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. Statements made in this
Prospectus as to the contents of any contract, agreement or other document are
not necessarily complete. With respect to each such contract, agreement or other
document filed or incorporated by reference as an exhibit to the Registration
Statement, reference is made to such exhibit for a more complete description of
the matter involved, and each such statement is qualified in its entirety by
such reference. The Registration Statement (including the exhibits and schedules
thereto) may be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549 and will also be available for inspection and
copying at the regional offices of the Commission located at Seven World Trade
Center, New York, New York 10048 and at Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials may also
be obtained from the Public Reference Section of the Commission at 450 Fifth
Street, N.W., Washington, D.C. 20549 at prescribed rates. The Commission
maintains a Web site that contains reports, proxy and information statements and
other information regarding registrants that file electronically with the
Commission. The address of such site is http://www.sec.gov.
Upon consummation of the Notes Exchange Offer, the Company will become
subject to the information requirements of the Securities Exchange Act of 1934,
as amended (the 'Exchange Act'), and in accordance therewith will be required to
file periodic reports and other information with the Commission. In the event
that the Company is not subject to the reporting requirements of the Exchange
Act at any time following consummation of the Notes Exchange Offer, the Company
will be required under the Indenture, dated as of February 24, 1998, as
supplemented by the First Supplemental Indenture, dated February 24, 1998 (as so
supplemented, the 'Indenture'), among the Company, Parent, certain subsidiaries
of the Company and The Bank of New York, as trustee (the 'Trustee'), pursuant to
which the Old Notes were, and the New Notes will be, issued, to continue to file
with the Commission, and to furnish holders of the Notes with (i) all quarterly
and annual financial information that would be required to be contained in a
filing with the Commission on Forms 10-Q and 10-K if the Company were required
to file such forms, including a 'Management's Discussion and Analysis of
Financial Condition and Results of Operations' with respect to the Company, and,
with respect to the annual information only, a report on the financial
statements therein by the Company's certified independent accountants, and (ii)
all reports that would be required to be filed with the Commission on Form 8-K
if the Company were required to file such reports. In addition, for so long as
any of the Old Notes remain outstanding, the Company has agreed to make
available to any prospective purchaser of the Old Notes or beneficial owner of
the Old Notes in connection with any sale thereof the information required by
Rule 144A(d)(4) under the Securities Act.
3
<PAGE>
<PAGE>
SUMMARY
The following summary is qualified in its entirety and should be read in
conjunction with by the more detailed information, including the financial
statements and notes thereto, appearing elsewhere in this Prospectus. Except
where otherwise indicated, 'Parent' means Eagle-Picher Holdings, Inc., and
'Eagle-Picher' and the 'Company' mean Eagle-Picher Industries, Inc. and its
subsidiaries. Except as otherwise indicated, a 'Fiscal Year' means the fiscal
year of the Company ended November 30 of the year specified, e.g., '1997 Fiscal
Year' and 'Fiscal 1997' mean the fiscal year ended November 30, 1997.
THE COMPANY
Founded in 1843, Eagle-Picher is a diversified manufacturer of industrial
products for the automotive, aerospace, defense, telecommunications, food and
beverage and construction industries. The Company's long history of innovation
in technology and engineering has helped it become a leader in certain niche
markets in which it competes. Eagle-Picher operates more than 50 plants in the
U.S., England, Germany, Spain and Mexico, and sells its products in over 60
countries worldwide. The Company has achieved significant internal growth in
both sales and EBITDA (as defined herein), with a compounded annual growth rate
since 1993 of 8.2% and 10.9%, respectively. For the 1997 Fiscal Year, the
Company realized net sales and EBITDA of $906.1 million and $104.0 million,
respectively. The Company's operations are organized under three major business
groups: the Automotive Group, the Machinery Group and the Industrial Group,
which accounted for 48.1%, 29.8% and 22.1% of the Company's net sales and, after
allocation of corporate overhead, accounted for 49.2%, 27.0% and 23.8% of the
Company's EBITDA, respectively, for the 1997 Fiscal Year.
The Automotive Group. The Automotive Group designs, develops, and
manufactures precision machined and rubber coated metal components for the
global automotive industry. Its customers include automotive original equipment
manufacturers ('OEMs') such as Ford Motor Company ('Ford'), General Motors
Corporation ('GM'), Chrysler Corporation ('Chrysler'), Toyota Motor Corporation
('Toyota'), Nissan Motor Manufacturing Corporation U.S.A. ('Nissan'), Honda of
America, Inc. ('Honda'), FMA (SPA) ('Fiat'), Bayerische Motoren Werke AG ('BMW')
and BMW's subsidiary, Rover Group Limited ('Rover'), as well as direct suppliers
to OEMs (referred to herein as 'Tier I' suppliers). The Company pioneered the
development of materials and processes for coating metal with elastomer (rubber)
compounds, and the Company believes its proprietary technologies in this area
give it competitive advantages. The Company's rubber coated metal products
consist of highly specialized gaskets and materials for high-temperature and
high-pressure applications, including disc brake noise insulators, air
conditioning compressor gaskets, and gaskets and coated materials for automotive
powertrains. More than 150 precision machined components are produced by the
Automotive Group, including vibration dampening devices for engine and
drivetrain applications and automatic transmission pump assemblies. The Company
believes that it is the only non-OEM in North America manufacturing high volumes
of automatic transmission oil pumps and is one of the top three companies
worldwide that design and produce torsional crankshaft dampers. The Automotive
Group also produces fluid systems assemblies, molded rubber products, aluminum
castings, and interior trim products.
The Machinery Group. The Machinery Group designs and produces special
purpose batteries, construction equipment and can washing and coating machinery.
The Company has played a crucial role in the development of power systems for
U.S. space flight, and its batteries have powered missions from the back-up
system that safely brought Apollo 13 back to Earth 28 years ago, to last year's
Mars Pathfinder. The Company's batteries are also used in virtually every U.S.
missile system, including the Patriot and Tomahawk missiles. Recognized as one
of the world leaders in nickel-hydrogen technology since it powered the first
communication satellite launch in 1983, the Company believes it is a world
leader in providing power systems for communications and surveillance
satellites, including Motorola Inc.'s ('Motorola') Iridium'r' project.
Construction equipment produced by the Machinery Group includes elevating wheel
tractor scrapers, which are made under a sole-source contract with Caterpillar,
Inc. ('Caterpillar'), and a premium line of heavy duty forklift trucks, as well
as related replacement
4
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<PAGE>
parts. The Machinery Group also designs, manufactures and installs specialized
high volume can washing and coating machinery for the manufacturers of two-piece
cans primarily for the food and beverage industry.
The Industrial Group. The Industrial Group is a leading producer of
specialty materials, filter aids and absorbents which are used in a wide range
of applications. The Company's specialty materials business, which has grown by
approximately 60%, as measured by net sales, in the past two years, develops,
manufactures and tests high-purity materials including germanium wafers (used in
solar cells for the satellite industry), germanium tetrachloride (used in fiber
optic cables for the telecommunications industry) and boron (used as a neutron
absorber in nuclear power plants and as a semiconductor dopant). With a 30-year
history of developing processing techniques, the Company produces the highest
purity boron and germanium available in the market. Recent innovations by the
Industrial Group have led to development stage production of a zinc selenide
crystal that adds blue and green to the existing red color spectrum of light
emitting diodes (LEDs), with potential use in flat panel displays and signage.
The Industrial Group is also one of the world's largest producers of
diatomaceous earth filter aids, which are used for high purity filtration by
food and beverage processors and by chemical and pharmaceutical companies.
BUSINESS STRATEGY
The Company's strategy is to enhance its competitive position as a leading
global manufacturer for the automotive, aerospace, defense, telecommunications,
food and beverage, and construction industries. To achieve this objective, the
Company will continue to build upon the following strengths:
Leading Positions in Niche Markets. Eagle-Picher's long history of
innovation and reputation for quality have afforded it leading positions in
certain niche markets. The Company enjoys leading positions in, among others,
the market for rubber coated metal products, the North American non-OEM market
for transmission pumps, the market for nickel-hydrogen batteries and the market
for two-piece can washers. The Company believes that it has achieved significant
market share in these markets because of its customer relationships, engineering
excellence, high quality standards and industry reputation.
Strong Customer Relationships. The Company has established long-term
relationships with many of its customers. It has been supplying its products to
each of Ford, GM and Chrysler for more than 45 years; Lockheed Martin
Corporation ('Lockheed Martin') for more than 40 years; and Motorola for more
than 30 years. The Company believes it has developed strong customer
relationships by working closely with customers to design products that meet the
customers' specifications. Often, the Company provides innovative and
cost-efficient engineering solutions to customer problems. For example, the
Industrial Group continuously works with customers to develop lighter and
longer-lasting battery systems to complement the latest generations of missiles
and satellites. In addition, through the development of a new camshaft damper,
the Automotive Group recently solved a significant powertrain vibration problem
for certain OEMs.
Many of the Company's facilities are located near customer plants,
enhancing the Company's ability to respond to its customers' needs. The
Automotive Group recently built a new transmission pump production facility in
Manchester, Tennessee and a new manufacturing facility in San Luis Potosi,
Mexico, in each case to meet the increasing needs of OEMs located nearby. The
Company believes that its strong relationships with customers, particularly
automotive and capital equipment OEMs, give the Company a competitive advantage
and position the Company to capitalize on a growing trend toward outsourcing.
Diversified Product Lines; Global Presence. The Company manufactures
hundreds of products for the automotive, aerospace, defense, telecommunications,
food and beverage and construction industries. The Company sells its products to
customers located in over 60 countries through its extensive network, including
global manufacturing facilities throughout the U.S. and Europe. The Automotive
Group alone serves virtually all major automotive OEMs worldwide. The Company
5
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believes that its product diversification and global sales reduce its exposure
to any one market segment or customer.
Superior Product Quality. The Company believes it has a reputation among
its customers for providing technologically advanced, high quality products. The
Company has been honored by many of its customers for its commitment to quality
and service, and, in the last two years, has earned Ford's 'Supplier of the Year
Award' (Ford's Sharonville facility), Hughes Space and Communications Company's
('Hughes SC') 'Performance Excellence Award,' McDonnell Douglas Corporation's
('MD') 'Preferred Supplier Award' and Lockheed Martin's 'Tradition of Excellence
Award.'
Low Cost Structure. The Company is committed to controlling costs and
improving operating efficiencies. The Company believes that it is a low cost
producer in many of the markets in which it competes. The Company attributes its
low cost position to its leading positions in niche markets, relatively low
overhead costs due to the small town locations of many of its facilities, a
primarily non-union workforce, advanced proprietary technology and advanced
manufacturing processes, including the Toyota Production System at one of the
Automotive Group's facilities. Low cost is essential to the Company's ability to
continue to remain competitive.
The Company's principal executive offices are located at the Chiquita
Center, 250 East Fifth Street, Cincinnati, Ohio 45202 and its telephone number
is (513) 721-7010.
THE ACQUISITION AND USE OF PROCEEDS
On February 24, 1998, the Company was acquired (the 'Acquisition') by
Granaria Industries BV ('Granaria Industries') from the Eagle-Picher Industries,
Inc. Personal Injury Settlement Trust (the 'Trust'). The Trust was established
pursuant to the Company's Consolidated Plan of Reorganization upon its emergence
from bankruptcy. See 'Company History;' 'Business -- Plan of Reorganization and
Related Injunction.' The Acquisition was effected pursuant to the Merger
Agreement, dated as of December 23, 1997, as amended by Amendment No. 1 dated
February 23, 1998, (the 'Merger Agreement'), among E-P Acquisition, Inc., a
Delaware corporation (the 'Issuer'), Parent, the Company and the Trust. In
accordance with the Merger Agreement, on February 24, 1998, the Issuer was
merged into the Company, with the Company continuing as the surviving
corporation (the 'Merger').
At the closing of the Acquisition (the 'Closing'): (i) $100 million (the
'Equity Investment') was contributed to Parent by Granaria Industries and Lange
Voorhout Investments B.V. ('LV Investment'), an affiliate of ABN AMRO Bank, N.V.
('ABN AMRO Bank'); (ii) Parent received gross proceeds of approximately $80
million from an offering of its 11 3/4% Cumulative Redeemable Exchangeable
Preferred Stock (the 'Preferred Stock Offering'); (iii) Parent contributed to
the Issuer in the form of common equity approximately $180 million (the 'Equity
Contribution') comprising the Equity Investment and all of the proceeds of the
Preferred Stock Offering; (iv) the Issuer borrowed $225 million in term loans
and $79.1 million in revolving loans under a syndicated senior secured loan
facility (the 'New Credit Agreement') with ABN AMRO Bank, and completed the
offering of the Old Notes; (v) the Company (a) terminated the Credit Agreement
dated as of November 29, 1996 by and among the Company, certain subsidiaries of
the Company, PNC Bank, Ohio, National Association, as Agent, and the banks named
as parties therein (the 'PNC Bank Facility,' under which there was no
outstanding indebtedness at Closing) and (b) redeemed 660,000 shares of common
stock, par value $.01 per share (the 'Common Stock') of the Company from the
Trust for an aggregate purchase price of $29 million (the 'Redemption Amount');
and (vi) the Issuer was merged into the Company. As a result of these
transactions, the Company became a wholly-owned subsidiary of Parent and assumed
all of the obligations and liabilities of the Issuer, including the Issuer's
obligations and liabilities under the Old Notes, the Indenture, the Registration
Rights Agreement and the New Credit Agreement. Simultaneously with the
effectiveness of the Merger (the 'Effective Time'), the Company paid the total
outstanding amount under the Company's 10% Senior Unsecured Sinking Fund
Debentures due November 29, 2006 (the '10% Debentures'). In connection with the
Acquisition, the Trust, the sole holder of the 10% Debentures, waived the
prepayment penalty on the 10% Debentures.
6
<PAGE>
<PAGE>
The following table sets forth the approximate cash sources and uses of
funds, including the application of the proceeds therefrom, at the Effective
Time.
<TABLE>
<CAPTION>
SOURCES OF FUNDS(A)
(DOLLARS IN MILLIONS)
<S> <C>
New Credit Agreement:
Revolving Credit Facility(B)............. $ 79.1
Term Loans............................... 225.0
Senior Subordinated Notes(C).................. 219.6
Equity Contribution(D)........................ 180.0
Cash.......................................... 39.5
------
Total............................... $743.2
------
------
<CAPTION>
USES OF FUNDS(A)
(DOLLARS IN MILLIONS)
<S> <C>
Merger Consideration(E)....................... $417.6
Repayment of Existing Indebtedness(F)......... 255.9
Common Stock Redemption(G).................... 29.0
Estimated Transaction Fees and Expenses(H).... 27.8
Management Compensation(I).................... 12.9
------
Total............................... $743.2
------
------
</TABLE>
- ------------
(A) Sources and uses of funds are based on (i) the borrowings of debt
outstanding under the Company's existing credit facilities on February 24,
1998 (the 'Closing Date') and (ii) the purchase price paid for the Company
in connection with the Acquisition.
(B) Immediately following the Acquisition, the Company borrowed approximately
$28.6 million under the revolving credit facility under the New Credit
Agreement for use as credit support in the form of letters of credit,
leaving approximately $52.3 million available for additional borrowings
under the revolving credit facility under the New Credit Agreement.
(C) Includes original issue discount of $0.4 million.
(D) Parent funded the Equity Contribution from the Equity Investment and the
Preferred Stock Offering (the fees and expenses of which were paid by the
Company).
(E) Merger Consideration (the 'Merger Consideration') represents the sum of (i)
$410.0 million and (ii) an additional amount equal to 8% on an annual basis
on $410.0 million from December 1, 1997 up to and including the Closing
Date.
(F) Consists of payment of $250.0 million principal amount due under the 10%
Debentures and $5.9 million of interest accrued thereon from December 1,
1997 up to and including the Closing Date.
(G) The Company redeemed 660,000 shares of Common Stock immediately prior to
the Effective Time.
(H) Approximately $27.8 million in transaction fees and expenses (including an
amount equal to approximately 1% of the transaction value payable to
Granaria Holdings (as defined herein)) was paid on the Closing Date. This
amount includes $2.6 million in fees and expenses of Parent related to the
Preferred Stock Offering.
(I) Following the Acquisition, the Company paid approximately $10.0 million to
a trust established for the benefit of certain members of senior management
of the Company (the 'E-P Management Trust') and $2.9 million for the
related tax obligation. The E-P Management Trust used the $10.0 million to
satisfy a loan from Granaria Holdings, the proceeds of which were used by
the E-P Management Trust to acquire 16% of the common stock of Granaria
Industries. See 'Executive Compensation -- Compensation to Senior
Management.' The Company made additional payments to certain
members of senior management of the Company in the amount of approximately
$7.6 million, which consists of $2.7 million in stay-put bonuses and $4.9
million in sales incentive bonuses under the STSP (as defined herein).
7
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<PAGE>
THE NOTES OFFERING
<TABLE>
<S> <C>
The Issuer................................ The Old Notes were sold by the Issuer on February 24, 1998 (i) to
'qualified institutional buyers' (as defined in Rule 144A under the
Securities Act) in reliance upon Rule 144A under the Securities Act
and (ii) outside the United States to persons other than U.S. persons
in reliance upon Regulation S under the Securities Act. Immediately
following the sale of the Old Notes, the Issuer was merged into
Eagle-Picher Industries, Inc. Upon consummation of the Merger, the
Old Notes became obligations of Eagle-Picher Industries, Inc.
Registration Rights Agreement............. In connection with the sale of the Old Notes, the Issuer entered into
a Registration Rights Agreement, dated February 24, 1998 (the
'Registration Rights Agreement'), providing for, among other things,
the Notes Exchange Offer. Upon consummation of the Merger, the
Company assumed all of the obligations and liabilities of the Issuer
under the Registration Rights Agreement.
THE NOTES EXCHANGE OFFER
The Notes Exchange Offer.................. The Company is offering to exchange up to $220,000,000 aggregate
principal amount of New Notes for up to $220,000,000 aggregate
principal amount of Old Notes issued in the Notes Offering in
reliance upon an exemption from registration under the Securities
Act. Upon consummation of the Notes Exchange Offer, the terms of the
New Notes (including principal amount, interest rate, maturity and
ranking) will be identical in all material respects to the terms of
the Old Notes for which they may be exchanged pursuant to the Notes
Exchange Offer, except that the New Notes have been registered under
the Securities Act and therefore will not bear legends restricting
their transfer and will not contain terms providing for an increase
in the interest rate thereon under certain circumstances described in
the Registration Rights Agreement.
Based on interpretations by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that
New Notes issued pursuant to the Notes Exchange Offer in exchange for
Old Notes may be offered for resale, resold and otherwise transferred
by a holder thereof (other than a Restricted Holder or a
Participating Broker-Dealer) without compliance with the registration
and prospectus delivery provisions of the Securities Act, provided
that such New Notes are acquired in the ordinary course of such
holder's business and that such holder is not engaged in, and does
not intend to engage in, and has no arrangement or understanding with
any person to participate in, the distribution of such New Notes.
Any Participating Broker-Dealer that receives New Notes for its own
account in exchange for Old Notes, where such Old Notes were acquired
by such broker or dealer as a result of
</TABLE>
8
<PAGE>
<PAGE>
<TABLE>
<S> <C>
market-making activities or other trading activities, must
acknowledge that it will deliver a prospectus in connection with any
resale of such New Notes. The Letter of Transmittal states that by so
acknowledging and by delivering a prospectus, a Participating
Broker-Dealer will not be deemed to admit that it is an 'underwriter'
within the meaning of the Securities Act. This Prospectus, as it may
be amended or supplemented from time to time, may be used by a
Participating Broker-Dealer in connection with the resale of New
Notes received in exchange for Old Notes where such Old Notes were
acquired by such Participating Broker-Dealer as a result of
market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it
will make this Prospectus available to any Participating
Broker-Dealer for use in connection with any such resale. See 'Plan
of Distribution.'
Any holder who tenders in the Notes Exchange Offer with the intention
of participating, or for the purpose of participating, in a
distribution of the New Notes may not rely on the position of the
staff of the Commission enunciated in no-action letters and, in the
absence of an exemption therefrom, must comply with the registration
and prospectus delivery requirements of the Securities Act in
connection with any resale.
Expiration Date........................... 5:00 p.m., New York City time, on , 1998, unless the
Notes Exchange Offer is extended, in which case the term 'Expiration
Date' means the latest date and time to which the Notes Exchange
Offer is extended.
Conditions to the Notes
Exchange Offer.......................... The obligation of the Company to consummate the Notes Exchange Offer
is subject to certain conditions. See 'The Notes Exchange
Offer -- Conditions.' The Company reserves the right to terminate or
amend the Notes Exchange Offer at any time prior to the Expiration
Date upon the occurrence of any such condition.
Procedures for Tendering
Old Notes............................... Each holder of Old Notes wishing to accept the Notes Exchange Offer
must complete, sign and date the Letter of Transmittal, or a
facsimile thereof, or transmit an Agent's Message (as defined herein)
in connection with a book-entry transfer, in accordance with the
instructions contained herein and therein, and mail or otherwise
deliver such Letter of Transmittal, such facsimile or such Agent's
Message, together with the Old Notes and any other required
documentation to the exchange agent (the 'Exchange Agent') at the
address set forth herein. By executing the Letter of Transmittal or
Agent's Message, each holder will represent to the Company that,
among other things, the New Notes acquired pursuant to the Notes
Exchange Offer are being obtained in the ordinary course of business
of the person receiving such New Notes, whether or not such person is
the holder, that neither the holder nor any such other person (i) has
any arrangement or
</TABLE>
9
<PAGE>
<PAGE>
<TABLE>
<S> <C>
understanding with any person to participate in the distribution of
such New Notes, (ii) is engaging or intends to engage in the
distribution of such New Notes or (iii) is an 'affiliate,' as defined
under Rule 405 of the Securities Act, of the Company. See 'The Notes
Exchange Offer -- Purpose and Effect of the Notes Exchange Offer,'
' -- Procedures for Tendering' and 'Plan of Distribution.'
Special Procedures for
Beneficial Owners....................... Any beneficial owner whose Old Notes are registrered in the name of a
broker, dealer, commercial bank, trust company or other nominee and
who wishes to tender should contact such registered holder promptly
and instruct such registered holder to tender on such beneficial
owner's behalf. If such beneficial owner wishes to tender on such
owner's own behalf, such owner must, prior to completing and
executing the Letter of Transmittal and delivering his Old Notes,
either make appropriate arrangements to register ownership of the Old
Notes in such owner's name or obtain a properly completed bond power
from the registered holder. The transfer of registered ownership may
take considerable time. See 'The Notes Exchange Offer -- Procedures
for Tendering.'
Guaranteed Delivery
Procedures.............................. Holders of Old Notes who wish to tender their Old Notes and whose Old
Notes are not entirely available or who cannot deliver their Old
Notes, the Letter of Transmittal or any other documents required by
the Letter of Transmittal to the Exchange Agent prior to the
Expiration Date must tender their Old Notes according to the
guaranteed delivery procedures set forth in 'The Notes Exchange
Offer -- Guaranteed Delivery Procedures.'
Withdrawal Rights......................... Tenders may be withdrawn at any time prior to 5:00 p.m., New York
City time, on the Expiration Date. See 'The Notes Exchange
Offer -- Withdrawal of Tenders.'
Acceptance of Old Notes and
Delivery of New Notes................... The Company will accept for exchange any and all Old Notes which are
properly tendered in the Notes Exchange Offer prior to 5:00 p.m., New
York City time, on the Expiration Date. The New Notes issued pursuant
to the Notes Exchange Offer will be delivered promptly following the
Expiration Date. See 'The Notes Exchange Offer -- Terms of the Notes
Exchange Offer.'
Exchange Agent............................ The Bank of New York is serving as Exchange Agent in connection with
the Exchange Offers. See 'The Notes Exchange Offer -- Exchange
Agent.'
</TABLE>
10
<PAGE>
<PAGE>
THE NEW NOTES
The Notes Exchange Offer applies to $220.0 million aggregate principal
amount of Old Notes. The terms of the New Notes are identical in all material
respects to the Old Notes, except for certain transfer restrictions and
registration and other rights relating to the exchange of the Old Notes for New
Notes. The New Notes will evidence the same debt as the Old Notes and will be
entitled to the benefits of the Indenture under which both the Old Notes were,
and the New Notes will be, issued. See 'Description of the Notes.'
<TABLE>
<S> <C>
Notes Offered............................. $220,000,000 principal amount of 9 3/8% Senior Subordinated Notes due
2008.
Maturity Date............................. March 1, 2008.
Interest Payment Dates.................... March 1 and September 1 of each year, commencing September 1, 1998.
Sinking Fund.............................. None.
Subordination............................. The Notes are general unsecured obligations of the Company,
subordinated in right of payment to all existing and future Senior
Indebtedness of the Company (including the Company's obligations
under the New Credit Agreement). At February 28, 1998, after giving
effect to the issuance of the Notes and the related financing
transactions, the Company had approximately $327.0 million of Senior
Indebtedness outstanding of which approximately $323.8 million was
secured.
Guarantees................................ The Notes are unconditionally guaranteed on an unsecured senior
subordinated basis by Parent and all domestic subsidiaries of the
Company (the 'Subsidiary Guarantors' and, together with Parent, the
'Guarantors'). Each Note Guarantee is a general unsecured obligation
of the Guarantor thereof, subordinated in right of payment to the
Guarantor's guarantee of the Company's obligations under the New
Credit Agreement and to all Senior Indebtedness of such Guarantor.
Optional Redemption....................... The Notes are redeemable at the option of the Company, in whole or in
part, at any time on or after March 1, 2003, at the redemption prices
set forth herein, plus accrued and unpaid interest, if any, to the
redemption date. The Company may also redeem up to 35% of the
aggregate principal amount of the Notes at its option, at any time
prior to March 1, 2001, at a redemption price equal to 109.375% of
the principal amount thereof, plus accrued and unpaid interest and
Special Interest, if any, to the redemption date, with the net
proceeds of one or more Equity Offerings (as defined herein);
provided, however, that at least $100 million in aggregate principal
amount of the Notes remains outstanding following each such
redemption. See 'Description of the Notes -- Optional Redemption of
the Notes.'
Change of Control......................... Upon the occurrence of a Change of Control, the Company will be
required to offer to purchase all or any part of each holder's Notes
at a price equal to 101% of the principal amount thereof, plus
accrued and unpaid interest and Special Interest, if any, to the date
of purchase. There can be no
</TABLE>
11
<PAGE>
<PAGE>
<TABLE>
<S> <C>
assurance that the Company will have the financial resources
necessary, or be permitted by its debt or other agreements, to
purchase the Notes upon a Change of Control. See 'Description of the
Notes -- Change of Control.'
Certain Covenants......................... The Indenture (as defined herein) contains certain covenants that,
among other things, will limit the ability of the Company and the
Restricted Subsidiaries (as defined herein) to incur additional
indebtedness; issue capital stock of Restricted Subsidiaries; make
restricted payments; pay dividends or make other distributions; incur
liens; enter into certain transactions with affiliates; or enter into
certain mergers or consolidations or sell all or substantially all of
the assets of the Company and its subsidiaries. These covenants are
subject to a number of significant exceptions and qualifications. See
'Description of the Notes -- Certain Covenants.'
Use of Proceeds........................... There will be no proceeds to the Company from any exchange pursuant
to the Notes Exchange Offer.
</TABLE>
RISK FACTORS
See 'Risk Factors' for a discussion of certain factors that should be
considered before tendering Old Notes in the Notes Exchange Offer.
12
<PAGE>
<PAGE>
SUMMARY OF HISTORICAL AND PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following historical condensed consolidated financial information is
derived from the Consolidated Financial Statements of the Company. The unaudited
pro forma condensed consolidated statement of income (loss) for the year ended
November 30, 1997 gives effect to the Acquisition and the application of the
proceeds as if it had been consummated on December 1, 1996. The unaudited pro
forma condensed consolidated balance sheet as of November 30, 1997 gives effect
to the Acquisition and the application of the proceeds as if it had been
consummated on November 30, 1997. Effective November 29, 1996, the Company
emerged from bankruptcy and, accordingly, it adopted fresh-start reporting in
accordance with Statement of Position 90-7, 'Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code.' As a result, the condensed
consolidated financial information for the periods subsequent to the adoption of
fresh-start reporting are presented on a different cost basis than the
information for prior periods and, therefore, are not comparable. Accordingly, a
vertical black line is shown to separate post-emergence operations. The Company
recorded a number of charges in 1995 and 1996 in connection with its
reorganization and emergence from bankruptcy as set forth in the financial
information herein. Given that the Company has emerged from bankruptcy, there
will be no further reorganization charges. The unaudited condensed consolidated
financial information presented for the three months ended February 28, 1997 and
1998 and as of February 28, 1998 are derived from the unaudited consolidated
financial statements of the Company and include, in the opinion of management,
all adjustments (consisting of normal recurring adjustments) necessary for a
fair presentation of the financial information for such periods. As a result of
the Acquisition of the Company by Granaria Industries from the Trust as of
February 24, 1998, which was accounted for as a purchase, the Company's results
of operations and financial position for periods after February 24, 1998 are not
comparable to prior periods. See Note (I) below. The unaudited pro forma
condensed consolidated statement of income (loss) for the three months ended
February 28, 1998 gives effect to the Acquisition as if it had been consummated
on December 1, 1997. Pro forma balance sheet data as of February 28, 1998 are
not included herewith because the effects of the Acquisition have already been
reflected in such balance sheet data. Neither the historical condensed
consolidated financial data nor the pro forma condensed consolidated financial
data are necessarily indicative of either the future results of operations or
the results of operations that would have occurred if those events had been
consummated on the indicated dates. The following condensed consolidated
financial information should be read in conjunction with 'Management's
Discussion and Analysis of Financial Condition and Results of Operations,' the
Pro Forma Condensed Consolidated Financial Statements (as defined herein) and
the historical Consolidated Financial Statements, related notes, and other
financial information all included elsewhere herein.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NOVEMBER 30,
-------------------------------------------------------
1997
-----------------------
1995 1996 ACTUAL PRO FORMA
----------- ---------- -------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
STATEMENT OF INCOME (LOSS):
Net sales(A).............................. $ 848,548 $ 891,287 $906,077 $906,077
Operating income.......................... 63,087 62,106 45,558(B) 38,698
Adjustment for asbestos litigation........ (1,005,511) 502,197 -- --
Fresh start revaluation................... -- 118,684(C) -- --
Reorganization items and claims(D)........ (2,225) (6,593) -- --
Interest expense.......................... (1,926) (3,083) (31,261) (54,881)
Other income (expense).................... 11,704(E) 1,345 (251) (251)
Income (loss) before taxes, extraordinary
items and accounting changes............ (934,871) 674,656 14,046 (16,434)
Income (loss) before extraordinary items
and accounting changes.................. (944,171) 622,086 (3,854) (9,334)
Extraordinary items and accounting
changes................................. -- 1,524,305(F) -- --
Net income (loss)......................... (944,171) 2,146,391 (3,854) (9,334)
BALANCE SHEET DATA (END OF PERIOD):
Working capital........................... $ 243,495 $ 211,808 $187,968 $149,617
Property, plant and equipment, net........ 155,818 256,351 243,538 243,538
Total assets.............................. 580,073 848,880 746,881 867,280
Total debt................................ 20,628 386,439 273,397 547,497
Shareholder's equity (deficit)............ (2,211,308) 341,807 336,117 170,580
SELECTED FINANCIAL DATA:
EBITDA(G)................................. $ 91,795 $ 92,856 $103,958 $103,958
Depreciation and amortization............. 28,708 30,750 55,989 56,749
Capital expenditures...................... 40,558 44,957 51,324(H) 51,324
SELECTED RATIOS:
EBITDA/interest expense................... 47.66x 30.12x 3.33x 1.89x
Total debt/EBITDA......................... 0.22 4.16 2.63 5.27
Total debt/capitalization................. N/M 53.1% 44.9% 76.2%
<CAPTION>
UNAUDITED
THREE MONTHS ENDED
FEBRUARY 28,
--------------------------------
1998(I)
---------------------
1997 ACTUAL PRO FORMA
-------- -------- ---------
<S> <C> <C> <C>
STATEMENT OF INCOME (LOSS):
Net sales(A)..............................$223,607 $205,842 $205,842
Operating income.......................... 9,040 11,027 5,373
Adjustment for asbestos litigation........ -- -- --
Fresh start revaluation................... -- -- --
Reorganization items and claims(D)........ -- -- --
Interest expense.......................... (8,927) (6,940) (13,122)
Other income (expense).................... 1,703 820 820
Income (loss) before taxes, extraordinary
items and accounting changes............ 1,816 4,907 (6,929)
Income (loss) before extraordinary items
and accounting changes.................. (1,220) 807 (5,079)
Extraordinary items and accounting
changes.................................
Net income (loss)......................... (1,220) 807 (5,079)
BALANCE SHEET DATA (END OF PERIOD):
Working capital...........................$208,373 $162,450 --
Property, plant and equipment, net........ 260,850 239,337 --
Total assets.............................. 831,943 867,139 --
Total debt................................ 372,170 546,996 --
Shareholder's equity (deficit)............ 338,642 180,005 --
SELECTED FINANCIAL DATA:
EBITDA(G).................................$ 23,482 $ 25,905 $ 25,905
Depreciation and amortization............. 14,442 12,822 13,221
Capital expenditures...................... 15,857 5,692 5,692
SELECTED RATIOS:
EBITDA/interest expense................... 2.63x 3.73x 2.05x
Total debt/EBITDA......................... N/M N/M N/M
Total debt/capitalization................. 52.4% 75.2% N/M
</TABLE>
(footnotes on next page)
13
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<PAGE>
NOTES TO HISTORICAL AND PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands)
(A) In 1997, the Company sold the Plastics division, the Transicoil division
and the Fabricon Products division and contributed the Suspension Systems
division to the Eagle-Picher-Boge L.L.C. joint venture (collectively, the
'Divested Divisions'). In 1995, 1996, 1997, and the three months ended
February 28, 1997, the Divested Divisions contributed net sales of
$145,733, $138,116, $78,604 and $29,254, respectively.
(B) Operating income in 1997 includes (i) amortization of reorganization value
in excess of amounts allocable to identifiable assets in the amount of
$16,284, (ii) depreciation of assets written up to fair value in the amount
of $9,804 and (iii) loss on sale of divisions of $2,411. See 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Effects of Reorganization on Operations and Financial
Condition.'
(C) Fresh-start valuation gain of $118,684 reflects transactions related to
emergence from bankruptcy and reorganization in accordance with Statement
of Position 90-7, 'Financial Reporting by Entities in Reorganization under
the United States Bankruptcy Code.' See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Effects of
Reorganization on Operations and Financial Condition.'
(D) Reflects provision for claims of $4,244 in 1996. Remaining reorganization
items is net expense resulting from the Company's bankruptcy filing. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Effects of Reorganization on Operations and Financial
Condition.'
(E) Other income (expense) reflects a gain of $11,505 in 1995 relating to the
sale of an investment in a Canadian mining concern.
(F) Reflects (i) a gain of $1,525,540 in 1996 related to emergence from
bankruptcy and reorganization in accordance with Statement of Position
90-7, 'Financial Reporting by Entities in Reorganization under the United
States Bankruptcy Code' and (ii) a loss of $1,235 in 1996 due to an
accounting change of its method of computing LIFO inventories.
(G) 'EBITDA' is used as defined in the Indenture. See 'Description of the
Notes.' 'EBITDA' is presented because management believes it is an
indicator of a company's ability to service and incur debt. EBITDA does not
represent net income or cash flows from operations as those terms are
defined by generally accepted accounting principles and does not
necessarily indicate whether cash flows will be sufficient to fund cash
needs. Under the Indenture, the definition of EBITDA excludes loss on sale
of divisions. The Divested Divisions contributed $7,695, $3,615, $361 and
($652) of EBITDA in 1995, 1996, 1997, and the three months ended February
28, 1997, respectively.
(H) Includes capital expenditures in 1997 of (i) $10,157 in connection with the
new facility in Manchester, Tennessee, (ii) $6,495 in connection with the
completion of a $13,054 diatomaceous earth processing facility in Vale,
Oregon and (iii) $4,651 in connection with a new automotive facility in
Tamworth, England.
(I) The unaudited condensed consolidated financial statements as of and for the
three months ended February 28, 1998 include the effects of the Acquisition
that result as of February 24, 1998, the Closing Date. Accordingly, the
historical condensed consolidated statement of income (loss) for the three
months ended February 28, 1998 includes results of operations from (1)
December 1, 1997 through February 24, 1998 of the Company prior to the
consummation of the Acquisition (for clarity, sometimes referred to herein
as the 'Predecessor Company') and (2) February 25 through February 28, 1998
of the Company.
14
<PAGE>
<PAGE>
RISK FACTORS
In addition to the other information in this Prospectus, holders of the Old
Notes should consider carefully the following risk factors before deciding to
tender their Old Notes in the Notes Exchange Offer.
SUBSTANTIAL LEVERAGE; RESTRICTIVE COVENANTS
The Company is highly leveraged and has significant debt service
requirements. On February 28, 1998, after giving effect to the Acquisition, the
Company had $547.0 million of long-term debt outstanding, $323.8 million of
which was secured. Under the New Credit Agreement, the Company has scheduled
principal payments aggregating $5.3 million, $10.4 million and $15.4 million for
the years 1998, 1999 and 2000, respectively, increasing to a maximum of $73.9
million in 2006. For the 1997 Fiscal Year, on a pro forma basis after giving
effect to the Acquisition, the Company's total debt to EBITDA ratio would have
been 5.27x. The degree to which the Company is leveraged could have important
consequences to holders of the Notes, including: (i) the Company's ability to
obtain additional financing, whether for working capital, acquisitions, capital
expenditures, or other purposes, may be impaired; (ii) a substantial portion of
the Company's cash flow from operations will be required for debt service,
thereby reducing funds available to the Company for its operations; (iii)
certain of the Company's indebtedness contains financial and other restrictive
covenants which, if breached, would result in an event of default under such
indebtedness; (iv) the Company's flexibility in planning for or reacting to
changes in market conditions may be limited; (v) the Company may be more
vulnerable upon a downturn in its business or in an industry in which it
operates; and (vi) to the extent that the Company incurs any indebtedness at
variable rates, including under the New Credit Agreement, the Company will be
vulnerable to increases in interest rates.
Based on the current level of operations (assuming the Company does not
incur any material liabilities not presently known to the Company (including any
environmental liabilities)) and anticipated future growth, the Company believes
that its operating cash flow, together with available borrowings under the New
Credit Agreement, will be sufficient to meet the debt service requirements on
its indebtedness, meet its working capital needs and fund its capital
expenditures and other operating expenses. However, there can be no assurance
that the Company's business will generate cash flow at levels sufficient to meet
these requirements. If the Company is unable to generate sufficient cash flow
from operations to service its debt obligations and to meet other cash
requirements, it may be required to sell assets, reduce capital expenditures,
refinance all or a portion of its existing debt (including the Notes) or obtain
additional financing. There can be no assurance that any such asset sales or
refinancing would be possible or that any additional financing would be
available, if at all, on terms acceptable to the Company. The Company's ability
to meet its debt service obligations will be dependent upon its future
performance which, in turn, will be subject to future economic conditions and to
financial, business and other factors, many of which are beyond the Company's
control.
The terms of the New Credit Agreement, the Indenture, and the other
agreements governing the Company's indebtedness impose operating and financing
restrictions on the Company. Such restrictions affect, and in many respects
limit or prohibit, among other things, the ability of the Company to incur
additional indebtedness, pay dividends or repurchase stock or make other
distributions, create liens, make certain investments, sell assets, or enter
into mergers or consolidations. The New Credit Agreement will require the
Company to comply with certain financial ratios and tests, under which the
Company is required to achieve certain financial and operating results. The
restrictions could limit the ability of the Company to plan for or react to
market conditions or meet extraordinary capital needs or otherwise could
restrict corporate activities. There can be no assurance that such restrictions
will not adversely affect the Company's ability to finance its future operations
or capital needs or to engage in other business activities that would be in the
interest of the Company. Moreover, any default under the documents governing the
indebtedness of the Company could have a significant adverse effect on the
market value of the Notes.
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SUBORDINATION OF NOTES; GUARANTEES
The payment of principal of and interest on, and any premium or other
amounts owing in respect of, the Notes will be subordinated to the prior payment
in full of all existing and future Senior Indebtedness of the Company, including
all amounts owing or guaranteed under the New Credit Agreement. The Guarantees
will be similarly subordinated to all existing and future Senior Indebtedness of
the Guarantors. Consequently, in the event of a bankruptcy, liquidation,
dissolution, reorganization or similar proceeding with respect to the Company or
a Guarantor, assets of the Company or such Guarantor will be available to pay
obligations on the Notes or Subsidiary Guarantees only after all Senior
Indebtedness of the Company or the Senior Indebtedness of the Guarantors, as
applicable, has been paid in full, and there can be no assurance that there will
be sufficient assets to pay amounts due on any or all of the Notes. In addition,
upon the occurrence of payment defaults in respect of the Senior Indebtedness,
the Company and the Guarantors will be prohibited from paying principal,
premium, interest or other amounts on account of the Notes or any Guarantee
under certain circumstances.
As of February 28, 1998, after giving effect to the Acquisition, the
Company had $322.5 million of Senior Indebtedness outstanding (excluding debt of
the Company's foreign subsidiaries), all of which was secured, and $4.5 million
of debt of the Company's foreign subsidiaries, $1.3 million of which was
secured, to which the Notes were structurally subordinated. See 'Description of
the Notes -- Ranking.' In Fiscal 1997, the Subsidiary Guarantors accounted for
approximately 54%, 58% and 43% of the Company's net sales, EBITDA and total
assets, respectively, and the Company's foreign subsidiaries (which are not
Subsidiary Guarantors) accounted for approximately 9%, 9% and 10% of the
Company's net sales, EBITDA and total assets, respectively.
Parent has unconditionally guaranteed, on a senior subordinated basis, all
principal and interest payments on the Notes. However, because Parent's only
significant asset following the Acquisition is the capital stock of the Company
(and such asset is pledged to the lenders under the New Credit Agreement),
should the Company be unable to meet its payment obligations with respect to the
Notes, it is unlikely that Parent would be able to do so.
FRAUDULENT CONVEYANCE STATUTES
The Company, the Issuer, Parent and each Subsidiary Guarantor each believes
that Parent's, the Issuer's and the Company's incurrence of indebtedness in
connection with the issuance of the Securities and the guarantees by Parent and
the Subsidiary Guarantors of indebtedness in connection with the Notes was
incurred for proper purposes and in good faith and that, based on present
forecasts, asset valuations and other financial information, the Company, the
Issuer, Parent and each Subsidiary Guarantor is, and after the issuance of the
Securities was, solvent, will have sufficient capital for carrying on its
business and will be able to pay its debts as they mature. However, if a court
of competent jurisdiction were to find that the Issuer, the Company, Parent or
such Subsidiary Guarantor did not receive fair consideration or reasonably
equivalent value for incurring such indebtedness or obligation (including any
guarantee thereof) and, at the time of such incurrence, the Issuer, the Company,
Parent or such Subsidiary Guarantor (i) was insolvent, (ii) was rendered
insolvent by reason of such incurrence or the Acquisition, (iii) was engaged in
a business or transaction for which the assets remaining in the Issuer, the
Company, Parent or such Subsidiary Guarantor, as the case may be, constituted
unreasonably small capital, or (iv) intended to incur or believed it would incur
debts beyond its ability to pay such debts as they mature, such court, subject
to applicable statutes of limitation, could, among other things, (a) invalidate,
in whole or in part, such indebtedness and obligation (including any guarantee
thereof) as fraudulent conveyances, the effect of which could be that the
holders of the Securities may not be repaid in full, and/or (b) subordinate such
indebtedness and obligation (including any guarantee thereof) to existing or
future creditors of the Issuer, the Company, Parent or such Subsidiary
Guarantor, as the case may be, the effect of which would be to entitle such
other creditors to be paid in full before any payment could be made on the
Securities. If a court were to find that the Issuer, the Company, Parent or any
Subsidiary Guarantor, as the case may be, satisfied the measures of insolvency
or capital inadequacy described in (i) through (iv) above, such court could
avoid any previous distribution by such entity in respect of such indebtedness
(including, without limitation, any
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payment of principal or interest) or obligation, (including any guarantee
thereof) and order that it be returned to the Issuer, the Company, Parent or
such Subsidiary Guarantor, as the case may be, or to a fund for the benefit of
the creditors of such entity.
With respect to each Subsidiary Guarantee, a court may compare its estimate
of the value received by each Subsidiary Guarantor with the magnitude of its
obligation under such Subsidiary Guarantee. If the value received by the
Subsidiary Guarantor is found to be disproportionately small as compared with
its obligation under such Subsidiary Guarantee, then, to that extent, there
would be a lack of fair consideration for the giving of the Subsidiary Guarantee
and if the Subsidiary Guarantee came within any of the foregoing clauses (i)
through (iv) above, such Subsidiary Guarantee could be held invalid to such
extent. The obligation of each Subsidiary Guarantor under its Subsidiary
Guarantee will be limited in a manner intended to avoid it being deemed a
fraudulent conveyance under applicable law.
The measure of insolvency for purposes of the foregoing will vary depending
on the law of the jurisdiction being applied. Generally, however, the Issuer,
the Company, Parent or any of the Subsidiary Guarantors would be considered
insolvent at a particular time if the sum of its debts was then greater than all
of its property at a fair valuation or if the present fair saleable value of its
assets was then less than the amount that would be required to pay its probable
liabilities on its existing debts as they became absolute and matured. The
Company believes, based upon the financial information, the recent operating
history as discussed in 'Management's Discussion and Analysis of Financial
Condition and Results of Operations' and other factors, that, after giving
effect to the issuance of the Notes, none of the Issuer, the Company, Parent, or
any of the Subsidiary Guarantors will be rendered insolvent, each such entity
will have sufficient capital for the businesses in which it is engaged and it
will be able to pay its debts as they mature. While the Company believes each of
the Issuer, the Company, Parent and each Subsidiary Guarantor is solvent, there
can be no assurance as to whether a court would concur with such beliefs.
CYCLICALITY OF MARKETS
Certain industries in which the Company competes are highly cyclical and
can be affected by the strength of the economy generally. In particular, the
Company's automotive and construction equipment businesses depend, in large
part, on the overall strength of demand for light trucks, passenger cars,
forklifts and wheel tractor scrapers. There can be no assurance that the
industries for which the Company supplies components will not experience
downturns in the future. An economic recession typically impacts substantially
leveraged companies such as the Company more than similarly situated companies
with less leverage. A decrease in overall demand for light trucks, passenger
cars, forklifts and wheel tractor scrapers could have a material adverse effect
on the Company's financial condition, results of operations or cash flows.
RELIANCE ON PRINCIPAL CUSTOMERS; GOVERNMENT APPROVALS
Sales to the Company's three largest customers, Ford, GM and Caterpillar,
accounted for approximately 18.8%, 7.1% and 6.1%, respectively, of the Company's
net sales for Fiscal 1997. Although the Company has ongoing relationships with
Ford, GM and Caterpillar, there can be no assurance that sales to these
customers will continue at the same levels.
Ford has notified the Company that from December 1997 through March 1999,
it will no longer purchase certain product lines of the Company. These product
lines contributed approximately $19.4 million, or 2.1%, of the Company's net
sales for Fiscal 1997 (which represents 11.4% of the Company's sales to Ford in
Fiscal 1997). Although the Company believes that this revenue will be replaced
by new programs currently being implemented with other customers, there can be
no assurance that Ford or other customers will continue to purchase products for
the Company at current levels. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations.'
Continuation of the Company's relationships with its principal customers is
dependent upon the customers' satisfaction with the price, quality and delivery
of the Company's products. While the Company believes its relationships with its
customers (including Ford) are satisfactory, if any of its principal customers
were to reduce substantially or discontinue its purchases from the Company, the
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financial condition, results of operations or cash flows of the Company could be
materially adversely affected.
The Company manufactures certain products for U.S. government agencies
(including National Aeronautics and Space Administration ('NASA') and the U.S.
Department of Defense ('DOD')), many of which have concerns about doing business
with non-U.S. entities and some of which require the Company to maintain special
security clearance and other arrangements. Because the Company is controlled by
a non-U.S. citizen as a result of the Acquisition, it is required to enter into
additional special security clearance and other arrangements with the DOD. The
Company is currently in discussions with the DOD regarding the terms of the
special security clearance arrangements and a filing under the Exon-Florio
provisions of the Defense Production Act. There can be no assurance, however,
that the U.S. government will continue as a customer of the Company or will
continue to do business with the Company at its current level. Contracts funded,
directly or indirectly, by various agencies of the federal government that
require security clearance represented approximately 6% of the Company's net
sales for Fiscal 1997.
THE OEM SUPPLIER INDUSTRY
The Company's automotive business competes in the global OEM supplier
industry. The automotive industry is characterized by a small number of OEMs
that are able to exert considerable pressure on component and system suppliers
to reduce costs, improve quality and provide additional design and engineering
capabilities. In the past, OEMs have generally demanded and received price
reductions and measurable increases in quality by implementing competitive
selection processes, rating programs and various other arrangements. Also,
through increased partnering on platform work, OEMs have generally required
component and system suppliers to provide more design engineering input at
earlier stages of the product development process, the costs of which have, in
some cases, been absorbed by the suppliers. There can be no assurance that
future price reductions, increased quality standards or additional engineering
capabilities required by OEMs will not have a material adverse effect on the
Company's financial condition, results of operations or cash flows.
ENVIRONMENTAL MATTERS
Like companies involved in similar manufacturing businesses, the Company's
operations and properties are subject to extensive federal, state, local and
foreign environmental laws and regulations, including those concerning, among
other things, the treatment, storage and disposal of wastes, the investigation
and remediation of soil and groundwater affected by hazardous substances, the
discharge or emission of substances into the soil, water or air or otherwise
relating to environmental protection and various health and safety matters
(collectively and as amended, 'Environmental Laws'). Certain Environmental Laws,
such as the Comprehensive Environmental Response, Compensation, and Liability
Act, as amended ('CERCLA'), impose strict, retroactive and joint and several
liability upon persons responsible for releases of hazardous substances. Failure
to comply with such Environmental Laws can lead to the imposition of civil or
criminal penalties, injunctive relief and denial or loss of, or imposition of
significant restrictions on, environmental permits. In addition, the Company
could be subject to suit by third parties in connection with violations of or
liability under Environmental Laws. The Company currently is undertaking
remedial activities at a number of its facilities and properties, and has
received notices under CERCLA or analogous state laws of liability or potential
liability in connection with the disposal of material from the Company's
operations or former operations. See 'Business -- Environmental Matters.'
The Company's expenditures related to environmental matters have not had,
and are not currently expected to have, a material adverse effect on the
Company's financial condition, results of operations or cash flows. However, the
Environmental Laws under which the Company's facilities operate are numerous,
complicated and often ambiguous. Moreover, the Environmental Laws are constantly
changing, historically have become increasingly more stringent, and may be
applied retroactively. Accordingly, there can be no assurance that the Company
will not be required to make substantial additional expenditures to remain in or
to achieve compliance with Environmental Laws in the future or
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that any such additional expenditures will not have a material adverse effect on
the Company's financial condition, results of operations or cash flows.
COMPETITION
The Company operates in highly competitive industries. The Company competes
with major national and international manufacturers in each of its product
lines, and its competitors include customers of the Company, such as automotive
OEMs, many of which are significantly larger and have greater financial,
technical, marketing, distribution and other resources than the Company. The
Company competes with such other companies in different product lines to various
degrees on the basis of price, technical performance, product features, product
system compatibility, customized design, availability, quality and sales and
technical support. The Company's ability to compete successfully depends on
elements both within and outside of the Company's control, including its product
mix, successful and timely development of new technology, products and
manufacturing processes, product performance and quality, manufacturing yields
and product availability, customer service, pricing, industry trends and general
economic trends. The Company believes that its experience in product design and
development, design engineering and implementing cost reduction programs and
ability to control manufacturing and development costs should allow the
Company's products and prices to remain competitive. However, there can be no
assurance that the Company will be able to improve or maintain its sales or its
profit margins on sales to OEMs or other customers.
TECHNOLOGICAL CHANGE AND NEW PRODUCT DEVELOPMENT
Certain industries in which the Company competes are subject to rapid
technological change resulting in the frequent introduction of new and
increasingly complex and powerful products, evolving industry standards, rapid
product obsolescence and price erosion, and fluctuations in end user demand. The
Company believes that its success depends, in part, on its ability to improve
its existing core products, to develop new products, to develop and implement
new technologies, to adapt products and processes to technological changes and
to adopt emerging industry standards. If the Company is not able to implement
new technologies or develop or introduce new products successfully, the Company
may lose its position as a market leader and its financial condition, results of
operations or cash flows may be adversely affected. The Company must continue to
develop and introduce new products that compete effectively on the basis of
price and performance and that satisfy customer requirements.
In order to attempt to anticipate its customers' needs and market trends,
the Company monitors technological changes in the various industries in which it
competes and works closely with certain of its customers to develop new
products. Because the development process can be time consuming, decisions to
undertake development must anticipate both future demand and changes in the
technology to supply such demand. There can be no assurance that the Company
will be able to identify new product opportunities or that the Company will be
able to develop and market new products successfully. Delays in developing new
products or achieving volume production of certain new products could have a
material adverse effect on the Company's financial condition, results of
operations or cash flows. In addition, there can be no assurance that such
products, if introduced, will gain market acceptance or that the Company will be
able to respond effectively to new technological changes or new product
announcements by others.
ACCESS TO RAW MATERIALS
Certain of the Company's manufacturing operations depend upon obtaining
adequate supplies of raw materials such as steel, rubber, germanium, gallium,
chemicals and gases and other inputs on a timely basis. The Company purchases
such raw materials and other inputs from a limited number of suppliers which the
Company believes to be reliable. The Company's financial condition, results of
operations or cash flows would be adversely affected if it were unable to obtain
adequate supplies of raw materials and other inputs in a timely manner or if
there were significant increases in the costs of raw materials and other inputs.
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RELIANCE ON KEY MANAGEMENT AND PERSONNEL
The Company's success depends to a significant extent upon, among other
factors, its ability to continue to attract, retain and motivate qualified
personnel, including key senior executives and research and development,
engineering, marketing, sales, manufacturing, support and other personnel.
Although all of the key management employees have employment contracts with the
Company and own shares of common stock of Granaria Industries, there can be no
assurance that such individuals will remain employed with the Company. If, for
any reason, such key personnel do not continue to be active in the Company's
management, the Company's financial condition, results of operations or cash
flows could be adversely affected. The Company has no key man life insurance
policies with respect to any of its senior executives.
CONTROL BY PRINCIPAL SHAREHOLDERS
Granaria Holdings and LV Investment (the 'Shareholders') beneficially own
approximately 90% of the outstanding common stock of Parent and the Company.
Circumstances may occur in which the interests of the Shareholders could be in
conflict with the interests of the holders of the Securities. In particular, ABN
AMRO Bank, an affiliate of LV Investment, acted as agent and arranger for loan
facilities of $385 million under the New Credit Agreement. See 'Description of
New Credit Agreement.' If the Company encounters financial difficulties, or is
unable to pay certain of its debts as they mature, the interests of the
Shareholders (whether or not as holders of the Company's equity securities)
might conflict with those of the holders of the Securities. In addition, the
Shareholders may have an interest in pursuing acquisitions, divestitures or
other transactions that, in their judgment, could enhance their equity
investment, even though such transactions might involve risks to the holders of
the Securities.
PLAN OF REORGANIZATION AND RELATED INJUNCTION
In January 1991, Eagle-Picher and seven of its U.S. subsidiaries
(collectively, the 'Eagle-Picher Group') filed voluntary petitions for
reorganization under the United States Bankruptcy Code, as amended (the
'Bankruptcy Code'). The Consolidated Plan of Reorganization (the 'Plan') of the
Eagle-Picher Group was jointly confirmed by an order (the 'Order') of the United
States Bankruptcy Court for the Southern District of Ohio (the 'Bankruptcy
Court') and the United States District Court for the Southern District of Ohio
(the 'Ohio District Court') in November 1996. A consolidated appeal of the Order
(the 'Appeal') is currently pending before the United States Circuit Court for
the Sixth Circuit (the 'Sixth Circuit'); however, the Order was not stayed
pending the Appeal and the Plan was consummated and, commencing on November 29,
1996, distributions were made pursuant to the Plan. See 'Business -- Plan of
Reorganization and Related Injunction.'
Among other things, the Plan discharges all past, present and future
asbestos-related and lead-related claims against Eagle-Picher and the
Eagle-Picher Group arising out of business operations prior to the date of the
bankruptcy petitions by (i) requiring the establishment of the Trust and of a
separate Eagle-Picher Industries, Inc. Property Damage Settlement Trust (the 'PD
Trust'), (ii) contributing to the Trust assets valued at approximately $730.0
million in the aggregate, consisting of $51.3 million in cash, $250.0 million in
10% Debentures, $69.1 million in Tax Refund Notes (as defined herein), $18.1
million in Divestiture Notes (as defined herein) and 10 million shares of Common
Stock (representing all outstanding shares of Common Stock), and an escrow of
$3.0 million in cash for use in funding the PD Trust once it is established and
(iii) imposing injunctions (collectively, the 'Injunction') prohibiting the
assertion of any asbestos-related and lead-related claims against Eagle-Picher
and the Eagle-Picher Group and directing that such claims be asserted only
against the Trust or the PD Trust. See 'Business -- Plan of Reorganization and
Related Injunction.'
Although the Injunction has not, to the Company's knowledge, been the
subject of any filed legal challenges (other than the Appeal), it is possible
that one or more components of the Injunction could be vacated, modified or
restricted in applicability pursuant to the Appeal or otherwise. If the
Injunction were for any reason to be vacated, modified or restricted, whether in
connection with the Appeal or otherwise, the Company could be adversely
affected. The Company believes that the Injunction and the
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Plan will withstand legal challenge, including the Appeal, and that the
Injunction and the Plan will remain as in effect today. See 'Business -- Plan of
Reorganization and Related Injunction.'
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, the holders of the Notes have
the right to require the Company to offer to purchase all of the outstanding
Notes at 101% of the principal amount thereof, plus accrued and unpaid interest
thereon, if any, to the date of repurchase. There can be no assurance that the
Company will have sufficient funds available or will be permitted by its other
debt agreements to repurchase the Notes upon the occurrence of a Change of
Control. In addition, the occurrence of a Change of Control may require the
Company to offer to repurchase other outstanding indebtedness and may cause a
default under the New Credit Agreement. The inability to purchase all of the
tendered Notes would constitute an Event of Default (as defined herein) under
the Indenture. See 'Description of the Notes -- Change of Control.'
ABSENCE OF PUBLIC MARKET
The New Notes are being offered exclusively to holders of the Old Notes.
The Old Notes were issued to a limited number of institutional investors on
February 24, 1998. There is currently no established market for the New Notes.
There can be no assurance as to the liquidity of any markets that may develop
for the New Notes, the ability of the holders of the New Notes to sell their
Notes or the price at which holders would be able to sell their Notes. Future
trading prices of the New Notes will depend on many factors, including, among
other things, prevailing interest rates, the Company's operating results, and
the market for similar securities. The Company does not intend to apply for
listing of the New Notes on any securities exchange.
The liquidity of, and trading market for, the New Notes may also be
materially and adversely affected by declines in the market for high yield
securities generally. Such a decline may materially and adversely affect such
liquidity and trading independent of the financial performance of, and prospects
for, the Company and Parent.
To the extent Old Notes are tendered and accepted in the Notes Exchange
Offer, the principal amount of outstanding Old Notes will decrease with a
resulting decrease in the liquidity in the market therefor. Following the
consummation of the Notes Exchange Offer, holders of Old Notes will continue to
be subject to certain restrictions on transfer. Accordingly, the liquidity of
the market for the Old Notes will be adversely affected.
CONSEQUENCES OF FAILURE TO EXCHANGE
Issuance of the New Notes in exchange for the Old Notes pursuant to the
Notes Exchange Offer will be made only after a timely receipt by the Company of
such Old Notes, a properly completed and duly executed Letter of Transmittal and
all other required documents. Therefore, holders of the Old Notes desiring to
tender such Old Notes in exchange for New Notes should allow sufficient time to
ensure timely delivery. The Company is under no duty to give notification of
defects or irregularities with respect to the tenders of Old Notes for exchange.
Holders of Old Notes who do not exchange their Old Notes for New Notes
pursuant to the Notes Exchange Offer, including holders of Old Notes whose Old
Notes are tendered but not accepted, will continue to be subject to the
restrictions on transfer of such Old Notes as set forth in the legend thereon
and, except in certain limited circumstances, will no longer have any
registration rights with respect to the Old Notes. In general, the Old Notes may
not be offered or sold, unless registered under the Securities Act, except
pursuant to an exemption from, or in a transaction not subject to, the
Securities Act and applicable state securities laws. The Company does not
currently anticipate that it will register the Old Notes under the Securities
Act.
New Notes issued pursuant to the Notes Exchange Offer in exchange for Old
Notes may be offered for resale, resold or otherwise transferred by holders
thereof (other than Restricted Holders or Participating Broker-Dealers) without
compliance with the registration and prospectus delivery
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provisions of the Securities Act, provided that such holder represents, among
other things, that such holder is not an 'affiliate' of the Company or any
Guarantor (as defined in Rule 405 of the Securities Act), that such New Notes
are acquired in the ordinary course of such holder's business and that such
holder is not engaged in, and does not intend to engage in, and has no
arrangement or understanding with any person to participate in, the distribution
of such New Notes. Any holder unable to make such representations will not be
able to participate in the Notes Exchange Offer and may only sell its Old Notes
pursuant to a registration statement and prospectus meeting the requirements of
the Securities Act, or pursuant to an exemption from the registration
requirements of the Securities Act.
Each Participating Broker-Dealer that receives New Notes for its own
account in exchange for Old Notes, where such Old Notes were acquired by such
Participating Broker-Dealer as a result of market-making activities or other
trading activities, must acknowledge that it will deliver a prospectus in
connection with any resale of such New Notes. The Letter of Transmittal states
that, by so acknowledging and by delivering a prospectus, a Participating
Broker-Dealer will not be deemed to admit that it is an 'underwriter' within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a Participating Broker-Dealer in
connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired by such Participating Broker-Dealer as a result of
market-making activities or other trading activities. The Company has agreed
that, for a period of 180 days after the Expiration Date, it will make this
Prospectus available to any Participating Broker-Dealer for use in connection
with any such resale. See 'Plan of Distribution.' However, to comply with the
securities laws of certain jurisdictions, if applicable, the New Notes may not
be offered or sold unless they have been registered or qualified for sale in
such jurisdictions or an exemption from registration or qualification is
available and is complied with. To the extent that Old Notes are tendered and
accepted in the Notes Exchange Offer, the trading market for untendered and
tendered but unaccepted Old Notes will be adversely affected.
FORWARD-LOOKING STATEMENTS
Certain information included in this Prospectus is forward-looking,
including statements contained in 'Summary,' 'Risk Factors,' 'Management's
Discussion and Analysis of Financial Condition and Results of Operations' and
'Business,' and includes statements regarding the intent, belief and current
expectations of the Company and Parent and their directors and officers. Such
forward-looking information involves important risks and uncertainties that
could materially alter results in the future from those expressed in any
forward-looking statements made by, or on behalf of, the Company. These risks
and uncertainties include, but are not limited to, the ability of the Company to
maintain existing relationships with long-standing customers, the ability of the
Company to successfully implement productivity improvements, cost reduction
initiatives, facilities expansion and the ability of the Company and Parent to
develop, market and sell new products and to continue to comply with
environmental laws, rules and regulations. Other risks and uncertainties include
uncertainties relating to economic conditions, acquisitions and divestitures,
government and regulatory policies, technological developments and changes in
the competitive environment in which the Company operates. Persons reading this
Prospectus are cautioned that such statements are only predictions and that
actual events or results may differ materially. In evaluating such statements,
readers should specifically consider the various factors which could cause
actual events or results to differ materially from those indicated by such
forward-looking statements, including those discussed in 'Risk Factors.'
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COMPANY HISTORY
The Company was founded in Cincinnati in 1843 and was incorporated in 1867
under the laws of the State of Ohio. The Company evolved into a diversified
manufacturer of industrial products, a small portion of which were products
containing asbestos. The Company's asbestos-related business operations ceased
in 1974. In January 1991, the Eagle-Picher Group filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court.
The filings were precipitated primarily by costs and expenses resulting from
litigation arising out of the Eagle-Picher Group's previous asbestos-related
business operations. In connection with the bankruptcy proceedings and pursuant
to the Plan, which was confirmed by the Bankruptcy Court and the Ohio District
Court in November 1996, all of the outstanding shares of Common Stock were
transferred to the Trust on November 29, 1996. See 'Risk Factors -- Plan of
Reorganization and Related Injunction;' 'Business -- Plan of Reorganization and
Related Injunction.'
THE ACQUISITION
On February 24, 1998, the Company was acquired by Granaria Industries from
the Trust. The Acquisition was effected pursuant to the Merger Agreement, in
accordance with which, among other things, the Issuer was merged into the
Company, with the Company continuing as the surviving corporation.
Granaria Industries, which owns all of the voting stock of Parent, is
controlled by Granaria Holdings B.V., a private Dutch company ('Granaria
Holdings'). See 'Security Ownership and Certain Beneficial Owners and Management
of Parent.' Granaria Holdings is a Netherlands-based food processing and
investment company, which was founded in 1912 by Louis Wyler. Granaria Holdings'
food processing division, which processes and distributes nuts and dried fruits,
portion pack and partly-baked bread from its manufacturing facilities in The
Netherlands, France, Poland and Russia, has annual net sales in excess of $200.0
million. Granaria Holdings' investment portfolio includes real estate
investments in The Netherlands, the United Kingdom and the U.S., and minority
holdings in special situation funds and private companies. The principal owner
of Granaria Holdings is the Wyler family of The Netherlands.
At the Closing the following occurred: (i) the Equity Investment was
contributed to Parent by Granaria Industries and LV Investment; (ii) Parent
received gross proceeds of approximately $80.0 million from the Preferred Stock
Offering; (iii) Parent contributed to the Issuer in the form of common equity
approximately $180.0 million comprising the Equity Investment and all of the
proceeds of the Preferred Stock Offering; (iv) the Issuer borrowed $225.0
million in term loans and $79.1 million in revolving loans under the New Credit
Agreement and completed the Notes Offering; (v) the Company (a) terminated the
PNC Credit Facility (under which there was no outstanding indebtedness at
Closing) and (b) redeemed 660,000 shares of Common Stock from the Trust for the
Redemption Amount; and (vi) the Issuer was merged into the Company. See
'Security Ownership and Certain Beneficial Owners and Management of Parent.' As
a result of these transactions, the Company became a wholly-owned subsidiary of
Parent and assumed all of the obligations and liabilities of the Issuer,
including the Issuer's obligations and liabilities under the Old Notes, the
Indenture, the Registration Rights Agreement and the New Credit Agreement.
Simultaneously with the Effective Time, the Company paid the total outstanding
amount under the 10% Debentures. In connection with the Acquisition, the Trust
waived the prepayment penalty on the 10% Debentures.
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<PAGE>
The following table sets forth the approximate cash sources and uses of funds,
including the application of the proceeds therefrom, at the Effective Time.
<TABLE>
<CAPTION>
SOURCES OF FUNDS(A)
(DOLLARS IN MILLIONS)
<S> <C>
New Credit Agreement:
Revolving Credit Facility(B)................ $ 79.1
Term Loans.................................. 225.0
Senior Subordinated Notes(C).................. 219.6
Equity Contribution(D)........................ 180.0
Cash.......................................... 39.5
------
Total............................... $743.2
------
------
<CAPTION>
USES OF FUNDS(A)
(DOLLARS IN MILLIONS)
<S> <C>
Merger Consideration(E)....................... $417.6
Repayment of Existing Indebtedness(F)......... 255.9
Common Stock Redemption(G).................... 29.0
Estimated Transaction Fees and Expenses(H).... 27.8
Management Compensation(I).................... 12.9
------
Total............................... $743.2
------
------
</TABLE>
- ------------
(A) Sources and uses of funds are based on (i) the borrowings of debt
outstanding under the Company's existing credit facilities on the Closing
Date and (ii) the purchase price paid for the Company in connection with
the Acquisition.
(B) Immediately following the Acquisition, the Company borrowed approximately
$28.6 million under the revolving credit facility under the New Credit
Agreement for use as credit support in the form of letters of credit,
leaving approximately $52.3 million available for additional borrowings
under such facility.
(C) Includes original issue discount of $0.4 million.
(D) Parent funded the Equity Contribution from the Equity Investment and the
Preferred Stock Offering (the fees and expenses of which were paid by the
Company).
(E) Merger Consideration represents the sum of (i) $410.0 million and (ii) an
additional amount equal to 8.0% on an annual basis on $410.0 million from
December 1, 1997 up to and including the Closing Date.
(F) Consists of payment of $250.0 million principal amount due under the
Company's 10% Debentures and $5.9 million of interest accrued on the 10%
Debentures from December 1, 1997 up to and including the Closing Date.
(G) The Company redeemed 660,000 shares of Common Stock immediately prior to
the Effective Time.
(H) Approximately $27.8 million in transaction fees and expenses (including an
amount equal to approximately 1% of the transaction value payable to
Granaria Holdings) was paid on the Closing Date. This amount includes
approximately $2.6 million in fees and expenses of Parent related to the
Preferred Stock Offering.
(I) Following the Acquisition, the Company paid approximately $10.0 million to
the E-P Management Trust and $2.9 million for the related tax obligation.
The E-P Management Trust used the $10.0 million to satisfy a loan from
Granaria Holdings, the proceeds of which were used by the E-P Management
Trust to acquire 16% of the common stock of Granaria Industries. See
'Executive Compensation -- Compensation to Senior Management.'
The Company made additional payments to certain members of senior
management of the Company shortly after the Acquisition in the amount of
approximately $7.6 million, which consists of $2.7 million in stay-put
bonuses and $4.9 million in sales incentive bonuses under the STSP.
USE OF PROCEEDS
There will be no proceeds to the Company from any exchange pursuant to the
Exchange Offers.
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THE NOTES EXCHANGE OFFER
PURPOSE AND EFFECT OF THE NOTES EXCHANGE OFFER
The Old Notes were sold by the Issuer on February 24, 1998 to SBC
Warburg/Dillon Read Inc. and ABN AMRO Incorporated (together, the 'Initial
Purchasers') who resold the Old Notes (i) to 'qualified institutional buyers'
(as defined in Rule 144A under the Securities Act) in reliance upon Rule 144A
under the Securities Act and (ii) outside the United States to persons other
than U.S. persons in reliance upon Regulation S under the Securities Act. In
connection therewith, the Issuer and the Initial Purchasers entered into the
Registration Rights Agreement. Pursuant to the Merger, the Company assumed all
of the Issuer's obligations and liabilities under the Registration Rights
Agreement.
The Registration Rights Agreement requires that, among other things, as
soon as practicable within 45 days following the original issuance of the Old
Notes, the Company file with the Commission a Registration Statement (the 'Notes
Exchange Offer Registration Statement,' of which this Prospectus is a part)
under the Securities Act with respect to an issue of new notes of the Company
identical in all material respects to the Old Notes, use its best efforts to
cause such Notes Exchange Offer Registration Statement to be declared effective
by the Commission under the Securities Act on or prior to 90 days after the
issuance of the Old Notes and, upon the effectiveness of the Notes Exchange
Offer Registration Statement, offer to the Holders of the Old Notes the
opportunity to exchange their Old Notes for a like principal amount of New
Notes, to be issued without a legend restricting their transfer and which may,
subject to certain exceptions described below, be reoffered and resold by the
holder without restrictions or limitations under the Securities Act. A copy of
the Registration Rights Agreement has been filed as an exhibit to the Notes
Exchange Offer Registration Statement. The term 'Holder' with respect to any
Note means any person in whose name such Note is registered on the books of the
Company.
Each Holder desiring to participate in the Notes Exchange Offer will be
required to represent, among other things, that (i) it is not an 'affiliate' (as
defined in Rule 405 of the Securities Act) of the Company or any Guarantor (ii)
it is not engaged in, and does not intend to engage in, and has no arrangement
or understanding with any person to participate in, a distribution of the New
Notes and (iii) it is acquiring the New Notes in the ordinary course of its
business (a Holder unable to make the foregoing representation is referred to as
a 'Restricted Holder'). A Restricted Holder will not be able to participate in
the Notes Exchange Offer and may only sell its Old Notes pursuant to a
registration statement containing the selling security holder information
required by Item 507 of Regulation S-K under the Securities Act, or pursuant to
an exemption from the registration requirement of the Securities Act.
Based on interpretations by the staff of the Commission set forth in
no-action letters issued to third parties, the Company believes that the New
Notes issued pursuant to the Notes Exchange Offer may be offered for resale,
resold and otherwise transferred by any holder of such New Notes (other than
Restricted Holders or Participating Broker-Dealers) without compliance with the
registration and prospectus delivery provisions of the Securities Act. Any
Holder who tenders in the Notes Exchange Offer for the purpose of participating
in a distribution of the New Notes cannot rely on the staff position enunciated
in the no-action letters issued to third parties referred to above and must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction.
Each Participating Broker-Dealer must acknowledge in the Letter of
Transmittal that it will deliver a prospectus in connection with any resale of
such New Notes. The Letter of Transmittal states that by so acknowledging and by
delivering a prospectus, a broker-dealer will not be deemed to admit that it is
an 'underwriter' within the meaning of the Securities Act. Based upon
interpretations by the staff of the Commission, the Company believes that New
Notes issued pursuant to the Notes Exchange Offer to Participating
Broker-Dealers may be offered for resale, resold and otherwise transferred by a
Participating Broker-Dealer upon compliance with the prospectus delivery
requirements, but without compliance with the registration requirements, of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a Participating Broker-dealer in
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connection with resales of New Notes received in exchange for Old Notes where
such Old Notes were acquired as a result of market-making activities or other
trading activities. The Company has agreed that, for a period of 180 days after
the date the Notes Exchange Offer Registration Statement is declared effective
by the Commission, it will make this Prospectus available to any broker-dealer
for use in connection with any such resale. By acceptance of this Notes Exchange
Offer, each broker-dealer that receives New Notes pursuant to the Notes Exchange
Offer agrees to notify the Company prior to using this Prospectus in connection
with the sale or transfer of New Notes. See 'Plan of Distribution.'
As a result of the filing and the effectiveness of the Notes Exchange Offer
Registration Statement and the consummation of the Notes Exchange Offer, the
Company's obligation to make certain semi-annual payments with respect to the
Old Notes will be terminated. The Old Notes were issued to a limited number of
institutional investors on February 24, 1998 and there is no public market for
them at present. To the extent Old Notes are tendered and accepted in the
exchange, the principal amount of outstanding Old Notes will decrease with a
resulting decrease in the liquidity in the market therefor. Following the
consummation of the Notes Exchange Offer, holders of Old Notes will continue to
be subject to certain restrictions on transfer. Accordingly, the liquidity of
the market for the Old Notes could be adversely affected.
The Registration Rights Agreement provides that if (i) the Company is not
required to file the Notes Exchange Offer Registration Statement because the
Notes Exchange Offer is not permitted by applicable law or Commission policy or
(ii) any holder of Transfer Restricted Securities (as defined herein) notifies
the Company within 20 days after the commencement of the Notes Exchange Offer
that (a) it is prohibited by law or Commission policy from participating in the
Notes Exchange Offer or (b) it may not resell the New Notes acquired by it in
the Notes Exchange Offer to the public without delivering a prospectus, and the
Prospectus contained in the Notes Exchange Offer Registration Statement is not
appropriate or available for such resales or (c) it is a broker-dealer and holds
Old Notes acquired directly from the Company or an affiliate of the Company, the
Company will file with the Commission a shelf registration statement (the 'Shelf
Registration Statement') to cover resales of the Notes by the holders thereof
who satisfy certain conditions relating to the provision of information in
connection with the Shelf Registration Statement. For purposes of the foregoing,
'Transfer Restricted Securities' means each Old Note or New Note until (i) the
date on which such Old Note has been exchanged by a person other than a
broker-dealer for a New Note in the Notes Exchange Offer, (ii) following the
exchange by a broker-dealer in the Notes Exchange Offer of an Old Note for a New
Note, the date on which such New Note is sold to a purchaser who receives from
such broker-dealer on or prior to the date of such sale a copy of the prospectus
contained in the Notes Exchange Offer Registration Statement, (iii) the date on
which such Old Note has been effectively registered under the Securities Act and
disposed of in accordance with the Shelf Registration Statement or (iv) the date
on which such Old Note could be resold pursuant to Rule 144 under the Act.
The Registration Rights Agreement provides that if (a) the Company fails to
file within 45 days of the Issue Date, or cause to become effective within 90
days of the Issue Date, the Notes Exchange Offer Registration Statement or (b)
the Company is obligated to file the Shelf Registration Statement and such Shelf
Registration Statement is not filed within 45 days, or declared effective within
90 days, of the date on which the Company became so obligated or (c) the Company
fails to consummate the Notes Exchange Offer within 45 days of the Notes
Exchange Offer Effective Date or (d) the Shelf Registration Statement or the
Notes Exchange Offer Registration Statement is declared effective but thereafter
ceases to be effective or usable in connection with resales of Transfer
Restricted Securities during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (a) through (d) above a
'Registration Default'), interest ('Special Interest') will accrue on the
principal amount of the Old Notes and the New Notes (in addition to the stated
interest on the Old Notes and the New Notes) from and including the date on
which any such Registration Default shall occur to but excluding the date on
which any such Registration Defaults have been cured. Special Interest will
accrue at a rate of 0.25% per annum during the 90-day period immediately
following the occurrence of any Registration Default and shall increase by 0.25%
per annum at the end of each subsequent 90-day period, but in no event shall
such rate exceed 1.5% per annum.
26
<PAGE>
<PAGE>
TERMS OF THE NOTES EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old Notes
validly tendered and not withdrawn prior to 5:00 p.m., New York City time, on
the Expiration Date. As of the date of this Prospectus, an aggregate of $220
million principal amount of the Old Notes is outstanding. The Company will issue
$1,000 principal amount at maturity of New Notes in exchange for each $1,000
principal amount at maturity of outstanding Old Notes accepted in the Notes
Exchange Offer. Holders may tender some or all of their Old Notes pursuant to
the Notes Exchange Offer. However, Old Notes may be tendered only in integral
multiples of $1,000.
The form and terms of the New Notes will be identical in all material
respects to the form and terms of the Old Notes, except that the New Notes have
been registered under the Securities Act and therefore will not bear legends
restricting the transfer thereof. The New Notes will evidence the same debt as
the Old Notes and will be entitled to the benefits of the Indenture under which
the Old Notes were, and the New Notes will be, issued.
The Company has fixed the close of business on , 1998 as the
record date for the Notes Exchange Offer for purposes of determining the persons
to whom this Prospectus, together with the Letter of Transmittal, will initially
be sent.
Holders of the Old Notes do not have any appraisal or dissenters' rights
under law or the Indenture in connection with the Notes Exchange Offer. The
Company intends to conduct the Notes Exchange Offer in accordance with the
applicable requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral (promptly confirmed in writing) or
written notice thereof to the Exchange Agent. The Exchange Agent will act as
agent for the tendering holders for the purpose of receiving the New Notes from
the Company.
If any tendered Old Notes are not accepted for exchange because of an
invalid tender, the occurrence of certain other events set forth herein or
otherwise, certificates for any such unaccepted Old Notes will be returned,
without expense, to the tendering holder thereof as promptly as practicable
after the Expiration Date.
Holders who tender Old Notes in the Notes Exchange Offer will not be
required to pay brokerage commissions or fees or, subject to the instructions in
the Letter of Transmittal, transfer taxes with respect to the exchange of Old
Notes pursuant to the Notes Exchange Offer. The Company will pay all charges and
expenses, other than certain applicable taxes, in connection with the Notes
Exchange Offer. See ' -- Fees and Expenses.'
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term 'Expiration Date' means 5:00 p.m., New York City time, on
, 1998, unless the Company, in its sole discretion, extends the
Notes Exchange Offer, in which case the term 'Expiration Date' shall mean the
latest date and time to which the Notes Exchange Offer is extended.
In order to extend the Notes Exchange Offer, the Company will notify the
Exchange Agent of any extension by oral (promptly confirmed in writing) or
written notice and will make a public announcement thereof, each prior to 9:00
a.m., New York City time, on the next business day after the previously
scheduled expiration date unless otherwise required by applicable law or
regulation.
The Company reserves the right, in its reasonable discretion, (i) to delay
accepting any Old Notes, to extend the Notes Exchange Offer or, if any of the
conditions set forth below under 'Conditions' shall not have been satisfied, to
terminate the Notes Exchange Offer, by giving oral or written notice of such
delay, extension or termination to the Exchange Agent, or (ii) to amend the
terms of the Notes Exchange Offer in any manner. Any such delay in acceptance,
extension, termination or amendment will be followed as promptly as practicable
by a public announcement thereof. If the Notes Exchange Offer is amended in a
manner determined by the Company to constitute a material change, the Company
will promptly disclose such amendment by means of a prospectus supplement that
will be
27
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distributed to the registered holders, and the Company will extend the Notes
Exchange Offer for a period of five to ten business days, depending upon the
significance of the amendment and the manner of disclosure to the registered
holders, if the Notes Exchange Offer would otherwise expire during such five to
ten business day period.
Without limiting the manner in which the Company may choose to make public
announcement of any delay, extension, termination or amendment of the Notes
Exchange Offer, the Company shall have no obligation to publish, advertise or
otherwise communicate any such public announcement, other than by making a
timely release to the Dow Jones News Service.
PROCEDURES FOR TENDERING
Only a Holder of Old Notes may tender such Old Notes in the Notes Exchange
Offer. To tender in the Notes Exchange Offer, a Holder must complete, sign and
date the Letter of Transmittal, or a facsimile thereof, have the signatures
thereon guaranteed if required by the Letter of Transmittal, and mail or
otherwise deliver such Letter of Transmittal or such facsimile, together with
the Old Notes (or a confirmation of an appropriate book-entry transfer into the
Exchange Agent's account at The Depository Trust Company ('DTC' or the
'Depositary') (as described below)) and any other required documents, to the
Exchange Agent prior to 5:00 p.m., New York City time, on the Expiration Date.
To be tendered effectively, the Old Notes (or a timely confirmation of a
book-entry transfer of such Old Notes into the Exchange Agent's account at DTC
as described below), Letter of Transmittal and other required documents must be
received by the Exchange Agent at the address set forth below under 'Exchange
Agent' prior to 5:00 p.m., New York City time, on the Expiration Date.
The tender by a holder will constitute an agreement between such holder and
the Company in accordance with the terms and subject to the conditions set forth
herein and in the Letter of Transmittal.
The Exchange Agent has established an account with respect to the Old Notes
at DTC, and any financial institution which is a participant in DTC may make
book-entry delivery of the Old Notes by causing DTC to transfer such Old Notes
into the Exchange Agent's account in accordance with DTC's procedure for such
transfer. Although delivery of Old Notes may be effected through book-entry
transfer into the Exchange Agent's account at DTC, the Letter of Transmittal,
with any required signature guarantees and any other required documents, must in
any case be transmitted to and received by the Exchange Agent prior to 5:00
p.m., New York City time, on the Expiration Date at one of its addresses set
forth below under 'Exchange Agent', or the guaranteed delivery procedure
described below must be complied with. Delivery of documents to DTC in
accordance with its procedures does not constitute delivery to the Exchange
Agent. All references in this Prospectus to deposit or delivery of Old Notes
shall be deemed to include DTC's book-entry delivery method.
The method of delivery of Old Notes and the Letter of Transmittal and all
other required documents to the Exchange Agent, including delivery through DTC,
is at the election and risk of the holder. Instead of delivery by mail, it is
recommended that Holders use an overnight or hand delivery service. If Old Notes
are sent by mail, registered mail with return receipt requested, properly
insured, is recommended. In all cases, sufficient time should be allowed to
assure delivery to the Exchange Agent before the Expiration Date. No Letter of
Transmittal or Old Notes should be sent to the Company.
Holders may request their respective brokers, dealers, commercial banks,
trust companies or nominees to effect the above transactions for such holders.
Any beneficial owner whose Old Notes are registered in the name of a
broker, dealer, commercial bank, trust company or other nominee and who wishes
to tender should contact the registered holder promptly and instruct such
registered holder to tender on such beneficial owner's behalf. If such
beneficial owner wishes to tender on such owner's own behalf, such owner must,
prior to completing and executing the Letter of Transmittal and delivering such
owner's Old Notes, either make appropriate arrangements to register ownership of
the Old Notes in such owner's name or obtain a properly completed bond power
from the registered holder. The transfer of registered ownership may take
considerable time.
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Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined below)
unless the Old Notes tendered pursuant thereto are tendered (i) by a registered
holder who has not completed the box entitled 'Special Issuance Instructions' or
'Special Delivery Instructions' on the Letter of Transmittal or (ii) for the
account of an Eligible Institution. In the event that signatures on a Letter of
Transmittal or a notice of withdrawal, as the case may be, are required to be
guaranteed, such guarantee must be by a member firm of a registered national
securities exchange or of the National Association of Securities Dealers, Inc.,
a commercial bank or trust company having an office or correspondent in the
United States or an 'eligible guarantor institution' within the meaning of Rule
17Ad-15 under the Exchange Act (an 'Eligible Institution').
If the Letter of Transmittal or any Old Notes or bond powers are signed by
trustees, executors, administrators, guardians, attorneys-in-fact, officers of
corporations or others acting in a fiduciary or representative capacity, such
persons should so indicate when signing, and unless waived by the Company,
proper evidence satisfactory to the Company of their authority to so act must be
submitted with the Letter of Transmittal.
All questions as to the validity, form, eligibility (including time of
receipt), acceptance and withdrawal of tendered Old Notes will be determined by
the Company in its sole discretion, which determination will be final and
binding. The Company reserves the absolute right to reject any and all Old Notes
not properly tendered or any Old Notes the Company's acceptance of which would,
in the opinion of counsel for the Company, be unlawful. The Company also
reserves the right to waive any defects, irregularities or conditions of tender
as to particular Old Notes. The Company's interpretation of the terms and
conditions of the Notes Exchange Offer (including the instructions in the Letter
of Transmittal) will be final and binding on all parties. Unless waived, any
defects or irregularities in connection with tenders of Old Notes must be cured
within such time as the Company shall determine. Although the Company intends to
notify holders of defects or irregularities with respect to tenders of Old
Notes, neither the Company, the Exchange Agent nor any other person shall incur
any liability for failure to give such notification. Tenders of Old Notes will
not be deemed to have been made until such defects or irregularities have been
cured or waived. Any Old Notes received by the Exchange Agent that are not
properly tendered and as to which the defects or irregularities have not been
cured or waived will be returned by the Exchange Agent to the tendering holders
(or, in the case of Old Notes delivered by book-entry transfer within DTC, will
be credited to the account maintained within DTC by the participant in DTC which
delivered such Old Notes), unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
In addition, the Company reserves the right in its sole discretion to
purchase or make offers for any Old Notes that remain outstanding subsequent to
the Expiration Date or, as set forth below under 'Conditions,' to terminate the
Notes Exchange Offer and, to the extent permitted by applicable law, purchase
Old Notes in the open market, in privately negotiated transactions or otherwise.
The terms of any such purchases or offers could differ from the terms of the
Notes Exchange Offer.
By tendering, each Holder will represent to the Company that, among other
things, such Holder is not a Restricted Holder. In addition, each Participating
Broker-Dealer must acknowledge that it will deliver a prospectus in connection
with any resale of New Notes. See 'Plan of Distribution.'
BOOK-ENTRY TRANSFER
The Exchange Agent will establish a new account or utilize an existing
account with respect to the Old Notes at the Depositary promptly after the date
of this Prospectus, and any financial institution that is a participant in the
Depositary and whose name appears on a security position listing as the owner of
Old Notes may make a book-entry tender of Old Notes by causing the Depositary to
transfer such Old Notes into the Exchange Agent's account in accordance with the
Depositary's procedures for such transfer. However, although tender of Old Notes
may be effected through book-entry transfer into the Exchange Agent's account at
the Depositary, the Letter of Transmittal (or a manually-signed facsimile
thereof), properly completed and validly executed, with any required signature
guarantees, or an Agent's Message in lieu of the Letter of Transmittal, and any
other required documents, must, in any case, be received by the Exchange Agent
at its address set forth below under the caption 'Exchange
29
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<PAGE>
Agent' on or prior to the Expiration Date, or the guaranteed delivery procedures
described below must be complied with. The confirmation of book-entry transfer
of Old Notes into the Exchange Agent's account at the Depositary as described
above is referred to herein as a 'Book-Entry Confirmation.' Delivery of
documents to the Depositary in accordance with the Depositary's procedures does
not constitute delivery to the Exchange Agent.
The term 'Agent's Message' means a message transmitted by the Depositary
to, and received by, the Exchange Agent and forming a part of a Book-Entry
Confirmation, which states that the Depositary has received an express
acknowledgment from the participant in the Depositary tendering Old Notes
stating (i) the aggregate principal amount of Old Notes which have been tendered
by such participant, (ii) that such participant has received and agrees to be
bound by the terms of the Letter of Transmittal and (iii) that the Company may
enforce such agreement against the participant.
GUARANTEED DELIVERY PROCEDURES
Holders who wish to tender their Old Notes and (i) whose Old Notes are not
immediately available or (ii) who cannot deliver their Old Notes (or a
confirmation of book-entry transfer of Old Notes into the Exchange Agent's
account at DTC), the Letter of Transmittal or any other required documents to
the Exchange Agent prior to the Expiration Date or (iii) who cannot complete the
procedure for book-entry transfer on a timely basis, may effect a tender if:
(a) the tender is made by or through an Eligible Institution;
(b) prior to the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Notice of
Guaranteed Delivery (by facsimile transmission, mail or hand delivery)
setting forth the name and address of the holder of such Old Notes and the
principal amount of Old Notes tendered, stating that the tender is being
made thereby and guaranteeing that, within three (3) New York Stock
Exchange, Inc. trading days after the Expiration Date, a duly executed
Letter of Transmittal (or facsimile thereof) together with the Old Notes
(or a confirmation of book-entry transfer of such Old Notes into the
Exchange Agent's account at DTC), and any other documents required by the
Letter of Transmittal and the instructions thereto, will be deposited by
such Eligible Institution with the Exchange Agent; and
(c) such properly completed and executed Letter of Transmittal (or
facsimile thereof), and all tendered Old Notes in proper form for transfer
(or a confirmation of book-entry transfer of such Old Notes into the
Exchange Agent's account at DTC) and all other documents required by the
Letter of Transmittal are received by the Exchange Agent within three (3)
New York Stock Exchange, Inc. trading days after the Expiration Date.
Upon request to the Exchange Agent, a Notice of Guaranteed Delivery will be
sent to holders who wish to tender their Old Notes according to the guaranteed
delivery procedures set forth above.
WITHDRAWAL OF TENDERS
Except as otherwise provided herein, tenders of Old Notes may be withdrawn
at any time prior to 5:00 p.m., New York City time, on the Expiration Date.
To withdraw a tender of Old Notes in the Notes Exchange Offer, a written or
facsimile transmission notice of withdrawal must be received by the Exchange
Agent at its address set forth herein prior to 5:00 p.m.. New York City time, on
the Expiration Date. Any such notice of withdrawal must (i) specify the name of
the person having deposited the Old Notes to be withdrawn (the 'Depositor'),
(ii) identify the Old Notes to be withdrawn (including the certificate number or
numbers and principal amount of such Old Notes). (iii) be signed by the holder
in the same manner as the original signature on the Letter of Transmittal by
which such Old Notes were tendered (including any required signature guarantees)
or be accompanied by documents of transfer sufficient to have the Trustee with
respect to the Old Notes register the transfer of such Old Notes into the name
of the person withdrawing the tender and (iv) specify the name in which any such
Old Notes are to be registered, if different from that of the Depositor. If the
Old Notes have been delivered pursuant to the book-entry procedure set forth
above under ' -- Procedures for Tendering,' any notice of withdrawal must
specify the name and number of
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the participant's account at DTC to be credited with the withdrawn Old Notes.
All questions as to the validity, form and eligibility (including time of
receipt) of such notices will be determined by the Company in its sole
discretion, which determination shall be final and binding on all parties. Any
Old Notes so withdrawn will be deemed not to have been validly tendered for
purposes of the Notes Exchange Offer and no New Notes will be issued with
respect thereto unless the Old Notes so withdrawn are validly retendered.
Properly withdrawn Old Notes may be retendered by following one of the
procedures described above under ' -- Procedures for Tendering' at any time
prior to the Expiration Date.
Any Old Notes which are tendered but which are not accepted due to
withdrawal, rejection of tender or termination of the Notes Exchange Offer will
be returned as soon as practicable to the holder thereof without cost to such
holder (or, in the case of Old Notes tendered by book-entry transfer into the
Exchange Agent's account at the Book-Entry Transfer Facility pursuant to the
book-entry transfer procedures described above, such Old Notes will be credited
to an account maintained with such Book-Entry Transfer Facility for the Old
Notes).
CONDITIONS
Notwithstanding any other term of the Notes Exchange Offer, the Company
shall not be required to accept for exchange, or exchange New Notes for, any Old
Notes, and may terminate the Notes Exchange Offer as provided herein before the
acceptance of such Old Notes, if:
(a) any action or proceeding is instituted or threatened in any court
or by or before any governmental agency with respect to the Notes Exchange
Offer which, in the reasonable judgment of the Company, might materially
impair the ability of the Company to proceed with the Notes Exchange Offer
or materially impair the contemplated benefits of the Notes Exchange Offer
to the Company, or any material adverse development has occurred in any
existing action or proceeding with respect to the Company or any of its
subsidiaries, or
(b) any change, or any development involving a prospective change, in
the business or financial affairs of the Company or any of its subsidiaries
has occurred which, in the reasonable judgment of the Company, might
materially impair the ability of the Company to proceed with the Notes
Exchange Offer or materially impair the contemplated benefits of the Notes
Exchange Offer to the Company; or
(c) any law, statute, rule or regulation is proposed, adopted or
enacted, which, in the reasonable judgment of the Company, might materially
impair the ability of the Company to proceed with the Notes Exchange Offer
or materially impair the contemplated benefits of the Notes Exchange Offer
to the Company; or
(d) there shall have occurred (i) any general suspension of trading
in, or general limitation on prices for, securities on the New York Stock
Exchange, (ii) a declaration of a banking moratorium or any suspension of
payments in respect of banks in the United States or any limitation by any
governmental agency or authority that adversely affects the extension of
credit to the Company or (iii) a commencement of war, armed hostilities or
other similar international calamity directly or indirectly involving the
United States; or, in the case any of the foregoing exists at the time of
commencement of the Notes Exchange Offer, a material acceleration or
worsening thereof; or
(e) any governmental approval has not been obtained, which approval
the Company shall in its reasonable judgment, deem necessary, for the
consummation of the Notes Exchange Offer as contemplated hereby.
The foregoing conditions are for the sole benefit of the Company and may be
asserted by the Company regardless of the circumstances giving rise to any such
condition or may be waived by the Company in whole or in part at any time and
from time to time in its reasonable discretion. The failure by the Company at
any time to exercise any of the foregoing rights shall not be deemed a waiver of
such right and each such right shall be deemed an ongoing right which may be
asserted at any time and from time to time.
31
<PAGE>
<PAGE>
If the Company determines in its reasonable judgment that any of the
conditions are not satisfied, the Company may (i) refuse to accept any Old Notes
and return all tendered Old Notes to the tendering Holders (or, in the case of
Old Notes delivered by book-entry transfer within DTC, credit such Old Notes to
the account maintained within DTC by the participant in DTC which delivered such
Notes), (ii) extend the Notes Exchange Offer and retain all Old Notes tendered
prior to the expiration of the Notes Exchange Offer, subject, however, to the
rights of Holders to withdraw such tenders of Old Notes (see 'Withdrawal of
Tenders' above) or (iii) waive such unsatisfied conditions with respect to the
Notes Exchange Offer and accept all properly tendered Old Notes which have not
been withdrawn. If such waiver constitutes a material change to the Notes
Exchange Offer, the Company will promptly disclose such waiver by means of a
prospectus supplement that will be distributed to the registered Holders, and
the Company will extend the Notes Exchange Offer for a period of five to ten
business days, depending upon the significance of the waiver and the manner of
disclosure to the registered Holders, if the Notes Exchange Offer would
otherwise expire during such five to ten business day period.
EXCHANGE AGENT
The Bank of New York has been appointed as Exchange Agent for the Notes
Exchange Offer. Questions and requests for assistance, requests for additional
copies of this Prospectus or of the Letter of Transmittal and requests for
Notices of Guaranteed Delivery should be directed to the Exchange Agent
addressed as follows:
THE BANK OF NEW YORK
<TABLE>
<S> <C> <C>
By Hand or Overnight Delivery: By Facsimile Transmission By Registered or Certified Mail:
101 Barclay Street, (eligible institutions only): 101 Barclay Street, 7E
Corporate Trust Service Window (212) 815-6339 New York, New York 10286
Ground Level Attn: Reorganization Section, 7E;
New York, New York 10286 Santino Ginocchietti
Attn: Reorganization Section, 7E; To Confirm Facsimile
Santino Ginocchietti or for Information Call:
(212) 815-2963
</TABLE>
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitation is being made by mail; however, additional solicitation
may be made by facsimile, telephone or in person by officers and regular
employees of the Company and its affiliates.
The Company has not retained any dealer-manager in connection with the
Notes Exchange Offer and will not make any payments to brokers, dealers or
others soliciting acceptance of the Notes Exchange Offer. The Company, however,
will pay the Exchange Agent reasonable and customary fees for services and will
reimburse it for its reasonable out-of-pocket expenses in connection therewith
and will pay the reasonable fees and expenses of one firm acting as counsel for
the holders of Old Notes should such holders deem it advisable to appoint such
counsel.
The cash expenses to be incurred in connection with the Notes Exchange
Offer will be paid by the Company. Such expenses include fees and expenses of
the Exchange Agent and Trustee, accounting and legal fees and printing costs,
among others.
The Company will pay all transfer taxes, if any, applicable to the exchange
of Old Notes pursuant to the Notes Exchange Offer. If, however, New Notes or Old
Notes for principal amounts not tendered or accepted for exchange are to be
registered, or are to be issued in the name of, or delivered to, any person
other than the registered holder, or if tendered Old Notes are registered in the
name of any person other than the person signing the Letter of Transmittal, or
if a transfer tax is imposed for any reason other than the exchange of Old Notes
pursuant to the Notes Exchange Offer, then the amount of any such transfer taxes
(whether imposed on the registered holder or any other persons) will be payable
by the tendering holder. If satisfactory evidence of payment of such taxes or
exemption therefrom is not
32
<PAGE>
<PAGE>
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
ACCOUNTING TREATMENT
The New Notes will be recorded at the same carrying value as the Old Notes
on the date of the exchange. Accordingly, no gain or loss for accounting
purposes will be recognized by the Company. The expenses of the Notes Exchange
Offer and the unamortized expenses relating to the issuance of the Old Notes
will be amortized over the term of the New Notes.
33
<PAGE>
<PAGE>
CAPITALIZATION
COMPANY
The following table sets forth, as of November 30, 1997, the consolidated
capitalization of (i) the Company and its subsidiaries on a historical basis and
(ii) the Company and its subsidiaries on an unaudited pro forma basis to give
effect to the Acquisition. This table should be read in conjunction with the
Company's Consolidated Financial Statements, including the notes thereto, and
'Management's Discussion and Analysis of Financial Condition and Results of
Operations' included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NOVEMBER 30, 1997
----------------------------------------
PRO FORMA COMPANY
ACTUAL ADJUSTMENTS PRO FORMA
-------- ----------------- ---------
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C>
Long-term Debt, including Current Maturities
10% Debentures................................................... $250,000 $(250,000)(A) $ --
New Credit Agreement:
Term Loan A................................................. -- 100,000(B) 100,000
Term Loan B................................................. -- 50,000(B) 50,000
Term Loan C................................................. -- 75,000(B) 75,000
Revolving Credit Facility................................... -- 79,100(C) 79,100
9 3/8% Senior Subordinated Notes due 2008........................ -- 220,000(D) 220,000
Industrial Revenue Bonds......................................... 18,400 -- 18,400
Debt of Foreign Subsidiaries..................................... 4,997 -- 4,997
-------- ----------------- ---------
Total Long-term Debt, including Current Maturities.......... 273,397 274,100 547,497
-------- ----------------- ---------
Shareholder's Equity
Old Common Stock................................................. 341,807 (341,807)(E) --
New Common Stock................................................. -- 180,005(F) 180,005
Foreign Currency Translation..................................... (1,836) 1,836(G) --
Retained Earnings (Deficit)...................................... (3,854) (5,571)(H) (9,425)
-------- ----------------- ---------
Total Shareholder's Equity (Deficit)........................ 336,117 (165,537) 170,580
-------- ----------------- ---------
Total Capitalization.................................................. $609,514 $ 108,563 $718,077
-------- ----------------- ---------
-------- ----------------- ---------
</TABLE>
- ------------
NOTES TO CAPITALIZATION TABLE OF THE COMPANY
(Dollars in thousands)
(A) Reflects the payment of $250,000 in principal amount of the 10% Debentures
to the Trust.
(B) Reflects senior secured term loans under the New Credit Agreement of
$100,000, $50,000 and $75,000 for Term Loans A, B and C, respectively.
(C) Reflects revolving credit loans under the New Credit Agreement of $160,000
of which $79,100 was drawn at Closing, $28,600 was used for credit support
in the form of letters of credit and $52,300 was undrawn at Closing. See
'Description of New Credit Agreement.'
(D) Reflects senior subordinated notes of $220,000.
(E) Reflects the redemption of the common stock, all of which is owned by the
Trust, in connection with the Acquisition.
(F) Reflects issuance of new common stock to Parent.
(G) Reflects elimination of prior foreign currency translation adjustments.
(H) Reflects the effects on retained earnings of the reversal of the prior
retained deficit of $3,854 and the recognition of management compensation
expense, net of taxes, of $9,425. The components of this expense, on a
pre-tax basis, are: (i) $6,100, which includes $3,200 of the first year
earnings by certain members of senior management of the $10,000 that was
paid to the E-P Management Trust and $2,900 for the related tax obligations
and (ii) $8,400 for amounts under the STSP, of which $800 has not yet been
paid.
34
<PAGE>
<PAGE>
PARENT
The following table sets forth the consolidated capitalization of Parent
and its subsidiaries (including the Company) as of November 30, 1997 assuming
that Parent had been formed at such date and after giving pro forma effect to
the Acquisition. This table should be read in conjunction with the Company's
Consolidated Financial Statements, including the notes thereto, and the
'Management's Discussion and Analysis of Financial Condition and Results of
Operations' included elsewhere in this Prospectus.
<TABLE>
<CAPTION>
NOVEMBER 30, 1997
----------------------
PARENT
PRO FORMA
----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Long-term Debt, including Current Maturities
New Credit Agreement:
Term Loan A...................................................................... $100,000(A)
Term Loan B...................................................................... 50,000(A)
Term Loan C...................................................................... 75,000(A)
Revolving Credit Facility........................................................ 79,100(B)
9 3/8% Senior Subordinated Notes due 2008............................................. 220,000(C)
Industrial Revenue Bonds.............................................................. 18,400
Debt of Foreign Subsidiaries.......................................................... 4,997
-----------
Total Long-term Debt, including Current Maturities............................... 547,497
Cumulative Exchangeable Redeemable Preferred Stock......................................... 80,005(D)
Shareholders' Equity
Common Stock.......................................................................... 100,000
Retained Earnings (Deficit)........................................................... (9,425)
-----------
Total Shareholders' Equity....................................................... 90,575
-----------
Total Capitalization....................................................................... $718,077
-----------
-----------
</TABLE>
- ------------
NOTES TO CAPITALIZATION TABLE OF PARENT
(Dollars in thousands)
(A) Reflects senior secured term loans under the New Credit Agreement of
$100,000, $50,000 and $75,000 for Term Loans A, B and C, respectively.
(B) Reflects revolving credit loans under the New Credit Agreement of $160,000
of which $79,100 was drawn at Closing, $28,600 was used for credit support
in the form of letters of credit and $52,300 was undrawn at Closing. See
'Description of New Credit Agreement.'
(C) Reflects senior subordinated notes of $220,000.
(D) Reflects gross proceeds of approximately $80,005 from the offering of
cumulative redeemable exchangeable preferred stock offered in the Preferred
Stock Offering.
35
<PAGE>
<PAGE>
SUPPLEMENTAL GUARANTOR INFORMATION
The Company's payment obligations under the Senior Subordinated Notes
issued February 24, 1998 are jointly and severally guaranteed by the Company and
certain of its domestic subsidiaries. Each such note guarantee is an unsecured
senior subordinated obligation of the entity providing it, and ranks junior in
right of payment to all existing and future senior indebtedness. Foreign
subsidiaries have not guaranteed the Senior Subordinated Notes. The following
tables provide financial data with respect to such supplemental guarantor
information.
INDEX TO SUPPLEMENTAL GUARANTOR INFORMATION
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Supplemental Condensed Combining Statements of Income (Loss) For the Years Ended November 30, 1997, 1996 and 1995... 37-39
Supplemental Condensed Combined Balance Sheets as of November 30, 1997 and 1996..................................... 40-41
Supplemental Condensed Combining Statements of Cash Flows For the Years Ended November 30, 1997, 1996 and 1995...... 42-44
Supplemental Condensed Combining Statements of Operations For the Three Months Ended February 28, 1998 and 1997
(Unaudited)....................................................................................................... 45-46
Supplemental Condensed Combined Balance Sheets as of February 28, 1998 and 1997 (Unaudited)......................... 47-48
Supplemental Condensed Combining Statements of Cash Flows For the Three Months Ended February 28, 1998 and 1997
(Unaudited)....................................................................................................... 49-50
</TABLE>
36
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF INCOME (LOSS)
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
-------- ---------- ------------ --------- ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Net sales
Customers............................. $255,330 $489,304 $ 82,839 $ 78,604 $ -- $906,077
Intercompany.......................... 12,345 9,512 5,775 29 (27,661) --
Operating costs and expenses
Cost of products sold................. 202,259 407,006 71,144 71,688 (27,087) 725,010
Selling and administrative............ 42,766 22,280 7,756 4,624 (317) 77,109
Intercompany charges.................. (11,015) 9,055 -- 1,960 -- --
Depreciation.......................... 11,523 21,001 3,609 3,538 -- 39,671
Amortization of intangibles........... 3,254 13,030 34 -- -- 16,318
Loss on sale of divisions............. 699 1,712 -- -- -- 2,411
-------- ---------- ------------ --------- ------------ --------
Total............................ 249,486 474,084 82,543 81,810 (27,404) 860,519
Operating income (loss).................... 18,189 24,732 6,071 (3,177) (257) 45,558
Other income (expense)
Interest expense...................... (30,932) (131) (202) -- 4 (31,261)
Other income (expense)................ 1,105 147 (231) 113 (1,385) (251)
-------- ---------- ------------ --------- ------------ --------
Income (loss) before taxes................. (11,638) 24,748 5,638 (3,064) (1,638) 14,046
Income taxes............................... 9,659 8,719 (636) 158 -- 17,900
-------- ---------- ------------ --------- ------------ --------
Net income (loss).......................... $(21,297) $ 16,029 $ 6,274 $ (3,222) $ (1,638) $ (3,854)
-------- ---------- ------------ --------- ------------ --------
-------- ---------- ------------ --------- ------------ --------
</TABLE>
37
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF INCOME (LOSS)
YEAR ENDED NOVEMBER 30, 1996
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
---------- ---------- ------------ --------- ------------ ----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Net sales
Customers........................................ $ 242,537 $432,194 $ 78,440 $ 138,116 $ -- $ 891,287
Intercompany..................................... 11,944 6,990 5,551 80 (24,565) --
Operating costs and expenses
Cost of products sold............................ 196,102 357,062 64,314 122,367 (22,919) 716,926
Selling and administrative....................... 42,262 22,616 8,834 9,166 (1,373) 81,505
Intercompany charges............................. (10,010) 7,281 -- 2,729 -- --
Depreciation..................................... 7,534 14,432 2,603 5,769 -- 30,338
Amortization of intangibles...................... 325 74 -- 13 -- 412
---------- ---------- ------------ --------- ------------ ----------
Total....................................... 236,213 401,465 75,751 140,044 (24,292) 829,181
Operating income (loss)............................... 18,268 37,719 8,240 (1,848) (273) 62,106
Other income (expense)
Interest expense................................. (2,914) -- (157) -- (12) (3,083)
Other income (expense)........................... 574 (206) 939 26 12 1,345
Asbestos litigation and other claims............. 497,953 -- -- -- -- 497,953
---------- ---------- ------------ --------- ------------ ----------
Income (loss) before reorganization items, taxes,
extraordinary item and cumulative effect of
accounting change................................... 513,881 37,513 9,022 (1,822) (273) 558,321
Reorganization items.................................. 116,335 -- -- -- -- 116,335
Income taxes.......................................... (46,090) (1,999) (4,326) (155) -- (52,570)
---------- ---------- ------------ --------- ------------ ----------
Income (loss) before extraordinary item and cumulative
effect of accounting change......................... 584,126 35,514 4,696 (1,977) (273) 622,086
Extraordinary item -- gain on discharge
of pre-petition liabilities......................... 1,525,540 -- -- -- -- 1,525,540
Cumulative effect of change in accounting for
inventories......................................... (1,235) -- -- -- -- (1,235)
---------- ---------- ------------ --------- ------------ ----------
Net income (loss)..................................... $2,108,431 $ 35,514 $ 4,696 $ (1,977) $ (273) $2,146,391
---------- ---------- ------------ --------- ------------ ----------
---------- ---------- ------------ --------- ------------ ----------
</TABLE>
38
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF INCOME (LOSS)
YEAR ENDED NOVEMBER 30, 1995
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTOR SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
----------- --------- ------------ --------- ------------ -----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Net sales
Customers........................... $ 246,377 $ 381,297 $ 75,141 $ 145,733 $ -- $ 848,548
Intercompany........................ 11,028 6,394 3,143 51 (20,616) --
Operating costs and expenses
Cost of products sold............... 198,632 314,195 62,020 126,450 (19,924) 681,373
Selling and administrative.......... 40,812 20,027 6,657 8,531 (647) 75,380
Intercompany charges................ (9,846) 6,140 -- 3,706 -- --
Depreciation........................ 6,716 13,436 2,391 5,753 -- 28,296
Amortization of intangibles......... 325 74 -- 13 -- 412
----------- --------- ------------ --------- ------------ -----------
Total.......................... 236,639 353,872 71,068 144,453 (20,571) 785,461
Operating income (loss).................. 20,766 33,819 7,216 1,331 (45) 63,087
Other income (expense)
Interest expense.................... (1,770) -- (189) -- 33 (1,926)
Other income (expense).............. 11,379 377 210 (137) (125) 11,704
Adjustment for asbestos
litigation........................ (1,005,511) -- -- -- -- (1,005,511)
----------- --------- ------------ --------- ------------ -----------
Income (loss) before taxes and
reorganization items................... (975,136) 34,196 7,237 1,194 (137) (932,646)
Reorganization items..................... (2,225) -- -- -- -- (2,225)
Income taxes............................. (3,824) (2,011) (3,377) (88) -- (9,300)
----------- --------- ------------ --------- ------------ -----------
Net income (loss)........................ $ (981,185) $ 32,185 $ 3,860 $ 1,106 $ (137) $ (944,171)
----------- --------- ------------ --------- ------------ -----------
----------- --------- ------------ --------- ------------ -----------
</TABLE>
39
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINED BALANCE SHEET
NOVEMBER 30, 1997
<TABLE>
<CAPTION>
FOREIGN
ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
-------- ---------- ------------ ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents........................ $ 48,834 $ 561 $ 4,344 $ -- $ 53,739
Receivables...................................... 36,541 72,992 21,394 -- 130,927
Intercompany accounts receivable................. 2,982 3,295 -- (6,277) --
Income tax refunds receivable.................... 3,025 -- -- -- 3,025
Inventories...................................... 32,309 48,830 12,432 (1,375) 92,196
Prepaid expenses................................. 5,618 2,401 271 -- 8,290
Deferred income taxes............................ 13,793 -- -- -- 13,793
-------- ---------- ------------ ------------ --------
Total current assets........................ 143,102 128,079 38,441 (7,652) 301,970
Property, plant and equipment.................... 72,630 135,560 35,348 -- 243,538
Investment in subsidiaries....................... 59,981 5,186 -- (65,167) --
Deferred income taxes............................ 98,991 -- -- -- 98,991
Reorganization value in excess of amounts
allocable to indentifiable assets.............. 9,746 39,091 -- -- 48,837
Other assets..................................... 36,395 16,462 688 -- 53,545
-------- ---------- ------------ ------------ --------
Total assets................................ $420,845 $324,378 $ 74,477 $(72,819) $746,881
-------- ---------- ------------ ------------ --------
-------- ---------- ------------ ------------ --------
LIABILITIES AND
SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable............................ $ 16,974 $ 28,257 $ 7,655 $ -- $ 52,886
Intercompany accounts payable............... -- -- 6,247 (6,247) --
Accrued liabilities......................... 29,404 22,440 3,713 (138) 55,419
Income taxes................................ 2,284 -- 10 -- 2,294
Long-term debt -- current portion........... 80 -- 3,323 -- 3,403
-------- ---------- ------------ ------------ --------
Current liabilities.................... 48,742 50,697 20,948 (6,385) 114,002
Long-term debt -- less current portion........... 268,320 -- 1,674 -- 269,994
Other liabilities................................ 26,768 -- -- -- 26,768
-------- ---------- ------------ ------------ --------
Total liabilities...................... 343,830 50,697 22,622 (6,385) 410,764
Intercompany accounts............................ (240,324) 210,930 16,895 12,499 --
Shareholder's Equity............................. 317,339 62,751 34,960 (78,933) 336,117
-------- ---------- ------------ ------------ --------
Total liabilities and shareholder's
equity............................... $420,845 $324,378 $ 74,477 $(72,819) $746,881
-------- ---------- ------------ ------------ --------
-------- ---------- ------------ ------------ --------
</TABLE>
40
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINED BALANCE SHEET
NOVEMBER 30, 1996
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
--------- ---------- ------------ --------- ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents.................... $ 26,089 $ 553 $ 5,985 $ 98 $ -- $ 32,725
Receivables.................................. 34,258 64,400 17,436 16,781 -- 132,875
Intercompany accounts receivable............. 2,721 2,915 -- -- (5,636) --
Income tax refunds receivable................ 73,720 -- -- -- -- 73,720
Inventories.................................. 28,139 49,874 10,408 14,480 -- 102,901
Prepaid expenses............................. 3,067 3,449 505 1,143 -- 8,164
Deferred income taxes........................ 26,351 -- -- -- -- 26,351
--------- ---------- ------------ --------- ------------ --------
Total current assets.................... 194,345 121,191 34,334 32,502 (5,636) 376,736
Property, plant and equipment................ 75,865 125,586 28,879 26,021 -- 256,351
Investment in subsidiaries................... 58,743 24,960 -- -- (83,703) --
Deferred income taxes........................ 102,133 -- -- -- -- 102,133
Reorganization value in excess of amounts
allocable to identifiable assets........... 13,000 52,121 -- -- -- 65,121
Other assets................................. 25,561 14,045 630 8,303 -- 48,539
--------- ---------- ------------ --------- ------------ --------
Total assets............................ $ 469,647 $337,903 $ 63,843 $ 66,826 $(89,339) $848,880
--------- ---------- ------------ --------- ------------ --------
--------- ---------- ------------ --------- ------------ --------
LIABLITIES AND
SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable........................ $ 14,844 $ 16,210 $ 4,959 $ 5,022 $ -- $ 41,035
Intercompany accounts payable........... -- -- 5,608 -- (5,608) --
Accrued liabilities..................... 25,522 15,199 5,897 3,248 -- 49,866
Income taxes............................ 3,038 -- 611 -- -- 3,649
Long-term debt -- current portion....... 70,378 -- -- -- -- 70,378
--------- ---------- ------------ --------- ------------ --------
Current liabilities................ 113,782 31,409 17,075 8,270 (5,608) 164,928
Long-term debt -- less current portion....... 316,061 -- -- -- -- 316,061
Other liabilities............................ 25,495 -- 589 -- -- 26,084
--------- ---------- ------------ --------- ------------ --------
Total liabilities.................. 455,338 31,409 17,664 8,270 (5,608) 507,073
Intercompany accounts........................ (327,498) 259,714 15,830 38,469 13,485 --
Shareholder's Equity......................... 341,807 46,780 30,349 20,087 (97,216) 341,807
--------- ---------- ------------ --------- ------------ --------
Total Liabilities and Shareholder's
Equity........................... $ 469,647 $337,903 $ 63,843 $ 66,826 $(89,339) $848,880
--------- ---------- ------------ --------- ------------ --------
--------- ---------- ------------ --------- ------------ --------
</TABLE>
41
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS
YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
--------- ---------- ------------ --------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Cash Flows From Operating Activities:
Net Income (loss)...................... $ (21,297) $ 16,029 $ 6,274 $(3,222) $ (1,638) $ (3,854)
Adjustments to reconcile net income loss to
cash provided by (used in) operating
activities:
Depreciation and amortization.......... 14,777 34,031 3,643 3,538 -- 55,989
Loss on sale of divisions.............. 699 1,712 -- -- -- 2,411
Change in assets and liabilities:
Income tax refunds receivable.......... 70,695 -- -- -- -- 70,695
Deferred income taxes.................. 15,700 -- -- -- -- 15,700
Working capital and other items........ (1,684) 9,991 (5,655) 3,051 1,239 6,942
--------- ---------- ------------ --------- ------------ ---------
Net cash provided by (used in)
operating activities............ 78,890 61,763 4,262 3,367 (399) 147,883
Cash Flows From Investing Activities:
Proceeds from sale of divisions........ 30,735 8,272 -- -- -- 39,007
Capital expenditures................... (8,454) (31,396) (10,694) (780) -- (51,324)
Other.................................. (1,670) 50 (1,271) (4) 1,385 (1,510)
--------- ---------- ------------ --------- ------------ ---------
Net cash provided by (used in)
investing activities............ 20,611 (23,074) (11,965) (784) 1,385 (13,827)
Cash Flows From Financing Activities:
Issuance of long-term debt............. 8,000 -- 4,997 -- -- 12,997
Reduction of long-term debt............ (126,039) -- -- -- -- (126,039)
--------- ---------- ------------ --------- ------------ ---------
Net cash provided by (used in)
financing activities............ (118,039) -- 4,997 -- -- (113,042)
--------- ---------- ------------ --------- ------------ ---------
Increase (decrease) in cash and cash
equivalents............................... (18,538) 38,689 (2,706) 2,583 986 21,014
Intercompany accounts....................... 41,283 (38,681) 1,065 (2,681) (986) --
Cash and cash equivalents, beginning of
year...................................... 26,089 553 5,985 98 -- 32,725
--------- ---------- ------------ --------- ------------ ---------
Cash and cash equivalents,
end of year............................... $ 48,834 $ 561 $ 4,344 $ -- $ -- $ 53,739
--------- ---------- ------------ --------- ------------ ---------
--------- ---------- ------------ --------- ------------ ---------
</TABLE>
42
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS
YEAR ENDED NOVEMBER 30, 1996
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
---------- ---------- ------------ --------- ------------ -----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)....................... $2,108,431 $ 35,514 $ 4,696 $ (1,977) $ (273) $ 2,146,391
Adjustments to reconcile net income (loss) to
cash provided by (used in) operating
activities:
Non-cash adjustments relating to non-
operating income items..................... (2,140,942) -- -- -- -- (2,140,942)
Depreciation and amortization................ 7,859 14,506 2,603 5,782 -- 30,750
Change in assets and liabilities:
Deferred income taxes................... 29,170 -- -- -- -- 29,170
Working capital and other items......... 17,044 (15,532) 636 6,505 (1,161) 7,492
---------- ---------- ------------ --------- ------------ -----------
Net cash provided by (used in)
operating acitivities............ 21,562 34,488 7,935 10,310 (1,434) 72,861
Cash flows from investing activities:
Proceeds from sale of divisions......... 4,248 -- -- -- -- 4,248
Capital expenditures.................... (9,417) (25,074) (5,602) (4,864) -- (44,957)
Other................................... (661) (1,246) 108 44 694 (1,061)
---------- ---------- ------------ --------- ------------ -----------
Net cash provided by (used in)
investing activities............. (5,830) (26,320) (5,494) (4,820) 694 (41,770)
Cash flows from financing activities......... -- --
Reduction of long-term debt............. (1,520) -- (1,678) -- -- (3,198)
Cash payments on effective date of plan of
reorganization............................. (88,498) -- -- -- -- (88,498)
---------- ---------- ------------ --------- ------------ -----------
Increase (decrease) in cash and cash
equivalents................................ (74,286) 8,168 763 5,490 (740) (60,605)
Intercompany accounts........................ 13,409 (8,676) 196 (5,669) 740 --
Cash and cash equivalents, beginning of
year....................................... 86,966 1,061 5,026 277 -- 93,330
---------- ---------- ------------ --------- ------------ -----------
Cash and cash equivalents,
end of year................................ $ 26,089 $ 553 $ 5,985 $ 98 $ -- $ 32,725
---------- ---------- ------------ --------- ------------ -----------
---------- ---------- ------------ --------- ------------ -----------
</TABLE>
43
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPLEMENTAL COMBINING STATEMENT OF CASH FLOWS
YEAR ENDED NOVEMBER 30, 1995
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
--------- ---------- ------------ --------- ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).......................... $(981,185) $ 32,185 $ 3,860 $ 1,106 $ (137) $(944,171)
Adjustments to reconcile net income (loss) to
cash provided by (used in) operating
activities:
Non-cash adjustments relating to
non-operating income items............... 994,006 -- -- -- -- 994,006
Depreciation and amortization.............. 7,041 13,510 2,391 5,766 -- 28,708
Change in assets and liabilities:
Deferred income taxes...................... (18,900) -- -- -- -- (18,900)
Working capital and other items............ (9,738) (9,137) (4,302) (6,095) 85 (29,187)
--------- ---------- ------------ --------- ------ ---------
Net cash provided by (used in)
operating activities................ (8,776) 36,558 1,949 777 (52) 30,456
Cash flows from investing activities:
Proceeds from sale of investment........... 11,505 -- -- -- -- 11,505
Capital expenditures....................... (17,582) (11,051) (5,620) (6,305) -- (40,558)
Other...................................... (1,337) (1,518) 2,414 (176) 957 340
--------- ---------- ------------ --------- ------ ---------
Net cash provided by (used in)
investing activities................ (7,414) (12,569) (3,206) (6,481) 957 (28,713)
Cash flows from financing activities:
Issuance of long-term debt................. -- -- 1,240 -- -- 1,240
Reduction of long-term debt................ (1,597) (42) (620) -- -- (2,259)
--------- ---------- ------------ --------- ------ ---------
Net cash provided by (used in)
investing activities................ (1,597) (42) 620 -- -- (1,019)
--------- ---------- ------------ --------- ------ ---------
Increase (decrease) in cash and cash
equivalents................................... (17,787) 23,947 (637) (5,704) 905 724
Intercompany accounts........................... 17,462 (23,300) 1,006 5,737 (905) --
Cash and cash equivalents, beginning of year.... 87,291 414 4,657 244 -- 92,606
--------- ---------- ------------ --------- ------ ---------
Cash and cash equivalents, end of year.......... $ 86,966 $ 1,061 $ 5,026 $ 277 $-- $ 93,330
--------- ---------- ------------ --------- ------ ---------
--------- ---------- ------------ --------- ------ ---------
</TABLE>
44
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1998
<TABLE>
<CAPTION>
FOREIGN
ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
------- ---------- ------------ ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Net sales
Customers.................................... $61,071 $123,181 $ 21,590 $ -- $205,842
Intercompany................................. 3,381 2,421 1,451 (7,253) --
Operating costs and expenses
Cost of products sold........................ 48,329 102,771 18,772 (7,076) 162,796
Selling and administrative................... 9,673 5,167 2,301 -- 17,141
Management compensation expense.............. 2,056 -- -- -- 2,056
Intercompany charges......................... (2,172) 2,172 -- -- --
Depreciation................................. 2,823 5,220 940 -- 8,983
Amortization of intangibles.................. 765 3,064 10 -- 3,839
------- ---------- ------------ ------------ --------
Total................................... 61,474 118,394 22,023 (7,076) 194,015
Operating income (loss)........................... 2,278 7,208 1,018 (177) 11,027
Other income (expense)
Interest expense............................. (6,844) -- (96) -- (6,940)
Other income (expense)....................... 812 333 (325) -- 820
------- ---------- ------------ ------------ --------
Income before taxes............................... (13,054) 7,541 597 (177) 4,907
Income taxes...................................... 1,083 2,486 531 -- 4,100
------- ---------- ------------ ------------ --------
Net income (loss)................................. $(4,137) $ 5,055 $ 66 $ (177) $ 807
------- ---------- ------------ ------------ --------
------- ---------- ------------ ------------ --------
</TABLE>
45
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1997
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
------- ---------- ------------ --------- ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Net sales
Customers......................... $60,310 $114,398 $ 19,645 $ 29,254 $ -- $223,607
Intercompany...................... 3,465 2,599 1,141 37 (7,242) --
Operating costs and expenses
Cost of products sold............. 47,577 95,817 16,853 27,299 (7,145) 180,401
Selling and administrative........ 11,222 4,843 2,021 1,638 -- 19,724
Intercompany charges.............. (3,518) 2,512 -- 1,006 -- --
Depreciation...................... 2,866 5,160 908 1,432 -- 10,366
Amortization of intangibles....... 813 3,258 5 -- -- 4,076
------- ---------- ------------ --------- ------------ --------
Total........................ 58,960 111,590 19,787 31,375 (7,145) 214,567
Operating income....................... 4,815 5,407 999 (2,084) (97) 9,040
Other income (expense)
Interest expense.................. (8,899) -- (28) -- -- (8,927)
Other income (expense)............ 1,416 212 75 -- -- 1,703
------- ---------- ------------ --------- ------------ --------
Income before taxes.................... (2,668) 5,619 1,046 (2,084) (97) 1,816
Income taxes........................... 113 2,040 814 69 -- 3,036
------- ---------- ------------ --------- ------------ --------
Net income (loss)...................... $(2,781) $ 3,579 $ 232 $ (2,153) $ (97) $ (1,220)
------- ---------- ------------ --------- ------------ --------
------- ---------- ------------ --------- ------------ --------
</TABLE>
46
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINED BALANCE SHEET (UNAUDITED)
AS OF FEBRUARY 28, 1998
<TABLE>
<CAPTION>
FOREIGN
ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- ---------- ------------ ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents......................... $ 12,115 $ 1,145 $ 5,513 $ 194 $ 18,967
Receivables....................................... 38,724 78,745 18,163 -- 135,632
Intercompany accounts receivable.................. 3,081 4,012 -- (7,093) --
Income tax refunds receivable..................... 2,001 -- -- -- 2,001
Inventories....................................... 37,775 44,818 13,830 (1,375) 95,048
Prepaid expenses.................................. 5,527 3,490 482 -- 9,499
Deferred income taxes............................. 19,585 -- -- -- 19,535
--------- ---------- ------------ ------------ --------
Total current assets......................... 118,758 132,210 37,988 (8,274) 280,682
Property, plant and equipment..................... 72,085 132,112 35,140 -- 239,337
Investment in subsidiaries........................ 60,908 5,185 -- (66,093) --
Excess of acquired net assets over cost........... 52,059 203,436 -- -- 255,495
Other assets...................................... 73,185 18,187 253 -- 91,625
--------- ---------- ------------ ------------ --------
Total assets................................. $ 376,995 $491,130 $ 73,381 $(74,367) $867,139
--------- ---------- ------------ ------------ --------
--------- ---------- ------------ ------------ --------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Accounts payable.................................. $ 16,686 $ 25,241 $ 8,972 $ -- $ 50,899
Intercompany accounts payable..................... 176 110 6,340 (6,626) --
Accrued liabilities............................... 27,614 19,782 2,535 -- 49,931
Income taxes...................................... 6,658 -- 88 -- 6,746
Long-term debt -- current portion................. 7,780 -- 2,876 -- 10,656
--------- ---------- ------------ ------------ --------
Current liabilities.......................... 58,914 45,133 20,811 (6,626) 118,232
Long-term debt -- less current portion............ 534,720 -- 1,620 -- 536,340
Deferred income taxes............................. 7,634 -- -- -- 7,634
Other liabilities................................. 24,928 -- -- -- 24,928
--------- ---------- ------------ ------------ --------
Total liabilities............................ 626,196 45,133 22,431 (6,626) 687,134
Intercompany accounts............................. (429,206) 399,218 21,074 8,914 --
SHAREHOLDERS' EQUITY 180,005 46,779 29,876 (76,655) 180,005
--------- ---------- ------------ ------------ --------
Total liabilities and shareholders' equity... $ 376,995 $491,130 $ 73,381 $(74,367) $867,139
--------- ---------- ------------ ------------ --------
--------- ---------- ------------ ------------ --------
</TABLE>
47
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINED BALANCE SHEET (UNAUDITED)
AS OF FEBRUARY 28, 1997
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
--------- ---------- ------------ --------- ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Cash and cash equivalents.............. $ 14,133 $ 443 $ 4,688 $ 112 $ -- $ 19,376
Receivables............................ 37,995 71,568 17,827 17,415 -- 144,805
Intercompany accounts receivable....... 3,538 3,313 -- -- (6,851) --
Income tax refunds receivable.......... 56,814 -- -- -- -- 56,814
Inventories............................ 28,330 52,557 10,551 14,682 -- 106,120
Prepaid expenses....................... 4,476 3,860 332 1,061 -- 9,729
Deferred income taxes.................. 20,575 -- -- -- -- 20,575
--------- ---------- ------------ --------- ------------ --------
Total current assets.............. 165,861 131,741 33,398 33,270 (6,851) 357,419
Property, plant and equipment.......... 74,790 129,929 31,136 24,995 -- 260,850
Investment in subsidiaries............. 58,656 5,132 -- -- (63,788) --
Deferred income taxes.................. 106,078 -- -- -- -- 106,078
Reorganization value in excess of
amounts allocable to identifiable
assets............................... 12,187 48,863 -- -- -- 61,050
Other assets........................... 23,711 14,000 1,154 7,681 -- 46,546
--------- ---------- ------------ --------- ------------ --------
Total assets...................... $ 441,283 $329,665 $ 65,688 $ 65,946 $(70,639) $831,943
--------- ---------- ------------ --------- ------------ --------
--------- ---------- ------------ --------- ------------ --------
LIABILITIES AND
SHAREHOLDERS' EQUITY
Accounts payable....................... $ 15,927 $ 13,360 $ 4,231 $ 5,600 -- $ 39,118
Intercompany accounts payable.......... -- -- 6,597 -- (6,597) --
Accrued liabilities.................... 30,322 12,479 4,889 3,052 -- 50,742
Income taxes........................... 3,244 -- 1,932 -- -- 5,176
Current portion -- long-term debt...... 54,010 -- -- -- -- 54,010
--------- ---------- ------------ --------- ------------ --------
Current liabilities............... 103,503 25,839 17,649 8,652 (6,597) 149,046
Long-term debt -- less current
portion.............................. 315,726 -- 2,434 -- -- 318,160
Other liabilities...................... 25,515 -- 580 -- -- 26,095
--------- ---------- ------------ --------- ------------ --------
Total liabilities................. 444,744 25,839 20,663 8,652 (6,597) 493,301
Intercompany accounts.................. (342,500) 273,584 15,790 39,360 13,766 --
SHAREHOLDER'S EQUITY 339,039 30,242 29,235 17,934 (77,808) 338,642
--------- ---------- ------------ --------- ------------ --------
Total liabilities and
shareholder's equity............ $ 441,283 $329,665 $ 65,688 $ 65,946 $(70,639) $831,943
--------- ---------- ------------ --------- ------------ --------
--------- ---------- ------------ --------- ------------ --------
</TABLE>
48
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL CONDENSED COMBINING STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1998
<TABLE>
<CAPTION>
NON-
GUARANTOR
FOREIGN
ISSUER GUARANTORS SUBSIDIARIES ELIMINATIONS TOTAL
--------- ---------- ------------ ------------ ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)......................... $ (4,137) $ 5,055 $ 66 $ (177) $ 807
Adjustments to reconcile net income (loss) to
cash provided by (used in) operating
activities:
Depreciation and amortization............. 3,588 8,284 950 -- 12,822
Changes in assets and liabilities......... (16,059) (9,247) 2,018 575 (22,713)
--------- ---------- ------------ ------------ ---------
Net cash provided by (used in)
operating activities............... (16,608) 4,092 3,034 398 (9,084)
Cash flows from investing activities:
Capital expenditures...................... (2,300) (1,833) (1,559) -- (5,692)
Other..................................... (956) 65 (846) 695 (1,042)
--------- ---------- ------------ ------------ ---------
Net cash provided by (used in)
investing activities............... (3,256) (1,768) (2,405) 695 (6,734)
Cash flows from financing activities:
Issuance of long-term debt................ 524,100 -- -- -- 524,100
Reduction of long-term debt............... (250,000) -- -- -- (250,000)
Redemption of common stock................ (446,638) -- -- -- (446,638)
Issuance of common stock.................. 180,005 -- -- -- 180,005
Debt issue cost........................... (26,062) -- -- -- (26,062)
Other..................................... -- -- (359) -- (359)
--------- ---------- ------------ ------------ ---------
Net cash provided by (used in)
financing activities............... (18,595) -- (359) -- (18,954)
--------- ---------- ------------ ------------ ---------
Increase (decrease) in cash and cash
equivalents.................................. (38,459) 2,324 270 1,093 (34,772)
Intercompany accounts.......................... 1,740 (1,740) 899 (899) --
Cash and cash equivalents, beginning of
period....................................... 48,834 561 4,344 -- 53,739
--------- ---------- ------------ ------------ ---------
Cash and cash equivalents, end of period....... $ 12,115 $ 1,145 $ 5,513 $ 194 $ 18,967
--------- ---------- ------------ ------------ ---------
--------- ---------- ------------ ------------ ---------
</TABLE>
49
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SUPPLEMENTAL COMBINING STATEMENT OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1997
<TABLE>
<CAPTION>
FOREIGN DIVESTED
ISSUER GUARANTORS SUBSIDIARIES DIVISIONS ELIMINATIONS TOTAL
-------- ---------- ------------ ---------- ------------ --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss)....................... $ (2,781) $ 3,579 $ 232 $ (2,153) $ (97) $ (1,220)
Adjustments to reconcile net income (loss) to
cash provided by (used in) operating
activities:
Depreciation and amortization........... 3,679 8,418 913 1,432 -- 14,442
Changes in assets and liabilities:
Income tax refunds...................... 16,906 -- -- -- -- 16,906
Working capital and other............... 3,637 (16,185) (142) 250 226 (12,214)
-------- ---------- ------------ ---------- ------ --------
Net cash provided by (used in)
operating activities............. 21,441 (4,188) 1,003 (471) 129 17,914
Cash flows from investing activities:
Capital expenditures.................... (1,790) (9,630) (4,036) (401) -- (15,857)
Other................................... 98 (162) (704) (5) (410) (1,183)
-------- ---------- ------------ ---------- ------ --------
Net cash provided by (used in)
investing activities............. (1,692) (9,792) (4,740) (406) (410) (17,040)
Cash flows from financing activities:
Reduction of long-term debt............. (16,703) -- -- -- -- (16,703)
Other................................... -- -- 2,480 -- -- 2,480
-------- ---------- ------------ ---------- ------ --------
Net cash provided by (used in)
financing activities............. (16,703) -- 2,480 -- -- (14,223)
-------- ---------- ------------ ---------- ------ --------
Increase (decrease) in cash and cash
equivalents................................ 3,046 (13,980) (1,257) (877) (281) (13,349)
Intercompany accounts........................ (15,002) 13,870 (40) 891 281 --
Cash and cash equivalents, beginning of
period..................................... 26,089 553 5,985 98 -- 32,725
-------- ---------- ------------ ---------- ------ --------
Cash and cash equivalents,
end of period.............................. $ 14,133 $ 443 $ 4,688 $ 112 $-- $ 19,376
-------- ---------- ------------ ---------- ------ --------
-------- ---------- ------------ ---------- ------ --------
</TABLE>
50
<PAGE>
<PAGE>
SELECTED HISTORICAL CONDENSED CONSOLIDATED FINANCIAL INFORMATION
The following table sets forth the historical condensed consolidated
financial data of the Company for the periods indicated. The historical selected
financial information is derived from the historical Consolidated Financial
Statements of Eagle-Picher. Effective November 29, 1996, the Company emerged
from bankruptcy and, accordingly, it adopted fresh-start reporting in accordance
with Statement of Position 90-7, 'Financial Reporting by Entities in
Reorganization Under the Bankruptcy Code.' As a result, the condensed
consolidated financial information for the periods subsequent to the adoption of
fresh-start reporting are presented on a different cost basis than that for
prior periods and, therefore, are not comparable. Accordingly, a vertical black
line is shown to separate post-emergence operations.
The unaudited condensed consolidated financial information presented for
the three months ended February 28, 1997 and 1998 and as of February 28, 1998
are derived from the unaudited consolidated financial statements of the Company
and include, in the opinion of management, all adjustments (consisting of normal
recurring adjustments) necessary for a fair presentation of the financial
information for such periods. As a result of the Acquisition of the Company by
Granaria Industries from the Trust as of February 24, 1998, which was accounted
for as a purchase, the Company's results of operations and financial position
for periods after February 24, 1998 are not comparable to prior periods. See
Note (K) below.
The following selected historical consolidated financial information should
be read in conjunction with 'Management's Discussion and Analysis of Financial
Condition and Results of Operations,' the Pro Forma Consolidated Financial Data
and the Consolidated Financial Statements, related notes and other financial
information included herein.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NOVEMBER 30,
-------------------------------------------------------------------------
(DOLLARS IN THOUSANDS) 1993 1994 1995 1996 1997
----------- ----------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C>
STATEMENT OF INCOME (LOSS):
Net sales(A)............. $ 661,452 $ 756,741 $ 848,548 $ 891,287 $906,077
Operating income......... 43,754 58,281 63,087 62,106 45,558(B)
Adjustment for asbestos
litigation............. (1,135,500) -- (1,005,511) 502,197 --
Fresh-start
revaluation............ -- -- -- 118,684(C) --
Reorganization items and
claims(D).............. (45,780) (3,426) (2,225) (6,593) --
Interest expense......... (2,070) (1,809) (1,926) (3,083) (31,261)
Other income (expense)... (174) 703 11,704(E) 1,345 (251)
Income (loss) before
taxes, extraordinary
items and accounting
changes................ (1,139,770) 53,749 (934,871) 674,656 14,046
Income (loss) before
extraordinary items and
accounting changes..... (1,144,770) 48,749 (944,171) 622,086 (3,854)
Extraordinary items and
accounting changes..... (12,598)(F) -- -- 1,524,305(F) --
Net income (loss)........ (1,157,368) 48,749 (944,171) 2,146,391 (3,854)
BALANCE SHEET DATA (END OF
PERIOD):
Working capital.......... $ 187,224 $ 210,298 $ 243,495 $ 211,808 $187,968
Property, plant and
equipment, net......... 134,401 144,649 155,818 256,351 243,538
Total assets............. 459,360 521,107 580,073 848,880 746,881
Total debt............... 24,449 21,622 20,628 386,439 273,397
Shareholders' equity
(deficit).............. (1,317,206) (1,266,693) (2,211,308) 341,807 336,117
SELECTED FINANCIAL DATA:
EBITDA(H)................ $ 68,709 $ 84,424 $ 91,795 $ 92,856 $103,958
Depreciation and
amortization........... 24,955 26,143 28,708 30,750 55,989
Capital expenditures..... 28,512 35,887 40,558 44,957 51,324(G)
SELECTED RATIOS:
EBITDA/interest expense.. 33.19x 46.67x 47.66x 30.12x 3.33x
Total debt/EBITDA........ 0.36 0.26 0.22 4.16 2.63
Total
debt/capitalization.... N/M N/M N/M 53.1% 44.9%
Earnings/fixed
charges(I)............. --(J) 24.28x --(J) 173.50x 1.43x
<CAPTION>
UNAUDITED
THREE MONTHS ENDED
FEBRUARY 28,
---------------------------------
(DOLLARS IN THOUSANDS) 1997 1998(K)
-------- ---------------------
ACTUAL PRO FORMA
-------- ---------
<S> <C> <C> <C>
STATEMENT OF INCOME (LOSS):
Net sales(A).............$223,607 $205,842 $205,842
Operating income......... 9,040 11,027 5,373
Adjustment for asbestos
litigation............. -- -- --
Fresh-start
revaluation............ -- -- --
Reorganization items and
claims(D).............. -- -- --
Interest expense......... (8,927) (6,940) (13,122)
Other income (expense)... 1,703 820 820
Income (loss) before
taxes, extraordinary
items and accounting
changes................ 1,816 4,907 6,929
Income (loss) before
extraordinary items and
accounting changes..... (1,220) 807 (5,079)
Extraordinary items and
accounting changes..... -- -- --
Net income (loss)........ (1,220) 807 (5079)
BALANCE SHEET DATA (END OF
PERIOD):
Working capital..........$208,373 $163,650 --
Property, plant and
equipment, net......... 260,850 239,337 --
Total assets............. 831,943 865,339 --
Total debt............... 372,170 546,996 --
Shareholders' equity
(deficit).............. 338,642 180,005 --
SELECTED FINANCIAL DATA:
EBITDA(H)................$ 23,482 $ 25,905 $ 25,905
Depreciation and
amortization........... 14,442 12,822 13,221
Capital expenditures..... 15,857 5,692 5,692
SELECTED RATIOS:
EBITDA/interest expense.. 2.63x 3.73x 2.05x
Total debt/EBITDA........ N/M N/M N/M
Total
debt/capitalization.... 52.4% 75.2% N/M
Earnings/fixed
charges(I)............. 1.20x 1.69x N/M
</TABLE>
(footnotes on next page)
51
<PAGE>
<PAGE>
NOTES TO SELECTED HISTORICAL CONSOLIDATED FINANCIAL INFORMATION
(Dollars in thousands)
(A) Includes net sales attributed to the Divested Divisions of $115,008 in
1993, $127,229 in 1994, $145,339 in 1995, $138,117 in 1996, $78,604 in 1997
and $29,254 for the three months ended February 28, 1997.
(B) Operating income in 1997 includes (i) amortization of reorganization value
in excess of amounts allocable to identifiable assets in the amount of
$16,284, (ii) depreciation of assets written-up to fair value in the amount
of $9,804 and (iii) loss on sale of divisions of $2,411. See 'Management's
Discussion and Analysis of Financial Condition and Results of
Operations -- Effects of Reorganization on Operations and Financial
Condition.'
(C) Fresh-start valuation gain of $118,684 reflects transactions related to
emergence from bankruptcy and reorganization in accordance with Statement
of Position 90-7, 'Financial Reporting by Entities in Reorganization under
the Bankruptcy Code.' See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Effects of Reorganization
on Operations and Financial Condition.'
(D) Reflects provision for claims of $41,436 in 1993 and $4,244 in 1996.
Remaining reorganization items are net expense resulting from the Company's
bankruptcy filing. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Effects of Reorganization on
Operations and Financial Condition.'
(E) Other income (expense) reflects a gain of $11,505 in 1995 relating to the
sale of an investment in a Canadian mining concern.
(F) Reflects (i) a gain of $1,525,540 in 1996 related to emergence from
bankruptcy and reorganization in accordance with Statement of Position
90-7, 'Financial Reporting by Entities in Reorganization under the
Bankruptcy Code;' (ii) a loss of $12,598 in 1993 due to an accounting
change to reflect adoption of Statement of Financial Accounting Standards
No. 106 'Employers Accounting for Postretirement Benefits;' and (iii) a
loss of $1,235 in 1996 due to an accounting change of its method of
computing LIFO inventories of boron, germanium and other rare metals.
(G) Includes capital expenditures in 1997 of (i) $10,157 in connection with the
new facility in Manchester, Tennessee, (ii) $6,495 in connection with a
$13,054 diatomaceous earth processing facility in Vale, Oregon and (iii)
$4,651 in connection with a new automotive facility in Tamworth, England.
(H) 'EBITDA' as used herein is defined in the Indenture. See 'Description of
the Notes.' 'EBITDA' is presented because management believes it is an
indicator of a company's ability to service and incur debt. EBITDA does not
represent net income or cash flows from operations as those terms are
defined by generally accepted accounting principles and does not
necessarily indicate whether cash flows will be sufficient to fund cash
needs. Under the Indenture, the definition of EBITDA excludes loss on sale
of divisions. Includes EBITDA attributed to the Divested Divisions of
$7,053 in 1993, $7,552 in 1994, $7,695 in 1995, $3,615 in 1996, $361 in
1997 and ($652) for the three months ended February 28, 1997.
(I) For the purpose of determining the ratio of earnings to fixed charges,
'earnings' consist of income before provision (benefit) for income taxes
and fixed charges. 'Fixed charges' consist of interest expense (including
amortization of deferred financing costs) and approximately 30% of rental
expense, representing that portion of rental expense deemed representative
of the interest factor.
(J) Such ratio of earnings to fixed charges is not meaningful for 1993 and 1995
because of significant charges for an asbestos litigation and is not
meaningful for 1996 because of significant reversal of asbestos litigation
reserves, fresh-start revaluation and extraordinary items. Earnings were
inadequate to cover fixed charges by $1,139,700 and $934,871 for the years
ended November 30, 1993 and 1995, respectively.
(K) The unaudited condensed consolidated financial statements as of and for the
three months ended February 28, 1998 include the effects of the Acquisition
that resulted as of February 24, 1998, the Closing Date. Accordingly, the
historical condensed consolidated statement of income (loss) for the three
months ended February 28, 1998 include results of operations from (1)
December 1, 1997 through February 24, 1998 of the Predecessor Company and
(2) February 25 through February 28, 1998 of the Company.
52
<PAGE>
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma consolidated financial statements (the
'Pro Forma Financial Statements') are based on the historical financial
statements of the Company included elsewhere in this Prospectus.
The unaudited pro forma balance sheet as of November 30, 1997 has been
prepared to give effect to the Acquisition as though it were consummated on
November 30, 1997. The unaudited pro forma statement of operations for the year
ended November 30, 1997 gives effect to the Acquisition as though it were
consummated on December 1, 1996. The unaudited pro forma statement of operations
for the three months ended February 28, 1998 gives effect to the Acquisition as
though it were consummated on December 1, 1997. The pro forma adjustments are
based upon available information and certain assumptions that the Company
believes are reasonable. The acquisition of Eagle-Picher was accounted for using
the purchase method of accounting. The preliminary allocation of the purchase
price of the Company has been determined based upon estimates of fair value and
are subject to change. Appraisals are currently being completed to value
property, plant, equipment and identifiable intangible assets. The excess of
purchase price over the assessed values of those assets will be allocated to
goodwill.
The Pro Forma Financial Statements do not purport to be indicative of the
results that would have been obtained had such transactions described above
occurred as of the assumed dates. In addition, the Pro Forma Financial
Statements do not purport to project the Company's results of operations for any
future date or period. The Pro Forma Financial Statements should be read in
conjunction with the financial statements of the Company, and the notes thereto,
included elsewhere herein.
53
<PAGE>
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30, 1997
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ------------------------------------
-------- ACQUISITION AND COMPANY
COMPANY OFFERING ADJUSTMENTS PRO FORMA
-------- -------------------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................. $ 53,739 $ (39,497)(A) $ 14,242
Receivables, net.......................................... 130,927 -- 130,927
Income tax refunds receivable............................. 3,025 -- 3,025
Inventories............................................... 92,196 373(B) 92,569
Prepaid expenses.......................................... 8,290 5,903(C) 14,193
Deferred income taxes..................................... 13,793 8,650(D) 22,443
-------- -------------------- ---------
Total current assets...................................... 301,970 (24,571) 277,399
Property, plant and equipment, net............................. 243,538 -- 243,538
Deferred income taxes.......................................... 98,991 (103,627)(D) (4,636)
Reorganization value in excess of amounts allocable to
identifiable assets.......................................... 48,837 (48,837)(E) --
Excess of acquired net assets over cost........................ -- 255,659(F) 255,659
Other assets................................................... 53,545 41,775(G) 95,320
-------- -------------------- ---------
Total assets......................................... $746,881 $ 120,399 $867,280
-------- -------------------- ---------
-------- -------------------- ---------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable.......................................... $ 52,886 $-- $ 52,886
Accrued liabilities....................................... 55,419 (720)(H) 54,699
Management compensation................................... -- 14,500(H) 14,500
Income taxes.............................................. 2,294 -- 2,294
Long-term debt -- current portion......................... 3,403 -- 3,403
-------- -------------------- ---------
Total current liabilities............................ 114,002 13,780 127,782
Long-term debt, less current portion:
10% Debentures............................................ 250,000 (250,000)(I) --
Industrial revenue bonds.................................. 18,320 -- 18,320
Debt of foreign subsidiaries.............................. 1,674 -- 1,674
Senior secured revolver................................... -- 79,100(J) 79,100
Senior secured term loan A................................ -- 100,000(J) 100,000
Senior secured term loan B................................ -- 50,000(J) 50,000
Senior secured term loan C................................ -- 75,000(J) 75,000
Senior subordinated notes................................. -- 220,000(J) 220,000
-------- -------------------- ---------
Total long-term debt................................. 269,994 274,100 544,094
Post-retirement benefits....................................... 21,681 (1,944)(K) 19,737
Other long-term liabilities.................................... 5,087 -- 5,087
-------- -------------------- ---------
Total liabilities.................................... $410,764 $ 285,936 $696,700
-------- -------------------- ---------
SHAREHOLDER'S EQUITY
Old common stock............................................... $341,807 $ (341,807)(L) $ --
New common stock............................................... -- 180,005(M) 180,005
Foreign currency translation................................... (1,836) 1,836(N) --
Retained earnings (deficit).................................... (3,854) (5,571)(O) (9,425)
-------- -------------------- ---------
Total shareholder's equity (deficit)................. 336,117 (165,537) 170,580
-------- -------------------- ---------
Total liabilities and shareholder's equity........... $746,881 $ 120,399 $867,280
-------- -------------------- ---------
-------- -------------------- ---------
</TABLE>
(footnotes on next page)
54
<PAGE>
<PAGE>
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
(A) The $39,497 decrease in pro forma cash and cash equivalents results from
the following:
<TABLE>
<CAPTION>
Revolving credit facility........................................................ $ 79,100
<S> <C>
Term loans....................................................................... 225,000
Senior subordinated notes........................................................ 219,639
Equity contribution.............................................................. 180,005
Merger consideration............................................................. (417,638)
Repayment of existing indebtedness............................................... (255,903)
Common stock redemption.......................................................... (29,000)
Estimated transaction fees and expenses.......................................... (27,800)
Management compensation.......................................................... (12,900)
---------
Cash and cash equivalents adjustment........................................ $ (39,497)
---------
---------
</TABLE>
(B) To record an adjustment of $373 to fair value of inventory by elimination
of LIFO inventory reserve.
(C) To reflect payment of interest on the 10% Debentures in the amount of
$5,903.
(D) To adjust the net deferred tax asset as follows:
<TABLE>
<CAPTION>
CURRENT NON-CURRENT
------- -----------
<S> <C> <C>
To recognize the excess of tax over book gain on the
transaction......................................................... $3,575 $ 47,152
To recognize the deduction on payment of the 10%
Debentures to the Trust............................................. (87,500)
To recognize the utilization of the net operating loss
carryforwards against the net transaction gain and the
expiration of the remainder......................................... (61,304)
To adjust for the elimination of the unrecognized pension gain........ (1,300)
To adjust for the unrecognized gain in post-retirement
benefits............................................................ (675)
To adjust for the increase in the management compensation accrual..... 5,075 --
------- -----------
Total............................................................ $8,650 $(103,627)
------- -----------
------- -----------
</TABLE>
(E) Adjustment of $48,837 to reflect elimination of reorganization value in
excess of amounts allocable to identifiable assets.
(F) To record the excess of purchase price over the aggregate amount of
property, plant and equipment at historical costs and all other assets and
liabilities at fair value, and $3,000 of fees associated with the issuance
of common stock. Although the property, plant and equipment was revalued to
fair value at November 29, 1996 in accordance with fresh-start reporting,
management is currently re-evaluating the fair values of these assets and
of identifiable intangible assets, with the excess purchase price over fair
value to be allocated to goodwill.
(G) To record (i) $24,800 of fees and expenses associated with issuance of new
debt and redeemable preferred stock, (ii) an adjustment of $3,714 to
eliminate unrecognized pension gain which will adjust prepaid pension asset
to fair value, (iii) a $10,000 aggregate payment to the E-P Management
Trust which will be used to acquire common stock of Granaria Industries for
the benefit of certain members of senior management, (iv) a $2,900
aggregate payment to certain members of senior management as reimbursement
for their individual taxes in connection with the $10,000 compensation
payment referred to in (iii) above and (v) an original issue discount of
$361 on the issuance of the $220,000 Senior Subordinated Notes.
(H) To record the following transactions: $14,500 ($720 was expensed in 1997)
aggregate amounts totaling (i) $8,400, of which $800 has not been paid, to
certain members of senior management
(footnotes continued on next page)
55
<PAGE>
<PAGE>
(footnotes continued from previous page)
pursuant to the STSP; (ii) $3,200 in connection with the E-P Management
Trust, which represents the value of the compensation which vests shortly
after consummation of the Acquisition; and (iii) $2,900, which represents
the reimbursement of taxes in connection with such compensation. Such
amounts will be reflected in the future results of operations and cash
flows.
(I) To reflect the payment of all outstanding obligations under the 10%
Debentures to the Trust.
(J) To record the new debt structure as follows:
<TABLE>
<CAPTION>
RATE AMOUNT
----- --------
<S> <C> <C>
Senior secured revolver
Used............................................................. 8.00% $ 79,100
Letters of credit................................................ 2.25 28,600
Unused........................................................... 0.50 52,300
Senior secured term loan A............................................ 8.00 100,000
Senior secured term loan B............................................ 8.38 50,000
Senior secured term loan C............................................ 8.63 75,000
Senior subordinated notes............................................. 9.38 220,000
</TABLE>
(K) To record $1,944 of unrecognized gain in post-retirement benefits in order
to adjust to fair value.
(L) Reflects the redemption of the common stock, all of which is owned by the
Trust, in connection with the Acquisition.
(M) Reflects issuance of new common stock to Parent.
(N) Reflects elimination of prior foreign currency translation adjustments.
(O) Reflects the effects on retained earnings of the reversal of the prior
retained deficit of $3,854 and the recognition of management compensation
expense, net of taxes, of $9,425. The components of this expense, on a
pre-tax basis, are: (i) $6,100, which includes $3,200 of the first year
earnings by certain members of senior management of the $10,000 that was
paid to the E-P Management Trust and $2,900 for the related tax obligations
and (ii) $7,600 for payments under the STSP.
56
<PAGE>
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED NOVEMBER 30, 1997
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL ------------------------------------
-------- ACQUISITION AND COMPANY
COMPANY OFFERING ADJUSTMENTS PRO FORMA
-------- -------------------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales...................................................... $906,077 $-- $906,077
Operating costs and expenses:
Cost of products sold..................................... 725,010 -- 725,010
Selling and administrative................................ 77,109 -- 77,109
Management compensation expense........................... -- 6,100(A) 6,100
Depreciation.............................................. 39,671 -- 39,671
Amortization of intangibles............................... 16,318 760(B) 17,078
Loss on sale of divisions................................. 2,411 -- 2,411
-------- ----------- ---------
860,519 6,860 867,379
Operating income (loss)........................................ 45,558 (6,860) 38,698
Interest expense.......................................... (31,261) (23,620)(C) (54,881)
Other..................................................... (251) -- (251)
-------- ----------- ---------
Income (loss) before taxes..................................... 14,046 (30,480) (16,434)
Income taxes (benefit)......................................... 17,900 (25,000)(D) (7,100)
-------- ----------- ---------
Net loss....................................................... $ (3,854) $ (5,480) $ (9,334)
-------- ----------- ---------
-------- ----------- ---------
</TABLE>
- ------------
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands)
(A) To record $6,100 of compensation earned by certain members of senior
management for which the cash has been paid to the E-P Management Trust.
(B) To reflect the difference in the amortization of the reorganization value
in excess of amounts allocable to identifiable asset of $16,318 compared to
the excess of assets over cost of $17,078.
(C) Pro forma interest expense increased $23,620 as follows:
<TABLE>
<S> <C>
Interest expense associated with the redemption of 10% Debentures................... $(25,000)
Interest expense on New Credit Facilities and Senior Subordinated Notes............. 45,610
Amortization of debt transaction fees and expenses over weighted
average life of 8.18 years........................................................ 2,750
Amortization of Preferred Stock Offering fees and expenses over
10 years.......................................................................... 260
--------
Interest expense adjustment......................................................... $ 23,620
--------
--------
</TABLE>
The actual interest expense for the year ended November 30, 1997 included
interest expense of $4,417 relating to debt obligations that were paid off in
1997. Such debt obligations primarily consisted of the Divestiture Notes and Tax
Refund Notes. The pro forma adjustments do not give effect to the reduction in
this interest expense.
(D) To record incremental tax benefit.
57
<PAGE>
<PAGE>
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED FEBRUARY 28, 1998
<TABLE>
<CAPTION>
PRO FORMA
ACTUAL -------------------------
-------- ACQUISITION COMPANY
COMPANY ADJUSTMENTS PRO FORMA
-------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Net sales................................................................ $205,842 $ -- $205,842
Operating costs and expenses:
Cost of products sold............................................... 162,796 -- 162,796
Selling and administrative.......................................... 17,141 -- 17,141
Management compensation expense..................................... 2,056 5,255(A) 7,311
Depreciation........................................................ 8,983 -- 8,983
Amortization of intangibles......................................... 3,839 399(B) 4,238
-------- ----------- ---------
194,815 5,654 200,469
Operating income (loss).................................................. 11,027 (5,654) 5,373
Interest expense.................................................... (6,940) (6,182)(C) (13,122)
Other............................................................... 820 -- 820
-------- ----------- ---------
Income (loss) before taxes............................................... 4,907 (11,836) (6,929)
Income taxes (benefit)................................................... 4,100 (5,950)(D) (1,850)
-------- ----------- ---------
Net income (loss)........................................................ $ 807 $ (5,886) $ (5,079)
-------- ----------- ---------
-------- ----------- ---------
</TABLE>
- ------------
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
(Dollars in thousands)
(A) To record $5,255 of compensation earned by certain members of senior
management. This represents the portion of the $10,000 contribution to the
E-P Management Trust for the stock that has been earned and vested and the
expected tax payments for the same vested stock.
(B) To reflect the difference in the amortization of the reorganization value
in excess of amounts allocable to identifiable assets of $3,839 (4 year
amortization) compared to the excess of assets over cost of $4,238 (15 year
amortization).
(C) Pro forma interest expense increased $6,182 as follows:
<TABLE>
<S> <C>
Interest expense associated with the redemption of
10% Debentures..................................................................... $(5,903)
Interest expense on New Credit Facilities and Senior
Subordinated Notes................................................................. 11,403
Amortization of debt transaction fees and expenses
over weighted average life of the debt............................................. 617
Amortization of Preferred Stock Offering fees and expenses
over 10 years...................................................................... 65
-------
Interest expense adjustment.......................................................... $ 6,182
-------
-------
</TABLE>
(D) To record incremental tax benefit of 50.3%.
58
<PAGE>
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Unless otherwise stated, any reference to a year in this section refers to
the Company's fiscal year.
RESULTS OF OPERATIONS
The following table sets forth certain sales and operating data, net of all
inter-segment transactions, for the Company's businesses for the periods
indicated:
<TABLE>
<CAPTION>
FISCAL YEAR ENDED NOVEMBER 30,1995
------------------------------------------------------------
1995 % 1996 % 1997 %
------ ------ ------ ------ ------ ------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Net sales and segment sales as percentage of
total:
Automotive................................... $433.2 51.1% $439.6 49.3% $435.2 48.0%
Machinery.................................... 254.7 30.0 257.6 28.9 270.8 29.9
Industrial................................... 160.6 18.9 194.1 21.8 200.1 22.1
------ ------ ------ ------ ------ ------
Total........................................ $848.5 100.0% $891.3 100.0% $906.1 100.0%
------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------
EBITDA by segment:
Automotive................................... $ 59.7 $ 57.2 $ 60.1
Machinery.................................... 28.8 27.5 32.0
Industrial................................... 21.7 27.5 30.6
Corporate overhead........................... (18.4) (19.3) (18.7)
------ ------ ------
Total........................................ $ 91.8 $ 92.9 $104.0
------ ------ ------
------ ------ ------
</TABLE>
EFFECTS OF REORGANIZATION ON OPERATIONS AND FINANCIAL CONDITION
Upon emergence from bankruptcy, the Company applied the 'fresh-start'
provisions of the American Institute of Certified Public Accountants Statement
of Position No. 90-7 ('SOP 90-7'). In accordance with SOP 90-7, the assets and
liabilities of the Company were restated at their fair value and a valuation of
equity was made based on the appraised reorganization value of the business. The
reorganization value in excess of amounts allocable to identifiable assets was
capitalized. Of the $268.8 million increase in total assets for the year ended
November 30, 1996 over those at November 30, 1995, $86.6 million and $65.1
million were due to the restatement of property, plant and equipment at their
fair value and the reorganization value in excess of amounts allocable to
identifiable assets, respectively, and $69.1 million was due to a federal income
tax refund receivable. Consequently, results of operations in 1996 and 1997 are
not comparable, primarily due to increased depreciation on the property, plant
and equipment and amortization of the reorganization value in excess of amounts
allocable to identifiable assets.
Adjusting the assets and liabilities to fair value resulted in the
fresh-start revaluation of $118.7 million in 1996. Other reorganization items in
1996 and 1995 were the costs of the reorganization process, net of the interest
income earned on accumulated cash balances.
The Plan included a settlement of the Eagle-Picher Group's aggregate
liability on account of present and future asbestos-related and lead-related
personal injury claims. An adjustment was made to the consolidated financial
statements in 1996 to reflect this settlement. The order confirming the Plan
contains a permanent injunction which precludes holders of present or future
asbestos-related or lead-related personal injury claims from pursuing their
claims against the reorganized Eagle-Picher Group. Those claims will be
channeled to the Trust, which is an independently administered qualified
settlement trust established to resolve and satisfy those claims.
The Company's emergence from bankruptcy on November 29, 1996 resulted in an
extraordinary gain of $1.5 billion on the discharge of pre-petition liabilities,
including the asbestos liability, because the value of consideration distributed
and expected to be distributed to the Trust and other unsecured creditors is
approximately 37% of the amount of the allowed claims. The Plan and the Order
confirming
59
<PAGE>
<PAGE>
the Plan provide that the pre-petition unsecured claims, including the
asbestos-related claims, are thereby discharged and the Eagle-Picher Group has
no further liability in connection with such claims.
In 1997, the Company received federal tax refunds totaling $69.1 million
resulting from net operating losses ('NOLs') carried back to recover taxes paid
in prior years. The majority of the NOLs were created when the Company
contributed cash and securities to the Trust in the bankruptcy. Losses remaining
after the NOL carryback were carried forward to reduce taxable income in future
years. NOLs, which were carried forward, along with other items that are
deductible in the future, such as the repayment of the debt issued in
conjunction with the Company's emergence from bankruptcy, resulted in Deferred
Tax Assets of $128.5 million at November 30, 1996. Deductions for debt
previously contributed to the Trust are taken when the debt is repaid. The 10%
Debentures were repaid in connection with the Acquisition. For tax purposes, the
Acquisition was treated like a sale of assets. The gains on the sale of the
assets of the Company absorbed most of the NOL carryforwards that the Company
had available and any NOL carryforwards that were not absorbed were lost.
Interest expense increased by $28.2 million in 1997 primarily due to the
debt issued to the Trust and unsecured creditors upon the Company's emergence
from bankruptcy. In addition, interest expense was not recorded on unsecured
debt or undersecured debt during the duration of the bankruptcy proceedings,
which resulted in minimal interest expense in 1996 and 1995.
Three Months Ended February 28, 1998 Compared to Three Months Ended February 28,
1997
As a result of the Acquisition of the Company by Granaria Industries from
the Trust as of February 24, 1998, which was accounted for as a purchase, the
Company's results of operations and financial position for periods after
February 24, 1998 are not comparable to prior periods. The unaudited condensed
consolidated statement of income (loss) as of February 28, 1998 includes results
of operations from (1) December 1, 1997 through February 24, 1998 of the
Predecessor Company and (2) February 25 through February 28, 1998 of the
Company. The effects of the purchase accounting adjustments on the Company's
results of operations for the three months ended February 28, 1998 were
immaterial.
Net Sales. The Company's net sales decreased by approximately $17.8
million, or 8.0%, from $223.6 million in the three months ended February 28,
1997 to $205.8 million in the three months ended February 28, 1998. Included in
the results for the first three months of 1997 are $29.2 million of sales of the
Divested Divisions which, if excluded, would reflect an increase in the
Company's quarterly net sales of approximately 5.9%.
First quarter net sales for the Industrial Group, excluding net sales of
the Divested Divisions, decreased 8.8% from 1997 to 1998 due primarily to
decreased sales of germanium products. Germanium sales have been affected by
lower market prices, increased use of recycled germanium by the Company's
customers and the completion of a major satellite project. Germanium prices have
decreased by as much as half during the last year due to increased supplies. In
response to sharp increases in the cost of germanium during 1996, the Company's
customers have increasingly been recycling scrap germanium. As a result, its
customers supply a larger portion of the Company's raw materials. While the
Company has been able to maintain its margins, the sales volume is less as a
toll refiner than as a buyer and seller of germanium.
Net sales for the Machinery Group in the first three months of 1998,
excluding net sales of the Divested Divisions, increased 7.4% from the first
three months of 1997 on increased sales of special purpose batteries. Net sales
for the Automotive Group, excluding net sales of the Divested Divisions,
increased 11.5% on increased sales of precision machined components.
Cost of Products Sold. Cost of products sold, excluding depreciation
expense, decreased by $17.6 million, or 9.8% from $180.4 million in the three
months ended February 28, 1997 to $162.8 million in the three months ended
February 28, 1998. Excluding the results of Divested Divisions, as a percentage
of sales, cost of products sold remained stable at approximately 79.0%.
Selling and Administrative. Selling and administrative expenses decreased
by $2.6 million, or 13.1% from $19.7 million for the three months ended February
28, 1997 to $17.1 million for the three months
60
<PAGE>
<PAGE>
ended February 28, 1998. Excluding the results of Divested Divisions, selling
and administrative expenses for the first three months of 1998 decreased by $.7
million from the first three months of 1997.
Depreciation and Amortization. Depreciation and amortization decreased by
$1.4 million, or 13.3% from $10.4 million for the three months ended February
28, 1997 to $9.0 million for the three months ended February 28, 1998. Excluding
the results of Divested Divisions, depreciation and amortization was $9.0
million for the first three months of both 1997 and 1998.
EBITDA. The Company's earnings before interest, taxes, depreciation and
amortization ('EBITDA') increased by approximately $2.4 million, or 10.3%, from
$23.5 million in 1997 to $25.9 million in 1998. Excluding the $.6 million
negative impact of the Divested Divisions on 1997 EBITDA, the EBITDA of the
Company increased $1.8 million, or 7.3%.
Despite decreased sales, EBITDA of the Industrial Group for the first three
months of 1998, exclusive of EBITDA of the Divested Divisions, increased by 1.3%
over the first three months of 1997. This increase was due to improved results
at the Company's Boron operations and the Company's ability to maintain its
margins despite decreased germanium sales. First quarter 1998 EBITDA of the
Machinery Group, exclusive of the results of Divested Divisions, was unchanged
from the first quarter of 1997. Increased profitability of special-purpose
batteries due to higher volumes was offset by startup costs of new construction
equipment products. EBITDA of the Automotive Group for the first three months of
1998 increased by 9.6% from the first three months of 1997 due to higher volumes
of precision machined components.
Interest Expense. Interest expense decreased by $2.0 million, or 22.2%,
from $8.9 million for the three months ended February 28, 1997 to $6.9 million
for the three months ended February 28, 1998. Most of this decrease was due to
the retirement of $125.9 million of debt during 1997, which included $50.0
million of divestiture notes, $69.1 million of tax refund notes and $6.8 million
of secured notes bearing interest at 9%, 6.5% and 10%, respectively. Of the
total debt that was retired during 1997, only $16.7 million was retired during
the first three months of 1997. The decrease in interest expense due to debt
retirements was partially offset by interest on an additional $8.0 million of
Industrial Revenue Bonds issued during the third quarter of 1997 and revolving
lines of credit, for which interest during the first three months of 1998 was
$.1 million.
Fiscal Year Ended 1997 Compared to Fiscal Year Ended 1996
In addition to the effects of reorganization, another factor affecting
comparability of operations is the sale of the Plastics, Transicoil and Fabricon
Products divisions in 1997. The Company's aggregate loss on these transactions
was $2.4 million. The Company also contributed the assets of its former
Suspension Systems division to Eagle-Picher-Boge, L.L.C., a joint venture formed
in 1997 in which the Company has a 45% interest.
Net Sales. The Company's net sales increased approximately $14.8 million,
or 1.7%, from $891.3 million in 1996 to $906.1 million in 1997. Included are net
sales of the Divested Divisions which, if excluded for both periods, would
reflect an increase in the Company's net sales of approximately 9.9%. In 1996
and 1997, the Divested Divisions contributed net sales of approximately $138.2
million and $78.6 million, respectively.
Net sales for the Industrial Group, excluding net sales of the Divested
Divisions, increased 10.2% primarily due to increased demand for germanium
products used in aerospace applications, such as solar cell substrates for
satellites. In the Machinery Group, net sales increased by 7.6% (excluding net
sales of the Divested Divisions), which increase was primarily attributable to
increased demand for batteries used in satellite applications. Net sales for the
Automotive Group (excluding net sales of the Divested Divisions) increased by
11.2% in 1997, which increase was attributable primarily to increased sales
volume of precision machined components and interior trim products. Many of the
precision machined components are used in light trucks, vans and sport utility
vehicles which have recently grown in popularity. Several new programs at the
automotive trim operation, which had been delayed by customers, are beginning to
reach anticipated production volumes. The Company has been notified by Ford that
it will no longer purchase certain product lines from the Automotive Group. The
first program was discontinued in December 1997, and other programs will be
discontinued at various times
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through March 1999. The total amount of 1997 net sales contributed by these
programs was $19.4 million. The Company anticipates that this revenue will be
replaced by new programs currently being implemented.
Cost of Products Sold. Cost of products sold (excluding depreciation
expense) increased by $8.1 million, or 1.1%, from $716.9 million in 1996 to
$725.0 million in 1997. As a percentage of net sales, cost of products sold
remained constant at 80.0% excluding the cost of products sold of the Divested
Divisions.
Selling and Administrative. Selling and administrative expenses decreased
by $4.4 million, or 5.4%, from $81.5 million in 1996 to $77.1 million in 1997.
Excluding expenses of the Divested Divisions, the selling and administrative
expenses remained constant from 1996 to 1997.
Depreciation and Amortization. See comments above regarding the effects of
reorganization.
Loss on Sale of Divisions. In 1997, the Company sold the Plastics,
Transicoil and Fabricon Products divisions for approximately $30.7 million, $8.3
million and $3.1 million, respectively. The aggregate loss on the sales of the
Divested Divisions (excluding Suspension Systems) in 1997 was $2.4 million.
EBITDA. Due to the increased depreciation and amortization in connection
with the Company's emergence from bankruptcy, a comparison of 1997 and 1996
operating income is not meaningful. The Company's EBITDA increased by $11.1
million, or 11.9%, from $92.9 million in 1996 to $104.0 million in 1997. In 1996
and 1997, the EBITDA of the Divested Divisions was $3.6 million and $0.4
million, respectively. The Company's EBITDA, excluding EBITDA of the Divested
Divisions, increased 17.7%. The Industrial Group's EBITDA, excluding EBITDA of
the Divested Divisions, increased by 13.5%, primarily as a result of increased
demand for germanium products. Also, the Industrial Group's diatomaceous earth
product processing operation contributed to the increase in EBITDA for 1997 due
to non-recurring charges taken in 1996.
The Machinery Group's EBITDA, excluding EBITDA of the Divested Divisions,
increased 18.9% as a result of increases in battery sales and an increase in the
margins of the operations that manufacture wheel tractor scrapers and heavy duty
forklift trucks. Despite flat sales in those product lines, EBITDA increased for
wheel tractor scrapers and heavy duty forklift trucks as a result of increased
efficiencies and lower costs associated primarily with expansion of the
Machinery Group's operations in Mexico. The Automotive Group's EBITDA, excluding
EBITDA of the Divested Divisions, increased 11.7% as a result of increased sales
and a better absorption of fixed costs. Currency exchange differences offset
volume gains in the European operations, and therefore, results of these
operations were relatively flat.
Interest Expense. Interest expense increased by $28.2 million, or 909.7%,
from $3.1 million in 1996 to $31.3 million in 1997, for reasons discussed above
related to the effects of reorganization on the Company's results.
Fiscal Year Ended 1996 Compared to Fiscal Year Ended 1995
Net Sales. The Company's net sales increased by approximately $42.8
million, or 5.0%, from $848.5 million in 1995 to $891.3 million in 1996. The
Industrial Group's net sales increased 20.9% due primarily to increased sales of
germanium products. Approximately one-third of the increase was due to increases
in the market price of germanium itself, which increased significantly during
the year.
In the Machinery Group, net sales were relatively flat. Increases in sales
of special-purpose batteries were offset by declines in volume of wheel tractor
scrapers and forklift trucks of 15.6% and 11.1%, respectively. The Machinery
Group's sales were unusually high in 1995 because a significant order backlog of
forklift trucks was worked off during 1995 and because demand for wheel tractor
scrapers was high. Net sales for the Automotive Group were relatively flat from
1995 to 1996. Two factors which offset increases in volumes in the Automotive
Group by approximately $14.5 million were the sale of an injection molding
business in the first quarter of 1996 and the loss of sales volume at the
Plastics Division, most of which resulted when GM discontinued production of its
all-purpose van during 1996.
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Cost of Products Sold. Cost of products sold (excluding depreciation),
increased by $35.5 million, or 5.2%, from $681.4 million in 1995 to $716.9
million in 1996. As a percentage of net sales, cost of products sold remained
constant at 80.0%.
Selling and Administrative. Selling and administrative expenses increased
by $6.1 million, or 8.1%, from $75.4 million in 1995 to $81.5 million in 1996 in
part as a result of start-up costs associated with establishing European
administrative and sales offices for the Automotive Group.
EBITDA. The Company's EBITDA increased by $1.1 million, or 1.2%, from $91.8
million in 1995 to $92.9 million in 1996. The increase in sales of germanium
products contributed to a 26.7% increase in EBITDA in the Industrial Group. The
decline in back orders and demand in the Machinery Group, described above, as
well as start-up costs of certain satellite battery programs, resulted in a
decrease in the Machinery Group's EBITDA of 4.5% for 1996 as compared to 1995.
The decreased volume at the Plastics Division was also a primary reason for the
decrease in EBITDA from $59.7 million in 1995 to $57.2 million in 1996 in the
Automotive Group. Other contributing factors to this decrease include a new
plant in Brighton, Michigan that produces extruded nylon parts for fuel and
brake systems.
Adjustment for Asbestos Litigation and Provision for Other Claims. In
December 1995, the Bankruptcy Court estimated the Company's aggregate liability
for asbestos-related personal injury claims to be $2.5 billion. The Company
adjusted the 1995 consolidated financial statements by $1.0 billion to increase
the asbestos liability subject to compromise to $2.5 billion. In 1996, the
consolidated financial statements were adjusted by $502.2 million to $2.0
billion to reflect the amount of the settlement on which the Plan was based. A
provision for other claims related to the bankruptcy proceedings of $4.2 million
was also made in Fiscal 1996.
Interest Expense. Interest expense increased by $1.2 million, or 63.2%,
from $1.9 million in 1995 to $3.1 million in 1996. The principal reason for the
increase was the settlement of certain secured tax claims in the bankruptcy for
which the claimants were entitled to interest.
Gain on Sale of Investment. In 1995, the Company sold an investment in
stock of a Canadian mining concern which resulted in a gain of $11.5 million.
OPERATING ACTIVITIES
Cash and cash equivalents were $53.7 million at November 30, 1997 compared
to $32.7 million and $93.3 million at November 30, 1996 and 1995, respectively.
Cash flows from operations in 1997, excluding a tax refund of $69.1 million,
were $78.8 million, despite the small net loss of $3.9 million, and in 1996 and
1995 were $72.9 million and $30.5 million, respectively. In 1997, the repayment
of the Divestiture Notes and the Tax Refund Notes resulted in deductions in
excess of income, so that the Company's current federal income tax liability was
minimal. Income taxes were paid primarily to foreign, state and local
jurisdictions in 1997 and amounted to, net of miscellaneous small refunds, $4.3
million. In 1996 and 1995, the Company paid income taxes, including federal
income taxes, of $17.3 million and $28.8 million, respectively.
Cash and cash equivalents were $19.0 million at February 28, 1998.
As previously discussed, depreciation and amortization increased
significantly in 1997 to $56.0 million as compared to $30.8 million in 1996 and
$28.7 million in 1995. The reorganization value in excess of amounts allocable
to identifiable assets is being amortized over four years.
Changes in working capital and other items provided approximately $6.9
million in cash in 1997. Certain divisions have been able to negotiate better
terms on their accounts payable following the Company's emergence from
bankruptcy. Decreases in certain working capital components have more than
offset increases in receivables and inventories which have resulted from
increased sales volumes. Working capital provided approximately $4.0 million in
1996, but $27.0 million was used for working capital items in 1995. In 1995 into
1996, the Company commenced several new programs in the Automotive Group that
required investment in customer tooling. It is common practice in the Automotive
Industry for suppliers such as the Company to accumulate customer tooling costs
while the tooling is under construction and to bill the customer upon its
completion. In 1995, an $11.5 million increase in the amount of tooling carried
on the Company's consolidated balance sheet brought the total
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of such amount to $26.5 million at November 30, 1995. Tooling costs recorded on
the Company's consolidated balance sheet were $10.6 million and $11.5 million at
November 30, 1997 and 1996, respectively. The accumulation of tooling costs was
on top of 'normal' growth of working capital due to revenue growth. In 1996, as
the new programs were instituted, amounts for tooling were collected from
customers; however, revenue growth from these new programs resulted in 'normal'
working capital growth that partially offset the decrease in working capital
resulting from decreases in tooling activity. Another factor contributing to the
less than expected decrease in working capital in 1996 was the increase in the
price of germanium which resulted in increased inventories and receivables.
INVESTING ACTIVITIES
Capital expenditures were $51.3 million in 1997. Major additions included
two new plants to manufacture precision machined parts, one in Manchester,
Tennessee and the other in Tamworth, England. Construction on the new
diatomaceous earth processing unit in Vale, Oregon, which commenced in 1996, was
completed in 1997. Capital expenditures were $45.0 million and $40.6 million in
1996 and 1995, respectively. In addition to amounts spent on construction of the
facility in Vale, Oregon in 1996 and the addition of a new coating line for the
manufacture of rubber coated metal products in 1995, significant expenditures
were made to increase machine capacity at existing facilities or improve
processes, particularly in the Automotive Group. The Company does not have any
plans for major expansions in the near future. The Company anticipates capital
expenditures of $35.0 million for 1998. The Company believes that its minimum
capital expenditure level is approximately $15.0 million.
The Company sold the Plastics, Transicoil and Fabricon Products divisions
in 1997. The net cash proceeds of these transactions totaled $39.0 million. The
injection molding operations of the Orthane Division were sold in 1996 for $4.2
million. No other divestitures have been announced or committed to at this time;
however, the possibility of future divestitures of certain businesses exists,
particularly if the Company needs cash to fund future expansions.
In 1995, the Company sold an investment in stock of a Canadian mining
concern which had no book value for $11.5 million. The stock, which had been
received in settlement of certain indebtedness, was deemed by the Company to be
impaired and was written down to zero. The Company generally does not invest in
marketable securities of this nature. Any available cash is generally invested
in cash equivalent instruments.
FINANCING ACTIVITIES
The Company used the proceeds of tax refunds totaling $69.1 million
received in 1997 to redeem the $69.1 million Tax Refund Notes (the 'Tax Refund
Notes') which were issued by the Company to the Trust in conjunction with the
Company's emergence from bankruptcy. The Divestiture Notes were issued to the
Trust and other unsecured creditors on the Consummation Date (as defined
herein). A total of $45.3 million of the Divestiture Notes was prepaid in August
1997 with the proceeds of the divestiture of the Divested Divisions; the
remaining obligation of $4.7 million was reclassified to accrued liabilities as
a reserve for the final bankruptcy distribution. The Divestiture Notes bore
interest at 9% and had a maturity date of November 29, 1999. In addition,
secured notes totaling $6.8 million at November 30, 1996 were repaid in full in
1997 due, in certain cases, to the sale of the assets which secured the notes.
In 1997, the Company issued an $8.0 million Industrial Revenue Bond to finance
the new facility in Manchester, Tennessee. Debt totaling $5.0 million was
incurred in Europe to finance the expansion activities.
Following the Acquisition, the Company has a $160.0 million revolving
credit facility available to finance short-term borrowings and letters of
credit. In connection with the Acquisition, $79.1 million was drawn against the
revolving credit facility, approximately $52.3 million was available for
additional borrowings and $28.6 million was used for credit support in the form
of letters of credit. See 'Description of the New Credit Agreement.' The
Company's European operations also had several lines of credit totaling $20.2
million at November 30, 1997, of which, at the Closing Date, $5.0 million was
borrowed. At Closing, the Company had $15.7 million available under the European
operations' lines of credit. The European operations' lines of credit contain
financial covenants, with which the
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Company is in compliance. The Company believes that the European operations
should generate enough cash through operations and borrowings on lines of credit
to finance growth in the near-term.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity needs are primarily for debt service and capital
maintenance. The Company believes that its cash flows from operations and
available borrowings under its bank credit facilities will be sufficient to fund
its anticipated liquidity requirements for the next twelve months. In the event
that the foregoing sources are not sufficient to fund the Company's expenditures
and service its indebtedness, the Company would be required to raise additional
funds. See 'Description of New Credit Agreement.'
YEAR 2000
The Company is performing a comprehensive review to identify the systems
affected by the Year 2000 issue. A project committee meets regularly to review
the status of the investigation into and resolution of Year 2000 issues. As a
result of the committee's progress to date, the Company expects to modify or
upgrade existing systems and, in some cases, replace systems. The Company does
not expect to spend any significant incremental amounts with outside contractors
to complete any necessary modifications or conversions, but is redeploying
existing internal resources. The Company presently believes that through the
planned modification to existing systems and conversion to new systems, the Year
2000 issue will be resolved on a timely basis, and any related costs will not
have a material impact on the results of operations, cash flows or financial
condition of the Company.
RECENTLY ISSUED ACCOUNTING STANDARDS
In 1997, the FASB issued Statement of Financial Accounting Standards No.
128, 'Earnings per share' ('SFAS 128'), Statement of Financial Accounting
Standards No. 130, 'Reporting Comprehensive Income' ('SFAS 130') and Statement
of Financial Accounting Standards No. 131, 'Disclosures About Segments of an
Enterprise and Related Information' ('SFAS 131'). SFAS 128 establishes standards
for computing and presenting earnings per share ('EPS') and applies to entities
with publicly held common stock or potential common stock. This statement
requires dual presentation of basic and diluted EPS on the face of the income
statement for all entities with complex capital structures and requires a
reconciliation of the numerator and denominator of the basic EPS computation to
the numerator and denominator of the diluted EPS computation. SFAS 130
establishes standards to measure all changes in equity that result from
transactions and other economic events other than transactions with owners.
Comprehensive income is the total of net income and all other nonowner changes
in equity. SFAS 131 introduces a new segment reporting model called the
'management approach.' The management approach is based on the manner in which
management organizes segments within a company for making operating decisions
and assessing performance. The management approach replaces the notion of
industry and geographic segments. The Company will adopt SFAS 128 in the fiscal
year ending November 30, 1998, including interim periods. The Company does not
expect to adopt SFAS 130 and SFAS 131 until the end of its fiscal year ending
November 30, 1999. The Company believes that the adoption of SFAS 128, SFAS 130
and SFAS 131 will not significantly affect the Company's financial condition,
results of operations or cash flows.
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BUSINESS
The Company operates in certain self-defined markets for which public
market share information is not readily available. The market share information
and description of the markets contained in this Prospectus are based on
management's good faith estimates. Management's estimates are based on, among
other things, the following factors: (i) management's knowledge of the market
based on its historical business and industry experience; (ii) discussions with
customers and competitors in the various niche markets in which the Company
competes; and (iii) the Company's product sales compared to management's
calculated estimates of the total product sales in each particular market. The
Company has not independently verified this market share data and makes no
representation as to its accuracy.
GENERAL
Founded in 1843, Eagle-Picher is a diversified manufacturer of industrial
products for the automotive, aerospace, defense, telecommunications, food and
beverage and construction industries. The Company's long history of innovation
in technology and engineering has helped it become a leader in certain niche
markets in which it competes. Eagle-Picher operates more than 50 plants in the
U.S., England, Germany, Spain and Mexico, and sells its products in over 60
countries worldwide. The Company has achieved significant internal growth in
both sales and EBITDA, with a compounded annual growth rate since 1993 of 8.2%
and 10.9%, respectively. For the 1997 Fiscal Year, the Company realized net
sales and EBITDA of $906.1 million and $104.0 million, respectively. The
Company's operations are organized under three major business groups: the
Automotive Group, the Machinery Group and the Industrial Group, which accounted
for 48.0%, 29.9% and 22.1% of the Company's net sales and, after allocation of
corporate overhead, accounted for 49.2%, 27.0% and 23.8% of the Company's
EBITDA, respectively, for the 1997 Fiscal Year.
The Automotive Group. The Automotive Group designs, develops, and
manufactures precision machined and rubber coated metal components for the
global automotive industry. Its customers include OEMs such as Ford, GM,
Chrysler, Toyota, Nissan, Honda, Fiat, BMW and Rover, as well as Tier I
suppliers. The Company pioneered the development of materials and processes for
coating metal with elastomer (rubber) compounds, and the Company believes its
proprietary technologies in this area give it competitive advantages. The
Company's rubber coated metal products consist of highly specialized gaskets and
materials for high-temperature and high-pressure applications, including disc
brake noise insulators, air conditioning compressor gaskets, and gaskets and
coated materials for automotive powertrains. More than 150 precision machined
components are produced by the Automotive Group, including vibration dampening
devices for engine and drivetrain applications and automatic transmission pump
assemblies. The Company believes that it is the only non-OEM in North America
manufacturing high volumes of automatic transmission oil pumps and is one of the
top three companies worldwide that design and produce torsional crankshaft
dampers. The Automotive Group also produces fluid systems assemblies, molded
rubber products, aluminum castings, and interior trim products.
The Machinery Group. The Machinery Group designs and produces special
purpose batteries, construction equipment and can washing and coating machinery.
The Company has played a crucial role in the development of power systems for
U.S. space flight, and its batteries have powered missions from the back-up
system that safely brought Apollo 13 back to Earth 28 years ago, to last year's
Mars Pathfinder. The Company's batteries are also used in virtually every U.S.
missile system, including the Patriot and Tomahawk missiles. Recognized as one
of the world leaders in nickel-hydrogen technology since it powered the first
communication satellite launch in 1983, the Company believes it is a world
leader in providing power systems for communications and surveillance
satellites, including Motorola's Iridium'r' project. Construction equipment
produced by the Machinery Group includes elevating wheel tractor scrapers, which
are made under a sole-source contract with Caterpillar, and a premium line of
heavy duty forklift trucks, as well as related replacement parts. The Machinery
Group also designs, manufactures and installs specialized high volume can
washing and coating machinery primarily for the manufacturers of two-piece cans
primarily for the food and beverage industry.
The Industrial Group. The Industrial Group is a leading producer of
specialty materials, filter aids and absorbents which are used in a wide range
of applications. The Company's specialty materials
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business, which has grown by approximately 60%, as measured by net sales, in the
past two years, develops, manufactures and tests high-purity materials including
germanium wafers (used in solar cells for the satellite industry), germanium
tetrachloride (used in fiber optic cables for the telecommunications industry)
and boron (used as a neutron absorber in nuclear power plants and as a
semiconductor dopant). With a 30-year history of developing processing
techniques, the Company produces the highest purity boron and germanium
available in the market. Recent innovations by the Industrial Group have led to
development stage production of a zinc selenide crystal that adds blue and
true-green to the existing red color spectrum of LEDs, with potential use in
flat panel displays and signage. The Industrial Group is also one of the world's
largest producers of diatomaceous earth and perlite filter aids, which are used
for high purity filtration by food and beverage processors and by chemical and
pharmaceutical companies.
BUSINESS STRATEGY
The Company's strategy is to enhance its competitive position as a leading
global manufacturer for the automotive, aerospace, defense, telecommunications,
food and beverage, and construction industries. To achieve this objective, the
Company will continue to build upon the following strengths:
Leading Positions in Niche Markets. Eagle-Picher's long history of
innovation and reputation for quality have afforded it leading positions in
certain niche markets. The Company enjoys leading positions in, among others,
the market for rubber coated metal products, the North American non-OEM market
for transmission pumps, the market for nickel-hydrogen batteries and the market
for two-piece can washers. The Company believes that it has achieved significant
market share in these markets because of its customer relationships, engineering
excellence, high quality standards and industry reputation.
Strong Customer Relationships. The Company has established long-term
relationships with many of its customers. It has been supplying its products to
each of Ford, GM and Chrysler for more than 45 years; Lockheed Martin for more
than 40 years; and Motorola for more than 30 years. The Company believes it has
developed strong customer relationships by working closely with customers to
design products that meet the customers' specifications. Often, the Company
provides innovative and cost-efficient engineering solutions to customer
problems. For example, the Industrial Group continuously works with customers to
develop lighter and longer-lasting battery systems to complement the latest
generations of missiles and satellites. In addition, through the development of
a new camshaft damper, the Automotive Group recently solved a significant
powertrain vibration problem for certain OEMs.
Many of the Company's facilities are located near customer plants,
enhancing the Company's ability to respond to its customers' needs. The
Automotive Group recently built a new transmission pump production facility in
Manchester, Tennessee and a new manufacturing facility in San Luis Potosi,
Mexico, in each case to meet the increasing needs of OEMs located nearby. The
Company believes that its strong relationships with customers, particularly
automotive and capital equipment OEMs, give the Company a competitive advantage
and position the Company to capitalize on a growing trend toward outsourcing.
Diversified Product Lines; Global Presence. The Company manufactures
hundreds of products for the automotive, aerospace, defense, telecommunications,
food and beverage and construction industries. The Company sells its products to
customers located in over 60 countries through its extensive network, including
global manufacturing facilities throughout the U.S. and Europe. The Automotive
Group alone serves virtually all major automotive OEMs worldwide. The Company
believes that its product diversification and global sales reduce its exposure
to any one market segment or customer.
Superior Product Quality. The Company believes it has a reputation among
its customers for providing technologically advanced, high quality products. The
Company has been honored by many of its customers for its commitment to quality
and service, and, in the last two years, has earned Ford's 'Supplier of the Year
Award' (Ford's Sharonville facility), Hughes SC's 'Performance Excellence
Award,' MD's 'Preferred Supplier Award' and Lockheed Martin's 'Tradition of
Excellence Award.'
Low Cost Structure. The Company is committed to controlling costs and
improving operating efficiencies. The Company believes that it is a low cost
producer in many of the markets in which it
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competes. The Company attributes its low cost position to its leading positions
in niche markets, relatively low overhead costs due to the small town locations
of many of its facilities, a primarily non-union workforce, advanced proprietary
technology and advanced manufacturing processes, including the Toyota Production
System at one of the Automotive Group's facilities. Low cost is essential to the
Company's ability to continue to remain competitive.
INDUSTRY OVERVIEW
AUTOMOTIVE
The Automotive Group's performance, growth and strategic plan are directly
related to certain trends within the OEM and Tier I markets, including the OEMs'
increasing reliance on outsourcing, the expansion of OEM supplier
responsibilities and the shift by OEMs to the purchase of 'systems' (several
components assembled together) rather than individual components, all of which
have contributed to a consolidation of OEM suppliers.
Since the 1980's, OEMs such as Ford, GM and Chrysler have been outsourcing
an increasing percentage of their production requirements. OEMs benefit from
outsourcing because outside suppliers generally have significantly lower cost
structures and can assist in shortening development periods for new products.
Consistent with the trend toward outsourcing, OEMs have focused on developing
long-term, sole source relationships with suppliers that accept significant
responsibility for product management and meet increasingly strict standards for
product quality, on-time delivery and lower manufacturing costs. These suppliers
are expected to control all aspects of the production of system components,
including design, development, component sourcing, manufacturing, quality
assurance, testing and delivery to the customer's assembly plant. Many suppliers
do not have the resources to meet these requirements and the Company believes
that, as a result, the automotive OEM supplier market will be divided among a
smaller group of high quality key suppliers.
While the OEMs' focus today is on quality, cost and service, the Company
believes that their focus for the future will be on global capabilities,
innovation and ability to provide value-added products and systems. The OEMs
have been very successful in making high quality and low cost a minimum
requirement to remain in the industry, rather than a competitive advantage for
certain suppliers.
These evolving requirements can best be addressed by suppliers with
sufficient resources to meet such demands. For suppliers such as the Company,
this environment provides an opportunity to grow by obtaining business
previously provided by other suppliers who can no longer meet the current or
future requirements and expectations of the OEMs and by acquisitions that
further enhance product manufacturing and service capabilities.
INDUSTRIAL AND MACHINERY
Defense and Space Power Systems. The defense and space power systems
markets to which the Industrial and Machinery Groups sell their products design,
develop, produce and sell components or systems for use in a variety of military
applications (including missiles, smart weapons and aircraft) and space power
applications (including satellites, spacecraft and launch vehicles).
In recent years, the defense industry in the U.S. has been characterized by
steadily declining defense budgets primarily as a result of a change in the
nature of perceived threats to U.S. national security interests since the
dissolution of the Soviet Union in 1991 and growing political pressure to
balance the federal budget. Industry sales to the DOD declined for eight
consecutive years through 1995. As a result, many U.S. spacepower and
defense-related companies have focused on a strategy of downsizing and
consolidation.
Although the defense budget is shrinking, the U.S. government is still the
largest consumer of space power. However, propelled by rapid growth in
telecommunications, broadcast, aircraft navigation, and imaging applications,
worldwide non-governmental spending in the space power market is growing. If
this trend continues, non-governmental space power spending could surpass
government space power spending within a decade.
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Significant markets in the commercial space segment include satellites,
satellite launchers and supporting ground equipment. U.S.-based companies
manufacture of satellites worldwide, led by Hughes and other U.S. satellite
manufacturers including Lockheed Martin, Loral Space and Communication Ltd., TRW
Inc. and Ball Corporation.
Despite their lead in satellite technology and production, U.S. companies
command only about one-third of the worldwide satellite launch business. Market
participants include Paris-based Arianespace, an affiliate of The European Space
Union, as well as U.S.-based Lockheed Martin and The Boeing Company ('Boeing').
In addition, NASA's Space Shuttle is used to launch commercial as well as
government satellites, and U.S. companies are developing next-generation
reusable launch vehicles. Several other countries, including China, India,
Israel, Brazil and Japan, are also developing satellite launch capabilities, and
certain Russian and Ukrainian companies have entered into joint ventures with
U.S. companies. The rapid growth in satellite launch demand has been furthered
by the development of an array of satellite services companies and the
development of new services such as satellite broadcast cable television and
global mobile telephone services and high-volume data transfer.
In the military space power market, satellite reconnaissance and
communications capabilities are becoming more important. For example, the U.S.
Air Force has a number of important space programs including DSP (Defense
Support Program), Milstar satellite communications, and Navstar Global
Positioning System, and continues to provide funding for the production of
medium launch vehicles and Titan heavy launch vehicles. The primary Army space
program provides ground systems for the Defense Satellite Communications System,
while the Navy operates its Fleet Satellite Communications System.
Telecommunications. A number of trends within the telecommunications
industry have had and will continue to have a fundamental impact on the
satellite market. Advances in cellular and satellite technologies have made
possible mobile satellite systems that could link the entire world in a single,
seamless wireless communication system. Owners and operators of communication
satellites, which continually need space access, have fueled the growth in this
industry and now account for virtually all of the private sector market for
commercial launch services. Six new services planned for implementation between
1998 and 2000 will rely on large low earth orbiting ('LEO') satellite systems to
offer global mobile telephone, television, internet and other information
services. LEO satellites, with orbits of approximately 1,500 nautical miles, are
typically smaller and lighter than their geostationary ('GEO') counterparts,
which orbit at a distance of approximately 22,300 nautical miles, and mid-earth
orbit satellite systems, which orbit the Earth at distances between the orbits
of LEOs and GEOs. The demand for these services is expected to result in the
production and launch of hundreds of satellites between 1998 and 2000. The
Company believes that these satellite constellations will increase future demand
because the satellites are expected to be replaced every five years.
The primary customers of satellite components are the satellite
manufacturers such as Hughes and Lockheed Martin, and satellite owners such as
Iridium World Communications Ltd. (30% of which is owned by Motorola),
Globalstar Telecommunications Limited ('Globalstar') (which is owned by
Loral/Qualcomm Incorporated) and Orbital Sciences Corporation. The increased
demand for satellites has attracted several small companies and several larger
satellite manufacturers to become satellite owners.
Semiconductors. Semiconductors are the basic building blocks used to create
a variety of components and systems used in satellites, spacecraft and aircraft
as well as a broad array of other communications, computer and computer
peripheral and consumer electronics applications. Continual improvements in
semiconductor processes and design technologies have enabled the production of
complex, highly integrated circuits which provide faster execution, increased
functionality and greater reliability at lower cost. As a result, semiconductor
demand has grown substantially in its primary markets of computing and
communications, and has experienced increased growth in additional markets such
as consumer electronic devices, automotive products and industrial automation
and control systems.
Construction Equipment. The construction equipment industry in which the
Machinery Group competes has a broad spectrum of participants that specialize in
various product lines. The principal factors affecting the market are
distribution strength, market share objectives, profit objectives, unique
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product or service advantages and product support. The construction industry in
the Midwest and Northeast is highly seasonal. Construction activity slows down,
especially in these regions, beginning in November and continuing through the
first quarter. North American retail demand for construction equipment is
strongest in the second and fourth quarters. In the construction equipment
market, the Company is the sole producer of elevating wheel tractor scrapers for
Caterpillar. The other major participant in this market is Deere & Company. The
primary participants in the vertical mast rough-terrain forklift truck market,
in addition to the Company, are Case Corporation, JCB Inc. and Sellick Equipment
Limited.
The materials handling industry to which the Machinery Group supplies its
cushion-tire forklift trucks, which are primarily used in the paper, metals and
automotive markets, is a mature industry which historically has been cyclical.
Fluctuations in the rate of orders for forklift trucks reflect the capital
investment decisions of the customers, which in turn depend upon the general
level of economic activity in the various industries served by such customers.
In the most recent business cycle, the North American market for forklift trucks
reached its lowest level in 1991 and has increased in all but one year
thereafter.
Can Washing Equipment. The U.S. metal beverage container industry in which
the Machinery Group also competes has experienced slow demand growth at a
compounded annual rate of approximately 2% over the last decade, with much of
that growth in the soft drink market. As a result, capital spending on can
manufacturing equipment has been minimal and the Company has focused on
servicing and providing replacement parts for existing equipment. The demand for
can manufacturing equipment is primarily from emerging markets such as China,
Vietnam, Thailand, Poland, Russia, India and Brazil. The majority of the
Company's sales of new two-piece can washers is expected to be in these emerging
markets for the foreseeable future.
DESCRIPTION OF BUSINESSES
THE AUTOMOTIVE GROUP
The Automotive Group is a supplier in the global automotive market offering
a diverse range of products to three primary geographic markets -- North
America, Europe and Asia. The Automotive Group is primarily engaged in the
production and sale of mechanical and structural parts for passenger cars,
trucks, vans and recreational and utility vehicles. Their offerings include
state-of-the-art products based on proprietary technologies and staple products
within different markets. Manufacturing plants, largely in the U.S., but also in
England, Germany, Mexico and Spain, and sales and engineering offices in the
U.S., Japan and Europe serve automotive markets around the world. The operating
strategy of the Automotive Group is to identify and target niche markets and
then to create substantial market positions within these niche markets. The
Company believes that the Automotive Group is positioned to capitalize on the
recent trend by OEMs to outsource their products. The Automotive Group
distributes its products primarily to Ford, GM, Chrysler, Toyota, Nissan and
Honda, and to Tier I suppliers of those manufacturers, directly through its
internal sales personnel. With respect to the hundreds of products manufactured
by the Automotive Group, competition varies widely as to the number and type of
competitors, the methods of competition, and the Automotive Group's competitive
positions. Generally, competitive conditions for the Automotive Group are
characterized by a decrease in the number of competitors while at the same time
an increase in the size of existing competitors, increased foreign competition
(particularly from Asia), increased emphasis on quality and intense pricing
pressures from major customers.
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The Automotive Group is composed of two major product groups: Precision Machined
Components and Rubber Coated Metal Products. The following table sets forth, for
the last three fiscal years, the net sales and the percentage of the Company's
total net sales contributed by each product group.
<TABLE>
<CAPTION>
1995 1996 1997
---------------------- ---------------------- ----------------------
% OF TOTAL % OF TOTAL % OF TOTAL
NET SALES NET SALES NET SALES NET SALES NET SALES NET SALES
--------- ---------- --------- ---------- --------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Precision Machined Components................. $ 168.9 20.0% $ 182.1 20.4% $ 205.6 22.7%
Rubber Coated Metal Products.................. 77.9 9.2 83.9 9.4 80.8 8.9
Other Automotive Products..................... 92.1 10.8 92.8 10.4 112.5 12.5
Divested Automotive Products.................. 94.3 11.1 80.8 9.1 36.3 4.0
--------- ----- --------- ----- --------- -----
Total............................... $ 433.2 51.1% $ 439.6 49.3% $ 435.2 48.1%
--------- ----- --------- ----- --------- -----
--------- ----- --------- ----- --------- -----
</TABLE>
Precision Machined Components. The Automotive Group's Hillsdale division
specializes in the design, manufacture and distribution of a full line of
precision machined aluminum and steel parts for the worldwide automotive market.
Precision machined components include vibration dampening devices and precision
machined castings and forgings which are designed and engineered for engine,
transmission and driveline applications.
The Automotive Group's transmission products include pump assemblies for
use in automatic transmissions. The Company believes that it is the only non-OEM
in North America manufacturing high volumes of automatic transmission oil pumps.
The Hillsdale division produces the entire pump assembly for Ford's electronic
four-speed overdrive transmission, which is used on pick-up trucks, vans and
sport utility vehicles. Each pump contains over 50 components which are
machined, assembled and tested by Hillsdale.
The Automotive Group also produces torsional vibration dampening devices
for use in engine and drivetrain applications. A damper is a vibration control
device which reduces the torsional stress vibrations caused by internal
combustion engine systems, thereby alleviating the stress on shafts and relaxing
the flex points. Dampers reduce fatigue and prevent cracking thereby enhancing
the durability of engines and their components. The Company believes it is one
of the top three companies worldwide which designs and produces torsional
crankshaft dampers. The Automotive Group recently expanded its international
operations by opening a new facility in Tamworth, England to service existing
and new customer needs.
The Automotive Group also produces nearly 150 different machined castings
and forgings for power steering, drivetrain and transmission applications from
numerous metals. Each part is specially designed to meet a customer's
specifications. Once a product is designed for a customer, the Company believes
it becomes the sole source provider of such products to that customer.
The Automotive Group also produces its own rubber compounds which enables
it to consistently maintain high quality and to manipulate the composition of
the rubber for its different products. By controlling the quality and
composition of its rubber, the Automotive Group is better able to manufacture
components to critical tolerances, giving it an advantage over its competitors.
Hillsdale continues to diversify its customer base, application and product
range, as well as its international presence, most notably in Mexico. Hillsdale
has experienced growth within the expanding Japanese plant operations in the
U.S. with such products as torsional vibration dampers and transmission pumps.
As a result of such business, and consistent with its strategy to remain close
to its customer base, Hillsdale recently completed a new manufacturing facility
in Manchester, Tennessee to supply the nearby Nissan assembly plant's
transmission pump needs, which were approximately 271,000 for the year ended
December 31, 1997. The Company believes that its Manchester facility will have
the capacity to produce 300,000 transmission pumps annually by the end of 1998.
The market for precision machined components tends to have a few strong and
well-positioned competitors including the OEMs, as well as Simpson Industries,
Inc. and Freudenberg-NOK General Partnership ('Freudenberg'). The Automotive
Group competes in this market primarily on the basis of price, delivery, quality
and service.
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Rubber Coated Metal Products. The Automotive Group's rubber coated metal
products, which are manufactured by its Wolverine Gasket division, consist of
highly specialized gaskets and materials for high-temperature and high-pressure
applications in the automotive industry using proprietary processes and
formulations. Generally, gaskets are compressible, lightweight material placed
between metal parts to act as a seal and prevent fluids and gases from leaking.
Rubber coated metal products are composed of three principal product lines: disc
brake noise insulators, compressor gaskets for air conditioning units and
gaskets and coated materials for powertrain applications (including head
gaskets).
Wolverine Gasket pioneered the development of materials to manufacture the
high-torque sealing products needed to withstand intense heat and pressure.
Wolverine Gasket also invented the process of coating materials with a thin
elastomer to render them impervious to fluid penetration and able to withstand
high-torque loads. This technology makes possible the coating of the wide range
of substrate materials necessary to operate a complex machine such as a car,
which generates intense heat and pressure. The Automotive Group's widely used
compounds include Wolverine Steel N'r', a steel base with an oil-resistant
specialty compounded rubber; Foamet'r', a temperature-resistant compound which
is bonded to steel or aluminum; Alum-N'r', an aluminum alloy-based product
coated with nitrile synthetic rubber which is particularly effective where
corrosion or weight is a factor; and Vulkol'r', a coated rubber-to-vulcanized
fiber sealing material. Wolverine Gasket, which is currently a supplier to OEMs
including Ford, Toyota and GM, plans to expand its sales to Tier I suppliers in
the future.
The trend in the auto industry toward high-temperature, high-compression
and longer-lasting engines requires that engine gaskets meet more stringent
specifications for durability and sealing. Wolverine Gasket's coated metal
products provide the most significant component of multilayer steel head
gaskets, which the Company believes will become the gasket of choice for future
engine designs. A multilayer steel head gasket is a sealing material which is
better able to withstand intense heat and pressure, such as those which are
common in diesel engines. In addition, Wolverine Gasket expects the brake
insulator market to grow as more cars are equipped with four-wheel disc brakes.
Wolverine Gasket's coating expertise, combined with its recent major investment
in a state-of-the-art coating line, gives the Company the opportunity to sell
its material to a new customer base throughout the world. The Automotive Group's
new 50,000 square foot facility in Blacksburg, Virginia contains a technically-
advanced liquid rubber-to-steel coil coating line which enables the Company to
produce rubber coated metal to closer tolerances.
The market for rubber coated metal products is highly fragmented. The
Automotive Group competes against a variety of different companies in the
geographical markets it supplies, and has no primary competitor. The Company
believes that it is the sole supplier to the U.S. automotive compressor gasket
market. The Company also believes that it has 70% of the U.S. market for disc
brake noise insulators.
THE MACHINERY GROUP
The Machinery Group is composed of two major product groups: special
purpose batteries and construction equipment. The following table sets forth,
for the last three fiscal years, the net sales and percentage of the Company's
total net sales contributed by each product group:
<TABLE>
<CAPTION>
1995 1996 1997
---------------------- ---------------------- ----------------------
% OF TOTAL % OF TOTAL % OF TOTAL
NET SALES NET SALES NET SALES NET SALES NET SALES NET SALES
--------- ---------- --------- ---------- --------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Special Purpose Batteries..................... $ 99.3 11.7% $ 108.8 12.2% $ 131.0 14.4%
Construction Equipment........................ 108.4 12.8 95.1 10.7 96.8 10.7
Other Machinery Products...................... 32.2 3.8 35.7 4.0 30.2 3.3
Divested Machinery Products................... 14.8 1.7 18.0 2.0 12.8 1.4
--------- ----- --------- ----- --------- -----
Total............................... $ 254.7 30.0% $ 257.6 28.9% $ 270.8 29.8%
--------- ----- --------- ----- --------- -----
--------- ----- --------- ----- --------- -----
</TABLE>
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Special Purpose Batteries
The Machinery Group, primarily through its Federal Systems, Power Systems
and Power Subsystems departments, designs, manufactures and tests special
purpose batteries for advanced value-added products for three markets:
telecommunications, aerospace and the U.S. government. The Company is the
leading supplier of special purpose batteries for aerospace and defense
applications. The Company's broad line of specialty batteries includes: (i)
thermal batteries (used primarily in missiles, smart weapons and other defense
systems); (ii) silver-zinc batteries (used primarily in military applications
and in launch vehicles); (iii) nickel-hydrogen cells and batteries (used in
military, scientific and commercial aerospace and telecommunications
satellites); (iv) lead acid batteries (used in emergency lighting,
uninterruptible power systems, telecommunications, handheld power tools and
ride-on toys); and (v) nickel-cadmium batteries (used in aircraft and aerospace
applications). The Company believes that its special purpose batteries have been
used in virtually every U.S. missile system, including the Patriot and Tomahawk
missiles used in the Persian Gulf war, and in all spacecrafts used in the
principal U.S. space missions, including the space shuttle and the Mercury,
Gemini and Apollo spacecrafts.
Thermal Batteries and Silver-Zinc Batteries. Thermal batteries, unlike most
other batteries, can remain dormant for long periods of time prior to their use.
The Company is the leading supplier of batteries for missiles, submunitions,
mines, sonobuoys, fuses and aerospace power backup. The Company has supplied
batteries for virtually every U.S. missile system and accounts for 70% of all
thermal battery sales for U.S. military applications and 50% of all such sales
for military applications for the U.S. and its allies combined. It was the
Company's silver-zinc batteries that provided the essential back-up power
systems for the life support, guidance and communications that safely brought
the Apollo 13 spacecraft back to Earth 28 years ago, as well as the batteries
used to power the Mars Pathfinder in the exploration of Mars last year. The
Company believes that it is the market leader in thermal and silver-zinc
batteries on the basis of quality, customer satisfaction, technological
innovation and cost structure. The Machinery Group's primary competitor for
thermal batteries is (ASB) Aerospatiale Batteries, which has a large share of
the European market. The Machinery Group's primary competitor for silver-zinc
batteries is Yardney Technical Products, Inc. in the U.S. and SAFT in Europe.
The Company believes that its higher quality and lower cost have enabled it to
maintain its market share.
Nickel-Hydrogen Batteries. The Machinery Group's Power Subsystems
department is recognized as the world leader in nickel-hydrogen technology as
well as being the most diversified manufacturer of special purpose NiH2 power
systems. The nickel-hydrogen battery system, which is the most widely-used power
source for weather, communications and military satellites, is recognized for
its long-life (typically greater than 15 years), reliability and durability. The
NiH2 power system, which is designed to outlast most systems in which it is
installed, powered the first communication satellite launch in 1983 and is
currently part of the Hubble Space Telescope. The Company believes that more
than 90% of the communications and surveillance satellites manufactured in the
U.S. are powered by Eagle-Picher nickel-hydrogen batteries, including all major
global telecommunications systems. The Company believes that it is the primary
or sole source supplier to such customers as Lockheed Martin, SS/Loral, Hughes
and Boeing. The Company has several contracts for satellite components with
several of these satellite projects including Motorola's Iridium'r' system
consisting of 66 LEO satellites and offering digital communications (voice,
data, fax and paging capability) to subscribers and Globalstar's system
consisting of 48 LEO satellites to provide fixed and mobile telecommunication
services by 1999.
Lead-Acid Batteries. The Machinery Group manufactures an extensive line of
rechargeable valve regulated lead-acid ('VRLA') batteries under the Carefree'r'
brand. Carefree'r' sealed lead-acid batteries are typically small rechargeable
batteries used in emergency lighting, uninterruptible power systems,
telecommunications, handheld power tools and ride-on toys. The Carefree'r' line
has approximately 6% of the $250 million market for less-than-60-ampere-hour
VRLA batteries. Major customers of the Carefree'r' line include Peg Perego,
Simplex, C.E.A. and Lithonia. The Company competes with companies that have a
significantly larger market share. The Company believes that it offers the
shortest lead times of any manufacturer, superior telecommunications product
performance and the ability to provide unique battery shapes and sizes to adapt
to a customer's needs.
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Nickel Cadmium Batteries. The Company supplies its nickel cadmium batteries
for space and satellite programs to NASA and U.S. satellite builders, such as
Hughes and TRW. They also sell to the DOD and aircraft manufacturers, such as
Lockheed Martin and Bell Helicopter, for use in airplanes and helicopters. The
Company competes primarily on the basis of quality, performance and cost.
Construction Equipment
The Machinery Group's Construction Equipment division manufactures
primarily two construction equipment products: elevating wheel tractor scrapers
and heavy-duty industrial forklift trucks. Wheel tractor scrapers are used for
removal of overburden in open-pit mining and site preparation on highway,
commercial, municipal and industrial projects. The Company is the exclusive
source of elevating wheel tractor scrapers to Caterpillar, which the Company
believes has 85% of the U.S. market for elevating wheel tractor scrapers. In
1996, the Company received Caterpillar's 'Certified Supplier' designation.
The Machinery Group manufactures several different models of heavy duty
forklifts. Through its Construction Equipment division, the Machinery Group
utilizes Caterpillar's dealer network to sell its own branded products,
including cushion-tire forklift trucks, which are sold primarily to paper, metal
and automotive manufacturers, and its R-Series, which are sold primarily to
independent rental fleets such as The Hertz Corporation and U.S. Rentals. The
division recently introduced a lower cost truckmounted forklift called
'TrailerMate' which is also sold to a variety of customers through the
Caterpillar dealer network. The industrial forklift market is highly fragmented
and many of the Company's competitors have a greater market share. However, in
the niche markets in which the Company competes, such as in the heavy duty rough
terrain market, the Company has a significant market share. The Company also
sells to the replacement parts market, which accounts for 12% of the sales of
the Company's Construction Equipment division. The Construction Equipment
division recently expanded its facility in Mexico, which now has more than 300
employees.
THE INDUSTRIAL GROUP
The Industrial Group is composed of two product groups: specialty materials
and filter aids and absorbent products. The following table sets forth, for the
periods indicated, the net sales and percentage of the Company's total net sales
contributed by each product line:
<TABLE>
<CAPTION>
1995 1996 1997
---------------------- ---------------------- ----------------------
% OF TOTAL % OF TOTAL % OF TOTAL
NET SALES NET SALES NET SALES NET SALES NET SALES NET SALES
--------- ---------- --------- ---------- --------- ----------
(DOLLARS IN MILLIONS)
<S> <C> <C> <C> <C> <C> <C>
Specialty Materials............................ $ 62.2 7.3% $ 88.4 9.9% $ 101.9 11.3%
Filter Aids/Absorbent Products................. 58.1 6.8 61.8 7.0 63.6 7.0
Other Industrial Products...................... 4.1 0.5 4.6 0.5 5.1 0.5
Divested Industrial Products................... 36.2 4.3 39.3 4.4 29.5 3.3
--------- ----- --------- ----- --------- -----
Total................................ $ 160.6 18.9% $ 194.1 21.8% $ 200.1 22.1%
--------- ----- --------- ----- --------- -----
--------- ----- --------- ----- --------- -----
</TABLE>
Specialty Materials
The Industrial Group, primarily through its Environmental Science and
Technology ('ESAT'), Electro-Optic Materials ('EOM') and Boron departments,
develops, manufactures and tests high-purity specialty materials for a wide
range of services and products. The Industrial Group's significant specialty
materials products include germanium and boron.
Germanium. The Industrial Group is one of the world's leading manufacturers
of germanium products. With over 50% of the market, the Industrial Group is one
of the leading suppliers of thin polished germanium substrates (known as wafers)
for solar cells on space satellites. The wafers are used in the production of
solar cells which power satellites and recharge their batteries. The Industrial
Group's germanium wafers are used on the Hubble Space Telescope, satellite
systems including Panamsat, Indiasat, the Lockheed Martin A-2100 Buss and the
Iridium'r' network. The Industrial Group also produces germanium tetrachloride,
which is used as a dopant in the manufacture of fiber optic
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cable. Germanium tetrachloride, when added to glass fiber, changes the light
guiding properties of the fiber, enabling light signals to travel for over 60
miles. The Industrial Group also supplies germanium metal for use in infrared
optics (such as night vision lenses) and germanium dioxide, which is used as a
catalyst in the production of polyethylene terephthalate (PET) bottles in the
Asian market.
Boron. The Industrial Group's Boron department developed the sophisticated
manufacturing processes necessary to produce isotopically pure boron, which
involves the separation of boron into its isotopes, and to produce high purity
enriched boron compounds. One of its primary products is enriched boric acid,
which is used as a neutron absorber in nuclear power plants. The nuclear power
plants that use enriched boron are primarily those that use mixed oxide ('MOX')
fuels, which create a more intense reaction. Other plants that have not
converted to the use of MOX fuels can use non-enriched boron, which is not
manufactured by the Company, as a control material. Boron isotopes can also be
used in the manufacture of nuclear control rod pellets and in storage casks used
to transport and store spent nuclear fuel and other materials. The Industrial
Group supplies over 90% of the world's demand for 10B and 11B isotopes. Although
there are few competitors in the enriched boron markets, the Industrial Group's
primary competition is manufacturers of alternate materials made of non-enriched
boron compounds. The Industrial group competes in the boron market primarily on
the basis of a facility's overall operating cost.
Semiconductor Dopants and Crystal Growth. The Industrial Group, through its
ESAT, EOM and Boron departments, also manufactures semiconductor dopants.
Semiconductors which are the 'brains' of the modern computer, are tiny powerful
devices that control electrical currents. In recent years, the trend in the
semiconductor market has been toward producing smaller and more powerful chips
which are more sensitive to impurities in the production process. The Industrial
Group, through its patented 'Chromacut' purification process, purifies
semiconductor dopants beyond current standards. The Industrial Group has
pioneered certain development stage products including a zinc selenide crystal
that adds blue and green to the existing red color spectrum of light emitting
diodes (LEDs). This development provides increased brightness and definition for
a variety of applications including flat panel displays (personal computers),
signage (athletic facilities), aircraft cockpit display, traffic lights and
automotive instrumentation.
Filter Aids and Absorbent Products
The Industrial Group produces diatomaceous earth (diatomite) filter aids
and perlite filter aids which are used primarily by the food and beverage
industry and for general industrial applications. Diatomite is an odorless and
tasteless non-metallic mineral, derived from the skeletal remains of aquatic
plants, with a honeycomb structure that is ideal for filtration. Perlite is a
non-metallic mineral of volcanic origin that expands like popcorn when heated to
elevated temperatures. The diatomite and the expanded perlite are milled and
classified into appropriate particle size ranges, producing low density,
efficient filter aids. Examples of diatomite and perlite filtration applications
include corn sweeteners, vegetable oils, cane and beet sugar, fruit juices,
beer, wine, chemicals, pharmaceuticals, and water purification. The Industrial
Group also produces diatomite granular absorbents and functional fillers. These
products are used as industrial absorbents, soil amendments, fillers, catalyst
carriers, and for agricultural applications. The diatomite and perlite filter
aids are marketed worldwide under the brand name Celatom'r' and the absorbents
are marketed under the brand name Floor Dry'r'. The Industrial Group competes
globally in the market for diatomaceous earth and perlite filter aids and in
North America for industrial absorbents. The Company believes that it has the
second largest market share in the worldwide filter aids market. The largest
market share is held by World Minerals, a division of Alleghany Corporation. In
the North American market for industrial absorbents, the Industrial Group has a
variety of competitors, some of which have a larger market share.
RESEARCH AND DEVELOPMENT
In fiscal 1997, Eagle-Picher spent approximately $14.8 million for research
and development and related activities, primarily for the development of new
products or the improvement of existing products. Comparable costs were $18.0
million and $17.3 million for 1996 and 1995, respectively.
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RAW MATERIALS
The prices of raw materials are subject to volatility. The Company's
principal raw materials are rubber, steel, zinc, nickel, germanium, gallium and
boron. These raw materials are commodities that are widely available. Although
the Company has alternate sources for most of its raw materials, the Company's
policy is to establish arrangements with select vendors, based upon price,
quality, and delivery terms. By limiting the number of its suppliers, the
Company believes that it obtains materials of consistently high quality at
favorable prices.
BACKLOG
At November 30, 1997 and 1996, the Company's order backlog was
approximately $250.0 million. The Company expects the order backlog outstanding
at November 30, 1997 to be filled within the 1998 Fiscal Year. Approximately
$13.2 million of the Company's order backlog at November 30, 1996 was
attributable to sales of the Transicoil business, which was sold by the Company
in July 1997. As customary in the automotive industry, the Company enters into
blanket purchase orders with their customers with respect to specific product
orders. From time to time, the customer, depending on its needs, will provide
the Company with releases on a blanket purchase order for a specified amount of
products. As a result, the Automotive Group has virtually no order backlog.
The Company's Industrial and Machinery Groups have contracts with the U.S.
Government which have standard termination provisions. The U.S. Government
retains the right to terminate contracts at its convenience. However, if
contracts are terminated, the Company is entitled to be reimbursed for allowable
costs and profits to the date of termination relating to authorized work
performed to such date. U.S. Government contracts are also subject to reduction
or modification in the event of changes in Government requirements or budgetary
constraints.
INTELLECTUAL PROPERTY
The Company holds more than 50 patents, primarily in the United States and
Canada. Many of the Company's products incorporate a wide variety of
technological innovations, some of which are protected by individual patents.
Many of these innovations are treated as trade secrets with programs in place to
protect these trade secrets. Accordingly, no one patent or group of related
patents is material to the Company's business. The Company also has numerous
trademarks, including the Eagle-Picher name, and considers the Eagle-Picher name
to be material to its business.
PLAN OF REORGANIZATION AND RELATED INJUNCTION
In January 1991, the Eagle-Picher Group filed voluntary petitions for
reorganization under Chapter 11 of the Bankruptcy Code. The filings were not
precipitated by any fundamental business problems. Rather, the filings were
caused by contingent liabilities, settlement costs and legal expenses resulting
from more than two decades of litigation arising out of tens of thousands of
claims asserted against the Eagle-Picher Group in connection with its
asbestos-related business operations, which ceased by 1974. In August 1996, the
Eagle-Picher Group, together with the Injury Claimants' Committee and the
Representative for Future Claimants who was appointed by the Bankruptcy Court,
proposed the Plan to the Bankruptcy Court. The Bankruptcy Court and the Ohio
District Court jointly issued the Order confirming the Plan in November 1996,
and the Plan was consummated on November 29, 1996 (the 'Consummation Date'). The
major component of the Plan was a settlement of the Eagle-Picher Group's
liability for present and future asbestos-related personal injury claims arising
out of business operations prior to the date of the bankruptcy petitions under
which it was agreed that these claims had a total value of $2 billion. Pursuant
to the Plan, (i) the Trust was established and the Company contributed assets to
the Trust valued at approximately $730 million in the aggregate (representing
the approximately 37% distribution upon the $2 billion allowed claim of the
asbestos claimants, as unsecured creditors), consisting of $51.3 million in
cash, $250 million in the 10% Debentures, $69.1 million in Tax Refund Notes,
$18.1 million in Divestiture Notes and 10,000,000 shares of Common Stock
(representing all outstanding shares of Common Stock), and (ii) the PD Trust is
to be established and funded with $3 million in cash (which is currently held in
escrow by the Company). Pursuant to the
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Plan, the asbestos-related claims are discharged and the Eagle-Picher Group has
no further liability in connection with such claims.
Pursuant to the Plan, the Eagle-Picher Group is discharged of the burden of
defending more than 150,000 asbestos-related, as well as any lead-related,
claims that had been, as well as any such claims that may in the future be,
filed against the Eagle-Picher Group. This relief has been accomplished through
the establishment of the independent trusts under the Plan to assume,
administer, settle and pay such claims. In addition, the Order includes the
Injunction, which prohibits claimants with asbestos-related or lead related
claims from bringing actions against the Eagle-Picher Group, and instead
requires these claimants to assert such claims only against the Trust or, as to
asbestos-related property damage claims, against the PD Trust, each of which
was, or in the case of the PD Trust, will be, funded by the Company pursuant to
the Plan. Under the Plan the Trust assumed all liability and responsibility for
asbestos-related and lead-related personal injury claims against the
Eagle-Picher Group, and the PD Trust assumed all liability and responsibility
for asbestos-related property damage claims. The Company believes that the Plan,
the Injunction and the Bankruptcy Code together will enjoin any claims against
the Company or the Eagle-Picher Group with respect to any past, present, or
future asbestos-related or lead-related liabilities arising from or based upon
business operations prior to the date of the bankruptcy petition.
Following confirmation of the Plan, notices of appeal of the Order were
filed by one general unsecured creditor (the 'Creditor Appellant') and the
Unofficial Committee of Co-Defendants (the 'Co-Defendants'), a group of former
manufacturers and distributors of asbestos-containing products that have been
named as co-defendants with one or more members of the Eagle-Picher Group in
asbestos personal injury lawsuits and have asserted claims against the
Eagle-Picher Group for contribution, indemnity and subrogation. The allowance of
contribution claims against the Eagle-Picher Group is subject to Section 502(e)
of the Bankruptcy Code which states that a claim for contribution asserted by an
entity that is liable with a Chapter 11 debtor shall be disallowed to the extent
such contribution claim is contingent as of the time of allowance or
disallowance of such claim. Neither the Creditor Appellant nor the Co-Defendants
requested that the Order be stayed pending appeal. The Creditor Appellant
withdrew its notice of appeal by a stipulation dated January 24, 1997.
The Co-Defendants appealed the Order directly to the Sixth Circuit (the
'Confirmation Order Appeal'), raising a variety of objections to the Plan and to
the Trust's procedures for processing, allowing and paying the Co-Defendants'
claims. The Co-Defendants also asserted, among other things, that Section 524(g)
of the Bankruptcy Code, which authorizes courts to issue injunctions to channel
asbestos claims away from a reorganized company to a personal injury trust
established by such company (as discussed below), is unconstitutional. The
Co-Defendants did not, however, contend that the Bankruptcy Court and Ohio
District Court lacked jurisdiction to enter the Injunction or that Section
524(g) of the Bankruptcy Code had not been satisfied. The Co-Defendants did not
raise their objections in the bankruptcy case until after the deadline for
filing objections to the Plan.
The Co-Defendants also appealed to the Ohio District Court the Bankruptcy
Court's denial of the Co-Defendants' motion for leave to file their late
objection to the Plan discussed above (the 'Objection Appeal'). The Ohio
District Court affirmed the Bankruptcy Court's denial of the Co-Defendants'
motion to file a late objection to the Plan and the Co-Defendants appealed that
judgment to the Sixth Circuit. The Objection Appeal, which was briefed in early
1998, was consolidated with the Confirmation Order Appeal by the Sixth Circuit.
The Company anticipates that oral argument will be held on the consolidated
appeals by the third quarter of 1998.
The Company has argued to the Sixth Circuit that the Confirmation Order
Appeal is moot in light of (i) the substantial consummation of the Plan, (ii)
the fact that the Co-Defendants did not seek a stay of the Order pending appeal
and (iii) the adverse effects that vacation of the Order would have on creditors
and non-creditor third parties who have acted in reliance on the Order.
Even if the Sixth Circuit were willing to consider the substance of the
Co-Defendants' objections to the confirmation of the Plan, the Co-Defendants
have represented in their court papers that they do not object to the amount of
money that was transferred to the Trust, and that their objections relate to the
internal Trust procedures and the identity of the trustees and members of the
advisory committee for the Trust. The Company believes, therefore, that even if
there is a ruling on the Co-Defendants'
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objections, it is unlikely to adversely affect the scope of the Injunction
issued pursuant to the Order, the significance of which is discussed herein. The
Objection Appeal will likely be denied because the Co-Defendants failed to
timely file an objection to the confirmation of the Plan notwithstanding having
adequate notice of the deadline for the filing of objections to the Order. For
the foregoing reasons, the Company expects that the Objection Appeal and the
Confirmation Order Appeal will be denied by the Sixth Circuit.
The Company believes that the Injunction is critical to its ability to
continue to operate its business. Indeed, the Bankruptcy Court and the Ohio
District Court found that the Injunction was 'essential' to the viability of the
business operations of the Company and to the successful implementation of the
Plan. Notwithstanding that the Bankruptcy Court and Ohio District Court
determined that they had authority to issue the Injunction, it is possible that
the Injunction could be dissolved in connection with the Co-Defendants' appeals
discussed above or a later challenge. The Company believes, for the reasons
discussed herein, that neither the appeals nor later challenge would result in
the dissolution of the Injunction. However, although unlikely, dissolution of
the Injunction is possible.
A later challenge to the Injunction will likely be unsuccessful because the
Bankruptcy Court and Ohio District Court entered the Injunction pursuant to
Section 524(g) of the Bankruptcy Code. Section 524(g) of the Bankruptcy Code was
enacted by Congress in 1994 to provide a statutory safe-harbor for asbestos
manufacturing companies faced with numerous asbestos-related personal injury
claims. Section 524(g) grants bankruptcy courts express statutory authority to
issue injunctions that prohibit present and future asbestos claimants from suing
a reorganized debtor; provided that a trust is established and funded to pay
asbestos-related claims through procedures that reasonably assure that claimants
with similar injuries will receive similar payments and other specific statutory
requirements are satisfied.
Under Section 524(g), if the injunction is issued or affirmed by a district
court with jurisdiction over the reorganization, the injunction will be
permanent and not subject to modification by any court once the injunction
becomes final and nonappealable. In confirming the Plan and issuing the
Injunction, the Bankruptcy Court and Ohio District Court determined that the
Trust and the PD Trust each satisfied the requirements of Section 524(g) and
that they had jurisdiction to issue the Injunction under both Section 524(g) of
the Bankruptcy Code and their more general powers under the Bankruptcy Code to
issue orders that are necessary or appropriate in bankruptcy cases. The Order
has not yet become final, however, due to the Co-Defendants' appeal to the Sixth
Circuit discussed above. Once the Order becomes final, it is likely that Section
524(g) would bar any later challenge to the Injunction. It is possible, however,
that a court would rule that Section 524(g) does not operate to preclude all
subsequent challenges to a qualifying injunction and that dissolution or
modification of the Injunction is appropriate under the circumstances then
existing.
While Section 524(g) specifically addresses trusts created to resolve
asbestos-related litigation and injunctions issued in connection therewith, it
does not specifically address whether an injunction directing claims to a trust
that will pay both asbestos-related and non-asbestos-related claims, as in this
case, is protected under Section 524(g). While there is a risk that the
Injunction would not apply to future lead-related claimants because lead-related
claims are not addressed in Section 524(g), the Company believes that the
Injunction would be upheld and enforced against lead-related claimants if
challenged. That belief is based on the fact that the Bankruptcy Court and Ohio
District Court, in confirming the Plan and entering the Injunction, specifically
ruled that Section 524(g) does not prohibit channeling of non-asbestos related
claims along with asbestos-related claims. In the event that Section 524(g) does
not operate to protect the Injunction's channeling of lead-related claims, such
channeling could be upheld as a necessary or appropriate order under Section
105(a) of the Bankruptcy Code. Although the filing of future lead-related
lawsuits cannot be predicted, the Company believes that this risk is limited
because to date, only approximately 125 lead-related claims have been asserted
against the Eagle-Picher Group (as compared to the tens of thousands of
asbestos-related claims asserted against the Eagle-Picher Group).
On and shortly after the Consummation Date, the Eagle-Picher Group made
distributions (the 'Initial Distribution') under the Plan totaling approximately
$800 million in cash, common stock and debt securities (including the
approximately $730 million contributed to the Trust, $3.0 million to the
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PD Trust escrow and the remainder in connection with various other allowed
claims including the environmental claims described below). Final distributions
under the Plan will not be made until all remaining unresolved claims (other
than asbestos-related and lead-related claims) are resolved. Approximately
twelve unresolved claims remain (seven of which are subject to the Liberty
Mutual Settlement discussed below, three of which relate to environmental
liability claims discussed below and the others are product liability claims in
connection with products manufactured prior to the filing of the bankruptcy
petitions). As of February 28, 1998, the Company has recorded a reserve on the
Company's balance sheet in the amount of approximately $13.5 million for the
payment of such claims, as well as any other allowed or resolved claims that
were not paid in the Initial Distribution, and administrative expenses (the
'Final Distribution Reserve'). Although there can be no assurance as to the
amount required to resolve the remaining claims, the Company expects those
claims, together with any other claims not paid in the Initial Distribution, and
administrative expenses, to be resolved for an amount not in excess of the Final
Distribution Reserve.
On February 12, 1997, the Eagle-Picher Group commenced an adversary
proceeding in the Bankruptcy Court to obtain approval of a settlement agreement
between the Eagle-Picher Group and the Liberty Mutual Insurance Company and
certain of its affiliates (together, 'Liberty Mutual'), a provider of the
Eagle-Picher Group's primary insurance coverage, with respect to disputed
coverage claims that had been asserted by the Eagle-Picher Group against Liberty
Mutual and by Liberty Mutual against the Eagle-Picher Group (the 'Liberty Mutual
Settlement'). The Bankruptcy Court has not yet made any ruling in connection
with the Liberty Mutual Settlement. Pursuant to the Liberty Mutual Settlement,
upon an order of approval of the Bankruptcy Court becoming final, and subject to
certain conditions, including a permanent injunction against all other parties
that might claim an interest in specified Liberty Mutual policies from taking
any action or asserting any claim against such Liberty Mutual policies, Liberty
Mutual would be required to remit to the Company approximately $13.8 million.
The Company believes that the Liberty Mutual Settlement is fair and equitable,
and, together with the other members of the Eagle-Picher Group, intends to move
in the Bankruptcy Court for approval of the Liberty Mutual Settlement.
Although a bankruptcy plan of reorganization generally serves to resolve
all claims that arose prior to the bankruptcy proceedings, courts in a number of
cases have limited the types of environmental obligations that can be discharged
by bankruptcy (concluding, for example, that an order to conduct an
environmental clean-up of a site may not be a 'claim' or that an environmental
claim did not 'arise' before the bankruptcy). The Eagle-Picher Group has entered
into the Environmental Settlement, discussed below, which is intended to relieve
the Eagle-Picher Group of the burden of defending against certain claims
asserted under Environmental Laws relating to conditions occurring prior to the
date of the bankruptcy petition and governs certain environmentally related
claims that may be asserted against the Company or the Eagle-Picher Group after
the Consummation Date relating to conditions occurring prior to the date of the
bankruptcy petition. See ' -- Environmental Matters.' Nevertheless, due to the
limitations on the types of environmental obligations that can be discharged by
bankruptcy, the Eagle-Picher Group may have obligations relating to historical
noncompliance with environmental laws with respect to sites owned by the Company
as of the Confirmation Date that were not asserted in the bankruptcy
proceedings. See ' -- Environmental Matters.'
If, regardless of the settlements, decisions, proceedings and legislation
discussed herein, the Order were to be vacated, modified or restricted in
applicability in a way that permits a substantial number of claims to be
asserted against the Company, the successful assertion of such claims would
materially adversely effect the Company's financial condition, results of
operations or cash flows and could render the Company insolvent. For all of the
reasons described above, however, the Company believes that any such result is
highly unlikely.
ENVIRONMENTAL MATTERS
Like companies involved in similar manufacturing businesses, the Company's
operations and properties are subject to extensive Environmental Laws. The Clean
Air Act and Clean Water Act, each as amended, impose stringent standards on air
emissions and water discharges, respectively. Under the Resource Conservation
and Recovery Act, as amended ('RCRA'), a facility that generates hazardous
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wastes must manage those wastes in accordance with strict standards, and a
facility that treats, stores or disposes of hazardous waste on-site may be
liable for corrective action costs. A facility that holds a RCRA permit may have
to incur costs relating to the closure of certain 'hazardous' or 'solid' waste
management units. Under CERCLA and similar state laws, an owner or operator of
property at which releases of hazardous substances have occurred, or the
generator of hazardous substances disposed of offsite, may be jointly and
severally liable for costs of investigation and remediation of any resulting
contamination and related natural resource damages, regardless of fault. Failure
to comply with such Environmental Laws, which are frequently amended, can lead
to the imposition of civil or criminal penalties, injunctive relief and denial
or loss of, or imposition of significant restrictions on, environmental permits.
In addition, the Company could be subject to suit by third parties in connection
with violations of or liability under Environmental Laws.
The Company has established a number of programs to facilitate compliance
with Environmental Laws. In addition, from time to time, the Company has
undertaken remedial activities or incurred compliance costs at or around the
Company's operations or former operations, both voluntarily and as a result of
federal and state agency orders, permit requirements or other notices. Further,
from time to time the Company receives notice of liability or potential
liability under CERCLA or analogous state laws in connection with the disposal
of materials from the Company's operations. It is also possible that there are
areas in which the Company's facilities have not been, are not currently, or may
in the future not be, in compliance with Environmental Laws.
For the last three fiscal years, the Company's average capital expenditures
and operating expenses (including expenses for remedial activities) for
environmental matters were $1.1 million and $7.3 million, respectively
(excluding depreciation). Such amounts do not include payments made by the
Company under the Plan to settle or otherwise resolve certain environmental
claims asserted in the bankruptcy proceedings. See ' -- Environmental
Settlement.' The Company estimates that capital expenditures and operating
expenses (including expenses for remedial activities) for environmental matters
will be approximately $1.9 million and $8.3 million, respectively, for fiscal
year 1998 and approximately $1.2 million and $9.2 million, respectively, for
fiscal year 1999. However, because Environmental Laws have historically become
more stringent, costs and expenses relating to environmental control and
compliance may increase in the future. In addition, the Company may have to
incur additional capital expenditures and compliance costs (which it is unable
to estimate at this time) in connection with the remedial activities discussed
below. Accordingly, there can be no assurance that costs of compliance with
existing and future Environmental Laws will not exceed current estimates and
will not have a material adverse effect on the Company's financial condition,
results of operations or cash flows.
The Merger Agreement provides for indemnification for costs and expenses
from certain environmental exposures in connection with the operations of the
Company in excess of agreed upon thresholds for specific properties, which
totals approximately $24 million in the aggregate. The indemnity applies only to
certain environmental claims arising out of the business or operations of the
Company prior to the Closing of which the Trust is notified within three years
after the Closing. The Trust's indemnity obligations are subject to a deductible
of $10.0 million and the Trust is only obligated to pay $50.0 million above the
deductible for all indemnity claims, including those relating to environmental
matters. In addition, indemnification is unavailable in connection with certain
sites specified in the Merger Agreement and, in connection with other sites, may
be asserted only for the amount by which such claim exceeds the Company's
projected remediation or compliance costs. The Company has recorded a reserve as
of November 30, 1997 of approximately $6.1 million in connection with
environmental matters, and believes such reserves to be adequate.
Certain Compliance and Remedial Activities
Joplin, Missouri and Colorado Springs, Colorado. The Company is undertaking
closure and corrective actions under RCRA at two of its permitted hazardous
waste facilities. At the Joplin, Missouri, facility, consistent with the
requirements of its RCRA permit, the Company is investigating the nature and
extent of contamination from two closed hazardous waste impoundments and over
100 former solid waste management units formerly in use during the 130-year
operating history of this
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property. The Company's investigation has identified areas of soil and
groundwater contamination or suspected contamination, certain of which likely
will require the Company to undertake remedial activities. Following completion
of its investigation, the Company, in conjunction with federal and state
regulators, will determine what, if any, corrective actions are appropriate at
this property. At the Colorado Springs, Colorado, facility, the closure of four
former hazardous waste impoundments is being completed. Materials formerly
stored in the impoundments have contaminated groundwater and soil at and around
the facility. A groundwater remediation system was placed in service in 1995 and
continues in operation. It is anticipated that corrective actions for soils will
be implemented in 1998. The Company does not believe that it will be assessed
any penalty in connection with the remediation of these sites, although there
can be no assurance that one will not be imposed.
Galena, Kansas. The Company owned and operated a lead and zinc smelting
facility, which was dismantled in 1982, on the Galena property. The Galena
property is located within the Tri-State mining district, formerly one of the
largest lead and zinc fields in the world. The Tri-State mining district was
actively worked from the mid-1800s until the 1960s and, as a result, soil,
groundwater and surface waters have been significantly and adversely impacted.
In the 1980s and early 1990s, the United States Environmental Protection Agency
(the 'US EPA') addressed both surface contamination (including residential soil
contamination) and groundwater contamination issues in the Tri-State mining
district in the immediate vicinity of the Galena property. Under the
Environmental Settlement (as defined below), while the Company resolved all of
its other liability under CERCLA associated with the Tri-State mining district,
it specifically retained liability for the Galena property. Environmental
impacts are likely at the Galena property as a result of the former smelter
operation and from historic materials management practices on the Galena
property. US EPA has not required remediation of the Galena property and the
Company has no current expenses in connection with remedial activities at this
property. However, the Company anticipates that certain investigations and
remediation may be required at some point in the future. The Company does not
believe that it will be assessed any penalty in connection with the remediation
of this site, although there can be no assurance that one will not be imposed.
The Company is undertaking other remedial actions at a number of its
facilities and properties. The Company does not anticipate that such expenses,
including expenses in connection with the specific sites discussed above, will
have a material adverse effect on the Company's financial condition, results of
operations or cash flows. However, there can be no assurance that, in the
future, the Company's expenditures in connection with remedial activities will
not exceed current expenditures and will not have a material adverse effect on
the Company's financial condition, results of operations or cash flows.
In addition, in connection with certain sales of its assets, including the
Plastics and Transicoil divisions sold in 1997, the Company has agreed to
undertake remedial actions and/or to indemnify the respective purchasers of
particular assets for certain liabilities under the Environmental Laws relating
to that asset's operations or activities prior to the sale. The Company believes
that claims under these indemnity provisions will not have a material adverse
effect on the Company's financial condition, results of operations or cash
flows.
Environmental Settlement
During the pendency of the bankruptcy proceedings, the Eagle-Picher Group
entered into a settlement agreement (the 'Environmental Settlement') with the US
EPA, the United States Department of the Interior and the states of Arizona,
Michigan and Oklahoma (together, the 'Settling Parties'), addressing all known
and unknown environmentally-related claims that were or could have been asserted
by those entities against the Eagle-Picher Group in the bankruptcy proceeding.
The Environmental Settlement was approved by the Bankruptcy Court on June 6,
1996, affirmed by the Ohio District Court on July 14, 1997, and became final 30
days later. The Environmental Settlement resolved the majority of the
approximately 1,100 environmental liability-related claims filed against the
Eagle-Picher Group in the bankruptcy proceedings by allowing the Settling
Parties general unsecured claims totaling approximately $43.8 million (pursuant
to the Plan, general unsecured claims are paid at 37% of the allowed amount).
All environmental claims filed in the bankruptcy proceedings not subject to the
Environmental Settlement were either disallowed by the Bankruptcy Court or
resolved as general
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unsecured claims, with the exception of three claims, none of which the Company
believes is material and all of which will be paid, if at all, from the Final
Distribution Reserve. In addition, the Environmental Settlement provides that
any additional claims by the Settling Parties against the Eagle-Picher Group in
connection with pre-petition activities at any site not owned by the Company
(the 'Additional Sites'), shall be resolved as if they had been asserted during
the bankruptcy proceedings. Accordingly, if any member of the Eagle-Picher Group
is found liable or settles any Additional Site claim, such member's liability is
limited to 37% of the liability or settlement amount.
The Environmental Settlement also provides that any liability, whether
alleged to arise before or after the Consummation Date, relating to a site owned
by the Eagle-Picher Group on or after the Consummation Date (the 'Owned Sites'),
or relating to post-petition conduct by the Eagle-Picher Group, is not
discharged in the bankruptcy proceedings, and will be resolved as if the
Eagle-Picher Group had never filed for reorganization. Accordingly, the
Eagle-Picher Group is responsible for 100% of any liability (including, if
required, the performance of remedial activities) or settlement amount in
connection with Owned Sites or post-petition conduct. See ' -- Certain
Compliance and Remedial Activities.'
Additional Sites. The Company has received notice from one or more of the
Settling Parties that the Company may have liability in connection with 19
Additional Sites. The Company may be insured for a portion of these claims. The
Company believes that its potential liability at 16 of these Additional Sites is
not material to the Company's financial condition, results of operations or cash
flows. The remaining three Additional Sites may require significant expenditures
by the Company: the Henryetta Smelter Site at Henryetta, Oklahoma, the RSR
Smelter Site at Dallas, Texas, and the Witter Drum Site at Asbury, Missouri. Of
the $6.1 million total reserves recorded by the Company in connection with
environmental matters, $1.2 million is for its anticipated costs in resolving
these three claims:
Henryetta Smelter Site. The Company received a notice from the US EPA
in 1997, alleging liability for remediation expenses at the site of a
former zinc smelting facility owned and operated by the Company at
Henryetta, Oklahoma, and for the removal and disposal from surrounding
residential locations of contaminated soil and gravel that originated from
the facility and from other companies operating in the area. The Company
operated the facility for approximately 50 years, until it was shut down in
1968. The US EPA performed remedial activities at the site at a cost of
approximately $4 million to $5 million. The Company expects to settle this
claim with the US EPA for some portion of that amount.
RSR Smelter Site. The Company received a notice from the US EPA in
1997, alleging that it may be a Potentially Responsible Party ('PRP')
regarding liability for remediation expenses at a secondary lead smelting
facility in Dallas, Texas. The Company allegedly leased the facility, which
was in operation until in or about 1984, for a period of at least one year
in the early 1950s. The US EPA has conducted and continues to conduct
extensive remedial activities at this site, and the US EPA's total expenses
may amount to $60 million or more. The Company is one of more than 1,000
PRPs identified by the US EPA in connection with this site and is not
identified by the US EPA as one of the 14 significant PRPs. However, the
Company believes that it may be required to make some expenditure to
resolve its potential liability for remediation expenses in connection with
this site.
Witter Drum Site. The Company received a notice from the US EPA in
1997, alleging liability in connection with a third-party facility that had
provided drum reclamation services for the Company. The US EPA has
investigated the site and estimates that approximately $400,000 in remedial
activities will be undertaken at this site. The Company expects to settle
this claim with the US EPA for some portion of that amount.
The Company does not expect that its total costs associated with these
sites will have a material adverse effect on the Company's financial condition,
results of operations or cash flows. Because each site is an Additional Site
under the Environmental Settlement, the Company will be required to pay only 37%
of any amount for which it may be found liable or settle the claim.
While the Company does not believe, based on current information and taking
into account reserves established for environmental matters, that costs
associated with compliance with and
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remediation under Environmental Laws will have a material adverse effect on its
financial condition, results of operations or cash flows, the Environmental Laws
under which the Company's facilities operate are numerous, complicated and often
ambiguous and historically have become increasingly more stringent. In addition,
costs related to remediation of Company-owned sites may exceed current
estimates. Accordingly, there can be no assurance that future events, such as
changes in existing laws, the promulgation of new laws or the development of new
facts or conditions, will not cause the Company to incur substantial additional
expenditures or that any such additional expenditures will not have a material
adverse effect on the Company's financial condition, results of operations, or
cash flows.
LEGAL PROCEEDINGS
On January 25, 1996, Richard Darrell Peoples, a former employee of the
Company, filed a Qui Tam suit under seal in United States District Court for the
Western District of Missouri (the 'Missouri Court'). A Qui Tam suit is a lawsuit
brought by a private individual pursuant to federal statute, allegedly on behalf
of the U.S. Government. The U.S. Government, which has the opportunity to
intervene in, and take control of, a Qui Tam suit, has declined to intervene or
take control of the Qui Tam suit filed against the Company. The Company became
aware of the suit on October 20, 1997, when it was served on the Company, after
it had been unsealed. The suit involves allegations of irregularities in expense
accounts and testing procedures in connection with certain U.S. Government
contracts. The allegations are substantially the same as allegations made by the
former employee, and investigated by outside counsel for the Company, prior to
the filing of the Qui Tam suit. Outside counsel's investigation found no
evidence to support any of the employee's allegations, except for some
inconsequential expense account mistakes. The Company, which believes that the
U.S. Government did not incur any expense as a result of the mistakes, reported
to the U.S. Government the employee's allegations and the results of outside
counsel's investigation. The employee also initiated a different action against
the Company in 1996 for wrongful termination, in which he alleged many of the
same acts complained of in the Qui Tam suit. That action was dismissed with
prejudice by the Missouri Court in October 1996. The Company believes that the
Qui Tam suit is without legal or factual merit and intends to contest this suit
vigorously. The Company does not believe that resolution of this suit will have
a material adverse effect on the Company's financial condition, results of
operations or cash flows.
The Company is also involved in various other proceedings incidental to the
ordinary conduct of its business. The Company believes that none of these other
proceedings will have a material adverse effect on the Company's financial
condition, results of operations or cash flows.
EMPLOYEES AND EMPLOYEE RELATIONS
As of November 30, 1997, the Company employed 1,825 salaried employees and
4,871 hourly employees. Following is a breakdown of foreign and United States
employees:
<TABLE>
<CAPTION>
SALARIED NON-SALARIED TOTAL
-------- ------------ -----
<S> <C> <C> <C>
United States employees....................................... 1,581 4,175 5,756
Foreign employees............................................. 244 696 940
Total employees..................................... 1,825 4,871 6,696
</TABLE>
Approximately 20.5% of the Company's non-salaried employees (approximately
14.9% of the Company's total employees) are represented by six different labor
unions under seven separate labor contracts. The International Union of
Operating Engineers Local Union No. 351 represents the largest bargaining unit
with approximately 400 employees. Another significant affiliation is the United
Steelworkers of America, Local No. 812, representing approximately 335 employees
at two facilities. Labor negotiations are conducted on a plant-by-plant basis
with two to three of the outstanding contracts renegotiated in any one year.
In the last five years the Company has had no work stoppages due to
strikes. However, there can be no assurance that there will not be work
stoppages due to strikes in the future, or that the Company would be able to
continue operating at affected facilities in the event of any work stoppage or
union dispute in the future.
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PROPERTIES
The principal fixed assets of the Company consist of its manufacturing,
processing and storage facilities and its transportation and plant vehicles. As
of November 30, 1997, properties, facilities and equipment (net of depreciation)
represented approximately 33% of the Company's total assets, as reflected in its
consolidated balance sheet. The following chart sets forth selected information
regarding the Company's manufacturing and processing facilities:
<TABLE>
<CAPTION>
DESCRIPTION OF
BUSINESS GROUP LOCATION PROPERTY INTEREST
- --------------------------------------- ------------------------------------------------------ -----------------
<S> <C> <C>
AUTOMOTIVE
Domestic Ann Arbor, Michigan leased
Blacksburg, Virginia (2 properties) owned
Brighton, Michigan leased
Hillsdale, Michigan (6 properties)(1) owned
Hamilton, Indiana owned
Inkster, Michigan owned
Jonesville, Michigan owned
Kalkaska, Michigan leased(2)
Leesburg, Florida owned
Manchester, Tennessee leased(2)
Norwich, Connecticut owned
Paris, Illinois owned(3)
Pine Bluff, Arkansas leased
Sidney, Ohio (2 properties) owned
Stratford, Connecticut owned
Vassar, Michigan leased
International Market Harborough, England owned
Ohringen, Germany owned
San Luis Potosi, Mexico owned
Soria, Spain owned
Tamworth, England owned
MACHINERY
Domestic Colorado Springs, Colorado owned
Colorado Springs, Colorado (2 properties) leased
Galena, Kansas owned
Grove, Oklahoma owned
Hamilton, Ohio leased
Harrisonville, Missouri owned
Joplin, Missouri (6 properties) owned
Joplin, Missouri (2 properties) leased
Lenexa, Kansas owned
Lubbock, Texas owned
Seneca, Missouri owned
Sharonville, Ohio owned
Socorro, New Mexico(1) leased
Stella, Missouri owned
International Acuna, Coahuila, Mexico owned
Rothenbach, Germany leased(3)
INDUSTRIAL(4)
Domestic Clark Station, Nevada owned
Lovelock, Nevada owned
Miami, Oklahoma (2 properties) owned
Miami, Oklahoma (3 properties) leased
Quapaw, Oklahoma (2 properties) owned
Vale, Oregon leased(2)
International Kyoto, Japan leased(3)
</TABLE>
- ------------
(1) There is little, if any, activity at this time at the Socorro, New Mexico
property and two of the Hillsdale, Michigan properties.
(2) The Company will become owner of each property upon payment in full of all
existing obligations under the respective IRB Obligations (as defined
herein) in connection with such property. See 'Description of Industrial
Revenue Bonds.'
(3) These properties are owned or leased by certain of the Company's joint
ventures. Accordingly, the Company has a 45% interest in the Paris, Illinois
property through the Eagle-Picher-Boge, L.L.C. joint venture; a 35% interest
in the Kyoto, Japan property though the Yamanaka EP Corporation joint
venture and a 45% interest in the Rothenbach, Germany property through the
Diehl & Eagle-Picher GmbH joint venture.
(4) In addition, the Company's Minerals division has mining locations and
numerous claims in Nevada, Oregon and California (discussed below), leases
office space in Reno, Nevada and leases 14 warehouses in the United States
and Canada.
84
<PAGE>
<PAGE>
The Company owns or leases additional office space, including sales offices
in Europe and Asia, and warehouse space for certain of its operations. The
Company's properties are adequate and suitable for the business of the Company,
and substantially all of its buildings have been well maintained and are in
sound operating condition and regular use.
The Company's corporate headquarters are located in approximately 19,420
square feet of leased office space in the Chiquita Center building in
Cincinnati, Ohio. The office space is leased from YCP Cincinnati, L.P. pursuant
to a six-year lease, with the initial term expiring February 29, 2004. The lease
provides renewal options for two additional periods of five years each. The
Company believes that its existing and planned facilities are adequate for its
current needs.
Mining. The Industrial Group's Minerals division owns and leases
diatomaceous earth and perlite mining locations as well as numerous claims in
Nevada, Oregon and California (collectively, 'mining properties'). The Company's
owned and leased mining properties, including those not currently being mined,
comprise a total of approximately 7,000 acres in Storey, Lyon, Pershing, and
Churchill Counties in Nevada and 3,600 acres in Malheur and Harney Counties in
Oregon, as well as rights on 1,040 acres not currently being mined in Siskiyou
County in California. The Company continually evaluates potential mining
properties, and additional mining properties may be acquired in the future. The
Minerals division extracts diatomaceous earth and perlite through open-pit
mining using bulldozers and wheel tractor scrapers. The extracted materials are
carried by truck to separate processing facilities. A total of approximately
506,000 tons of diatomaceous earth and perlite were extracted from the Company's
mining properties in Nevada and Oregon during Fiscal 1997. On average, the
Company has extracted a total of approximately 402,000 tons of diatomaceous
earth and perlite from its Nevada and Oregon properties each year for the past
three years. As ore deposits are depleted, the Company reclaims the land in
accordance with reclamation plans approved by the relevant federal, state and
local regulators. The following mining properties are of major significance to
the Company's mining operations:
Nevada. The Company's diatomaceous earth mining operations in Nevada
commenced more than 50 years ago in Storey County. The Company commenced
perlite mining operations in Churchill County in 1993. The Company
extracted a total of approximately 380,000 tons of diatomaceous earth and
perlite from its Nevada mining properties in Fiscal 1997 and, on average,
extracted a total of approximately 306,000 tons of diatomaceous earth and
perlite from its Nevada mining properties each year for the past three
years, or approximately 76% of the Company's total diatomaceous earth and
perlite production (and including 100% of its perlite production).
Approximately 265 acres in Storey, where active mining activities commenced
over 50 years ago, and approximately 62 acres in the Lyon/Churchill area
are actively being mined by the Company for diatomaceous earth.
Diatomaceous earth from the Storey, Churchill and Lyon mining properties is
processed at the Clark Station, Nevada facility. The Company believes its
diatomaceous earth reserves in Storey, Churchill and Lyon, including mining
properties not actively being mined, to be in excess of 40 years at current
levels of extraction based upon estimates prepared by its mining and
exploration personnel. Diatomaceous earth extractions from the Pershing
mining properties, which commenced more than 40 years ago, are processed at
the Lovelock, Nevada facility. Approximately 975 acres are actively being
mined for diatomaceous earth in Pershing. The Company believes its
diatomaceous earth reserves in Pershing, including mining properties not
actively being mined, to be in excess of 15 years at the current level of
extraction based upon estimates prepared by its mining and exploration
personnel. Beginning in 1993, the Company has actively mined approximately
25 acres in Churchill for perlite, which is processed at the Lovelock,
Nevada facility. The Company believes its perlite reserves in Churchill,
including mining properties not actively being mined, to be in excess of 50
years at the current level of extraction based upon estimates prepared by
its mining and exploration personnel.
Oregon. The Company commenced mining diatomaceous earth in Oregon
approximately 13 years ago at its mining properties in Harney and Malheur
Counties. Approximately 88 acres and 80 acres, respectively, are actively
being mined in Harney and Malheur; diatomaceous earth extracted from these
mines is processed at the Company's Vale, Oregon facility. The Company
extracted approximately 126,000 tons of diatomaceous earth from the Harney
and Malheur mining properties
85
<PAGE>
<PAGE>
during Fiscal Year 1997 and, on average, has extracted approximately 96,000
tons of diatomaceous earth each year for the past three years from these
mining properties, or approximately 24% of the Company's total diatomaceous
earth production. The Company believes its diatomaceous earth reserves in
Harney and Malheur, including mining properties not actively being mined,
to be in excess of 75 years at the current level of extraction based upon
estimates prepared by its mining and exploration personnel.
Substantially all of the Company's owned properties and assets are pledged
as collateral under the New Credit Agreement. See 'Description of New Credit
Agreement.'
CHANGE IN INDEPENDENT AUDITORS
Following the Company's emergence from bankruptcy in November 1996, the
Company appointed Deloitte & Touche LLP to replace KPMG Peat Marwick LLP as the
independent auditors for the Company. The Company's Board of Directors approved
the dismissal of KPMG Peat Marwick LLP and their replacement with Deloitte &
Touche LLP as the new independent auditors upon recommendation of the Company's
Audit committee. The Company did not consult with Deloitte & Touche LLP
regarding matters of accounting principles, practices or financial statement
disclosure prior to the firm being engaged as auditors. In connection with the
audits of the Company's financial statements for each of the two fiscal years
preceding the change in accountants, there were no disagreements with KPMG Peat
Marwick LLP on any matters of accounting principles or practices, financial
statement disclosure or auditing scope or procedure which, if not resolved to
the satisfaction of KPMG Peat Marwick LLP, would have caused KPMG Peat Marwick
LLP to make reference to the matter in their report on the consolidated
financial statements for such years. KPMG Peat Marwick LLP's opinion was
qualified as of and for the year ended November 30, 1995, in that the
consolidated financial statements were prepared assuming the Company would
continue as a going concern. The filing under Chapter 11 of the Bankruptcy Code
and the uncertainty associated with the Company's sale of asbestos products and
certain other litigation, raised substantial doubt about the Company's ability
to continue as a going concern. KPMG Peat Marwick LLP's opinion was unqualified
as of and for the year ended November 30, 1996, except for consistency in the
application of accounting principles as a result of the Company's change in its
method of computing LIFO for certain inventories.
86
<PAGE>
<PAGE>
MANAGEMENT
THE COMPANY
The following table sets forth the name, age and position with the Company
of the directors and executive officers of the Company as of the consummation of
the Acquisition. Directors will hold their positions until the annual meeting of
the stockholders at which their term expires or until their respective
successors are elected and qualified. Executive officers will hold their
positions until the annual meeting of the Board of Directors or until their
respective successors are elected and qualified.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ ---- ----------------------------------------------------------
<S> <C> <C>
Joel P. Wyler....................... 48 Chairman of the Board
Thomas E. Petry..................... 58 Director
Andries Ruijssenaars................ 55 Director, President and Chief Executive Officer
David N. Hall....................... 58 Senior Vice President - Finance
Wayne R. Wickens.................... 51 Senior Vice President - Automotive
</TABLE>
Mr. Wyler became a Director of the Company upon consummation of the
Acquisition. Mr. Wyler has been the Chairman of the Board of Directors of
Granaria Holdings since 1982.
Mr. Petry has been a Director of the Company since 1981. Following
consummation of the Acquisition, Mr. Petry resigned as Chairman of the Board of
Directors, a position he held since 1989, and as Chief Executive Officer, a
position he held since 1982. Mr. Petry was first employed by the Company in 1968
as assistant to the Treasurer and subsequently served as Assistant Treasurer;
Treasurer; Vice President and Treasurer; President of the Akron Standard
Division; and Group Vice President. Mr. Petry was elected a Director, President
and Chief Operating Officer of the Company in 1981, and President and Chief
Executive Officer in 1982. He served as President from 1981-89 and from 1992-94.
Mr. Petry is also a director of Cinergy Corp., Star Banc Corp., Union Central
Life Insurance Co., Insilco Corp. and The Wm. Powell Company.
Upon consummation of the Acquisition, Mr. Ruijssenaars became Chief
Executive Officer and continued as President and a Director of the Company,
positions he has held since 1994. Prior to the Acquisition, Mr. Ruijssenaars was
President and Chief Operating Officer of the Company from December 1994 until
1998 and Senior Vice President of the Company from 1989 until December 1994. Mr.
Ruijssenaars was first employed by the Company in 1980 as General Manager of
Eagle-Picher Industries GmbH in Ohringen, Germany, and has also served as
Executive Vice President and then President of the Company's Ohio Rubber Company
division.
Mr. Hall joined the Company as Treasurer in 1977 and became Vice President
and Treasurer in 1979. He has been Senior Vice President -- Finance since 1987.
Mr. Wickens has been Senior Vice President -- Automotive of the Company
since December 1994. From 1990 until December 1994, he was Division President of
the Company's Hillsdale Tool & Manufacturing Co. Mr. Wickens joined the Company
in 1976 as a management trainee with the Company's former Fabricon Automotive
division, and was promoted to Plant Manager, Vice President and then President
of Fabricon Automotive. Subsequently, Mr. Wickens served as President of the
Wolverine Gasket division and then as Vice President of the Automotive Group.
PARENT
The following table sets forth the name, age and position with Parent of
the directors and executive officers of Parent as of the consummation of the
Acquisition. Directors will hold their positions until the annual meeting of the
stockholders at which time their terms expire or until their respective
successors are elected and qualified. Executive officers will hold their
positions until the annual meeting of the Board of Directors or until their
respective successors are elected and qualified.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ------------------------------------ ---- ----------------------------------------------------------
<S> <C> <C>
Joel P. Wyler....................... 48 Chairman of the Board
Thomas E. Petry..................... 58 Director
Andries Ruijssenaars................ 55 Director, President and Chief Executive Officer
David N. Hall....................... 58 Senior Vice President - Finance
Wayne R. Wickens.................... 51 Senior Vice President - Automotive
</TABLE>
87
<PAGE>
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth information concerning the compensation for
services in all capacities to the Company for the years ended November 30, 1997,
1996 and 1995, of those persons who (i) served during the fiscal year ended
November 30, 1997, as the Chief Executive Officer of the Company and (ii) were,
at November 30, 1997, the other five most highly compensated officers of the
Company who earned more than $100,000 in salary and bonus in fiscal 1997
(collectively, the 'Named Executive Officers').
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
-------------------------------------------------------------------
FISCAL OTHER ANNUAL ALL OTHER
YEAR COMPENSATION COMPENSATION
NAME AND PRINCIPAL POSITION ENDED SALARY ($) BONUS ($) ($)(1) ($)(2)
- ----------------------------------------------- --------- ---------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Thomas E. Petry................................ 11/30/97 $ 625,000 $ 278,000 $232,737 $260,103
Chairman and Chief Executive 11/30/96 625,000 239,000 218,919 245,073
Officer 11/30/95 575,000 244,000 255,296 285,611
Andries Ruijssenaars........................... 11/30/97 525,000 205,000 179,244 206,206
President and Chief Operating 11/30/96 425,000 160,000 174,171 200,081
Officer 11/30/95 390,000 145,000 87,298 102,571
David N. Hall.................................. 11/30/97 375,000 126,000 166,629 188,163
Senior Vice President -- Finance 11/30/96 360,000 107,000 146,980 165,986
11/30/95 345,000 110,000 120,284 136,415
Wayne R. Wickens............................... 11/30/97 325,000 109,000 77,942 91,919
Senior Vice President -- Automotive 11/30/96 295,000 72,000 99,564 116,357
11/30/95 280,000 85,000 24,377 31,109
James A. Ralston............................... 11/30/97 240,000 67,000 41,069 49,762
Vice President, General 11/30/96 230,000 86,000 40,106 48,966
Counsel and Secretary 11/30/95 215,000 58,000 11,475 18,292
Carroll D. Curless............................. 11/30/97 240,000 67,000 116,456 132,211
Vice President and Controller 11/30/96 230,000 86,000 78,715 91,470
11/30/95 215,000 56,000 50,616 60,304
</TABLE>
- ------------
(1) This column includes nothing for perquisites since in no case did
perquisites exceed the reporting thresholds (the lesser of 10% of salary
plus bonuses or $50,000), but includes amounts for the payment of taxes on
purchases of annuities under the Supplemental Executive Retirement Plan (as
defined herein).
(2) All other compensation is made up entirely of the cost of annuity under the
Supplemental Executive Retirement Plan and the Company's contributions to
the Eagle-Picher Salaried 401(k) Plan. See ' -- Retirement Benefits.'
EXECUTIVE STOCK OPTIONS
On the Consummation Date, all stock option plans and any unexercised or
unexercisable stock options were terminated. The Company had no other benefit
plans calling for the issuance of stock by the Company. Accordingly, none of the
Named Executive Officers had any unexercised stock options or SARS as of
November 30, 1997. No options were issued by the Company and no options were
exercised by the Named Executive Officers during the fiscal year ended November
30, 1997.
RETIREMENT BENEFITS
The following table shows the Named Executive Officers' Fiscal 1997
compensation relating to the cost of the annuity under the Supplemental
Executive Retirement Plan and the Company's contributions to the Eagle-Picher
Salaried 401(k) Plan.
88
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
COST OF
ANNUITY
UNDER COMPANY
SUPPLEMENTAL CONTRIBUTIONS
FISCAL EXECUTIVE TO EAGLE-PICHER
YEAR RETIREMENT SALARIED 401(K) TOTAL
ENDED PLAN ($) PLAN ($) ($)
--------- ------------ --------------- --------
<S> <C> <C> <C> <C>
Thomas E. Petry................................. 11/30/97 $255,353 $ 4,750 $260,103
11/30/96 240,323 4,750 245,073
11/30/95 280,991 4,620 285,611
Andries Ruijssenaars............................ 11/30/97 201,456 4,750 206,206
11/30/96 195,331 4,750 200,081
11/30/95 97,951 4,620 102,571
David N. Hall................................... 11/30/97 183,413 4,750 188,163
11/30/96 161,236 4,750 165,986
11/30/95 131,795 4,620 136,415
Wayne R. Wickens................................ 11/30/97 87,169 4,750 91,919
11/30/96 111,607 4,750 116,357
11/30/95 26,489 4,620 31,109
James A. Ralston................................ 11/30/97 45,012 4,750 49,762
11/30/96 44,216 4,750 48,966
11/30/95 13,672 4,620 18,292
Carroll D. Curless.............................. 11/30/97 127,461 4,750 132,211
11/30/96 86,720 4,750 91,470
11/30/95 55,684 4,620 60,304
</TABLE>
The following table shows the estimated total combined annual benefits to
the Named Executive Officers upon retirement at age 62 payable under Social
Security, the Salaried Plan (as defined herein), and the Supplemental Executive
Retirement Plan:
<TABLE>
<CAPTION>
YEARS OF SERVICE
--------------------------------------------------------
RENUMERATION 15 20 25 30 35
- ------------------------------------------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
$ 250,000.................................. $ 90,000 $120,000 $150,000 $150,000 $150,000
300,000................................. 108,000 144,000 180,000 180,000 180,000
350,000................................. 126,000 168,000 210,000 210,000 210,000
400,000................................. 144,000 192,000 240,000 240,000 240,000
450,000................................. 162,000 216,000 270,000 270,000 270,000
500,000................................. 180,000 240,000 300,000 300,000 300,000
550,000................................. 198,000 264,000 330,000 330,000 330,000
600,000................................. 216,000 288,000 360,000 360,000 360,000
650,000................................. 234,000 312,000 390,000 390,000 390,000
700,000................................. 252,000 336,000 420,000 420,000 420,000
750,000................................. 270,000 360,000 450,000 450,000 450,000
800,000................................. 288,000 384,000 480,000 480,000 480,000
850,000................................. 306,000 408,000 510,000 510,000 510,000
900,000................................. 324,000 432,000 540,000 540,000 540,000
950,000................................. 342,000 456,000 570,000 570,000 570,000
1,000,000................................. 360,000 480,000 600,000 600,000 600,000
</TABLE>
The Eagle-Picher Salaried Plan (the 'Salaried Plan') is a non-contributory
defined benefit pension plan in which the Named Executive Officers are
participants. The Supplemental Executive Retirement Plan (the 'SERP' and,
together with the Salaried Plan, the 'Retirement Plans'), in which the Named
Executive Officers are also participants, provides retirement benefits in
addition to the benefits available under the Salaried Plan. The Retirement Plans
provide benefits after retirement based on the highest average monthly
compensation during five consecutive years of the last ten years preceding
retirement. For purposes of the Retirement Plans, compensation includes base
salary, bonuses, commissions, and severance payments; salary and bonus payments
that would be included in the Retirement Plans are as reported in the Summary
Compensation Table, and commissions or severance payments, if there had been
any, would have been included in that Table. The benefits shown by the
89
<PAGE>
<PAGE>
Pension Plan Table above include amounts payable under Social Security as well
as those payable under the Salaried Plan and the SERP. Benefits are computed on
the basis of straight-life annuity amounts.
The estimated credited years of service with the Company for the Named
Executive Officers at age 62 will be:
<TABLE>
<S> <C>
Thomas E. Petry................................................................ 33
David N. Hall.................................................................. 24
Andries Ruijssenaars........................................................... 24
Wayne R. Wickens............................................................... 32
James A. Ralston............................................................... 29
Carroll D. Curless............................................................. 36
</TABLE>
COMPENSATION OF DIRECTORS
The Company does not pay director retainers or attendance fees, or
committee retainers or attendance fees, to directors who are also employees of
the Company. During the 1997 Fiscal Year, until April 14, 1997, directors who
were not employees of the Company were paid an annual retainer of $24,000, a fee
of $1,000 for each Board meeting attended and a fee of $1,000 for each Board
committee meeting attended. In addition, Board committee members, other than
committee chairmen, were paid an annual retainer of $3,000 for each committee on
which they served; the chairman of each Board committee was paid an annual
retainer of $5,000. Effective April 14, 1997, directors who are not employees of
the Company are paid an annual retainer of $50,000, with no additional
attendance or committee membership fees. The Company intends to continue these
compensation policies for directors following the Acquisition.
Directors who were not also employees of the Company who retired with ten
or more years of service as members of the Board and who were elected or
appointed members of the Board prior to April 14, 1997, are paid an annual
advisory fee for life in the amount equal to the annual retainer paid to active
directors immediately prior to the time of their retirement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the 1997 Fiscal Year, until April 14, 1997, Daniel W. LeBlond
(Committee Chairman), Paul W. Christensen, V. Anderson Coombe and Roger L. Howe,
directors of the Company during that time, constituted the Stock
Option/Compensation Committee. Since May 28, 1997, Darius W. Gaskins (Committee
Chairman), Robert B. Steinberg and Will M. Storey, directors of the Company
until the Effective Date, constituted the Compensation Committee. None of the
members of the Compensation Committee or Stock Option/Compensation Committee
have ever been an employee of the Company or any of its subsidiaries.
During the 1997 Fiscal Year, Mr. Petry, Chairman and Chief Executive
Officer of the Company, served as a director and as a member of the compensation
committee of The Wm. Powell Company. During the 1997 Fiscal Year, Mr. Coombe, a
director of the Company until April 14, 1997, was Chairman of the Board of The
Wm. Powell Company.
INDEMNIFICATION PROVISIONS FOR OFFICERS AND DIRECTORS
Pursuant to Article 5 of the Company's Regulations, the Company will
indemnify its officers and directors to the fullest extent permitted by law
against all expenses, liability, loss or costs (including attorneys fees) in
connection with any action, lawsuit or other proceeding brought or threatened
against such officer or director by reason of the fact that he or she is or was
an officer or director of the Company. The Company has purchased directors and
officers liability insurance in favor of the Company and its officers and
directors covering up to $15.0 million in losses, including any indemnity
payment made by the Company to an officer or director, for a wrongful act of an
officer or director. In addition, under the Merger Agreement, Parent and the
Company have agreed to indemnify all pre-Effective Date officers and directors
of the Company, and to purchase directors and officers liability insurance in
their favor, for a period of six years after the Effective Date.
90
<PAGE>
<PAGE>
EMPLOYMENT AGREEMENTS; SEVERANCE
The Company has entered into employment agreements (the 'Employment
Agreements') with each of the Named Executive Officers which became effective on
November 29, 1996 (the Consummation Date of the Company's Consolidated Plan of
Reorganization) and each of which was amended in August 1997. The purpose of the
employment agreements was to provide the Company with continuity of management
following its emergence from bankruptcy. Other than the description of the
duties of each Named Executive Officer, the Employment Agreements are
substantially identical in their terms. The Employment Agreements terminate on
the earlier of (i) the second anniversary of any change of control (as defined
in the Employment Agreements) occurring prior to December 31, 1998 or (ii) May
18, 1999. The consummation of the Acquisition constituted a change of control
under the Employment Agreements.
The Employment Agreements provide that each Named Executive Officer will
maintain his current duties and responsibilities and will not be relocated from
his current geographical location. The Employment Agreements provide for salary
continuation at the Named Executive Officer's then-current rate plus customary
annual increases and bonuses and discretionary bonuses, as determined by the
Board of Directors of the Company (as shown in the Summary Compensation Table,
above). In addition, the Employment Agreements provide that each Named Executive
Officer will participate in the Company's employee and executive benefit and
short-term and long-term incentive plans as may be in effect from time to time
(including retirement or pension plans, health plans, death or disability plans
and the STSP).
If the employment of a Named Executive Officer is terminated by the Company
for good Cause (defined as the Commission of (i) a felony or (ii) a fraud upon
the Company or willful failure to perform job duties in all material respects)
or by such Named Executive Officer without good reason (as defined below), the
Named Executive Officer will receive accrued and unpaid salary, payment in lieu
of unused vacation and accrued benefits, if any (including the right to receive
pension or retirement benefits in accordance with the Company's retirement and
pension benefit plans as set forth in ' -- Retirement Benefits') (all such
payments, including salary, the 'Accrued Benefits'). If the employment of a
Named Executive Officer is terminated due to death or long term disability, such
Named Executive Officer or his dependents or estate will receive, in addition to
the Accrued Benefits, certain continuing health care benefits for a period of 30
months. If the employment of a Named Executive Officer is terminated by the
Company other than for Cause, or by such officer for Good Reason (defined as
material diminution of duties, diminution of salary or benefits, relocation,
substantial increase in travel requirements or material breach by the Company of
such Named Executive Officer's Employment Agreement) such Named Executive
Officer is entitled to receive, in addition to the Accrued Benefits, a lump-sum
severance benefit equivalent to two years' current base salary. Mr. Petry, who
resigned as Chairman of the Board and Chief Executive Officer following
consummation of the Acquisition, received in connection with his resignation a
lump-sum severance benefit of $1,250,000. In addition, Mr. Petry received a
payment in cash pursuant to the SERP of $742,000 in lieu of the Company's
purchase of an annuity; the Company expects to make additional payments for the
benefit of Mr. Petry in the amount of approximately $676,000 for related tax
obligations.
91
<PAGE>
<PAGE>
SECURITY OWNERSHIP AND CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT OF PARENT
The following table sets forth certain information regarding the beneficial
ownership of the Common Stock after giving effect to the Offerings of (i) each
person known by the Company to own beneficially 5% or more of the voting Common
Stock, (ii) each anticipated director of the Company, (iii) each executive
officer of the Company and (iv) all current directors and executive officers as
a group.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY OWNED
--------------------------------
NUMBER OF PERCENTAGE OF
NAME CLASS A SHARES CLASS A SHARES
- ----------------------------------------------------------------------- -------------- --------------
<S> <C> <C>
Granaria Holdings N.V. ................................................ 625,001 100%
Lange Voorhout 16
P.O. Box 233
2501 CE The Hague
The Netherlands(1)
Joel P. Wyler ......................................................... 625,001 100%
Lange Voorhout 16
P.O. Box 233
2501 CE The Hague
The Netherlands(2)
Daniel C. Wyler(1) .................................................... 625,001 100%
Lange Voorhout 16
P.O. Box 233
2501 CE The Hague
The Netherlands(2)
All directors and executive officers as a group ....................... 625,001 100%
(five persons)(3)
</TABLE>
- ------------
(1) Granaria Holdings N.V. is 100% owned by Wijler Holding N.V., a Dutch
Antilles company, 50.1% of which is owned by Joel P. Wyler and 49.9% of
which is owned by Daniel C. Wyler.
(2) Includes shares held by Granaria Holdings B.V.
(3) Shortly after the Acquisition, pursuant to the Incentive Stock Plan certain
members of senior management of the Company received interests in the E-P
Management Trust, which beneficially owns 10% of the equity of Parent. The
trustees of the E-P Management Trust are Andries Ruijssenaars, Thomas E.
Petry and Joel P. Wyler.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As part of the arrangements made prior to the negotiation and execution of
the Merger Agreement, the Company will make bonus payments to certain of its
executive officers in connection with the consummation of any merger,
acquisition, recapitalization or other transaction resulting in a change of
control of the Company. The Acquisition resulted in such a change of control.
The Company made special bonus payments shortly after consummation of the
Acquisition in the aggregate amount of $7.6 million to certain members of senior
management of the Company and expects to make an additional special bonus
payment of approximately $2.4 million on the second anniversary of the
Acquisition.
In connection with the Acquisition, the Company paid a transaction fee of
$7.3 million (approximately 1% of the transaction value) to Granaria Holdings in
consideration for advisory services related to the structuring and financing of
the Acquisition. The Company believes that such transaction fee is on terms no
less favorable to the Company than could have been obtained from an independent
third party.
The Company has entered into an advisory and consulting agreement with
Granaria Holdings pursuant to which the Company will pay an annual management
fee of $1.75 million to Granaria Holdings. The Company believes that such
management agreement is on terms no less favorable to the Company than could
have been obtained from an independent third party.
92
<PAGE>
<PAGE>
DESCRIPTION OF INDUSTRIAL REVENUE BONDS
The Company has incurred obligations under certain tax-exempt industrial
revenue bond financings (the 'IRB Obligations') totaling $18.4 million at
November 30, 1997 for development projects relating to the Company's facilities
at its Vale, Oregon, Manchester, Tennessee and Kalkaska, Michigan facilities.
The IRB Obligations for the Kalkaska, Michigan facility are collateralized by
real property and equipment and bears interest at 6.0%. The industrial revenue
bonds for the Vale, Oregon and Manchester, Tennessee facilities are floating
rate notes that are collateralized by letters of credit. The IRB Obligations
mature at various dates ranging from 2002 to 2012.
DESCRIPTION OF NEW CREDIT AGREEMENT
On the Closing Date, the Company entered into the New Credit Agreement with
ABN AMRO Bank, providing for the establishment of $385 million aggregate
principal amount of new credit facilities (the 'New Credit Facilities'). The
Company drew down approximately $304.1 million on the Closing Date in connection
with the Acquisition, including $225.0 million in term loan facilities and
approximately $79.1 million under the revolving credit facility. In addition,
$28.6 million of the revolving credit facility was used as credit support in the
form of letters of credit on the Closing Date. The New Credit Facilities have
been syndicated among several lenders who are parties thereto (collectively, the
'Lenders'), with ABN AMRO Bank, as Agent and Arranger, and PNC Bank, National
Association, as Documentation Agent (together, the 'Agents'). The following is a
summary description of the principal terms of the New Credit Agreement. The
description set forth below does not purport to be complete and is qualified in
its entirety by reference to the agreements setting forth the principal terms
and conditions of the New Credit Facilities, which have been filed as exhibits
to the Notes Exchange Offer Registration Statement of which this Prospectus
constitutes a part.
New Credit Facilities. The New Credit Agreement provides for (i) a senior
secured revolving credit facility (the 'Revolving Credit Facility') and (ii) a
senior secured term loan facility (the 'Term Loan Facility'). The Revolving
Credit Facility may be borrowed in the aggregate principal amount of up to
$160.0 million (of which up to $50.0 million may be utilized in the form of
commercial and standby letters of credit). In connection with the Revolving
Credit Facility, the Lenders will make available to the Company a swing-line
facility under which the Company may make short-term borrowings up to $10.0
million, each of which reduces the availability under the Revolving Credit
Facility on a dollar-for-dollar basis. The Term Loan Facility, in the aggregate
principal amount of $225.0 million, consists of: (i) Tranche A Term Loan in the
principal amount of $100.0 million (the 'Tranche A Term Loan'), (ii) Tranche B
Term Loan in the principal amount of $50.0 million (the 'Tranche B Term Loan'),
and (iii) Tranche C Term Loan in the principal amount of $75.0 million (the
'Tranche C Term Loan' and together with the Tranche A Term Loan and the Tranche
B Term Loan, the 'Term Loans').
Availability. The entire amount of the Term Loans was required to be drawn
in a single drawing at consummation of the Acquisition. Amounts borrowed under
the Term Loan Facility that are repaid may not be reborrowed. Loans under the
Revolving Credit Facility are available at any time on or after the Closing and
prior to the final maturity date of the Revolving Credit Facility, in principal
amounts to be agreed upon. Amounts repaid under the Revolving Credit Facility
during such availability period may be reborrowed provided no event of default
has occurred and is continuing and the other conditions to borrowing specified
therein have been satisfied.
Guarantees and Security. All obligations under the New Credit Facilities
are guaranteed by Parent and the Subsidiary Guarantors. The Company's
obligations under the New Credit Facilities, and Parent's and the Subsidiary
Guarantors' obligations under their respective Guarantees, are secured by (i)
with respect to the Company, substantially all of its U.S. property and assets
(tangible and intangible), a pledge of all capital stock of its U.S.
subsidiaries and up to 65% of the capital stock of its directly held non-U.S.
subsidiaries, (ii) with respect to Parent, all of the capital stock of the
Company (until the Company's leverage ratio falls below a certain level) and
(iii) with respect to the Subsidiary Guarantors, substantially all of its U.S.
property and assets (tangible and intangible) (collectively, the 'Collateral').
If at any time the Company can pledge more than 65% of the capital stock of a
non-U.S. subsidiary without creating adverse tax consequences to the Company,
the Company is required to pledge such stock.
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Interest. The Senior Indebtedness Facility provides for interest rates, at
the Company's option, equal to the following: (i) Revolving Credit
Facility -- Adjusted LIBOR plus 2.25% or ABR plus 1.25%, (ii) Tranche A Term
Loan -- Adjusted LIBOR plus 2.25% or ABR plus 1.25%, (iii) Tranche B Term
Loan -- Adjusted LIBOR plus 2.625% or ABR plus 1.625%, and (iv) Tranche C Term
Loan -- Adjusted LIBOR plus 2.875% or ABR plus 1.875%. The default interest rate
shall be the applicable rate plus 2% per annum. 'ABR' is the higher of ABN AMRO
Bank's prime rate and the Federal Funds Effective Rate plus 0.5%. 'Adjusted
LIBOR' is the applicable London interbank offered rate adjusted for reserves (if
any).
Maturity, Amortization and Prepayments. The Revolving Credit Facility
matures and shall be due and payable on the last business day of February 2004.
The Term Loan Facility maturity dates are as follows: (i) the Tranche A Term
Loan matures nine months after the fifth anniversary of the Closing, (ii) the
Tranche B Term Loan matures six months after the seventh anniversary of the
Closing, and (iii) the Tranche C Term Loan matures six months after the eighth
anniversary of the Closing. Amortization of the Tranche A Term Loan commences on
the last business day in August 1998 in the following quarterly payment amounts:
in 1998 and 1999, $2.5 million; in 2000, $3.75 million; in 2001, $5.0 million;
in 2002 through maturity, $6.25 million. Amortization of the Tranche B Term Loan
commences on the last business day in November 1998 in the following annual
payment amounts: in 1998, $100,000, in 1999 through 2004, $150,000 and the
remaining amount due at maturity. Amortization of the Tranche C Term Loan
commences on the last business day in November 1998 in the following annual
payment amounts: in 1998, $100,000, in 1999 through 2005, $150,000 and the
remaining amount due at maturity. Borrowings may be prepaid, and voluntary
reductions of the unutilized portion of the Revolving Credit Facility made, at
any time, in certain agreed upon minimum amounts, without premium or penalty,
subject to LIBOR breakage costs. Any voluntary prepayments of the Term Loan
Facility will be applied pro rata to the remaining amortization payments under
the Term Loans. The Company will be required to make mandatory prepayments on
the New Credit Facilities equal to (a) 60% of annual excess cash flow, (b) 100%
of the net proceeds from the sale of assets (including insurance proceeds),
subject to certain reinvestment provisions, (c) 100% of the net proceeds from
the issuance of debt obligations, and (d) 50% of the net proceeds from the
issuance by the Company or its subsidiaries of equity securities. Any Lender of
Tranche B Term Loans or Tranche C Term Loans will have the right to decline to
have such loans prepaid with the amounts set forth above, in which case such
amounts shall instead be applied as a prepayment of the Tranche A Term Loan
(until paid in full), and then to permanently reduce the Revolving Credit
Facility to an amount not less than $100 million. For purposes of the mandatory
prepayments, the term 'excess cash flow' means cash flows from the Company's
operating activities as reduced by (i) certain capital expenditures, (ii)
amounts expended with respect to certain permitted acquisitions, (iii) permanent
principal payments and interest payments of indebtedness for borrowed money of
the Company and its subsidiaries subject to certain exceptions, and (iv) unusual
or non-recurring charges that decrease the Company's working capital.
Certain Covenants. The New Credit Agreement contains covenants restricting
the ability of the Company and its subsidiaries to, among other things, (i)
declare dividends or redeem or repurchase capital stock, (ii) issue stock of a
subsidiary, (iii) incur liens, (iv) make loans and investments, (v) issue
additional debt, (vi) amend or otherwise alter debt agreements, (vii) create
subsidiaries, (viii) engage in mergers, acquisitions and assets sales, (ix)
transact with affiliates and (x) alter the business it conducts. In addition,
the New Credit Agreement provides that the Company cannot make certain payments
including: (i) lending money to any person, (ii) purchasing any stock,
securities of or any other interest in, or making any capital contribution to,
any other person, and (iii) purchasing any futures contract or otherwise
becoming liable for the purchase or sale of currency or other commodities at a
future date; provided that the Company and its subsidiaries may (a) acquire and
hold accounts receivable acquired in the ordinary course of business, (b) hold
certain cash equivalents, (c) make inter-company loans and advances to
wholly-owned subsidiaries for working capital purposes and cash management, (d)
hold stock of its subsidiaries, (e) enter into certain interest rate protection
agreements, (f) own investments received in connection with the bankruptcy or
reorganization of suppliers and customers, and (g) make loans and advances to
employees for certain moving and travel expenses. The New Credit Agreement will
not permit the Company and its subsidiaries to make any capital expenditures
except for such expenditures which do not exceed $40.0 million in any fiscal
year. The Company will also be required to
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comply with the following financial covenants (i) a maximum leverage ratio, (ii)
a minimum interest coverage ratio and (iii) a minimum fixed charge coverage
ratio which ratios are set forth below:
<TABLE>
<CAPTION>
1998 1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Maximum leverage..................................... 5.60 5.60 4.50 3.50 3.50 3.50 3.50
Interest coverage.................................... 1.85 1.85 2.25 2.50 3.00 3.00 3.00
Fixed charge coverage................................ 1.50 1.50 1.75 1.75 1.75 1.75 1.75
</TABLE>
DESCRIPTION OF THE NOTES
The New Notes will be issued pursuant to the Indenture among the Company,
the Guarantors and The Bank of New York, as trustee (the 'Trustee'), which has
been filed as an exhibit to the Notes Exchange Offer Registration Statement of
which this Prospectus constitutes a part. The following is a summary of the
material terms and provisions of the Notes. The terms of the New Notes include
those set forth in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939, as amended (the 'Trust Indenture
Act'). The Notes are subject to all such terms, and holders of the Notes are
referred to the Indenture and the Trust Indenture Act for a statement thereof.
The following summary does not purport to be a complete description of the Notes
and is subject to the detailed provisions of, and qualified in its entirety by
reference to, the Indenture. Capitalized terms that are used but not otherwise
defined herein have the meanings assigned to them in the Indenture and such
definitions are incorporated herein by reference.
GENERAL
On February 24, 1998, the Issuer issued $220.0 million aggregate principal
amount of Old Notes under the Indenture. Pursuant to the merger of the Issuer
into the Company, the Company assumed all of the Issuer's obligations and
liabilities under the Old Notes and the Indenture. The terms of the New Notes
are identical in all material respects to the Old Notes, except for certain
transfer restrictions and registration and other rights relating to the exchange
of the Old Notes for New Notes. The Trustee will authenticate and deliver New
Notes for original issue only in exchange for a like principal amount of Old
Notes. Any Old Notes that remain outstanding after the consummation of the Notes
Exchange Offer, together with the New Notes, will be treated as a single class
of securities under the Indenture.
The Notes represent senior subordinated unsecured obligations of the
Company limited to an aggregate principal amount of $220 million, subordinated
in right of payment to all existing and future Senior Indebtedness of the
Company (including the Company's obligations under the New Credit Agreement) as
described below under ' -- Subordination.' The Notes are unconditionally
guaranteed by each Guarantor on a senior subordinated basis, with each such
guarantee subordinated to the Guarantor's guarantee of the obligations of the
Company under the New Credit Agreement and to all other Senior Indebtedness of
such Guarantor.
The Notes bear interest at the rate shown on the cover page of this
Prospectus, payable on March 1 and September 1 of each year, commencing on March
1, 1998, to holders of record at the close of business on February 15 or August
15, as the case may be, immediately preceding the relevant interest payment
date. The Notes will mature on March 1, 2008 and will be issued in registered
form, without coupons, and in denominations of $1,000 and integral multiples
thereof. The Notes will be payable as to principal, premium, if any, and
interest at the office or agency of the Company maintained for such purpose
within the City and State of New York or, at the option of the Company, by wire
transfer of immediately available funds or, in the case of certificated
securities only, by mailing a check to the registered address of the holder. See
' -- Book Entry, Delivery and Form of Securities.' Until otherwise designated by
the Company, the Company's office or agency in New York will be the office of
the Trustee maintained for such purpose.
SUBORDINATION
The payment by the Company of principal of, and premium (if any) and
interest (including Special Interest) on the Notes, and by each Guarantor of
such amounts under its Note Guarantee (collectively,
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the 'Note Indebtedness'), will be subordinated to the prior payment in full in
cash when due of the principal of, and premium, if any, and accrued and unpaid
interest on and all other amounts owing in respect of, all existing and future
Senior Indebtedness of the Company and of each Guarantor, as the case may be.
The Company has agreed in the Indenture that it will not incur, directly or
indirectly, any Indebtedness that is subordinate or junior in ranking in right
of payment to its Senior Indebtedness unless such Indebtedness is pari passu
with or is expressly subordinated in right of payment to the Notes. In addition,
each Guarantor has agreed that it will not incur, directly or indirectly, any
Indebtedness that is subordinate or junior in ranking in right of payment to its
Senior Indebtedness unless such Indebtedness is pari passu with or is expressly
subordinated in right of payment to the Notes. At February 28, 1998, the Company
and the Subsidiary Guarantors had approximately $327.0 million of Indebtedness
outstanding other than the Notes, of which approximately $323.8 million was
secured and $322.5 million of which was Senior Indebtedness. Subject to certain
limitations, the Company and its Subsidiaries (including the Subsidiary
Guarantors) may incur additional Indebtedness in the future. See ' -- Certain
Covenants -- Limitations on Additional Indebtedness.'
The Indenture provides that, upon any payment or distribution to creditors
of the Company or any Guarantor of the assets of the Company or the Guarantors
of any kind or character in a total or partial liquidation or dissolution of the
Company or the Guarantors or in a bankruptcy, reorganization, insolvency,
receivership or similar proceeding relating to the Company or any Guarantor,
whether voluntary or involuntary (including any assignment for the benefit of
creditors and proceedings for marshaling of assets and liabilities of the
Company or any Guarantor), the holders of all Senior Indebtedness of the Company
or any Guarantor then outstanding will be entitled to payment in full in cash
(including interest accruing subsequent to the filing of petition of bankruptcy
or insolvency at the rate specified in the document relating to the applicable
Senior Indebtedness, whether or not such interest is an allowed claim
enforceable against the Company or any Guarantor under applicable law) before
the holders of Notes are entitled to receive any payment (other than payments
made from a trust previously established pursuant to provisions described under
' -- Satisfaction and Discharge of Indenture; Defeasance') on or with respect to
the Note Indebtedness and until all Senior Indebtedness receives payment in full
in cash, any distribution to which the holders of Notes would be entitled will
be made to holders of Senior Indebtedness.
Upon the occurrence of any default in the payment of any principal of or
interest on or other amounts due on any Designated Senior Indebtedness (as
defined below) of the Company or any Guarantor (a 'Payment Default'), no payment
of any kind or character shall be made by the Company or a Guarantor (or by any
other Person on its or their behalf) with respect to the Note Indebtedness
unless and until (i) such Payment Default shall have been cured or waived in
accordance with the instruments governing such Indebtedness or shall have ceased
to exist, (ii) such Designated Senior Indebtedness has been discharged or paid
in full in cash in accordance with the instruments governing such Indebtedness
or (iii) the benefits of this sentence have been waived by the holders of such
Designated Senior Indebtedness or their representative, including, if
applicable, the Agents, immediately after which the Company must resume making
any and all required payments, including missed payments, in respect of its
obligations under the Notes.
Upon (1) the occurrence and continuance of an event of default (other than
a Payment Default) relating to Designated Senior Indebtedness, as such event of
default is defined therein or in the instrument or agreement under which it is
outstanding, which event of default, pursuant to the instruments governing such
Designated Senior Indebtedness, entitles the holders (or a specified portion of
the holders) of such Designated Senior Indebtedness or their designated
representative to immediately accelerate without further notice (except such
notice as may be required to effect such acceleration) the maturity of such
Designated Senior Indebtedness (whether or not such acceleration has actually
occurred) (a 'Non-payment Default') and (2) the receipt by the Trustee and the
Company from the trustee or other representative of holders of such Designated
Senior Indebtedness of written notice (a 'Payment Blockage Notice') of such
occurrence, no payment is permitted to be made by the Company or any Guarantor
(or by any other Person on its or their behalf) in respect of the Note
Indebtedness for a period (a 'Payment Blockage Period') commencing on the date
of receipt by the Trustee of such notice and ending on the earliest to occur of
the following events (subject to any blockage of payments that may then be in
effect due to a Payment Default on Designated Senior
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Indebtedness): (w) such Non-payment Default has been cured or waived or has
ceased to exist; (x) a 179-consecutive-day period commencing on the date such
written notice is received by the Trustee has elapsed; (y) such Payment Blockage
Period has been terminated by written notice to the Trustee from the Trustee or
other representative of holders of such Designated Senior Indebtedness, whether
or not such Non-payment Default has been cured or waived or has ceased to exist;
and (z) such Designated Senior Indebtedness has been discharged or paid in full
in cash, immediately after which, in the case of clause (w), (x), (y) or (z),
the Company must resume making any and all required payments, including missed
payments, in respect of its obligations under the Notes. Notwithstanding the
foregoing, (a) not more than one Payment Blockage Period may be commenced in any
period of 365 consecutive days and (b) no default or event of default with
respect to the Designated Senior Indebtedness of the Company that was the
subject of a Payment Blockage Notice which existed or was continuing on the date
of the giving of any Payment Blockage Notice shall be or serve as the basis for
the giving of a subsequent Payment Blockage Notice whether or not within a
period of 365 consecutive days unless such default or event of default shall
have been cured or waived for a period of at least 90 consecutive days after
such date. Notwithstanding anything in the Indenture to the contrary, there must
be 180 consecutive days in any 365-day period in which no Payment Blockage
Period is in effect.
Notwithstanding the foregoing, holders of Notes may receive and retain
Permitted Junior Securities and payment from the money or the proceeds held in
any defeasance trust described under ' -- Satisfaction and Discharge of
Indenture; Defeasance' below, and no such receipt or retention will be
contractually subordinated in right of payment to any Senior Indebtedness or
subject to the restrictions described in this 'Subordination' section.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets of the Company or any Guarantor, whether in cash,
property or securities, shall be received by the Trustee or the holders of Notes
at a time when such payment or distribution is prohibited by the foregoing
provisions, such payment or distribution shall be segregated from other funds or
assets and held in trust for the benefit of the holders of Senior Indebtedness
of the Company or such Guarantor, as the case may be, and shall be paid or
delivered by the Trustee or such holders, as the case may be, to the holders of
the Senior Indebtedness of the Company or such Guarantor, as the case may be,
remaining unpaid or unprovided for or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness of the Company or such
Guarantor, as the case may be, may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness of the
Company or such Guarantor, as the case may be, held or represented by each, for
application to the payment of all Senior Indebtedness of the Company or such
Guarantor, as the case may be, remaining unpaid, to the extent necessary to pay
or to provide for the payment in full in cash of all such Senior Indebtedness
after giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness.
If the Company fails to make any payment on the Notes when due or within
any applicable grace period, whether or not such failure is on account of the
subordination provisions referred to above, such failure would constitute an
Event of Default under the Indenture and would enable the holders of Notes to
accelerate the maturity of the Notes. See ' -- Events of Default.'
By reason of the subordination provisions contained in the Indenture, in
the event of bankruptcy, liquidation, insolvency or other similar proceedings,
creditors of the Company who are holders of Senior Indebtedness may recover
more, ratably, than the holders of the Notes, and creditors of the Company who
are not holders of Senior Indebtedness may recover less, ratably, than holders
of Senior Indebtedness and may recover more, ratably, than the holders of the
Notes.
GUARANTEES
The Company's payment obligations under the Notes will be jointly and
severally guaranteed (the 'Note Guarantees') by Parent and by each Subsidiary
Guarantor. Each Note Guarantee will be an unsecured senior subordinated
obligation of the Guarantor providing it, and will rank junior in right of
payment to all existing and future Senior Indebtedness of such Guarantor,
including such Guarantor's guarantee of the Company's obligations under the New
Credit Agreement. The obligations of each
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Guarantor under its Note Guarantee will be limited so as not to constitute a
fraudulent conveyance under applicable law.
The Indenture provides that no Subsidiary Guarantor may consolidate with or
merge with or into (whether or not such Subsidiary Guarantor is the surviving
Person) another Person whether or not affiliated with such Subsidiary Guarantor
unless (i) the Person formed by or surviving any such consolidation or merger
(if other than such Subsidiary Guarantor) assumes all of the obligations of such
Subsidiary Guarantor pursuant to a supplemental indenture, in form and substance
satisfactory to the Trustee, under the Notes and the Indenture; (ii) immediately
after giving effect to such transaction, no Default or Event of Default exists;
and (iii) immediately after giving effect to such transaction, the Coverage
Ratio Incurrence Condition would be met.
OPTIONAL REDEMPTION OF THE NOTES
The Notes may not be redeemed prior to March 1, 2003, but will be
redeemable at the option of the Company, in whole or in part, at any time on or
after March 1, 2003, at the following redemption prices (expressed as
percentages of principal amount), together with accrued and unpaid interest, if
any, thereon to the redemption date, if redeemed during the twelve-month period
beginning March 1:
<TABLE>
<CAPTION>
OPTIONAL
YEAR REDEMPTION PRICE
- --------------------------------------------------------------------------- ----------------
<S> <C>
2003....................................................................... 104.688%
2004....................................................................... 103.125%
2005....................................................................... 101.563%
2006 and thereafter........................................................ 100.000%
</TABLE>
Notwithstanding the foregoing, at any time prior to March 1, 2001, the
Company may redeem up to 35% of the aggregate principal amount of the Notes
outstanding on the Closing Date with the net cash proceeds of one or more Equity
Offerings at a redemption price equal to 109.375% of the principal amount
thereof, plus accrued and unpaid interest and Special Interest, if any, to the
redemption date; provided that (a) at least $100 million aggregate principal
amount of the Notes remains outstanding immediately after the occurrence of such
redemption and (b) such redemption occurs within 60 days of the date of the
closing of any such Equity Offering.
If less than all of the Notes are to be redeemed at any time, selection of
the Notes to be redeemed will be made by the Trustee from among the outstanding
Notes on a pro rata basis, by lot or by any other method permitted in the
Indenture. Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each holder whose Notes are to be
redeemed at the registered address of such holder. On and after the redemption
date, interest will cease to accrue on the Notes or portions thereof called for
redemption.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each holder of the Notes will
have the right to require that the Company repurchase such holder's Notes for a
cash price (the 'Change of Control Purchase Price') equal to 101% of the
principal amount of the Notes, plus accrued and unpaid interest and Special
Interest, if any, to the date of repurchase, all in accordance with the
following paragraph.
Within 30 days following any Change of Control, the Company will mail to
the Trustee (who shall mail to each holder at the Company's expense) a notice
(i) describing the transaction or transactions that constitute the Change of
Control, (ii) offering to repurchase, pursuant to the procedures required by the
Indenture and described in such notice (a 'Change of Control Offer'), on a date
specified in such notice (which shall be a business day not earlier than 30 days
or later than 60 days from the date such notice is mailed) and for the Change of
Control Purchase Price, all Notes properly tendered by such holder pursuant to
such offer to purchase for the Change of Control Purchase Price and (iii)
describing the procedures that holders must follow to accept the Change of
Control Offer. The Change of Control Offer is required to remain open for at
least 20 business days or for such longer period as is required by law.
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The occurrence of the events constituting a Change of Control under the
Indenture may result in an event of default in respect of other Indebtedness
(including the Senior Indebtedness) of the Company and its Subsidiaries and,
consequently, the lenders thereof may have the right to require repayment of
such Indebtedness in full. If a Change of Control Offer is made, there can be no
assurance that the Company will have available funds sufficient to pay for all
or any of the Notes that might be delivered by holders of Notes seeking to
accept the Change of Control Offer. There can be no assurance that in the event
of a Change of Control the Company will be able to obtain the consents necessary
to consummate a Change of Control Offer from the lenders under agreements
governing outstanding Indebtedness which may prohibit such an offer. The
Company's obligation to make a Change of Control Offer will be satisfied if a
third party makes the Change of Control Offer in the manner and at the times and
otherwise in compliance with the requirements applicable to a Change of Control
Offer made by the Company and purchases all Notes properly tendered and not
withdrawn under such Change of Control Offer. The definition of Change of
Control includes the sale of 'all or substantially all' of the assets of the
Company or Parent and their Subsidiaries, in either case taken as a whole, the
determination of which depends upon the circumstances of any such sale and is
subject to interpretation under applicable legal precedent.
The Change of Control feature of the Notes, by requiring a Change of
Control Offer, may in certain circumstances make more difficult or discourage a
sale or takeover of the Company, and, thus, the removal of incumbent management.
The Change of Control feature, however, is not part of a plan by management to
adopt a series of antitakeover provisions. Instead, the Change of Control
feature is a result of negotiations between the Company and the Initial
Purchasers. Subject to the limitations discussed below, the Company could, in
the future, enter into certain transactions, including acquisitions,
refinancings or other recapitalizations, that would not constitute a Change of
Control under the Indenture, but that could increase the amount of Indebtedness
outstanding at such time or otherwise affect the Company's capital structure or
credit ratings.
The Company will comply with the applicable tender offer rules, including
the requirements of Rule 14e-1 under the Exchange Act and any other applicable
laws and regulations in connection with the purchase of Notes pursuant to a
Change of Control Offer.
CERTAIN COVENANTS
Limitations on Additional Indebtedness. The Indenture provides that the
Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, incur any Indebtedness (including without limitation
Acquired Indebtedness); provided that (i) the Company and its Restricted
Subsidiaries may incur Permitted Indebtedness and (ii) the Company may incur
additional Indebtedness if, after giving effect thereto, the Company's
Consolidated Interest Coverage Ratio on the date thereof would be at least 2.0
to 1, determined on a pro forma basis as if the incurrence of such additional
Indebtedness, and the application of the net proceeds therefrom, had occurred at
the beginning of the four-quarter period used to calculate the Company's
Consolidated Interest Coverage Ratio.
Limitation on the Issuance of Capital Stock of Restricted Subsidiaries. The
Indenture provides that the Company will not permit any Restricted Subsidiary,
directly or indirectly, to issue or sell any shares of its Capital Stock
(including options, warrants or other rights to purchase shares of such Capital
Stock) except (i) to the Company or a Wholly-Owned Restricted Subsidiary, (ii)
if, immediately after giving effect to such issuance or sale, such Restricted
Subsidiary would no longer constitute a Restricted Subsidiary or (iii) to the
extent such shares represent directors' qualifying shares or shares required by
applicable law to be held by a Person other than the Company or a Wholly-Owned
Restricted Subsidiary. The proceeds of any sale of Capital Stock permitted
hereunder and referred to in clauses (ii) and (iii) above will be treated as Net
Available Proceeds and must be applied in a manner consistent with the
provisions of the covenant described under ' -- Limitations on Asset Sales.'
Limitations on Layering Debt. The Indenture provides that the Company will
not, and will not permit any Subsidiary Guarantor to, incur any Indebtedness
that is subordinate or junior in right of payment to any Senior Indebtedness of
the Company or such Subsidiary Guarantor unless such Indebtedness by its terms
is pari passu with, or subordinated to, the Notes or the Note Guarantee of such
Subsidiary Guarantor, as the case may be.
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Limitations on Restricted Payments. The Indenture provides that the Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, make any Restricted Payment (except as permitted below) if at the
time of such Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) the Company would be unable to meet the Coverage Ratio Incurrence
Condition; or
(iii) the amount of such Restricted Payment, when added to the
aggregate amount of all other Restricted Payments (except as expressly
provided in the second following paragraph) made after the Issue Date,
exceeds the sum of (A) 50% of the Company's Consolidated Net Income (taken
as one accounting period) from the beginning of the first fiscal quarter
commencing after the Issue Date to the end of the Company's most recently
ended fiscal quarter for which financial statements are available at the
time of such Restricted Payment (or, if such aggregate Consolidated Net
Income shall be a deficit, minus 100% of such aggregate deficit) plus (B)
the net cash proceeds from the issuance and sale (other than to a
Subsidiary of the Company) after the Issue Date of (1) the Company's
Capital Stock that is not Disqualified Capital Stock or (2) debt securities
of the Company that have been converted into the Company's Capital Stock
that is not Disqualified Capital Stock and that is not then held by a
Subsidiary of the Company, plus (C) to the extent that any Restricted
Investment that was made after the Issue Date is sold for cash or otherwise
liquidated or repaid for cash, the lesser of (x) the cash return of capital
with respect to such Restricted Investment (less the cost of disposition,
if any) and (y) the initial amount of such Restricted Investment plus (D)
the amount of Restricted Investment outstanding in an Unrestricted
Subsidiary at the time such Unrestricted Subsidiary is designated a
Restricted Subsidiary of the Company in accordance with the definition of
'Unrestricted Subsidiary.'
The foregoing provisions do not prohibit (1) the payment of any dividend by
the Company or any Restricted Subsidiary within 60 days after the date of
declaration thereof, if at said date of declaration such payment would have
complied with the provisions of the Indenture; (2) the redemption, repurchase,
retirement or other acquisition of any Capital Stock of the Company in exchange
for, or out of the proceeds of, the substantially concurrent sale (other than to
a Subsidiary of the Company) of other Capital Stock of the Company (other than
any Disqualified Capital Stock); (3) the defeasance, redemption, repurchase or
other retirement of Subordinated Indebtedness in exchange for, or out of the
proceeds of, the substantially concurrent issue and sale of Capital Stock of the
Company (other than (x) Disqualified Capital Stock, (y) Capital Stock sold to a
Subsidiary of the Company and (z) Capital Stock purchased with the proceeds of
loans from the Company or any of its Subsidiaries); (4) the making of a Related
Business Investment in joint ventures or Unrestricted Subsidiaries out of the
proceeds of the substantially concurrent issue and sale of Capital Stock of the
Company (other than (x) Disqualified Capital Stock, (y) Capital Stock sold to a
Subsidiary of the Company and (z) Capital Stock purchased with the proceeds of
loans from the Company or any of its Subsidiaries); (5) Specified Transaction
Payments; (6) payments of up to $1.75 million to Granaria Holdings or any of its
Affiliates in the aggregate in any fiscal year pursuant to any Related Party
Agreement entered into between Granaria Holdings or any of its Affiliates and
the Company or its Subsidiaries to provide management and similar services to
any such Persons or to Parent; (7) the payments of dividends or distributions to
Parent solely in amounts and at the times necessary to permit Parent to
purchase, redeem, acquire, cancel or otherwise retire for value Capital Stock of
Parent, or permit payments of dividends or distributions by Parent to its
shareholders solely in amounts and at the times necessary to permit such
shareholders to (or permit subsequent distributions to permit their respective
shareholders to) purchase, redeem, acquire, cancel or otherwise retire for value
Capital Stock of such shareholders, in each case held by officers, directors or
employees or former officers, directors or employees (or their transferees,
estates or beneficiaries under their estates), or a trust established for the
benefit of any of the foregoing of Parent, the Company or its Subsidiaries, upon
death, disability, retirement, severance or termination of employment or service
or pursuant to any agreement under which such Capital Stock or related rights
were issued; provided that the amount of such payments under this clause (7)
after the Issue Date does not exceed in the aggregate $5.0 million; (8) the
payment of dividends or distributions of amounts to Parent in amounts and at
such times as are sufficient to pay the scheduled interest or dividends owed
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by Parent on the Parent Preferred Stock or Exchange Debentures so long as (x)
Parent is the direct Parent of the Company owning 100% of the Capital Stock of
the Company and (y) such Parent Preferred Stock or Exchange Debentures contains
no scheduled requirement for the payment of cash interest or dividends, as
applicable, until at least five years from the date of their original issuance,
provided that at the time of such Restricted Payment and after giving effect
thereto, either (A) the Company would be able to meet the Coverage Ratio
Incurrence Condition or (B) the amount of such Restricted Payment, when added to
the aggregate amount of all other Restricted Payments made after the Issue Date,
does not exceed the sum referred to in clause (iii) of the next preceding
paragraph; (9) Restricted Investments the amount of which, together with the
amount of all other Restricted Investments made pursuant to this clause (9)
after the Issue Date, does not exceed $10.0 million, provided that, in the case
of clauses (8) and (9), no Default or Event of Default shall have occurred and
be continuing or occur as a consequence of the actions or payments set forth
therein; or (10) during any period in which Parent files consolidated income tax
returns that include the Company, payments to Parent in amounts not in excess of
the amount that the Company would have paid if it had filed consolidated tax
returns on a separate-company basis, in each case solely in amounts and at the
times necessary to permit Parent to pay its consolidated income taxes.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payments referred to in clauses (2) through (5) or
(10) thereof, and, to the extent deducted in determining Consolidated Net Income
in any period, the Restricted Payments referred to in clauses (6) and (7)
thereof) shall be included once in calculating whether the conditions of clause
(iii) of the second preceding paragraph have been met with respect to any
subsequent Restricted Payments. For purposes of determining compliance with this
'Limitation on Restricted Payments' covenant, in the event that a transaction
meets the criteria of more than one of the types of Restricted Payments
described in the clauses of the immediately preceding paragraph or of the
clauses of the definition of 'Restricted Payment,' the Company, in its sole
discretion, shall classify such transaction and only be required to include the
amount and type of such transaction in one of such clauses. If an issuance of
Capital Stock of the Company is applied to make a Restricted Payment pursuant to
clause (2), (3) or (4) above, then, in calculating whether the conditions of
clause (iii) of the second preceding paragraph have been met with respect to any
subsequent Restricted Payments, the proceeds of any such issuance shall be
included under such clause (iii) only to the extent such proceeds are not
applied as so described in this sentence.
Not later than the date of making any Restricted Payment, the Company shall
deliver to the Trustee an Officers' Certificate stating that such Restricted
Payment is permitted and setting forth the basis upon which the calculations
required by the covenant 'Limitations on Restricted Payments' were computed,
which calculations shall be based upon the Company's latest available financial
statements.
Limitations on Restrictions on Distributions from Restricted Subsidiaries.
The Indenture provides that the Company will not, and will not permit any of its
Restricted Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual Payment Restriction with respect to any of its
Restricted Subsidiaries, except for (a) any such Payment Restriction in effect
on the Issue Date under the New Credit Agreement or the Parent Preferred Stock
or any similar Payment Restriction under any similar credit facility, or any
amendment, restatement, renewal, replacement or refinancing of any of the
foregoing, provided that such similar Payment Restrictions are not, taken as a
whole, materially more restrictive than the Payment Restrictions in effect on
the Issue Date under the New Credit Agreement or the Parent Preferred Stock, (b)
any such Payment Restriction in effect on the Issue Date consisting of customary
net worth or leverage tests in effect on the Issue Date under any credit
facility of any Foreign Subsidiary, or any amendment, restatement, renewal,
replacement or refinancing of any of the foregoing (including for purposes of
this clause (b), any increase in the principal amount available thereunder) (a
'Replacement Facility'), provided that such Payment Restrictions in any such
Replacement Facility are not, taken as a whole, materially more restrictive than
the Payment Restrictions in effect on the Issue Date under the facility amended,
restated, renewed, replaced or refinanced, (c) any such Payment Restriction
under any agreement evidencing any Acquired Indebtedness that was permitted to
be incurred pursuant to the Indenture in effect at the time of such incurrence
and not created in contemplation of such event, provided that such Payment
Restriction is not extended to apply to any of the assets of the entities not
previously subject thereto, (d) any such Payment Restriction arising in
connection with Refinancing Indebtedness; provided that any such
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Payment Restrictions that arise under such Refinancing Indebtedness are not,
taken as a whole, materially more restrictive than those under the agreement
creating or evidencing the Indebtedness being refunded or refinanced and (e) any
such restriction by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business.
Limitations on Transactions with Affiliates. The Indenture provides that
the Company will not, and will not permit any of its Restricted Subsidiaries to,
directly or indirectly, in one transaction or a series of related transactions,
sell, lease, transfer or otherwise dispose of any of its properties or assets
to, or purchase any property or assets from or enter into any contract,
agreement, understanding, loan, advance or guarantee with, or for the benefit
of, any Affiliate (each of the foregoing, an 'Affiliate Transaction'), unless
(i) such Affiliate Transaction is on terms that are no less favorable to the
Company or the relevant Restricted Subsidiary than those that would have been
obtained in a comparable transaction by the Company or such Restricted
Subsidiary with an unrelated Person and (ii) the Company delivers to the Trustee
(a) with respect to any Affiliate Transaction (or series of related
transactions) involving aggregate payments in excess of $1.0 million, an
Officers' Certificate certifying that such Affiliate Transaction complies with
clause (i) above and a Secretary's Certificate which sets forth and
authenticates a resolution that has been adopted by a vote of a majority of the
Independent Directors approving such Affiliate Transaction or, if at the time
fewer than three Independent Directors are then in office, a Secretary's
Certificate which sets forth and authenticates a resolution that has been
adopted unanimously by the Company's Board of Directors and (b) with respect to
any Affiliate Transaction (or series of related transactions) involving
aggregate payments of $5.0 million or more, the certificates described in the
preceding clause (a) and an opinion as to the fairness to the Company or such
Subsidiary from a financial point of view issued by an Independent Financial
Advisor; provided, however, that the following shall not be deemed to be
Affiliate Transactions: (i) transactions exclusively between or among (1) the
Company and one or more Restricted Subsidiaries or (2) Restricted Subsidiaries,
provided, in each case, that no Affiliate of the Company (other than another
Restricted Subsidiary) owns Capital Stock of any such Restricted Subsidiary;
(ii) transactions between the Company or any Restricted Subsidiary and any
qualified employee stock ownership plan established for the benefit of the
Company's employees, or the establishment or maintenance of any such plan; (iii)
reasonable director, officer and employee compensation and other benefit, and
indemnification arrangements approved by a majority of the Independent Directors
on the Board of Directors; (iv) transactions permitted by the 'Limitations on
Restricted Payments' covenant; (v) the pledge of Capital Stock of Unrestricted
Subsidiaries to support the Indebtedness thereof; (vi) the entering into of any
Tax Sharing Agreement, and any payment pursuant thereto; (vii) the payment on
behalf of Parent of ministerial administrative and operating fees and expenses
in the ordinary course to Persons other than to Affiliates of Parent or the
Company, provided that the aggregate amount thereof in any fiscal year of the
Company does not exceed $750,000; (viii) arrangements with ABN AMRO Bank or any
of its Affiliates or their respective successors (x) under the New Credit
Agreement or the Notes or in connection therewith, (y) in connection with the
offering of the Notes or the Series A Senior Preferred Stock or (z) pursuant to
other banking, financing or underwriting activity entered into in the ordinary
course of business; (ix) transactions between the Company or any Restricted
Subsidiary and any Affiliate of the Company or such Restricted Subsidiary that
is a joint venture, provided that no direct or indirect holder of an equity
interest in such joint venture (other than the Company or a Restricted
Subsidiary) is an Affiliate of the Company or such Restricted Subsidiary; and
(x) Specified Transaction Payments.
Limitations on Liens. The Company shall not, and shall not permit any
Restricted Subsidiary to, directly or indirectly, incur or permit to exist any
Lien of any nature whatsoever on any property of the Company or any Restricted
Subsidiary (including Capital Stock of a Restricted Subsidiary), whether owned
at the Issue Date or thereafter acquired, which secures Indebtedness that is not
Senior Indebtedness unless contemporaneously therewith effective provision is
made to secure the Notes equally and ratably with (or if such Lien secures
Indebtedness that is subordinated to the Notes, prior to) such Indebtedness for
so long as such Indebtedness is secured by a Lien.
The foregoing restrictions shall not apply to (i) Liens existing on the
Issue Date securing Indebtedness outstanding on the Issue Date; (ii) Liens in
favor of the Company or a Subsidiary
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Guarantor; (iii) Liens to secure Indebtedness that is non-recourse to the
Company or any of its Subsidiaries or any of their respective assets other than
the assets acquired or improved with such Indebtedness; (iv) Liens securing
Acquired Indebtedness permitted to be incurred under the Indenture, provided
that the Liens do not extend to property or assets not subject to such Lien at
the time of acquisition (other than improvements thereon); (v) Liens on property
of a Person existing at the time such Person is acquired or merged with or into
or consolidated with the Company or any such Restricted Subsidiary (and not
created in anticipation or contemplation thereof); (vi) Liens to secure
Refinancing Indebtedness of Indebtedness secured by Liens referred to in the
foregoing clauses (iv) and (v), provided that in each case such Liens do not
extend to any additional property or assets (other than improvements thereon).
Limitations on Asset Sales. (a) The Indenture provides that the Company
will not, and will not permit any of its Restricted Subsidiaries to, consummate
any Asset Sale unless (i) the Company or such Restricted Subsidiary receives
consideration at the time of such Asset Sale at least equal to the Fair Market
Value of the assets included in such Asset Sale (evidenced by the delivery by
the Company to the Trustee of an Officers' Certificate certifying that such
Asset Sale complies with this clause (i)), (ii) immediately before and
immediately giving effect to such Asset Sale, no Default or Event of Default
shall have occurred and be continuing, and (iii) at least 80% of the
consideration received by the Company or such Restricted Subsidiary therefor is
in the form of cash paid at the closing thereof. The amount (without
duplication) of any (x) Indebtedness (other than Subordinated Indebtedness) of
the Company or such Restricted Subsidiary that is expressly assumed by the
transferee in such Asset Sale and with respect to which the Company or such
Restricted Subsidiary, as the case may be, is unconditionally released by the
holder of such Indebtedness, and (y) any Cash Equivalents, or other notes,
securities or items of property received from such transferee that are promptly
(but in any event within 15 days) converted by the Company or such Restricted
Subsidiary to cash (to the extent of the cash actually so received), shall be
deemed to be cash for purposes of clause (ii) and, in the case of clause (x)
above, shall also be deemed to constitute a repayment of, and a permanent
reduction in, the amount of such Indebtedness for purposes of the following
paragraph (b). If at any time any non-cash consideration received by the Company
or any Restricted Subsidiary of the Company, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then the date of such conversion or disposition shall be deemed to constitute
the date of an Asset Sale hereunder and the Net Available Proceeds thereof shall
be applied in accordance with this covenant. A transfer of assets by the Company
to a Restricted Subsidiary or by a Restricted Subsidiary to the Company or to a
Restricted Subsidiary will not be deemed to be an Asset Sale and a transfer of
assets that constitutes a Restricted Investment and that is permitted under
' -- Limitations on Restricted Payments' will not be deemed to be an Asset Sale.
(b) If the Company or any Restricted Subsidiary engages in an Asset Sale,
the Company or any Restricted Subsidiary shall, no later than 360 days after
such Asset Sale (i) apply all or any of the Net Available Proceeds therefrom to
repay amounts outstanding under the New Credit Agreement or any other Senior
Indebtedness; provided, in each case, that the related loan commitment (if any)
of any Indebtedness constituting revolving credit debt is thereby permanently
reduced by the amount of such Indebtedness so repaid and/or (ii) invest all or
any part of the Net Available Proceeds thereof in the purchase of fixed assets
to be used by the Company and its Restricted Subsidiaries in a Related Business
(together with any short-term assets incidental thereto), or the making of a
Related Business Investment. The amount of such Net Available Proceeds not
applied or invested as provided in this paragraph will constitute 'Excess
Proceeds.'
(c) When the aggregate amount of Excess Proceeds equals or exceed $5.0
million, the Company will be required to make an offer to purchase, from all
holders of the Notes, an aggregate principal amount of Notes equal to the amount
of such Excess Proceeds as follows:
(i) The Company will make an offer to purchase (a 'Net Proceeds
Offer') from all holders of the Notes in accordance with the procedures set
forth in the Indenture the maximum principal amount (expressed as a
multiple of $10,000) of Notes that may be purchased out of the amount (the
'Payment Amount') of such Excess Proceeds.
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(ii) The offer price for the Notes will be payable in cash in an
amount equal to 100% of the principal amount of the Notes tendered pursuant
to a Net Proceeds Offer, plus accrued and unpaid interest and Special
Interest, if any, to the date such Net Proceeds Offer is consummated (the
'Offered Price'), in accordance with the procedures set forth in the
Indenture. To the extent that the aggregate Offered Price of Notes tendered
pursuant to a Net Proceeds Offer is less than the Payment Amount relating
thereto (such shortfall constituting a 'Net Proceeds Deficiency'), the
Company may use such Net Proceeds Deficiency, or a portion thereof, for
general corporate purposes, subject to the limitations of the 'Limitations
on Restricted Payments' covenant.
(iii) If the aggregate Offered Price of Notes validly tendered and not
withdrawn by holders thereof exceeds the Payment Amount, Notes to be
purchased will be selected on a pro rata basis.
(iv) Upon completion of such Net Proceeds Offer in accordance with the
foregoing provisions, the amount of Excess Proceeds with respect to which
such Net Proceeds Offer was made shall be deemed to be zero.
The Company will not permit any Subsidiary to enter into or suffer to exist
any agreement that would place any restriction of any kind (other than pursuant
to law or regulation) on the ability of the Company to make a Net Proceeds Offer
following any Asset Sale. The Company will comply with Rule 14e-1 under the
Exchange Act and any other securities laws and regulations thereunder, if
applicable, in the event that an Asset Sale occurs and the Company is required
to purchase Notes as described above.
Limitations on Mergers and Certain Other Transactions. The Indenture
provides that the Company will not, in a single transaction or a series of
related transactions, (i) consolidate or merge with or into (other than a merger
with a Wholly-Owned Restricted Subsidiary solely for the purpose of changing the
Company's jurisdiction of incorporation to another State of the United States),
or sell, lease, transfer, convey or otherwise dispose of or assign all or
substantially all of the assets of the Company or the Company and its
Subsidiaries (taken as a whole), or assign any of its obligations under the
Notes and the Indenture, to any Person or (ii) adopt a Plan of Liquidation
unless, in either case: (a) the Person formed by or surviving such consolidation
or merger (if other than the Company) or to which such sale, lease, conveyance
or other disposition or assignment shall be made (or, in the case of a Plan of
Liquidation, any Person to which assets are transferred) (collectively, the
'Successor'), is a corporation organized and existing under the laws of any
State of the United States of America or the District of Columbia, and the
Successor assumes by supplemental indenture in a form satisfactory to the
Trustee all of the obligations of the Company under the Notes and the Indenture;
(b) immediately prior to and immediately after giving effect to such transaction
and the assumption of the obligations as set forth in clause (a) above and the
incurrence of any Indebtedness to be incurred in connection therewith, no
Default or Event of Default shall have occurred and be continuing; and (c)
immediately after and giving effect to such transaction and the assumption of
the obligations set forth in clause (a) above and the incurrence of any
Indebtedness to be incurred in connection therewith, and the use of any net
proceeds therefrom on a pro forma basis, (1) the Consolidated Net Worth of the
Company or the Successor, as the case may be, would be at least equal to the
Consolidated Net Worth of the Company immediately prior to such transaction and
(2) the Company or the Successor, as the case may be, could meet the Coverage
Ratio Incurrence Condition; and (d) each Subsidiary Guarantor, unless it is the
other party to the transactions described above, shall have by amendment to its
guarantee confirmed that its guarantee of the Notes shall apply to the
obligations of the Company or the Successor under the Notes and the Indenture.
For purposes of this covenant, any Indebtedness of the Successor which was not
Indebtedness of the Company immediately prior to the transaction shall be deemed
to have been incurred in connection with such transaction.
Additional Note Guarantees. The Indenture provides that if the Company or
any of its Subsidiaries shall acquire or create another Subsidiary (other than
(x) any Foreign Subsidiary or (y) a Subsidiary that has been designated as an
Unrestricted Subsidiary or (z) an Immaterial Subsidiary), then such newly
acquired or created Subsidiary will be required to execute a Note Guarantee, in
accordance with the terms of the Indenture.
Reports. Whether or not required by the rules and regulations of the
Securities and Exchange Commission (the 'Commission'), so long as any Notes are
outstanding, the Company and the Guarantors will file with the Commission, to
the extent such filings are accepted by the Commission,
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and will furnish (within 15 days after such filing) to the Trustee and to the
holders of Notes all quarterly and annual reports and other information,
documents and reports that would be required to be filed with the Commission
pursuant to Section 13 of the Exchange Act if the Company and the Guarantors
were required to file under such section. In addition, the Company and the
Guarantors will make such information available to prospective purchasers of the
Notes, securities analysts and broker-dealers who request it in writing. The
Company and the Guarantors have agreed that, for so long as any Notes remain
outstanding, they will furnish to the holders and beneficial holders of Notes
and to prospective purchasers of Notes designated by the holders of Transfer
Restricted Securities and to broker dealers, upon their request, the information
required to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.
EVENTS OF DEFAULT
An 'Event of Default' is defined in the Indenture as (i) failure by the
Company to pay interest on any of the Notes when it becomes due and payable and
the continuance of any such failure for 30 days; (ii) failure by the Company to
pay the principal or premium, if any, on any of the Notes when it becomes due
and payable, whether at stated maturity, upon redemption, upon acceleration or
otherwise; (iii) failure by the Company to comply with any of its agreements or
covenants described above under 'Certain Covenants -- Limitations on Mergers and
Certain Other Transactions', or in respect of its obligations to make a Change
of Control Offer or a Net Proceeds Offer described in 'Change of Control' and
'Certain Covenants -- Limitations on Asset Sales', respectively; (iv) failure by
the Company to comply with any other covenant in the Indenture and continuance
of such failure for 60 days after notice of such failure has been given to the
Company by the Trustee or by the holders of at least 25% of the aggregate
principal amount of the Notes then outstanding; (v) failure by either the
Company or any of its Restricted Subsidiaries to make any payment when due after
the expiration of any applicable grace period, in respect of any Indebtedness of
the Company or any of such Restricted Subsidiaries, or the acceleration of the
maturity of such Indebtedness by the holders thereof because of a default, with
an aggregate outstanding principal amount for all such Indebtedness under this
clause (v) of $10.0 million or more (but excluding in any event any such
Indebtedness that is paid when so due after expiration of any applicable grace
period, or upon acceleration of the maturity thereof, pursuant to any letter of
credit); (vi) one or more final, non-appealable judgments or orders that exceed
$10.0 million in the aggregate for the payment of money have been entered by a
court or courts of competent jurisdiction against the Company or any Subsidiary
of the Company and such judgment or judgments have not been satisfied, stayed,
annulled or rescinded within 60 days of being entered; (vii) certain events of
bankruptcy, insolvency or reorganization involving the Parent, the Company or
any Significant Subsidiary; and (viii) except as permitted by the Indenture, any
Note Guarantee ceases to be in full force and effect or any Guarantor repudiates
its obligations under any Note Guarantee.
In the case of an Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes, an equivalent
premium shall also become and be immediately due and payable, to the extent
permitted by law, upon the acceleration of the Notes. If an Event of Default
occurs prior to March 1, 2003 by reason of any willful action (or inaction)
taken (or not taken) by or on behalf of the Company with the intention of
avoiding the prohibition on redemption of the Notes prior to March 1, 2003,
then, upon acceleration of the Notes, an additional premium shall also become
and be immediately due and payable, to the extent permitted by law, in an amount
equal to 10.0%.
If an Event of Default (other than an Event of Default specified in clause
(vii) above with respect to the Company), shall have occurred and be continuing
under the Indenture, the Trustee, by written notice to the Company, or the
holders of at least 25% in aggregate principal amount of the Notes then
outstanding by written notice to the Company and the Trustee may declare all
amounts owing under the Notes to be due and payable immediately. Upon such
declaration of acceleration, the aggregate principal of, premium, if any, and
interest on the outstanding Notes shall immediately become due and payable. If
an Event of Default results from bankruptcy, insolvency or reorganization with
respect to the Company, all outstanding Notes shall become due and payable
without any further action or notice.
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In certain cases, the holders of a majority in aggregate principal amount of the
Notes then outstanding may waive an existing Default or Event of Default and its
consequences, except a default in the payment of principal of, premium, if any,
and interest on the Notes.
The holders may not enforce the provisions of the Indenture or the Notes
except as provided in the Indenture. Subject to certain limitations, holders of
a majority in principal amount of the Notes then outstanding may direct the
Trustee in its exercise of any trust or power; provided however, that such
direction does not conflict with the terms of the Indenture. The Trustee may
withhold from the holders notice of any continuing Default or Event of Default
(except any Default or Event of Default in payment of principal of, premium, if
any, or interest on the Notes) if the Trustee determines that withholding such
notice is in the holders' interest.
The Company is required to deliver to the Trustee annually a statement
regarding compliance with the Indenture and, upon any Officer of the Company
becoming aware of any Default or Event of Default, a statement specifying such
Default or Event of Default and what action the Company is taking or proposes to
take with respect thereto.
SATISFACTION AND DISCHARGE OF INDENTURE; DEFEASANCE
The Company may terminate its obligations under the Indenture at any time
by delivering all outstanding Notes to the Trustee for cancellation and paying
all sums payable by it thereunder. The Company, at its option, (i) will be
discharged from any and all obligations with respect to the Notes (except for
certain obligations of the Company to register the transfer or exchange of such
Notes, replace stolen, lost or mutilated Notes, maintain paying agencies and
hold moneys for payment in trust) or (ii) need not comply with certain of the
restrictive covenants with respect to the Indenture, if the Company deposits
with the Trustee, in trust, U.S. Legal Tender or U.S. Government Obligations or
a combination thereof that, through the payment of interest and premium thereon
and principal amount at maturity in respect thereof in accordance with their
terms, will be sufficient to pay all the principal amount at maturity of and
interest and premium on the Notes on the dates such payments are due in
accordance with the terms of such Notes as well as the Trustee's fees and
expenses. To exercise either such option, the Company is required to deliver to
the Trustee (A) an Opinion of Counsel and, in connection with a discharge
pursuant to clause (i) above, confirmation of such counsel that (I) the Company
has received from, or there has been published by, the Internal Revenue Service
a ruling or (II) since the date of the Indenture there has been a change in the
applicable federal income tax law, in either case to the effect that the holders
of the Notes will not recognize income, gain or loss for federal income tax
purposes as a result of the deposit and related defeasance and will be subject
to federal income tax on the same amount and in the same manner and at the same
times as would have been the case if such option had not been exercised, (B)
subject to certain qualifications, an Opinion of Counsel to the effect that
funds so deposited will not violate the Investment Company Act of 1940 and will
not be subject to the effect of Section 547 of the United States Bankruptcy Code
or Section 15 of the New York Debtor and Creditor Law and (C) an Officers'
Certificate and an Opinion of Counsel to the effect that the Company has
complied with all conditions precedent to the defeasance.
TRANSFER AND EXCHANGE
A holder will be able to register the transfer of or exchange Notes only in
accordance with the provisions of the Indenture. The Registrar may require a
holder, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. Without the prior consent of the Company, the Registrar is not
required (i) to register the transfer of or exchange any Note selected for
redemption, (ii) to register the transfer of or exchange any Note for a period
of 15 days before the mailing of a notice of redemption and ending on the date
of such mailing or (iii) to register the transfer or exchange of a Note between
a record date and the next succeeding interest payment date. The registered
holder of a Note will be treated as the owner of such Note for all purposes.
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AMENDMENT, SUPPLEMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Notes may be amended or
supplemented with the consent (which may include consents obtained in connection
with a tender offer or exchange offer for Notes) of the holders of at least a
majority in principal amount of the Notes then outstanding, and any existing
Default under, or compliance with any provision of, the Indenture may be waived
(other than any continuing Default or Event of Default in the payment of the
principal of, premium, if any, or interest on the Notes) with the consent (which
may include consents obtained in connection with a tender offer or exchange
offer for Notes) of the holders of a majority in principal amount of the Notes
then outstanding; provided that:
(A) no such modification or amendment may, without the consent of the
holders of 75% in aggregate principal amount of Notes then outstanding,
amend or modify the obligation of the Company under the caption 'Change of
Control' or the definitions related thereto that could adversely affect the
rights of any holder of the Notes; and
(B) without the consent of each holder affected, the Company and the
Trustee may not: (i) extend the maturity of any Note; (ii) affect the terms
of any scheduled payment of interest on or principal of the Notes
(including without limitation any redemption provisions); (iii) take any
action that would subordinate the Notes or the Note Guarantees to any other
Indebtedness of the Company or any of Guarantors, respectively (except as
provided under 'Subordination' above), or otherwise affect the ranking of
the Notes or the Note Guarantees; or (iv) reduce the percentage of holders
necessary to consent to an amendment, supplement or waiver to the
Indenture.
Without the consent of any holder, the Company and the Trustee may
amend or supplement the Indenture or the Notes to cure any ambiguity,
defect or inconsistency, to provide for uncertificated Notes in addition to
or in place of certificated Notes, to provide for the assumption of the
Company's obligations to holders in the case of a merger or acquisition, or
to make any change that does not adversely affect the rights of any holder.
CONCERNING THE TRUSTEE
The Bank of New York is the Trustee under the Indenture and has been
appointed by the Company as Registrar and Paying Agent with regard to the Notes.
The Indenture contains certain limitations on the rights of the Trustee, should
it become a creditor of the Company, to obtain payment of claims in certain
cases, or to realize on certain property received in respect of any such claim
as security or otherwise. The Trustee is permitted to engage in other
transactions; however, if it acquires any conflicting interest (as defined in
the Indenture), it must eliminate such conflict or resign.
The holders of a majority in principal amount of the then outstanding Notes
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy available to the Trustee, subject to
certain exceptions. The Indenture provides that, in case an Event of Default
occurs and is not cured, the Trustee will be required, in the exercise of its
power, to use the degree of care of a prudent person in similar circumstances in
the conduct of his own affairs. Subject to such provisions, the Trustee will be
under no obligation to exercise any of its rights or powers under the Indenture
at the request of any holder, unless such holder shall have offered to the
Trustee security and indemnity satisfactory to the Trustee.
GOVERNING LAW
Each of the Indenture, the Notes and the Note Guarantees provides that it
will be governed by, and construed in accordance with, the laws of the State of
New York.
BOOK-ENTRY, DELIVERY AND FORM OF SECURITIES
The Old Notes were initially issued in the form of one or more Global Notes
(collectively, the 'Old Global Note'). The New Notes will initially be issued in
the form of one or more Global Notes (collectively, the 'New Global Note'). The
Old Global Note was deposited on the date of closing of the sale of the Old
Notes, and the New Global Note will be deposited on the date of closing of the
Notes
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Exchange Offer, with or on behalf of the Depositary and registered in the name
of Cede & Co., as nominee of the Depositary (such nominee being referred to
herein as the 'Global Note Holder').
The Depositary is a limited-purpose trust company that was created to hold
securities for its participating organizations (collectively, the 'Participants'
or the 'Depositary's Participants') and to facilitate the clearance and
settlement of transactions in such securities between Participants through
electronic book-entry changes in accounts of its Participants. The Depositary's
Participants include securities brokers and dealers (including the Initial
Purchasers), banks and trust companies, clearing corporations and certain other
organizations. Access to the Depositary's system is also available to other
entities such as banks, brokers, dealers and trust companies (collectively, the
'Indirect Participants' or the 'Depositary's Indirect Participants') that clear
through or maintain a custodial relationship with a Participant, either directly
or indirectly. Persons who are not Participants may beneficially own securities
held by or on behalf of the Depositary only through the Depositary's
Participants or the Depositary's Indirect Participants.
Pursuant to procedures established by the Depositary (i) upon deposit of
the Global Note, the Depositary will credit the accounts of Participants in
connection with the Notes with portions of the principal amount of the Global
Note and (ii) ownership of the Notes will be shown on, and the transfer of
ownership thereof will be effected only through, records maintained by the
Depositary (with respect to the interests of the Depositary's Participants), the
Depositary's Participants and the Depositary's Indirect Participants.
The laws of some states require that certain persons take physical delivery
in definitive form of securities that they own. Consequently, the ability to
transfer the Notes will be limited to such extent.
So long as the Depositary or its nominee is the registered owner of a
Global Note, the Depositary or its nominee, as the case may be, will be
considered the sole owner or holder of outstanding Notes represented by such
Global Note for all purposes under the Indenture and the New Notes. Except as
provided below, owners of Notes will not be entitled to have Notes registered in
their names and will not be considered the owners or holders thereof under the
Indenture for any purpose, including with respect to the giving of any
directions, instructions or approvals to the Trustee thereunder. None of the
Company, the Guarantors or the Trustee will have any responsibility or liability
for any aspect of the records relating to or payments made on account of Notes
by the Depositary, or for maintaining, supervising or reviewing any records of
the Depositary relating to such Notes.
Payments in respect of the principal of, premium, if any, and interest on
any Notes registered in the name of a Global Note Holder on the applicable
record date will be payable by the Trustee to or at the direction of such Global
Note Holder in its capacity as the registered holder under the Indenture. Under
the terms of the Indenture, the Company and the Trustee may treat the persons in
whose names any Notes, including the Global Notes, are registered as the owners
thereof for the purpose of receiving such payments and for any and all other
purposes whatsoever. Consequently, none of the Company or the Trustee has or
will have any responsibility or liability for the payment of such amounts to
beneficial owners of Notes (including principal, premium, if any, and interest).
The Company believes, however, that it is currently the policy of the Depositary
immediately to credit the accounts of the relevant Participants with such
payments, in amounts proportionate to their respective beneficial interests in
the relevant security as shown on the records of the Depositary. Payments by the
Depositary's Participants and the Depositary's Indirect Participants to the
beneficial owners of Notes will be governed by standing instructions and
customary practice and will be the responsibility of the Depositary's
Participants or the Depositary's Indirect Participants.
Subject to certain conditions, any person having a beneficial interest in
the Global Notes may, upon request to the Trustee, exchange such beneficial
interest for Notes in definitive form. Upon any such issuance, the Trustee is
required to register such Notes in the name of, and cause the same to be
delivered to, such person or persons (or the nominee of any thereof). In
addition, if (i) the Company notifies the Trustee in writing that the Depositary
is no longer willing or able to act as a depositary and the Company is unable to
locate a qualified successor within 90 days or (ii) the Company, at its option,
notifies the Trustee in writing that it elects to cause the issuance of Notes in
definitive form under the Indenture, then, upon surrender by the relevant Global
Note Holder of its Global Note, Notes in such
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form will be issued to each person that such Global Note Holder and the
Depositary identifies as being the beneficial owner of the related Notes.
Neither the Company nor the Trustee will be liable for any delay by the
Global Note Holder or the Depositary in identifying the beneficial owners of
Notes and the Company and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the Global Note Holder or the
Depositary for all purposes.
REGISTRATION RIGHTS
Holders of New Notes are not entitled to any registration rights with
respect to the New Notes. The Company has agreed for a period of 180 days from
the consummation of the Notes Exchange Offer to make available a prospectus
meeting the requirements of the Securities Act to any broker-dealer for use in
connection with any resale of any New Notes. The Registration Statement of which
this Prospectus is a part constitutes the registration statement for the Notes
Exchange Offer which is the subject of the Registration Rights Agreement. Upon
the closing of the Notes Exchange Offer, subject to certain limited exceptions,
Holders of untendered Old Notes will not retain any rights under the
Registration Rights Agreement.
ADDITIONAL INFORMATION
Anyone who receives this Prospectus may obtain a copy of the Indenture
without charge by contacting the Company at 250 East Fifth Street, Suite 500,
Cincinnati, Ohio 45202 or by telephone at (513) 721-7010.
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms.
'Acquired Indebtedness' means (a) with respect to any Person that becomes a
Restricted Subsidiary after the date of the Indenture, Indebtedness of such
Person and its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and (b) with
respect to the Company or any of its Restricted Subsidiaries, any Indebtedness
of a Person (other than the Company or a Restricted Subsidiary) existing at the
time such Person is merged with or into the Company or a Restricted Subsidiary,
or Indebtedness assumed by the Company or any of its Restricted Subsidiaries in
connection with the acquisition of an asset or assets from another Person, which
Indebtedness was not, in any case, incurred by such other Person in connection
with, or in contemplation of, such merger or acquisition.
'Affiliate' of any Person means any Person (i) which directly or indirectly
controls or is controlled by, or is under direct or indirect common control
with, the referent Person, (ii) which beneficially owns or holds, directly or
indirectly, 10% or more of any class of the Voting Stock, or more than 20% of
all classes of Capital Stock (other than preferred stock) in the aggregate, of
the referent Person, (iii) of which 10% or more of the Voting Stock, or more
than 20% of all classes of Capital Stock (other than preferred stock) in the
aggregate, is beneficially owned or held, directly or indirectly, by the
referent Person or (iv) with respect to an individual, any immediate family
member of such Person. For purposes of this definition, control of a Person
shall mean the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise.
'Asset Sale' means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition to any Person other than the Company or any of
its Restricted Subsidiaries (including, without limitation, by means of a Sale
and Leaseback Transaction or a merger or consolidation) (collectively, for
purposes of this definition, a 'transfer'), directly or indirectly, in one
transaction or a series of related transactions, of (a) any Capital Stock of any
Subsidiary or (b) any other properties or assets of the Company or any of its
Subsidiaries other than transfers of cash, Cash Equivalents, accounts
receivable,
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inventory or other properties or assets in the ordinary course of business. For
the purposes of this definition, the term 'Asset Sale' shall not include any of
the following: (i) any transfer of properties or assets (including Capital
Stock) that is governed by, and made in accordance with, the provisions
described under 'Covenants -- Limitations on Mergers and Certain Other
Transactions'; (ii) any transfer of properties or assets to an Unrestricted
Subsidiary, if permitted under the 'Limitations on Restricted Payments'
covenant; (iii) sales of damaged, worn-out or obsolete equipment or assets that,
in the Company's reasonable judgment, are either no longer used or useful in the
business of the Company or its Subsidiaries, provided that the proceeds thereof
are used to purchase replacement or similar assets for use in the business of
the Company and its Subsidiaries; and (iv) any transfers that, but for this
clause (iv), would be Asset Sales, if after giving effect to such transfers, the
aggregate Fair Market Value of the properties or assets transferred in such
transaction or any such series of related transactions does not exceed $500,000.
'Attributable Indebtedness,' when used with respect to any Sale and
Leaseback Transaction, means, as at the time of determination, property subject
to such Sale and Leaseback Transaction and the present value (discounted at a
rate equivalent to the Company's then-current weighted average cost of funds for
borrowed money as at the time of determination, compounded on a semi-annual
basis) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in any such Sale and Leaseback Transaction.
'Board Resolution' means a duly adopted resolution of the Board of
Directors of the Company.
'Capital Stock' of any Person means (i) any and all shares or other equity
interests (including without limitation common stock, preferred stock and
partnership interests) in such Person and (ii) all rights to purchase, warrants
or options (whether or not currently exercisable), participations or other
equivalents of or interests in (however designated) such shares or other
interests in such Person.
'Capitalized Lease Obligations' of any Person means the obligations of such
Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
'Cash Equivalents' means (i) marketable obligations with a maturity of 360
days or less issued or directly and fully guaranteed or insured by the United
States of America or any agency or instrumentality thereof (provided that the
full faith and credit of the United States of America is pledged in support
thereof); (ii) U.S. dollar denominated time deposits and certificates of deposit
of any financial institution (a) that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than $500
million or (b) whose short-term commercial paper rating or that of its parent
company is at least A-1 or the equivalent thereof from S&P or P-1 or the
equivalent thereof from Moody's (any such bank, an 'Approved Bank'), in each
case with a maturity of 360 days or less from the date of acquisition; (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing no more than 360 days
from the date of acquisition; (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clause
(i) above entered into with any commercial bank meeting the specifications of
clause (ii)(a) above; (v) investments in money market or other mutual funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (iv) above; and (vi) time deposits and certificates of
deposit of any commercial bank of recognized standing having capital and surplus
in excess of the local currency equivalent of $100,000,000 incorporated in a
country where the Company has one or more locally operating Foreign
Subsidiaries, and that is, as of the Issue Date, providing banking services to
the Company or any of its Foreign Subsidiaries.
'Change of Control' means the occurrence of any of the following: (i) the
consummation of any transaction the result of which is (x) if such transaction
occurs prior to the first sale of Voting Stock of Parent or the Company pursuant
to a registration statement under the Securities Act that results in at
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least 20% of the then outstanding Voting Stock of Parent or the Company having
been sold to the public, that either (A) Control Group Members beneficially own,
directly or indirectly, less than 51% of the Voting Stock of the Company or
Parent (such percentage determined, for purposes of this definition, as a
percentage of the total voting power of all Voting Stock of the relevant Person)
or (B) any other Person or group (as such term is used in Section 13(d)(3) of
the Exchange Act) is or becomes the beneficial owner (as defined in Rule 13d-3
of the Exchange Act), directly or indirectly, of 51% of the Voting Stock of the
Company or Parent (including in any event through direct or indirect beneficial
ownership of Capital Stock of Control Group Members referred to in clause (ii)
of the definition thereof) and (y) if such transaction occured thereafter, that
any Person or group (as such term is used in Section 13(d)(3) of the Exchange
Act) (other than Control Group Members), is or becomes the beneficial owner (as
defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of 40% of
the Voting Stock of the Company or Parent at any time at which Control Group
Members do not beneficially own, directly or indirectly, at least 51% of the
Voting Stock of the Company and Parent, (ii) the Company or Parent consolidates
with, or merges with or into, another Person or sells, assigns, conveys,
transfers, leases or otherwise disposes of all or substantially all of the
assets of the Company or Parent and their Subsidiaries, in either case taken as
a whole, to any Person, or any Person consolidates with, or merges with or into,
the Company or Parent, in any such event pursuant to a transaction in which the
outstanding Voting Stock of the Company or Parent, as the case may be, is
converted into or exchanged for cash, securities or other property, other than
any such transaction where the outstanding Voting Stock of the Company or
Parent, as the case may be, is converted into or exchanged for Voting Stock
(other than Disqualified Capital Stock) of the surviving or transferee
corporation and the beneficial owners of the Voting Stock of the Company or
Parent, as the case may be, immediately prior to such transaction own, directly
or indirectly, not less than a majority of the Voting Stock of the surviving or
transferee corporation immediately after such transaction, or (iii) during any
consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors of the Company or Parent (together with any
new directors whose election by such Board of Directors or whose nomination for
election by the stockholders of the Company or Parent, as the case may be, was
approved by either (i) a vote of a majority of the directors then still in
office who were either directors at the beginning of such period or whose
election or nomination for election was previously so approved or (ii) a Control
Group Member) cease for any reason to constitute a majority of the Board of
Directors of the Company or Parent, as the case may be, then in office.
'Consolidated Amortization Expense' for any period means the amortization
expense of the Company and its Restricted Subsidiaries for such period (to the
extent included in the computation of Consolidated Net Income), determined on a
consolidated basis in accordance with GAAP.
'Consolidated Depreciation Expense' for any period means the depreciation
expense of the Company and its Restricted Subsidiaries for such period (to the
extent included in the computation of Consolidated Net Income), determined on a
consolidated basis in accordance with GAAP.
'Consolidated Income Tax Expense' for any period means the provision for
taxes based on income and profits of the Company and its Restricted Subsidiaries
to the extent such income or profits were included in computing Consolidated Net
Income for such period.
'Consolidated Interest Coverage Ratio' means, with respect to any
determination date, the ratio of (a) EBITDA for the four full fiscal quarters
immediately preceding the determination date (for any determination, the
'Reference Period'), to (b) Consolidated Interest Expense for such Reference
Period. In making such computations, (i) EBITDA and Consolidated Interest
Expense shall be calculated on a pro forma basis assuming that (A) the
Indebtedness to be incurred or the Disqualified Capital Stock to be issued (and
all other Indebtedness incurred or Disqualified Capital Stock issued after the
first day of such Reference Period referred to in the covenant described under
' -- Certain Covenants Limitations on Additional Indebtedness' through and
including the date of determination), and (if applicable) the application of the
net proceeds therefrom (and from any other such Indebtedness or Disqualified
Capital Stock), including the refinancing of other Indebtedness, had been
incurred on the first day of such Reference Period and, in the case of Acquired
Indebtedness, on the assumption that the related transaction (whether by means
of purchase, merger or otherwise) also had occurred on such date with the
appropriate adjustments with respect to such acquisition being included in such
pro
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forma calculation and (B) any acquisition or disposition by the Company or any
Restricted Subsidiary of any properties or assets outside the ordinary course of
business or any repayment of any principal amount of any Indebtedness of the
Company or any Restricted Subsidiary prior to the stated maturity thereof, in
either case since the first day of such Reference Period through and including
the date of determination, had been consummated on such first day of such
Reference Period; (ii) the Consolidated Interest Expense attributable to
interest on any Indebtedness required to be computed on a pro forma basis in
accordance with the covenant described under ' -- Certain
Covenants -- Limitations on Additional Indebtedness' and (A) bearing a floating
interest rate shall be computed as if the rate in effect on the date of
computation had been the applicable rate for the entire period and (B) which was
not outstanding during the period for which the computation is being made but
which bears, at the option of the Company, a fixed or floating rate of interest,
shall be computed by applying, at the option of the Company, either the fixed or
floating rate; (iii) the Consolidated Interest Expense attributable to interest
on any Indebtedness under a revolving credit facility required to be computed on
a pro forma basis in accordance with the covenant described under ' -- Certain
Covenants -- Limitations on Additional Indebtedness' shall be computed based
upon the average daily balance of such Indebtedness during the applicable
period, provided that such average daily balance shall be reduced by the amount
of any repayment of Indebtedness under a revolving credit facility during the
applicable period, which repayment permanently reduced the commitments or
amounts available to be reborrowed under such facility; (iv) notwithstanding the
foregoing clauses (ii) and (iii), interest on Indebtedness determined on a
floating rate basis, to the extent such interest is covered by agreements
relating to Hedging Obligations, shall be deemed to have accrued at the rate per
annum resulting after giving effect to the operation of such agreements; and (v)
if after the first day of the applicable Reference Period and before the date of
determination, the Company has permanently retired any Indebtedness out of the
net proceeds of the issuance and sale of shares of Capital Stock (other than
Disqualified Capital Stock) of the Company within 60 days of such issuance and
sale, Consolidated Interest Expense shall be calculated on a pro forma basis as
if such Indebtedness had been retired on the first day of such period.
'Consolidated Interest Expense' for any period means the sum, without
duplication, of the total interest expense of the Company and its consolidated
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP and including, without limitation (i) imputed interest on
Capitalized Lease Obligations and Attributable Indebtedness, (ii) commissions,
discounts and other fees and charges owed with respect to letters of credit
securing financial obligations and bankers' acceptance financing, (iii) the net
costs associated with Hedging Obligations, (iv) amortization of other financing
fees and expenses, (v) the interest portion of any deferred payment obligations,
(vi) amortization of debt discount or premium, if any, (vii) all other non-cash
interest expense, (viii) capitalized interest, (ix) all cash dividend payments
(and non-cash dividend payments in the case of a Restricted Subsidiary) on any
series of preferred stock of the Company or any Restricted Subsidiary, (x) all
interest payable with respect to discontinued operations, and (xi) all interest
on any Indebtedness of any other Person guaranteed by the Company or any
Restricted Subsidiary.
'Consolidated Net Income' for any period means the net income (or loss) of
the Company and its consolidated Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication (i) the net income (or loss) of any Person (other
than a Restricted Subsidiary) in which any Person other than the Company and its
Restricted Subsidiaries has an ownership interest, except to the extent that any
such income has actually been received by the Company and its Restricted
Subsidiaries in the form of cash dividends during such period; (ii) except to
the extent includible in the consolidated net income of the Company pursuant to
the foregoing clause (i), the net income (or loss) of any Person that accrued
prior to the date that (a) such Person becomes a Restricted Subsidiary or is
merged into or consolidated with the Company or any Restricted Subsidiary or (b)
the assets of such Person are acquired by the Company or any Restricted
Subsidiary; (iii) the net income of any Restricted Subsidiary during such period
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of that income (a) is not permitted
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary during such period or (b) would be subject to
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any taxes payable on such dividend or distribution; (iv) any gain (or, only in
the case of a determination of Consolidated Net Income as used in EBITDA, any
loss), together with any related provisions for taxes on any such gain (or, if
applicable, the tax effects of such loss), realized during such period by the
Company or any Restricted Subsidiary upon (a) the acquisition of any securities,
or the extinguishment of any Indebtedness, of the Company or any Restricted
Subsidiary or (b) any Asset Sale by the Company or any of its Restricted
Subsidiary; (v) any extraordinary gain (or, only in the case of a determination
of Consolidated Net Income as used in EBITDA, any extraordinary loss), together
with any related provision for taxes on any such extraordinary gain (or, if
applicable, the tax effects of such extraordinary loss), realized by the Company
or any Restricted Subsidiary during such period; (vi) any non-cash loss during
Fiscal 1998 reflecting the decrease in deferred tax assets resulting from the
Acquisition and transactions consummated in connection therewith; and (vii) in
the case of a successor to the Company by consolidation, merger or transfer of
its assets, any earnings of the successor prior to such merger, consolidation or
transfer of assets; and provided, further, that (A) any gain referred to in
clauses (iv) and (v) above that relates to a Restricted Investment and which is
received in cash by the Company or a Restricted Subsidiary during such period
shall be included in the consolidated net income of the Company, (B) to the
extent deducted in determining consolidated net income for such period and not
otherwise added back pursuant to the foregoing clauses of this definition, the
amount of expenses in respect of Specified Transaction Payments attributable to
such period shall be added back in determining Consolidated Net Income for such
period, and (C) to the extent not otherwise deducted in determining such
consolidated net income for any period, all payments made to Parent pursuant to
any Tax Sharing Agreement or otherwise (including pursuant to the 'Certain
Covenants -- Limitations on Restricted Payments') in respect of taxes for such
period shall be deducted from the consolidated net income of the Company.
'Consolidated Net Worth' means, with respect to any Person as of any date,
the consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries as of such date, less all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to the date of the Indenture in the
book value of any asset owned by such Person or a Subsidiary of such Person.
'Control Group Members' means (i) the natural person or persons who are the
ultimate beneficial owners of Granaria Holdings N.V. on the Issue Date, as
disclosed under 'Security Ownership and Certain Beneficial Owners and Management
of Parent' and members of their immediate families and any spouse, parent or
descendant of any such person, or a trust the beneficiaries of which include
only any of the foregoing, and any corporation or other entity all of the
Capital Stock of which (other than directors' qualifying shares) is owned by any
of the foregoing or (ii) any corporation or other entity at least 51% of the
Voting Stock of which is owned by any of the Persons referred to in clause (i).
'Coverage Ratio Incurrence Condition' would be met at any specified time
only if the Company (or its Successor, as the case may be) would be able to
incur $1.00 of additional Indebtedness at such specified time pursuant to the
Consolidated Interest Coverage Ratio test set forth in the covenant described
under ' -- Certain Covenants -- Limitations on Additional Indebtedness.'
'Default' means any event, act or condition that is, or after notice or the
passage of time or both would be, an Event of Default.
'Designated Senior Indebtedness' means (i) Indebtedness under the New
Credit Agreement (whether incurred pursuant to the definition of Permitted
Indebtedness or pursuant to the covenant described under ' -- Limitations on
Additional Indebtedness' covenant) and (ii) any other Indebtedness constituting
Senior Indebtedness that at the date of determination, has an aggregate
principal amount outstanding of at least $25.0 million and that is specifically
designated by the Company, in the instrument creating or evidencing such Senior
Indebtedness or in an Officer's Certificate delivered to the Trustee, as
'Designated Senior Indebtedness.'
'Disqualified Capital Stock' means any Capital Stock of such Person or any
of its Subsidiaries that, by its terms, by the terms of any agreement related
thereto or by the terms of any security into which it is convertible, putable or
exchangeable, is, or upon the happening of any event or the passage of time
would be, required to be redeemed or repurchased by such Person or any to its
Subsidiaries, whether or
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not at the option of the holder thereof, or matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, in whole or in
part, on or prior to the final maturity date of the Notes; provided, however,
that any class of Capital Stock of such Person that, by its terms, authorizes
such Person to satisfy in full its obligations with respect to the payment of
dividends or upon maturity, redemption (pursuant to a sinking fund or otherwise)
or repurchase thereof or otherwise by the delivery of Capital Stock that is not
Disqualified Capital Stock, and that is not convertible, puttable or
exchangeable for Disqualified Capital Stock or Indebtedness, shall not be deemed
to be Disqualified Capital Stock so long as such Person satisfies its
obligations with respect thereto solely by the delivery of Capital Stock that is
not Disqualified Capital Stock.
'EBITDA' for any period mean without duplication, the sum of the amounts
for such period of (i) Consolidated Net Income plus (ii) in each case to the
extent deducted in determining Consolidated Net Income for such period (and
without duplication), (A) Consolidated Income Tax Expense, (B) Consolidated
Amortization Expense (but only to the extent not included in Consolidated
Interest Expense), (C) Consolidated Depreciation Expense, (D) Consolidated
Interest Expense and (E) all other non-cash items reducing the Consolidated Net
Income (excluding any such non-cash charge that results in an accrual of a
reserve for cash charges in any future period) for such period, in each case
determined on a consolidated basis in accordance with GAAP and minus (iii) the
aggregate amount of all non-cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such Period.
'Eligible Junior Securities' means (a) the common stock of Parent and (b)
any preferred stock of Parent that (i) has a maturity date or mandatory
redemption date not earlier than March 1, 2009, (ii) has no remedies for missed
dividends other than accrual on a cumulative basis and appointment of not more
than two directors to the Board of Directors of Parent, (iii) is not
convertible, puttable or exchangeable into any other security of Parent other
than common stock and (iv) is not, by its terms, by the terms of any agreement
related thereto or by the terms of any security into which it is convertible,
puttable or exchangeable, and upon the happening of any event or the passage of
time would not be, required to be redeemed or repurchased by such Person or any
of its Subsidiaries, whether or not at the option of the holder thereof, or
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, in whole or in part, on or prior to March 1, 2009.
'Equity Offering' means an underwritten primary offering of Eligible Junior
Securities of Parent pursuant to a registration statement filed with the
Commission in accordance with the Securities Act, or pursuant to a private
placement pursuant to an available exemption from registration and, in the case
of any such private placement, a majority of such placement of which is sold to
Persons that are not then and were not at the Issue Date Affiliates of Granaria
Holdings.
'Exchange Act' means the Securities Exchange Act of 1934, as amended.
'Exchange Debentures' means the 11 3/4% Exchange Debentures due 2008 of
Parent.
'Existing Indebtedness' means all of the Indebtedness of the Company and
its Subsidiaries that is outstanding on the Issue Date.
'Fair Market Value' of any asset or items means the fair market value of
such asset or items as determined in good faith by the Board of Directors and
evidenced by a Board Resolution.
'Foreign Subsidiary' means any Subsidiary of the Company that is not
incorporated or organized in the United States or in any State thereof.
'GAAP' means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the Issue Date.
'Granaria Holdings' means Granaria Holdings N.V., a Dutch corporation, and
its successors.
'Guarantee' means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without
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limitation, letters of credit and reimbursement agreements in respect thereof),
of all or any part of any Indebtedness.
'Guarantors' means each of the Subsidiary Guarantors and Parent, and
'Guarantor' means any one of the foregoing.
'Hedging Obligations' of any Person means the obligations of such Person
pursuant to (i) any interest rate swap agreement, interest rate collar agreement
or other similar agreement or arrangement designed to protect such Person
against fluctuations in interest rates, (ii) agreements or arrangements designed
to protect such Person against fluctuations in foreign currency exchange rates
in the conduct of its operations, or (iii) any forward contract, commodity swap
agreement, commodity option agreement or other similar agreement or arrangement
designed to protect such Person against fluctuations in commodity prices, in
each case, entered into in the ordinary course of business for bona fide hedging
purposes and not for the purpose of speculation.
'Immaterial Subsidiary' means (i) any Subsidiary of the Company which does
not own assets in excess of $50,000, (ii) any Name Holder Subsidiary, and (iii)
Eagle-Picher Inc., a Virgin Island foreign sales corporation.
'incur' means, with respect to any Indebtedness or Obligation, incur,
create, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to such Indebtedness or
Obligation; provided that (i) the Indebtedness of a Person existing at the time
such Person became a Restricted Subsidiary shall be deemed to have been incurred
by such Restricted Subsidiary and (ii) neither the accrual of interest nor the
accretion of accreted value shall be deemed to be an incurrence of Indebtedness.
'Indebtedness' of any Person at any date means, without duplication: (i)
all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
person or only to a portion thereof); (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto); (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred by
such Person in the ordinary course of business in connection with obtaining
goods, materials or services, which payable is not overdue by more than 60 days
according to the original terms of sale unless such payable is being contested
in good faith; (v) the maximum fixed redemption or repurchase price of all
Disqualified Capital Stock of such Person; (vi) all Capitalized Lease
Obligations of such Person; (vii) all Indebtedness of others secured by a Lien
on any asset of such Person, whether or not such Indebtedness is assumed by such
Person; (viii) all Indebtedness of others guaranteed by such Person to the
extent of such guarantee; provided that Indebtedness of the Company or its
Subsidiaries that is guaranteed by the Company or the Company's Subsidiaries
shall only be counted once in the calculation of the amount of Indebtedness of
the Company and its Subsidiaries on a consolidated basis; (ix) all Attributable
Indebtedness; and (x) to the extent not otherwise included in this definition,
Hedging Obligations of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such Person for any
such contingent obligations at such date and, in the case of clause (vii), the
lesser of (A) the Fair Market Value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (B) the amount of
the Indebtedness secured. For purposes of the preceding sentence, the 'maximum
fixed redemption or repurchase price' of any Disqualified Capital Stock that
does not have a fixed redemption or repurchase price shall be calculated in
accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased or redeemed on any date on which
Indebtedness shall be required to be determined pursuant to the Indenture, and
if such price is based upon, or measured by, the fair market value of such
Disqualified Capital Stock (or any equity security for which it may be exchanged
or converted), such fair market value shall be determined in good faith by the
Board of Directors of such Person, which determination shall be evidenced by a
Board Resolution.
'Independent Director' means a director of the Company who has not and
whose Affiliates have not, at any time during the twelve months prior to the
taking of any action hereunder, directly or
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indirectly, received, or entered into any understanding or agreement to receive,
any compensation, payment or other benefit, of any type or form, from the
Company or any of its Affiliates, other than customary directors fees for
serving on the Board of Directors of the Company or any Affiliate and
reimbursement of out-of-pocket expenses for attendance at the Company's or
Affiliate's board and board committee meetings.
'Independent Financial Advisor' means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Company and its Affiliates.
'Investments' of any Person means (i) all investments by such Person in any
other Person in the form of loans, advances or capital contributions (excluding
commission, travel and similar advances to officers and employees made in the
ordinary course of business) or similar credit extensions constituting
Indebtedness of such Person, and any guarantee of Indebtedness of any other
Person, (ii) all purchases (or other acquisitions for consideration) by such
Person of Indebtedness, Capital Stock or other securities of any other Person
and (iii) all other items that would be classified as investments (including
without limitation purchases of assets outside the ordinary course of business)
on a balance sheet of such Person prepared in accordance with GAAP.
'Issue Date' means the date the Notes are initially issued.
'Lien' means, with respect to any asset or property, any mortgage, deed of
trust, lien (statutory or other), pledge, lease, easement, restriction,
covenant, charge, security interest or other encumbrance of any kind or nature
in respect of such asset or property, whether or not filed, recorded or
otherwise perfected under applicable law, including without limitation any
conditional sale or other title retention agreement, and any lease in the nature
thereof, any option or other agreement to sell, and any filing of, or agreement
to give, any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction (other than cautionary filings in
respect of operating leases).
'Moody's' means Moody's Investors Service, Inc., and its successors.
'Name Holder Subsidiary' means any Subsidiary of the Company incorporated
and existing solely for the purpose of reserving the corporate name of such
Subsidiary and which does not conduct any business or hold any assets other than
shares of another Name Holder Subsidiary.
'Net Available Proceeds' means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel, accountants and investment banks) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary) owning a beneficial interest in the
properties or assets subject to the Asset Sale or having a Lien therein and (iv)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pensions and other postemployment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee; provided, however, that any
amounts remaining after adjustments, revaluations or liquidations of such
reserves shall constitute Net Available Proceeds.
'New Credit Agreement' means the Credit Agreement dated as of February 24,
1998 by and among ABN AMRO Bank N.V., as agent, PNC Bank, National Association,
as documentation agent, the banks party thereto, the Company and the Guarantors,
together with any additional guarantees by the Guarantors and security
agreements, as any of the foregoing may be subsequently amended, restated,
refinanced, or replaced from time to time, and shall include agreements in
respect of Hedging
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Obligations designed to protect against fluctuations in interest rates and
entered into with respect to loans thereunder.
'Non-Recourse Purchase Money Indebtedness' means Indebtedness of the
Company or any of its Subsidiaries incurred (a) to finance the purchase of any
assets of the Company or any of its Subsidiaries within 90 days of such
purchase, (b) to the extent the amount of Indebtedness thereunder does not
exceed 100% of the purchase cost of such assets, (c) to the extent the purchase
cost of such assets is or should be included in 'additions to property, plant
and equipment' in accordance with GAAP, and (d) to the extent that such
Indebtedness is non-recourse to the Company or any of its Subsidiaries or any of
their respective assets other than the assets so purchased.
'Obligation' means any principal, interest (including, in the case of
Senior Indebtedness, interest accruing subsequent to the filing of a petition in
bankruptcy or insolvency at the rate specified in the document relating to such
Indebtedness, whether or not such interest is an allowed claim permitted to be
enforced against the obligor under applicable law), penalties, fees,
indemnification, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
'Officer' means any of the following of the Company: the Chairman of the
Board, the Chief Executive Officer, the Chief Financial Officer, the President,
any Vice President, the Treasurer or the Secretary.
'Officers' Certificate' means a certificate signed by any two Officers.
'Opinion of Counsel' means a written opinion from legal counsel (such
counsel may be an employee of or counsel to the Company or the Trustee) that
complies with the requirements of this Indenture.
'Parent' means Eagle-Picher Holdings, Inc., a Delaware corporation, and its
successors.
'Parent Preferred Stock' means collectively the Series A 11 3/4% Cumulative
Redeemable Exchangeable Preferred Stock of Parent and Series B 11 3/4%
Cumulative Redeemable Exchangeable Preferred Stock of Parent.
'Payment Restriction' with respect to a Subsidiary of any Person, means any
encumbrance, restriction of limitation, whether by operation of the terms of its
charter or by reason of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation, on the ability of (i) such Subsidiary
to (a) pay dividends or make other distributions on its Capital Stock or make
payments on any obligation, liability or Indebtedness owed to such Person or any
other Subsidiary of such Person, (b) make loans or advances to such Person or
any other Subsidiary or such Person, (c) guarantee any Indebtedness of the
Company or any Restricted Subsidiary or (d) transfer any of its properties or
assets to such Person or any other Subsidiary of such Person (other than
customary restrictions on transfers of property subject to a Lien permitted
under the Indenture) or (ii) such Person or any other Subsidiary of such Person
to receive or retain any such dividends, distributions or payments, loans or
advances, guarantee, or transfer of properties or assets.
'Permitted Indebtedness' means any of the following:
(i) Indebtedness of the Company and any Subsidiary Guarantor under the
New Credit Agreement in an aggregate principal amount at any time
outstanding not to exceed (a) under the Senior Secured Term Loan Facility,
$225 million, less the amount thereof that has been repaid under the
covenant described under ' -- Limitations on Asset Sales' and (b) under the
Revolving Loan Facility the greater of (x) $175 million and (y) the sum of
80% of the book value of the eligible accounts receivable and 50% of
inventory of the Company and its Subsidiaries, calculated on a consolidated
basis and in accordance with GAAP;
(ii) Indebtedness under the Notes, the Note Guarantees and the
Indenture;
(iii) Existing Indebtedness;
(iv) Indebtedness under Hedging Obligations, provided that (1) such
Hedging Obligations are related to payment obligations on Permitted
Indebtedness or Indebtedness otherwise permitted by the 'Limitations on
Additional Indebtedness' covenant, and (2) the notional principal amount of
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such Hedging Obligations at the time incurred does not exceed the principal
amount of such Indebtedness to which such Hedging Obligations relate;
(v) Indebtedness of the Company to a Subsidiary Guarantor and
Indebtedness of any Subsidiary Guarantor to the Company or any other
Subsidiary Guarantor; provided, however, that upon either (1) the
subsequent issuance (other than directors' qualifying shares), sale,
transfer or other disposition of any Capital Stock or any other event which
results in any such Subsidiary Guarantor ceasing to be a Subsidiary
Guarantor or (2) the transfer or other disposition of any such Indebtedness
(except to the Company or a Subsidiary Guarantor), the provisions of this
clause (v) shall no longer be applicable to such Indebtedness and such
Indebtedness shall be deemed, in each case, to be incurred and shall be
treated as an incurrence for purposes of the 'Limitations on Additional
Indebtedness' covenant at the time the Subsidiary Guarantor in question
ceased to be a Subsidiary Guarantor or the time such transfer or other
disposition occurred;
(vi) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company in the ordinary course of business,
including guarantees or obligations of the Company with respect to letters
of credit supporting such bid, performance or surety obligations (in each
case other than for an obligation for money borrowed);
(vii) Indebtedness in respect of Non-Recourse Purchase Money
Indebtedness incurred by the Company or any Restricted Subsidiary;
(viii) Refinancing Indebtedness; and
(ix) Indebtedness, in addition to Indebtedness incurred pursuant to
the foregoing clauses of this definition, with an aggregate principal face
or stated amount (as applicable) at any time outstanding for all such
Indebtedness incurred pursuant to this clause not in excess of $35.0
million; provided, however, that (A) Indebtedness under letters of credit
and performance bonds issued for the account of a Foreign Subsidiary
pursuant to this clause to finance trade activities or otherwise in the
ordinary course of business, and not to support borrowed money or the
obtaining of advances or credit, may not exceed $10.0 million in an
aggregate stated or face amount for all such letters of credit and
performance bonds and (B) the aggregate principal amount at any time
outstanding for all other Indebtedness incurred by all Foreign Subsidiaries
pursuant to this clause may not exceed $25.0 million.
'Permitted Junior Securities' means any securities of the Company provided
for by a plan of reorganization or readjustment that are subordinated in right
of payment to all Senior Indebtedness that may at the time be outstanding to
substantially the same extent as, or to a greater extent than, the Notes are
subordinated to Senior Indebtedness.
'Person' means any individual, corporation, partnership, limited liability
company, joint venture, incorporated or unincorporated association, joint-stock
company, trust, unincorporated organization or government or other agency or
political subdivision thereof or other entity of any kind.
'Plan of Liquidation' with respect to any Person, means a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such Person to holders of
Capital Stock of such Person.
'Refinancing Indebtedness' means Indebtedness of the Company or a
Restricted Subsidiary issued in exchange for, or the proceeds from the issuance
and sale or disbursement of which are used substantially concurrently to repay,
redeem, refund, refinance, discharge or otherwise retire for value, in whole or
in part (collectively, 'repay'), or constituting an amendment, modification or
supplement to or a deferral or renewal of (collectively, an 'amendment'), any
Indebtedness of the Company or any Restricted Subsidiary (the 'Refinanced
Indebtedness') in a principal amount not in excess of the principal amount of
the Refinanced Indebtedness (or, if such Refinancing Indebtedness refinances
Indebtedness under a revolving credit facility or other agreement providing a
commitment for subsequent borrowings, with a maximum commitment not to exceed
the maximum commitment under
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such revolving credit facility or other agreement); provided that: (i) the
Refinancing Indebtedness is the obligation of the same Person as that of the
Refinanced Indebtedness, (ii) if the Refinanced Indebtedness was subordinated to
or pari passu with the Note Indebtedness, then such Refinancing Indebtedness, by
its terms, is expressly pari passu with (in the case of Refinanced Indebtedness
that was pari passu with) the Note Indebtedness, or subordinate in right of
payment to (in the case of Refinanced Indebtedness that was subordinated to) the
Note Indebtedness at least to the same extent as the Refinanced Indebtedness;
(iii) the portion, if any, of the Refinancing Indebtedness that is scheduled to
mature on or prior to the maturity date of the Notes has a Weighted Average Life
to Maturity at the time such Refinancing Indebtedness is incurred that is equal
to or greater than the Weighted Average Life to Maturity of the portion of the
Refinanced Indebtedness being repaid that is scheduled to mature on or prior to
the maturity date of the Notes; and (iv) the Refinancing Indebtedness is secured
only to the extent, if at all, and by the assets (which may include
after-acquired assets), that the Refinanced Indebtedness is secured.
'Related Business' means any business in which the Company and its
Subsidiaries operate on the Issue Date, or that is closely related to or
complements the business of the Company and its Subsidiaries, as such business
exists on the Issue Date.
'Related Business Investment' means any Investment directly by the Company
or its Subsidiaries in any Related Business.
'Related Party Agreement' means any management or advisory agreements or
other arrangements with any Affiliate of the Company or with any other direct or
indirect holder of more than 10% of any class of the Company's or Parent's
capital stock (except, in any such case, Parent, the Company or any Restricted
Subsidiary), but excluding in any event arrangements with ABN AMRO Bank N.V. and
its Affiliates of their respective successors (i) under the New Credit Agreement
or in connection therewith, (ii) in connection with the offering of the Notes or
the Series A Senior Preferred Stock or (iii) pursuant to other banking,
financing or underwriting activity entered into in the ordinary course of
business.
'Restricted Debt Payment' means any purchase, redemption, defeasance
(including without limitation in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by the Company or a
Restricted Subsidiary, prior to the scheduled maturity or prior to any scheduled
repayment of principal or sinking fund payment, as the case may be, in respect
of Subordinated Indebtedness.
'Restricted Investment' means any Investment by the Company or any
Restricted Subsidiary (other than investments in Cash Equivalents) in any Person
that is not the Company or a Restricted Subsidiary, including in any
Unrestricted Subsidiary.
'Restricted Payment' means with respect to any Person: (i) the declaration
or payment of any dividend (other than a dividend declared and paid (x) by a
Wholly-Owned Restricted Subsidiary to holders of its Capital Stock, or (y) by a
Subsidiary (other than a Wholly-Owned Restricted Subsidiary) to its shareholders
on a pro rata basis, but only to the extent of the dividends actually received
by the Company or a Restricted Subsidiary) or the making of any other payment or
distribution of cash, securities or other property or assets in respect of such
Person's Capital Stock (except that a dividend payable solely in Capital Stock
(other than Disqualified Capital Stock) of such Person shall not constitute a
Restricted Payment); (ii) any payment on account of the purchase, redemption,
retirement or other acquisition for value of (A) the Capital Stock of the
Company or (B) the Capital Stock of any Restricted Subsidiary, or any other
payment or distribution made in respect thereof, either directly or indirectly
(other than a payment solely in Capital Stock that is not Disqualified Capital
Stock, and excluding any such payment to the extent actually received by the
Company or a Restricted Subsidiary); (iii) any Restricted Investment; (iv) any
Restricted Debt Payment; or (v) payments by the Company or its Restricted
Subsidiaries in respect of any Related Party Agreement.
'Restricted Subsidiary' means any Subsidiary of the Company other than an
Unrestricted Subsidiary.
'Revolving Loan Facility' means the revolving loan facility provided under
the New Credit Agreement.
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'S&P' means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc., and its successors.
'Sale and Leaseback Transactions' means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person of any property or asset of such Person which has been or is being sold
or transferred by such Person to such lender or investor or to any Person to
whom funds have been or are to be advanced by such lender or investor on the
security of such property or asset.
'Securities Act' means the U.S. Securities Act of 1933, as amended.
'Senior Indebtedness' means all Indebtedness and other Obligations
specified below payable directly or indirectly by the Company or any Guarantor,
as the case may be, whether outstanding on the Issue Date or thereafter created,
incurred or assumed by the Company or such Guarantor: (i) the principal of and
interest on and all other Indebtedness and Obligations related to the New Credit
Agreement (including, without limitation, all loans, letters of credit and
unpaid drawings with respect thereto and other extensions of credit under the
New Credit Agreement, and all expenses, fees, reimbursements, indemnities and
other amounts owing pursuant to the New Credit Agreement), (ii) amounts payable
in respect of any Hedging Obligations, (iii) in addition to the amounts
described in (i) and (ii), all Indebtedness not prohibited by the 'Limitations
on Additional Indebtedness' covenant that is not expressly pari passu with, or
subordinated to, the Notes or the Note Guarantees, as the case may be, (iv) all
Capital Lease Obligations outstanding on the Issue Date, and (v) all Refinancing
Indebtedness permitted under the Indenture. Notwithstanding anything to the
contrary in the foregoing Senior Indebtedness will not include (a) any
Indebtedness which by the express terms of the agreement or instrument creating,
evidencing or governing the same is junior or subordinate in right of payment to
any item of Senior Indebtedness, (b) any trade payable arising from the purchase
of goods or materials or for services obtained in the ordinary course of
business, (c) Indebtedness incurred (but only to the extent incurred) in
violation of the Indenture as in effect at the time of the respective
incurrence, (d) any Indebtedness of the Company that, when incurred, was without
recourse to the Company, (e) any Indebtedness to any employee of the Company or
any of its respective Subsidiaries or (f) any liability for taxes owned or owing
by the Company.
'Senior Preferred Stock' means, collectively, the Series A Senior Preferred
Stock and the Series B Senior Preferred Stock.
'Senior Secured Term Loan Facility' means the term loan facility providing
for the senior secured Tranche A, Tranche B and Tranche C term loans.
'Senior Subordinated Indebtedness' of the Company means the Notes and any
other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness. 'Senior Subordinated
Indebtedness' of any Guarantor has a correlative meaning.
'Series A Senior Preferred Stock' means the 11 3/4% Series A Cumulative
Redeemable Exchangeable Preferred Stock of Parent.
'Series B Senior Preferred Stock' means the 11 3/4% Series B Cumulative
Redeemable Exchangeable Preferred Stock of Parent.
'Significant Subsidiary' means any Subsidiary of the Company that would be
a 'Significant Subsidiary' as defined in Article 1, Rule 1-02 of Regulation S-X,
promulgated pursuant to the Securities Act, as such Regulation is in effect on
the Issue Date, except all references to '10 percent' in such definition shall
be changed to '2 percent.'
'Specified Transaction Payments' means the following payments made to or
for the benefit of present or future officers and employees of the Company and
its Affiliates, or to Granaria Holdings and its Affiliates, in each case in
connection with the Acquisition and on terms (including without limitation the
amount thereof) substantially as described in the Prospectus, but only to the
extent that the aggregate amount thereof does not exceed $43.2 million for all
periods from and after the Issue Date: (i) payments to finance or refinance the
purchase by such officers and employees (or a trust for their
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benefit) of capital stock of Parent or its parent company, the grant or vesting
of any award of such capital stock and the payment by such officers and
employees of income taxes in respect thereof, (ii) stay put and other incentive
bonuses, (iii) severance payments and (iv) transaction fees paid to Granaria
Holdings.
'Subordinated Indebtedness' means Indebtedness of the Company or any
Restricted Subsidiary that is subordinated in right of payment to the Notes or
the Note Guarantee of such Restricted Subsidiary, respectively.
'Subsidiary' of any Person means (i) any corporation of which at least a
majority of the aggregate voting power of all classes of the Voting Stock is
owned by such Person directly or through one or more other Subsidiaries of such
Person and (ii) any entity other than a corporation in which such Person,
directly or indirectly, owns at least a majority of the Voting Stock of such
entity entitling the holder thereof to vote or otherwise participate in the
selection of the governing body, partners, managers or others that control the
management and policies of such entity. Unless otherwise specified, 'Subsidiary'
means a Subsidiary of the Company.
'Subsidiary Guarantor' means each domestic Restricted Subsidiary of the
Company (other than an Immaterial Subsidiary) and each other person who is
required to become (or whom the Company otherwise causes to become) a Subsidiary
Guarantor by the terms of the Indenture.
'Tax Sharing Agreement' means any tax sharing agreement or arrangement
entered or to be entered into by Parent, the Company and its Subsidiaries,
providing for payments by or to Parent, the Company and its Subsidiaries that,
in each case, are not in excess of the tax liabilities that would have been
payable by such Person on a stand-alone basis.
'Unrestricted Subsidiary' means (i) any Subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors of the Company in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Company may designate
any Restricted Subsidiary to be an Unrestricted Subsidiary, and any such
designation shall be deemed to be a Restricted Investment at the time of and
immediately upon such designation by the Company and its Restricted Subsidiaries
in the amount of the Consolidated Net Worth of such designated Subsidiary and
its consolidated Subsidiaries at such time, provided that such designation shall
be permitted only if (A) the Company and its Restricted Subsidiaries would be
able to make the Restricted Investment deemed made pursuant to such designation
at such time, (B) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of such Subsidiary (x) is Guaranteed by the Company or
any Restricted Subsidiary, (y) is recourse to the Company or any Restricted
Subsidiary or (z) subjects any property or asset of the Company or any
Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the
satisfaction thereof and (C) no default or event of default with respect to any
Indebtedness of such Subsidiary would permit any holder of any Indebtedness of
the Company or any Restricted Subsidiary to declare such Indebtedness of the
Company or any restricted Subsidiary due and payable prior to its maturity. The
Board of Directors of the Company may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary, and any such designation shall be deemed to be an
incurrence by the Company and its Subsidiaries of the Indebtedness (if any) of
such Subsidiary so designated for purposes of the ' -- Limitations on Additional
Indebtedness' covenant as of the date of such designation, provided that such
designation shall be permitted only if immediately after giving effect to such
designation and the incurrence of any such additional Indebtedness deemed to
have been incurred thereby (x) the Company would meet the Coverage Ratio
Incurrence Condition and (y) no Default or Event of Default shall be continuing.
Any such designation by the Board of Directors described in the two preceding
sentences shall be evidenced to the Trustee by the filing with the Trustee of a
certified copy of the Board Resolution giving effect to such designation and an
Officers' Certificate certifying that such designation complied with the
foregoing conditions and setting forth the underlying calculations of such
certificate.
'Voting Stock' with respect to any Person, means securities of any class of
Capital Stock of such Person entitling the holders thereof (whether at all times
or only so long as no senior class of stock or other relevant equity interest
has voting power by reason of any contingency) to vote in the election of
members of the board of directors of such Person.
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'Weighted Average Life to Maturity', when applied to any Indebtedness at
any date, means the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (ii) the then outstanding principal
amount of such Indebtedness.
'Wholly-Owned Restricted Subsidiary' means a Restricted Subsidiary of which
100% of the Capital Stock (except for directors' qualifying shares or certain
minority interests owned by other Persons solely due to local law requirements
that there be more than one stockholder, but which interest is not in excess of
what is required for such purpose) is owned directly by the Company or through
one or more Wholly-Owned Restricted Subsidiaries.
DESCRIPTION OF PREFERRED STOCK
The Series A Preferred Stock was offered and sold by Parent pursuant to a
Certificate of Designation and the By-laws of Parent. The Series A Preferred
Stock was issued in a private transaction that was not subject to the
registration requirements of the Securities Act. Concurrently with the Notes
Exchange Offer, Parent is offering to exchange its Series B Preferred Stock for
Series A Preferred Stock in the Preferred Stock Exchange Offer.
GENERAL
The Certificate of Incorporation of Parent authorizes 50,000 shares of
preferred stock, of which 14,191 shares of Preferred Stock are outstanding, and
the same number will be outstanding after giving effect to the Preferred Stock
Exchange Offer. The liquidation preference of the Preferred Stock was initially
$5,637.7 per share and accretes from March 1, 1998 to March 1, 2003, on a daily
basis, at the rate of 11.75% per annum, compounded semi-annually, to a
liquidation preference of $10,000 per share on March 1, 2003. The accreted value
of the Preferred Stock, at any date of determination, will hereinafter be
referred to as the 'Liquidation Preference.'
RANK
The Preferred Stock, with respect to dividend distributions and
distributions upon the liquidation, winding-up and dissolution of Parent, ranks
(i) senior to all classes of common stock of Parent and each other class of
capital stock or series of preferred stock established after February 20, 1998
(the date of the Offering Memorandum in connection with the offer of the Series
A Preferred Stock (the 'Preferred Stock Offering Memorandum')) by the Board of
Directors of Parent (the 'Board') the terms of which do not expressly provide
that it ranks on a parity with the Preferred Stock as to dividend distributions
and distributions upon the liquidation, winding-up and dissolution of Parent
(collectively referred to as 'Junior Securities') and (ii) subject to certain
conditions, on a parity with any class of capital stock or series of preferred
stock established the Board of Directors of Parent, the terms of which expressly
provide that such class or series will rank on a parity with the Preferred Stock
as to dividend distributions and distributions upon the liquidation, winding-up
and dissolution of Parent (collectively referred to as 'Parity Securities').
Creditors of Parent will have priority over the Preferred Stock with respect to
claims on the assets of Parent. Parent has provided guarantees under the New
Credit Agreement and the Notes, and pledged the capital stock of the Company in
support of its guarantee under the New Credit Agreement. In addition, creditors
and stockholders of Parent's Subsidiaries will have priority over the holders of
Preferred Stock with respect to claims on the assets of such Subsidiaries.
DIVIDENDS
No dividends will accrue on the Preferred Stock prior to March 1, 2003.
After March 1, 2003, holders of Preferred Stock will be entitled to receive,
when, as and if declared by the Board, out of funds legally available therefor,
dividends on the Preferred Stock at a rate per annum equal to 11.75% of the
Liquidation Preference per share of Preferred Stock. All dividends will be
cumulative whether or
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not earned or declared on a daily basis from March 1, 2003 and will be payable
on March 1 and September 1 of each year, commencing on September 1, 2003. The
terms of certain debt instruments of Parent and the Company, including the New
Credit Agreement and the Indenture, restrict the payment of cash dividends by
Parent and the payment to Parent of cash dividends by the Company, and future
agreements may provide the same. See 'Description of New Credit Agreement' and
'Description of the Notes -- Certain Covenants.'
OPTIONAL REDEMPTION
The Preferred Stock is redeemable at the option of Parent, in whole or in
part, at any time (subject to contractual and other restrictions with respect
thereto and to the legal availability of funds therefor) on or after March 1,
2003, at certain redemption prices set forth in the Preferred Stock Exchange
Offer Prospectus, together with accrued and unpaid dividends, and Special
Accretion, if any.
Notwithstanding the foregoing, at any time prior to March 1, 2001, Parent
may redeem up to 35% of shares of Preferred Stock outstanding on the Issue Date
out of the proceeds of one or more Equity Offerings, at any time or from time to
time in part, at a redemption price equal to 111.75% of the Liquidation
Preference (excluding any Special Accretion) at the time of redemption, together
with the amount of any Special Accretion to the date of redemption; provided,
that (a) at least $50 million aggregate amount of Liquidation Preference remains
outstanding after each such redemption and (b) such redemption occurs within 60
days of the date of the closing of any such Equity Offering.
MANDATORY REDEMPTION
The Preferred Stock is mandatorily redeemable by Parent on the earlier of
March 1, 2008 and making of a Mandatory Redemption Demand upon the occurrence of
certain Mandatory Redemption Events at a price equal to the then effective
Liquidation Preference, together with all accrued and unpaid dividends, and
Special Interest, if any, to the redemption date.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each holder of Preferred Stock
will have the right to require that Parent repurchase such holder's shares of
Preferred Stock for a cash price equal to 101% of the aggregate Liquidation
Preference (excluding any Special Accretion) of the Preferred Stock at the time
of the occurrence of the Change of Control, plus all accumulated and unpaid
dividends and the amount of Special Accretion, if any, to the date of
repurchase.
VOTING RIGHTS
Holders of the Preferred Stock have no voting rights with respect to
general corporate matters except as provided by law or as set forth in the
Certificate. The Certificate provides that in certain circumstances, holders of
Preferred Stock will be entitled to elect a majority of Parent's Board of
Directors or to vote for certain mergers, consolidations or sales of all or
substantially all of the assets of Parent.
EARLY MANDATORY REDEMPTION EVENTS
It will be considered an Early Mandatory Redemption Event under the
Certificate if Parent does not comply with specific limitations on its ability:
(a) to incur additional indebtedness, issue capital stock, engage in any
activities other than the performance of its guarantees under the New Credit
Agreement and the Notes Indenture, or merge or consolidate with any other person
or (b) to permit the Company or its Restricted Subsidiaries to incur additional
indebtedness, issue capital stock, make restricted payments, pay dividends or
make other distributions, enter into certain transactions with affiliates, or
enter into certain mergers or consolidations or sell all or substantially all of
the assets of the Company and the Restricted Subsidiaries. These Early Mandatory
Redemption Events are subject to a number of significant exceptions and
qualifications. The Certificate also requires Parent to deliver certain reports
and information to holders of the Preferred Stock.
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EXCHANGE FEATURE
On March 1, 2003 or any subsequent dividend payment date, Parent may, at
its option, but subject to certain conditions, exchange all, but not less than
all of the shares of Preferred Stock then outstanding for the Exchange
Debentures.
REGISTRATION RIGHTS
Parent and the Initial Purchasers have entered into a Registration Rights
Agreement (the 'Preferred Stock Registration Rights Agreement'). Pursuant to the
Preferred Stock Registration Rights Agreement, Parent has agreed to file with
the Commission a registration statement on an appropriate form under the
Securities Act with respect to an offer to exchange the Series A Preferred Stock
for a new issue of Series B Preferred Stock of Parent registered under the
Securities Act, with terms identical in all material respects to those of the
Series A Preferred Stock (the 'Preferred Stock Exchange Offer'). Parent is
making the Preferred Stock Exchange Offer concurrently with the Company's Notes
Exchange Offer. In certain circumstances, Parent or an affiliate of Parent will
be required to file with the Commission a shelf registration statement to cover
resales of the shares of Preferred Stock by holders thereof. If Parent fails to
satisfy these registration obligations, the Preferred Stock will be subject to
Special Accretion until all such registration defaults are cured.
DESCRIPTION OF EXCHANGE DEBENTURES
The Exchange Debentures, if issued, will be issued pursuant to an indenture
(the 'Exchange Debentures Indenture') between Parent and a trustee to be
determined (the 'Trustee'). The Exchange Debentures will be general unsecured
obligations of Parent, subordinated in right of payment to all existing and
future Senior Indebtedness (as defined in the Exchange Debentures Indenture) of
Parent, including its guarantee of the Notes and borrowings under the New Credit
Agreement.
The Exchange Debentures will bear interest from the Exchange Date at a rate
of 11.75% per annum, payable in cash semiannually, commencing with the first
such date to occur after the Exchange Date. The Exchange Debentures will mature
on March 1, 2008.
OPTIONAL REDEMPTION
The Exchange Debentures will be redeemable at the option of Parent, in
whole or in part, at any time on or after March 1, 2003, at certain redemption
prices set forth in the Preferred Stock Exchange Offer Prospectus, together with
accrued and unpaid interest, if any, thereon to the redemption date.
CHANGE OF CONTROL
Upon the occurrence of a Change of Control, each holder of Exchange
Debentures will have the right to require Parent to repurchase all or any part
of such holder's Exchange Debentures at an offer price in cash equal to 101% of
the aggregate principal amount thereof, plus accrued and unpaid interest thereon
to the date of repurchase. There can be no assurance that Parent will have
financial resources necessary to repurchase the Exchange Debentures upon a
Change of Control.
CERTAIN COVENANTS
The Exchange Debentures Indenture will contain covenants that, among other
things, limit the ability of Parent, among other things: (a) to incur additional
indebtedness, issue capital stock, engage in activities other than the
performance of its guarantee under the New Credit Agreement and the Notes, or
merger or consolidate with any other Person and (b) to permit the Company and
its Restricted Subsidiaries (as defined in the Exchange Debenture Indenture) to:
incur additional indebtedness; issue capital stock, pay dividends or make
certain other distributions; enter into certain transactions with affiliates; or
merge or consolidate with any other Person or sell all or substantially all of
the assets of the Company and its Restricted Subsidiaries. These covenants are
subject to a number of significant exceptions and qualifications. The Exchange
Debentures Indenture will also require Parent to deliver certain reports and
information to holders of the Preferred Stock.
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PLAN OF DISTRIBUTION
Each Holder desiring to participate in the Notes Exchange Offer will be
required to represent, among other things, that (i) it is not an 'affiliate' (as
defined in Rule 405 of the Securities Act) of the Company or any Guarantor (ii)
it is not engaged in, and does not intend to engage in, and has no arrangement
or understanding with any person to participate in, a distribution of the New
Notes and (iii) it is acquiring the New Notes in the ordinary course of its
business (a Holder unable to make the foregoing representation is referred to as
a 'Restricted Holder'). A Restricted Holder will not be able to participate in
the Notes Exchange Offer and may only sell its Old Notes pursuant to a
registration statement containing the selling security holder information
required by Item 507 of Regulation S-K under the Securities Act, or pursuant to
an exemption from the registration requirement of the Securities Act.
Each broker-dealer (other than a Restricted Holder) that receives New Notes
for its own account pursuant to the Notes Exchange Offer (a 'Participating
Broker-Dealer') must acknowledge in the Letter of Transmittal that it will
deliver a prospectus in connection with any resale of such New Notes. Based upon
interpretations by the staff of the Commission, the Company believes that New
Notes issued pursuant to the Notes Exchange Offer to Participating
Broker-Dealers may be offered for resale, resold, and otherwise transferred by a
participating Broker-Dealer upon compliance with the prospectus delivery
requirements, but without compliance with the registration requirements, of the
Securities Act. This Prospectus, as it may be amended or supplemented from time
to time, may be used by a Broker-Dealer in connection with resales of New Notes
received in exchange for Old Notes where such Old Notes were acquired as a
result of market-making activities or other trading activities. The Company has
agreed that, for a period of 180 days after the Expiration Date, it will make
this Prospectus, as amended or supplemented, available to any Participating
Broker-Dealer for use in connection with any such resale. If the Company is not
so notified by any Participating Broker-Dealers that they may be subject to such
requirements or if it is later notified by all such Participating Broker-Dealers
that they are no longer subject to such requirements, the Company will not be
required to maintain the effectiveness of the Notes Exchange Offer Registration
Statement or to amend or supplement this Prospectus following the consummation
of the Notes Exchange Offer or following such date of notification, as the case
may be. The Company believes that during such period of time, delivery of this
Prospectus, as it may be amended or supplemented, will satisfy the prospectus
delivery requirements of a Participating Broker-Dealer engaged in market-making
or other trading activities.
Based on interpretations by the staff of the Commission, the Company
believes that New Notes issued pursuant to the Notes Exchange Offer may be
offered for resale, resold, and other transferred by a Holder thereof (other
than a Restricted Holder or a Participating Broker-Dealer) without compliance
with the registration and prospectus delivery requirements of the Securities
Act.
The Company will not receive any proceeds from any sale of New Notes by
broker-dealers (including Participating Broker-Dealers). New Notes received by
Participating Broker-Dealers for their own accounts pursuant to the Notes
Exchange Offer may be sold from time to time in one or more transactions in the
over-the-counter market, in negotiated transactions, through the writing of
options on the New Notes or a combination of such methods of resale, at market
prices prevailing at the time of resale, at prices related to such prevailing
market prices or negotiated prices. Any such resale may be made directly to
purchasers or to or through brokers or dealers who may receive compensation in
the form of commissions or concessions from any such Participating Broker-Dealer
and/or the purchasers of any such New Notes. Any Participating Broker-Dealer
that resells New Notes may be deemed to be an 'underwriter' within the meaning
of the Securities Act and any profit on any such resale of New Notes and any
commissions or concessions received by any such persons may be deemed to be
underwriting compensation under the Securities Act. The Letter of Transmittal
states that, by acknowledging that it will deliver and by delivering a
prospectus, a broker-dealer will not be deemed to admit that it is an
'underwriter' within the meaning of the Securities Act.
The Company has agreed to pay all expenses incidental to the Notes Exchange
Offer other than commissions and concessions of any brokers or dealers and will
indemnify Holders of the Notes (including any broker-dealers) against certain
liabilities, including liabilities under the Securities Act, as set forth in the
Registration Rights Agreement.
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By acceptance of the Notes Exchange Offer, each Participating Broker-Dealer
that receives New Notes pursuant to the Notes Exchange Offer hereby agrees to
notify the Company prior to using the Prospectus in connection with the sale or
transfer of New Notes, and acknowledges and agrees that, upon receipt of notice
from the Company of the happening of any event that makes any statement in the
Prospectus untrue in any material respect or which requires the making of any
changes in the Prospectus in order to make the statements therein not misleading
(which notice the Company agrees to deliver promptly to such Participating
Broker-Dealer), such Participating Broker-Dealer will suspend use of the
Prospectus until the Company has amended or supplemented the Prospectus to
correct such misstatement or omission and has furnished copies of the amended or
supplemented prospectus to such Participating Broker-Dealer.
CERTAIN U.S. FEDERAL INCOME TAX CONSIDERATIONS
The following is a summary of certain material United States federal income
tax consequences generally applicable to the exchange of Old Notes for New Notes
and the ownership and disposition of Notes. The federal income tax
considerations set forth below are based upon currently existing provisions of
the Code, applicable Treasury Regulations ('Treasury Regulations'), judicial
authority, and current administrative rulings and pronouncements of the Internal
Revenue Service (the 'IRS'). There can be no assurance that the IRS will not
take a contrary view, and no ruling from the IRS has been, or will be, sought on
the issues discussed herein. Legislative, judicial, or administrative changes or
interpretations may be forthcoming that could alter or modify the statements and
conclusions set forth herein. Any such changes or interpretations may or may not
be retroactive and could affect the tax consequences discussed below.
As used in this summary, 'Note' means either a New Note or an Old Note,
and, where the context so requires, 'the Note' or 'such Note' includes a Note
for which the relevant Note was exchanged pursuant to the Note Exchange Offer.
As used in this summary, the term 'U.S. Holder' means the beneficial owner
of a Note that is for U.S. federal income tax purposes (i) an individual citizen
or resident of the United States, (ii) a corporation, partnership or other
entity created or organized in or under the laws of the United States or any
political subdivision thereof, (iii) an estate the income of which is subject to
United States federal income tax regardless of its source, or (iv) a trust whose
administration is subject to the primary supervision of a United States court
and which has one or more United States persons who have the authority to
control all substantial decisions of the trust.
As used in this summary, the term 'Non-United States Holder' means an owner
of a Note that is, for United States federal income tax purposes, (i) a
nonresident alien individual, (ii) a foreign corporation or (iii) a foreign
estate or foreign trust.
The summary is not a complete analysis or description of all potential
federal tax considerations that may be relevant to, or of the actual tax effect
that any of the matters described herein will have on, particular U.S. Holders
and Non-U.S. Holders (collectively, 'Holders'), and does not address foreign,
state, local or other tax consequences. This summary does not address the
federal income tax consequences to (a) special classes of taxpayers (such as S
corporations, mutual funds, insurance companies, financial institutions, small
business investment companies, foreign companies, nonresident alien individuals,
regulated investment companies, real estate investment trusts, dealers in
securities or currencies, broker-dealers and tax-exempt organizations) who are
subject to special treatment under the federal income tax laws, (b) Holders that
hold Notes as part of a position in a 'straddle,' or as part of a 'hedging,'
'conversion,' or other integrated investment transaction for federal income tax
purposes, (c) Holders that do not hold the Notes as capital assets within the
meaning of section 1221 of the Code or (d) Holders whose functional currency is
not the U.S. dollar. Furthermore, estate and gift tax consequences are not
discussed herein.
BECAUSE INDIVIDUAL CIRCUMSTANCES MAY DIFFER, EACH PROSPECTIVE PURCHASER OF
THE NEW NOTES IS STRONGLY URGED TO CONSULT HIS OR HER OWN TAX ADVISOR WITH
RESPECT TO HIS OR HER PARTICULAR TAX SITUATION AND AS TO ANY FEDERAL, FOREIGN,
STATE, LOCAL OR OTHER TAX CONSIDERATIONS
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(INCLUDING ANY POSSIBLE CHANGES IN TAX LAW) AFFECTING THE PURCHASE, HOLDING AND
DISPOSITION OF THE NEW NOTES.
Note Exchange Offer
The exchange of Notes for the New Notes pursuant to the Note Exchange Offer
should not be a taxable event for U.S. federal income tax purposes. As a result,
there should be no U.S. federal income tax consequences to holders exchanging
the Notes for the New Notes pursuant to the Note Exchange Offer, and immediately
after the Expiration Date a holder should have the same tax basis and holding
period in the New Notes as in the Old Notes exchanged therefor.
TAX CONSEQUENCES TO U.S. HOLDERS
Interest
Generally, interest paid on the Notes will be taxable to a U.S. Holder as
ordinary income at the time it accrues or is received in accordance with such
U.S. Holder's method of accounting for U.S. federal income tax purposes.
Market Discount
If a Note is acquired at a 'market discount,' some or all of any gain
realized upon a subsequent sale, other disposition, or full or partial principal
payment, of such Note (including of a New Note received in exchange for an Old
Note that was acquired at a 'market discount') may be treated as ordinary
income, as described below. For this purpose, 'market discount' is the excess
(if any) of the principal amount of a Note over the purchase price thereof,
subject to a statutory de minimis exception. Unless a U.S. Holder has elected to
include the market discount in income as it accrues, gain, if any, realized on
any subsequent disposition (other than in connection with certain nonrecognition
transactions) or full or partial principal payment of such Note will be treated
as ordinary income to the extent of the market discount that is treated as
having accrued during the period such U.S. Holder held such Note.
The amount of market discount treated as having accrued will be determined
either (i) on a straight-line basis by multiplying the market discount times a
fraction, the numerator of which is the number of days the Note was held by the
U.S. Holder and the denominator of which it is the total number of days after
the date such U.S. Holder acquired the Note up to and including the date of its
maturity or (ii) if the U.S. Holder so elects, on a constant interest rate
method. A U.S. Holder may make that election with respect to any Note but, once
made, such election is irrevocable.
A U.S. Holder of a Note acquired at a market discount may elect to include
market discount in income currently, through the use of either the straight-line
inclusion method or the elective constant interest method in lieu of
recharacterizing gain upon disposition as ordinary income to the extent of
accrued market discount at the time of disposition. Once made, this election
will apply to all notes and other obligations acquired by the electing U.S.
Holder at a market discount during the taxable year for which the election is
made, and all subsequent taxable years, unless the IRS consents to a revocation
of the election. If an election is made to include market discount in income
currently, the basis of the Note in the hands of the U.S. Holder will be
increased by the amount of the market discount that is included in income.
Unless a U.S. Holder who acquires a Note at a market discount elects to
include market discount in income currently, such U.S. Holder may be required to
defer deductions for a portion of the interest paid on indebtedness allocable to
such Note in an amount not exceeding the deferred market discount, until such
income is realized.
Bond Premium
Under the Code and regulations, including new regulations generally
effective for bonds acquired on or after March 2, 1998 (or certain others by
election), if a U.S. Holder purchases a Note and
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immediately after the purchase the adjusted basis of the Note exceeds the sum of
all amounts payable on the instrument after the purchase date (other than
payments of stated interest), the Note will be treated as having been acquired
with 'bond premium.' A U.S. Holder may elect to amortize such bond premium over
the remaining term of such Note (or, if it results in a smaller amount of
amortizable bond premium, until an earlier call date).
If bond premium is amortized, the amount of interest that must be included
in the U.S. Holder's income for each period ending on an interest payment date
or at the stated maturity, as the case may be, will be reduced by the portion of
premium allocable to such period based on the U.S Holder's yield to maturity
with respect to the Note as determined under the bond premium rules. Under the
new regulations, if the amortizable bond premium allocable to an accrual period
exceeds the amount of stated interest allocable to such accrual period, such
excess would be allowed as a deduction for such accrual period, but only to the
extent of the U.S. Holder's prior interest inclusions on the Note; any excess is
generally carried forward and allocable to the next accrual period. A U.S.
Holder who elects to amortize bond premium must reduce his tax basis in the Note
as described below under 'Disposition of the Notes.' If such an election to
amortize bond premium is not made, a U.S. Holder must include the full amount of
each interest payment in income in accordance with his or her regular method of
accounting and may receive a tax benefit (in the form of capital loss or reduced
capital gain) from the premium only in computing such U.S. Holder's gain or loss
upon the sale or disposition or payment of the principal amount of the Note.
An election to amortize premium will apply to amortizable bond premium on
all notes and other bonds, the interest on which is includible in the U.S.
Holder's gross income, held at the beginning of the U.S. Holder's first taxable
year to which the election applies or that are thereafter acquired, and may be
revoked only with the consent of the IRS.
Disposition of the Notes
Upon the sale, exchange or retirement of a Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on the sale, exchange or retirement (except to the extent attributable
to accrued interest that has not been included in income) and such U.S. Holder's
adjusted tax basis in the Note. A U.S. Holder's adjusted tax basis in a Note
will generally equal the U.S. Holder's purchase price for such Note, increased
by any market discount previously included in income by the U.S. Holder and
decreased by any principal payments received by the U.S. Holders, any
amortizable bond premium used to offset stated interest and certain other
amortizable bond premium allowed as a deduction under the new regulations
described above under 'Bond Premium,' deducted over the term of the Note. Gain
or loss realized on the sale, exchange or retirement of a Note generally will be
capital gain or loss. Recently enacted legislation includes substantial changes
to the federal taxation of capital gains recognized by individuals, including a
20% maximum tax rate for certain gains from the sale of capital assets held for
more than 18 months. The deduction of capital losses is subject to certain
limitations. Prospective investors should consult their tax advisors regarding
the treatment of capital gains and losses.
The Company does not intend to treat the possibility of an optional
redemption or repurchase of the Notes as giving rise to any accrual of original
issue discount or recognition of ordinary income upon redemption, sale or
exchange of a Note. U.S. Holders may wish to consider that Treasury Regulations
regarding the treatment of certain contingencies were recently issued and may
wish to consult their tax advisers in this regard.
Backup Withholding
Under section 3406 of the Code and applicable Treasury Regulations, a
noncorporate U.S. Holder of the Notes may be subject to backup withholding at
the rate of 31 percent with respect to 'reportable payments,' which include
interest paid on or the proceeds of a sale, exchange or redemption of, the
Notes. The payor will be required to deduct and withhold the prescribed amounts
if (i) the payee fails to furnish a Taxpayer Identification Number ('TIN') to
the payor in the manner required, (ii) the IRS notifies the payor that the TIN
furnished by the payee is incorrect, (iii) there has been a 'notified payee
128
<PAGE>
<PAGE>
underreporting' described in section 3406(c) of the Code or (iv) there has been
a failure of the payee to certify under penalty of perjury that the payee is not
subject to withholding under section 3406(a)(1)(C) of the Code. As a result, if
any one of the events listed above occurs, the payor will be required to
withhold an amount equal to 31 percent from any interest payment made with
respect to the Notes or any payment of proceeds of a redemption of the Notes to
a noncorporate U.S. Holder. Amounts paid as backup withholding do not constitute
an additional tax and will be credited against the U.S. Holder's federal income
tax liability, so long as the required information is provided to the IRS. The
payor generally will report to the U.S. Holders of the Notes and to the IRS the
amount of any 'reportable payments' for each calendar year and the amount of tax
withheld, if any, with respect to payment on those securities.
TAX CONSEQUENCES TO NON-UNITED STATES HOLDERS
Interest paid by the Company to a Non-United States Holder will not be
subject to United States federal income or withholding tax if such interest is
not effectively connected with the conduct of a trade or business within the
United States (or a permanent establishment therein, if a tax treaty applies) by
such Non-United States Holder and such Non-United States Holder (i) does not
actually or constructively own 10% or more of the total combined voting power of
all classes of stock of the Company; (ii) is not a controlled foreign
corporation with respect to which the Company is a 'related person'; (iii) is
not a bank whose receipt of interest on a Note is described in Section 881(c)
(3)(A) of the United States Internal Revenue Code of 1986, as amended, (the
'Code'); and (iv) certifies, under penalties of perjury, that such Holder is not
a United States person and provides the Company with such Holder's name and
address or a securities clearing organization, bank, or other financial
institution that holds customers' securities in the ordinary course of its trade
or business certifies, under penalties of perjury, that such certification and
information has been received by it or a qualifying intermediary from the
Non-United States Holder and furnishes the Company with a copy thereof.
If a Non-United States Holder of a Note is engaged in a trade or business
in the United States, and if interest (including market discount) on the Note
(or gain realized on its sale, exchange or other disposition) is effectively
connected with the conduct of such trade or business, the Non-United States
Holder, although exempt from the withholding tax discussed in the preceding
paragraph, will generally be subject to regular United States income tax on such
effectively connected income in the same manner as if it were a U.S. Holder. See
'U.S. Holders' above. Such Holder will be required to provide to the withholding
agent a properly executed IRS Form 4224 (or, after December 31, 1998, a Form
W-8) to claim an exemption from withholding tax. In addition, if such Non-United
States Holder is a foreign corporation, it may be subject to a 30% branch
profits tax (unless reduced or eliminated by an applicable treaty) of its
effectively connected earnings and profits for the taxable year, subject to
certain adjustments. For purposes of the branch profits tax, interest (including
market discount) on, and any gain recognized on the sale, exchange or other
disposition of, a Note will be included in the effectively connected earnings
and profits of such Non-United States Holder if such interest or gain, as the
case may be, is effectively connected with the conduct by the Non-United States
Holder of a trade or business in the United States.
Gain on Disposition
A Non-United States Holder will generally not be subject to United States
federal income tax on gain recognized on a sale, redemption or other disposition
of a Note unless (i) the gain is effectively connected with the conduct of a
trade or business within the United States (or a permanent establishment
therein, if a tax treaty applies) by the Non-United States Holder, (ii) in the
case of a Non-United States Holder who is a nonresident alien individual and
holds the Note as a capital asset, such Holder is present in the United States
for 183 or more days in the taxable year and certain other requirements are met
or (iii) the Holder is subject to tax pursuant to the provisions of the Code
applicable to certain United States expatriates.
129
<PAGE>
<PAGE>
Information Reporting and Backup Withholding
The Company will, where required, report to the Non-United States Holders
of Notes and the IRS the amount of any interest paid on the Notes in each
calendar year and the amounts of tax withheld, if any, with respect to such
payments.
In the case of payments of interest to Non-United States Holders, Treasury
regulations provide that the 31% backup withholding tax and certain information
reporting will not apply to such payments with respect to which either the
requisite certification, as described above, has been received or an exemption
has otherwise been established; provided that neither the Company nor its
payment agent has actual knowledge that the Non-United States Holder is a United
States person or that the conditions of any other exemption are not in fact
satisfied. Under Treasury regulations, these information reporting and backup
withholding requirements will apply, however, to the gross proceeds paid to a
Non-United States Holder on the disposition of the Notes by or through a United
States office of a United States or foreign broker, unless such Holder certifies
to the broker under penalties of perjury as to its name, address and status as a
foreign person or the Holder otherwise establishes an exemption. Information
reporting requirements, but not backup withholding, will also apply to a payment
of the proceeds of a disposition of the Notes by or through a foreign office of
a United States broker or foreign brokers with certain types of relationships to
the United States unless such broker has documentary evidence in its file that
the Non-United States Holder of the Notes is not a United States person, and
such broker has no actual knowledge to the contrary, or the Non-United States
Holder establishes an exemption. Neither information reporting nor backup
withholding generally will apply to a payment of the proceeds of a disposition
of the Notes by or through a foreign office of a foreign broker not subject to
the preceding sentence.
The Treasury Department recently adopted regulations regarding the
withholding and information reporting rules discussed above. In general, the
final regulations do not alter the substantive withholding and information
reporting requirements but unify current certification procedures and forms and
clarify reliance standards. These regulations will become effective for payments
made after December 31, 1998, subject to certain transition rules.
Backup withholding is not an additional tax. Any amounts withheld under the
backup withholding rules may be refunded or credited against the Non-United
States Holder's United States federal income tax liability, provided that the
required information is furnished to the Internal Revenue Service.
LEGAL MATTERS
The legality of the New Notes will be passed upon on behalf of the Company
by Howard, Darby & Levin, New York, New York.
EXPERTS
The consolidated financial statements of Eagle-Picher Industries, Inc. as
of and for the year ended November 30, 1997, included in this Prospectus have
been audited by Deloitte & Touche LLP, independent auditors, as stated in their
report appearing herein and have been so included in reliance upon the report
of such firm given on their authority as experts in auditing and accounting.
The consolidated financial statements of Eagle-Picher Industries, Inc. as of
November 30, 1996 and for each of the two years in the period ended
November 30, 1996, included in this Prospectus, have been audited by
KPMG Peat Marwick LLP, independent auditors, as stated in their report
appearing herein, and are given upon the authority of said firm as experts
in auditing and accounting. See 'Business -- Change in Independent Auditors.'
130
<PAGE>
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Eagle-Picher Industries, Inc.
Independent Auditors' Reports......................................................................... F-2
Consolidated Statements of Income (Loss) For the Years Ended November 30, 1997, 1996 and 1995......... F-4
Consolidated Balance Sheets as of November 30, 1997 and 1996.......................................... F-5
Consolidated Statements of Cash Flows For the Years Ended November 30, 1997,
1996 and 1995....................................................................................... F-6
Consolidated Statements of Shareholders' Equity (Deficit) For the Years Ended November 30, 1997, 1996
and 1995............................................................................................. F-7
Notes to Consolidated Financial Statements............................................................ F-8
Condensed Consolidated Statements of Income (Loss) For the Three Months Ended February 28, 1998 and
1997 (Unaudited)..................................................................................... F-23
Condensed Consolidated Balance Sheets as of February 28, 1998 and 1997
(Unaudited)......................................................................................... F-24
Condensed Consolidated Statements of Cash Flows For the Three Months Ended February 28, 1998 and 1997
(Unaudited).......................................................................................... F-25
Notes to Condensed Consolidated Financial Statements (Unaudited)...................................... F-26
Eagle-Picher Holdings, Inc.
Independent Auditors' Report.......................................................................... F-28
Balance Sheet and Notes to Balance Sheet as of December 22, 1997...................................... F-29
Condensed Consolidated Statements of Income For the Three Months Ended
February 28, 1998 and 1997 (Unaudited).............................................................. F-30
Condensed Consolidated Balance Sheets as of February 28, 1998 and 1997
(Unaudited)......................................................................................... F-31
Condensed Consolidated Statements of Cash Flows For the Three Months Ended February 28, 1998 and 1997
(Unaudited).......................................................................................... F-32
Notes to Condensed Consolidated Financial Statements (Unaudited)...................................... F-33
</TABLE>
F-1
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Eagle-Picher Industries, Inc.:
We have audited the accompanying consolidated balance sheet of Eagle-Picher
Industries, Inc. and subsidiaries as of November 30, 1997, and the related
consolidated statements of loss, shareholders' equity, and cash flows for the
year then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company as of November 30,
1997, and the results of its operations and its cash flows for the year then
ended in conformity with generally accepted accounting principles.
As discussed in Notes B and C to the consolidated financial statements,
effective November 29, 1996, the Company emerged from Chapter 11 of the United
States Bankruptcy Code and adopted 'fresh-start' reporting principles in
accordance with the American Institute of Certified Public Accountants'
Statement of Position 90-7, 'Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code.' As a result, the consolidated financial statements
for the period subsequent to the adoption of fresh-start reporting are presented
on a different cost basis than that for prior periods and, therefore, are not
comparable.
DELOITTE & TOUCHE LLP
Cincinnati, Ohio
January 15, 1998
F-2
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Eagle-Picher Industries, Inc.:
We have audited the accompanying consolidated balance sheet of Eagle-Picher
Industries, Inc. and subsidiaries as of November 30, 1996, and the related
consolidated statements of income (loss), shareholders' equity (deficit), and
cash flows for each of the years in the two-year period ended November 30, 1996.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Eagle-Picher
Industries, Inc. and subsidiaries as of November 30, 1996, and the results of
their operations and their cash flows for each of the years in the two-year
period ended November 30, 1996 in conformity with generally accepted accounting
principles.
As discussed in Notes B and C to the consolidated financial statements,
effective November 29, 1996, the Company emerged from chapter 11 of the United
States Bankruptcy Code and adopted 'fresh-start' reporting principles in
accordance with the American Institute of Certified Public Accountants'
Statement of Position 90-7, 'Financial Reporting by Entities in Reorganization
under the Bankruptcy Code.'
As discussed in Note E to the consolidated financial statements, the
Company changed its method of computing LIFO for inventories of boron, germanium
and other rare metals in 1996.
KPMG PEAT MARWICK LLP
Cincinnati, Ohio
February 5, 1997
F-3
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF INCOME (LOSS)
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30,
-------------------------------------
1997 1996 1995
-------- ---------- -----------
<S> <C> <C> <C>
Net sales................................................................ $906,077 $ 891,287 $ 848,548
Operating costs and expenses
Cost of products sold............................................... 725,010 716,926 681,373
Selling and administrative.......................................... 77,109 81,505 75,380
Depreciation........................................................ 39,671 30,338 28,296
Amortization of intangibles......................................... 16,318 412 412
Loss on sale of divisions........................................... 2,411 -- --
-------- ---------- -----------
860,519 829,181 785,461
-------- ---------- -----------
Operating income......................................................... 45,558 62,106 63,087
Adjustment for asbestos litigation....................................... -- 502,197 (1,005,511)
Provision for other claims............................................... -- (4,244) --
Interest expense (contractual interest of $9,889 in 1996 and $8,897 in
1995).................................................................. (31,261) (3,083) (1,926)
Gain on sale of investment............................................... -- -- 11,505
Other income (expense)................................................... (251) 1,345 199
-------- ---------- -----------
Income (loss) before reorganization items, taxes, extraordinary item and
cumulative effect of accounting change................................. 14,046 558,321 (932,646)
Fresh start revaluation.................................................. -- 118,684 --
Reorganization items..................................................... -- (2,349) (2,225)
-------- ---------- -----------
Income (loss) before taxes, extraordinary item and cumulative effect of
accounting change...................................................... 14,046 674,656 (934,871)
Income taxes............................................................. 17,900 52,570 9,300
-------- ---------- -----------
Income (loss) before extraordinary item and cumulative effect of
accounting change...................................................... (3,854) 622,086 (944,171)
Extraordinary item -- gain on discharge of pre-petition liabilities...... -- 1,525,540 --
Cumulative effect of change in accounting for inventories................ -- (1,235) --
-------- ---------- -----------
Net income (loss).............................................. $ (3,854) $2,146,391 $ (944,171)
-------- ---------- -----------
-------- ---------- -----------
Income (loss) per share:
Income (loss) before extraordinary item and cumulative effect of
accounting change................................................. $ (.39) $ 56.34 $ (85.51)
Extraordinary item -- gain on discharge of pre-petition
liabilities....................................................... -- 138.17 --
Cumulative effect of change in accounting for inventories........... -- (.11) --
-------- ---------- -----------
Net income (loss) per share.............................................. $ (.39) $ 194.40 $ (85.51)
-------- ---------- -----------
-------- ---------- -----------
</TABLE>
See accompanying notes to consolidated financial statements.
F-4
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
NOVEMBER 30,
--------------------
1997 1996
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................ $ 53,739 $ 32,725
Receivables, less allowances of $1,614 in 1997 and $2,233 in 1996.................... 130,927 132,875
Income tax refunds receivable........................................................ 3,025 73,720
Inventories.......................................................................... 92,196 102,901
Prepaid expenses..................................................................... 8,290 8,164
Deferred income taxes................................................................ 13,793 26,351
-------- --------
Total current assets............................................................ 301,970 376,736
-------- --------
Property, plant and equipment
Land and land improvements........................................................... 19,832 20,010
Buildings............................................................................ 65,289 67,836
Machinery and equipment.............................................................. 173,909 145,309
Construction in progress............................................................. 20,817 23,196
-------- --------
279,847 256,351
Less accumulated depreciation............................................................. 36,309 --
-------- --------
Net property, plant and equipment......................................................... 243,538 256,351
-------- --------
Deferred income taxes..................................................................... 98,991 102,133
Reorganization value in excess of amounts allocable to identifiable assets, net of
accumulated amortization of $16,284 in 1997............................................. 48,837 65,121
Other assets.............................................................................. 53,545 48,539
-------- --------
Total assets.................................................................... $746,881 $848,880
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................................... $ 52,886 $ 41,035
Compensation and employee benefits................................................... 22,630 18,127
Long-term debt -- current portion.................................................... 3,403 70,378
Income taxes......................................................................... 2,294 3,649
Reorganization items................................................................. 13,128 13,292
Other accrued liabilities............................................................ 19,661 18,447
-------- --------
Total current liabilities....................................................... 114,002 164,928
-------- --------
Long-term debt, less current portion...................................................... 269,994 316,061
Postretirement benefits other than pensions............................................... 21,681 21,675
Other long-term liabilities............................................................... 5,087 4,409
-------- --------
Total liabilities............................................................... 410,764 507,073
-------- --------
Shareholders' equity
Common stock -- no par value
Authorized 20,000,000 shares; issued and outstanding 10,000,000 shares............. 341,807 341,807
Retained deficit..................................................................... (3,854) --
Foreign currency translation......................................................... (1,836) --
-------- --------
Total shareholders' equity...................................................... 336,117 341,807
-------- --------
Total liabilities and shareholders' equity...................................... $746,881 $848,880
-------- --------
-------- --------
</TABLE>
See accompanying notes to consolidated financial statements.
F-5
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
YEARS ENDED NOVEMBER 30,
--------------------------------------
1997 1996 1995
--------- ----------- ----------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income (loss).................................................. $ (3,854) $ 2,146,391 $ (944,171)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Changes due to reorganization activities:
Extraordinary gain on discharge of pre-petition liabilities... -- (1,525,540) --
Fresh start revaluation....................................... -- (118,684) --
Adjustment for asbestos litigation................................. -- (502,197) 1,005,511
Provision for other claims......................................... -- 4,244 --
Cumulative effect of accounting change............................. -- 1,235 --
Depreciation and amortization...................................... 55,989 30,750 28,708
Loss on sale of divisions.......................................... 2,411 -- --
Gain on sale of investment......................................... -- -- (11,505)
Changes in assets and liabilities, net of effects of divestitures:
Receivables................................................... (14,562) (7,664) (17,914)
Income tax refunds receivable................................. 70,695 3,535 (2,156)
Inventories................................................... (3,393) (6,283) (1,665)
Deferred income taxes......................................... 15,700 29,170 (18,900)
Accounts payable.............................................. 16,351 657 (3,373)
Other......................................................... 8,546 17,247 (4,079)
--------- ----------- ----------
Net cash provided by operating activities.......................... 147,883 72,861 30,456
Cash flows from investing activities:
Proceeds from sale of divisions.................................... 39,007 4,248 --
Proceeds from sale of investment................................... -- -- 11,505
Capital expenditures............................................... (51,324) (44,957) (40,558)
Other.............................................................. (1,510) (1,061) 340
--------- ----------- ----------
Net cash used in investing activities......................... (13,827) (41,770) (28,713)
Cash flows from financing activities:
Issuance of long-term debt......................................... 12,997 -- 1,240
Reduction of long-term debt........................................ (126,039) (3,198) (2,259)
--------- ----------- ----------
Net cash used in financing activities......................... (113,042) (3,198) (1,019)
Cash payments on effective date of plan of reorganization............... -- (88,498) --
--------- ----------- ----------
Net increase (decrease) in cash and cash equivalents.................... 21,014 (60,605) 724
--------- ----------- ----------
Cash and cash equivalents, beginning of year............................ 32,725 93,330 92,606
--------- ----------- ----------
Cash and cash equivalents, end of year.................................. $ 53,739 $ 32,725 $ 93,330
--------- ----------- ----------
--------- ----------- ----------
</TABLE>
See accompanying notes to consolidated financial statements
F-6
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
UNREALIZED
ADDITIONAL GAIN (LOSS)
COMMON PAID-IN RETAINED ON
STOCK CAPITAL DEFICIT INVESTMENTS
-------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Balance November 30, 1994............................................. $ 13,906 $ 36,378 $(1,317,118) $--
Cumulative effect of change in accounting for marketable
securities..................................................... -- -- -- 5,377
Net loss......................................................... -- -- (944,171) --
Realized gain on investment...................................... -- -- -- (5,044)
Foreign currency translation..................................... -- -- -- --
-------- ---------- ----------- -----------
Balance November 30, 1995............................................. 13,906 36,378 (2,261,289) 333
Net income....................................................... -- -- 2,146,391 --
Foreign currency translation..................................... -- -- -- --
Unrealized loss on investment.................................... -- -- -- (141)
Cancellation of the former common shares per the Plan of
Reorganization................................................. (13,906) (36,378) 48,371 --
Issuance of the new common shares per the Plan of
Reorganization................................................. 341,807 -- -- --
Fresh-start revaluation.......................................... -- -- 66,527 (192)
-------- ---------- ----------- -----------
Balance November 30, 1996............................................. 341,807 -- -- --
Net loss......................................................... -- -- (3,854) --
Foreign currency translation..................................... -- -- -- --
-------- ---------- ----------- -----------
Balance November 30, 1997............................................. $341,807 $ -- $ (3,854) $--
-------- ---------- ----------- -----------
-------- ---------- ----------- -----------
<CAPTION>
TOTAL
FOREIGN SHAREHOLDERS'
CURRENCY TREASURY EQUITY
TRANSLATION STOCK (DEFICIT)
----------- -------- -------------
<S> <C> <C> <C>
Balance November 30, 1994............................................. $ 2,054 $ (1,913) $ (1,266,693)
Cumulative effect of change in accounting for marketable
securities..................................................... -- -- 5,377
Net loss......................................................... -- -- (944,171)
Realized gain on investment...................................... -- -- (5,044)
Foreign currency translation..................................... (777) -- (777)
----------- -------- -------------
Balance November 30, 1995............................................. 1,277 (1,913) (2,211,308)
Net income....................................................... -- -- 2,146,391
Foreign currency translation..................................... 129 -- 129
Unrealized loss on investment.................................... -- -- (141)
Cancellation of the former common shares per the Plan of
Reorganization................................................. -- 1,913 --
Issuance of the new common shares per the Plan of
Reorganization................................................. -- -- 341,807
Fresh-start revaluation.......................................... (1,406) -- 64,929
----------- -------- -------------
Balance November 30, 1996............................................. -- -- 341,807
Net loss......................................................... -- -- (3,854)
Foreign currency translation..................................... (1,836) -- (1,836)
----------- -------- -------------
Balance November 30, 1997............................................. $(1,836) $ -- $ 336,117
----------- -------- -------------
----------- -------- -------------
</TABLE>
See accompanying notes to consolidated financial statements.
F-7
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements include the accounts of the Company's
subsidiaries which are more than 50% owned and controlled. Intercompany accounts
and transactions have been eliminated. Investments in unconsolidated affiliates
which are at least 20% owned and over which the Company exercises significant
influence are accounted for using the equity method.
Revenue Recognition
Sales are recognized primarily upon shipment of products except for a
division of the Company that sells products under contracts and subcontracts
with various United States Government agencies and aerospace and defense
contractors. On cost-reimbursable contracts, sales are recognized as costs are
incurred and include a portion of the total estimated earnings to be realized in
the ratio that costs incurred relate to total estimated costs. On fixed-price
contracts, sales are recognized using the percentage of completion method, when
deliveries are made or upon completion of specified tasks. Contract losses are
provided for in their entirety in the period they become known, without regard
to the percentage-of-completion.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect amounts reported in the consolidated financial
statements and accompanying notes. Actual results could differ from those
estimates.
Reporting for Reorganization
Eagle-Picher Industries, Inc. (the 'Company') has accounted for all
transactions related to its chapter 11 proceedings and reorganization in
accordance with Statement of Position 90-7 ('SOP 90-7'), 'Financial Reporting by
Entities in Reorganization Under the Bankruptcy Code' (See Note B). The
adjustments to reflect the Company's emergence from bankruptcy have been
reflected in the accompanying consolidated financial statements. Accordingly, a
vertical black line is shown in the consolidated financial statements to
separate post-emergence operations from those prior to November 29, 1996 since
they have not been prepared on a comparable basis.
Cash and Cash Equivalents
Marketable securities with original maturities of three months or less are
considered to be cash equivalents.
Financial Instruments
The Company's financial instruments consist primarily of investments in
cash and cash equivalents, receivables and certain other assets as well as
obligations under accounts payable and long-term debt. The carrying values of
these financial instruments, with the exception of long-term debt, approximate
fair value (See Note G).
Financial instruments which potentially expose the Company to
concentrations of credit risk consist primarily of trade accounts receivable.
The Company's customer base includes all significant automotive manufacturers
and their first tier suppliers in North America and Europe. Although the Company
is directly affected by the well-being of the automotive industry, management
does not believe significant credit risk existed at November 30, 1997.
F-8
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Inventories
Inventories are valued at the lower of cost or market, which approximates
current replacement cost. A substantial portion of domestic inventories are
valued using the last-in first-out ('LIFO') method while the balance of the
Company's inventories are valued using the first-in first-out method.
Property, Plant and Equipment
The Company records investments in property, plant and equipment at cost.
The Company provides for depreciation of plant and equipment using the
straight-line method over the estimated lives of the assets which are generally
20 to 40 years for buildings and 3 to 10 years for machinery and equipment.
Improvements which extend the useful life of property are capitalized, while
repair and maintenance costs are charged to operations as incurred. In
accordance with fresh-start reporting, property, plant and equipment in service
at November 30, 1996 were stated at fair value, based on independent appraisals,
as of that date.
Intangible Assets
Reorganization value in excess of amounts allocable to identifiable assets
is being amortized on a straight-line basis over four years. The recoverability
of the assets is evaluated periodically based on current and estimated future
cash flows of the Company over the remaining amortization period. Prior to the
Company's emergence from chapter 11, the excess of cost over net assets acquired
was being amortized using the straight-line method primarily over 40 years.
Environmental Remediation Costs
The Company accrues for environmental expenses resulting from existing
conditions relating to past operations when the costs are probable and
reasonably estimable.
Income Taxes
Income taxes are provided based upon income for financial statement
purposes. Deferred tax assets and liabilities are established based on the
difference between the financial statement and income tax bases of assets and
liabilities using existing tax rates.
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated at current
exchange rates, and income and expenses are translated using weighted average
exchange rates. Adjustments resulting from translation of financial statements
stated in local currencies generally are excluded from the results of operations
and accumulated in a separate component of Shareholders' Equity (Deficit). Gains
and losses from foreign currency transactions are included in the determination
of net income (loss) and were immaterial.
Reclassifications
Certain prior year amounts have been reclassified to conform with current
year consolidated financial statement presentation.
B. REORGANIZATION AND EMERGENCE FROM CHAPTER 11
On November 18, 1996, the U.S. Bankruptcy Court for the Southern District
of Ohio, Western Division (the 'Bankruptcy Court'), together with the U.S.
District Court for the Southern District of Ohio, Western Division (the
'District Court'), confirmed the Third Amended Consolidated Plan of
Reorganization (the 'Plan') of the Company and seven of its domestic
subsidiaries. The Company
F-9
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
emerged from bankruptcy on November 29, 1996 (the 'Effective Date'). The Plan
was filed jointly by the Company, the Injury Claimants' Committee, which
represented approximately 150,000 persons alleging injury due to exposure to
asbestos-containing products manufactured by the Company from 1934 until 1971,
and the Representative for Future Claimants, which represented future personal
injury claimants. The Plan was also supported by the Unsecured Creditors'
Committee. The Company's chapter 11 case commenced January 7, 1991 (the
'Petition Date').
The Plan was based on a settlement of $2.0 billion for the Company's
liability for present and future asbestos-related personal injury claims. As a
result of the settlement, which was reached in the third quarter of 1996, an
adjustment was made to the consolidated financial statements to reduce the
asbestos liability subject to compromise from $2.5 billion, the amount the
Bankruptcy Court had previously estimated as the Company's liability for
asbestos-related personal injury claims. The order confirming the Plan contains
a permanent injunction which precludes holders of present and future asbestos or
lead-related personal injury claims from pursuing their claims against the
reorganized Company. Those claims will be channeled to an independently
administered qualified settlement trust (the 'PI Trust') which has been
established to resolve and satisfy those claims. Asbestos-related property
damage claims will be channeled to and resolved by a separate trust (the 'PD
Trust').
The Plan provided for distributions of $6.5 million in cash to holders of
priority claims, convenience claims, certain secured claims, and administrative
expenses. The PD Trust received $3.0 million in cash under the Plan. At November
30, 1996, the Company retained $15.0 million in cash for operating purposes,
held $4.2 million in escrow from a division sale and set aside $13.5 million for
remaining administrative expenses and unresolved claims. The remaining
consideration was distributed to the holders of other general unsecured claims,
which totaled approximately $152 million, and the PI Trust. The PI Trust and
each holder of a general unsecured claim received a distribution that was
proportionate to the size of its claim to the aggregate amount of unsecured
claims of $2,152 million. Pursuant to the terms of the Plan, the general
unsecured creditors received half of their consideration in cash and half in
three-year notes of the reorganized Company. These notes were repaid in 1997.
The PI Trust received, in the initial distribution, $51.3 million in cash, $18.1
million in such three-year notes, $69.1 million in Tax Refund notes, which were
paid in 1997, $250.0 million in ten-year debentures and all of the outstanding
shares of common stock of the reorganized Company. The Company's then existing
shareholders received no distribution and their shares were canceled.
Following the confirmation of the Plan, one general unsecured creditor and
the Unofficial Asbestos Co-defendants' Committee each filed a notice indicating
its intention to appeal the confirmation order issued by the Bankruptcy Court
and the U.S. District Court. After the end of the Company's fiscal year, the
general unsecured creditor formally withdrew its notice of appeal. The Company
and the Unofficial Asbestos Co-defendants Committee have submitted appellate
briefs to the United States Court of Appeals for the Sixth Circuit with respect
to the appeal of the confirmation order. The Company expects a decision on the
appeal in fiscal 1998. Further, the Company expects that the order confirming
the Plan will be upheld by all appellate courts.
It is anticipated that a final distribution will be made to the PI Trust
and all unsecured claimants, other than those holding convenience claims, when
all claims asserted in the chapter 11 cases (other than those channeled to the
PI Trust and the PD Trust) are resolved. Based on certain assumptions, the
Company anticipates that holders of general unsecured claims will ultimately
receive consideration having a value equal to approximately 37% of their allowed
claims.
The Plan resulted in the discharge of pre-petition liabilities through the
distribution of cash and securities to the PI Trust and the other creditors. The
value of the consideration distributed and expected to be distributed to the PI
Trust and other unsecured creditors was less than the amount of the allowed
claims resulting in an extraordinary gain of approximately $1.5 billion.
The net expense resulting from the Company's chapter 11 filings was
segregated from expenses related to ordinary operations in the accompanying
Consolidated Statements of Income (Loss) and includes the following:
F-10
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
<TABLE>
<CAPTION>
1996 1995
------------- -----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
Professional fees............................................................ $ 5,298 $ 7,047
Debt financing costs......................................................... 700 --
Other expenses............................................................... 1,711 181
Interest income.............................................................. (5,360) (5,003)
------------- -----------
$ 2,349 $ 2,225
------------- -----------
------------- -----------
</TABLE>
Interest income was attributable to the accumulation of cash and cash
equivalents subsequent to the petition date.
C. FRESH-START REPORTING
The Company adopted fresh-start reporting on the Effective Date in
accordance with SOP 90-7. Fresh-start reporting requires valuation of assets and
liabilities at fair value and valuation of equity based on the appraised
reorganization value of the ongoing business.
The Company's reorganization value was based on consideration of many
factors and several valuation methods, including discounted cash flows and
selected comparable publicly traded company multiples. The discounted cash flow
approach was based on the Company's forecast of unleveraged, after-tax cash
flows calculated for each year over the five-year period from 1997 through 2001.
A growth rate of 3.5% was assumed to capitalize cash flows for years after 2001.
Amounts were discounted to present value at rates ranging from 11.5% to 15%,
which approximate the Company's projected weighted average cost of capital. The
present value of future tax benefits was also considered.
D. SUBSEQUENT EVENT
On December 23, 1997, the PI Trust entered into an agreement (the 'Merger
Agreement') to sell its 100% interest in the common equity of the Company to a
unit of Granaria Holdings BV of The Netherlands. The transaction, which is
subject to certain conditions, is expected to close in February 1998.
E. INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
1997 1996
------------- -----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
Raw materials and supplies................................................... $51,797 $ 50,026
Work-in-process.............................................................. 25,932 34,250
Finished goods............................................................... 14,840 18,625
------------- -----------
92,569 102,901
Adjustment to state inventory at LIFO value.................................. (373) --
------------- -----------
$92,196 $ 102,901
------------- -----------
------------- -----------
</TABLE>
The percentage of inventories valued using the LIFO method was 81% in 1997
and 74% in 1996. In connection with fresh-start reporting, a new LIFO base layer
was established based on inventory levels at November 30, 1996. The effects of
liquidations of LIFO inventory quantities carried at lower costs prevailing in
prior years were immaterial.
Effective December 1, 1995, the Company changed its method of computing
LIFO inventories of boron, germanium and other rare metals from a
double-extension method to an index method. The Company believes that the index
method results in better matching of revenues and expenses. The cumulative
effect of the change on prior years was $1.2 million on an after tax basis. The
effect of this change was to increase net income $8.1 million in fiscal year
1996.
F-11
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
F. OTHER ASSETS
Other assets consisted of:
<TABLE>
<CAPTION>
1997 1996
------------- -----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
Prepaid pension cost -- Note J............................................... $36,621 $34,724
Investments in and receivables from unconsolidated affiliates................ 8,732 3,102
Notes receivable -- Note N................................................... 3,920 2,797
Other........................................................................ 4,272 7,916
------------- -----------
$53,545 $48,539
------------- -----------
------------- -----------
</TABLE>
On June 1, 1997, the Company contributed certain of the assets of the
former Suspension Systems Division totaling $5.1 million to a joint venture,
Eagle-Picher-Boge, L.L.C. ('E-P-Boge'). The Company retained a 45% interest in
E-P-Boge and recorded no gain on this transaction. The Company is accounting for
this investment in accordance with the equity method. The Company also received
a note from E-P-Boge in the amount of $2,827,000. This note is due June 1, 2000,
and bears interest of 7.5%. The note is secured by the accounts receivable of
E-P-Boge. Included in the Consolidated Statements of Income (Loss) are the
following results of the former Suspension Systems Division:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Net sales............................................................ $10,577 $19,606 $18,681
------- ------- -------
------- ------- -------
Operating income (loss).............................................. $ 96 $ (998) $ (506)
------- ------- -------
------- ------- -------
</TABLE>
G. LONG-TERM DEBT AND SHORT-TERM BORROWINGS
Credit Agreements
On the Effective Date, the Company entered a financing agreement which
provides a three-year, $60,000,000 unsecured committed revolving credit facility
(the 'Facility'). The Facility expires November 29, 1999 and is available for
cash borrowings and issuance of letters of credit. The Facility replaced debtor
in possession financing (the 'Debtor in Possession Facility') which provided a
$40,000,000 committed revolving credit facility secured by accounts receivable
and inventories. There were no cash borrowings under either revolving credit
facility at any time during 1997 or 1996. Letters of credit totaling $27,700,000
and $32,200,000 were outstanding at November 30, 1997 and 1996, respectively,
leaving the Company with $32,300,000 and $27,800,000, respectively, of borrowing
capacity.
Fees for letters of credit have declined from 1.5% to 1.25% per annum and
commitment fees on the unused portion have declined from .4% to .3% per annum.
The Facility contains covenants which limit other debt and asset sales (other
than those funding the Divestiture Notes), prohibit dividends and the sale of
Company securities by the PI Trust, and require minimum financial coverages and
bank approval for certain changes in corporate management and control. The
Company was in compliance with the covenants of the Facility at November 30,
1997. It is anticipated, however, that the Facility would be replaced with
another financing agreement upon sale of the Company.
Several of the Company's foreign subsidiaries have entered into agreements
with various banks which provide lines of credit totaling approximately
$20,200,000 at November 30, 1997 and $18,100,000 at November 30, 1996. At
November 30, 1997, $5,000,000 of borrowings were outstanding leaving $15,200,000
in borrowing capacity. There were no borrowings outstanding on any of these
agreements at November 30, 1996. These agreements, of which the substantial
majority is committed and unsecured, expire in 1998 and 2001. The annual rates
of interest on these lines of credit range from .75% to 1.5% over the banks'
base rates. Some have no commitment fees; the fees on the others range from .25%
to .65% per annum on the unused portion. These agreements also contain covenants
which include
F-12
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
restrictions on dividends and minimum financial requirements. The Company is in
compliance with these covenants at November 30, 1997.
Long-term debt consisted of:
<TABLE>
<CAPTION>
1997 1996
------------- -----------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C>
Senior unsecured sinking fund debentures..................................... $ 250,000 $ 250,000
Divestiture notes............................................................ -- 50,000
Tax refund notes............................................................. -- 69,146
Industrial revenue bonds..................................................... 18,400 10,475
Secured notes................................................................ -- 6,818
Debt of foreign subsidiaries................................................. 4,997 --
------------- -----------
273,397 386,439
Less:
Current portion.............................................................. 3,403 70,378
------------- -----------
Long-term debt, less current portion......................................... $ 269,994 $ 316,061
------------- -----------
------------- -----------
</TABLE>
Long-term debt had estimated fair value of approximately $287,000,000 at
November 30, 1997 and the estimated fair value approximated carrying value at
November 30, 1996. The estimated fair value of long-term debt was calculated
using discounted cash flow analysis based on current rates offered for similar
debt issues.
Senior Unsecured Sinking Fund Debentures
The Company issued Senior Sinking Fund Debentures ('Debentures') to the PI
Trust on the Effective Date in the amount of $250 million. The Debentures bear
interest of 10% per annum, payable semi-annually, and mature in ten years. The
Debentures will have a mandatory sinking fund of $20 million annually in the
third through ninth years, with a final payment of $110 million at maturity.
Beginning in the third year, the Company has the option to retire additional
amounts of principal; however, a premium will be due on the amount in excess of
twice the scheduled sinking fund amount. It is anticipated that the Debentures
will be retired in conjunction with the Purchase Agreement and the premium for
pre-payment will be waived.
Divestiture Notes
The Divestiture Notes, which were issued to the PI Trust and other
unsecured creditors on the Effective Date, were unsecured, bore interest of 9%
and were to mature November 29, 1999. These notes were repaid on August 25,
1997, without a penalty.
Tax Refund Notes
The Company issued Tax Refund Notes in the aggregate principal amount of
the expected Federal income tax refund (see Note H), to the PI Trust on the
Effective Date. These notes were repaid in 1997 when the Federal income tax
refund was received.
Industrial Revenue Bonds
Certain secured industrial revenue bonds, due in 2002 and 2004, were
reinstated at their original terms during the chapter 11 process. The Company
issued an additional industrial revenue bond in 1997 in the amount of $8 million
which matures in 2012. Generally, the industrial revenue bonds bear interest at
variable rates based on the market for similar issues and are secured by letters
of credit.
F-13
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Secured Notes
Certain secured notes, which were reissued on the effective date at 10% per
annum, were repaid in 1997.
The Company paid interest of $31,044,000, $2,767,000 and $1,966,000 during
1997, 1996 and 1995, respectively.
Long-term debt is scheduled to mature over the next five years as follows:
$3,403,000 in 1998, $20,080,000 in 1999, $20,080,000 in 2000, $21,754,000 in
2001 and $20,080,000 in 2002.
Lease Commitments
Future minimum rental commitments over the next five years as of November
30, 1997 under noncancellable operating leases, which expire at various dates,
are as follows: $3,450,000 in 1998, $2,930,000 in 1999, $2,460,000 in 2000,
$1,200,000 in 2001 and $530,000 in 2002. Rental expense in 1997, 1996, 1995 was
approximately $4,900,000, $5,000,000 and $4,600,000, respectively.
H. INCOME TAXES
The following is a summary of the components of income taxes (benefit) from
operations and fresh start revaluation in 1996:
<TABLE>
<CAPTION>
1997 1996 1995
------- ------- -------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Current:
Federal......................................................... $ 1,000 $17,200 $20,900
Foreign......................................................... (600) 4,350 3,400
State and local................................................. 1,800 1,850 3,900
------- ------- -------
2,200 23,400 28,200
Deferred:
Federal......................................................... 11,300 29,170 (18,900)
State and local................................................. 4,400 -- --
------- ------- -------
15,700 29,170 (18,900)
------- ------- -------
$17,900 $52,570 $ 9,300
------- ------- -------
------- ------- -------
</TABLE>
Total income tax benefit for the year ended November 30, 1996 of
$117,880,000 consisted of $52,570,000 expense from operations and the
fresh-start revaluation, $169,785,000 tax benefit from the extraordinary gain on
the discharge of pre-petition liabilities, and $665,000 tax benefit from the
cumulative effect of the change in accounting for inventories.
The sources of income (loss) before income tax expense (benefit),
extraordinary gain on discharge of pre-petition liabilities and cumulative
effect of accounting change are as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------- -------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
United States..................................................... $ 7,873 $665,907 $(941,971)
Foreign........................................................... 6,173 8,749 7,100
------- -------- ---------
$14,046 $674,656 $(934,871)
------- -------- ---------
------- -------- ---------
</TABLE>
F-14
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The differences between the total income tax expense from operations and
fresh start revaluation in 1996 and the income tax expense computed using the
Federal income tax rate were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------- --------- ---------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Income tax expense (benefit) at Federal statutory rate............. $ 4,900 $ 236,130 $(327,200)
Change in valuation allowance...................................... 1,200 (187,950) 332,900
Foreign taxes rate differential.................................... (3,800) 900 600
State and local taxes, net of Federal benefit...................... 3,600 1,200 2,500
Non-deductible amortization of reorganization value in excess of
amounts allocable to identifiable assets......................... 5,700 -- --
Non-deductible fresh start items................................... -- 4,100 --
Expired tax credits................................................ 5,900 -- --
Other.............................................................. 400 (1,810) 500
------- --------- ---------
Total income tax expense................................. $17,900 $ 52,570 $ 9,300
------- --------- ---------
------- --------- ---------
</TABLE>
Components of deferred tax balances as of November 30 are as follows:
<TABLE>
<CAPTION>
1997 1996
-------- --------
(IN THOUSANDS OF
DOLLARS)
<S> <C> <C>
Deferred tax liabilities:
Property, plant and equipment.............................................. $(46,761) $(58,885)
Prepaid pension............................................................ (12,817) (12,154)
Other...................................................................... (5,735) (6,461)
-------- --------
Total deferred tax liabilities........................................ (65,313) (77,500)
-------- --------
Deferred tax assets:
Notes to former creditors.................................................. 87,500 122,787
Net operating loss carryforwards........................................... 74,142 64,328
Credit carryforwards....................................................... 14,686 20,653
Accrued liabilities........................................................ 14,356 9,851
Postretirement benefit liability........................................... 7,588 7,586
Other...................................................................... 8,067 7,851
-------- --------
Total deferred tax assets............................................. 206,339 233,056
-------- --------
Valuation allowance........................................................ (28,242) (27,072)
-------- --------
Net deferred tax assets............................................... $112,784 $128,484
-------- --------
-------- --------
</TABLE>
At November 30, 1997, undistributed earnings of foreign subsidiaries
totaled $30 million. Deferred tax liabilities have not been recognized for these
undistributed earnings because it is management's intention to reinvest such
undistributed earnings outside the United States. If all undistributed earnings
were remitted to the United States, the amount of incremental United States
Federal and foreign income taxes payable, net of foreign tax credits, would be
approximately $10.5 million.
On the Effective Date, the Company contributed cash, notes and stock to the
PI Trust and distributed cash and notes to other unsecured creditors. The
distribution of cash and stock resulted in a net operating loss for tax purposes
for the fiscal year ended November 30, 1996. A portion of this operating loss
was applied to prior years' taxable income according to carryback rules to
generate a Federal tax refund of $69,146,000 which was received in 1997. The
remainder is carried forward to offset taxable income in future years.
Deductions for the notes distributed are taken as the notes are repaid. Net
operating loss carryforwards of approximately $161 million and $34 million will
expire in 2011 and 2012, respectively.
As a result of the net operating loss carried back to obtain a refund, tax
credits totaling $9,708,000, which had been previously used to reduce tax
liability in the carryback years, were restored and are
F-15
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
available to offset tax liability in future years. These credits are scheduled
to expire in the years 1998 through 2012, but are expected to expire unutilized.
Therefore, a provision for these items is included in the valuation allowance.
The Company also has available minimum tax credits of approximately $5,000,000
which may be used indefinitely to reduce Federal income tax liability.
While the Company was in chapter 11, significant uncertainties existed
relating to the amounts of deferred tax benefits that would be realized.
Accordingly, the valuation allowance reflected these uncertainties. The Company
reversed a significant portion of the valuation allowance upon emergence from
chapter 11 when the Company was able to determine more accurately the amounts of
the deferred tax benefits. Based on its history of prior years' operations and
its expectations for the future, the Company has determined that it is more
likely than not that the results of future operations will generate sufficient
taxable income to realize the deferred tax benefits before they expire,
excluding the tax credits referred to above. Although the Automotive Segment is
susceptible to economic cycles and recessions, the Industrial and Machinery
Segments of the Company consist of certain businesses which are not impacted as
significantly by economic downturns.
The Company paid income taxes, net of refunds received, of $4,300,000 in
1997 (with the exception of the Federal tax refund received of $69,146,000),
$17,300,000 in 1996 and $28,800,000 in 1995.
I. INCOME (LOSS) PER SHARE
The calculation of net income (loss) per share is based upon the average
number of shares outstanding. The average number of shares used in the
computation of net income (loss) per share was 10,000,000 in 1997 and 11,040,932
in 1996 and 1995.
J. RETIREMENT BENEFIT PLANS
Substantially all employees of the Company and its subsidiaries are covered
by various pension or profit sharing retirement plans. The cost of providing
retirement benefits was $1,900,000 in 1997, $2,300,000 in 1996 and $1,900,000 in
1995. Amounts for a supplemental executive retirement plan to provide senior
management with benefits in excess of normal pension benefits are included in
the cost of providing retirement benefits. Under the plan, annuities are
purchased by the Company and distributed to participants on an annual basis. The
cost of these annuities was $1,058,000 in 1997, $1,279,000 in 1996 and $964,000
in 1995.
The Company's funding policy for defined benefit plans is to fund amounts
on an actuarial basis to provide for current and future benefits in accordance
with the funding guidelines of ERISA.
Plan benefits for salaried employees are based primarily on employees'
highest five consecutive years' earnings during the last ten years of
employment. Plan benefits for hourly employees typically are based on a dollar
unit multiplied by the number of service years.
Net periodic pension expense for the Company's defined benefit plans
included the following components:
<TABLE>
<CAPTION>
1997 1996 1995
-------- -------- --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Service cost-benefits earned during the period...................... $ 4,848 $ 5,497 $ 4,001
Interest cost on projected benefit obligation....................... 14,276 13,701 12,972
Actual gain on plan assets.......................................... (36,544) (29,296) (40,975)
Net amortization and deferral....................................... 16,669 10,000 24,336
-------- -------- --------
Net periodic pension cost (income).................................. $ (751) $ (98) $ 334
-------- -------- --------
-------- -------- --------
</TABLE>
In addition, in 1997, the Company recognized a curtailment gain of
$1,662,000 due to the reduction in active participants in the Company's
retirement plans that resulted primarily from the divestiture of divisions.
F-16
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The plans' assets consist primarily of listed equity securities and
publicly traded notes and bonds. The actual net return on plan assets was 15.3%
in 1997, 13.5% in 1996 and 21.2% in 1995, and generally reflects the performance
of the equity and bond markets.
The following table sets forth the plans' funded status and amounts
recognized in the Company's Consolidated Balance Sheets at November 30:
<TABLE>
<CAPTION>
1997 1996
--------- ---------
(IN THOUSANDS OF
DOLLARS)
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation................................................ $(184,123) $(168,896)
--------- ---------
--------- ---------
Accumulated benefit obligation........................................... $(191,148) $(175,191)
--------- ---------
--------- ---------
Projected benefit obligation............................................. $(209,701) $(191,667)
Plan assets at fair value..................................................... 250,036 226,391
--------- ---------
Projected benefit obligation less than plan assets............................ 40,335 34,724
Unrecognized net gain......................................................... (3,761) --
Unrecognized prior service cost............................................... 47 --
--------- ---------
Prepaid pension cost recognized............................................... $ 36,621 $ 34,724
--------- ---------
--------- ---------
</TABLE>
The discount rate and weighted average rate of increase in future
compensation levels used in determining the actuarial present value of the
projected benefit obligation were 7.0% and 4.2%, and 7.5% and 4.2%,
respectively, at November 30, 1997 and 1996, respectively. The expected
long-term rate of return on assets was 9.0% in 1997 and in 1996.
Upon the adoption of fresh start reporting, all unrecognized items as of
November 30, 1996 were recognized and recorded on the Company's Consolidated
Balance Sheet.
K. EMPLOYEE BENEFITS OTHER THAN PENSIONS
In addition to providing pension retirement benefits, the Company makes
health care and life insurance benefits available to certain retired employees
on a limited basis. Generally, the medical plans pay a stated percentage of
medical expenses reduced by deductibles and other coverages. Eligible employees
may elect to be covered by these health and life insurance benefits if they
reach early or normal retirement age while working for the Company. In most
cases, a retiree contribution for health insurance coverage is required. The
Company funds these benefit costs primarily on a pay-as-you-go basis. The net
amounts funded approximate $1,000,000 on an annual basis.
The components of net periodic postretirement benefit cost were as follows:
<TABLE>
<CAPTION>
1997 1996 1995
------ ------ ------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Service cost -- benefits earned during the period.......................... $ 554 $ 710 $ 396
Interest cost on accumulated postretirement benefit obligation............. 1,241 1,424 1,202
Amortization of unrecognized net gain...................................... (93) -- (179)
------ ------ ------
Net periodic postretirement benefit cost................................... $1,702 $2,134 $1,419
------ ------ ------
------ ------ ------
</TABLE>
In addition, in 1997, the Company recognized a curtailment gain of $564,000
due to the reduction in eligible employees that resulted primarily from the
divestiture of divisions.
F-17
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The accumulated postretirement benefit obligation at November 30 consisted
of the following components:
<TABLE>
<CAPTION>
1997 1996
------- -------
(IN THOUSANDS OF
DOLLARS)
<S> <C> <C>
Retirees and dependents........................................................... $10,670 $12,561
Eligible active participants...................................................... 2,074 2,021
Other active participants......................................................... 6,993 7,093
------- -------
Accumulated postretirement benefit obligation..................................... 19,737 21,675
Unrecognized net gain............................................................. 1,944 --
------- -------
Accrued postretirement benefit costs.............................................. $21,681 $21,675
------- -------
------- -------
</TABLE>
Benefit costs were estimated assuming retiree health care costs would
initially increase at an 9% annual rate which decreases to an ultimate rate of
6% in 4 years. If this annual trend rate would increase by 1%, the accumulated
postretirement obligation as of November 30, 1997 would increase by $2,460,000
with a corresponding increase of $323,000 in the postretirement benefit expense
in 1997. The discount rates used in determining the accumulated postretirement
obligation at November 30, 1997 and 1996 were 6.5% and 7.0%, respectively. The
unrecognized net gain as of November 30, 1996 was recognized and recorded in the
Consolidated Balance Sheet per the provisions of fresh-start reporting.
L. ASBESTOS LITIGATION AND CLAIMS
As discussed in Note B, above, the Plan provides that all present and
future asbestos-related personal injury claims will be channeled to and resolved
by the PI Trust. Such claims result from exposure to asbestos-containing
industrial insulation products that the Company manufactured from 1934 to 1971.
The Company expects that the approximately 150,000 such claims that were filed
pursuant to the bar date for such claims, and the tens of thousands of such
claims that will arise for several decades into the future, will be administered
and resolved by such trust. In fact, the Company has learned that the PI Trust
began resolving and paying such claims in fiscal 1997.
Further, the Company expects that the channeling injunction provided by
section 524 of the Bankruptcy Code will prevent any such claimants from
prosecuting such claims against the reorganized Company. The Company is not
aware of any attempt by any asbestos-related personal injury claimant to nullify
the channeling injunction provided by section 524 of the Bankruptcy Code
subsequent to the entry of that injunction by the Bankruptcy Court and the
District Court in November, 1996.
In addition, the Plan also resolved and discharged all asbestos property
damage claims against the Company. The class of holders of such claims voted to
accept a settlement for such claims that was contained in the Plan. Pursuant to
the settlement, the Company has set aside $3 million in cash to fund the PD
Trust to resolve such claims. Certain of the holders of such claims will appoint
trustees to establish and administer such trust. The Company expects that such
trust will be established in due course. Further, the Company expects that an
injunction provided by the Plan, which orders all holders of asbestos property
claims to pursue such claims solely against the PD Trust, will prevent any such
claimants from prosecuting such claims against the reorganized Company.
M. ENVIRONMENTAL AND OTHER LITIGATION CLAIMS
Most of the pre-petition claims against the Company alleging a right to
payment due to environmental and litigation matters were resolved prior to the
Effective Date. The holders of those claims which were allowed have received a
proportionate distribution of the assets of the estate based on the amount of
their claims to the total liabilities of the Company.
In addition to the items discussed below, the Company is also involved in
routine litigation, environmental proceedings and claims pending with respect to
matters arising out of the normal course of business. As of November 30, 1997,
the Company has reserved $6.1 million associated with
F-18
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
environmental remediation activities at some of its current and former sites. In
management's opinion, the ultimate liability resulting from all claims,
individually or in the aggregate, will not materially affect the Company's
consolidated financial position, results of operations or cash flows.
Environmental
The settlement among the Company, the United States Environmental
Protection Agency, and the United States Department of Interior which resolved
the majority of the 1,102 proofs of claim timely filed alleging a right to
payment because of environmental matters, was approved by the Bankruptcy Court
in June, 1996. Certain parties that may be liable at certain of the sites
resolved by the settlement appealed such approval. In August 1997, the District
Court affirmed the Bankruptcy Court's approval of the settlement. The time
within which such affirmance may be appealed has expired without any further
appeal having been taken. Thus, the settlement has become final and binding on
all parties.
One of the significant features of the settlement is the agreement with
respect to 'Additional Sites.' Additional Sites are those superfund sites for
which the Company's liability allegedly arises as a result of pre-petition waste
disposal or recycling. The Company retains all of its defenses, legal or
factual, at such sites. However, if the Company is found liable at any
Additional Sites or settles any claims for any Additional Sites, the Company is
required to pay as if such claims had been resolved in the reorganization under
chapter 11. Thus, the Company's liability at Additional Sites will be paid at
approximately 37% of any amount due.
In fiscal 1997, the Company received notice that it may have liability
under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 at sixteen Additional Sites. The Company believes, after an
investigation of these claims, that it has only de minimis liability at thirteen
of these sites. Three of the sixteen sites may require expenditures above the de
minimis level. The Company has valid legal and factual defenses at these sites
and intends to contest vigorously its liability.
Lead Chemicals
The Plan that was consummated on November 29, 1996 provides that all
lead-related personal injury claims that were pending on the Plan's Effective
Date and all future lead-related personal injury claims, will be channeled to
and resolved by the PI Trust discussed in Notes B and L, above. The Company
expects that the channeling injunction provided by section 524 of the Bankruptcy
Code will prevent any such claimants from prosecuting such claims against the
reorganized Company. The Company is not aware of any attempt by any lead-related
personal injury claimant to nullify the channeling injunction provided by
section 524 of the Bankruptcy Code subsequent to the entry of that injunction by
the Bankruptcy Court and the District Court in November 1996. All claims
asserting liability against the Company based on property damage from lead
chemicals allegedly manufactured and sold by the Company were disallowed during
the reorganization.
Other Litigation Claims
In May 1997, Caradon Doors and Windows, Inc. ('Caradon') filed a suit
against the Company in the U.S. District Court in Atlanta, Georgia alleging
breach of contract and asserting contribution rights against the Company. Prior
to this suit, Caradon had been found liable to Therma-Tru Corporation
('Therma-Tru') in the amount of approximately $8.8 million for infringing a
Therma-Tru patent for plastic door components manufactured by the Company's now
divested Plastics Division. Caradon settled the litigation with Therma-Tru and
was seeking to recover some or all of its liability from the Company. In May
1997, Therma-Tru also attempted to hold the Company liable for patent
infringement for plastic door components that the Plastics Division manufactured
and sold to Pease Industries, Inc. ('Pease'). Further, after the Company
divested its Plastics Division in July 1997, Therma-Tru attempted to hold the
purchaser of the Plastics Division, Cambridge Industries, Inc. ('Cambridge'),
liable for infringement for Cambridge's manufacture of door components for Pease
after the divestiture, but using the prior technology. The Company had agreed to
indemnify Cambridge for those sales. Thus, Therma-
F-19
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Tru's suit against Cambridge might also be a liability of the Company. The
Company estimates that the total damages that Therma-Tru is seeking to recover,
jointly and severally, from the Company and Pease in these two suits is
approximately $11.4 million. The Company asserted, in a motion filed to dismiss
these claims, that all of Caradon's and Therma-Tru's claims had been discharged
in the Company's reorganization under chapter 11. On December 24, 1997, the
Bankruptcy Court decided that all of Caradon's claim and approximately $9.8
million of Therma-Tru's claim were discharged and could not be asserted against
the Company. The Company believes that these decisions will be upheld on appeal.
Further, the Company believes that it has valid legal and factual defenses and
intends to contest vigorously all such claims, either on appeal or in any
proceeding on the approximately $1.6 million of Therma-Tru's claim that was not
held to be discharged by the Bankruptcy Court's decision.
In December 1997, two distributors of forklift trucks manufactured by the
Company's Construction Equipment Division filed suit against the Company and two
co-defendants in the Superior Court of Maricopa County, Arizona after such
distributors were notified that they would be terminated as distributors. The
suit alleges three causes of action, only two of which are against the Company.
The suit alleges that the Company violated the Arizona Equipment Dealer
Protection Law and breached its implied covenant of good faith and fair dealing.
The suit seeks not less than $10 million in damages on each count pled against
the Company and not less than $30 million in punitive damages against all three
defendants. The Company believes that it has valid legal and factual defenses to
the allegations and it intends to contest vigorously this suit. Because the suit
has recently been filed, the Company has not been required to answer or
otherwise respond to the suit and no legal discovery has begun.
N. DIVESTITURES
Pursuant to the Plan, the Company sold its Plastics, Transicoil and
Fabricon Divisions to fund the repayment of the Divestiture Notes. The Company
received net cash proceeds of $39,007,000. The aggregate loss on these
transactions was $2,411,000.
The Company received a note for $3,719,000 from the buyer of the Fabricon
Division, which is included in Other Assets. The note bears interest of 8% per
annum and is secured by accounts receivable and inventory. Payments of $300,000
are required on the first and second anniversaries of the note with the balance
due on October 31, 2000.
The Company remains as guarantor on the lease of the building in which the
former Transicoil Division is located, and is liable should the buyer not
perform on the lease. The remaining lease payments total approximately
$10,100,000 over the lease term which expires in 2005. The Company believes the
likelihood of being liable for the lease to be remote.
Included in the Consolidated Statements of Income (Loss) are the following
results of these divested divisions (excluding net loss on sale of divisions):
<TABLE>
<CAPTION>
1997 1996 1995
------- -------- --------
(IN THOUSANDS OF DOLLARS)
<S> <C> <C> <C>
Net sales............................................................ $68,028 $118,508 $126,658
------- -------- --------
------- -------- --------
Operating income (loss).............................................. $(1,313) $ 1,732 $ 6,141
------- -------- --------
------- -------- --------
</TABLE>
O. OTHER INCOME
The Company held certain equity investments related to shares of stock in a
Canadian mining concern that the Company received in 1990 in settlement of
certain indebtedness. The Company had previously deemed the investments to be
permanently impaired and had recorded a loss on the investments in the amount of
its full book value. Subsequently, the value of the stock increased
significantly. These investments were sold in June 1995, resulting in realized
gain of $11.5 million.
F-20
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
P. INDUSTRY SEGMENT INFORMATION
The Company is a diversified manufacturer serving global markets and many
industries. A general description of the products manufactured and the markets
served by the Company's three industry segments is:
Industrial
Diatomaceous earth products, rubber products, rare metals, fiberglass
reinforced plastic parts and industrial chemicals are produced by the Industrial
Segment operations serving the food and beverage, recreation, nuclear,
telecommunications, electronics, and other industrial markets globally. Sales
and operating income (excluding net loss on sale of divisions), respectively, of
divested operations included in this Segment were $29,534,000 and $1,500,000 in
1997, $39,344,000 and $1,008,000 in 1996 and $36,236,000 and $1,000,000 in 1995.
Machinery
The Machinery Segment serves the commercial aerospace, construction, food
and beverage and other industrial markets. Its products include earth moving
machines, heavy-duty forklift trucks, aerospace and defense batteries and
components, metal cleaning and finishing systems and other industrial machinery.
Divested operations included in this segment had sales and operating income
(excluding net loss on sale of divisions), respectively, of $12,788,000 and
$834,000 in 1997, $18,023,000 and $934,000 in 1996 and $14,766,000 and $715,000
in 1995.
Automotive
The operations in the Automotive Segment provide mechanical, structural,
and trim parts for passenger cars, trucks, vans and sport utility vehicles for
the original equipment manufacturers and replacement markets. Resources are
concentrated in serving the North American, European and Pacific Rim markets.
Sales and operating income (loss) (excluding net loss on sale of
divisions), respectively, of divested operations and operations contributed to
the E-P-Boge joint venture, which are included in the Automotive Segment were
$36,284,000 and $(3,551,000) in 1997, $80,747,000 and $(1,208,000) in 1996 and
$94,337,000 and $3,920,000 in 1995.
Consolidated sales to Ford Motor Company amounted to $170,500,000 in 1997,
$167,700,000 in 1996 and $166,800,000 in 1995. No other customer accounted for
10% or more of consolidated sales.
Other Information
Sales between segments were not material.
Research and development costs are expensed as incurred. In fiscal 1997,
the Company spent approximately $14,800,000 for research and development and
related activities, primarily for the development of new products or the
improvement of existing products. Comparable costs were $18,000,000 and
$17,300,000 for 1996 and 1995, respectively.
United States net sales include export sales to non-affiliated customers of
$113,600,000 in 1997, $108,500,000 in 1996 and $92,500,000 in 1995.
The Company does not derive more than 10% of its revenues from, nor do 10%
of its assets reside in, its foreign operations, which are located primarily in
Europe and Mexico. Intercompany transactions with foreign operations are made at
established transfer prices.
F-21
<PAGE>
<PAGE>
INDUSTRY SEGMENT INFORMATION
FOR THE YEARS ENDED NOVEMBER 30
<TABLE>
<CAPTION>
INDUSTRIAL MACHINERY
-------------------------- -----------------------------
1997 1996 1995 1997 1996 1995
------ ------ ------ ------ ------ ---------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Sales.............................................................. $200.1 $194.1 $160.6 $270.8 $257.6 $ 254.7
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
Operating Income................................................... 15.0 20.6 15.6 20.0 22.5 24.1
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
Depreciation and amortization...................................... 14.4 6.9 6.1 10.3 5.0 4.7
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
Capital expenditures............................................... 10.6 10.8 4.4 5.9 4.5 7.6
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
Identifiable assets................................................ 138.1 146.3 80.6 122.3 136.0 112.0
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
<CAPTION>
AUTOMOTIVE
------------------------------
1997 1996 1995
------ ------ ---------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Sales.............................................................. $435.2 $439.6 $ 433.2
------ ------ ---------
------ ------ ---------
Operating Income................................................... 29.7 38.5 42.1
------ ------ ---------
------ ------ ---------
Depreciation and amortization...................................... 30.9 18.7 17.6
------ ------ ---------
------ ------ ---------
Capital expenditures............................................... 34.6 29.5 28.3
------ ------ ---------
------ ------ ---------
Identifiable assets................................................ 274.0 292.8 217.1
------ ------ ---------
------ ------ ---------
</TABLE>
<TABLE>
<CAPTION>
SEGMENT TOTAL CORPORATE
-------------------------- -----------------------------
1997 1996 1995 1997 1996 1995
------ ------ ------ ------ ------ ---------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C> <C> <C> <C>
Sales.............................................................. $906.1 $891.3 $848.5 $ -- $ -- $ --
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
Operating income (loss)............................................ 64.7 81.6 81.8 (19.1) (19.5) (18.7)
------ ------ ------
------ ------ ------
Adjustment for asbestos litigation................................. -- 502.2 (1,005.5)
Interest expenses.................................................. (31.3) (3.1) (1.9)
Other income (expense)............................................. (0.3) (2.9) 11.6
Reorganization items............................................... -- 116.3 (2.2)
------ ------ ---------
------ ------ ---------
Income (loss) before taxes.........................................
Depreciation and amortization...................................... 55.6 30.6 28.4 0.4 0.2 0.3
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
Capital expenditures............................................... 51.1 44.8 40.3 0.2 0.2 0.3
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
Indentifiable assets............................................... 534.4 575.1 409.7 212.5 273.8 170.4
------ ------ ------ ------ ------ ---------
------ ------ ------ ------ ------ ---------
<CAPTION>
TOTAL
------------------------------
1997 1996 1995
------ ------ ---------
(IN MILLIONS OF DOLLARS)
<S> <C> <C> <C>
Sales.............................................................. $906.1 $891.3 $ 848.5
------ ------ ---------
------ ------ ---------
Operating income (loss)............................................ 45.6 62.1 63.1
Adjustment for asbestos litigation................................. -- 502.2 (1,005.5)
Interest expenses.................................................. (31.3) (3.1) (1.9)
Other income (expense)............................................. (0.3) (2.9) 11.6
Reorganization items............................................... -- 116.3 (2.2)
------ ------ ---------
Income (loss) before taxes......................................... 14.0 674.6(1) (934.9)
------ ------ ---------
------ ------ ---------
Depreciation and amortization...................................... 56.0 30.8 28.7
------ ------ ---------
------ ------ ---------
Capital expenditures............................................... 51.3 45.0 40.6
------ ------ ---------
------ ------ ---------
Indentifiable assets............................................... 746.9 848.9 580.1
------ ------ ---------
------ ------ ---------
</TABLE>
- ------------
(1) Before extraordinary gain and cumulative effect of accounting change.
F-22
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED)
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28,
--------------------
1998 1997
-------- --------
<S> <C> <C>
NET SALES................................................................................. $205,842 $223,607
OPERATING COSTS AND EXPENSES
Cost of products sold..................................................................... 162,796 180,401
Selling and administrative................................................................ 17,141 19,724
Management compensation expenses.......................................................... 2,056 --
Depreciation.............................................................................. 8,983 10,366
Amortization of intangibles............................................................... 3,839 4,076
-------- --------
194,815 214,567
Operating income.......................................................................... 11,027 9,040
OTHER INCOME (EXPENSE)
Interest expense.......................................................................... (6,940) (8,927)
Other income.............................................................................. 820 1,703
-------- --------
INCOME BEFORE TAXES....................................................................... 4,907 1,816
INCOME TAXES.............................................................................. 4,100 3,036
-------- --------
NET INCOME (LOSS)......................................................................... $ 807 $ (1,220)
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-23
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
FEBRUARY 28,
--------------------
1998 1997
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................ $ 18,967 $ 19,376
Receivables, less allowances......................................................... 135,632 144,805
Income tax refunds receivable........................................................ 2,001 56,814
Inventories:
Raw materials and supplies...................................................... 56,970 51,804
Work in process................................................................. 22,569 35,071
Finished goods.................................................................. 15,509 19,245
-------- --------
95,048 106,120
Prepaid expenses..................................................................... 9,499 9,729
Deferred income taxes................................................................ 19,535 20,575
-------- --------
Total current assets....................................................... 280,682 357,419
Property, plant and equipment............................................................. 239,337 271,181
Less accumulated depreciation........................................................ -- 10,331
-------- --------
Net property, plant and equipment............................................... 239,337 260,850
Deferred income taxes..................................................................... -- 106,078
Excess of acquired net assets over cost................................................... 255,495 --
Reorganization value in excess of amounts allocable to identifiable assets, net of
accumulated amortization of $4,071...................................................... -- 61,050
Other assets.............................................................................. 91,625 46,546
-------- --------
Total assets............................................................... $867,139 $831,943
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities:
Accounts payable..................................................................... $ 50,899 $ 39,118
Accrued liabilities.................................................................. 49,931 50,742
Income taxes......................................................................... 6,746 5,176
Current portion -- long-term debt.................................................... 10,656 54,010
-------- --------
Total current liabilities.................................................. 118,232 149,046
Long-term debt -- less current portion.................................................... 536,340 318,160
Deferred income taxes..................................................................... 7,634 --
Other liabilities......................................................................... 24,928 26,095
-------- --------
Total liabilities.......................................................... 687,134 493,301
-------- --------
Shareholder's equity
Common shares -- authorized 1,000 shares, issued and outstanding 100 shares.......... 180,005 --
Common shares -- authorized 20,000,000 shares, issued and outstanding 10,000,000
shares.............................................................................. -- 341,807
Foreign currency translation......................................................... -- (1,945)
Accumulated deficit
Beginning balance............................................................... -- --
Net loss year to date........................................................... -- (1,220)
-------- --------
Total shareholder's equity................................................. 180,005 338,642
-------- --------
Total liabilities and shareholder's equity................................. $867,139 $831,943
-------- --------
-------- --------
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
F-24
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28,
---------------------
1998 1997
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)................................................................... $ 807 $ (1,220)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization....................................................... 12,822 14,442
Changes in assets and liabilities:
Receivables.................................................................... (4,705) (11,930)
Inventories.................................................................... (2,235) (3,219)
Accounts payable............................................................... (2,787) (1,917)
Accrued liabilities............................................................ (5,488) 2,176
Income tax refunds receivable.................................................. 1,024 16,906
Deferred taxes................................................................. 2,600 1,831
Other.......................................................................... (11,121) 845
--------- --------
Net cash provided by (used in) operating activities................................. (9,083) 17,914
Cash flows from investing activities:
Capital expenditures................................................................ (5,692) (15,857)
Other............................................................................... (1,042) (1,183)
--------- --------
Net cash used in investing activities............................................... (6,734) (17,040)
Cash flows from financing activities:
Issuance of long-term debt.......................................................... 524,100 --
Reduction of long-term debt......................................................... (250,000) (16,703)
Redemption of common stock.......................................................... (446,638) --
Issuance of common stock............................................................ 180,005 --
Debt issue cost..................................................................... (26,062) --
Other............................................................................... (360) 2,480
--------- --------
Net cash used in financing activities............................................... (18,955) (14,223)
Net decrease in cash and cash equivalents................................................ (34,772) (13,349)
--------- --------
Cash and cash equivalents, beginning of period........................................... 53,739 32,725
--------- --------
Cash and cash equivalents, end of period................................................. $ 18,967 $ 19,376
--------- --------
--------- --------
Supplemental cash flow information:
Cash paid during the three month period:
Interest paid.................................................................. $ 6,402 $ 475
Income tax (refunds received net of payments).................................... $ (376) $(15,928)
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
F-25
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS
The unaudited financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information presented not
misleading. These financial statements should be read in conjunction with the
financial statements and notes thereto included elsewhere in this document for
the fiscal year ended November 30, 1997.
The financial statements presented herein reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for the
three months ended February 28, 1998 and 1997. Results of operations for interim
periods are not necessarily indicative of results to be expected for an entire
year.
See Note B.
B. ACQUISITION OF THE COMPANY
On February 24, 1998 ('Closing Date'), Eagle-Picher Industries, Inc.
('Company') was acquired by a subsidiary of Granaria Industries BV, Eagle-Picher
Holdings, Inc. ('Parent'), from the Eagle-Picher Industries, Inc. Personal
Injury Settlement Trust ('Trust'). The Trust was established pursuant to the
Company's Plan of Reorganization upon its emergence from bankruptcy.
These unaudited condensed consolidated financial statements as of and for
the three months ended February 28, 1998 include the effects of the Acquisition
that result as of February 24, 1998, the Closing Date. Accordingly, the
condensed consolidated statement of income (loss) for the three months ended
February 28, 1998 includes results of operations from (1) December 1, 1997
through February 24, 1998 of the Company prior to the consummation of the
Acquisition (for clarity, sometimes referred to herein as the 'Predecessor
Company') and (2) February 25 through February 28, 1998 of the Company. The
effects of the purchase accounting adjustments on the Company's results of
operations for the three months ended February 28, 1998 were immaterial.
Upon closing of the acquisition, the Parent received $100 million equity
investment from Granaria Industries BV and an equity partner. The Parent also
received proceeds approximating $80 million from its offering of preferred
stock. These proceeds were invested in the Company, which issued approximately
$180 million of common stock to the Parent. The Company also borrowed $225
million in term loans and $79.1 million in revolving credit loans under a
syndicated senior secured loan facility, and issued $220 million in senior
subordinated notes ('Subordinated Notes'), the proceeds of which were used to
redeem the Company's 10% Senior Unsecured Sinking Fund Debentures ('Debentures')
and common stock, both held by the Trust. The Company, a wholly-owned subsidiary
of the Parent, is the operating entity. The Parent's results of operations and
cash flows approximate those of the Company.
C. EARNINGS PER SHARE
The calculation of net income (loss) per share is based upon the average
number of shares outstanding, which was 9,555,560 and 10,000,000 in the three
months ended February 28, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28,
----------------------
1998 1997
-------- ----------
<S> <C> <C>
Net income (loss) per share................................ N/M $ (.12)
-------- ----------
-------- ----------
</TABLE>
F-26
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
D. LONG-TERM DEBT
On the Closing Date, the Company's existing $60 million unsecured committed
revolving credit facility was terminated. It was replaced by a syndicated senior
secured loan facility ('Credit Agreement') which provided $225 million in term
loans and a $160 million revolving credit facility, of which $79.1 million was
drawn at the time of closing. Immediately following the closing, the Company
borrowed approximately $28.6 million for use as credit support in the form of
letters of credit, leaving approximately $52.3 million in available credit. The
Credit Agreement matures February 29, 2004.
The Credit Agreement is secured by the capital stock of the Company, up to
65% of the capital stock of foreign subsidiaries and substantially all other
property in the United States. Both the Credit Agreement and the Subordinated
Notes are guaranteed by certain of the Company's domestic subsidiaries.
Long-term debt consisted of:
<TABLE>
<CAPTION>
FEBRUARY 28,
-----------------------
1998 1997
------ ------
(IN MILLIONS OF
DOLLARS)
<S> <C> <C>
New Credit Agreement:
Revolving Credit Facility........................................................ $ 79.1 $ --
Term Loans....................................................................... 225.0 --
Senior Subordinated Notes............................................................. 220.0 --
Senior Unsecured Sinking Fund Debentures.............................................. -- 250.0
Divestiture Notes..................................................................... -- 50.0
Tax Refund Notes...................................................................... -- 52.6
Industrial Revenue Bonds.............................................................. 18.4 10.5
Secured Notes......................................................................... -- 6.7
Debt of Foreign Subsidiaries.......................................................... 4.5 2.4
------ ------
547.0 372.2
Less current portion.................................................................. 10.7 54.0
------ ------
Long-term debt, less current portion.................................................. $536.3 $318.2
------ ------
------ ------
</TABLE>
E. INCOME TAXES
The acquisition of the Company has been treated as a sale of its assets for
purposes of income taxes. The deferred tax benefits relating to the Debentures,
which were repaid on the Closing Date, and most of the benefits relating to the
net operating loss carryforwards will be realized to shelter the gain on the
sale of the assets. Any remaining net operating loss carryforwards will be lost.
The Company, however, will be liable for approximately $2.0 in alternative
minimum taxes and $1.6 million in state income taxes as a result of the
transaction. These taxes are recognized as part of the Acquisition adjustments.
F. LEGAL MATTERS
The Company is involved in routine litigation, environmental proceedings
and claims pending with respect to matters arising out of the normal course of
business. In management's opinion, the ultimate liability resulting from all
claims, individually or in the aggregate, will not materially affect the
Company's consolidated financial position, results of operations or cash flows.
F-27
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Eagle-Picher Holdings, Inc.:
We have audited the accompanying balance sheet of Eagle-Picher Holdings,
Inc. as of December 22, 1997. This financial statement is the responsibility of
Eagle-Picher Holdings, Inc. management. Our responsibility is to express an
opinion on this financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the balance sheet. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall balance sheet presentation. We
believe that our audit of the balance sheet provides a reasonable basis for our
opinion.
In our opinion, such balance sheet presents fairly, in all material
respects, the financial position of the Company at December 22, 1997, in
conformity with generally accepted accounting principles.
DELOITTE & TOUCHE LLP
Cincinnati, Ohio
January 15, 1998
F-28
<PAGE>
<PAGE>
EAGLE-PICHER HOLDINGS, INC.
BALANCE SHEET
DECEMBER 22, 1997
<TABLE>
<S> <C>
ASSETS
Cash..................................................................................................... $1,000
------
------
SHAREHOLDERS' EQUITY
Common stock -- authorized 1,000 shares of $.01 par value each; 100 shares
issued and outstanding................................................................................. 1
Additional Paid-in-Capital............................................................................... 999
------
Total............................................................................................... $1,000
------
------
</TABLE>
- ------------
NOTES TO BALANCE SHEET
(1) Eagle-Picher Holdings, Inc. ('Holdings'), a Delaware corporation, was
organized on December 22, 1997, and had no operations prior to that date.
(2) On December 23, 1997, Holdings and its wholly-owned subsidiary, E-P
Acquisition, Inc. ('Acquisition'), approved the merger of Acquisition with
and into Eagle-Picher Industries, Inc. In connection with the merger,
Holdings will offer $80,000,000 of cumulative redeemable exchangeable
preferred stock.
F-29
<PAGE>
<PAGE>
EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28,
--------------------
1998 1997
-------- --------
<S> <C> <C>
NET SALES................................................................................. $205,842 $223,607
OPERATING COSTS AND EXPENSES
Cost of products sold..................................................................... 162,796 180,401
Selling and administrative................................................................ 17,141 19,724
Management compensation expenses.......................................................... 2,056 --
Depreciation.............................................................................. 8,983 10,366
Amortization of intangibles............................................................... 3,839 4,076
-------- --------
194,815 214,567
Operating income.......................................................................... 11,027 9,040
OTHER INCOME (EXPENSE)
Interest expense.......................................................................... (6,940) (8,927)
Other income.............................................................................. 820 1,703
-------- --------
INCOME BEFORE TAXES....................................................................... 4,907 1,816
INCOME TAXES.............................................................................. 4,100 3,036
-------- --------
NET INCOME................................................................................ $ 803 $ (1,200)
-------- --------
-------- --------
</TABLE>
See accompanying notes to condensed consolidated financial statements.
F-30
<PAGE>
<PAGE>
EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
FEBRUARY 28,
--------------------
1998 1997
-------- --------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................ $ 18,968 $ 19,376
Receivables, less allowances......................................................... 135,632 144,805
Income tax refund receivable......................................................... 2,001 56,814
Inventories:
Raw materials and supplies...................................................... 56,970 51,804
Work in process................................................................. 22,569 35,071
Finished goods.................................................................. 15,509 19,245
-------- --------
95,048 106,120
Prepaid expenses..................................................................... 9,499 9,729
Deferred income taxes................................................................ 19,535 20,575
-------- --------
Total current assets............................................................ 280,683 357,419
Property, plant and equipment............................................................. 239,337 271,181
Less accumulated depreciation........................................................ 10,331
-------- --------
Net property, plant and equipment............................................... 255,495 260,850
Excess of acquired net assets over cost................................................... 254,295 --
Other assets.............................................................................. 91,625 107,596
-------- --------
Total assets.................................................................... $867,140 $831,943
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................................... $ 50,899 $ 39,118
Other accrued liabilities............................................................ 49,931 50,742
Long-term debt -- current portion.................................................... 10,656 54,010
Income taxes......................................................................... 6,746 5,176
-------- --------
Total current liabilities....................................................... 118,232 149,046
Long-term debt -- less current portion.................................................... 536,340 318,160
Deferred income taxes..................................................................... 7,634 --
Other liabilities......................................................................... 24,928 26,095
-------- --------
Series A 11 3/4% Cumulative Exchangeable Preferred Stock; authorized 50,000 shares; issued
and outstanding 14,191 shares........................................................... 80,005 --
Shareholders' equity
Class A Common stock, authorized 625,001 shares; issued and outstanding 625,001
shares.............................................................................. 55,001 --
Class B Common stock, authorized 374,999 shares; issued and outstanding 374,999
shares.............................................................................. 45,000 --
Common shares -- authorized 20,000,000 shares, issued and outstanding 10,000,000
shares.............................................................................. 341,807
Foreign currency translation......................................................... (1,945)
Accumulated deficit -- net loss year to date......................................... (1,220)
-------- --------
Total shareholders' equity...................................................... 100,001 338,642
-------- --------
Total liabilities and shareholders' equity...................................... $867,140 $831,943
-------- --------
-------- --------
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
F-31
<PAGE>
<PAGE>
EAGLE-PICHER HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28,
---------------------
1998 1997
--------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income.......................................................................... $ 807 $ (1,220)
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization....................................................... 12,822 14,442
Changes in assets and liabilities:
Receivables.................................................................... (4,705) (11,930)
Inventories.................................................................... (2,235) (3,219)
Accounts payable............................................................... (2,787) (1,917)
Accrued liabilities............................................................ (5,488) 2,176
Income tax refund receivable................................................... 1,024 16,906
Deferred taxes................................................................. 2,600 1,831
Other.......................................................................... (11,121) 845
--------- --------
Net cash used in operating activities............................................... (9,083) 17,914
Cash flows from investing activities:
Capital expenditures................................................................ (5,692) (15,857)
Other............................................................................... (1,042) (1,183)
--------- --------
Net cash used in investing activities............................................... (6,734) (17,040)
Cash flows from financing activities:
Issuance of long-term debt.......................................................... 524,100 --
Reduction of long-term debt......................................................... (250,000) (16,703)
Redemption of common stock.......................................................... (446,638) --
Issuance of common stock............................................................ 100,001 --
Issuance of preferred stock......................................................... 80,005 --
Debt issue cost..................................................................... (26,062) --
Other............................................................................... (360) 2,480
--------- --------
Net cash used in financing activities.......................................... (18,954) (14,223)
Net decrease in cash and cash equivalents................................................ (34,771) (13,349)
--------- --------
Cash and cash equivalents, beginning of period........................................... 53,739 32,775
--------- --------
Cash and cash equivalents, end of period................................................. $ 18,968 $ 19,376
--------- --------
--------- --------
Supplemental cash flow information:
Cash paid during the three month period:
Interest paid.................................................................. $ 6,402 $ 475
Income tax (refunds received net of payments).................................. $ (376) $(15,928)
</TABLE>
See accompanying notes to the condensed consolidated financial statements.
F-32
<PAGE>
<PAGE>
EAGLE-PICHER HOLDINGS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
A. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS
The unaudited financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted pursuant to such rules and regulations, although the Company
believes that the disclosures are adequate to make the information presented not
misleading. These financial statements should be read in conjunction with the
financial statements and notes thereto included elsewhere in this document for
the fiscal year ended November 30, 1997.
The financial statements presented herein reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for the
three month periods ended February 28, 1998 and 1997. Results of operations for
interim periods are not necessarily indicative of results to be expected for an
entire year.
See Note B.
B. ACQUISITION OF THE COMPANY
On February 24, 1998 ('Closing Date'), Eagle-Picher Industries, Inc.
('Company') was acquired by a subsidiary of Granaria Industries BV, Eagle-Picher
Holdings, Inc. ('Parent'), from the Eagle-Picher Industries, Inc. Personal
Injury Settlement Trust ('Trust'). The Trust was established pursuant to the
Company's Plan of Reorganization upon its emergence from bankruptcy.
These unaudited condensed consolidated financial statements as of and for
the three months ended February 28, 1998 include the effects of the Acquisition
that result as of February 24, 1998, the Closing Date. Accordingly, the
condensed consolidated statement of income (loss) for the three months ended
February 28, 1998 includes results of operations from (1) December 1, 1997
through February 24, 1998 of the Company prior to the consummation of the
Acquisition (for clarity, sometimes referred to herein as the 'Predecessor
Company') and (2) February 25 through February 28, 1998 of the Company. The
effects of the purchase accounting adjustments on the Company's results of
operations for the three months ended February 28, 1998 were immaterial.
Upon closing of the acquisition, the Parent received $100 million equity
investment from Granaria Industries BV and an equity partner. The Parent also
received proceeds approximating $80 million from its offering of preferred
stock. These proceeds were invested in the Company, which issued approximately
$180 million of common stock to the Parent. The Company also borrowed $225
million in term loans and $79.1 million in revolving credit loans under a
syndicated senior secured loan facility, and issued $220 million in senior
subordinated notes ('Subordinated Notes'), the proceeds of which were used to
redeem the Company's 10% Senior Unsecured Sinking Fund Debentures ('Debentures')
and common stock, both held by the Trust. The Company, which is the operating
entity, is a wholly-owned subsidiary of the Parent. The Parent's results of
operations and cash flows approximate those of the Company.
C. EARNINGS PER SHARE
The calculation of net income (loss) per share is based upon the average
number of shares outstanding, which was 9,600,072 and 10,000,000 in the three
months ended February 28, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
FEBRUARY 28,
----------------------
1998 1997
--------- ---------
<S> <C> <C>
Net income (loss) per share........................... N/M $(.12)
--------- ---------
--------- ---------
</TABLE>
F-33
<PAGE>
<PAGE>
EAGLE-PICHER HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
D. LONG-TERM DEBT
On the Closing Date, the Company's existing $60 million unsecured committed
revolving credit facility was terminated. It was replaced by a syndicated senior
secured loan facility ('Credit Agreement') which provided $225 million in term
loans and a $160 million revolving credit facility, of which $79.1 million was
drawn at the time of closing. Immediately following the closing, the Company
borrowed approximately $28.6 million for use as credit support in the form of
letters of credit, leaving approximately $52.3 million in available credit. The
Credit Agreement matures February 29, 2004.
The Credit Agreement is secured by the capital stock of the Company, up to
65% of the capital stock of foreign subsidiaries and substantially all other
property in the United States. Both the Credit Agreement and the Subordinated
Notes are guaranteed by certain of the Company's domestic subsidiaries.
Long-term debt consisted of:
<TABLE>
<CAPTION>
FEBRUARY 28,
------------------
1998 1997
------ ------
(IN MILLIONS OF
DOLLARS)
<S> <C> <C>
New Credit Agreement:
Revolving Credit Facility.............................................................. $ 79.1 $ --
Term Loans............................................................................. 225.0 --
Senior Subordinated Notes................................................................... 220.0 --
Senior Unsecured Sinking Fund Debentures.................................................... -- 250.0
Divestiture Notes........................................................................... -- 50.0
Tax Refund Notes............................................................................ -- 52.6
Industrial Revenue Bonds.................................................................... 18.4 10.5
Secured Notes............................................................................... -- 6.7
Debt of Foreign Subsidiaries................................................................ 4.5 2.4
------ ------
547.0 372.2
Less current portion........................................................................ 10.7 54.0
------ ------
Long-term debt, less current portion........................................................ $536.3 $318.2
------ ------
------ ------
</TABLE>
E. INCOME TAXES
The acquisition of the Company has been treated as a sale of its assets for
purposes of income taxes. The deferred tax benefits relating to the Debentures,
which were repaid on the Closing Date, and most of the benefits relating to the
net operating loss carryforwards will be realized to shelter the gain on the
sale of the assets. Any remaining net operating loss carryforwards will be lost.
The Company, however, will be liable for approximately $2.0 in alternative
minimum taxes and $1.6 million in state income taxes as a result of the
transaction. These taxes are recognized as part of the Acquisition adjustments.
F. LEGAL MATTERS
The Company is involved in routine litigation, environmental proceedings
and claims pending with respect to matters arising out of the normal course of
business. In management's opinion, the ultimate liability resulting from all
claims, individually or in the aggregate, will not materially affect the
Company's consolidated financial position, results of operations or cash flows.
F-34
<PAGE>
<PAGE>
_____________________________ _____________________________
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFERING COVERED BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A
SOLICITATION OF AN OFFER TO BUY ANY SECURITY OTHER THAN THE SECURITIES OFFERED
HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS
CORRECT AS OF A TIME SUBSEQUENT TO THE DATE HEREOF OR THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information....................................................................................................... 3
Summary..................................................................................................................... 4
Risk Factors................................................................................................................ 15
Company History............................................................................................................. 23
The Acquisition............................................................................................................. 23
Use of Proceeds............................................................................................................. 24
The Notes Exchange Offer.................................................................................................... 25
Capitalization.............................................................................................................. 34
Supplemental Guarantor Information.......................................................................................... 36
Selected Historical Condensed Consolidated Financial Information............................................................ 51
Unaudited Pro Forma Consolidated Financial Statements....................................................................... 53
Management's Discussion and Analysis of Financial Condition and Results of Operations....................................... 59
Business.................................................................................................................... 66
Industry Overview........................................................................................................... 68
Description of Businesses................................................................................................... 70
Management.................................................................................................................. 87
Executive Compensation...................................................................................................... 88
Security Ownership and Certain Beneficial Owners and Management of Parent................................................... 92
Certain Relationships and Related Transactions.............................................................................. 92
Description of Industrial Revenue Bonds..................................................................................... 93
Description of New Credit Agreement......................................................................................... 93
Description of the Notes.................................................................................................... 95
Description of Preferred Stock.............................................................................................. 122
Description of Exchange Debentures.......................................................................................... 124
Plan of Distribution........................................................................................................ 125
Certain U.S. Federal Income Tax Considerations.............................................................................. 126
Legal Matters............................................................................................................... 130
Experts..................................................................................................................... 130
Index to Financial Statements............................................................................................... F-1
</TABLE>
EAGLE-PICHER
INDUSTRIES, INC.
OFFER TO EXCHANGE ITS
9 3/8% SENIOR SUBORDINATED
NOTES DUE 2008
FOR ANY AND ALL OF ITS
OUTSTANDING
9 3/8% SENIOR SUBORDINATED
NOTES DUE 2008
----------------------
PROSPECTUS
----------------------
_____________________________ _____________________________
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 1701.13 of the Ohio General Corporation Law permits an Ohio
corporation to indemnify any person who was or is a party, or is threatened to
be made a party, to any threatened, pending, or completed civil, criminal,
administrative, or investigative action, suit or proceeding by reason of the
fact that such person is or was a director, officer, employee, or agent of the
corporation, or is or was serving as such with respect to another corporation or
entity at the request of the corporation, provided that such person acted in
good faith and in a manner such person reasonably believed to be in or not
opposed to the best interests of the company and, with respect to any criminal
action or proceeding, without reasonable cause to believe the conduct was
unlawful. Where the action or suit is by or in the right of the corporation, the
corporation may not indemnify such person for liability in connection with
unlawful loans, dividends or distributions; nor may the corporation indemnify
such person for any act of negligence or misconduct except as otherwise approved
by the Ohio court of common pleas or the court in which the action or suit was
brought. The Registrant has provided in its Regulations that its directors and
officers will be indemnified and held harmless against all expenses, liability
and loss (including attorneys' fees, and, in respect of claims not made by or in
the right of the Company, judgments, fines ERISA excise taxes or penalties and
amounts paid in settlement) to the fullest extent provided by the law as it
exists or may hereafter be amended.
Section 1701.13 of the Ohio General Corporation Law and the Regulations of
the Registrant also permit the Registrant to purchase insurance for the benefit
of any person who is or was a director, officer, employee, or agent of the
corporation against any liability incurred by such person, whether or not the
corporation would have the power to indemnify such person against such
liability.
The Registrant has purchased insurance on behalf of its directors and
officers, in such amounts as it deems reasonable, against certain liabilities
that may be asserted against, or incurred by, such persons in their capacities
as directors or officers of Registrant, including liabilities under the federal
and state securities laws.
Each individual Employment Agreement entered into by Registrant with each
Named Executive Officer contains provisions for the indemnification of such
Named Executive Officer to the fullest extent permitted or required by the laws
of the State of Ohio and for the procurement by Registrant of such insurance as
Registrant deems necessary or appropriate to protect Registrant's interest.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits:
<TABLE>
<S> <C>
2.1 -- Third Amended Plan of Reorganization of Eagle-Picher Industries, Inc. (the 'Company')
2.2 -- Exhibits to Third Amended Plan of Reorganization of the Company
3.1 -- Articles of Incorporation of the Company, as amended
3.2 -- Regulations of the Company
3.3 -- Amended and Restated Certificate of Incorporation of Eagle-Picher Holdings, Inc.
3.4 -- Bylaws of Eagle-Picher Holdings, Inc.
3.5 -- Articles of Incorporation of Daisy Parts, Inc.*
3.6 -- Bylaws of Daisy Parts, Inc.*
3.7 -- Certificate of Incorporation of Eagle-Picher Development Company, Inc.*
3.8 -- Bylaws of Eagle-Picher Development Company, Inc.*
3.9 -- Certificate of Incorporation of Eagle-Picher Far East, Inc.*
3.10 -- Bylaws of Eagle-Picher Far East, Inc.*
3.11 -- Articles of Incorporation of Eagle-Picher Fluid Systems, Inc.*
3.12 -- Bylaws of Eagle-Picher Fluid Systems, Inc.*
3.13 -- Articles of Incorporation of Eagle-Picher Minerals, Inc.*
3.14 -- Bylaws of Eagle-Picher Minerals, Inc.*
3.15 -- Certificate of Formation of Eagle-Picher Technologies, LLC*
</TABLE>
II-1
<PAGE>
<PAGE>
<TABLE>
<S> <C>
3.16 -- Operating Agreement of Eagle-Picher Technologies, LLC*
3.17 -- Articles of Incorporation of Hillsdale Tool & Manufacturing Co.*
3.18 -- Bylaws of Hillsdale Tool & Manufacturing Co.*
3.19 -- Articles of Incorporation of Michigan Automotive Research Corporation*
3.20 -- Bylaws of Michigan Automotive Research Corporation*
4.1 -- Indenture, dated as of February 24, 1998, between E-P Acquisition, Inc., Eagle-Picher Holdings, Inc.
as a Guarantor, the Subsidiary Guarantors (Daisy Parts, Inc. Eagle-Picher Development Company, Inc.,
Eagle-Picher Far East, Inc., Eagle-Picher Fluid Systems, Inc., Eagle-Picher Minerals, Inc.,
Eagle-Picher Technologies, LLC, Hillsdale Tool & Manufacturing Co., Michigan Automotive Research
Corporation (together, the 'Subsidiary Guarantors' or the 'Domestic Subsidiaries'), and The Bank of
New York as Trustee (the 'Trustee')
4.2 -- Cross Reference Table showing the location in the Indenture of the provisions of Sections 310
through 318(a), inclusive, of the Trust Indenture Act of 1939.
4.3 -- First Supplemental Indenture dated as of February 24, 1998, between the Company and the Trustee
4.4 -- Form of Global Note (attached as Exhibit A to the Indenture filed as Exhibit 4.1 to the Registration
Statement)
5.1 -- Opinion of Howard, Darby & Levin as to the Legality of the New Notes*
10.1 -- Merger Agreement, dated as of December 23, 1997, among the Company, the Eagle-Picher Industries,
Inc. Personal Injury Settlement Trust, Eagle-Picher Holdings, Inc. and E-P Acquisition, Inc.
10.2 -- Amendment No. 1 to the Merger Agreement, dated as of February 23, 1998, among the Company, the
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust, Eagle-Picher Holdings, Inc. and E-P
Acquisition, Inc.
10.3 -- Supplemental Executive Retirement Plan of the Company*
10.4 -- Notes Purchase Agreement, dated February 19, 1998, among E-P Acquisition, Inc. the Company,
Eagle-Picher Holdings, SBC Warburg Dillon Read and ABN AMRO Incorporated
10.5 -- Assumption Agreement for the Notes Purchase Agreement, dated as of February 24, 1998, between the
Company and the Subsidiary Guarantors
10.6 -- Registration Rights Agreement, dated as of February 24, 1998, between E-P Acquisition, SBC Warburg
Dillon Read and ABN AMRO Incorporated
10.7 -- Assumption Agreement for the Registration Rights Agreement, dated as of February 24, 1998, of the
Company
10.8 -- Credit Agreement, dated as of February 19, 1998, among E-P Acquisition, Inc. (to be merged with and
into the Company), Various Lenders from time to time party thereto, ABN AMRO Bank N.V., as Agent (the
'Agent'), PNC Bank, National Association, as Documentation Agent and DLJ Capital Funding, Inc., as
Syndication Agent
10.9 -- Assumption Agreement dated as of February 24, 1998, between the Company and the Agent
10.10 -- Security Agreement, dated as of February 24, 1998, among the Company, the Agent and the Domestic
Subsidiaries
10.11 -- Holdings Pledge Agreement, dated as of February 24, 1998, between Eagle-Picher Holdings, Inc. and
the Agent
10.12 -- Borrower and Subsidiary Pledge Agreement, dated as of February 24, 1998, among the Company, E-P
Development, E-P Minerals and the Agent
10.13 -- Holdings Guaranty Agreement, dated as of February 24, 1998, by Eagle-Picher Holdings, Inc., accepted
and agreed by the Agent
10.14 -- Subsidiary Guaranty Agreement, dated as of February 24, 1998, by the Domestic Subsidiaries, accepted
and agreed by the Agent
10.15 -- Trademark Collateral Agreement, dated February 24, 1998, between the Company and the Agent
10.16 -- Patent Collateral Agreement, dated February 24, 1998, between the Company and the Agent
10.17 -- Copyright Collateral Agreement, dated February 24, 1998, between the Company and the Agent
10.18 -- Subordination Agreement, dated as of February 24, 1998, among E-P Acquisition, Inc., the Company and
the Domestic Subsidiaries
</TABLE>
II-2
<PAGE>
<PAGE>
<TABLE>
<C> <S>
10.19 -- Management Agreement dated as of February 24, 1998 between the Company and Granaria Holdings B.V.
10.20 -- Eagle-Picher Management Trust made February 17, 1998, among Granaria Industries B.V. and Thomas E.
Petry, Andries Ruijssenaars and Joel Wyler as trustees (the 'E-P Management Trust')*
10.21 -- Incentive Stock Plan of Eagle-Picher Industries, Inc., effective as of February 25, 1998*
10.22 -- Employment Agreements dated November 29, 1996 between Registrant and each Named Executive Officer*
10.23 -- Amendments dated August 5, 1997 to Employment Agreements between the Company and each Named
Executive Officer*
10.24 -- Sales Incentive Program of the Company*
10.25 -- Letter Agreements dated August 5, 1997 between the Company and each Named Executive Officer
regarding Short Term Sale Program*
10.26 -- Letter Agreement dated September 12, 1997 between the Company and Carroll D. Curless regarding Sale
Incentive Bonus*
10.27 -- Letter Agreements dated February 18, 1998 between the Company and each Named Executive Officer
regarding Short Term Sale Program*
10.28 -- Side Letter, dated February 23, 1998, regarding Amendments to the Short Term Sale Program*
11.1 -- Statement re: Computation of Per Share Earnings*
12.1 -- Statement re: Computation of Ratios*
16.1 -- Letter of KPMG Peat Marwick LLP re Change in Certifying Accountant*
21.1 -- Chart of Subsidiaries of the Company
23.1 -- Consent of Deloitte & Touche LLP
23.2 -- Consent of KPMG Peat Marwick LLP
23.3 -- Consent of Howard, Darby & Levin*
24.1 -- Power of Attorney of Directors and Officers (set forth on the signature pages of this Registration
Statement)
25.1 -- Statement of Eligibility of Trustee on Form T-1 related to the Notes
27.1 -- Financial Data Schedule*
99.1 -- Letter of Transmittal for the Notes*
99.2 -- Form of Letter of Guaranteed Delivery*
(b) Financial Statement Schedules*
</TABLE>
- ------------
* To be filed by amendment.
ITEM 22. UNDERTAKINGS.
(a) Each undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933 (the 'Securities Act'), the information omitted from the form of
prospectus filed as part of this registration statement in reliance upon
Rule 430A and contained in a form of prospectus filed by such registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall
be deemed to be part of this Registration Statement as of the time it was
declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(b) Each undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the Prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.
II-3
<PAGE>
<PAGE>
(c) Each undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of each
registrant pursuant to the foregoing provisions, or otherwise, such registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by such registrant of expenses
incurred or paid by a director, officer or controlling person of such registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, such registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 9, 1998.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ ANDRIES RUIJSSENAARS
..................................
NAME: ANDRIES RUIJSSENAARS
TITLE: PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ ANDRIES RUIJSSENAARS Director, President and Chief Executive April 9, 1998
......................................... Officer
ANDRIES RUIJSSENAARS
/s/ DAVID N. HALL Senior Vice President - Finance April 8, 1998
.........................................
DAVID N. HALL
/s/ CARROLL D. CURLESS Vice President and Controller April 8, 1998
.........................................
CARROLL D. CURLESS
/s/ JOEL P. WYLER Director April 9, 1998
.........................................
JOEL P. WYLER
/s/ THOMAS E. PETRY Director April 9, 1998
.........................................
THOMAS E. PETRY
</TABLE>
II-5
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 9, 1998.
EAGLE-PICHER HOLDINGS, INC.
By /s/ ANDRIES RUIJSSENAARS
..................................
NAME: ANDRIES RUIJSSENAARS
TITLE: PRESIDENT AND CHIEF EXECUTIVE
OFFICER
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ ANDRIES RUIJSSENAARS Director, President and Chief Executive April 9, 1998
......................................... Officer
ANDRIES RUIJSSENAARS
/s/ DAVID N. HALL Senior Vice President - Finance April 8, 1998
.........................................
DAVID N. HALL
/s/ CARROLL D. CURLESS Vice President and Controller April 8, 1998
.........................................
CARROLL D. CURLESS
/s/ JOEL P. WYLER Chairman of the Board April 9, 1998
.........................................
JOEL P. WYLER
/s/ THOMAS E. PETRY Director April 9, 1998
.........................................
THOMAS E. PETRY
</TABLE>
II-6
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 10, 1998.
DAISY PARTS, INC.
By /s/ MICHAEL E. ASLANIAN
..................................
NAME: MICHAEL E. ASLANIAN
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ MICHAEL E. ASLANIAN President April 10, 1998
.........................................
MICHAEL E. ASLANIAN
/s/ HARRY A. NEELY Treasurer and Director April 8, 1998
.........................................
HARRY A. NEELY
/s/ DAVID P. KELLEY Controller April 10, 1998
.........................................
DAVID P. KELLEY
/s/ WAYNE R. WICKENS Director April 8, 1998
.........................................
WAYNE R. WICKENS
/s/ JAMES A. RALSTON Director April 8, 1998
.........................................
JAMES A. RALSTON
</TABLE>
II-7
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 9, 1998.
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
By /s/ ANDRIES RUIJSSENAARS
..................................
NAME: ANDRIES RUIJSSENAARS
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ ANDRIES RUIJSSENAARS President and Director April 9, 1998
.........................................
ANDRIES RUIJSSENAARS
/s/ HARRY A. NEELY Treasurer April 8, 1998
.........................................
HARRY A. NEELY
/s/ CARROLL D. CURLESS Controller April 8, 1998
.........................................
CARROLL D. CURLESS
/s/ JAMES A. RALSTON Director April 8, 1998
.........................................
JAMES A. RALSTON
/s/ WAYNE R. WICKENS Director April 8, 1998
.........................................
WAYNE R. WICKENS
</TABLE>
II-8
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 9, 1998.
EAGLE-PICHER FAR EAST, INC.
By /S/ SADAO TAKAHASHI
..................................
NAME: SADAO TAKAHASHI
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ SADAO TAKAHASHI President April 9, 1998
.........................................
SADAO TAKAHASHI
/s/ HARRY A. NEELY Treasurer April 8, 1998
.........................................
HARRY A. NEELY
/s/ CARROLL D. CURLESS Controller April 8, 1998
.........................................
CARROLL D. CURLESS
/s/ ANDRIES RUIJSSENAARS Director April 9, 1998
.........................................
ANDRIES RUIJSSENAARS
/s/ JAMES A. RALSTON Director April 8, 1998
.........................................
JAMES A. RALSTON
/s/ DAVID N. EVANS Director April 8, 1998
.........................................
DAVID N. EVANS
</TABLE>
II-9
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 9, 1998.
EAGLE-PICHER FLUID SYSTEMS, INC.
By /s/ SCOTT F. MALY
..................................
NAME: SCOTT F. MALY
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ SCOTT F. MALY President April 9, 1998
.........................................
SCOTT F. MALY
/s/ HARRY A. NEELY Treasurer April 8, 1998
.........................................
HARRY A. NEELY
/s/ DANIEL T. HOAG Controller April 8, 1998
.........................................
DANIEL T. HOAG
/s/ JAMES A. RALSTON Director April 8, 1998
.........................................
JAMES A. RALSTON
</TABLE>
II-10
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 8, 1998.
EAGLE-PICHER MINERALS, INC.
By /s/ WESLEY D. LEE
..................................
NAME: WESLEY D. LEE
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ WESLEY D. LEE President April 8, 1998
.........................................
WESLEY D. LEE
/s/ HARRY A. NEELY Treasurer April 8, 1998
.........................................
HARRY A. NEELY
/s/ NANCY C. REED Controller April 8, 1998
.........................................
NANCY C. REED
/s/ ANDRIES RUIJSSENAARS Director April 9, 1998
.........................................
ANDRIES RUIJSSENAARS
/s/ JAMES A. RALSTON Director April 8, 1998
.........................................
JAMES A. RALSTON
/s/ DAVID N. EVANS Director April 8, 1998
.........................................
DAVID N. EVANS
</TABLE>
II-11
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 8, 1998.
EAGLE-PICHER TECHNOLOGIES, LLC
By /S/ WILLIAM E. LONG
..................................
NAME: WILLIAM E. LONG
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ WILLIAM E. LONG President and Director April 8, 1998
.........................................
WILLIAM E. LONG
/s/ J.D. SELLER Treasurer, Chief Financial Officer April 8, 1998
......................................... and Controller
J.D. SELLER
/s/ PAUL G. KAMINSKI Director April 8, 1998
.........................................
DR. PAUL KAMINSKI
Director
.........................................
NEIL A. ARMSTRONG
/s/ ANDRIES RUIJSSENAARS Director April 9, 1998
.........................................
ANDRIES RUIJSSENAARS
/s/ JOEL P. WYLER Director April 9, 1998
.........................................
JOEL P. WYLER
</TABLE>
II-12
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 10, 1998.
HILLSDALE TOOL & MANUFACTURING CO.
By /s/ MICHAEL E. ASLANIAN
..................................
NAME: MICHAEL E. ASLANIAN
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ MICHAEL E. ASLANIAN President April 10, 1998
.........................................
MICHAEL E. ASLANIAN
/s/ HARRY A. NEELY Treasurer and Director April 8, 1998
.........................................
HARRY A. NEELY
/s/ DAVID P. KELLEY Controller April 10, 1998
.........................................
DAVID P. KELLEY
/s/ WAYNE R. WICKENS Director April 8, 1998
.........................................
WAYNE R. WICKENS
/s/ JAMES A. RALSTON Director April 8, 1998
.........................................
JAMES A. RALSTON
</TABLE>
II-13
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on April 8, 1998.
MICHIGAN AUTOMOTIVE RESEARCH
CORPORATION
By /S/ MICHAEL J. BOERMA
..................................
NAME: MICHAEL J. BOERMA
TITLE: PRESIDENT
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints each of Andries Ruijssenaars and David N. Hall
and each of them, with full power to act alone, as his true and lawful
attorneys-in-fact and agents, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to this Registration Statement and any subsequent registration statement filed
by the Registrant pursuant to Rule 462(b) of the Securities Act, and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the SEC, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in connection therewith, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT, THIS REGISTRATION
STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE CAPACITIES AND ON THE
DATE INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ -------------------------------------------- -------------------
<C> <S> <C>
/s/ MICHAEL J. BOERMA President and Director April 8, 1998
.........................................
MICHAEL J. BOERMA
/s/ TERENCE J. RHOADES Treasurer and Controller April 8, 1998
.........................................
TERENCE J. RHOADES
/s/ WAYNE R. WICKENS Director April 8, 1998
.........................................
WAYNE R. WICKENS
/s/ JAMES A. RALSTON Director April 8, 1998
.........................................
JAMES A. RALSTON
</TABLE>
II-14
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as ............'r'
The section symbol shall be expressed as .........................'SS'
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
- -------------------------------
THIRD AMENDED CONSOLIDATED PLAN OF REORGANIZATION
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
<TABLE>
<S> <C>
ARTICLE 1
DEFINITIONS ............................................................... 1
1.1 Defined Terms ................................................... 1
1.1.1 Administrative Expense .................................... 1
1.1.2 Administrative Expense Creditor ........................... 1
1.1.3 Affiliate ................................................. 1
1.1.4 Affiliate Claims and Interests ............................ 1
1.1.5 Agent Bank ................................................ 2
1.1.6 Allowed ................................................... 2
1.1.7 Allowed Amount ............................................ 3
1.1.8 Amended and Restated Articles of Incorporation ............ 3
1.1.9 Amended and Restated Code of Regulations .................. 3
1.1.10 Amplicon Lease Secured Claim ............................. 3
1.1.11 Articles of Incorporation ................................ 3
1.1.12 Asbestos and Lead PI Permanent Channeling Injunction ..... 3
1.1.13 Asbestos and Lead PI Trust Agreement ..................... 4
1.1.14 Asbestos or Lead Contribution Claim ...................... 4
1.1.15 Asbestos PD Trust ........................................ 4
1.1.16 Asbestos PD Trust Agreement .............................. 4
1.1.17 Asbestos PD Trust Funding Obligation ..................... 4
1.1.18 Asbestos PD Trust Share .................................. 4
1.1.19 Asbestos Personal Injury Claim ........................... 4
1.1.20 Asbestos Property Damage Claim ........................... 5
1.1.21 Asbestos Property Damage Contribution Claims ............. 5
1.1.22 Available Cash ........................................... 5
1.1.23 Ballot ................................................... 6
1.1.24 Ballot Date .............................................. 6
1.1.25 Bankruptcy Code .......................................... 6
1.1.26 Bankruptcy Court ......................................... 6
1.1.27 Bankruptcy Rules ......................................... 6
1.1.28 Bearer Unsecured Debt Securities ......................... 6
1.1.29 Board of Directors ....................................... 6
1.1.30 Business Day ............................................. 6
1.1.31 Chapter 11 Cases ......................................... 6
1.1.32 Claim .................................................... 6
1.1.33 Claims Settlement Guidelines ............................. 6
1.1.34 Claims Trading Injunction ................................ 6
1.1.35 Confirmation Date ........................................ 7
1.1.36 Confirmation Deadline .................................... 7
1.1.37 Confirmation Order ....................................... 7
1.1.38 Connecticut Mutual Note Secured Claim .................... 7
1.1.39 Contingent Claim ......................................... 7
1.1.40 Convenience Claim ........................................ 7
1.1.41 Creditor ................................................. 7
1.1.42 Debtors .................................................. 7
1.1.43 Debtors in Possession .................................... 7
1.1.44 Demand ................................................... 8
1.1.45 Designated Real Property Tax Claim ...................... 8
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1.1.46 DIP Credit Facility ..................................... 8
1.1.47 DIP Credit Facility Claim ............................... 8
1.1.48 DIP Lenders ............................................. 8
1.1.49 Disallowed Claim ........................................ 8
1.1.50 Disputed Claim .......................................... 8
1.1.51 Disputed Claim Amount ................................... 8
1.1.52 Distribution ............................................ 8
1.1.53 Distribution Amount ..................................... 8
1.1.54 Distribution Value ...................................... 8
1.1.55 District Court .......................................... 8
1.1.56 Divestiture Notes ....................................... 9
1.1.57 Eagle-Picher ............................................ 9
1.1.58 Effective Date .......................................... 9
1.1.59 Encumbrance ............................................. 9
1.1.60 Entity .................................................. 9
1.1.61 Environmental Claim ..................................... 9
1.1.62 Environmental Settlement Agreement ...................... 9
1.1.63 Equity Interest ......................................... 9
1.1.64 Equity Security Holders' Committee ...................... 9
1.1.65 Equity Value: ........................................... 9
1.1.66 Estimated Amount ........................................ 10
1.1.67 Existing Eagle-Picher Common Stock ...................... 10
1.1.68 Final Distribution Date ................................. 10
1.1.69 Final Order ............................................. 10
1.1.70 First Fidelity Group .................................... 10
1.1.71 First Fidelity Lease Secured Claim ...................... 10
1.1.72 Fleet Credit Secured Claim .............................. 10
1.1.73 Future Claimants' Representative ........................ 10
1.1.74 GE Capital Secured Claim ................................ 10
1.1.75 Grove IRB Secured Claim ................................. 11
1.1.76 Henry County IRBs ....................................... 11
1.1.77 Hillsdale ............................................... 11
1.1.78 Houston IRBs ............................................ 11
1.1.79 IBM Credit Corporation Secured Claim .................... 11
1.1.80 Initial Distribution Date ............................... 11
1.1.81 Injury Claimants' Committee ............................. 11
1.1.82 Inter-Market Note Secured Claim ......................... 11
1.1.83 Internal Revenue Code ................................... 11
1.1.84 IRS ..................................................... 12
1.1.85 Kalkaska Claim .......................................... 12
1.1.86 Lead Personal Injury Claim .............................. 12
1.1.87 Leesburg Note ........................................... 12
1.1.88 Leesburg Secured Claim .................................. 12
1.1.89 Mansfield IRBs .......................................... 12
1.1.90 MARCO ................................................... 12
1.1.91 New Debt Securities ..................................... 12
1.1.92 New Eagle-Picher Common Stock ........................... 12
1.1.93 Northwestern Group ...................................... 12
1.1.94 Northwestern Group Secured Claims ....................... 13
1.1.95 Other Product Liability Tort Claim ...................... 13
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1.1.96 Other Secured Claim ..................................... 13
1.1.97 Penalty Claim ........................................... 13
1.1.99 Petition Date ........................................... 13
1.1.100 PI Protected Party ..................................... 13
1.1.101 PI Trust ............................................... 14
1.1.102 PI Trust Share ......................................... 14
1.1.103 Plan ................................................... 14
1.1.104 Priority Claim ......................................... 14
1.1.105 Pro Rata Share ......................................... 14
1.1.106 Product Liability Tort Claim ........................... 14
1.1.107 Record Date ............................................ 15
1.1.108 Registered Unsecured Debt Securities ................... 15
1.1.109 Related Parties ........................................ 15
1.1.110 Reorganized Debtors .................................... 15
1.1.111 Reorganized Eagle-Picher ............................... 15
1.1.112 Retention Period ....................................... 15
1.1.113 Schedules .............................................. 15
1.1.114 Senior Unsecured Sinking Fund Debentures................ 15
1.1.115 Secured Claim .......................................... 15
1.1.117 Supplemental Severance Program ......................... 16
1.1.118 Tax Claim .............................................. 16
1.1.119 Tax Refund Notes ....................................... 16
1.1.121 Trustees ............................................... 16
1.1.122 Unliquidated Claim ..................................... 16
1.1.123 Unsecured Claim ........................................ 16
1.1.124 Unsecured Creditors' Committee ......................... 16
1.1.125 Unsecured Debt Securities .............................. 16
1.1.126 Unsecured Debt Securities Indenture .................... 16
1.1.127 Unsecured Debt Securities Trustee ...................... 16
1.1.128 Vale EDBs .............................................. 16
1.1.129 Vale EDBs Claims ....................................... 17
1.1.130 Voting Procedures Order ................................ 17
1.2 Other Terms..................................................... 17
1.3 Exhibits........................................................ 17
ARTICLE 2
PROVISIONS FOR PAYMENT OF ADMINISTRATIVE EXPENSES AND TAX CLAIMS ......... 18
2.1 Payment of Allowed Administrative Expenses ..................... 18
2.2 Compensation and Reimbursement ................................. 18
2.3 DIP Credit Facility Claim ...................................... 18
2.4 Tax Claims ..................................................... 18
ARTICLE 3
CLASSIFICATION AND TREATMENT OF CLAIMS AND EQUITY INTERESTS .............. 19
3.1 Summary ........................................................ 19
3.2 Classification and Treatment ................................... 20
3.3 Compromise and Settlement Relating to the Amount of the PI Trust
Share........................................................... 32
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3.4 Controversy Concerning Impairment............................... 33
ARTICLE 4
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN ...................... 34
4.1 Modification of the Plan ....................................... 34
4.2 Revocation or Withdrawal ....................................... 34
4.2.1 Right to Revoke ......................................... 34
4.2.2 Effect of Withdrawal or Revocation ...................... 34
4.3 Amendment of Plan Documents .................................... 34
ARTICLE 5
PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS .............................. 35
5.1 Objections to Claims; Prosecution of Disputed Claims 35
5.2 Amendment of Claims Settlement Guidelines ...................... 35
5.3 Distributions on Account of Disputed Claims .................... 35
ARTICLE 6
ACCEPTANCE OR REJECTION OF THE PLAN ...................................... 36
6.1 Impaired Classes to Vote ....................................... 36
6.2 Acceptance by Class of Claims .................................. 36
6.3 Nonconsensual Confirmation ..................................... 36
ARTICLE 7
IMPLEMENTATION OF THE PLAN ............................................... 37
7.1 Amendment of Articles of Incorporation ......................... 37
7.2 Amendment of Code of Regulations ............................... 37
7.3 Distributions under the Plan ................................... 37
7.4 Timing of Distributions under the Plan ......................... 37
7.5 Manner of Payment under the Plan ............................... 37
7.6 Hart-Scott-Rodino Compliance ................................... 38
7.7 Fractional Shares or Other Distributions ....................... 38
7.8 Occurrence of the Confirmation Date ............................ 38
7.9 Occurrence of the Effective Date ............................... 40
7.10 Distribution of Unclaimed Property ............................ 41
7.11 Management of the Reorganized Debtors ......................... 41
7.12 Supplemental Severance Program ................................ 41
7.13 Corporate Action .............................................. 41
7.14 Effectuating Documents and Further Transactions ............... 42
7.15 Dissolution of EDI, Inc. ...................................... 42
7.16 Allocation of Plan Distributions Between Principal and Interest 42
7.17 District Court Approval of the Confirmation Order.............. 42
ARTICLE 8
EXECUTORY CONTRACTS AND UNEXPIRED LEASES ................................. 43
8.1 Assumption of Executory Contracts and Unexpired Leases ......... 43
8.2 Rejection of Executory Contracts and Unexpired Leases .......... 43
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8.3 Claims Arising from Rejection or Termination ................... 43
8.4 Previously Scheduled Contracts ................................. 44
8.5 Insurance Policies ............................................. 44
8.5.1 Assumed Insurance Policies ............................... 44
8.5.2 Rejected Insurance Agreements ............................ 44
8.5.3 Reservation of Rights .................................... 44
8.6 Indemnification and Reimbursement Obligations .................. 44
8.7 Compensation and Benefit Programs .............................. 45
ARTICLE 9
RETENTION OF JURISDICTION ................................................ 46
ARTICLE 10
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF CERTAIN LIABILITIES BY
THE PI TRUST ............................................................. 48
10.1 Transfer of Certain Property to the PI Trust .................. 48
10.1.1 Transfer of Books and Records .......................... 48
10.1.2 Transfer of Certain Insurance Rights ................... 48
10.1.3 Transfer of Plan Consideration ......................... 48
10.2 Assumption of Certain Liabilities by the PI Trust.............. 49
10.3 Certain Property Held in Trust by the Reorganized Debtors ..... 49
10.4 Authority of the Debtors ...................................... 49
ARTICLE 11
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF CERTAIN LIABILITIES BY
THE ASBESTOS PD TRUST .................................................... 50
11.1 Transfer of Certain Property to the Asbestos PD Trust ......... 50
11.2 Assumption of Certain Liabilities by the Asbestos PD Trust..... 50
11.3 Certain Property Held in Trust by the Reorganized Debtors...... 50
11.4 Authority of the Debtors ...................................... 51
ARTICLE 12
MISCELLANEOUS PROVISIONS ................................................. 52
12.1 Payment of Statutory Fees ..................................... 52
12.2 Discharge of the Debtors ...................................... 52
12.3 Rights of Action .............................................. 52
12.4 Third Party Agreements ........................................ 52
12.5 Dissolution of Committees ..................................... 52
12.6 Exculpation ................................................... 53
12.7 Title to Assets; Discharge of Liabilities ..................... 53
12.8 Surrender and Cancellation of Instruments ..................... 53
12.9 Notices ....................................................... 53
12.10 Headings ..................................................... 55
12.11 Severability ................................................. 55
12.12 Governing Law ................................................ 55
12.13 Filing of Additional Documents ............................... 55
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12.14 Compliance with Tax Requirements ............................. 55
12.15 Exemption from Transfer Taxes ................................ 56
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
)
Debtors. )
)
- ---------------------------------- )
THIRD AMENDED CONSOLIDATED PLAN OF REORGANIZATION
The Debtors, Future Claimants' Representative, and Injury Claimants'
Committee (collectively, the "Plan Proponents") hereby collectively propose the
following third amended consolidated plan of reorganization:
ARTICLE 1
DEFINITIONS
1.1 DEFINED TERMS. As used herein, the following terms shall have
the respective meanings specified below, unless the context otherwise requires:
1.1.1 Administrative Expense: Any Claim constituting a cost or
expense of administration in the Chapter 11 Cases under section 503 of the
Bankruptcy Code, including, without express or implied limitation, any actual
and necessary costs and expenses of preserving the estate of the Debtors, any
actual and necessary costs and expenses of operating the businesses of the
Debtors, any indebtedness or obligations incurred or assumed by any of the
Debtors in Possession in connection with the conduct of its or their business or
for the acquisition or lease of property or the rendition of services, any
allowed compensation or reimbursement of expenses under section 503(b)(2)-(5) of
the Bankruptcy Code, and any fees or charges assessed against the estate of any
of the Debtors under section 1930, chapter 123, title 28, United States Code.
1.1.2 Administrative Expense Creditor: Any Creditor entitled
to payment of an Administrative Expense.
1.1.3 Affiliate: Any Entity that is an "affiliate" of any of
the Debtors within the meaning of section 101(2) of the Bankruptcy Code except
(i) American Imaging Services, Inc., (ii) Tri Sigma Corporation, and (iii) the
PI Trust.
1.1.4 Affiliate Claims and Interests: All Claims against any
of the Debtors held by an Affiliate or any interest in any of the Debtors other
than in Eagle-Picher.
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1.1.5 Agent Bank: NBD Bank, N.A., as agent under the DIP
Credit Facility.
1.1.6 Allowed:
1.1.6.1 With respect to any Claim other than an
Administrative Expense, Asbestos Property Damage Claim, or Product
Liability Tort Claim, proof of which was filed within the applicable
period of limitation fixed in accordance with Bankruptcy Rule 3003(c)(3)
by the Bankruptcy Court, (i) as to which no objection to the allowance
thereof has been interposed within the applicable period of limitation
fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or a Final
Order of the Bankruptcy Court, such Claim to the extent asserted in the
proof of such Claim, or (ii) as to which an objection has been interposed,
such Claim to the extent that it has been allowed in whole or in part by a
Final Order of the Bankruptcy Court.
1.1.6.2 With respect to any Claim other than an
Administrative Expense or Product Liability Tort Claim, as to which no
proof of claim was filed within the applicable period of limitation fixed
by the Plan, the Bankruptcy Code, the Bankruptcy Rules, or a Final Order
of the Bankruptcy Court, such Claim to the extent that it has been listed
by one of the Debtors in its Schedules as liquidated in amount and not
disputed or contingent.
1.1.6.3 With respect to any Claim that is asserted to
constitute an Administrative Expense (i) that represents an actual or
necessary expense of preserving the estate or operating the business of
the Debtors, any such Claim to the extent that the Debtors determine it to
constitute an Administrative Expense, (ii) other than with respect to a
Claim of a professional person employed under section 327 or 1103 of the
Bankruptcy Code that is required to apply to the Bankruptcy Court for the
allowance of compensation and reimbursement of expenses pursuant to
section 330 of the Bankruptcy Code, that the Debtors do not believe
constitutes an Administrative Expense, any such Claim to the extent it is
allowed in whole or in part by a Final Order of the Bankruptcy Court and
only to the extent that such allowed portion is deemed, pursuant to a
Final Order of the Bankruptcy Court, to constitute a cost or expense of
administration under sections 503(b) and 507(a)(1) of the Bankruptcy Code,
or (iii) that represents a Claim of a professional person employed under
section 327 or 1103 of the Bankruptcy Code that is required to apply to
the Bankruptcy Court for the allowance of compensation and reimbursement
of expenses pursuant to section 330 of the Bankruptcy Code, such Claim to
the extent it is allowed by a Final Order of the Bankruptcy Court under
section 330 of the Bankruptcy Code.
1.1.6.4 With respect to any Asbestos Personal Injury
Claim or Lead Personal Injury Claim, such Claim to the extent that it is
allowed in accordance with the procedures established pursuant to the
Asbestos and Lead PI Trust Agreement and the claims resolution procedures
implemented in accordance therewith.
1.1.6.5 With respect to any Asbestos Property Damage
Claim, proof of which was filed within the applicable period of limitation
fixed in accordance with Bankruptcy Rule 3003(c)(3) by the Bankruptcy
Court, such Claim to the extent that it is allowed in accordance with the
claims resolution procedures established for Class 16 of the Plan and such
other procedures as may be established in connection with the Asbestos PD
Trust.
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1.1.6.6 With respect to any Other Product Liability Tort
Claim, such Claim to the extent (i) it is timely asserted against the
Debtors or the Reorganized Debtors, as the case may be, and (ii) it is
litigated to judgment in a liquidated amount by a Final Order of a court
of competent jurisdiction or is liquidated by the agreement of the
respective Reorganized Debtor and the holder of such Other Product
Liability Tort Claim.
1.1.7 Allowed Amount: The lesser of (a) the dollar amount of
an Allowed Claim or (b) the Estimated Amount of such Claim. Unless otherwise
specified herein or by Final Order of the Bankruptcy Court, the Allowed Amount
of an Allowed Claim shall not include interest accruing on such Allowed Claim
from and after the Petition Date.
1.1.8 Amended and Restated Articles of Incorporation: The
Articles of Incorporation, to be amended and restated in accordance with section
7.1 hereof, in substantially the form of Exhibit "1.1.8" to the Plan.
1.1.9 Amended and Restated Code of Regulations: The Code of
Regulations of Eagle-Picher, to be amended and restated in accordance with
section hereof, in substantially the form of Exhibit "1.1.9" to the Plan.
1.1.10 Amplicon Lease Secured Claim: All Claims under or
relating to that certain (a) Lease Agreement, dated February 2, 1990, between
Transicoil Inc. and Amplicon, Inc. and Schedule No. 1 thereto and (b) Lease
Guaranty, dated February 2, 1990, by Eagle-Picher, as guarantor, to the extent
that such Claims constitute Secured Claims under that certain Stipulation and
Order for Adequate Protection, which was "so ordered" by the Bankruptcy Court on
or about October 21, 1992.
1.1.11 Articles of Incorporation: The Articles of
Incorporation of Eagle-Picher, as such Articles of Incorporation may be amended
by the Amended and Restated Articles of Incorporation or otherwise.
1.1.12 Asbestos and Lead PI Permanent Channeling Injunction:
An order or orders of the Bankruptcy Court or the District Court permanently and
forever staying, restraining, and enjoining any Entity from taking any of the
following actions for the purpose of, directly or indirectly, collecting,
recovering, or receiving payment of, on, or with respect to any Asbestos
Personal Injury Claims or Lead Personal Injury Claims (other than actions
brought to enforce any right or obligation under the Plan, any Exhibits to the
Plan, or any other agreement or instrument between any of the Debtors or the
Reorganized Debtors and the PI Trust, which actions shall be in conformity and
compliance with the provisions hereof):
a. commencing, conducting, or continuing in any manner,
directly or indirectly, any suit, action, or other proceeding
(including, without express or implied limitation, a judicial,
arbitral, administrative, or other proceeding) in any forum against
or affecting any PI Protected Party or any property or interests in
property of any PI Protected Party;
b. enforcing, levying, attaching (including, without
express or implied limitation, any prejudgment attachment),
collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or
other order against any PI Protected Party or any property or
interests in property of any PI Protected Party;
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c. creating, perfecting, or otherwise enforcing in any
manner, directly or indirectly, any Encumbrance against any PI
Protected Party or any property or interests in property of any PI
Protected Party;
d. setting off, seeking reimbursement of, contribution
from, or subrogation against, or otherwise recouping in any manner,
directly or indirectly, any amount against any liability owed to any
PI Protected Party or any property or interests in property of any
PI Protected Party; and
e. proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to the PI Trust,
except in conformity and compliance therewith.
1.1.13 Asbestos and Lead PI Trust Agreement: That certain
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust Agreement,
substantially in the form of Exhibit "1.1.13" to the Plan.
1.1.14 Asbestos or Lead Contribution Claim: Any right to
payment, claim, remedy, liability, or Demand now existing or hereafter arising,
whether or not such right, claim, remedy, liability, or Demand is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured, whether or not
the facts of or legal bases for such right, claim, remedy, liability, or Demand
are known or unknown, that is (i) held by (A) any Entity (other than a director
or officer entitled to indemnification pursuant to section of the Plan) who has
been, is, or may be a defendant in an action seeking damages for death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
(x) asbestos or asbestos-containing products or (y) products that contain lead
chemicals, or (B) any assignee or transferee of such Entity, and (ii) on account
of alleged liability of any of the Debtors for reimbursement or contribution of
any portion of any damages such Entity has paid or may pay to the plaintiff in
such action.
1.1.15 Asbestos PD Trust: The trust established in accordance
with the Asbestos PD Trust Agreement.
1.1.16 Asbestos PD Trust Agreement: That certain Eagle-Picher
Industries, Inc. Asbestos Property Damage Settlement Trust Agreement,
substantially in the form of Exhibit "1.1.16" to the Plan.
1.1.17 Asbestos PD Trust Funding Obligation: Either (a) if
Class 16 votes to accept the Plan, cash in the amount of Three Million and
00/100 Dollars ($3,000,000.00) or (b) if Class 16 votes to reject the Plan, the
Pro Rata Share with respect to the Asbestos PD Trust Share of the Distribution
Value, payable in an amount of the Senior Unsecured Sinking Fund Debentures
equal to such Pro Rata Share.
1.1.18 Asbestos PD Trust Share: Either (a) if Class 16 votes
to reject the Plan, a value to be established by the Bankruptcy Court as the
estimated aggregate value of Asbestos Property Damage Claims as of the Petition
Date or (b) if Class 16 votes to accept the Plan, $0.00.
1.1.19 Asbestos Personal Injury Claim: Any right to payment,
claim, remedy, liability, or Demand now existing or hereafter arising, whether
or not such right, claim, remedy, liability, or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent,
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matured, unmatured, disputed, undisputed, legal, equitable, secured, or
unsecured, whether or not the facts of or legal bases for such right, claim,
remedy, liability, or Demand are known or unknown, for, under any theory of law,
equity, admiralty, or otherwise, death, bodily injury, or other personal damages
(whether physical, emotional, or otherwise) to the extent caused or allegedly
caused, directly or indirectly, by exposure to asbestos or asbestos-containing
products that were manufactured, sold, supplied, produced, distributed,
released, or in any way marketed by any of the Debtors prior to the Petition
Date, including, without express or implied limitation, any right, claim,
remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages) and including punitive damages and any Asbestos or Lead
Contribution Claim.
1.1.20 Asbestos Property Damage Claim: Any Claim against any
of the Debtors, under any theory of law, equity, admiralty, or otherwise, for
damages arising from the presence in buildings or other structures of asbestos
or asbestos-containing products that was or were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, or for which any of the Debtors is otherwise liable due to the
acts or omissions of any of the Debtors, including, without express or implied
limitation, all such Claims for compensatory damages (such as proximate,
consequential, general, and special damages) and punitive damages, but excluding
Asbestos Property Damage Contribution Claims.
1.1.21 Asbestos Property Damage Contribution Claims: Any Claim
against any of the Debtors that is (i) held by (A) any Entity (other than a
director or officer entitled to indemnification pursuant to section of the Plan)
who has been, is, or may be a defendant in an action seeking damages arising
from the presence in buildings or other structures of asbestos or
asbestos-containing products that was or were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, or for which any of the Debtors is otherwise liable due to the
acts or omissions of any of the Debtors or (B) any assignee or transferee of
such Entity, and (ii) on account of alleged liability by any of the Debtors for
reimbursement or contribution of any portion of any damages such Entity has paid
or may pay to the plaintiff in such action.
1.1.22 Available Cash: All cash (other than restricted cash,
including, without express or implied limitation, any cash held in escrow by or
on behalf of the Debtors and cash held in the "Divestiture Account" maintained
at Star Bank, N.A., Cincinnati) that would be shown on a balance sheet of
Eagle-Picher and its consolidated subsidiaries as of the last day of the month
in which the Effective Date occurs, prepared in accordance with generally
accepted accounting principles, less the sum of the following as of such date:
(i) Fifteen Million and 00/100 Dollars ($15,000,000.00), (ii) the Allowed Amount
of Allowed Administrative Expenses, (iii) a reasonable estimate by the Debtors
of additional Administrative Expenses (such as professional fees and expenses)
that may become Allowed thereafter, (iv) the Allowed Amount of Allowed Tax
Claims, (v) a reasonable estimate by the Debtors of additional Tax Claims that
may become Allowed thereafter, (vi) the DIP Credit Facility Claim, (vii) the
Amplicon Lease Secured Claim, (viii) the First Fidelity Lease Secured Claim,
(ix) the Fleet Credit Secured Claim, (x) the GE Capital Secured Claim, (xi) the
Grove IRB Secured Claim, (xii) the IBM Credit Corporation Secured Claim, (xiii)
the Leesburg Secured Claim, (xiv) the Allowed Amount of Other Secured Claims,
(xv) a reasonable estimate by the Debtors of additional Other Secured Claims
that may become Allowed thereafter, (xvi) the Allowed Amount of Allowed
Convenience Claims, (xvii) a reasonable estimate by the Debtors of additional
Convenience Claims that may become Allowed thereafter, (xviii) if Class 16 votes
to accept the Plan, the Asbestos PD Trust Funding Obligation, and (xix) the
amount reasonably estimated by the Debtors to be the cost of curing any defaults
under the executory contracts and unexpired leases to be assumed by the Debtors
under the Plan.
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1.1.23 Ballot: The form or forms distributed to holders of
impaired Claims on which is to be indicated the acceptance or rejection of the
Plan.
1.1.24 Ballot Date: The date set by the Bankruptcy Court by
which all completed ballots must be received.
1.1.25 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as
amended, and as codified in title 11 of the United States Code, as applicable to
the Chapter 11 Cases.
1.1.26 Bankruptcy Court: The United States District Court for
the Southern District of Ohio, Western Division, having jurisdiction over the
Chapter 11 Cases and, to the extent of any reference made pursuant to section
157 of title 28 of the United States Code, the unit of such District Court
constituted pursuant to section 151 of title 28 of the United States Code.
1.1.27 Bankruptcy Rules: The Federal Rules of Bankruptcy
Procedure, as amended, as applicable to the Chapter 11 Cases, including the
Local Rules of the Bankruptcy Court.
1.1.28 Bearer Unsecured Debt Securities: Such of the Henry
County IRBs, Houston IRBs, and the Mansfield IRBs that are not registered in the
name of the holder (whether fully registered or as to principal only), including
such of the Henry County IRBs, Houston IRBs, and the Mansfield IRBs as are
registered to "bearer."
1.1.29 Board of Directors: The Board of Directors of
Eagle-Picher, as it may exist from time to time.
1.1.30 Business Day: Any day on which commercial banks are
required to be open for business in Cincinnati, Ohio.
1.1.31 Chapter 11 Cases: The cases of the Debtors commenced by
the filing by each of the Debtors of a voluntary petition for relief under
chapter 11 of the Bankruptcy Code on the Petition Date and procedurally
consolidated as Case No. 1-91-00100.
1.1.32 Claim: (a) A "claim," as defined in section 101(5) of
the Bankruptcy Code, against any of the Debtors or Debtors in Possession,
whether or not asserted, whether or not the facts of or legal bases therefor are
known or unknown, and specifically including, without express or implied
limitation, any rights under sections 502(g), 502(h), or 502(i) of the
Bankruptcy Code, any claim of a derivative nature, any potential or unmatured
contract claims, and any other Contingent Claim, and (b) any Environmental Claim
or Product Liability Tort Claim, whether or not it constitutes a "claim," as
defined in section 101(5) of the Bankruptcy Code.
1.1.33 Claims Settlement Guidelines: The settlement guidelines
and authority contained in that certain Order Authorizing Debtors to Compromise
or Settle Claims and Controversies, entered by the Clerk of the Bankruptcy Court
on December 1, 1991, as amended in accordance with section of the Plan.
1.1.34 Claims Trading Injunction: An order or orders of the
Bankruptcy Court or the District Court permanently and forever staying,
restraining, and enjoining any Entity from, directly or indirectly, purchasing,
selling, transferring, assigning, conveying, pledging, or otherwise acquiring or
disposing of any Asbestos Personal Injury Claim, Lead Personal Injury Claim, or
Asbestos Property Damage Claim; provided, however, that the foregoing shall not
apply to (i) the transfer of an Asbestos Personal Injury Claim, Lead Personal
Injury Claim, or Asbestos Property
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Damage Claim to the holder of an Asbestos or Lead Contribution Claim or Asbestos
Property Damage Contribution Claim, as the case may be, solely as a result of
such holder's satisfaction of such Asbestos Personal Injury Claim, Lead Personal
Injury Claim, or Asbestos Property Damage Contribution Claim, as the case may
be, or (ii) the transfer of an Asbestos Personal Injury Claim, Lead Personal
Injury Claim, or Asbestos Property Damage Claim by will or under the laws of
descent and distribution. Any such order or orders will also provide that any
action taken in violation thereof will be void ab initio.
1.1.35 Confirmation Date: The date on which the Confirmation
Order is entered by the Clerk of the Bankruptcy Court.
1.1.36 Confirmation Deadline: The date that is one hundred
fifty (150) days after the filing of the Plan with the Bankruptcy Court.
1.1.37 Confirmation Order: The order or orders of the
Bankruptcy Court confirming the Plan in accordance with the provisions of
chapter 11 of the Bankruptcy Code, which will contain, inter alia, the Asbestos
and Lead PI Permanent Channeling Injunction and the Claims Trading Injunction.
1.1.38 Connecticut Mutual Note Secured Claim: All Claims under
that certain (a) Note in the original principal amount of Six Million One
Hundred Fourteen Thousand Six Hundred Fifty-Nine and 00/100 Dollars
($6,114,659.00) issued by Hillsdale to Connecticut Mutual Life Insurance Company
on or about July 29, 1988, (b) Agreement, dated July 29, 1988, between Hillsdale
and Connecticut Mutual Life Insurance Company, and (c) Security Agreement, dated
July 29, 1988, between Hillsdale, as grantor, and Connecticut Mutual Life
Insurance Company, as lender and secured party, to the extent that such Claims
constitute "Secured Claims" under that certain Stipulation and Order for
Adequate Protection, which was "so ordered" by the Bankruptcy Court on November
25, 1991.
1.1.39 Contingent Claim: Any Claim, the liability for which
attaches or is dependent upon the occurrence or happening, or is triggered by,
an event, which event has not yet occurred, happened, or been triggered, as of
the date on which such Claim is sought to be estimated or an objection to such
Claim is filed, whether or not such event is within the actual or presumed
contemplation of the holder of such Claim and whether or not a relationship
between the holder of such Claim and any of the Debtors now or hereafter exists
or previously existed.
1.1.40 Convenience Claim: As to each holder of an Unsecured
Claim, (a) an Unsecured Claim held by such holder in an Allowed Amount of Five
Hundred and 00/100 Dollars ($500.00) or less, or (b) an Unsecured Claim of such
holder the Allowed Amount of which has been reduced to Five Hundred and 00/100
Dollars ($500.00) by the election of the holder thereof, as provided on the
Ballot.
1.1.41 Creditor: Any Entity that holds a Claim against any of
the Debtors or Debtors in Possession.
1.1.42 Debtors: Collectively, Eagle-Picher, Daisy Parts, Inc.,
Transicoil Inc., MARCO, EDI, Inc., Eagle-Picher Minerals, Inc., and Hillsdale.
1.1.43 Debtors in Possession: The Debtors, each in its
respective capacity as a debtor in possession pursuant to sections 1107(a) and
1108 of the Bankruptcy Code.
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1.1.44 Demand: A demand for payment, present or future, that
(i) was not a Claim during the Chapter 11 Cases; (ii) arises out of the same or
similar conduct or events that gave rise to the Claims addressed by the Asbestos
and Lead PI Permanent Channeling Injunction; and (iii) pursuant to the Plan, is
to be paid by the PI Trust.
1.1.45 Designated Real Property Tax Claim: Any Claim for taxes
assessed against Parcel No. 27-B-040-0-00-001-0 in Lake County, Ohio.
1.1.46 DIP Credit Facility: The postpetition credit facility
furnished to the Debtors in Possession by the DIP Lenders, the specific terms of
which are set forth in that certain Credit and Agency Agreement, dated May 29,
1991, as extended by that certain First Amendment to Credit Agreement, dated as
of February 26, 1992, and as amended and restated by that certain Credit and
Agency Agreement, dated November 5, 1992, as amended by that certain First
Amendment to Credit Agreement, dated as of August 29, 1994.
1.1.47 DIP Credit Facility Claim: Collectively, all Claims of
the DIP Lenders arising under the DIP Credit Facility.
1.1.48 DIP Lenders: NBD Bank, N.A., for itself and as agent,
and Star Bank, N.A., Cincinnati, PNC Bank, Ohio, N.A., f/k/a The Central Trust
Company, N.A., and The Bank of Nova Scotia.
1.1.49 Disallowed Claim: A Claim that is disallowed in its
entirety by a Final Order of the Bankruptcy Court or such other court of
competent jurisdiction.
1.1.50 Disputed Claim: A Claim that is neither an Allowed
Claim nor a Disallowed Claim; provided, however, that no Environmental Claim
shall be considered a Disputed Claim for the purposes of the Plan.
1.1.51 Disputed Claim Amount: The Estimated Amount of a
Disputed Claim, or, if no Estimated Amount exists, the amount set forth in the
proof of claim relating to such Disputed Claim as the liquidated amount of such
Disputed Claim.
1.1.52 Distribution: The payment or distribution under the
Plan of property or interests in property to the holders of Allowed Claims
(other than Asbestos Personal Injury Claims, Lead Personal Injury Claims, and
Asbestos Property Damage Claims) and to the PI Trust and the Asbestos PD Trust.
1.1.53 Distribution Amount: The amount of Distribution Value
payable to a holder of an Allowed Environmental Claim pursuant to section of the
Plan, an Allowed Unsecured Claim in accordance with section , or a Specified
Treatment Claim in accordance with section of the Plan on the Initial
Distribution Date or the Final Distribution Date, as the case may be.
1.1.54 Distribution Value: The sum of the Equity Value plus
Available Cash plus the aggregate face amount of the New Debt Securities.
1.1.55 District Court: The United States District Court for
the Southern District of Ohio, Western Division, having jurisdiction over the
Chapter 11 Cases.
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1.1.56 Divestiture Notes: Those certain Senior Unsecured Notes
in the aggregate principal amount of Fifty Million and 00/100 Dollars
($50,000,000.00), bearing interest at a rate determined by McDonald & Company
Securities, Inc., after consultation with the financial advisers to the
Unsecured Creditors' Committee, on the Effective Date as the rate such Senior
Unsecured Notes should bear in order to have a market value of one hundred
percent (100%) of their principal amount on the Effective Date, and
substantially in the form of Exhibit "1.1.56" to the Plan.
1.1.57 Eagle-Picher: Eagle-Picher Industries, Inc., an Ohio
corporation.
1.1.58 Effective Date: The first Business Day after the date
on which all of the conditions precedent to the effectiveness of the Plan
specified in Section have been satisfied or waived or, if a stay of the
Confirmation Order is in effect on such date, the first Business Day after the
expiration, dissolution, or lifting of such stay.
1.1.59 Encumbrance: With respect to any asset, any mortgage,
lien, pledge, charge, security interest, assignment, or encumbrance of any kind
or nature in respect of such asset (including, without express or implied
limitation, any conditional sale or other title retention agreement, any
security agreement, and the filing of, or agreement to give, any financing
statement under the Uniform Commercial Code or comparable law of any
jurisdiction).
1.1.60 Entity: An individual, corporation, partnership,
association, joint stock company, joint venture, estate, trust, unincorporated
organization, or government or any political subdivision thereof, or other
person or entity.
1.1.61 Environmental Claim: Any Claim as to which the
treatment thereof is set forth in (a) the Environmental Settlement Agreement or
(b) an agreement by and between any of the Debtors and any party asserting a
Claim against any of the Debtors relating to alleged contamination under the
federal or state environmental laws or regulations, pursuant to which agreement
all or a portion of such Claim (to the extent and subject to the limitations
imposed by such agreement) may be asserted by the holder thereof after the
Effective Date, to the extent that such agreement is approved and authorized by
a Final Order of the Bankruptcy Court or otherwise in accordance with the Claims
Settlement Guidelines.
1.1.62 Environmental Settlement Agreement: That certain
Settlement Agreement, lodged with the Bankruptcy Court on March 23, 1995, by and
between the Debtors and the parties listed on the signatory pages thereof, to
the extent that such Settlement Agreement is approved and authorized by the
Bankruptcy Court by a Final Order of the Bankruptcy Court.
1.1.63 Equity Interest: Any interest in Eagle-Picher
represented by shares of Existing Eagle-Picher Common Stock.
1.1.64 Equity Security Holders' Committee: The Official
Committee of Equity Security Holders consisting of Entities appointed as members
in the Chapter 11 Cases in accordance with section 1102(a) of the Bankruptcy
Code and their duly appointed successors, if any, as the same may be
reconstituted from time to time.
1.1.65 Equity Value: The residual value of the equity of
Reorganized Eagle-Picher (i.e., after excluding the amount of cash to be
distributed under the Plan and debt of the Reorganized Debtors), as determined
by McDonald & Company Securities, Inc., after consultation with the financial
advisers to the Unsecured Creditors' Committee, as of the date of the
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commencement of the hearing on confirmation of the Plan, or as otherwise
determined in a factual finding contained in the Confirmation Order.
1.1.66 Estimated Amount: The estimated dollar value of an
Unliquidated Claim, Disputed Claim, or Contingent Claim pursuant to section
502(c) of the Bankruptcy Code.
1.1.67 Existing Eagle-Picher Common Stock: Voting common stock
of Eagle-Picher, with a par value of $1.25 for each share, authorized pursuant
to the Articles of Incorporation as in effect immediately prior to the Effective
Date.
1.1.68 Final Distribution Date: A date on or after the Initial
Distribution Date and after all Disputed Claims (other than Asbestos Personal
Injury Claims, Lead Personal Injury Claims, and Asbestos Property Damage Claims)
have become either Allowed Claims or Disallowed Claims that is selected by
Reorganized Eagle-Picher in its discretion but, in any event, is no later than
thirty (30) days thereafter, or such later date as the Bankruptcy Court may
establish, upon request by Reorganized Eagle-Picher, for cause shown.
1.1.69 Final Order: An order as to which the time to appeal,
petition for certiorari, or move for reargument or rehearing has expired and as
to which no appeal, petition for certiorari, or other proceedings for reargument
or rehearing shall then be pending or as to which any right to appeal, petition
for certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtors or the Reorganized Debtors, as the case
may be, and their counsel or, in the event that an appeal, writ of certiorari,
or reargument or rehearing thereof has been sought, such order shall have been
affirmed by the highest court to which such order was appealed, or certiorari
has been denied or from which reargument or rehearing was sought, and the time
to take any further appeal, petition for certiorari or move for reargument or
rehearing shall have expired.
1.1.70 First Fidelity Group: First Fidelity Leasing Group,
Inc.
1.1.71 First Fidelity Lease Secured Claim: All Claims under
that certain Master Lease Finance Agreement, dated October 31, 1990, between
Eagle-Picher and First Fidelity Group, to the extent that such Claims
constituted Secured Claims as of November 1, 1991, less the aggregate amount of
payments made by Eagle-Picher to First Fidelity Group pursuant to that certain
Stipulation and Order Setting Motions of First Fidelity Group, which was "so
ordered" by the Bankruptcy Court and entered by the Bankruptcy Court on March
17, 1992.
1.1.72 Fleet Credit Secured Claim: All Claims under certain
equipment schedules, dated January 25, 1988, March 24, 1988, May 19, 1988, and
May 24, 1988, respectively, between MARCO and Fleet Credit Corporation, to the
extent that such Claims constitute Secured Claims under that certain Stipulation
and Order Settling Motions of Fleet Credit Corporation, which was "so ordered"
by the Bankruptcy Court on July 20, 1992.
1.1.73 Future Claimants' Representative: The Legal
Representative for Future Claimants appointed pursuant to the order of the
Bankruptcy Court dated October 31, 1991.
1.1.74 GE Capital Secured Claim: The Secured Claim of General
Electric Capital Corporation in the amount of Twenty-Two Thousand Four Hundred
Fifty-Four and 89/100 Dollars ($22,454.89), pursuant to that certain Stipulation
and Order of Dismissal between Eagle-Picher and General Electric Capital
Corporation, which was "so ordered" by the Bankruptcy Court on January 18, 1994.
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1.1.75 Grove IRB Secured Claim: Claims under that certain (a)
Note, dated August 9, 1989, from Eagle-Picher to the Grove Industrial
Development Authority of Grove, Oklahoma, in the original principal amount of
$450,000.00 and (b) Mortgage, filed on August 9, 1989, in the State of Oklahoma,
Delaware County, to the extent that such Claims constitute Secured Claims.
1.1.76 Henry County IRBs: The Henry County Development
Authority Industrial Development Revenue Bonds (Eagle-Picher Industries, Inc.
Project), Series 1981, in the original principal amount of Two Million Five
Hundred Thousand and 00/100 Dollars ($2,500,000.00).
1.1.77 Hillsdale: Hillsdale Tool & Manufacturing Co., a
Michigan corporation.
1.1.78 Houston IRBs: The Port Development Corporation
Industrial Development Revenue Bonds, Series 1980 (Eagle-Picher Industries,
Inc., Project), in the original principal amount of Three Million and 00/100
Dollars ($3,000,000.00).
1.1.79 IBM Credit Corporation Secured Claim: All Claims of IBM
Credit Corporation under that certain Term Lease Master Agreement No. ZHOAO43
between The Ohio Rubber Co., a former division of Eagle-Picher, and IBM Credit
Corporation, dated May 16, 1989, and the related Term Lease Supplements thereto,
to the extent that such Claims constituted Secured Claims as of November 1,
1991, less the aggregate amount of payments made by Eagle-Picher to IBM Credit
Corporation pursuant to that certain Stipulation and Order Settling Motion of
IBM Credit Corporation, which was "so ordered" by the Bankruptcy Court on
January 15, 1992.
1.1.80 Initial Distribution Date: A date on or after the
Effective Date that is selected by Reorganized Eagle-Picher in its discretion
but, in any event, is within thirty (30) days after the Effective Date, or such
later date as the Bankruptcy Court may establish, upon request by Reorganized
Eagle-Picher, for cause shown.
1.1.81 Injury Claimants' Committee: The Official Committee of
Injury Claimants, consisting of Entities appointed as members in the Chapter 11
Cases in accordance with section 1102(a) of the Bankruptcy Code and their duly
appointed successors, if any, as the same may be reconstituted from time to
time.
1.1.82 Inter-Market Note Secured Claim: All Claims under that
certain (a) Note Agreement, dated July 7, 1988, between Inter-Market Capital
Corporation and Eagle-Picher, (b) 9.8820% Promissory Note issued by Eagle-Picher
to New England Mutual Life Insurance Company on or about July 7, 1988, and (c)
Security Agreement, dated September 14, 1989, between Hillsdale, as grantor and
guarantor, and New England Mutual Life Insurance Company, as lender and secured
party, to the extent that such Claims constitute "Secured Claims" under that
certain Stipulation and Order Providing Adequate Protection of Interests of New
England Mutual Life Insurance Company, which was "so ordered" by the Bankruptcy
Court on April 7, 1992, as modified and extended by that certain Stipulation
Providing Adequate Protection of Interests of Certain Affiliates of Morgens,
Waterfall, Vintiadis & Company, Inc., which was approved by the Bankruptcy Court
by an order entered on February 14, 1995.
1.1.83 Internal Revenue Code: The Internal Revenue Code of
1986, as amended, and any applicable rulings, regulations (including temporary
and proposed regulations)
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promulgated thereunder, judicial decisions, and notices, announcements, and
other releases of the United States Treasury Department or the IRS.
1.1.84 IRS: The United States Internal Revenue Service.
1.1.85 Kalkaska Claim: Allowed Unsecured Claim in the amount
of Two Million and 00/100 Dollars ($2,000,000.00) pursuant to a settlement
approved by an order of the Bankruptcy Court entered on or about November 24,
1993.
1.1.86 Lead Personal Injury Claim: Any right to payment,
claim, remedy, liability, or Demand, now existing or hereafter arising, whether
or not such right, claim, remedy, liability, or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability, or Demand are known or
unknown, for, under any theory of law, equity, admiralty, or otherwise, death,
bodily injury, or other personal damages (whether physical, emotional, or
otherwise) to the extent caused or allegedly caused, directly or indirectly, by
exposure to products that contained lead chemicals that were manufactured, sold,
supplied, produced, distributed, or in any way marketed by any of the Debtors
prior to the Petition Date, including, without express or implied limitation,
any right, claim, remedy, liability, or Demand for compensatory damages (such as
loss of consortium, wrongful death, survivorship, proximate, consequential,
general, and special damages) and including punitive damages and any Asbestos or
Lead Contribution Claim.
1.1.87 Leesburg Note: That certain note, dated as of October
4, 1977, from William Robert Jacobsen to Sun First National Bank of Leesburg, as
Trustee of the J.D. Manly Construction Company Living Trust.
1.1.88 Leesburg Secured Claim: All Claims under (a) the
Leesburg Note and (b) that certain mortgage, dated October 4, 1977, recorded at
O.R. 638, pages 1587 through 1591, inclusive, of the Public Records of Lake
County, Florida, as amended by a mortgage amendment, recorded at O.R. 691, page
55, of the Public Records of the Lake County, Florida, which note and mortgage
were assumed by Eagle-Picher pursuant to a certain Real Estate Agreement, dated
as of May 18, 1979, between Eagle-Picher and William R. Jacobsen.
1.1.89 Mansfield IRBs: The Industrial Development Revenue
Bonds (Eagle- Picher Industries, Inc. Project) issued by the City of Mansfield,
Ohio, in the original principal amount of Two Million and 00/100 Dollars
($2,000,000.00).
1.1.90 MARCO: Michigan Automotive Research Corporation, a
Michigan corporation.
1.1.91 New Debt Securities: Collectively, the Divestiture
Notes, the Senior Unsecured Sinking Fund Debentures, and the Tax Refund Notes.
1.1.92 New Eagle-Picher Common Stock: Voting common stock,
with no par value, of Reorganized Eagle-Picher from and after the Effective Date
after giving effect to the Amended and Restated Articles of Incorporation.
1.1.93 Northwestern Group: Northwestern National Life
Insurance Company, Northern Life Insurance Company, The North Atlantic Life
Insurance Company of America, and American Investors Life Insurance Company.
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1.1.94 Northwestern Group Secured Claims: All Claims under
that certain (a) Note Purchase Agreement, dated April 21, 1989, between
Eagle-Picher and the Northwestern Group and (b) Security Agreement, dated April
21, 1989, executed by Eagle-Picher in favor of the Northwestern Group, to the
extent that such Claims constituted Secured Claims as of March 12, 1991, less
the aggregate amount of payments made by Eagle-Picher to the Northwestern Group
or any successor in interest to the Northwestern Group pursuant to that certain
Stipulation and Order for Adequate Protection Payments to Northwestern Group,
which was entered by the Bankruptcy Court on May 9, 1991.
1.1.95 Other Product Liability Tort Claim: Any Product
Liability Tort Claim as to which the facts or existence of first become apparent
to the holder of such Claim after the Effective Date other than Asbestos
Personal Injury Claims and Lead Personal Injury Claims.
1.1.96 Other Secured Claim: Any Secured Claim other than the
Amplicon Lease Secured Claim, the Connecticut Mutual Note Secured Claim, the
Designated Real Property Tax Claim, the Grove IRB Secured Claim, the First
Fidelity Lease Secured Claim, the Fleet Credit Secured Claim, the IBM Credit
Corporation Secured Claim, the Inter-Market Note Secured Claim, the Leesburg
Secured Claim, the Northwestern Group Secured Claim, and the Vale EDBs.
1.1.97 Penalty Claim: Any Claim (i) for any fine, penalty,
collection fee, or forfeiture, or for multiple, exemplary, or punitive damages
to the extent that such fine, penalty, forfeiture, or damages are not
compensation for actual pecuniary loss suffered by the holder of such Claim, but
not any such Claim to the extent that any of the Debtors has agreed to treat
such Claim under the Plan as an Unsecured Claim, or (ii) that, pursuant to an
order of the Bankruptcy Court, is subordinated for purposes of distribution to
all Allowed Unsecured Claims.
1.1.98 Per Share Value: An amount equal to the Equity Value
divided by ten million (10,000,000).
1.1.99 Petition Date: January 7, 1991.
1.1.100 PI Protected Party: Any of the following parties:
1.1.100.1 the Debtors;
1.1.100.2 the Reorganized Debtors;
1.1.100.3 an Affiliate;
1.1.100.4 any Entity that, pursuant to the Plan or after
the Effective Date, becomes a direct or indirect transferee of, or
successor to, any assets of any of the Debtors, the Reorganized Debtors,
or the PI Trust (but only to the extent that liability is asserted to
exist by reason of it becoming such a transferee or successor);
1.1.100.5 any Entity that, pursuant to the Plan or after
the Effective Date, makes a loan to any of the Reorganized Debtors or the
PI Trust or to a successor to, or transferee of, any assets of any of the
Debtors, the Reorganized Debtors, or the PI Trust (but only to the extent
that liability is asserted to exist by reason of such Entity becoming such
a lender or to the extent any pledge of assets made in connection with
such a loan is sought to be upset or impaired); or
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1.1.100.6 any Entity to the extent he, she, or it
is alleged to be directly or indirectly liable for the conduct of,
Claims against, or Demands on any of the Debtors, the Reorganized
Debtors, or the PI Trust on account of Asbestos Personal Injury
Claims or Lead Personal Injury Claims by reason of one or more of
the following:
1.1.100.6.1 such Entity's ownership of a financial
interest in any of the Debtors or the Reorganized Debtors, a past or
present affiliate of any of the Debtors or the Reorganized Debtors,
or predecessor in interest of any of the Debtors or the Reorganized
Debtors;
1.1.100.6.2 such Entity's involvement in the
management of any of the Debtors or the Reorganized Debtors or any
predecessor in interest of any of the Debtors or the Reorganized
Debtors;
1.1.100.6.3 such Entity's service as an officer,
director, or employee of any of the Debtors, the Reorganized
Debtors, or Related Parties;
1.1.100.6.4 such Entity's provision of insurance
to any of the Debtors, the Reorganized Debtors, or Related Parties;
or
1.1.100.6.5 such Entity's involvement in a
transaction changing the corporate structure, or in a loan or other
financial transaction affecting the financial condition, of any of
the Debtors, the Reorganized Debtors, or any of the Related Parties.
1.1.101 PI Trust: The trust established in accordance with the
Asbestos and Lead PI Trust Agreement.
1.1.102 PI Trust Share: Two Billion and 00/100 Dollars
($2,000,000,000).
1.1.103 Plan: This plan of reorganization, either in its
present form or as it may be amended, supplemented, or otherwise modified from
time to time, and the exhibits and schedules to the foregoing, as the same may
be in effect at the time such reference becomes operative.
1.1.104 Priority Claim: Any Claim to the extent such claim is
entitled to priority in right of payment under section 507(a) of the Bankruptcy
Code, other than an Administrative Expense, DIP Credit Facility Claim, or Tax
Claim.
1.1.105 Pro Rata Share: Amount obtained by dividing the
Allowed Amount of an Allowed Claim, or, in the case of the Distribution to the
PI Trust or the Asbestos PD Trust, the PI Trust Share or the Asbestos PD Trust
Share, respectively, by the sum of (a) the PI Trust Share, the Asbestos PD Trust
Share, and all Allowed Unsecured Claims (other than Allowed Convenience Claims),
and Allowed Environmental Claims, and (b) the Disputed Claim Amount of all
Disputed Unsecured Claims (other than Disputed Convenience Claims).
1.1.106 Product Liability Tort Claim: Any right to payment,
claim, remedy, liability, or Demand, now existing or hereafter arising, whether
or not such right, claim, remedy, liability, or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability, or Demand are known or
unknown,
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for, under any theory of law, equity, admiralty, or otherwise, death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
any products or byproducts that were manufactured, sold, supplied, produced,
released, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, including, without express or implied limitation, any right,
claim, remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages), including punitive damages, and including, without express or
implied limitation, any Asbestos Personal Injury Claim or Lead Personal Injury
Claim.
1.1.107 Record Date: The first Business Day that is five (5)
days from and after the Confirmation Date.
1.1.108 Registered Unsecured Debt Securities: (a) The 9.5%
Sinking Fund Debentures Due March 1, 2017, issued by Eagle-Picher, and (b) such
of the Henry County IRBs, Mansfield IRBs, and the Houston IRBs that are not
Bearer Unsecured Debt Securities.
1.1.109 Related Parties: (a) Any past or present affiliate of
any of the Debtors or the Reorganized Debtors, (b) any predecessor in interest
of any of the Debtors or the Reorganized Debtors, or (c) any Entity that owned a
financial interest in any of the Debtors or the Reorganized Debtors, any past or
present affiliate of any of the Debtors or the Reorganized Debtors, or any
predecessor in interest of any of the Debtors or the Reorganized Debtors.
1.1.110 Reorganized Debtors: The Debtors, or any successors in
interest thereto, from and after the Effective Date.
1.1.111 Reorganized Eagle-Picher: Eagle-Picher, or any
successor in interest thereto, from and after the Effective Date.
1.1.112 Retention Period: Five (5) years from and after the
Effective Date, or such shorter period as the Bankruptcy Court may set.
1.1.113 Schedules: The schedules of assets and liabilities and
the statements of financial affairs filed by the Debtors in Possession with the
Bankruptcy Court, as required by section 521 of the Bankruptcy Code and the
Official Bankruptcy Forms of the Bankruptcy Rules, as such schedules and
statements may be amended by the Debtors in Possession from time to time in
accordance with Bankruptcy Rule 1009.
1.1.114 Senior Unsecured Sinking Fund Debentures: Those
certain Senior Unsecured Sinking Fund Debentures in the aggregate principal
amount of Two Hundred Fifty Million and 00/100 Dollars ($250,000,000.00),
bearing interest at a rate determined by McDonald & Company Securities, Inc. on
the Effective Date as the rate such Senior Unsecured Sinking Fund Debentures
should bear in order to have a market value of one hundred percent (100%) of
their principal amount on the Effective Date, and substantially in the form set
forth in Exhibit "1.1.114" to the Plan.
1.1.115 Secured Claim: Any Claim against any of the Debtors to
the extent of the value of any interest in property of the estate of such Debtor
securing such Claim, except for the DIP Credit Facility Claim.
1.1.116 Specified Treatment Claims: The Kalkaska Claim, the
TLG Associates Claim, and any other Unsecured Claim that is (a) Allowed in
connection with a settlement
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with one or more of the Debtors and (b) for which a minimum and maximum
distribution under the Plan are specified.
1.1.117 Supplemental Severance Program: The Supplemental
Severance Program approved by the Bankruptcy Court pursuant to its "Order on
Motion Re Key Employee Retention, Etc.," entered on May 13, 1991.
1.1.118 Tax Claim: A Claim against any of the Debtors that is
of a kind specified in section 507(a)(8) of the Bankruptcy Code.
1.1.119 Tax Refund Notes: Those certain Senior Unsecured Notes
in an aggregate principal amount equal to the federal income tax refund
estimated by Eagle-Picher to be due and owing to the Debtors as of the Effective
Date, bearing interest at a rate determined by McDonald & Company Securities,
Inc. on the Effective Date as the rate such Senior Unsecured Notes should bear
in order to have a market value of one hundred percent (100%) of their principal
amount on the Effective Date, and in substantially the form of Exhibit "1.1.119"
to the Plan.
1.1.120 TLG Associates Claim: Allowed Unsecured Claim in the
amount of Two Hundred Fifteen Thousand Eight Hundred Thirty-Five and 00/100
($215,835.00) pursuant to a settlement approved by an order of the Bankruptcy
Court dated December 29, 1995.
1.1.121 Trustees: Collectively, the persons serving as
trustees of the PI Trust, pursuant to the terms of the Asbestos and Lead PI
Trust Agreement.
1.1.122 Unliquidated Claim: Any Claim, the amount of liability
for which has not been fixed, whether pursuant to agreement, applicable law, or
otherwise, as of the date on which such Claim is sought to be estimated.
1.1.123 Unsecured Claim: Any Claim that is not an
Administrative Expense, Tax Claim, Priority Claim, Asbestos Personal Injury
Claim, Asbestos Property Damage Claim, Lead Personal Injury Claim, Environmental
Claim, Other Product Liability Tort Claim, Designated Real Property Tax Claim,
Affiliate Claims and Interests, Penalty Claim, or Secured Claim.
1.1.124 Unsecured Creditors' Committee: The Official Unsecured
Creditors' Committee, consisting of Entities appointed as members in the Chapter
11 Cases in accordance with section 1102(a) of the Bankruptcy Code and their
duly appointed successors, if any, as the same may be reconstituted from time to
time.
1.1.125 Unsecured Debt Securities: Collectively, the Bearer
Unsecured Debt Securities and the Registered Unsecured Debt Securities.
1.1.126 Unsecured Debt Securities Indenture: The respective
indenture and any other agreements, documents, and instruments governing an
issue of Unsecured Debt Securities, as amended, supplemented, or modified as of
the date hereof.
1.1.127 Unsecured Debt Securities Trustee: The respective
trustee acting pursuant to an Unsecured Debt Securities Indenture.
1.1.128 Vale EDBs: Those certain Ten Million and 00/100
Dollars ($10,000,000.00) in original principal amount of Economic Development
Bonds, Series XCVI, issued
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<PAGE>
<PAGE>
by the State of Oregon Economic Development Commission to finance the
construction in the Harney and Malheur Counties of Oregon of certain facilities
of Eagle-Picher Minerals, Inc.
1.1.129 Vale EDBs Claims: Claims with respect to the Vale
EDBs.
1.1.130 Voting Procedures Order: An order of the Bankruptcy
Court approving procedures relating to the solicitation and tabulation of votes
with respect to the Plan.
1.2 OTHER TERMS. Wherever from the context it appears appropriate,
each term stated in either the singular or the plural shall include the singular
and the plural, and pronouns stated in the masculine, feminine, or neuter gender
shall include the masculine, the feminine, and the neuter. The words "herein,"
"hereof," "hereto," "hereunder," and others of similar import refer to the Plan
as a whole and not to any particular section, subsection, or clause contained in
the Plan. An initially capitalized term used herein that is not defined herein
shall have the meaning ascribed to such term, if any, in the Bankruptcy Code,
unless the context shall otherwise require.
1.3 EXHIBITS. All Exhibits to the Plan shall be contained in a
separate Exhibit Volume, which shall be filed with the Clerk of the Bankruptcy
Court not less than twenty (20) days prior to the commencement of the hearing on
confirmation of the Plan. Such Exhibits may be inspected in the office of the
Clerk of the Bankruptcy Court during normal hours of operation of the Bankruptcy
Court. Holders of Claims and Equity Interests may obtain a copy of such Exhibit
Volume, once filed, from Eagle-Picher by a written request sent to the following
address:
Eagle-Picher Industries, Inc.
P.O. Box 1847
Cincinnati, OH 45202
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<PAGE>
<PAGE>
ARTICLE 2
PROVISIONS FOR PAYMENT OF
ADMINISTRATIVE EXPENSES AND TAX CLAIMS
2.1 PAYMENT OF ALLOWED ADMINISTRATIVE EXPENSES. The Allowed Amount
of each Allowed Administrative Expense shall be paid in full, in cash, on the
Effective Date; provided, however, that (i) Administrative Expenses representing
(a) liabilities incurred in the ordinary course of business by any of the
Debtors in Possession or (b) liabilities arising under loans or advances to the
Debtors in Possession, whether or not incurred in the ordinary course of
business, shall be assumed and paid by the respective Reorganized Debtors in
accordance with the terms and conditions of the particular transactions and any
agreements relating thereto, (ii) the Bankruptcy Court shall fix in the
Confirmation Order a date for the filing of and a date to hear and determine all
applications for final allowances of compensation or reimbursement of expenses
under section 330 of the Bankruptcy Code, and (iii) if an Administrative
Expense, other than a trade payable incurred in the ordinary course of business
by any of the Debtors in Possession and other than a DIP Credit Facility Claim,
is a Contingent Claim or Unliquidated Claim as of the Effective Date, the
Debtors may request the Bankruptcy Court to estimate such Administrative Expense
pursuant to section 502(c) of the Bankruptcy Code, in which case the Allowed
Amount of such Administrative Expense shall be paid in full, in cash, on the
date that an order estimating such Administrative Expense becomes a Final Order.
2.2 COMPENSATION AND REIMBURSEMENT. The Allowed Amount of all
Administrative Expenses arising under section 503(b)(2), 503(b)(3), 503(b)(4),
or 503(b)(5) of the Bankruptcy Code shall be paid in full, in cash, (a) upon the
later of (i) the Effective Date and (ii) the date upon which the order with
respect to the allowance or disallowance of any such Administrative Expense
becomes a Final Order, or (b) upon such other terms as may be mutually agreed
upon between each Administrative Expense Creditor and the Reorganized Debtors.
2.3 DIP CREDIT FACILITY CLAIM. On the Effective Date, the DIP Credit
Facility Claim shall be paid, in full, in cash. Unless otherwise agreed by the
DIP Lenders, to the extent that any letters of credit issued pursuant to the DIP
Credit Facility remain outstanding on the Effective Date, the Debtors will pay
to the Agent Bank, for the ratable benefit of the DIP Lenders, cash in an amount
equal to the face amount of such letters of credit, which shall be held by the
Agent Bank for the repayment of all amounts due in respect of such letters of
credit.
2.4 TAX CLAIMS. Each holder of an Allowed Tax Claim shall be paid
the Allowed Amount of its Allowed Tax Claim, at the option of the Reorganized
Debtors, either (a) in full, in cash, on the Effective Date or (b) upon such
other terms as may be mutually agreed upon between each holder of a Tax Claim
and the Reorganized Debtors.
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<PAGE>
<PAGE>
ARTICLE 3
CLASSIFICATION AND TREATMENT OF CLAIMS
AND EQUITY INTERESTS
3.1 SUMMARY. Claims and Equity Interests are classified for all
purposes, including, without express or implied limitation, voting,
confirmation, and distribution pursuant to the Plan, as follows:
<TABLE>
<CAPTION>
CLASS STATUS
<S> <C> <C>
Class 1: Priority Claims Unimpaired - not entitled to vote.
Class 2: Amplicon Lease Secured Unimpaired - not entitled to vote.
Claim
Class 3: Connecticut Mutual Note Impaired - entitled to vote
Secured Claim
Class 4: Designated Real Property Impaired - entitled to vote.
Tax Claims
Class 5: First Fidelity Lease Unimpaired - not entitled to vote.
Secured Claim
Class 6: Fleet Credit Secured Claim Unimpaired - not entitled to vote.
Class 7: GE Capital Secured Claim Unimpaired - not entitled to vote.
Class 8: Grove IRB Secured Claim Unimpaired - not entitled to vote.
Class 9: IBM Credit Corporation Unimpaired - not entitled to vote.
Secured Claim
Class 10: Inter-Market Note Impaired - entitled to vote.
Secured Claim
Class 11: Leesburg Secured Claim Unimpaired - not entitled to vote.
Class 12: Northwestern Group Secured Impaired - entitled to vote.
Claims
Class 13: Vale EDBs Claims Unimpaired - not entitled to vote.
Class 14: Other Secured Claims Unimpaired - not entitled to vote.
Class 15: Convenience Claims Unimpaired - not entitled to vote.
Class 16: Asbestos Property Damage Impaired - entitled to vote.
Claims
</TABLE>
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<PAGE>
<PAGE>
<TABLE>
<CAPTION>
CLASS STATUS
<S> <C> <C>
Class 17: Asbestos Personal Injury Impaired - entitled to vote.
Claims and Lead Personal
Injury Claims
Class 18: Other Product Liability Impaired - entitled to vote.
Tort Claims
Class 19: Environmental Claims Impaired - entitled to vote.
Class 20: Unsecured Claims Impaired - entitled to vote.
other than Convenience
Claims and Specified
Treatment Claims
Class 21: Specified Treatment Claims Impaired - entitled to vote.
Class 22: Affiliate Claims and Unimpaired - not entitled to vote.
Interests
Class 23: Penalty Claims Impaired - deemed to reject the Plan.
Class 24: Equity Interests Impaired - deemed to reject the Plan.
3.2 CLASSIFICATION AND TREATMENT.
3.2.1 CLASS 1. PRIORITY CLAIMS.
1. Classification: Class 1 consists of all Allowed
Priority Claims.
2. Treatment: Each holder of an Allowed Priority Claim
shall be paid the Allowed Amount of its Allowed Priority Claim, in full, in
cash, on the Effective Date.
3. Status: Class 1 is not impaired. The holders of the
Claims in Class 1 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.2 CLASS 2. AMPLICON LEASE SECURED CLAIM.
1. Classification: Class 2 consists of the Amplicon
Lease Secured Claim.
2. Treatment: At the option of the Debtors and in
accordance with section 1124 of the Bankruptcy Code, the Amplicon Lease Secured
Claim shall be treated in one of the following ways:
a. The legal, equitable and contractual rights to
which the Amplicon Lease Secured Claim entitles the holder thereof
shall be unaltered.
or
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<PAGE>
b. Notwithstanding any contractual provision or
applicable law that entitles the holder of the Amplicon Lease
Secured Claim to demand or receive payment of such Claim prior to
the stated maturity of such Claim from and after the occurrence of a
default under the agreements governing or instruments evidencing the
Amplicon Lease Secured Claim, the Amplicon Lease Secured Claim shall
be reinstated, and the Debtors shall (i) cure all defaults that
occurred before or from and after the Petition Date (other than
defaults of a kind specified in section 365(b)(2) of the Bankruptcy
Code), (ii) reinstate the maturity of the Amplicon Lease Secured
Claim as such maturity existed prior to the occurrence of such
default, (iii) compensate the holder of such Claim for any damages
incurred as a consequence of any reasonable reliance by such holder
on such contractual provision or such applicable law, and (iv) not
otherwise alter the legal, equitable, or contractual rights to which
the holder of the Amplicon Lease Secured Claim is entitled.
or
c. On the Effective Date, the holder of the
Amplicon Lease Secured Claim shall be paid the Allowed Amount of the
Amplicon Lease Secured Claim, in full, in cash.
3. Status: Class 2 is not impaired. The holder of the
Claim in Class 2 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.3 CLASS 3. CONNECTICUT MUTUAL NOTE SECURED CLAIM.
1. Classification: Class 3 consists of the Connecticut
Mutual Note Secured Claim.
2. Treatment: The holder of the Connecticut Mutual Note
Secured Claim will retain the liens securing the Connecticut Mutual Note Secured
Claim and, on the Effective Date, will receive a note, substantially in the form
of Exhibit "1.1.38" to the Plan, which shall (i) have a maturity date of June 1,
2001, (ii) bear interest at the rate of 10.0% per annum, (iii) have a principal
amount equal to the amount of the Connecticut Mutual Note Secured Claim, and
(iv) provide for equal monthly payments of principal and interest in an amount
sufficient to fully amortize the principal amount of such note over the term of
such note.
3. Status: Class 3 is impaired. To the extent and in the
manner provided in the Voting Procedures Order, the holder of the Claim in Class
3 is entitled to vote to accept or reject the Plan.
3.2.4 CLASS 4. DESIGNATED REAL PROPERTY TAX CLAIM.
1. Classification: Class 4 consists of the Designated
Real Property Tax Claim.
2. Treatment: On the Effective Date, the property
securing the Designated Real Property Tax Claim shall be transferred to the
holder of the Designated Real Property Tax Claim in full and complete
satisfaction of the Designated Real Property Tax Claim. Notwithstanding the
foregoing, if the property securing the Designated Real Property Tax Claim is
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<PAGE>
<PAGE>
sold prior to the Effective Date, the Designated Real Property Tax Claim shall
be paid in full, in cash, on the date on which such sale is consummated.
3. Status: Class 4 is impaired. To the extent and in the
manner provided in the Voting Procedures Order, the holder of the Claim in Class
4 is entitled to vote to accept or reject the Plan.
3.2.5 CLASS 5. FIRST FIDELITY LEASE SECURED CLAIM.
1. Classification: Class 5 consists of the First
Fidelity Lease Secured Claim.
2. Treatment: On the Effective Date, the holder of the
First Fidelity Lease Secured Claim shall be paid the Allowed Amount of the First
Fidelity Lease Secured Claim, in full, in cash.
3. Status: Class 5 is unimpaired. The holder of the
Claim in Class 5 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.6 CLASS 6. FLEET CREDIT SECURED CLAIM.
1. Classification: Class 6 consists of the Fleet Credit
Secured Claim.
2. Treatment: On the Effective Date, the holder of the
Fleet Credit Secured Claim shall be paid the Allowed Amount of the Fleet Credit
Secured Claim, in full, in cash.
3. Status: Class 6 is unimpaired. The holder of the
Claim in Class 6 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.7 CLASS 7. GE CAPITAL SECURED CLAIM.
1. Classification: Class 7 consists of the GE Capital
Secured Claim.
2. Treatment: On the Effective Date, the holder of the
E Capital Secured Claim shall be paid the Allowed Amount of the GE Capital
Secured Claim, in full, in cash.
3. Status: Class 7 is not impaired. The holder of the
Claim in Class 7 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.8 CLASS 8. GROVE IRB SECURED CLAIM.
1. Classification: Class 8 consists of the Grove IRB
Secured Claim.
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<PAGE>
2. Treatment: On the Effective Date, the holder of the
Grove IRB Secured Claim shall be paid the Allowed Amount of the Grove IRB
Secured Claim, in full, in cash.
3. Status: Class 8 is not impaired. The holder of the
Claim in Class 8 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.9 CLASS 9. IBM CREDIT CORPORATION SECURED CLAIM.
1. Classification: Class 9 consists of the IBM Credit
Corporation Secured Claim.
2. Treatment: On the Effective Date, the holder of the
IBM Credit Corporation Secured Claim shall be paid the Allowed Amount of the IBM
Credit Corporation Secured Claim, in full, in cash.
3. Status: Class 9 is not impaired. The holder of the
Claim in Class 9 is deemed to accept the Plan, and, accordingly, is not entitled
to vote to accept or reject the Plan.
3.2.10 CLASS 10. INTER-MARKET NOTE SECURED CLAIM.
1. Classification: Class 10 consists of the Inter-Market
Note Secured Claim.
2. Treatment: The holder of the Inter-Market Note
Secured Claim will retain the liens securing the Inter-Market Note Secured Claim
and, on the Effective Date, will receive a note, substantially in the form of
Exhibit "1.1.82" to the Plan, which shall (i) have a maturity date of June 1,
2001, (ii) bear interest at the rate of 10.0% per annum, (iii) have a principal
amount equal to the amount of the Inter-Market Note Secured Claim, and (iv)
provide for equal monthly payments of principal and interest in an amount
sufficient to fully amortize the principal amount of such note over the term of
such note.
3. Status: Class 10 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holder of the Claim in
Class 10 is entitled to vote to accept or reject the Plan.
3.2.11 CLASS 11. LEESBURG SECURED CLAIM.
1. Classification: Class 11 consists of the Leesburg
Secured Claim.
2. Treatment: On the Effective Date, the holder of the
Leesburg Secured Claim shall be paid the Allowed Amount of the Leesburg Secured
Claim, in full, in cash.
3. Status: Class 11 is not impaired. The holder of the
Claim in Class 11 is deemed to accept the Plan and, accordingly, is not entitled
to vote to accept or reject the Plan.
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<PAGE>
3.2.12 CLASS 12. NORTHWESTERN GROUP SECURED CLAIMS.
1. Classification: Class 12 consists of the Northwestern
Group Secured Claims.
2. Treatment: The holders of the Northwestern Group
Secured Claims will retain the liens securing the Northwestern Group Secured
Claims and, on the Effective Date, will each receive a note, substantially in
the form of Exhibit "1.1.94" to the Plan, which shall (i) have a maturity date
of May 1, 2001, (ii) bear interest at the rate of 10.0% per annum, (iii) have a
principal amount equal to the amount of such holder's share of the Northwestern
Group Secured Claims, and (iv) provide for equal monthly payments of principal
and interest in an amount sufficient to fully amortize the principal amount of
such note over the term of such note.
3. Status: Class 12 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 12 are entitled to vote to accept or reject the Plan.
3.2.13 CLASS 13. VALE EDBS CLAIMS.
1. Classification: Class 13 consists of the Vale EDBs
Claims.
2. Treatment: Notwithstanding any contractual provision
or applicable law that entitles the holders of the Vale EDBs Claims to demand or
receive payment of such Claims prior to the stated maturity of such Claims from
and after the occurrence of a default under the agreements or instruments
evidencing the Vale EDBs Claims, the Vale EDBs shall be reinstated, and the
Debtors shall (i) cure all defaults that occurred before or from and after the
Petition Date (other than defaults of a kind specified in section 365(b)(2) of
the Bankruptcy Code), (ii) reinstate the maturity of the Vale EDBs as such
maturity existed prior to the occurrence of such default, (iii) compensate the
holders of the Vale EDBs Claims for any damages incurred as a consequence of any
reasonable reliance by such holders on such contractual provision or such
applicable law, and (iv) not otherwise alter the legal, equitable, or
contractual rights to which the holders of the Vale EDBs Claims are entitled.
Entry of the Confirmation Order shall constitute a finding that no amounts are
payable and owing under subsections (i) and (iii) hereof.
3. Status: Class 13 is not impaired. The holders of the
Claims in Class 13 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.14 CLASS 14. OTHER SECURED CLAIMS.
1. Classification: Class 14 consists of all Allowed
Other Secured Claims. Although placed in one class for purposes of convenience,
each Allowed Other Secured Claim shall be treated as though in a separate class
for all purposes under the Plan.
2. Treatment: At the option of the Debtors and in
accordance with section 1124 of the Bankruptcy Code, each Allowed Other Secured
Claim shall be treated in one of the following ways:
a. The legal, equitable and contractual rights to
which such Allowed Other Secured Claim entitles the holder of such
Claim shall be unaltered.
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<PAGE>
<PAGE>
or
b. Notwithstanding any contractual provision or
applicable law that entitles the holder of an Allowed Other Secured
Claim to demand or receive payment of such Claim prior to the stated
maturity of such Claim from and after the occurrence of a default
under the agreements governing or instruments evidencing such Claim,
such Claim shall be reinstated, and the Debtors shall (i) cure all
defaults that occurred before or from and after the Petition Date
(other than defaults of a kind specified in section 365(b)(2) of the
Bankruptcy Code), (ii) reinstate the maturity of such Claim as such
maturity existed prior to the occurrence of such default, (iii)
compensate the holder of such Claim for any damages incurred as a
consequence of any reasonable reliance by such holder on such
contractual provision or such applicable law, and (iv) not otherwise
alter the legal, equitable, or contractual rights to which the
holder of such Claim is entitled.
or
c. On the later of the Effective Date or the date
on which an Other Secured Claim becomes Allowed, the holder of such
Allowed Other Secured Claim shall be paid the Allowed Amount of such
Claim, in full, in cash. Interest accruing on any Allowed Other
Secured Claim after the Petition Date shall be accrued at the rate
of eight percent (8%) per annum.
3. Status: Class 14 is not impaired. The holders of the
Claims in Class 14 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.15 CLASS 15. CONVENIENCE CLAIMS.
1. Classification: Class 15 consists of all Allowed
Convenience Claims.
2. Treatment: Each holder of an Allowed Convenience
Claim shall be paid the Allowed Amount of its Allowed Convenience Claim, in
full, in cash on the Effective Date.
3. Election: Any holder of an Unsecured Claim that
desires treatment of such Claim as a Convenience Claim shall make such election
on the Ballot to be provided to holders of Unsecured Claims and return such
Ballot to the address specified therein on or before the Ballot Date. Any
election made after the Ballot Date shall not be binding on the Debtors unless
the Ballot Date is expressly waived in writing by the Debtors with respect to
any such Claim.
4. Status: Class 15 is not impaired. The holders of the
Claims in Class 15 are deemed to accept the Plan and, accordingly, are not
entitled to vote to accept or reject the Plan.
3.2.16 CLASS 16. ASBESTOS PROPERTY DAMAGE CLAIMS.
1. Classification: Class 16 consists of all Asbestos
Property Damage Claims.
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<PAGE>
<PAGE>
2. Treatment: All Asbestos Property Damage Claims shall
be determined and paid pursuant to the terms, provisions, and procedures of the
Asbestos PD Trust and the Asbestos PD Trust Agreement and the claims resolution
procedures adopted pursuant thereto and referred to in subsection 4. of this
section . The Asbestos PD Trust will be funded in accordance with the provisions
of section of the Plan. The sole recourse of the holder of an Asbestos Property
Damage Claim shall be the Asbestos PD Trust, and such holder shall have no right
whatsoever at any time to assert its Asbestos Property Damage Claim against the
Reorganized Debtors. Without limiting the foregoing, on the Effective Date, all
entities shall be permanently and forever stayed, restrained, and enjoined from
taking any of the following actions for the purpose of, directly or indirectly,
collecting, recovering, or receiving payment of, on, or with respect to any
Asbestos Property Damage Claims (other than actions brought to enforce any right
or obligation under the Plan, any Exhibits to the Plan, or any other agreement
or instrument between any of the Debtors or the Reorganized Debtors and the
Asbestos PD Trust, which actions shall be in conformity and compliance with the
provisions hereof):
a. commencing, conducting, or continuing in any manner,
directly or indirectly, any suit, action, or other proceeding
(including, without express or implied limitation, a judicial,
arbitral, administrative, or other proceeding) in any forum against
or affecting any of the Reorganized Debtors or any property or
interests in property of any of the Reorganized Debtors;
b. enforcing, levying, attaching (including, without
express or implied limitation, any prejudgment attachment),
collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or
other order against any of the Reorganized Debtors or any property
or interests in property of any of the Reorganized Debtors;
c. creating, perfecting, or otherwise enforcing in any
manner, directly or indirectly, any Encumbrance against any of the
Reorganized Debtors or any property or interests in property of any
of the Reorganized Debtors;
d. setting off, seeking reimbursement of, contribution
from, or subrogation against, or otherwise recouping in any manner,
directly or indirectly, any amount against any liability owed to any
of the Reorganized Debtors or any property or interests in property
of any of the Reorganized Debtors; and
e. proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to the Asbestos PD
Trust, except in conformity and compliance therewith.
3. Selection of Trustees for Asbestos PD Trust: If Class
16 votes to accept the Plan, then the trustees for the Asbestos PD Trust will be
selected by the representatives of each group for which a class proof of claim
asserting Asbestos Property Damage Claims was timely filed in the Chapter 11
Cases. If Class 16 votes to reject the Plan, Eagle-Picher will select one or
more trustees for the Asbestos PD Trust, by notice filed with the Bankruptcy
Court on or before ten (10) days prior to the Confirmation Hearing. Eagle-Picher
reserves the right to select Reorganized Eagle-Picher as the sole trustee of the
Asbestos PD Trust if Class 16 votes to reject the Plan.
4. Claims Resolution Procedures: If Class 16 votes to
accept the Plan, then the trustees for the Asbestos PD Trust will establish
procedures for the allowance and
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<PAGE>
payment of Asbestos Property Damage Claims. If Class 16 votes to reject the
Plan, then the claims resolution procedures attached to the Plan as Exhibit
"1.1.6.5" will govern and control in all respects the allowance and payment of
Asbestos Property Damage Claims.
5. Status: Class 16 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 16 are entitled to vote to accept or reject the Plan.
3.2.17 CLASS 17. ASBESTOS PERSONAL INJURY CLAIMS AND
LEAD PERSONAL INJURY CLAIMS.
1. Classification: Class 17 consists of all Asbestos
Personal Injury Claims and Lead Personal Injury Claims.
2. Treatment: All Asbestos Personal Injury Claims and
Lead Personal Injury Claims shall be determined and paid pursuant to the terms,
provisions, and procedures of the PI Trust and the Asbestos and Lead PI Trust
Agreement. The PI Trust will be funded in accordance with the provisions of
section of the Plan. The sole recourse of the holder of an Asbestos Personal
Injury Claim or Lead Personal Injury Claim shall be the PI Trust, and such
holder shall have no right whatsoever at any time to assert its Asbestos
Personal Injury Claim or Lead Personal Injury Claim, as the case may be, against
any PI Protected Party. Without limiting the foregoing, on the Effective Date,
all Entities shall be permanently and forever stayed, restrained, and enjoined
from taking any of the following actions for the purpose of, directly or
indirectly, collecting, recovering, or receiving payment of, on, or with respect
to any Asbestos Personal Injury Claims or Lead Personal Injury Claims (other
than actions brought to enforce any right or obligation under the Plan, any
Exhibits to the Plan or any other agreement or instrument between any of the
Debtors, or the Reorganized Debtors and the PI Trust, which actions shall be in
conformity and compliance with the provisions hereof):
a. commencing, conducting, or continuing in any manner,
directly or indirectly, any suit, action, or other proceeding
(including, without express or implied limitation, a judicial,
arbitral, administrative, or other proceeding) in any forum against
or affecting any PI Protected Party or any property or interests in
property of any PI Protected Party;
b. enforcing, levying, attaching (including, without
express or implied limitation, any prejudgment attachment),
collecting, or otherwise recovering by any means or in any manner,
whether directly or indirectly, any judgment, award, decree, or
other order against any PI Protected Party or any property or
interests in property of any PI Protected Party;
c. creating, perfecting, or otherwise enforcing in any
manner, directly or indirectly, any Encumbrance against any PI
Protected Party or any property or interests in property of any PI
Protected Party;
d. setting off, seeking reimbursement of, contribution
from, or subrogation against, or otherwise recouping in any manner,
directly or indirectly, any amount against any liability owed to any
PI Protected Party or any property or interests in property of any
PI Protected Party; and
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e. proceeding in any manner in any place with regard to
any matter that is subject to resolution pursuant to the PI Trust,
except in conformity and compliance therewith.
Nothing contained herein shall constitute or be deemed a waiver of any claim,
right, or cause of action that the Debtors, the Reorganized Debtors, or the PI
Trust may have against any Entity in connection with or arising out of an
Asbestos Personal Injury Claim or Lead Personal Injury Claim.
3. Discounted Payment Election: The Ballot to be
distributed to holders of Asbestos Personal Injury Claims will permit such
holders to elect to have their Asbestos Personal Injury Claims processed and
paid pursuant to the discounted payment procedure set forth in the Asbestos and
Lead PI Trust Agreement and the claims resolution procedures adopted pursuant
thereto.
4. Status: Class 17 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 17 are entitled to vote to accept or reject the Plan.
3.2.18 CLASS 18. OTHER PRODUCT LIABILITY TORT CLAIMS.
1. Classification: Class 18 consists of all Other
Product Liability Tort Claims.
2. Treatment: Each holder of an Allowed Other Product
Liability Tort Claim shall receive consideration having a value, determined by
Reorganized Eagle-Picher in good faith, equal to the value that would have been
distributed to such holder if such Allowed Other Product Liability Tort Claim
had been an Allowed Unsecured Claim on the Final Distribution Date; provided,
however, that, in determining the Pro Rata Share that would have been payable if
such Allowed Other Product Liability Tort Claim had been an Allowed Unsecured
Claim, no adjustments shall be made to the denominator of the equation specified
in section ; provided further, that, if any Other Product Liability Tort Claim
becomes known prior to the Final Distribution Date, the Other Product Liability
Tort Claim shall be treated as an Unsecured Claim for all purposes. The
treatment provided herein is not, and shall not be deemed to constitute, a
waiver of any of the Debtors' applicable non-bankruptcy defenses, including
statute of limitations.
3. Status: Class 18 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 18 are entitled to vote to accept or reject the Plan.
3.2.19 CLASS 19. ENVIRONMENTAL CLAIMS.
1. Classification: Class 19 consists of all
Environmental Claims.
2. Treatment: Each holder of an Environmental Claim
shall be entitled to treatment of its Environmental Claim and receive such
consideration as is provided in the settlement agreement applicable to such
Environmental Claim. Without limiting the provisions of such settlement
agreement, each holder of an Environmental Claim, to the extent any portion of
such Environmental Claim becomes Allowed prior to any Distribution, shall
receive on the Initial Distribution Date and the Final Distribution Date its Pro
Rata Share of the Distribution Value less the aggregate value of consideration
(computed as provided herein) previously distributed on account
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of such Allowed portion of the Environmental Claim in any Distribution made
prior thereto. The sole recourse of the holders of Environmental Claims against
the Debtors, the Reorganized Debtors, or any property or interests in property
of the Debtors or the Reorganized Debtors shall be in accordance with the rights
of such holders set forth in such settlement agreement. Nothing contained herein
or in any settlement agreement relating to an Environmental Claim shall
constitute or be deemed a waiver of any claim, right, or cause of action that
the Debtors or the Reorganized Debtors may have against any Entity that is not a
party to such settlement agreement. As to any portion of an Environmental Claim
that becomes Allowed prior to the Initial Distribution Date or the Final
Distribution Date, the holder of such Environmental Claim shall receive its
Distribution Amount in consideration consisting of Available Cash in an amount
equal to one-half (1/2) of the Distribution Amount and Divestiture Notes having
an aggregate principal amount equal to one-half (1/2) of the Distribution
Amount.
3. Status: Class 19 is impaired. The holders of the Claims in
Class 19 are entitled to vote to accept or reject the Plan.
3.2.20 CLASS 20. UNSECURED CLAIMS OTHER THAN CONVENIENCE
CLAIMS AND THE SPECIFIED TREATMENT CLAIMS.
1. Classification: Class 20 consists of Unsecured Claims
other than Convenience Claims and Specified Treatment Claims.
2. Treatment: Each holder of an Allowed Unsecured Claim
in Class 20 shall receive on the Initial Distribution Date and the Final
Distribution Date its Pro Rata Share of the Distribution Value less the
aggregate value of consideration (computed as provided herein) previously
distributed on account of such Allowed Unsecured Claim in any Distribution made
prior thereto. On the Initial Distribution Date and the Final Distribution Date,
each such holder's Distribution Amount shall be paid in consideration consisting
of Available Cash in an amount equal to one-half (1/2) of the Distribution
Amount and Divestiture Notes having an aggregate principal amount equal to
one-half (1/2) of the Distribution Amount.
3. Cancellation of Unsecured Debt Securities: As of the
Effective Date, all notes, agreements, and securities evidencing Unsecured
Claims and the rights of the holders thereof thereunder, including, without
express or implied limitation, the Unsecured Debt Securities and each Unsecured
Debt Securities Indenture, shall be cancelled and deemed null and void and of no
further force and effect, and the holders thereof shall have no rights, and such
instruments shall evidence no rights, except the right to receive the
Distributions provided herein. Notwithstanding the foregoing, such cancellation
shall not impair the rights and duties under each Unsecured Debt Securities
Indenture as between the Unsecured Debt Securities Trustee and the beneficiaries
of the trust created thereby.
4. Surrender of Bearer Unsecured Debt Securities:
Distributions with respect to the Bearer Unsecured Debt Securities shall be made
to the Unsecured Debt Securities Trustee for payment to the individual holders
of Bearer Unsecured Debt Securities. No holder of Bearer Unsecured Debt
Securities shall be entitled to any Distribution unless and until such holder
shall have first surrendered or caused to be surrendered to the Unsecured Debt
Securities Trustee the original Bearer Unsecured Debt Securities held by it or,
in the event that such Unsecured Debt Securities have been lost, destroyed,
stolen, or mutilated, executed and delivered an affidavit of loss and indemnity
with respect thereto in the form customarily utilized for such purposes that is
reasonably satisfactory to the Debtors and the Unsecured Debt Securities Trustee
and, in the event either the Debtors or the Unsecured Debt Securities Trustee
requests, furnished a bond in form and
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substance (including, without express or implied limitation, amount) reasonably
satisfactory to the Debtors or the Unsecured Debt Securities Trustee, as the
case may be. Promptly upon the surrender of any Bearer Unsecured Debt
Securities, the Unsecured Debt Securities Trustee shall cancel such securities
and deliver such cancelled securities to the Reorganized Debtors or otherwise
dispose of such securities in such manner as the Reorganized Debtors may
request. In accordance with section 1143 of the Bankruptcy Code, any holder of
Bearer Unsecured Debt Securities that fails to surrender its Bearer Unsecured
Debt Securities or deliver an affidavit of loss and indemnity as provided herein
within the Retention Period shall be deemed to have forfeited all rights and
claims against the Debtors and the Reorganized Debtors and shall not participate
in any Distribution on account of the Bearer Unsecured Debt Securities. As soon
as practicable after the receipt of the foregoing from the holder of Bearer
Unsecured Debt Securities, the Unsecured Debt Securities Trustee shall make the
Distribution provided hereunder. Thereafter, the Unsecured Debt Securities
Trustee shall maintain a register of the holders of Bearer Unsecured Debt
Securities that have complied with the foregoing provisions of this paragraph
and the amount of Bearer Unsecured Debt Securities held by each such holder, and
any further Distribution made shall be made by the Unsecured Debt Securities
Trustee to the holders reflected on such register.
5. Record Date for Registered Unsecured Debt Securities:
As at the close of business on the Record Date, the transfer ledgers for the
Registered Unsecured Debt Securities shall be closed, and there shall be no
further changes in the record holders of any Registered Unsecured Debt
Securities. Distributions with respect to the Registered Unsecured Debt
Securities shall be made to the Unsecured Debt Securities Trustee for payment to
the record holders of any Registered Unsecured Debt Securities as reflected on
the transfer ledgers for the Registered Unsecured Debt Securities as at the
close of business on the Record Date. The Debtors or the Reorganized Debtors, as
the case may be, and the Unsecured Debt Securities Trustee shall have no
obligation to recognize any transfer of the Registered Unsecured Debt Securities
that is not recorded on the transfer ledgers for the Registered Unsecured Debt
Securities as of the close of business on the Record Date. The Debtors or the
Reorganized Debtors, as the case may be, and the Unsecured Debt Securities
Trustee shall be entitled instead to recognize and deal with, for all purposes
hereunder, only those record holders stated on the transfer ledgers of the
Registered Unsecured Debt Securities Trustee as of the close of business on the
Record Date.
6. Expiration of the Retention Period: Upon the
expiration of the Retention Period, all monies or other property held for
distribution by the Unsecured Debt Securities Trustee shall be returned to the
Reorganized Debtors by the Unsecured Debt Securities Trustee, free and clear of
any claim or interest of any nature whatsoever, including, without express or
implied limitation, escheat rights of any governmental unit under applicable
law.
7. Compensation of the Unsecured Debt Securities
Trustee: The Unsecured Debt Securities Trustee shall be compensated by the
Reorganized Debtors for services rendered from and after the Effective Date,
including the reasonable compensation, disbursements, and expenses of the agents
and legal counsel of the Unsecured Debt Securities Trustee in connection with
the performance of its duties under this section and shall be indemnified by the
Reorganized Debtors for any loss, liability, or expense incurred by it in
connection with the performance of such duties to the same extent and in the
same manner as provided in the Unsecured Debt Securities Indenture.
8. Interest: Interest shall neither accrue nor be
payable with respect to Allowed Unsecured Claims.
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9. Status: Class 20 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 20 are entitled to vote to accept or reject the Plan.
3.2.21 CLASS 21. SPECIFIED TREATMENT CLAIMS.
1. Classification: Class 21 consists of the Specified
Treatment Claims.
2. Treatment: Each holder of a Specified Treatment Claim
shall receive on the Initial Distribution Date and the Final Distribution Date
its Pro Rata Share of the Distribution Value less the aggregate value of
consideration (computed as provided herein) previously distributed on account of
such Specified Treatment Claim in any Distribution made prior thereto. On the
Initial Distribution Date and the Final Distribution Date, each such holder's
Distribution Amount shall be paid in consideration consisting of Available Cash
in an amount equal to one-half (1/2) of the Distribution Amount and Divestiture
Notes having an aggregate principal amount equal to one-half (1/2) of the
Distribution Amount. Notwithstanding the foregoing, the aggregate value of the
Distributions on account of such Specified Treatment Claim shall be no less than
the amount set forth in the settlement agreement pursuant to which such
Specified Treatment Claim became Allowed and shall not exceed the amount set
forth in such settlement agreement.
3. Status: Class 21 is impaired. To the extent and in
the manner provided in the Voting Procedures Order, the holders of the Claims in
Class 21 are entitled to vote to accept or reject the Plan.
3.2.22 CLASS 22. AFFILIATE CLAIMS AND INTERESTS.
1. Classification: Class 22 consists of Affiliate Claims
and Interests.
2. Treatment: At the option of the Debtors and in
accordance with section 1124 of the Bankruptcy Code, the Allowed Affiliate
Claims and Interests shall be treated in one of the following ways:
a. The legal, equitable and contractual rights to
which such Allowed Affiliate Claims and Interests entitle the holder
of any such Claims and Interests shall be unaltered.
or
b. Notwithstanding any contractual provision or
applicable law that entitles the holder of Allowed Affiliate Claims
and Interests to demand or receive payment thereof prior to the
stated maturity thereof from and after the occurrence of a default
under the agreements governing or instruments evidencing such
Allowed Affiliate Claims and Interests, such Affiliate Claims and
Interests shall be reinstated, and the Debtors shall (i) cure all
defaults that occurred before or from and after the Petition Date
(other than defaults of a kind specified in section 365(b)(2) of the
Bankruptcy Code), (ii) reinstate the maturity of such Affiliate
Claims and Interests as such maturity existed prior to the
occurrence of such default, (iii) compensate the holders of such
Affiliate Claims and Interests for any damages incurred as a
consequence of any reasonable reliance by such holder on such
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contractual provision or such applicable law, and (iv) not otherwise
alter the legal, equitable, or contractual rights to which the
holders of such Affiliate Claims and Interests are entitled.
or
c. On the later of the Effective Date or the date
on which any Affiliate Claims and Interests become Allowed, the
holder of such Allowed Affiliate Claims and Interests shall be paid
the Allowed Amount of such Affiliate Claims and Interests, in full,
in cash.
3. Status: Class 22 is not impaired. The holders of
Claims and Interests in Class 22 are deemed to accept the Plan and, accordingly,
are not entitled to vote to accept or reject the Plan.
3.2.23 CLASS 23. PENALTY CLAIMS.
1. Classification: Class 23 consists of Penalty Claims.
2. Treatment: The holders of Penalty Claims will not
receive or retain any interest or property under the Plan.
3. Status: Class 23 is impaired. The holders of Claims
in Class 23 are deemed to reject the Plan and, accordingly, are not entitled to
vote to accept or reject the Plan.
3.2.24 CLASS 24. EQUITY INTERESTS.
1. Classification: Class 24 consists of Equity
Interests.
2. Treatment: The holders of Equity Interests will not
receive or retain any interest or property under the Plan. On the Effective
Date, the certificates that previously evidenced ownership of Existing
Eagle-Picher Common Stock shall be cancelled and shall be null and void, and the
holders thereof shall have no rights, and such certificates shall evidence no
rights.
3. Status: Class 24 is impaired. The holders of Equity
Interests are deemed to reject the Plan and, accordingly, are not entitled to
vote to accept or reject the Plan.
3.3 COMPROMISE AND SETTLEMENT RELATING TO THE AMOUNT OF THE PI TRUST
SHARE. The use of the amount of Two Billion and 00/100 Dollars
($2,000,000,000.00) as the PI Trust Share under the Plan represents a compromise
and settlement between the Plan Proponents and the Unsecured Creditors'
Committee regarding the issues raised in the appeal by the Unsecured Creditors'
Committee of the Bankruptcy Court's Decision and Order on 1) Debtors' Motion to
Estimate Liability and 2) Motion of UCC for Information Gathering, dated
December 4, 1995, and as amended on December 14, 1995, which appeal shall be
deemed dismissed with prejudice on the Effective Date. The Unsecured Creditors'
Committee will take whatever actions are reasonably necessary to effectuate such
dismissal.
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3.4 CONTROVERSY CONCERNING IMPAIRMENT. In the event of a controversy
as to whether any class of Claims or Equity Interests is impaired under the
Plan, the Bankruptcy Court shall, after notice and a hearing, determine such
controversy prior to the Confirmation Date.
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ARTICLE 4
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN
4.1 MODIFICATION OF THE PLAN. The Plan Proponents may, upon the
unanimous written consent of all Plan Proponents, alter, amend, or modify the
Plan under section 1127(a) of the Bankruptcy Code at any time prior to the
Confirmation Date so long as the Plan, as modified, meets the requirements of
sections 1122 and 1123 of the Bankruptcy Code. After the Confirmation Date and
prior to the Effective Date, the Plan Proponents, upon the unanimous written
consent of all Plan Proponents, may alter, amend, or modify the Plan in
accordance with section 1127(b) of the Bankruptcy Code.
4.2 REVOCATION OR WITHDRAWAL.
4.2.1 Right to Revoke. The Plan may be revoked or withdrawn
prior to the Confirmation Date by either (a) after the Confirmation Deadline,
any of the Plan Proponents or (b) upon the unanimous written consent of all Plan
Proponents, the Plan Proponents.
4.2.2 Effect of Withdrawal or Revocation. If the Plan is
revoked or withdrawn prior to the Confirmation Date, then the Plan shall be
deemed null and void. In such event, nothing contained herein shall be deemed to
constitute a waiver or release of any claims by the Debtors or any other Entity
or to prejudice in any manner the rights of the Debtors or any Entity in any
further proceedings involving the Debtors.
4.3 AMENDMENT OF PLAN DOCUMENTS. From and after the Effective Date,
the authority to amend, modify, or supplement the Exhibits to the Plan and any
documents attached to such Exhibits shall be as provided in such Exhibits and
their respective attachments.
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ARTICLE 5
PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS
5.1 OBJECTIONS TO CLAIMS; PROSECUTION OF DISPUTED CLAIMS. The
Reorganized Debtors shall object to the allowance of Claims filed with the
Bankruptcy Court (other than Asbestos Personal Injury Claims, Lead Personal
Injury Claims, and Asbestos Property Damage Claims) with respect to which the
Reorganized Debtors dispute liability in whole or in part. Notwithstanding the
foregoing, the Reorganized Debtors, at their option, may continue to prosecute
objections to Lead Personal Injury Claims and Asbestos Property Damage Claims if
such objections are pending as of the Effective Date. To the extent that
objections to Lead Personal Injury Claims are not pending as of the Effective
Date or the Reorganized Debtors elect not to prosecute pending objections to
Lead Personal Injury Claims, the PI Trust shall be vested with the complete
power and authority to file and prosecute any such objections. To the extent
that objections to Asbestos Property Damage Claims are not pending as of the
Effective Date or the Reorganized Debtors elect not to prosecute pending
objections to Asbestos Property Damage Claims, the Asbestos PD Trust shall be
vested with the complete power and authority to file and prosecute any such
objections. All objections that are filed and prosecuted by the Reorganized
Debtors as provided herein shall be litigated to Final Order by the Reorganized
Debtors or compromised and settled in accordance with the Claims Settlement
Guidelines. Unless otherwise provided herein or ordered by the Bankruptcy Court,
all objections by the Reorganized Debtors to Claims shall be served and filed no
later than one week after the Effective Date.
5.2 AMENDMENT OF CLAIMS SETTLEMENT GUIDELINES. On the Effective
Date, the Claims Settlement Guidelines shall be amended as set forth on Exhibit
"5.2" to the Plan.
5.3 DISTRIBUTIONS ON ACCOUNT OF DISPUTED CLAIMS. Notwithstanding
Section 3.2 hereof, a Distribution shall only be made by the Reorganized Debtors
to the holder of a Disputed Claim when, and to the extent that, such Disputed
Claim becomes Allowed. No interest shall be paid on account of Disputed Claims
that later become Allowed except to the extent that payment of interest is
required under section 506(b) of the Bankruptcy Code. No Distribution shall be
made with respect to all or any portion of any Disputed Claim pending the entire
resolution thereof in the manner prescribed by section hereof.
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ARTICLE 6
ACCEPTANCE OR REJECTION OF THE PLAN
6.1 IMPAIRED CLASSES TO VOTE. Each holder of a Claim in an impaired
class of Claims shall be entitled to vote to accept or reject the Plan to the
extent and in the manner provided by the Voting Procedures Order.
6.2 ACCEPTANCE BY CLASS OF CLAIMS. Acceptance of the Plan by any
impaired class of Claims shall be determined in accordance with the Voting
Procedures Order.
6.3 NONCONSENSUAL CONFIRMATION. Because Classes 23 and 24 are deemed
to have rejected the Plan, the Plan Proponents intend to request that the
Bankruptcy Court confirm the Plan in accordance with section 1129(b) of the
Bankruptcy Code with respect to Classes 23 and 24. In the event that any
impaired class of Claims shall fail to accept the Plan in accordance with
section 1129(a) of the Bankruptcy Code, the Plan Proponents reserve the right to
(a) request that the Bankruptcy Court confirm the Plan in accordance with
section 1129(b) of the Bankruptcy Code with respect to such non-accepting class,
in which case the Plan shall constitute a motion for such relief, or (b) amend
the Plan in accordance with section 4.1 hereof.
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ARTICLE 7
IMPLEMENTATION OF THE PLAN
7.1 AMENDMENT OF ARTICLES OF INCORPORATION. The Articles of
Incorporation shall be amended and restated as of the Effective Date in
substantially the form of the Amended and Restated Articles of Incorporation,
inter alia, (a) to prohibit the issuance of nonvoting equity securities as
required by section 1123(a)(6) of the Bankruptcy Code, subject to further
amendment of such Amended and Restated Articles of Incorporation as permitted by
applicable law, (b) to authorize the cancellation of the Existing Eagle-Picher
Common Stock and the creation of twenty million (20,000,000) shares of New
Eagle-Picher Common Stock, (i) of which ten million (10,000,000) shares shall be
issued to the PI Trust and the holders of Allowed Claims pursuant to the
provisions of the Plan, and (ii) of which ten million (10,000,000) shares shall
be reserved for future issuance, (c) to restrict the transfer of New
Eagle-Picher Common Stock and any other interests that would be treated as
"stock" of Reorganized Eagle-Picher under Section 382 of the Internal Revenue
Code in order to permit the continued utilization of the net operating loss
carryovers, capital loss carryovers, general business credit carryovers,
alternative minimum tax carryovers, foreign tax credit carryovers, and any net
unrealized built-in losses to which Reorganized Eagle-Picher, or any other
member of the consolidated group of which Reorganized Eagle-Picher is the common
parent, is or may be entitled, and (d) to effectuate the provisions of the Plan.
7.2 AMENDMENT OF CODE OF REGULATIONS. The Code of Regulations of
Eagle-Picher shall be amended and restated as of the Effective Date in
substantially the form of the Amended and Restated Code of Regulations.
7.3 DISTRIBUTIONS UNDER THE PLAN. Whenever any Distribution to be
made under this Plan shall be due on a day other than a Business Day, such
Distribution shall instead be made, without interest, on the immediately
succeeding Business Day, but shall be deemed to have been made on the date due.
For federal income tax purposes, a Distribution will be allocated to the
principal amount of a Claim first and then, to the extent the Distribution
exceeds the principal amount of the Claim, to accrued but unpaid interest.
7.4 TIMING OF DISTRIBUTIONS UNDER THE PLAN. Any Distribution to be
made by the Debtors or the Reorganized Debtors pursuant to the Plan shall be
deemed to have been timely made if made within ten (10) days after the time
therefor specified in the Plan. Distributions with respect to Classes 19, 20,
and 21, and to the PI Trust shall only be made on the Initial Distribution Date
and the Final Distribution Date; provided, however, that, if a Claim in any of
Classes 19, 20, or 21 becomes Allowed subsequent to the Initial Distribution
Date, the Reorganized Debtors may, in their sole discretion, make a Distribution
with respect to such Claim prior to the Final Distribution Date. If Class 16
votes to accept the Plan, the Distribution of the Asbestos PD Trust Funding
Obligation will be made on the Effective Date. If Class 16 votes to reject the
Plan, the Distribution of the Asbestos PD Trust Funding Obligation will be made
on the Initial Distribution Date and, to the extent not distributed on the
Initial Distribution Date, the Final Distribution Date.
7.5 MANNER OF PAYMENT UNDER THE PLAN. Unless the Entity receiving a
payment agrees otherwise, any payment in cash to be made by the Debtors or the
Reorganized Debtors shall be made, at the election of the Debtors or the
Reorganized Debtors (as the case may be), by check drawn on a domestic bank or
by wire transfer from a domestic bank.
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7.6 HART-SCOTT-RODINO COMPLIANCE. Any shares of New Eagle-Picher
Common Stock to be distributed under the Plan to any Entity required to file a
Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust
Improvement Act of 1976, as amended, shall not be distributed until the
notification and waiting periods applicable under such Act to such Entity shall
have expired or been terminated.
7.7 FRACTIONAL SHARES OR OTHER DISTRIBUTIONS. Notwithstanding
anything to the contrary contained herein, no fractional shares of New
Eagle-Picher Common Stock shall be distributed, no New Debt Securities will be
issued in an amount equal to fractional cents, and no cash payments of fractions
of cents will be made. Fractional cents shall be rounded to the nearest whole
cent (with .5 cent or less to be rounded down). Fractional shares shall be
rounded to the nearest whole share (with .5 share or less to be rounded down).
7.8 OCCURRENCE OF THE CONFIRMATION DATE. The following shall
constitute conditions to confirmation of the Plan:
7.8.0.1 The Bankruptcy Court makes the following
findings, each of which shall be contained in the Confirmation Order:
7.8.0.1.1 The Asbestos and Lead PI Permanent
Channeling Injunction is to be implemented in connection with the PI
Trust.
7.8.0.1.2 At the time of the order for relief with
respect to Eagle-Picher, Eagle-Picher had been named as a defendant
in personal injury, wrongful death, and property damage actions
seeking recovery for damages allegedly caused by the presence of, or
exposure to, asbestos or asbestos-containing products.
7.8.0.1.3 At the time of the order for relief with
respect to Eagle-Picher, Eagle-Picher had been named as a defendant
in personal injury, wrongful death, and property damage actions
seeking recovery for damages allegedly caused by the presence of, or
exposure to, lead-containing chemicals.
7.8.0.1.4 The PI Trust, as of the Effective Date,
will assume the liabilities of the Debtors with respect to Asbestos
Personal Injury Claims and Lead Personal Injury Claims.
7.8.0.1.5 The PI Trust is to be funded in whole or
in part by securities of one or more of the Debtors and by the
obligations of such Debtors to make future payments, including
dividends.
7.8.0.1.6 The PI Trust is to own, or by the
exercise of rights granted under the Plan would be entitled to own
if specified contingencies occur, a majority of the voting shares of
Eagle-Picher, the direct or indirect parent corporation of each of
the Debtors.
7.8.0.1.7 The Debtors are likely to be subject to
substantial future Demands for payment arising out of the same or
similar conduct or events that gave rise to the Claims that are
addressed by the Asbestos and Lead PI Permanent Channeling
Injunction.
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7.8.0.1.8 The actual amounts, numbers, and timing
of the future Demands referenced in section cannot be determined.
7.8.0.1.9 Pursuit of the Demands referenced in
section outside the procedures prescribed by the Plan is likely to
threaten the Plan's purpose to deal equitably with Claims and future
Demands.
7.8.0.1.10 The terms of the Asbestos and Lead PI
Permanent Channeling Injunction, including any provisions barring
actions against third parties pursuant to section 524(g)(4)(A), are
set out in the Plan and in any disclosure statement supporting the
Plan.
7.8.0.1.11 The Plan establishes, in Class 17
(Asbestos Personal Injury Claims and Lead Personal Injury Claims), a
separate class of the claimants whose Claims are to be addressed by
the PI Trust.
7.8.0.1.12 Class 17 (Asbestos Personal Injury
Claims and Lead Personal Injury Claims) has voted, by at least 75
percent (75%) of those voting, in favor of the Plan.
7.8.0.1.13 Pursuant to court orders or otherwise,
the PI Trust will operate through mechanisms such as structured,
periodic, or supplemental payments, pro rata distributions,
matrices, or periodic review of estimates of the numbers and values
of present Claims and future Demands, or other comparable
mechanisms, that provide reasonable assurance that the PI Trust will
value, and be in a financial position to pay, present Claims and
future Demands that involve similar Claims in the same manner.
7.8.0.1.14 The Future Claimants' Representative
was appointed as part of the proceedings leading to issuance of the
Asbestos and Lead PI Permanent Channeling Injunction for the purpose
of protecting the rights of persons that might subsequently assert
Demands that are addressed in the Asbestos and Lead PI Permanent
Channeling Injunction and transferred to the PI Trust.
7.8.0.1.15 Identifying each PI Protected Party in
the Asbestos and Lead PI Permanent Channeling Injunction is fair and
equitable with respect to persons that might subsequently assert
Demands against each such PI Protected Party, in light of the
benefits provided, or to be provided, to the PI Trust by or on
behalf of any such PI Protected Party.
7.8.0.2 Class 17 (Asbestos Personal Injury Claims and
Lead Personal Injury Claims) votes, by at least 75 percent (75%) of those
voting, in favor of the Plan.
7.8.0.3 The Bankruptcy Court has entered an order
approving the Environmental Settlement Agreement, which shall be
reasonably acceptable to the Plan Proponents, and such order has become a
Final Order.
7.8.0.4 The Confirmation Order shall be, in form and
substance, acceptable to the Plan Proponents.
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The Plan shall not be confirmed and the Confirmation Order shall not be entered
until and unless each of the foregoing conditions to confirmation is either
satisfied or waived by the unanimous vote of the Plan Proponents.
7.9 OCCURRENCE OF THE EFFECTIVE DATE. The "effective date of the
plan," as used in section 1129 of the Bankruptcy Code, shall not occur, and the
Plan shall be of no force and effect, until the Effective Date. The occurrence
of the Effective Date is subject to satisfaction of the following conditions
precedent:
7.9.0.1 The Confirmation Order has become a Final Order, or,
if not, then at least thirty (30) days have elapsed since the Confirmation
Date.
7.9.0.2 The Bankruptcy Court and/or the District Court, as
required, shall have entered the Asbestos and Lead PI Permanent Channeling
Injunction, which shall contain terms satisfactory to the Plan Proponents.
7.9.0.3 The Confirmation Order and the Asbestos and Lead PI
Permanent Channeling Injunction shall be in full force and effect.
7.9.0.4 No proceedings to estimate any Claims are pending.
7.9.0.5 If Class 16 votes to accept the Plan, the trustees for
the Asbestos PD Trust have been selected and have executed the Asbestos PD
Trust Agreement.
7.9.0.6 All Trustees have been selected in accordance with
that certain letter, dated November 9, 1993, from Eagle-Picher to the
Injury Claimants' Committee and the Future Claimants' Representative.
7.9.0.7 All Trustees have executed the Asbestos and Lead PI
Trust Agreement.
7.9.0.8 Certain favorable rulings have been obtained from the
IRS with respect to the qualification of the PI Trust as a "qualified
settlement fund" within the meaning of Treasury Regulation section
1.468B-1.
7.9.0.9 Certain favorable rulings have been obtained from the
IRS with respect to the application of section 382 of the Internal Revenue
Code.
7.9.0.10 The Reorganized Debtors shall have entered into and
shall have credit availability under a credit facility to provide the
Reorganized Debtors with working capital (including letters of credit) in
an amount sufficient to meet the needs of the Reorganized Debtors, as
determined by the Reorganized Debtors.
7.9.0.11 The Asbestos PD Trust Share has been determined to be
no greater than Fifteen Million and 00/100 Dollars ($15,000,000.00).
Notwithstanding the foregoing, the Plan Proponents reserve, in their sole
discretion, the right, upon unanimous agreement of the Plan Proponents, to waive
the occurrence of any of the foregoing conditions precedent to the Effective
Date or to modify any of such conditions precedent; provided, however, that the
waiver or modification of condition set forth in section 7.9.0.11 hereof may
only be made upon the unanimous agreement of the Plan Proponents and the
Unsecured Creditors'
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Committee. Any such waiver of a condition precedent hereof may be effected at
any time, without notice, without leave or order of the Bankruptcy Court, and
without any formal action other than proceeding to consummate the Plan. Any
actions required to be taken on the Effective Date shall take place and shall be
deemed to have occurred simultaneously, and no such action shall be deemed to
have occurred prior to the taking of any other such action. If the Plan
Proponents unanimously decide that one of the foregoing conditions cannot be
satisfied and the occurrence of such condition is not waived by the Plan
Proponents (or, in the case of section 7.9.0.11, the Plan Proponents and the
Unsecured Creditors' Committee), then the Plan Proponents shall file a notice of
the failure of the Effective Date with the Bankruptcy Court, at which time the
Plan and the Confirmation Order shall be deemed null and void.
7.10 DISTRIBUTION OF UNCLAIMED PROPERTY. Any Distribution under the
Plan that is unclaimed after one hundred eighty (180) days following the date
such property is distributed shall be deemed not to have been made and shall be
transferred to the Reorganized Debtors, free and clear of any claims or
interests of any Entities, including, without express or implied limitation, any
claims or interests of any governmental unit under escheat principles. Nothing
contained herein shall affect the discharge of the Claim with respect to which
such Distribution was made, and the holder of such Claim shall be forever barred
from enforcing such Claim against the Reorganized Debtors or the Reorganized
Debtors' assets, estates, properties, or interests in property.
7.11 MANAGEMENT OF THE REORGANIZED DEBTORS. On the Effective Date,
the employment contracts substantially in the form of Exhibit "" to the Plan
automatically shall become effective. On the Effective Date, the Board of
Directors shall consist of the same individuals who sit on the Board of
Directors on the day immediately preceding the Effective Date. Each of the
members of such Board of Directors shall serve until the first annual meeting of
stockholders of Reorganized Eagle-Picher or his or her earlier resignation or
removal in accordance with the Amended and Restated Articles of Incorporation or
the Amended and Restated Code of Regulations. The composition of the board of
directors of each of the Reorganized Debtors, other than Reorganized
Eagle-Picher, shall remain unchanged, subject to the rights of Reorganized
Eagle-Picher and the other shareholders of any such Reorganized Debtor to elect
directors in accordance with the articles of incorporation or bylaws of such
Reorganized Debtor. The officers of the respective Debtors immediately prior to
the Effective Date shall serve as the officers of the respective Reorganized
Debtors on and after the Effective Date in accordance with any employment
agreement with the Reorganized Debtors and applicable nonbankruptcy law.
7.12 SUPPLEMENTAL SEVERANCE PROGRAM. The Supplemental Severance
Program shall be modified as provided in Exhibit "" to the Plan. The
Supplemental Severance Program, as so modified, shall remain in effect
subsequent to the Effective Date, and all benefits shall be payable thereunder
in accordance with the terms thereof, as modified.
7.13 CORPORATE ACTION. On the Effective Date, the adoption of the
Amended and Restated Articles of Incorporation, the filing by Reorganized
Eagle-Picher of the Amended and Restated Articles of Incorporation, and the
adoption of the Amended and Restated Code of Regulations, as contemplated by
section hereof, shall be authorized and approved in all respects, in each case
without further action under applicable law, regulation, order, or rule,
including, without express or implied limitation, any action by the stockholders
or directors of the Debtors, the Debtors in Possession, or the Reorganized
Debtors. On the Effective Date or as soon thereafter as is practicable,
Eagle-Picher shall file with the Secretary of State of the State of Ohio, in
accordance with Ohio Revised Code section 1701.73, the Amended and Restated
Articles of Incorporation. On the Effective Date, the cancellation of the
Existing Eagle-Picher Common Stock, the issuance of the New Eagle-Picher Common
Stock, the issuance of the New Debt Securities, the approval and effectiveness
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of the employment agreements, severance, and other benefits described in
sections 7.11, 7.12, 8.7 and hereof, and other matters provided under the Plan
involving the corporate structure of the Reorganized Debtors or corporate action
by the Reorganized Debtors shall be deemed to have occurred, be authorized, and
shall be in effect from and after the Effective Date without requiring further
action under applicable law, regulation, order, or rule, including, without
express or implied limitation, any action by the stockholders or directors of
the Debtors, the Debtors in Possession, or the Reorganized Debtors. The
Reorganized Debtors shall be authorized to enter into the reorganized credit
facility referenced in section 7.9.0.10 hereof without any further order of the
Bankruptcy Court.
7.14 EFFECTUATING DOCUMENTS AND FURTHER TRANSACTIONS. Each of the
officers of the Debtors and the Reorganized Debtors is authorized, in accordance
with his or her authority under the resolutions of the Board of Directors, to
execute, deliver, file, or record such contracts, instruments, releases,
indentures, and other agreements or documents and take such actions as may be
necessary or appropriate to effectuate and further evidence the terms and
conditions of the Plan and any notes or securities issued pursuant to the Plan.
7.15 DISSOLUTION OF EDI, INC. On or as of the Effective Date, EDI,
Inc. will be dissolved, and such dissolution shall be effective as of the
Effective Date pursuant to the Confirmation Order without any further action by
the stockholder or directors of EDI, Inc.
7.16 ALLOCATION OF PLAN DISTRIBUTIONS BETWEEN PRINCIPAL AND
INTEREST. To the extent that any Allowed Claim entitled to a Distribution under
the Plan is comprised of indebtedness and accrued but unpaid interest thereon,
such Distribution shall, for federal income tax purposes, be allocated to the
principal amount of the Claim first and then, to the extent the consideration
exceeds the principal amount of the Claim, to accrued but unpaid interest.
7.17 DISTRICT COURT APPROVAL OF THE CONFIRMATION ORDER. The Plan
Proponents may seek to have the Confirmation Order and the Asbestos and Lead PI
Permanent Channeling Injunction either entered or affirmed by the District
Court.
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ARTICLE 8
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
8.1 ASSUMPTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Any
executory contracts or unexpired leases listed on Exhibit "8.1" to the Plan
shall be deemed to have been assumed by the Reorganized Debtors on the Effective
Date, and the Plan shall constitute a motion to assume such executory contracts
and unexpired leases. Subject to the occurrence of the Effective Date, entry of
the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute
approval of such assumptions pursuant to section 365(a) of the Bankruptcy Code
and a finding by the Bankruptcy Court that each such assumption is in the best
interest of the Debtors, their estates, and all parties in interest in the
Chapter 11 Cases. With respect to each such executory contract or unexpired
lease assumed by the Reorganized Debtors, unless otherwise determined by the
Bankruptcy Court pursuant to a Final Order or agreed to by the parties thereto
prior to the Effective Date, the dollar amount required to cure any defaults of
the Debtors existing as of the Confirmation Date shall be conclusively presumed
to be the amount set forth in Exhibit "8.1" with respect to such executory
contract or unexpired lease. Subject to the occurrence of the Effective Date,
any such cure amount shall be treated as an Allowed Administrative Expense under
the Plan, and, upon payment of such Allowed Administrative Expense, all defaults
of the Debtors existing as of the Confirmation Date with respect to such
executory contract or unexpired lease shall be deemed cured.
8.2 REJECTION OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Any
executory contracts or unexpired leases of any of the Debtors that (i) are not
listed on Exhibit "8.1" to the Plan, (ii) have not been assumed by any of the
Debtors with the approval of the Bankruptcy Court, and (iii) are not the subject
of pending motions to assume at the Confirmation Date shall be deemed to have
been rejected by the Debtors, the Plan shall constitute a motion to reject such
executory contracts and unexpired leases, and the Reorganized Debtors shall have
no liability thereunder except as is specifically provided in the Plan. Entry of
the Confirmation Order by the Clerk of the Bankruptcy Court shall constitute
approval of such rejections pursuant to section 365(a) of the Bankruptcy Code
and a finding by the Bankruptcy Court that each such rejected executory contract
or unexpired lease is burdensome and that the rejection thereof is in the best
interest of the Debtors, their estates, and all parties in interest in the
Chapter 11 Cases.
8.3 CLAIMS ARISING FROM REJECTION OR TERMINATION. Claims created by
the rejection of executory contracts or unexpired leases (including, without
limitation, the rejection provided in Section of the Plan) or the expiration or
termination of any executory contract or unexpired lease prior to the
Confirmation Date must be filed with the Bankruptcy Court and served on the
Debtors no later than thirty (30) days after (i) in the case of an executory
contract or unexpired lease that was terminated or expired by its terms prior to
the Confirmation Date, the Confirmation Date, (ii) in the case of an executory
contract or unexpired lease rejected by the Debtors, the entry of the order of
the Bankruptcy Court authorizing such rejection, or (iii) in the case of an
executory contract or unexpired lease that is deemed rejected pursuant to
section 8.2 of the Plan, the Confirmation Date. Any Claims for which a proof of
claim is not filed and served within such time will be forever barred from
assertion and shall not be enforceable against the Debtors, their estates,
assets, properties, or interests in property, or the Reorganized Debtors or
their estates, assets, properties, or interests in property. Unless otherwise
ordered by the Bankruptcy Court, all such Claims that are timely filed as
provided herein shall be treated as Unsecured Claims under the Plan.
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8.4 PREVIOUSLY SCHEDULED CONTRACTS. Exhibit "8.4" to the Plan sets
forth a list of agreements that were listed on the Schedules as executory
contracts, but which the Debtors believe should not be considered executory
contracts. If any such agreements are determined to be executory contracts, the
Debtors or the Reorganized Debtors, as the case may be, reserve the right to
seek the assumption or rejection of any such contracts, and the time within
which the Debtors or the Reorganized Debtors, as the case may be, may seek to
assume or reject any such agreements shall be tolled until ten (10) Business
Days after the date on which an order determining that any such agreement is an
executory contract becomes a Final Order. Set forth on Exhibit "8.4" is the
amount that the Debtors intend to treat as an Allowed Unsecured Claim for each
such agreement. Such amount and the treatment of each such agreement shall be
binding unless, on or before ten (10) days after the Confirmation Date, the
other party to any such agreement either (i) files a proof of claim (which proof
of claim shall be deemed timely filed) or (ii) files a motion seeking to compel
assumption or rejection of such agreement.
8.5 INSURANCE POLICIES.
8.5.1 Assumed Insurance Policies. To the extent that any or
all of the insurance policies set forth on Exhibit "8.5.1" to the Plan are
considered to be executory contracts, then, notwithstanding anything contained
in sections 8.1 and 8.2 of the Plan to the contrary, the Plan shall constitute a
motion to assume the insurance policies set forth on Exhibit "8.5.1" to the
Plan, and, subject to the occurrence of the Effective Date, the entry of the
Confirmation Order by the Clerk of the Bankruptcy Court shall constitute
approval of such assumption pursuant to section 365(a) of the Bankruptcy Code
and a finding by the Bankruptcy Court that each such assumption is in the best
interest of the Debtors, their estates, and all parties in interest in the
Chapter 11 Cases. Unless otherwise determined by the Bankruptcy Court pursuant
to a Final Order or agreed to by the parties thereto prior to the Effective
Date, no payments are required to cure any defaults of the Debtors existing as
of the Confirmation Date with respect to each such insurance policy set forth on
Exhibit "8.5.1" to the Plan. To the extent that the Bankruptcy Court determines
otherwise as to any such insurance policy, the Debtors reserve the right to seek
rejection of such insurance policy or other available relief.
8.5.2 Rejected Insurance Agreements. To the extent that any or
all of the insurance agreements set forth on Exhibit "8.5.2" to the Plan are
considered to be executory contracts, then, notwithstanding anything contained
in sections 8.1 and 8.2 of the Plan to the contrary, the Plan shall constitute a
motion to reject the insurance agreements set forth on Exhibit "8.5.2" to the
Plan, and the entry of the Confirmation Order by the Clerk of the Bankruptcy
Court shall constitute approval of such rejection pursuant to section 365(a) of
the Bankruptcy Code and a finding by the Bankruptcy Court that each such
rejected insurance agreement set forth on Exhibit "8.5.2" to the Plan is
burdensome and that the rejection thereof is in the best interest of the
Debtors, their estates, and all parties in interest in the Chapter 11 Cases.
8.5.3 Reservation of Rights. Nothing contained in the Plan,
including this section , shall constitute a waiver of any claim, right, or cause
of action that the Debtors or the Reorganized Debtors, as the case may be, may
hold against the insurer under any policy of insurance.
8.6 INDEMNIFICATION AND REIMBURSEMENT OBLIGATIONS. For purposes of
the Plan, the obligations of the Debtors to indemnify and reimburse their
directors or officers that were directors or officers, respectively, as at the
Petition Date or who became directors or officers after the Petition Date
against and for any obligations pursuant to articles of incorporation, codes of
regulations, bylaws, applicable state law, or specific agreement, or any
combination of the foregoing
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shall survive confirmation of the Plan, remain unaffected thereby, and not be
discharged in accordance with section 1141 of the Bankruptcy Code, irrespective
of whether indemnification or reimbursement is owed in connection with an event
occurring before, on, or after the Petition Date.
8.7 COMPENSATION AND BENEFIT PROGRAMS. All employment and severance
policies (including, without limitation, the Supplemental Severance Program, as
modified pursuant to section hereof), and all compensation and benefit plans,
policies and programs of the Debtors applicable to their present and former
employees, officers, and directors, including, without express or implied
limitation, all savings plans, retirement plans, health care plans, disability
plans, severance benefit plans, incentive plans, and life, accidental death, and
dismemberment insurance plans, shall be deemed to be, and shall be treated as
though they are, executory contracts that are deemed assumed under the Plan, and
the Debtors' obligations under such plans, policies, and programs shall be
deemed assumed pursuant to section 365(a) of the Bankruptcy Code, survive
confirmation of the Plan, remain unaffected thereby, and not be discharged in
accordance with section 1141 of the Bankruptcy Code. Any defaults existing under
any of such plans, policies, and programs shall be cured promptly after they
become known by the Debtors. Notwithstanding the foregoing, on the Effective
Date, the Eagle-Picher Automatic Dividend Reinvestment and Voluntary Cash
Payment Plan, the Eagle-Picher Industries, Inc. Stock Option Plan of 1983, as
amended, and the Eagle-Picher Industries, Inc. Stock Option Plan of 1990 will be
deemed terminated, cancelled, and of no further force and effect, and the
participants thereunder shall have no further rights thereunder.
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ARTICLE 9
RETENTION OF JURISDICTION
Pursuant to sections 105(a) and 1142 of the Bankruptcy Code, the
Bankruptcy Court shall retain and shall have exclusive jurisdiction over any
matter (a) arising under the Bankruptcy Code, (b) arising in or related to the
Chapter 11 Cases or the Plan, or (c) that relates to the following:
9.1 To interpret, enforce, and administer the terms of the Asbestos
and Lead PI Trust Agreement (including all annexes and exhibits thereto), the
Asbestos PD Trust Agreement (including all annexes and exhibits thereto), and
the restrictions on transfer of New Eagle-Picher Common Stock, Asbestos Personal
Injury Claims, Asbestos Property Damage Claims, and Lead Personal Injury Claims
contained in the Amended and Restated Articles of Incorporation and the
Confirmation Order.
9.2 To hear and determine any and all motions or applications
pending on the Confirmation Date for the assumption and/or assignment or
rejection of executory contracts or unexpired leases to which any of the Debtors
is a party or with respect to which any of the Debtors may be liable, and to
hear and determine any and all Claims resulting therefrom or from the expiration
or termination of any executory contract or unexpired lease prior to the
Confirmation Date;
9.3 To determine any and all adversary proceedings, applications,
motions, and contested or litigated matters that may be pending on the Effective
Date or that, pursuant to the Plan, may be instituted by any of the Reorganized
Debtors after the Effective Date, including, without express or implied
limitation, any claims to avoid any preferences, fraudulent transfers, or other
voidable transfers, or otherwise to recover assets for the benefit of the
Debtors' estates;
9.4 To hear and determine any objections to the allowance of Claims
arising prior to the Effective Date, whether filed, asserted, or made before or
after the Effective Date, including, without express or implied limitation, to
hear and determine any objections to the classification of any Claim and to
allow or disallow any Disputed Claim in whole or in part;
9.5 To issue such orders in aid of execution of the Plan to the
extent authorized or contemplated by section 1142 of the Bankruptcy Code;
9.6 To consider any modifications of the Plan, remedy any defect or
omission, or reconcile any inconsistency in any order of the Bankruptcy Court,
including, without express or implied limitation, the Confirmation Order;
9.7 To hear and determine all applications for allowances of
compensation and reimbursement of expenses of professionals under sections 330
and 331 of the Bankruptcy Code and any other fees and expenses authorized to be
paid or reimbursed under the Plan;
9.8 To hear and determine all controversies, suits, and disputes
that may relate to, impact upon, or arise in connection with the Plan (and all
Exhibits to the Plan) or its interpretation, implementation, enforcement, or
consummation;
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9.9 To the extent that Bankruptcy Court approval is required, to
consider and act on the compromise and settlement of any Claim or cause of
action by or against the Debtors' estates;
9.10 To determine such other matters that may be set forth in the
Plan, the Confirmation Order, the Claims Trading Injunction, or the Asbestos and
Lead PI Permanent Channeling Injunction, or that may arise in connection with
the Plan, the Confirmation Order, the Claims Trading Injunction, or the Asbestos
and Lead PI Permanent Channeling Injunction;
9.11 To hear and determine any proceeding that involves the
validity, application, construction, enforceability, or modification of the
Claims Trading Injunction or the Asbestos and Lead PI Permanent Channeling
Injunction or of the application of section 524(g) of the Bankruptcy Code to the
Asbestos and Lead PI Permanent Channeling Injunction.
9.12 To hear and determine matters concerning state, local, and
federal taxes, fines, penalties, or additions to taxes for which the Debtors or
Debtors in Possession may be liable, directly or indirectly, in accordance with
sections 346, 505, and 1146 of the Bankruptcy Code; and
9.13 To enter an order or final decree closing the Chapter 11 Cases.
To the extent that the Bankruptcy Court is not permitted under applicable law to
preside over any of the foregoing matters, the reference to the "Bankruptcy
Court" in this Article 9 shall be deemed to be replaced by the "District Court."
Notwithstanding anything in this Article 9 to the contrary, the allowance of
Asbestos Personal Injury Claims and Lead Personal Injury Claims (other than any
such Claims as to which the Reorganized Debtors prosecute objections pursuant to
section hereof) and the forum in which such allowance will be determined will be
governed by and in accordance with the procedures established by the Asbestos
and Lead PI Trust Agreement and the Trustees, and the allowance of Asbestos
Property Damage Claims (other than any such Claims as to which the Reorganized
Debtors prosecute objections pursuant to section 5.1 hereof) and the forum in
which such allowance will be determined will be governed by and in accordance
with the procedures established by the Asbestos PD Trust Agreement and the
trustees for the Asbestos PD Trust.
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ARTICLE 10
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF
CERTAIN LIABILITIES BY THE PI TRUST
10.1 TRANSFER OF CERTAIN PROPERTY TO THE PI TRUST.
10.1.1 Transfer of Books and Records. On the Effective Date or
as soon thereafter as is practicable, the Reorganized Debtors shall transfer and
assign, or cause to be transferred and assigned, to the PI Trust the books and
records of the Debtors that pertain directly to Asbestos Personal Injury Claims
or Lead Personal Injury Claims that have been asserted against the Debtors
(except, in the case of Lead Personal Injury Claims, to the extent that any such
Lead Personal Injury Claims are the subject of an objection brought by any of
the Debtors and which the Reorganized Debtors prosecute in accordance with
section 5.1 hereof, in which case the books and records pertaining to such Lead
Personal Injury Claims will be transferred to the PI Trust as soon as
practicable after such objection has been resolved by a Final Order). The Plan
Proponents will request that the Bankruptcy Court, in the Confirmation Order,
rule that such transfer does not result in the destruction or waiver of any
applicable privileges pertaining to such books and records. If the Bankruptcy
Court does not so rule, at the option of the Plan Proponents, the Reorganized
Debtors will retain the books and records and enter into arrangements to permit
the PI Trust to have access to such books and records.
10.1.2 Transfer of Certain Insurance Rights. Certain rights to
insurance, to be agreed upon by the Plan Proponents (each in its sole
discretion), also will be transferred to the PI Trust on the Effective Date.
10.1.3 Transfer of Plan Consideration. On the Initial
Distribution Date, the Reorganized Debtors shall transfer and assign, or cause
to be transferred and assigned, to the PI Trust all right, title, and interest
in and to the Pro Rata Share with respect to the PI Trust Share of the
Distribution Value. Such Pro Rata Share shall be payable to the PI Trust in the
following consideration: (i) first, the Tax Refund Notes; (ii) second, ten
million (10,000,000) shares of New Eagle-Picher Common Stock, (iii) third, to
the extent that the value of consideration paid under (i) and (ii) of this
section 10.1.3 is less than such Pro Rata Share, the amount of Available Cash
remaining after making all Distributions required to be made to the holders of
Claims in Classes 19, 20, and 21 of the Plan on the Initial Distribution Date
less the amount of Available Cash that may be required to be paid to the holders
of Claims in Classes 19, 20, and 21 of the Plan if all Disputed Claims become
Allowed in the full Disputed Amount; (iv) fourth, if the value of consideration
paid under (i), (ii), and (iii) of this section 10.1.3 is less than such Pro
Rata Share, Senior Unsecured Sinking Fund Debentures in an aggregate principal
amount equal to the lesser of (a) the remaining amount of such Pro Rata Share
after payment of the consideration under (i), (ii), and (iii) of this section
10.1.3 and (b) the aggregate principal amount of Senior Unsecured Sinking Fund
Debentures remaining after making any Distribution required to be made to the
Asbestos PD Trust on the Initial Distribution Date less the aggregate amount of
Senior Unsecured Sinking Fund Debentures that may be required to be distributed
to the Asbestos PD Trust if all Disputed Claims are disallowed; and (v) fifth,
to the extent that the value of consideration paid under (i), (ii), (iii), and
(iv) of this section 10.1.3 is less than such Pro Rata Share, Divestiture Notes
in an aggregate principal amount equal to the lesser of (x) the remaining amount
of such Pro Rata Share after payment of the consideration under (i), (ii),
(iii), and (iv) of this section 10.1.3 and (y) the aggregate principal amount of
Divestiture Notes remaining after making all Distributions required to be made
to the holders of Claims in Classes 19, 20, and 21 of the Plan on the Initial
Distribution Date less the aggregate
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amount of Divesture Notes that may be required to be paid to the holders of
Claims in Classes 19, 20, and 21 of the Plan if all Disputed Claims become
Allowed in the full Disputed Amount. On the Final Distribution Date, the
Reorganized Debtors shall transfer and assign, or cause to be transferred and
assigned, to the PI Trust all right, title, and interest in and to the Available
Cash, Senior Unsecured Sinking Fund Debentures, Divestiture Notes, and shares of
New Eagle-Picher Common Stock remaining after making all other Distributions
required to be made under the Plan on the Final Distribution Date.
10.2 ASSUMPTION OF CERTAIN LIABILITIES BY THE PI TRUST. In
consideration for the property transferred to the PI Trust pursuant to section
10.1 hereof and in furtherance of the purposes of the PI Trust and the Plan, the
PI Trust shall assume all liability and responsibility for all Asbestos Personal
Injury Claims and Lead Personal Injury Claims, and the Reorganized Debtors shall
have no further financial or other responsibility or liability therefor.
10.3 CERTAIN PROPERTY HELD IN TRUST BY THE REORGANIZED DEBTORS. If
and to the extent that any property of the Reorganized Debtors specified in
section 10.1 hereof, under applicable law or any binding contractual provision,
cannot be effectively transferred and assigned to the PI Trust pursuant to
section 10.1 hereof, or if for any reason after the Effective Date the
Reorganized Debtors shall retain or receive any property that is owned by the
Reorganized Debtors or the Debtors (as the case may be) and is to be transferred
to the PI Trust pursuant to section 10.1 hereof, then the Reorganized Debtors
shall hold such property (and any proceeds thereof) in trust for the benefit of
the PI Trust and shall take such actions with respect to such property (and any
proceeds thereof) as the Trustees shall direct in writing. The Reorganized
Debtors shall provide to the Trustees reasonable access to the relevant books
and records of the Debtors and the Reorganized Debtors during normal business
hours for the purpose of assisting the Trustees in defending against the
Asbestos Personal Injury Claims and Lead Personal Injury Claims and otherwise
administering the PI Trust.
10.4 AUTHORITY OF THE DEBTORS. On the Confirmation Date, the Debtors
shall be empowered and authorized to take or cause to be taken, prior to the
Effective Date, all actions necessary to enable them to implement effectively
the provisions of the Plan and the PI Trust Agreement.
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ARTICLE 11
TRANSFERS OF PROPERTY TO AND ASSUMPTION OF
CERTAIN LIABILITIES BY THE ASBESTOS PD TRUST
11.1 TRANSFER OF CERTAIN PROPERTY TO THE ASBESTOS PD TRUST. On the
Effective Date or as soon thereafter as is practicable, the Reorganized Debtors
shall transfer and assign, or cause to be transferred and assigned, to the
Asbestos PD Trust the books and records of the Debtors that pertain directly to
Asbestos Property Damage Claims that have been asserted against the Debtors
(except to the extent that any Asbestos Property Damage Claims are the subject
of an objection brought by any of the Debtors and which the Reorganized Debtors
prosecute in accordance with section 5.1 hereof, in which case the books and
records pertaining to such Asbestos Property Damage Claims will be transferred
to the Asbestos PD Trust as soon as practicable after such objection has been
resolved by a Final Order). The Plan Proponents will request that the Bankruptcy
Court, in the Confirmation Order, rule that such transfer does not result in the
destruction or waiver of any applicable privileges pertaining to such books and
records. If the Bankruptcy Court does not so rule, at the option of the Plan
Proponents, the Reorganized Debtors will retain the books and records and enter
into arrangements to permit the Asbestos PD Trust to have access to such books
and records. If Class 16 votes to accept the Plan, then, on the Effective Date,
the Reorganized Debtors shall transfer and assign, or cause to be transferred
and assigned, to the Asbestos PD Trust the Asbestos PD Trust Funding Obligation.
If Class 16 votes to reject the Plan, then, on the Initial Distribution Date and
the Final Distribution Date, the Reorganized Debtors shall transfer and assign,
or cause to be transferred and assigned, to the Asbestos PD Trust all right,
title, and interest in and to the Pro Rata Share of the Asbestos PD Trust of the
Distribution Value by the transfer to the Asbestos PD Trust of Senior Unsecured
Sinking Fund Debentures in the aggregate principal amount equal to such Pro Rata
Share of the Distribution Value less the aggregate principal amount of Senior
Unsecured Sinking Fund Debentures previously transferred to the Asbestos PD
Trust in any Distribution made prior thereto.
11.2 ASSUMPTION OF CERTAIN LIABILITIES BY THE ASBESTOS PD TRUST. In
consideration for the property transferred to the Asbestos PD Trust pursuant to
section 11.1 hereof and in furtherance of the purposes of the Asbestos PD Trust
and the Plan, the Asbestos PD Trust shall assume all liability and
responsibility for all Asbestos Property Damage Claims, and the Reorganized
Debtors shall have no further financial or other responsibility or liability
therefor.
11.3 CERTAIN PROPERTY HELD IN TRUST BY THE REORGANIZED DEBTORS. If
and to the extent that any property of the Reorganized Debtors specified in
section 11.1 hereof, under applicable law or any binding contractual provision,
cannot be effectively transferred and assigned to the Asbestos PD Trust pursuant
to section hereof, or if for any reason after the Effective Date the Reorganized
Debtors shall retain or receive any property that is owned by the Reorganized
Debtors or the Debtors (as the case may be) and is to be transferred to the
Asbestos PD Trust pursuant to section 11.1 hereof, then the Reorganized Debtors
shall hold such property (and any proceeds thereof) in trust for the benefit of
the Asbestos PD Trust and shall take such actions with respect to such property
(and any proceeds thereof) as the trustees of the Asbestos PD Trust shall direct
in writing. The Reorganized Debtors shall provide to the trustees of the
Asbestos PD Trust reasonable access to the relevant books and records of the
Debtors and the Reorganized Debtors during normal business hours for the purpose
of assisting the trustees of the Asbestos PD Trust in defending against the
Asbestos Property Damage Claims and otherwise administering the Asbestos PD
Trust.
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11.4 AUTHORITY OF THE DEBTORS. On the Confirmation Date, the Debtors
shall be empowered and authorized to take or cause to be taken, prior to the
Effective Date, all actions necessary to enable them to implement effectively
the provisions of the Plan and the Asbestos PD Trust Agreement.
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ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 PAYMENT OF STATUTORY FEES. All fees payable pursuant to section
1930 of title 28 of the United States Code, as determined by the Bankruptcy
Court at the hearing on confirmation of the Plan, shall be paid by the Debtors
on or before the Effective Date.
12.2 DISCHARGE OF THE DEBTORS. The rights afforded in the Plan and
the treatment of all Claims and Equity Interests herein shall be in exchange for
and in complete satisfaction, discharge, and release of all Claims and Equity
Interests of any nature whatsoever, including any interest accrued thereon from
and after the Petition Date, against the Debtors and the Debtors in Possession,
or any of their estates, assets, properties, or interests in property. Except as
otherwise provided herein, on the Effective Date, all Claims against and Equity
Interests in the Debtors and the Debtors in Possession shall be satisfied,
discharged, and released in full. The Reorganized Debtors shall not be
responsible for any obligations of the Debtors or the Debtors in Possession
except those expressly assumed by the Reorganized Debtors in the Plan. All
Entities shall be precluded and forever barred from asserting against the
Debtors, the Reorganized Debtors, their respective successors or assigns, or
their assets, properties, or interests in property any other or further Claims
based upon any act or omission, transaction, or other activity of any kind or
nature that occurred prior to the Effective Date, whether or not the facts of or
legal bases therefor were known or existed prior to the Effective Date.
12.3 RIGHTS OF ACTION. Any rights, claims, or causes of action
accruing to the Debtors or Debtors in Possession pursuant to the Bankruptcy Code
or pursuant to any statute or legal theory, including, without express or
implied limitation, any avoidance or recovery actions under sections 544, 545,
547, 548, 549, 550, 551, and 553 of the Bankruptcy Code and any rights to,
claims, or causes of action for recovery under any policies of insurance issued
to or on behalf of any of the Debtors or Debtors in Possession shall remain
assets of the Debtors' estates and, on the Effective Date, shall be transferred
to the Reorganized Debtors. The Reorganized Debtors shall be deemed the
appointed representative to, and may, pursue, litigate, and compromise and
settle any such rights, claims, or causes of action, as appropriate, in
accordance with what is in the best interests of and for the benefit of the
Reorganized Debtors.
12.4 THIRD PARTY AGREEMENTS. The Distributions to the various
classes of Claims hereunder shall not affect the right of any Entity to levy,
garnish, attach, or employ any other legal process with respect to such
Distributions by reason of any claimed subordination rights or otherwise. All of
such rights and any agreements relating thereto shall remain in full force and
effect.
12.5 DISSOLUTION OF COMMITTEES. On the Effective Date, the Future
Claimants' Representative, the Injury Claimants' Committee, the Unsecured
Creditors' Committee, and the Equity Security Holders' Committee shall thereupon
be released and discharged of and from all further authority, duties,
responsibilities, and obligations relating to and arising from and in connection
with the Chapter 11 Cases, and all such committees shall be deemed dissolved and
the Future Claimants' Representative's appointment terminated; provided,
however, that, in the event that the Effective Date occurs prior to the
Confirmation Order becoming a Final Order, the Unsecured Creditors' Committee,
Future Claimants' Representative, and the Injury Claimants' Committee may, at
their option, continue to serve and function for the sole purpose of
participating in any appeal of the Confirmation Order until such time as the
Confirmation Order becomes a Final Order.
A-52
<PAGE>
<PAGE>
12.6 EXCULPATION. None of the Reorganized Debtors, any of the Plan
Proponents, or any of their officers, directors, employees, or agents shall have
or incur any liability to any Entity for any act or omission in connection with
or arising out of the pursuit of confirmation of the Plan, the consummation of
the Plan, or the administration of the Plan or the property to be distributed
under the Plan, except for gross negligence or willful misconduct, and in all
respects shall be entitled to rely upon the advice of counsel with respect to
their duties and responsibilities under the Plan.
12.7 TITLE TO ASSETS; DISCHARGE OF LIABILITIES. Except as otherwise
provided in the Plan, on the Effective Date, title to all assets and properties
and interests in property dealt with by the Plan shall vest in the Reorganized
Debtors free and clear of all Claims, Equity Interests, Encumbrances, and other
interests, and the Confirmation Order shall be a judicial determination of
discharge of the liabilities of the Debtors, except as provided in the Plan.
12.8 SURRENDER AND CANCELLATION OF INSTRUMENTS. In addition to the
provisions of section hereof, each holder of a promissory note or other
instrument evidencing a Claim shall surrender such promissory note or instrument
to the Reorganized Debtors, and the Reorganized Debtors shall distribute or
cause to be distributed to the holder thereof the appropriate Distribution
hereunder. At the option of the Reorganized Debtors (in their sole and absolute
discretion), no Distribution hereunder shall be made to or on behalf of any
holder of such Claim unless and until such promissory note or instrument is
received or the unavailability of such note or instrument is reasonably
established to the satisfaction of the Reorganized Debtors. In accordance with
section 1143 of the Bankruptcy Code, any such holder of such a Claim that fails
to surrender or cause to be surrendered such promissory note or instrument or to
execute and deliver an affidavit of loss and indemnity reasonably satisfactory
to the Reorganized Debtors and, in the event that the Reorganized Debtors
request, furnish a bond in form and substance (including, without limitation,
amount) reasonably satisfactory to the Reorganized Debtors within the Retention
Period shall be deemed to have forfeited all rights, claims, and interests and
shall not participate in any Distribution hereunder.
12.9 NOTICES. Any notices, requests, and demands required or
permitted to be provided under the Plan, in order to be effective, shall be in
writing (including, without express or implied limitation, by facsimile
transmission), and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made when actually delivered or, in the case of
notice by facsimile transmission, when received and telephonically confirmed,
addressed as follows:
If to the Debtors: Eagle-Picher Industries, Inc.
Attention: General Counsel
IF BY HAND OR OVERNIGHT DELIVERY:
580 Building
580 Walnut Street
Suite 1300
Cincinnati, Ohio 45202
A-53
<PAGE>
<PAGE>
IF BY MAIL:
Post Office Box 779
Cincinnati, Ohio 45201
Telecopier: (513) 721-3404
Telephone Confirmation: (513) 629-2400
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen Karotkin, Esq.
Telecopier: (212) 310-8007
Telephone Confirmation: (212) 310-8888
and
Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
Attention: Edmund J. Adams, Esq.
Telecopier: (513) 651-6981
Telephone Confirmation: (513) 651-6800
If to the Injury
Claimants'
Committee: Robert E. Sweeney, Esq.
Robert E. Sweeney Co., L.P.A.
Suite 1500, Illuminating Building
55 Public Square
Cleveland, Ohio 44113
Telecopier: (216) 696-0732
Telephone Confirmation: (216) 696-0606
and
Keating, Muething & Klekamp
1800 Provident Tower
One East Fourth Street
Cincinnati, Ohio 45202
Attention: Kevin E. Irwin, Esq.
Telecopier: (513) 579-6457
Telephone Confirmation: (513) 579-6400
A-54
<PAGE>
<PAGE>
If to the Future
Representative: James J. G. McMonagle, Esq.
24 Walnut
Chagrin Falls, Ohio 44022
Telecopier: (216) 696-1210
Telephone Confirmation: (216) 696-1422
and
McCarthy, Lebit, Crystal & Haiman Co., LPA
1800 Midland Building
101 Prospect Avenue, West
Cleveland, Ohio 44115
Attention: Robert S. Balantzow, Esq.
Telecopier: (216) 696-1210
Telephone Confirmation: (216) 696-1422
12.10 HEADINGS. The headings used in the Plan are inserted for
convenience only and neither constitute a portion of the Plan nor in any manner
affect the construction of the provisions of the Plan.
12.11 SEVERABILITY. At the unanimous option of the Plan Proponents
acting in their sole discretion, any provision of the Plan, the Claims Trading
Injunction, the Confirmation Order, the Asbestos and Lead PI Permanent
Channeling Injunction, or any of the Exhibits to the Plan that is prohibited,
unenforceable, or invalid shall, as to any jurisdiction in which such provision
is prohibited, unenforceable, or invalidated, be ineffective to the extent of
such prohibition, unenforceability, or invalidation without invalidating the
remaining provisions of the Plan, the Claims Trading Injunction, the
Confirmation Order, the Asbestos and Lead PI Permanent Channeling Injunction,
and the Exhibits to the Plan or affecting the validity or enforceability of such
provisions in any other jurisdiction.
12.12 GOVERNING LAW. Unless a rule of law or procedure is supplied
by federal law (including the Bankruptcy Code and Bankruptcy Rules), the laws of
the State of Ohio, without giving effect to the conflicts of laws principles
thereof, shall govern the construction of the Plan and any agreements,
documents, and instruments executed in connection with the Plan, except as
otherwise expressly provided in such instruments, agreements or documents.
12.13 FILING OF ADDITIONAL DOCUMENTS. On or before the Effective
Date, the Debtors shall file with the Bankruptcy Court such agreements and other
documents as may be necessary or appropriate to effectuate and further evidence
the terms and conditions of the Plan.
12.14 COMPLIANCE WITH TAX REQUIREMENTS. In connection with the Plan,
the Debtors will comply with all withholding and reporting requirements imposed
by federal, state and local taxing authorities, and all distributions hereunder
shall be subject to such withholding and reporting requirements.
A-55
<PAGE>
<PAGE>
12.15 EXEMPTION FROM TRANSFER TAXES. Pursuant to section 1146(c) of
the Bankruptcy Code, the issuance, transfer, or exchange of notes or equity
securities under the Plan, the creation of any mortgage, deed of trust, or other
security interest, the making or assignment of any lease or sublease, or the
making or delivery of any deed or other instrument of transfer under, in
furtherance of, or in connection with the Plan, including, without express or
implied limitation, the liens and security interests provided under the
reorganized credit facility referenced in section 7.9.0.10 hereof, shall not be
subject to any stamp, real estate transfer, mortgage recording, or other similar
tax.
Dated: Cincinnati, Ohio
August 28, 1996
Respectfully submitted,
EAGLE-PICHER INDUSTRIES, INC.
By: /s/ THOMAS E. PETRY
-----------------------------------------
Name: Thomas E. Petry
Title: Chairman of the Board and Chief
Executive Officer
DAISY PARTS, INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Secretary
TRANSICOIL INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
MICHIGAN AUTOMOTIVE RESEARCH
CORPORATION
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
A-56
<PAGE>
<PAGE>
EDI, INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Assistant Secretary
EAGLE-PICHER MINERALS, INC.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Secretary
HILLSDALE TOOL & MANUFACTURING CO.
By: /s/ JAMES A. RALSTON
-----------------------------------------
Name: James A. Ralston
Title: Secretary
WEIL, GOTSHAL & MANGES LLP
Co-Attorneys for Eagle-Picher
Industries, Inc., et al.
Chapter 11 Debtors in Possession
767 Fifth Avenue
New York, New York 10153
(212) 310-8000
and
FROST & JACOBS
Co-Attorneys for Eagle-Picher
Industries, Inc., et al.
Chapter 11 Debtors in Possession
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
(513) 651-6800
A-57
<PAGE>
<PAGE>
JAMES J.G. McMONAGLE,
THE FUTURE CLAIMANTS'
REPRESENTATIVE
/s/ JAMES J.G. McMONAGLE
--------------------------------------------
McCarthy, Lebit, Crystal &
Haiman Co., LPA
Attorneys for the Future
Claimants' Representative
1800 Midland Building
101 Prospect Avenue, West
Cleveland, Ohio 44115
(216) 696-1422
THE INJURY CLAIMANTS' COMMITTEE
By: /s/ ROBERT E. SWEENEY
-----------------------------------------
Name: Robert E. Sweeney
Title: Chairperson
Keating, Muething & Klekamp
Attorneys for the Injury
Claimants' Committee
1800 Provident Tower
One East Fourth Street
P.O. Box 1800
Cincinnati, Ohio 45202
(513) 579-6400
<PAGE>
</TABLE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
Exhibit "1.1.6.5"
FORM OF ASBESTOS PROPERTY
DAMAGE CLAIMS RESOLUTION PROCEDURES
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
ASBESTOS PROPERTY DAMAGE CLAIMS RESOLUTION PROCEDURES
1. DEFINITIONS AND INTERPRETATION
1.1. The following terms and phrases shall have the following meanings:
"ACBM" shall mean asbestos-containing building
materials that the Claimant alleges
constitute One-Cote or Super "66."
"Accredited Inspector" shall mean a person accredited for the
purposes of inspecting for ACBM pursuant to
section 206 of title II of the Toxic
Substances Control Act, 15 U.S.C. 'SS'
2646.
"Accredited Inspector Report" shall mean a signed, written report of an
Accredited Inspector, which states (i) the
name, address, state of accreditation,
accreditation number, and the date of the
inspection; (ii) separately, for each
Homogeneous Area of ACBM for which a Claim
is made, (a) its location, (b) the
application of the ACBM, (c) the total
quantity of ACBM (stating in the case of
pipe fittings, the number and diameter, in
the case of pipe covering, the length and
diameter, and in the case of other
applications, the area), (d) whether the
ACBM is in need of repair, and (e) whether
the ACBM is in a position where it is likely
to be disturbed; (iii) the total number of
decontamination areas that it would be
necessary to construct; (iv) for each
decontamination area, (a) the total floor
area (in square feet) and (b) the total
circumference (in linear feet); and (v) if
an Approved Laboratory Report is submitted
with a Claim Information Form, certification
by the Accredited Inspector that the
Accredited Inspector has taken two bulk
samples from each Homogeneous Area listed in
(ii) in accordance with the procedures
described in the Protocols and an inventory
of the locations of the Homogeneous Areas
where samples are collected, the exact
location from which each sample is
collected, and the date of such collection.
"Adjusted Nominal Value" shall mean the nominal value of a Claim
assessed by reference to the Compensation
Model and adjusted by reference to the
Evaluation Criteria in accordance with
sections 4.3 and 4.4.
"Applicable Jurisdiction" shall mean the jurisdiction of the state in
which the buildings that are the subject of
the Claim are situated.
"Approved Laboratory" shall mean a laboratory conducting
constituent analysis listed in Exhibit "1"
or any laboratory that is a successful
participant in the National Institute of
Standards and Technology National Voluntary
Laboratory Accreditation Program for both
Asbestos Bulk Sample Analysis by Method in
40 C.F.R. 763, Appendix A, Subpart F, and
Airborne Fiber Analysis by Transmission
Electron Microscopy by the method in 40
C.F.R. 763, Appendix A, Subpart E.
A.1.1.6.5-1
<PAGE>
<PAGE>
"Approved Laboratory Report" shall mean a signed, written report by an
Approved Laboratory, pursuant to which the
Approved Laboratory (i) certifies (a) that
it has received the bulk samples referenced
in the related Accredited Inspector Report
and (b) that it has analyzed such bulk
samples in accordance with some or all of
the procedures described in the Protocols,
and (ii) makes one or more of the
certification(s) set forth in section 4.4.2
hereof. The Approved Laboratory Report shall
contain such other details of the results
and the procedures used to adequately
explain the analyses of the bulk samples
referenced therein.
"Arbitration" shall mean the binding dispute resolution
procedure set forth in section 7.
"Asbestos Abatement Program" shall mean a program for the removal and
disposal of ACBM carried out pursuant to
applicable federal and state regulations and
otherwise than in connection with the
renovation or demolition of a building.
"Asbestos PD Trust" shall mean the trust established in
accordance with the Eagle-Picher Industries,
Inc. Asbestos Property Damage Settlement
Trust Agreement, substantially in the form
of Exhibit "1.1.16" to the Plan.
"Bankruptcy Court" shall mean the United States Bankruptcy
Court for the Southern District of Ohio,
Western Division.
"Claim" shall mean any "Asbestos Property Damage
Claim," as such term is defined in a
confirmed plan of reorganization in the
Chapter 11 Cases.
"Claim Information Form" shall mean the Claim Information Form in the
form annexed hereto as Exhibit "2."
"Claimant" shall mean an entity asserting a Claim.
"Claims Information Deadline" shall mean the date that is one hundred
eighty (180) days after the Effective Date.
"Chapter 11 Cases" shall mean the cases of Eagle-Picher and its
affiliates under chapter 11 of title 11 of
the United States Code, pending in the
Bankruptcy Court under the consolidated case
number 1-91-00100.
"Compensation Model" shall mean the table of compensation values
set forth in Exhibit "3."
"Eagle-Picher" shall mean Eagle-Picher Industries, Inc.
"Effective Date" shall have the same meaning as provided in
the Plan.
"Evaluation Criteria" shall mean those criteria for evaluating the
Adjusted Nominal Value of a Claim set forth
in section 4.4.2.
"Homogeneous Area" shall mean an area of ACBM that is uniform
in color and texture.
"Nominal Value" shall mean the nominal value of a Claim
assessed in accordance with section 4.3.
"Notice of Arbitration" shall mean a notice of arbitration served by
a Claimant on the Asbestos PD Trust pursuant
to section 7.1.
"Notice of Decision" shall mean a notice of decision served by
the Asbestos PD Trust on a Claimant pursuant
to section 5 in the form annexed hereto as
Exhibit "4."
A.1.1.6.5-2
<PAGE>
<PAGE>
"Notice of Reconsideration" shall mean a notice of reconsideration
served by a Claimant on the Asbestos PD
Trust pursuant to section 6.1 in the form
annexed hereto as Exhibit "5."
"One-Cote" shall mean the product sold under the trade
name "One-Cote Insulating and Finishing
Cement."
"Plan" shall mean the Second Amended Consolidated
Plan of Reorganization of the debtors in the
Chapter 11 Cases, or such other plan that
may be confirmed with respect to
Eagle-Picher in the Chapter 11 Cases.
"Protocols" shall mean the product identification
protocols for One-Cote and Super "66" set
forth in Exhibits "6" and "7," respectively.
"Qualification Criteria" shall mean the criteria set forth in section
4.2, which must be satisfied before a claim
may be allowed.
"Super '66'" shall mean the product sold under the trade
name "Super '66' Insulating Cement."
"Trustee" shall mean, collectively, the trustee(s) of
the Asbestos PD Trust.
1.2. The headings and title of this document are for convenience only and are
not to be construed as part of the operative provisions of this document
or as defining or limiting in any way the scope or intent of the
provisions of this document.
1.3. References in this document to any section shall include all sections in
such section.
1.4. All references in this document to the singular shall include the plural,
where applicable.
1.5. Exhibits referred to in this document are hereby incorporated into and
made a part of this document.
1.6. The terms and provisions of this document shall be interpreted in
accordance with and governed by applicable federal law and the laws of the
State of Ohio without giving effect to the doctrine of conflict of laws.
2. ORGANIZATION
2.1. These procedures shall be the exclusive method for the evaluation and
settlement of Claims.
2.2. The Asbestos PD Trust may at any time following the Claims Information
Deadline, and at the sole discretion of the Trustee, by written notice to
each Claimant that has filed a Claim Information Form, extend any of the
dates established in these procedures within which a Claimant may or shall
take an action. The Asbestos PD Trust may only shorten any of the dates
within which a Claimant may or shall take an action or extend the time
within which the Asbestos PD Trust may or shall take an action by consent
of the Claimant(s) affected or by order of the Bankruptcy Court.
3. CLAIM INFORMATION FORM
3.1. On or before the date that is ninety (90) days after the Effective Date,
the Asbestos PD Trust shall mail to each holder of a Claim that has filed
a proof of claim in the Chapter 11 Cases and that has not previously been
disallowed or withdrawn, a copy of these Asbestos Property Damage Claims
Resolution Procedures and a Claim Information Form. The Asbestos PD Trust
shall provide one copy of these Asbestos Property
A.1.1.6.5-3
<PAGE>
<PAGE>
Damage Claims Resolution Procedures and a Claim Information Form to the
representative of each class that has filed a class proof of claim in the
Chapter 11 Cases so long as such class proof of claim has not been
disallowed as of the Effective Date, which representative shall be
responsible for distributing these Asbestos Property Damage Claims
Resolution Procedures and the Claim Information Form to each of the
members of such class; provided, however, that the Asbestos PD Trust shall
either (i) furnish any such class representative with copies of these
Asbestos Property Damage Claims Resolution Procedures and the Claim
Information Form, if within sixty (60) days after the Effective Date, such
class representative notifies the Asbestos PD Trust of the number of
copies needed for distribution to class members, or (ii) distribute these
Asbestos Property Damage Claims Resolution Procedures and the Claim
Information Form to each member of a class if, on or before sixty (60)
days after the Effective Date, the class representative furnishes the
Asbestos PD Trust with the names and addresses of the class members in a
format acceptable to the Asbestos PD Trust that will permit the automated
distribution of the Asbestos Property Damage Claims Resolution Procedures
and the Claim Information Form.
3.2. Each Claimant shall complete and serve the Claim Information Form so that
it is RECEIVED at the address specified on the Claim Information Form on
or before the Claims Information Deadline. EACH MEMBER OF A CLASS THAT HAS
FILED A CLASS PROOF OF CLAIM MUST FILE A SEPARATE CLAIM INFORMATION FORM.
IF A CLASS MEMBER DOES NOT TIMELY FILE A SEPARATE CLAIM INFORMATION FORM,
SUCH MEMBER WILL HAVE NO RIGHT TO ANY DISTRIBUTION FROM THE ASBESTOS PD
TRUST.
3.3. The Claimant shall complete a separate Claim Information Form for each
building with respect to which the Claim is made. Each Claim Information
Form shall state separately for each building the following information:
3.3.1. the name, location, and use of the building;
3.3.2. the date on which the Claimant first became aware of the presence
of the ACBM that are the subject of the Claim;
3.3.3. the date on which each Eagle-Picher product was installed;
3.3.4. separately for each Homogeneous Area, the Eagle-Picher brand-name,
location, and application of each product with respect to which the
Claim is made;
3.3.5. separately for each Homogeneous Area of ACBM, whether the ACBM for
which the Claim is made remains in place, whether it has been
abated pursuant to an Asbestos Abatement Program, or any other
disposition of the ACBM;
3.3.6. separately for each Homogeneous Area of ACBM, whether the ACBM has
been removed pursuant to a renovation or demolition, or otherwise
than in connection with an Asbestos Abatement Program and, if so,
the date of removal and actual abatement costs;
3.3.7. separately for each Homogeneous Area, whether the ACBM is in need
of repair and whether the ACBM is in a position in which it is
likely to be disturbed;
A.1.1.6.5-4
<PAGE>
<PAGE>
3.3.8. the total number rooms or areas for which it would be necessary to
construct an enclosure and decontamination area if the ACBM were to
be removed; and
3.3.9. separately for each Homogeneous Area, the quantity of the ACBM with
respect to which the Claim is made, stating in the case of fittings
the number and diameter of each fitting, in the case of pipe the
diameter and length, and in other cases the area.
3.4. The Claimant shall attach to the Claim Information Form the following
documentary evidence:
3.4.1. a copy of all documentary evidence (if any) evidencing the date of
installation of ACBM;
3.4.2. a copy of all documentary evidence (if any) evidencing the date on
which the Claimant first became aware of the presence of ACBM;
3.4.3. an Approved Laboratory Report;
3.4.4. with respect to a building in which ACBM remains in place, an
Accredited Inspector Report; and
3.4.5. with respect to a building in which ACBM was removed pursuant to an
Asbestos Abatement Program, evidence (if any) that such ACBM was
removed pursuant to such program and copies of bid specifications
and contracts for the abatement work, together with copies of the
receipted bills or other proof of payment.
4. ASSESSMENT OF CLAIMS
4.1. Each Claim shall be assessed solely by reference to the Qualification
Criteria, Evaluation Criteria, and Compensation Model.
4.2. QUALIFICATION CRITERIA
4.2.1. In order to be allowed, a Claim must satisfy each of the following
Qualification Criteria:
4.2.1.1. The Claimant properly filed a proof of claim corresponding
to the ACBM for which the Claim is made in the Chapter 11
Cases on or before September 30, 1992, except to the
extent that (i) the Bankruptcy Court has ordered, on or
before the Effective Date, that the Claimant be permitted
to file such proof of claim untimely, and the Claimant
has, in fact, filed its proof of claim within the time
specified by the Bankruptcy Court or (ii) Eagle-Picher has
expressly consented to the untimely filing of such proof
of claim, and such proof of claim is filed in accordance
with any conditions attached by Eagle-Picher to such
consent.
4.2.1.2. The Claim has not previously been disallowed by an order
of the Bankruptcy Court or withdrawn.
4.2.1.3. The Claim is not factually time-barred under the statute
of limitations or statute of repose of the Applicable
Jurisdiction.
4.2.1.4. The Claim is not otherwise barred by the law of the
Applicable Jurisdiction.
A.1.1.6.5-5
<PAGE>
<PAGE>
4.2.1.5. The Claimant timely served a Claim Information Form
containing the information required by section 3.3 hereof;
provided, however, that a Claimant that has timely served
a Claim Information Form but that has failed to supply all
of the information required by section 3.3 hereof may
supplement its Claim Information Form with such
information within thirty (30) days after receipt of
notice by the Asbestos PD Trust that information is
missing from the Claim Information Form.
4.2.1.6. The ACBM with respect to which the Claim is being made was
not removed from the building as part of a renovation or
demolition otherwise than in connection with an Asbestos
Abatement Program.
4.2.1.7. The Claimant has not previously received compensation with
respect to the ACBM for which Claim is made in excess of
the Claim's Adjusted Nominal Value from another party or
trust.
4.2.2. Disallowance of Claims based upon their failure to meet any of the
Qualification Criteria shall be made by the Bankruptcy Court, after
notice to the Claimants affected and a hearing thereon.
4.3. COMPENSATION MODEL; NOMINAL VALUE
4.3.1. The Nominal Value of each Claim will be calculated by the Asbestos
PD Trust with reference to the quantity, application, condition and
location of the ACBM with respect to each Homogeneous Area in
respect of which the Claim is made, and the number of enclosure and
decontamination areas necessary if that ACBM were to be removed,
applying the removal costs and the appropriate proportion of the
work area costs set forth in the Compensation Model.
4.3.2. Where the ACBM with respect to which the Claim is made has been
abated as part of an Asbestos Abatement Program, the Nominal Value
of the Claim shall be the lesser of (i) the Nominal Value
calculated by reference to the Compensation Model in accordance
with section 4.3.1 and (ii) the actual abatement costs incurred by
the Claimant.
4.4. EVALUATION CRITERIA; ADJUSTED NOMINAL VALUE
4.4.1. The Nominal Value of the Claim for each Homogenous Area shall be
adjusted in accordance with the provisions set forth herein in
order to take into account the weight and sufficiency of the
evidence provided by the Claimant showing that One-Cote or Super
"66" was installed and has not previously been removed or replaced
otherwise than pursuant to an Asbestos Abatement Program.
4.4.2. Proof of the installation of One-Cote or Super "66" for each
Homogenous Area may be established by the Claimant by the following
analytical and/or documentary evidence:
4.4.2.1. A Claim will be awarded 40 proof points if the Claimant
submits an Approved Laboratory Report that contains the
following certification: "Based upon the PLM tests
specified in the Protocols, the bulk samples referenced
herein are consistent with [One-Cote] [Super '66']."
A.1.1.6.5-6
<PAGE>
<PAGE>
4.4.2.2. A Claim will be awarded 30 proof points if the Claimant
submits an Approved Laboratory Report that contains the
following certification: "Based upon the qualitative
scanning electron microscopy and/or transmission electron
microscopy tests specified in the Protocols, the bulk
samples referenced herein are consistent with [One-Cote]
[Super '66']."
4.4.2.3. A Claim will be awarded 30 proof points if the Claimant
submits an Approved Laboratory Report that contains the
following certification: "Based upon quantitative x-ray
diffraction and chemical analysis tests specified in the
Protocols, the bulk samples referenced herein are
consistent with [One-Cote] [Super '66']."
4.5. The proof points awarded with respect to a Claim shall be totaled. The
Adjusted Nominal Value of a Claim with respect to each Homogenous Area
shall be calculated based upon the following formula:
Adjusted Proof Points
Nominal = Nominal x ------------
Value Value 100
The Adjusted Nominal Value of a Claim shall be the sum of the Adjusted
Nominal Values for each Homogenous Area for which a Claim is made.
4.6. For each Homogenous Area of ACBM that the Accredited Inspector has
determined is not in need of repair and which is not in a position in
which it is likely to be disturbed, the Adjusted Nominal Value calculated
pursuant to the preceding subsection shall be further adjusted downward by
75%.
5. NOTICE OF DECISION
5.1. The Asbestos PD Trust shall, within the later of (i) if either
Eagle-Picher or the Asbestos PD Trust moves to disallow a Claim and the
Bankruptcy Court enters an order denying such motion as to such Claim,
thirty (30) days after entry of such order, or (ii) one hundred eighty
(180) days after the Claims Information Deadline serve on each Claimant a
Notice of Decision with respect to each Claim stating the extent to which
the Claim has been accepted.
5.2. The Notice of Decision shall state the Nominal Value and the Adjusted
Nominal Value of the Claim and explain the application of the Evaluation
Criteria and the Compensation Model in the assessment and valuation of the
Claim.
5.3. The Notice of Decision will specify the date by which a Notice of
Reconsideration must be filed in accordance with the provisions of section
6.1.
6. RECONSIDERATION
6.1. Any Claimant that is dissatisfied with the decision in the Notice of
Decision may serve on the Asbestos PD Trust a Notice of Reconsideration
within thirty (30) days after service of the Notice of Decision. Failure
to timely serve on the Asbestos PD Trust a Notice of Reconsideration shall
be deemed a consent to the Notice of Decision and the Adjusted Nominal
Value stated therein, and the Claimant shall be deemed to have waived any
right to seek further review of its Claim.
A.1.1.6.5-7
<PAGE>
<PAGE>
6.2. The Notice of Reconsideration must identify specifically which of the
Evaluation Criteria and Compensation Model the Claimant contends were
improperly applied by the Asbestos PD Trust, stating the reason(s) for
seeking reconsideration and including any supporting documentation. A
Claimant may seek reconsideration of the Notice of Decision solely on the
basis that the Evaluation Criteria or Compensation Model formulae have
been improperly applied by the Asbestos PD Trust.
6.3. The Asbestos PD Trust shall confer with the Claimant or the Claimant's
designated representative in an effort to reach agreement on the Adjusted
Nominal Value of the Claim. The Asbestos PD Trust may agree upon an
Adjusted Nominal Value of a Claim in the discretion of the Trustee, but
the Asbestos PD Trust shall have no obligation to base its assessment of
the Adjusted Nominal Value of a Claim on anything other than application
of the Evaluation Criteria and the Compensation Model.
7. ARBITRATION
7.1. At any time within twenty (20) days following the service of the response
of the Asbestos PD Trust to the Notice of Reconsideration, the Claimant
may serve a Notice of Arbitration on the Asbestos PD Trust. If a Notice of
Arbitration is not timely served by a Claimant, then the Claimant shall be
deemed to have waived any right to seek Arbitration or any further review
of its Claim, and the Adjusted Nominal Value of the Claim set forth in the
Notice of Decision, or otherwise agreed to in writing by the Asbestos PD
Trust within the time period for seeking Arbitration, shall be binding on
the Claimant.
7.2. The Asbestos PD Trust shall maintain a list of a minimum of ten
independent arbitrators who are available to hear disputes hereunder. The
Asbestos PD Trust shall, within ten (10) days after receipt of a Notice of
Arbitration, send to the Claimant the names and addresses of the ten
independent arbitrators. The Claimant shall have fifteen (15) days from
the date the list is served to strike five arbitrators and to return the
list to the Asbestos PD Trust. The Asbestos PD Trust shall select one of
the five arbitrators not stricken by the Claimant to arrange a date on
which the Arbitration can be conducted, such date to be mutually
convenient to the Asbestos PD Trust, the Claimant, and the arbitrator.
Unless otherwise agreed to by the Asbestos PD Trust, in its sole
discretion, all Arbitration proceedings will be conducted in Cincinnati,
Ohio. Upon confirmation of the date on which Arbitration will commence,
the Asbestos PD Trust shall notify the Claimant in writing of its date and
location.
7.3. The arbitrator shall conduct a de novo review of the Claim. In assessing
the extent to which the Claim should be allowed, the arbitrator shall
apply only the Evaluation Criteria and the Compensation Model in
accordance with the procedures set forth herein. The Asbestos PD Trust
shall pay the fees and expenses of the arbitrator; provided, however, that
in the event Claimant fails to obtain an award equal to or greater than
120 percent (120%) of the Adjusted Nominal Value of such Claim set forth
in the Notice of Decision, such fees shall be borne by the Claimant. The
Claimant may, but need not, be represented by counsel in the arbitration
proceeding. The Claimant shall be solely responsible for all fees and
expenses incurred by the Claimant and its representatives in connection
with the Arbitration or otherwise pursuant to these Asbestos Property
Damage Claims Resolution Procedures.
8. NOTICES
8.1. All notices and other communications made or served under these Asbestos
Property Damage Claims Resolution Procedures shall be in writing and shall
be deemed to have been duly served on the date of delivery, if delivered
by hand or by express delivery service, or on the third business day after
the deposit into an authorized United States mail depository, if mailed by
First Class Mail, postage prepaid. Notices to the Asbestos PD Trust shall
be addressed as follows:
A.1.1.6.5-8
<PAGE>
<PAGE>
Eagle-Picher Industries, Inc. Asbestos Property Damage Claims Facility
P.O. Box 1847
Cincinnati, Ohio 45201
Notices to a Claimant shall be addressed as specified in the Claim Information
Form.
A.1.1.6.5-9
<PAGE>
<PAGE>
EXHIBIT "1"
APPROVED LABORATORIES
RJ Lee Group, Inc.
350 Hochberg Road
Monroeville, PA 15146
Contact: Dr. Richard J. Lee
(412) 325-1776
Capabilities: PLM, SEM, CCSEM, XRD
McCrone Environmental Services, Inc.
850 Pasquinelli Drive
Westmont, IL 60559
(708) 887-7100
Capabilities: PLM, SEM, CCSEM, XRD
Clayton Environmental Consultants, Inc.
400 Chastain Center Boulevard, N.W.
Suite 490
Kennesaw, GA 30144
Contact: Owen S. Crankshaw
(404) 499-7500
Capabilities: PLM, SEM, XRD
Millette, Vanderwood & Associates
5500 Oakbrook Parkway, Suite 200
Norcross, GA 30093
Contact: James Millette
(404) 662-8509
Capabilities: PLM, SEM, CCSEM
Materials Analytical Services, Inc.
3597 Parkaway Lane, Suite 250
Norcross, GA 30092
Contact: William E. Longo
(404) 448-3200
Capabilities: PLM, SEM, XRD
EMSL of California, Inc.
17620 South Amphlett Boulevard
Suite 130
San Mateo, CA 94402
Contact: Peter Frasca
(609) 858-4800
Capabilities: PLM, SEM, XRD
EMS Laboratories
117 West Bellevue Drive
Pasadena, CA 91105-2503
Contact: Bernadine Kolk
(818) 568-4065
Capabilities: PLM, SEM, XRD
Particle Diagnostics, Inc.
106-A White Horse Pike
Haddon Heights, NJ 8035
Contact: James J. Weitzman
(609) 547-0491
Capabilities: PLM, XRD
Miero Analytical Laboratories, Inc.
3618 N.W. 97th Boulevard
Gainesville, FL 32606
Contact: Nancy Dehgan
(904) 332-1701
Capabilities: PLM, SEM
Forensic Analytical Specialties, Inc.
3777 Depot Road, Suite 406
Hayward, CA 94545-2756
(510) 887-8828
Capabilities: PLM, SEM, XRD
A.1.1.6.5-1-1
<PAGE>
<PAGE>
EXHIBIT "2"
IN THE UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re )
)
EAGLE-PICHER INDUSTRIES, INC. )
) CONSOLIDATED CASE NO.
et al., ) 1-91-00100
) Chapter 11 - Judge Perlman
Debtors. )
- --------------------------------------------------------------------------------
CLAIM INFORMATION FORM FOR
ASBESTOS-RELATED PROPERTY DAMAGE CLAIMS
- --------------------------------------------------------------------------------
NOTE: A SEPARATE CLAIM INFORMATION FORM MUST
BE FILED FOR EACH BUILDING INCLUDED IN A CLAIMANT'S CLAIM
CLAIMANT INFORMATION
Claim Number: [Eagle-Picher #]--
-----------------------------------------------------------
(Consecutively number claims for each building, using the
preassigned claim number as a prefix)
Claimant Name:
-----------------------------------------------------------
Claimant Address:
-----------------------------------------------------------
-----------------------------------------------------------
-----------------------------------------------------------
Claimant Type (check one):
Owner Operator Attorney in Fact
[ ] [ ] [ ]
A1.1.6.5-2-1
<PAGE>
<PAGE>
BUILDING INFORMATION
Building Name: _______________________________________________________
(Include any ceremonial name for the building. If the
building is part of a complex, the building's
designation should appear here, and the complex name
should appear under Location.)
Division or Agency
Operating Building: _______________________________________________________
(If a division or agency of a governmental entity or
corporation is operating the building, the name of the
agency or division operating the building should appear
here.)
Site Identification: _______________________________________________________
(If claimant routinely uses a unique numerical
identification for its buildings, this should be
inserted to aid in uniquely defining the claim.)
Building Address
or Location: _______________________________________________________
_______________________________________________________
(If the building is part of a complex, such as a group
of hospital buildings, this should be indicated. If the
complex has a single street address, usually of the
administration building, then this should be included
with that fact so indicated.)
Construction Date:
Original _________ Addition 1 _________ Addition 2 _________
Addition 3 _________ Addition 4 _________
(The approximate year(s) of construction of the original building and any
additions should be indicated, whether or not they are the dates of installation
of asbestos-containing materials.)
Building Type/Purpose: _______________________________________________________
_______________________________________________________
_______________________________________________________
(short description of the routine building uses, e.g.
school, hospital, office building, library, convention
center, manufacturing plant, museum, etc.)
Dates of Any Consultants' Reports Received Relating to Asbestos-Containing
Materials in Building: ________________________________________________________
Date Claimant First Became Aware of Presence of Asbestos-Containing Materials in
Building: ____________________________________________________________________
A1.1.6.5-2-2
<PAGE>
<PAGE>
PRODUCT INFORMATION
(COMPLETE CHART FOR EACH HOMOGENEOUS AREA - AN AREA
OF ASBESTOS-CONTAINING MATERIALS THAT IS UNIFORM IN TEXTURE AND COLOR. ATTACH
ADDITIONAL PAGES, IF NECESSARY)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
ASBESTOS-CONTAINING CONDITION
HOMOGENEOUS MATERIALS (CHECK ANY THAT
AREA # _____ PRODUCT I.D. (CHECK ONE) APPLY)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Location (i.e., boiler room, Brand Name: [ ] remain in place Asbestos-containing materials
cafeteria, office): in this homogeneous area are
[ ] abated pursuant to Asbestos
Abatement Program
Installation date: Attached Approved
Laboratory Report Date:_____________________________ [ ] in need of repair
based upon the
following (check all Abatement Costs:
that apply):
Application (check one and
complete pertinent information): $_________________________________ [ ] likely to be disturbed
[ ] Fittings [ ] PLM tests [ ] removed in other renovation or
demolition
Number: ____________________
[ ] qualitative
Diameter:___________________ scanning electron Date:_____________________________
miscroscopy and/or
transmission electron Removal Costs:
microscopy
[ ] Pipes $_________________________________
Number: ____________________
Length:_____________________ [ ] quantitative x-ray [ ] Other (please attach explanation)
diffraction and
chemical analysis
[ ] Other
Area:_______________________
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
A1.1.6.5-2-3
<PAGE>
<PAGE>
OTHER CLAIMS AND ACTIONS
(LIST ALL OTHER ACTIONS OR PROCEEDINGS IN WHICH A CLAIM HAS BEEN ASSERTED FOR
ASBESTOS-RELATED PROPERTY DAMAGE ON ACCOUNT OF THIS BUILDING, STATE WHETHER THE
STATUS OF ACTION AS IT PERTAINS TO SUCH CLAIM, AND, IF A RECOVERY WAS RECEIVED,
THE AMOUNT OF SUCH RECOVERY. ATTACH ADDITIONAL PAGES, IF NECESSARY.)
<TABLE>
<CAPTION>
================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
</TABLE>
A1.1.6.5-2-4
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
- --------------------------------------------------------------------------------
</TABLE>
A1.1.6.5-2-5
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
================================================================================
AMOUNT OF
CASE NAME CASE NUMBER STATUS OF CASE RECOVERY, IF ANY
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
[ ] pending
$_________________
[ ] settled
[ ] dismissed without
prejudice
[ ] dismissed with If claimant is a
prejudice member of a class
that has received
[ ] judgment in favor of a classwide
claimant on some or all recovery, then
counts check this box and
do not list an
[ ] judgment in favor of amount
defendant on all counts
[ ] Class recovery
================================================================================
</TABLE>
A1.1.6.5-2-6
<PAGE>
<PAGE>
ATTACHMENTS
(ALL DOCUMENTATION SUBMITTED MUST BE IN READABLE FORM. ILLEGIBLE DOCUMENTATION
WILL BE DISREGARDED, OR THE ASBESTOS PD TRUST MAY SEEK TO HAVE THE CLAIMANT
SUPPLY A LEGIBLE COPY. ALL DOCUMENTATION MUST BE CONSECUTIVELY NUMBERED TO
CORRESPOND TO THE CLAIM NUMBER. FOR EXAMPLE, IF TEN DOCUMENTS ARE SUBMITTED
RELATING TO CLAIM NO. 11111-5 (I.E., IN SUPPORT OF THE FIFTH BUILDING COVERED
UNDER CLAIM NO. 11111), EACH DOCUMENT MUST BE NUMBERED 11111-5-1 THROUGH
11111-5-10.)
The following documents are attached to this Claim Information Form (check all
that apply)
[ ] Documents that show the date of installation of asbestos-containing
materials
[ ] Documents that show the date on which Claimant first became aware of the
presence of asbestos-containing materials in the building
[ ] Approved Laboratory Report
[ ] Accredited Inspector Report (required if asbestos-containing materials
remain in place in the building)
[ ] Documents that show that asbestos-containing materials were removed
pursuant to an Asbestos Abatement Program, including bid specifications,
contracts for the abatement work, and proof of payment
A1.1.6.5-2-7
<PAGE>
<PAGE>
CERTIFICATION
The undersigned certifies to the best of his [her] knowledge under penalty of
perjury that the information contained and submitted with this Claim Information
Form is true and correct.
- ------------ ------------------------------- ---------------------
Date (Print Name and Title, if any) (Signature)
SUBMISSION REQUIREMENT
This Claim Information Form must be submitted and received no later than
_____________, 1996 to the address below, or returned in the enclosed
pre-addressed envelope:
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS PROPERTY DAMAGE
CLAIMS FACILITY
P.O. Box 1847
Cincinnati, Ohio 45202
A1.1.6.5-2-8
<PAGE>
<PAGE>
EXHIBIT "3"
COMPENSATION MODEL
WORK AREA COST
Isolation barrier $2.50 per linear foot
Floor cover $0.30 per square foot
Decontamination enclosure $100.00 each work area
REMOVAL COST
1/2" - 1 1/2" pipe $3.75 per linear foot
2" - 3" pipe $4.15 per linear foot
4" - 5" pipe $5.00 per linear foot
6" - 10" pipe $8.50 per linear foot
LENGTH OF COVERING
1/2" - 1 1/2" fitting $3.75 per fitting
2" - 3" fitting $4.15 per fitting
4" - 5" fitting $5.00 per fitting
6" - 10" fitting $8.50 per fitting
Boilers, breaching
and ducting $9.00 per square foot
A1.1.6.5-3-1
<PAGE>
<PAGE>
EXHIBIT "4"
FORM OF NOTICE OF DECISION
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-4-1
<PAGE>
<PAGE>
EXHIBIT "5"
FORM OF NOTICE OF RECONSIDERATION
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-5-1
<PAGE>
<PAGE>
EXHIBIT "6"
PROTOCOLS FOR ONE-COTE
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-6-1
<PAGE>
<PAGE>
EXHIBIT "7"
PROTOCOLS FOR SUPER "66"
[TO BE PROVIDED
BY THE ASBESTOS PD TRUST
AFTER THE EFFECTIVE DATE
OF THE PLAN]
A1.1.6.5-7-1
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------)
EXHIBIT "1.1.8"
FORM OF AMENDED AND RESTATED ARTICLES OF INCORPORATION
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
CERTIFICATE OF REORGANIZATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Andries Ruijssenaars, President and Chief Operating
Officer, and James A. Ralston, Vice President, General Counsel and Secretary, of
Eagle-Picher Industries, Inc. (the "Corporation"), do hereby certify that: (1)
the Corporation is the Debtor in that certain Chapter 11 case identified as
Consolidated Case No. 1-91-00100 in the United States Bankruptcy Court for the
Southern District of Ohio, Western Division (the "Case"), (2) in the Case, the
Corporation has filed a Consolidated Plan of Reorganization that provides for
the adoption of Amended and Restated Articles of Incorporation for the
Corporation in the form set forth as Exhibit A to this Certificate, (3) the
Consolidated Plan of Reorganization, including the Amended and Restated Articles
of Incorporation that are Exhibit A hereto, was confirmed by the order of the
United States District Court for the Southern District of Ohio, Western
Division, on November __, 1996, and (4) such order remains in full force and
effect at the date hereof.
The Amended and Restated Articles of Incorporation annexed hereto may be
certified by the office of the Secretary of State of Ohio separately from this
Certificate of Reorganization.
IN WITNESS WHEREOF, the undersigned President and Secretary of
Eagle-Picher Industries, Inc., have executed this Certificate of Reorganization
this ___ day of November, 1996.
-----------------------------------
Name: Andries Ruijssenaars
Title: President and Chief
Operating Officer
-----------------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
<PAGE>
<PAGE>
CERTIFICATE OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Andries Ruijssenaars, President and Chief Operating
Officer and James A. Ralston, Vice President, General Counsel and Secretary, of
Eagle-Picher Industries, Inc. (the "Corporation"), do hereby certify that in
connection with a Plan of Reorganization confirmed by the United States District
Court for the Southern District of Ohio, Western Division, in the chapter 11
case of the Corporation, the Articles of the Corporation were amended and
restated, pursuant to such Plan and the authority granted by Section 1701.75 of
the Ohio Revised Code ("O.R.C."), to read as follows:
FIRST: The name of the Corporation is Eagle-Picher Industries, Inc.
SECOND: The place in Ohio where the principal office of the Corporation is
to be located is Cincinnati, Hamilton County, Ohio.
THIRD: The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under Sections
1701.01 to 1701.98 inclusive, of the O.R.C.
FOURTH: (a) All shares of the Corporation that are authorized for issuance
immediately prior to the time as of which these Amended and Restated Articles of
Incorporation become effective (the "Effective Time") are hereby canceled. As of
the Effective Time, the number of shares that the Corporation is authorized to
have outstanding is 20,000,000 common shares, without par value (the "Common
Stock").
(b) Pursuant to the requirements of Section 1123(a)(6) of the Bankruptcy
Code, the Corporation shall not issue nonvoting equity securities, subject,
however, to further amendment of these Amended and Restated Articles of
Incorporation as and to the extent permitted by applicable law.
FIFTH: The Corporation, by action of its board of directors, may purchase
its own shares at any time and from time-to-time to the extent permitted by law.
SIXTH: The shares of the Corporation's Common Stock, other rights or
options to purchase shares of the Corporation's Common
2
<PAGE>
<PAGE>
Stock and any other interests that would be treated as "stock" of the
Corporation under Section 382 of the Internal Revenue Code (collectively,
the "Corporate Securities") are subject to the following restrictions:
1. During the period beginning on the Effective Time and ending
twenty-five (25) months thereafter, any attempted sale, purchase, transfer,
assignment, conveyance, pledge or other disposition of any share or shares of
Corporate Securities ("Transfer") to any person or entity or to any group of
persons or entities acting in concert ("Transferee") who directly or indirectly
owns, or is treated as owning (within the meaning of the attribution rules
applicable under Section 382 of the Internal Revenue Code ("Own")), 4.75% or
more of any class of Corporate Securities, or after giving effect to the
Transfer, would directly or indirectly Own more than 4.75% of the outstanding
shares of any class of Corporate Securities, shall be void AB INITIO and shall
not be effective to Transfer any of such shares to the extent the Transfer
increases the Transferee's direct or indirect ownership of the Corporate
Securities above 4.75% of the total outstanding shares of such class of
Corporate Securities. Similarly, any Transfer by a transferor who directly or
indirectly Owns 5% or more of the outstanding shares of any class of Corporate
Securities shall be void AB INITIO and shall not be effective to Transfer any of
such shares to the purported Transferee.
2. (a) If the Board of Directors of the Corporation determines that a
Transfer of Corporate Securities constitutes a Transfer prohibited by Section 1
hereof (a "Prohibited Transfer"), then upon written demand made by any officer
of the Corporation, the purported Transferee shall transfer or cause to be
transferred any certificate or other evidence of ownership of Corporate
Securities that are the subject of the Prohibited Transfer ("Prohibited
Securities"), together with any dividends or other distributions that were
received by the Transferee from the Corporation with respect to such Prohibited
Securities ("Prohibited Distributions"), to an agent designated by the Board of
Directors of the Corporation (the "Agent"). The Agent shall then sell to a buyer
or buyers the Prohibited Securities so transferred to it. If, before receiving
the demand of the Corporation to transfer the Prohibited Securities to the
Agent, the purported Transferee has resold the Prohibited Securities, the
purported Transferee shall be deemed to have sold the Prohibited Securities for
and on behalf of the Agent and, in lieu of transferring the Prohibited
Securities to the Agent, shall transfer to the Agent any Prohibited
Distributions and the proceeds of such sale. If the purported Transferee fails
to surrender the Prohibited Securities or the proceeds of a sale thereof,
together with any Prohibited Distributions, to the Agent within thirty (30)
business days from the date on which the Corporation makes its demand for
surrender hereunder, the Corporation shall institute legal proceedings to compel
the surrender. The costs of any such proceeding in which the court
3
<PAGE>
<PAGE>
shall compel such surrender or award damages shall be borne by the purported
Transferee.
(b) Upon the receipt of the proceeds of any sale of Prohibited Securities
by the Agent or, upon the receipt from the purported Transferee thereof of the
proceeds from any previous sale of such Prohibited Securities by such
Transferee, the amount so received shall be applied by the Agent as follows: (i)
first, to the payment of the reasonable expenses of the Agent incurred in
connection with the performance of its duties hereunder; (ii) second, to the
purported Transferee up to the amount paid by the purported Transferee for the
Prohibited Securities, which amount shall be determined by the Board of
Directors of the Corporation in its sole discretion; and (iii) third, to one or
more organizations that shall then be qualified under Section 501(c)(3) of the
Internal Revenue Code as selected by the Board of Directors of the Corporation.
3. Neither the Corporation nor any transfer agent or other person on its
behalf shall effect a Prohibited Transfer on the stock record books of the
Corporation and the purported Transferee thereof shall not be recognized as a
shareholder of the Corporation for any purpose whatsoever in respect of the
Prohibited Securities. Until the Prohibited Securities are acquired by another
person in a Transfer that is not a Prohibited Transfer, the purported Transferee
shall not be entitled with respect to such Prohibited Securities to any rights
of shareholders of the Corporation, including, without limitation, the right to
vote such Prohibited Securities and to receive dividend distributions, whether
liquidating or otherwise, in respect thereof, if any. Once the Prohibited
Securities have been acquired in a Transfer that is not a Prohibited Transfer,
the Corporate Securities shall cease to be Prohibited Securities.
4. All certificates evidencing any Corporate Securities issued by the
Corporation after the Effective Time, shall bear a conspicuous legend reading
substantially as follows:
THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO
RESTRICTION PURSUANT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF REORGANIZED EAGLE-PICHER, WHICH RESTRICTION IS REPRINTED IN ITS
ENTIRETY ON THE BACK OF THIS CERTIFICATE.
With respect to any Corporate Securities that are not evidenced by a
certificate, but are uncertificated securities, the foregoing legend shall be
set forth in the initial transaction statement required for restrictions on
transfer by Section 1308.11 of the O.R.C.
5. Notwithstanding any other provisions of these Amended and Restated
Articles of Incorporation or the Regulations of the
4
<PAGE>
<PAGE>
Corporation (and notwithstanding the fact that a lesser percentage may be
specified by law, these Amended and Restated Articles or the Code of
Regulations), the affirmative vote of the holders of 80% or more of the
outstanding shares, voting together as a single class, shall be required to
amend or repeal, or adopt any provisions inconsistent with this Article Sixth;
provided, however, that shareholder action without a meeting shall require the
unanimous written consent of all shareholders entitled to vote thereon.
SEVENTH: All certificates evidencing any shares of the Corporation's
Common Stock issued by the Corporation after the Effective Time, shall bear a
conspicuous legend reading substantially as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER THE SECURITIES LAWS
OF ANY STATE OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED FOR SALE,
OR OTHERWISE TRANSFERRED UNLESS REGISTERED OR QUALIFIED UNDER SAID ACT AND
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN OPINION
OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH REGISTRATION OR
QUALIFICATION IS NOT REQUIRED.
EIGHTH: These Amended and Restated Articles of Incorporation supersede and
take the place of all prior Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, the undersigned President and Chief Operating Officer
and Vice President, General Counsel and Secretary of Eagle-Picher Industries,
Inc. have executed this Certificate this _____ day of November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By
-----------------------------
Name: Andries Ruijssenaars
Title: President and Chief
Operating Officer
-------------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
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EXHIBIT "1.1.9"
FORM OF AMENDED AND RESTATED CODE OF REGULATIONS
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Eagle-Picher Industries, Inc.
CODE OF REGULATIONS
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ARTICLE I
Seal
SECTION 1. Form. The seal of the Corporation shall have upon it the name
and words "Eagle-Picher Industries, Inc. Incorporated 1867 - Seal" and shall be
circular in form.
ARTICLE II
Shareholders
SECTION 1. Place of Meetings. Meetings of shareholders shall be held at
the office of the Corporation in Cincinnati, Ohio, or at such other place in
Cincinnati as may be designated by the Board of Directors.
SECTION 2. (a) Annual Meeting. The annual meeting of shareholders shall be
held at 2 o'clock P.M. on the fourth Tuesday in March of each year, if not a
legal holiday, but, if a legal holiday, then, at the same hour, on the next
succeeding business day which is not a legal holiday, at which time there shall
be elected, by ballot, in accordance with the laws of the State of Ohio and
these regulations, members of the Board of Directors to serve and hold office as
provided in Article III hereof.
(b) Shareholder Action. Any action required to be taken at a meeting of
shareholders shall be taken at an annual or special meeting thereof, or without
a meeting upon the unanimous written consent of all shareholders entitled to
vote thereon.
(c) Shareholder Nominations. Subject to the rights of holders of any class
or series of stock having a preference over the Common Stock as to dividends or
upon liquidation, nominations for the election of directors may be made by the
Board of Directors or by any shareholder entitled to vote in the election of
directors generally. However, any shareholder entitled to vote in the election
of directors generally may nominate one or more persons for
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election as directors, at an annual meeting or at a special meeting called in
whole or in part to vote on the election of directors, only if written notice of
such shareholder's intent to make such nomination or nominations has been
delivered to or mailed and received by the Secretary of the Corporation not less
than 60 days nor more than 90 days in advance of such meeting; provided,
however, that if less than 70 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the shareholder
must be so received not later than the close of business on the 10th day
following the date on which such notice of the date of the meeting was first
mailed or such public disclosure was made. Each such shareholder's notice shall
set forth: (a) the name and address, as they appear on the Corporation's books,
of the shareholder who intends to make the nomination and the name, age,
business address and residence address of the person or persons to be nominated;
(b) a representation that the shareholder is a holder of record of stock of the
Corporation entitled to vote at such meeting and intends to appear in person or
by proxy at the meeting to nominate the person or persons specified in the
notice; (c) a description of all arrangements or understandings between the
shareholder and each nominee and any other person or persons (naming such person
or persons) pursuant to which the nomination or nominations are to be made by
the shareholder; (d) the principal occupation or employment of the person or
persons to be nominated; (e) the class and number of shares of the Corporation
which are beneficially owned by the shareholder intending to make the nomination
and by the person or persons to be nominated; (f) such other information
regarding each nominee proposed by such shareholder as would be required to be
included in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission, had the nominee been nominated, or intended
to be nominated, by the Board of Directors; and (g) the written consent of each
nominee to being named in the proxy statement and serving as a director of the
Corporation if so elected. At the request of the Board of Directors, any person
nominated by the Board of Directors for election as a director shall furnish to
the Secretary of the Corporation that information required to be set forth in a
shareholder's notice of nomination which pertains to such nominee. No person to
be nominated by a shareholder shall be eligible for election as a director of
the Corporation unless nominated in accordance with the procedures set forth in
this Section 2.(c). The chairman of the meeting shall, if the facts warrant,
refuse to acknowledge the nomination of any person not made in compliance with
the foregoing procedure and if he should so determine, he shall so declare to
the meeting and the defective nomination shall be disregarded.
(d) Notice of Shareholder Business. At an annual meeting of shareholders,
only such business shall be conducted as shall have been properly brought before
the meeting. To be properly brought before an annual meeting, busi-
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ness must be (a) specified in the notice of meeting (or any supplement thereto)
given by or at the direction of the Board of Directors, (b) otherwise properly
brought before the meeting by or at the direction of the Board of Directors, or
(c) otherwise properly brought before the meeting by a shareholder. For business
to be properly brought before an annual meeting by a shareholder, the
shareholder must have given timely notice thereof in writing to the Secretary of
the Corporation. To be timely, a shareholder's notice must be delivered to or
mailed and received at the principal executive offices of the Corporation, not
less than 60 days nor more than 90 days prior to the meeting; provided, however,
that in the event that less than 70 days' notice or prior public disclosure of
the date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be so received not later than the close of
business on the 10th day following the day on which such notice of the date of
the annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter the
shareholder proposes to bring before the annual meeting (a) a brief description
of the business desired to be brought before the meeting and the reasons for
conducting such business at the annual meeting, (b) the name and address, as
they appear on the Corporation's books, of the shareholder proposing such
business, (c) the class and number of shares of the Corporation which are
beneficially owned by the shareholder, and (d) any material interest of the
shareholder in such business. Notwithstanding anything in these regulations to
the contrary, no business shall be conducted at an annual meeting except in
accordance with the procedures set forth in this Section 2.(d), Article II. The
chairman of the annual meeting shall, if the facts warrant, determine that
business was not properly brought before the meeting and in accordance with the
provisions of this Section 2.(d), Article II, and if he should so determine, he
shall so declare to the meeting and any such business not properly brought
before the meeting shall not be transacted.
(e) Notwithstanding anything in these regulations to the contrary, the
affirmative vote of the holders of 80% of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend, adopt any
provision inconsistent with or repeal these subsections (b), (c), (d) and (e) of
Section 2, Article II; provided, however, shareholder action without a meeting
shall require the unanimous written consent of all shareholders entitled to vote
thereon pursuant to Section 2.(b) hereof.
SECTION 3. Special Meetings of Shareholders. Subject to the rights of the
holders of any class or series of stock having preference over the Common Stock
as to dividends or upon liquidation, special meetings of shareholders may be
called by the Chairman of the Board of Directors, the President, or the
directors by action at a meeting or a majority of the directors
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acting without a meeting, persons who hold fifty percent of all shares
outstanding and entitled to vote thereat, the Secretary or an Assistant
Secretary. Any shareholder or shareholders entitled to call a special meeting
pursuant to this Section 3, Article II, must, in order properly to call such
meeting, deliver a written notice to the Secretary of the Corporation
requesting that a special meeting be called. Such meeting shall be held on
a date fixed by the Board of Directors of the Corporation, which date shall
be not less than 60 days nor more than 90 days after the date of receipt of
such notice by the Secretary of the Corporation. Any such notice shall set
forth as to each matter proposed to be brought before the special meeting
(a) a brief description of the business desired to be brought before the
meeting, (b) the name and address, as they appear on the Corporation's books,
of the shareholder or shareholders proposing such business, (c) the class and
number of shares of the Corporation which are beneficially owned by the
shareholder, and (d) any material interest of the shareholder in such business.
Notwithstanding anything in these regulations to the contrary, the Secretary
shall not call a special meeting upon the request of any shareholder if such
shareholder has failed to comply with this Section 3, Article II, with respect
to all matters proposed to be brought before such meeting and, subject to
Section 2.(c) of this Article II with respect to shareholder nominations for
election of directors, no business shall be conducted at a special meeting
except business proposed in accordance with the procedures set forth in this
Section 3, Article II. The Chairman of the special meeting shall, if the facts
warrant, determine that business was not properly brought before the meeting
and in accordance with the provisions of this Section 3, Article II, and if
he should so determine, he shall so declare to the meeting and any such
business not properly brought before the meeting shall not be transacted.
Notwithstanding anything in these regulations to the contrary, the affirmative
vote of the holders of 80% of the voting power of all shares of the
Corporation entitled to vote generally in the election of directors, voting
together as a single class, shall be required to alter, amend, adopt any
provision inconsistent with or repeal this Section 3 of Article II; provided,
however, shareholder action without a meeting shall require the unanimous
written consent of all shareholders entitled to vote thereon pursuant
to Section 2.(b) hereof.
SECTION 4. Notice of Meetings. A notice, as required by law, of each
regular or special meeting of shareholders shall be given in writing by the
Chairman of the Board of Directors, the President, the Secretary, or an
Assistant Secretary, not less than ten (10) days before the meeting.
SECTION 5. Quorum. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall be requisite and shall constitute a quorum at all meetings of
shareholders for the transaction of business, except as otherwise provided by
law. by the articles of incorporation, or by these regulations, if, however,
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such majority shall not be present or represented at any meeting of
shareholders, the shareholders entitled to vote thereat, present in person or
represented by proxy, shall have power to adjourn the meeting, from time to
time, without notice other than announcement at the meeting, until the requisite
amount of voting stock shall be present or represented. At such adjourned
meeting, at which the requisite amount of voting stock shall be present or
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
SECTION 6. Proxies. Any shareholder entitled to vote at a meeting of
shareholders may be represented and vote thereat by proxy, appointed by an
instrument in writing, subscribed by the shareholder or his duly authorized
agent, and submitted to the Secretary of the Corporation not less than
forty-eight hours before such meeting; provided, any such proxy, other than for
a corporation, shall himself be a shareholder.
SECTION 7. Organization. The Chairman of the Board of Directors, or the
President, shall preside at all meetings of shareholders. In the absence of
both, the Board of Directors shall designate a presiding officer, who shall have
all the powers herein conferred upon the presiding officer of the meeting. The
Secretary of the Corporation shall act as secretary of all meetings but, in the
absence of the Secretary, the presiding officer of shareholders may appoint any
person to act as secretary of the meeting.
SECTION 8. Order of Business. At all shareholders' meetings the order of
business shall be as follows:
1. Proof of notice of meeting.
2. Presentation and examination of proxies.
3. Reading of minutes of previous meeting and acting thereon.
4. Report of Directors or Committees.
5. Reports of Officers.
6. Unfinished business
7. Election of Directors.
8. New or miscellaneous business.
9. Adjournment.
This order may be changed by affirmative vote of the holders of a majority of
the outstanding shares, present in person or represented by proxy.
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ARTICLE III
Board of Directors
SECTION 1. (a) Number, Election and Terms. Except as otherwise fixed by or
pursuant to the provisions of Article Fourth, Division A of the Articles of
Incorporation relating to the rights of the holders of any class or series of
stock having a preference over the Common Stock as to dividends or upon
liquidation to elect additional directors under specified circumstances, the
Board of Directors of the Corporation shall consist of eleven (11) members or
such other number as may be determined from time to time by action of the Board
of Directors. The directors, other than those who may be elected by the holders
of any class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, shall be classified, with respect to the time for
which they severally hold office, into three classes, as nearly equal in number
as possible, as determined by the Board of Directors of the Corporation, one
class to be originally elected for a term expiring at the annual meeting of
shareholders to be held in 1986, another class to be originally elected for a
term expiring at the annual meeting of shareholders to be held in 1987, and
another class to be originally elected for a term expiring at the annual meeting
of shareholders to be held in 1988, with each class to hold office until its
successor is elected and qualified. At each annual meeting of shareholders of
the Corporation, the successors of the class of directors whose term expires at
that meeting shall be elected to hold office for a term expiring at the annual
meeting of shareholders held in the third year following the year of their
election.
(b) Newly Created Directorships and Vacancies. Newly created directorships
resulting from any increase in the number of directors shall be filled by the
affirmative vote of a majority of the remaining directors then in office, even
though less than a quorum of the Board of Directors. Any vacancies on the Board
of Directors shall be filled as provided by law. Any director so elected shall
hold office for the remainder of the full term of the class of directors in
which the new directorship was created or the vacancy occurred and until such
director's successor shall have been elected and qualified. No decrease in the
number of directors constituting the Board of Directors shall shorten the term
of any incumbent director.
(c) Removal. Any director may be removed from office as provided by law;
provided, however, the removal of directors by shareholders shall require an
affirmative vote of the holders of 80% of the combined voting power of the then
outstanding shares of stock entitled to vote generally in the election of
directors, voting together as a single class; provided, however, shareholder
action without a meeting shall require the unanimous written consent of all
shareholders entitled to vote thereon pursuant to Article II, Section 2.(b)
hereof.
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(d) Amendment, Repeal, Inconsistent Provisions. Notwithstanding anything
in these regulations to the contrary, the affirmative vote of the holders of 80%
of the voting power of all shares of the Corporation entitled to vote generally
in the election of directors, voting as a single class, shall be required to
alter, amend, adopt any provisions inconsistent with or repeal these Subsections
(a), (b), (c) and (d) of Section 1, Article III; provided, however, shareholder
action without a meeting shall require the unanimous written consent of all
shareholders entitled to vote thereon pursuant to Article II, Section 2.(b)
hereof.
SECTION 2. Time and Place of Meetings. A meeting of the Board of Directors
shall be held immediately following each meeting of shareholders at which
directors are elected, and notice of such meeting need not be given. Other
meetings of the Board may be held at such times and places, either within or
without the State of Ohio, as may be fixed by resolution of the Board or as may
be specified in the call and notice of meetings; and shall be held at least
quarterly.
SECTION 3. Call and Notice of Meetings. Meetings may be called at any time
by the Chairman of the Board, the President, the Secretary, or by a majority of
the Board. The Board shall decide what notice of meetings shall be given and the
length of time prior to the meeting that such notice shall be given. Any meeting
at which all directors are present shall be a valid meeting, whether notice
thereof was given or not, and any business may be transacted at such meeting.
Notice for call of any meeting may be waived by any one or all of the directors.
SECTION 4. Quorum. A majority of the Board of Directors shall constitute a
quorum for the transaction of business and, if at any meeting of the Board there
be less than a quorum present, a majority of those present may adjourn the
meeting from time to time.
SECTION 5. Compensation of Directors and Members of the Executive
Committee. The directors are authorized to fix, from time to time, their own
compensation for attendance at meetings of the Board and the compensation of
members of the Executive Committee for attendance at meetings of such Committee,
which may include expenses of attendance when meetings are not held at the place
of residence of any director or member.
SECTION 6. General Powers. The powers of the Corporation shall be
exercised, its business and affairs conducted, and its property controlled by
the Board of Directors, except as otherwise provided in the General Corporation
Law of Ohio or in the articles of incorporation of the Corporation and
amendments thereto. The Board of Directors shall have power to fix, define and
limit the powers and duties of all officers.
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SECTION 7. Indemnification of Directors and Officers. Each director and
each officer now, heretofore, or hereafter in office, shall be indemnified by
the Corporation against all costs imposed upon, and/or expenses reasonably
incurred by him in connection with or arising out of any action, suit or
proceeding of whatever nature (whether the same be settled or proceed to
judgement) in which he may be or become involved by reason of his being or
having been a director or officer of the Corporation, any subsidiary of the
Corporation, or any company or corporation which he serves as a director or
officer at the request of the Corporation (whether or not he continues to be a
director or officer at the time of the imposition of such costs and/or
expenses), except in respect to matters as to which he shall be finally adjudged
in such action, suit or proceeding to be liable for gross negligence or wilful
misconduct in the performance of his duty as such director or officer. The
foregoing right of indemnification shall be in addition to and not exclusive of
any and all other rights to which he may be entitled as a matter of law.
ARTICLE IV
Executive Committee
SECTION 1. Executive Committee. The Board of Directors may, by resolution,
designate not less than three (3) of its number to constitute an Executive
Committee, but may repeal said resolution and dispense with said Committee at
any time.
SECTION 2. Powers of Executive Committee. The Executive Committee shall
have charge of the management of the business and affairs of the Corporation in
the interim between meetings of the Board of Directors, and generally shall have
all of the authority of the Board, in the transaction of such business of the
Corporation as, in the judgement of the Committee, may require action between
meetings of the Board.
SECTION 3. Limitation of Powers of Executive Committee. The Board of
Directors shall have authority to limit or quality the powers of the Executive
Committee at any time, and may rescind any action of the Committee to the extent
that no rights of third persons shall have intervened.
SECTION 4. Record of Executive Committee. The Executive Committee shall
keep a record of its proceedings and make a report of its acts and transactions
to the Board of Directors, all of which shall form part of the records of the
Corporation.
ARTICLE V
Officers
SECTION 1. Number. The officers of the Corporation shall be a President,
one or more Vice-Presidents, a Secretary, one or more Assistant Secretaries,
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a Treasurer and one or more Assistant Treasurers. Any two or more of the offices
may be held by the same person, but no officer shall execute, acknowledge, or
verify any instrument in more than one capacity if such instrument is required
to be executed, acknowledged, or verified by two or more officers.
SECTION 2. Other Officers. The Board of Directors is authorized in its
discretion to establish the office of Chairman of the Board, and shall have the
further power to provide for such other offices and agencies as it shall deem
necessary from time to time and to dispense with any of said offices and
agencies at any time.
SECTION 3. Election, Term and Removal. At the meeting of the Board of
Directors immediately following each meeting of shareholders at which directors
are elected, the Board shall select one of its members to be President of the
Corporation. It shall also select all other officers of the Corporation, none of
whom shall be required to be a member of the Board, except the Chairman of the
Board if that office be established. All officers of the Corporation shall hold
office during the pleasure of the Board, or until their successors shall have
been elected and qualified, and the Board may remove or suspend any officer at
any time, without notice, by the affirmative vote of a majority of the entire
Board.
SECTION 4. Vacancies and Absence. If any office shall become vacant by
reason of the death, resignation, disqualification, or removal of the incumbent
thereof, or other cause, the Board of Directors may select a successor to hold
office for the unexpired term in respect to which such vacancy occurred or was
created. In case of the absence of any officer of the Corporation or for any
reason that the Board of Directors may determine as sufficient, the Board may
for the time being delegate the powers and duties of such officer to any other
officer, or to any director, except where otherwise provided by these
regulations or by statute.
SECTION 5. Salaries. The Board of Directors or the Executive Committee
shall fix the salaries of all officers; and shall supervise the salaries of all
other employees of the Corporation.
ARTICLE VI
Duties of Officers
SECTION 1. Chairman of the Board. The Chairman of the Board of Directors
(if the Board establishes such office) shall preside at all meetings of the
Board, appoint all special or other committees (unless otherwise ordered by the
Board) and shall confer with and advise all other officers of the Corporation.
He shall have such executive and managerial powers and authority and shall
perform such duties as may, from time to time, be delegated to him by the Board
of Directors or the Executive Committee.
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SECTION 2. President. The President shall, unless otherwise prescribed by
the Board of Directors or the Executive Committee, be the chief executive
officer and active head of the Corporation and, in the recesses of the Board of
Directors and the Executive Committee, shall have general control and management
of all of its business affairs. He shall make annual reports to the Board of
Directors, showing the condition of the affairs of the Corporation, making such
recommendations as he thinks proper, and from time to time shall bring before
the Board of Directors, or the Executive Committee, such information as may be
required touching upon the business and property of the Corporation. He shall
perform such other duties as may, from time to time, be assigned to him by the
Board of Directors. If there be no Chairman of the Board, or in his absence, the
President shall preside at all meetings of the Board and appoint all special or
other committees (unless otherwise ordered by the Board).
SECTION 3. Vice-Presidents. The Vice-Presidents shall perform such duties
as may be delegated to them by the Board of Directors, or assigned to them from
time to time by the Board of Directors, the Executive Committee, the Chairman of
the Board, or the President. In the absence of the Chairman of the Board and the
President, the Board of Directors shall designate one of the Vice-Presidents, or
some other person, to perform the duties and have the powers of the Chairman of
the Board and the President, and, during such absence, such person shall be
authorized to exercise all of the functions of the Chairman of the Board and the
President.
SECTION 4. Secretary. The Secretary shall keep a record of all proceedings
of the Board of Directors and of all meetings of shareholders, and shall perform
such other duties as may be assigned to him by the shareholders, the Board of
Directors, the Executive Committee, the Chairman of the Board, or the President.
SECTION 5. Assistant Secretaries. The Assistant Secretaries shall perform
such duties as may be assigned to them by the Board of Directors, the Executive
Committee, the Chairman of the Board, the President or the Secretary. The Board
of Directors shall designate one of the Assistant Secretaries to be acting
Secretary during the absence or disability of the Secretary.
SECTION 6. Treasurer. The Treasurer shall have charge of the funds of the
Corporation. He shall keep proper books of account showing all transactions
entered into by, for and on behalf of the Corporation, with vouchers in support
thereof. He shall also, from time to time as required, make reports and
statements to the Board of Directors and the Executive Committee as to the
financial condition of the Corporation, and submit detailed statements of
receipts and disbursements; and shall perform such other duties as may be
assigned to him from time to time by the Board of Directors, the Executive
Committee, the Chairman of the Board, or the President.
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SECTION 7. Assistant Treasurers. The Assistant Treasurers shall perform
such duties as may be assigned to them by the Board of Directors, the Executive
Committee, the Chairman of the Board, the President or the Treasurer. The Board
of Directors shall designate one of the Assistant Treasurers to be acting
Treasurer during the absence or disability of the Treasurer.
SECTION 8. Bonds of Officers. The Board of Directors or the Executive
Committee shall determine which officers of the Corporation shall give bond, and
the amount thereof, the expense to be paid by the Corporation.
ARTICLE VII
Certificates for Shares of Stock
SECTION 1. Certificates. Certificates evidencing the ownership of shares
of the Corporation shall be issued to those entitled to them by transfer or
otherwise. Each certificate for shares shall bear the signature of the Chairman
of the Board, or the President or one of the Vice-Presidents, and of the
Secretary or an Assistant Secretary, the seal of the Corporation (but failure to
affix the seal shall not invalidate the certificate if properly signed) and such
recitals as may be required by law.
SECTION 2. Mutilated and Lost Certificates. If any certificate for shares
of the Corporation becomes worn, defaced or mutilated, the Board of Directors,
upon surrender thereof, may order the same cancelled and a new certificate
issued in lieu thereof. If any certificate for shares be lost or destroyed, a
new certificate may be issued upon such terms and under such regulations as may
be adopted by the Board of Directors.
ARTICLE VIII
Committees
SECTION 1. Committees. The Board of Directors shall have power to create
from time to time such committees, standing or special, as it shall deem best,
and to revoke their appointment or restrict or modify their powers.
ARTICLE IX
Closing Stock Transfer Books
SECTION 1. Closing Stock Transfer Books. The Board of Directors may fix a
time, not exceeding forty-five (45) days preceding the date of any meeting of
shareholders or any dividend payment date or any date for the allotment of
rights, as a record date for the determination of the shareholders entitled to
notice of such meeting or to vote thereat or to receive such dividends or rights
as the case may be and/or the Board of Directors may close the books of the
Corporation against transfer of shares of stock during the whole or any part of
such period.
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ARTICLE X
Amendments
SECTION 1. Amendments. These regulations, or any of them, may be altered,
amended, added to or repealed as may be provided by law.
ARTICLE XI
Assent of Shareholders
SECTION 1. Assent of Shareholders. Any person becoming a shareholder in
this Corporation shall be deemed to assent to these regulations, and any
alterations, amendments, or additions thereto, lawfully adopted, and shall
designate to the Secretary or appointed Transfer Agents of the Corporation, the
address to which he desires that notices herein required to be given may be
sent, and all notices mailed to such address, with postage prepaid, shall be
considered as duly given at the date of mailing; provided, however, that, in the
event any shareholder shall have failed to so designate an address to which
notices shall be sent, said notices shall be sent to any address where the
Secretary believes he may be reached, otherwise to "General Delivery,
Cincinnati, Ohio." The mailing or any notice to "General Delivery, Cincinnati,
Ohio," shall be conclusive evidence that the Secretary knows of no address where
he believes said shareholder may be reached.
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
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EXHIBIT "1.1.13"
FORM OF EAGLE-PICHER INDUSTRIES, INC.
PERSONAL INJURY SETTLEMENT TRUST AGREEMENT
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EAGLE-PICHER INDUSTRIES, INC.
PERSONAL INJURY SETTLEMENT TRUST AGREEMENT
This Trust Agreement is among Eagle-Picher Industries, Inc., an Ohio
corporation and debtor in possession ("EAGLE-PICHER"), and its affiliates, Daisy
Parts, Inc., Transicoil, Inc., Michigan Automotive Research Corp., EDI, Inc.,
Eagle-Picher Minerals, Inc., Eagle-Picher Europe, Inc., and Hillsdale Tool &
Manufacturing Co. ("SETTLORS"), and Darius W. Gaskins, Jr., Kevin O'Donnell,
Daniel M. Phillips, William J. Williams and Marshall Wright, as Trustees
("TRUSTEES"), pursuant to the Second Amended Consolidated Joint Plan of
Reorganization of Eagle-Picher and its affiliated debtors, dated July 15, 1996
(the "PLAN").
WHEREAS, at the time of the entry of the order for relief in the Chapter
11 Cases, Eagle-Picher was named as a defendant in personal injury, wrongful
death, and property damage actions seeking recovery for damages allegedly caused
by the presence of, or exposure to, asbestos or asbestos-containing products;
and
WHEREAS, Eagle-Picher and its affiliated debtors (collectively, the
"DEBTORS") have reorganized under the provisions of Chapter 11 of the Bankruptcy
Code in cases pending in the United States Bankruptcy Court for the Southern
District of Ohio known as In re Eagle-Picher Industries, Inc., et al.,
Consolidated Case No. 1-91-00100 ("CHAPTER 11 CASES"); and
WHEREAS, the Plan, filed by the Debtors, the Legal Representative for
Future Claimants appointed by the Bankruptcy Court pursuant to its order of
October 31, 1991 ("FUTURE REPRESENTATIVE") and the Bankruptcy Court-appointed
committee composed of the representatives of certain tort claimants of the
Debtors ("INJURY CLAIMANTS' COMMITTEE") has been confirmed by the Bankruptcy
Court; and
WHEREAS, the Plan provides, inter alia, for the creation of the
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust ("PI TRUST"); and
WHEREAS, pursuant to the Plan, the PI Trust is to be funded in whole or in
part by the securities of the Debtors and by the obligation of the Debtors to
make future payments, including dividends; and
WHEREAS, pursuant to the Plan, the PI Trust is to own a majority of the
voting shares of the Eagle-Picher; and
WHEREAS, pursuant to the Plan, the PI Trust is to use its assets or income
to pay Claims and Demands, as defined in Sections 101(5) and 524(g)(5) of the
Bankruptcy Code respectively, against the Debtors; and
WHEREAS, the Plan provides, among other things, for the complete
settlement and satisfaction of all liabilities and obligations of the Debtors
with respect to Asbestos Personal Injury Claims and Lead Personal Injury Claims
(hereinafter Asbestos Personal Injury Claims and Lead Personal Injury Claims are
sometimes jointly referred to as "TOXIC PERSONAL INJURY CLAIMS"); and
WHEREAS, pursuant to the Plan, the PI Trust is intended to qualify as a
"Qualified Settlement Fund" within the meaning of Section 1.468B-1 of the
Treasury Regulations promulgated under Section 468B of the Internal Revenue
Code; and
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WHEREAS, the Bankruptcy Court has determined that the PI Trust and the
Plan satisfy all the prerequisites for a supplemental injunction pursuant to
Section 524(g) of the Bankruptcy Code, which Asbestos and Lead PI Permanent
Channeling Injunction has been entered in connection with the Confirmation
Order;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
As used herein, the following terms shall have the meanings specified
below:
1.1 Affiliate: Any Entity that is an "affiliate" of any of the Debtors
within the meaning of Section 101(2) of the Bankruptcy Code except (i) American
Imaging Services, Inc., (ii) Tri Sigma Corporation, and (iii) the PI Trust.
1.2 Asbestos and Lead PI Permanent Channeling Injunction: An order or
orders of the Bankruptcy Court or the District Court permanently and forever
staying, restraining, and enjoining any Entity from taking any of the following
actions for the purpose of, directly or indirectly, collecting, recovering, or
receiving payment of, on, or with respect to any Asbestos Personal Injury Claims
or Lead Personal Injury Claims (other than actions brought to enforce any right
or obligation under the Plan, any Exhibits to the Plan, or any other agreement
or instrument between any of the Debtors or the Reorganized Debtors and the PI
Trust, which actions shall be in conformity and compliance with the provisions
hereof):
(a) commencing, conducting, or continuing in any manner, directly or
indirectly, any suit, action, or other proceeding (including, without express or
implied limitation, a judicial, arbitral, administrative, or other proceeding)
in any forum against or affecting any PI Protected Party or any property or
interests in property of any PI Protected Party;
(b) enforcing, levying, attaching (including, without express or
implied limitation, any prejudgment attachment), collecting, or otherwise
recovering by any means or in any manner, whether directly or indirectly, any
judgment, award, decree, or other order against any PI Protected Party or any
property or interests in property of any PI Protected Party;
(c) creating, perfecting, or otherwise enforcing in any manner,
directly or indirectly, any Encumbrance against any PI Protected Party or any
property or interests in property of any PI Protected Party;
(d) setting off, seeking reimbursement of, contribution from, or
subrogation against, or otherwise recouping in any manner, directly or
indirectly, any amount against any liability owed to any PI Protected Party or
any property or interests in property of any PI Protected Party; and
(e) proceeding in any manner in any place with regard to any matter
that is subject to resolution pursuant to the PI Trust, except in conformity and
compliance therewith.
1.3 Asbestos or Lead Contribution Claim: Any right to payment, claim,
remedy, liability, or Demand now existing or hereafter arising, whether or not
such right, claim, remedy, liability or Demand is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured, whether or not the facts of
or legal bases for such right, claim, remedy, liability or Demand are known or
unknown, that is (i) held by (A) any Entity (other than a director or officer
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entitled to indemnification pursuant to Section 8.6 of the Plan) who has been,
is, or may be a defendant in an action seeking damages for death, bodily injury,
or other personal damages (whether physical, emotional, or otherwise) to the
extent caused or allegedly caused, directly or indirectly, by exposure to (x)
asbestos or asbestos-containing products or (y) products that contain lead
chemicals, or (B) any assignee or transferee of such Entity, and (ii) on account
of alleged liability of any of the Debtors for reimbursement or contribution of
any portion of any damages such Entity has paid or may pay to the plaintiff in
such action.
1.4 Asbestos Personal Injury Claim: Any right to payment, claim, remedy,
liability, or Demand now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, whether or not the facts of or legal
bases for such right, claim, remedy, liability, or Demand are known or unknown,
for, under any theory of law, equity, admiralty, or otherwise, death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
asbestos or asbestos-containing products that were manufactured, sold, supplied,
produced, distributed, released, or in any way marketed by any of the Debtors
prior to the Petition Date, including, without express or implied limitation,
any right, claim, remedy, liability, or Demand for compensatory damages (such as
loss of consortium, wrongful death, survivorship, proximate, consequential,
general, and special damages) and including punitive damages and any Asbestos or
Lead Contribution Claim.
1.5 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, and as
codified in Title 11 of the United States Code, as applicable to the Chapter 11
Cases.
1.6 Bankruptcy Court: The United States District Court for the Southern
District of Ohio, Western Division, having jurisdiction over the Chapter 11
Cases and, to the extent of any reference made pursuant to section 157 of title
28 of the United States Code, the unit of such District Court constituted
pursuant to section 151 of title 28 of the United States Code.
1.7 Business Day: Any day on which commercial banks are required to be
open for business in Cincinnati, Ohio.
1.8 Claim: (a) A "claim," as defined in Section 101(5) of the Bankruptcy
Code, against any of the Debtors or Debtors in Possession, whether or not
asserted, whether or not the facts of or legal bases therefor are known or
unknown, and specifically including, without express or implied limitation, any
rights under Sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, any
claim of a derivative nature, any potential or unmatured contract claims, and
any other Contingent Claim, and (b) any Environmental Claim or Product Liability
Tort Claim, whether or not it constitutes a "claim," as defined in Section
101(5) of the Bankruptcy Code.
1.9 Confirmation Order: The order or orders of the Bankruptcy Court
confirming the Plan in accordance with the provisions of Chapter 11 of the
Bankruptcy Code, which will contain, inter alia, the Asbestos and Lead PI
Permanent Channeling Injunction, the Asbestos Property Damage Permanent
Channeling Injunction, and the Claims Trading Injunction.
1.10 Contingent Claim: Any Claim, the liability for which attaches or is
dependent upon the occurrence or happening, or is triggered by, an event, which
event has not yet occurred, happened, or been triggered, as of the date on which
such Claim is sought to be estimated or an objection to such Claim is filed,
whether or not such event is within the actual or presumed contemplation of the
holder of such Claim and whether or not a relationship between the holder of
such Claim and any of the Debtors now or hereafter exists or previously existed.
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1.11 Demand: A demand for payment, present or future, that (i) was not a
Claim during the Chapter 11 Cases; (ii) arises out of the same or similar
conduct or events that gave rise to the Claims addressed by the Asbestos and
Lead PI Permanent Channeling Injunction; and (iii) pursuant to the Plan, is to
be paid by the PI Trust.
1.12 Divestiture Notes: Those certain Senior Unsecured Notes in the
aggregate principal amount of Fifty Million and 00/100 Dollars ($50,000,000.00),
bearing interest at a rate determined by McDonald & Company Securities, Inc. on
the Effective Date as the rate such Senior Unsecured Notes should bear in order
to have a market value of one hundred percent (100%) of their principal amount
on the Effective Date, and substantially in the form of Exhibit "1.1.55" to the
Plan.
1.13 Effective Date: The first Business Day after the date on which all of
the conditions precedent to the effectiveness of the Plan specified in Section
7.10 of the Plan have been satisfied or waived or, if a stay of the Confirmation
Order is in effect on such date, the first Business Day after the expiration,
dissolution, or lifting of such stay.
1.14 Encumbrance: With respect to any asset, any mortgage, lien, pledge,
charge, security interest, assignment, or encumbrance of any kind or nature in
respect of such asset (including, without express or implied limitation, any
conditional sale or other title retention agreement, any security agreement, and
the filing of, or agreement to give, any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction).
1.15 Entity: An individual, corporation, partnership, association, joint
stock company, joint venture, estate, trust, unincorporated organization, or
government or any political subdivision thereof, or other person or entity.
1.16 Environmental Claim: Any Claim as to which the treatment thereof is
set forth in (a) the Environmental Settlement Agreement or (b) an agreement by
and between any of the Debtors and any party asserting a Claim against any of
the Debtors relating to alleged contamination under the federal or state
environmental laws or regulations, pursuant to which agreement all or a portion
of such Claim (to the extent and subject to the limitations imposed by such
agreement) may be asserted by the holder thereof after the Effective Date, to
the extent that such agreement is approved and authorized by a Final Order of
the Bankruptcy Court or otherwise in accordance with the Claims Settlement
Guidelines.
1.17 Environmental Settlement Agreement: That certain Settlement
Agreement, lodged with the Bankruptcy Court on March 23, 1995, by and between
the Debtors and the parties listed on the signatory pages thereof, to the extent
that such Settlement Agreement is approved and authorized by the Bankruptcy
Court by a Final Order of the Bankruptcy Court.
1.18 Final Order: An order as to which the time to appeal, petition for
certiorari, or move for reargument or rehearing has expired and as to which no
appeal, petition for certiorari or other proceedings for reargument or rehearing
shall then be pending or as to which any right to appeal, petition for
certiorari, reargue, or rehear shall have been waived in writing in form and
substance satisfactory to the Debtors or the Reorganized Debtors, as the case
may be, and their counsel or, in the event that an appeal, writ of certiorari,
or reargument or rehearing thereof has been sought, such order shall have been
affirmed by the highest court to which such order was appealed, or certiorari
has been denied or from which reargument or rehearing was sought, and the time
to take any further appeal, petition for certiorari or move for reargument or
rehearing shall have expired.
A1.1.13-4
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1.19 Lead Personal Injury Claim: Any right to payment, claim, remedy,
liability, or Demand, now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured, or unsecured, whether or not the facts of or legal
bases for such right, claim, remedy, liability, or Demand are known or unknown,
for, under any theory of law, equity, admiralty, or otherwise, death, bodily
injury, or other personal damages (whether physical, emotional, or otherwise) to
the extent caused or allegedly caused, directly or indirectly, by exposure to
products that contained lead chemicals that were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, including, without express or implied limitation, any right,
claim, remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages) and including punitive damages and any Asbestos or Lead
Contribution Claim.
1.20 New Eagle-Picher Common Stock: Voting common stock, with no par
value, of Reorganized Eagle-Picher from and after the Effective Date after
giving effect to the Amended and Restated Articles of Incorporation.
1.21 Petition Date: January 7, 1991
1.22 PI Protected Party: Any of the following parties:
(a) the Debtors;
(b) the Reorganized Debtors;
(c) an Affiliate;
(d) any Entity that, pursuant to the Plan or after the Effective
Date becomes a direct or indirect transferee of, or successor to any assets of
any of the Debtors, the Reorganized Debtors, or the PI Trust (but only to the
extent that liability is asserted to exist by reason of it becoming such a
transferee or successor);
(e) any Entity that, pursuant to the Plan or after the Effective
Date, makes a loan to any of the Reorganized Debtors or the PI Trust or to a
successor to, or transferee of, any assets of any of the Debtors, the
Reorganized Debtors, or the PI Trust (but only to the extent that liability is
asserted to exist by reason of such Entity becoming such a lender or to the
extent any pledge of assets made in connection with such a loan is sought to be
upset or impaired); or
(f) any Entity to the extent he, she, or it is alleged to be
directly or indirectly liable for the conduct of, Claims against, or Demands on
any of the Debtors, the Reorganized Debtors, or the PI Trust on account of
Asbestos Personal Injury Claims or Lead Personal Injury Claims by reason of one
or more of the following:
(i) such Entity's ownership of a financial interest in any of
the Debtors or the Reorganized Debtors, a past or present affiliate of any
of the Debtors or the Reorganized Debtors, or predecessor in interest of
any of the Debtors or the Reorganized Debtors;
(ii) such Entity's involvement in the management of any of the
Debtors or the Reorganized Debtors or any predecessor in interest of any
of the Debtors or the Reorganized Debtors;
A1.1.13-5
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(iii) such Entity's service as an officer, director, or
employee of any of the Debtors, the Reorganized Debtors, or Related
Parties;
(iv) such Entity's provision of insurance to any of the
Debtors, the Reorganized Debtors, or Related Parties; or
(v) such Entity's involvement in a transaction changing the
corporate structure, or in a loan or other financial transaction affecting
the financial condition, of any of the Debtors, the Reorganized Debtors,
or any of the Related Parties.
1.23 Product Liability Tort Claim: Any right to payment, claim, remedy,
liability, or Demand, now existing or hereafter arising, whether or not such
right, claim, remedy, liability, or Demand is reduced to judgment, liquidated,
unliquidated fixed, contingent, matured, unmatured, disputed, undisputed, legal,
equitable, secured, or unsecured, whether or not the facts of or legal bases for
such right, claim, remedy, liability, or Demand are known or unknown, for, under
any theory of law, equity, admiralty, or otherwise, death, bodily injury, or
other personal damages (whether physical, emotional, or otherwise) to the extent
caused or allegedly caused, directly or indirectly, by exposure to any products
or byproducts that were manufactured, sold, supplied, produced, released,
distributed, or in any way marketed by any of the Debtors prior to the Petition
Date, including, without express or implied limitation, any right, claim,
remedy, liability, or Demand for compensatory damages (such as loss of
consortium, wrongful death, survivorship, proximate, consequential, general, and
special damages), including punitive damages, and including, without express or
implied limitation, any Asbestos Personal Injury Claim or Lead Personal Injury
Claim.
1.24 Related Parties: (a) Any past or present affiliate of any of the
Debtors or the Reorganized Debtors, (b) any predecessor in interest of any of
the Debtors or the Reorganized Debtors, or (c) any Entity that owned a financial
interest in any of the Debtors or the Reorganized Debtors, any past or present
affiliate of any of the Debtors or the Reorganized Debtors, or any predecessor
in interest of any of the Debtors or the Reorganized Debtors.
1.25 Reorganized Debtors: The Debtors, or any successors in interest
thereto, from and after the Effective Date.
1.26 Reorganized Eagle-Picher: Eagle-Picher, or any successor in interest
thereto, from and after the Effective Date.
1.27 Senior Unsecured Sinking Fund Debentures: Those certain Senior
Unsecured Sinking Fund Debentures in the aggregate principal amount of Two
Hundred Fifty Million and 00/100 Dollars ($250,000,000.00), bearing interest at
a rate determined by McDonald & Company Securities, Inc. on the Effective Date
as the rate such Senior Unsecured Sinking Fund Debentures should bear in order
to have a market value of one hundred percent (100%) of their principal amount
on the Effective Date, and substantially in the form set forth in Exhibit
"1.1.114" to the Plan.
All capitalized terms used herein and not defined in this Article 1 or in
another provision of this Trust Agreement shall have the meanings assigned to
them in the Plan and/or the Bankruptcy Code, which definitions are incorporated
by reference herein.
A1.1.13-6
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ARTICLE 2
AGREEMENT OF TRUST
2.1 Creation and Name. The Settlor hereby creates a trust known as the
"Eagle-Picher Industries, Inc. Personal Injury Settlement Trust", which is the
PI Trust provided for and referred to in the Plan. The Trustees of the PI Trust
may transact the business and affairs of the PI Trust in the name, "Eagle-Picher
Industries Personal Injury Settlement Trust".
2.2 Purpose. The purpose of the PI Trust is to assume any and all
liabilities of the Debtors, their successors in interest or their affiliates,
with respect to any and all Toxic Personal Injury Claims; to use the PI Trust's
assets and income to promptly pay holders of valid Toxic Personal Injury Claims
in such a way that holders of similar Toxic Personal Injury Claims are paid in
substantially the same manner; and to otherwise comply in all respects with the
requirements of a trust set forth in Section 524(g)(2)(B)(i) of the Bankruptcy
Code. This purpose shall be fulfilled through the provisions of this Trust
Agreement, the Eagle-Picher Industries, Inc. Asbestos Injury Claims Resolution
Procedures attached hereto as Annex B ("EPI ASBESTOS CLAIMS PROCEDURES"), and
any Lead Personal Injury Claims procedures adopted pursuant to the Trust
Agreement ("EPI LEAD CLAIMS PROCEDURES").
2.3 Transfer of Assets. The Settlors hereby transfer and assign to the PI
Trust the property set forth in Article 10 of the Plan ( herein the "ASSETS").
2.4 Acceptance of Assets and Assumption of Liabilities.
(a) In furtherance of the purposes of the PI Trust, the Trustees, on
behalf of the PI Trust, hereby expressly accept the transfer and assignment to
the PI Trust of the Assets.
(b) In furtherance of the purposes of the PI Trust, and subject to
Article 5.4, the Trustees, on behalf of the PI Trust, expressly assume all
liability for all Toxic Personal Injury Claims as provided for in Article 10 of
the Plan. Except as otherwise provided in the EPI Asbestos Claims Procedures,
the PI Trust shall have all defenses, cross-claims, offsets, and recoupments
regarding Toxic Personal Injury Claims that Eagle-Picher has or would have had
under applicable law.
(c) Neither the Debtors nor their successors in interest or their
affiliates shall be entitled to any indemnification from the PI Trust for any
expenses, costs, and fees (including attorneys' fees), judgments, settlements,
or other liabilities arising from or incurred in connection with, any action
related to a Toxic Personal Injury Claim, including, but not limited to,
indemnification or contribution for Toxic Personal Injury Claims prosecuted
against Reorganized Eagle-Picher. Nothing in this section or any other section
of this Trust Agreement shall be construed in any way to limit the scope,
enforceability, or effectiveness of the Asbestos and Lead PI Permanent
Channeling Injunction issued in connection with the Plan or the PI Trust's
assumption of all liability with respect to Toxic Personal Injury Claims.
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ARTICLE 3
POWERS AND TRUST ADMINISTRATION
3.1 Powers.
(a) Subject to the limitations set forth in this Trust Agreement,
the Trustees shall have the power to take any and all actions that, in the
judgment of the Trustees, are necessary or proper to fulfill the purposes of the
PI Trust, including, without limitation, each power expressly granted in this
Article 3.1, any power reasonably incidental thereto, and any trust power now or
hereafter permitted under the laws of the State of Ohio.
(b) Except as otherwise specified herein, the Trustees need not
obtain the order or approval of any court in the exercise of any power or
discretion conferred hereunder.
(c) Without limiting the generality of Article 3.1(a) above, the
Trustees shall have the power to:
(i) receive and hold the Assets, vote the New Eagle-Picher
Common Stock, exercise all rights with respect to, and sell any securities
issued by Reorganized Eagle-Picher that are included in the Assets,
subject to any restrictions set forth in the articles of incorporation of
Reorganized Eagle-Picher;
(ii) invest the monies held from time to time by the PI Trust;
(iii) sell, transfer or exchange any or all of the Assets at
such prices and upon such terms as they may consider proper, consistent
with the other terms of this Trust Agreement;
(iv) pay liabilities and expenses of the PI Trust;
(v) change the state of domicile of the PI Trust;
(vi) establish such funds, reserves and accounts within the PI
Trust estate, as deemed by the Trustees to be useful in carrying out the
purposes of the PI Trust;
(vii) sue and be sued and participate, as a party or
otherwise, in any judicial, administrative, arbitrative or other
proceeding;
(viii) amend the Bylaws, a copy of which is annexed hereto as
Annex A (the "BYLAWS");
(ix) appoint such officers and hire such employees and engage
such legal, financial, accounting, investment and other advisors,
alternative dispute resolution panelists, and agents as the business of
the PI Trust requires, and to delegate to such persons such powers and
authorities as the fiduciary duties of the Trustees permit and as the
Trustees, in their discretion, deem advisable or necessary in order to
carry out the terms of this PI Trust;
(x) pay employees, legal, financial, accounting, investment
and other advisors and agents reasonable compensation, including without
limitation, compensation at rates approved by the Trustees for services
rendered prior to the execution hereof;
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(xi) reimburse the Trustees, subject to Article 5.5, and
reimburse such officers, employees, legal, financial, accounting,
investment and other advisors and agents all reasonable out-of-pocket
costs and expenses incurred by such persons in connection with the
performance of their duties hereunder, including without limitation, costs
and expenses incurred prior to the execution hereof;
(xii) execute and deliver such deeds, leases and other
instruments as the Trustees consider proper in administering the PI Trust;
(xiii) enter into such other arrangements with third parties
as are deemed by the Trustees to be useful in carrying out the purposes of
the PI Trust, provided such arrangements do not conflict with any other
provision of this Trust Agreement;
(xiv) in accordance with Article 5.6, indemnify (and purchase
insurance indemnifying) Trustees and TAC members, and officers, employees,
agents, advisers and representatives of the PI Trust or the TAC to the
fullest extent that a corporation or trust organized under the law of the
PI Trust's domicile is from time to time entitled to indemnify and/or
insure its directors, trustees, officers, employees, agents, advisers and
representatives;
(xv) indemnify (and purchase insurance indemnifying) the
Additional Indemnitees as defined in Article 5.6 hereof;
(xvi) delegate any or all of the authority herein conferred
with respect to the investment of all or any portion of the Assets to any
one or more reputable individuals or recognized institutional investment
advisers or investment managers without liability for any action taken or
omission made because of any such delegation, except as provided in
Article 5.4;
(xvii) consult with Reorganized Eagle-Picher at such times and
with respect to such issues relating to the conduct of the PI Trust as the
Trustees consider desirable;
(xviii) make, pursue (by litigation or otherwise), collect,
compromise or settle any claim, right, action or cause of action included
in the Assets; and
(xix) merge or contract with other claims resolution
facilities that are not specifically created by this Agreement or the EPI
Asbestos Claims Procedures, subject to Article 3.2(e) of this Agreement;
provided that such merger or contract shall not (a) alter the EPI Asbestos
Claims Procedures; (b) subject the Reorganized Debtors or any successor in
interest to any risk of having any Toxic Personal Injury Claim asserted
against it or them; or (c) otherwise jeopardize the validity or
enforceability of the Asbestos and Lead PI Permanent Channeling
Injunction.
(d) The Trustees shall promptly educate and inform themselves as to
Lead Personal Injury Claims that may be asserted against the PI Trust. To do so,
the Trustees shall expend no more than $2.5 million of PI Trust funds, in total,
for medical, scientific, and other research into diseases and conditions
allegedly caused by exposure to lead pigment-containing products. This research
shall also be used to determine what products cause such diseases and
conditions. The nature of the research conducted shall be in the Trustees' sole
discretion. This subsection shall in no way limit the Trustees' authority to
expend money as they otherwise are permitted or required by other sections of
this Trust Agreement, including, without limitation, Article 3.3 herein.
(e) The Trustees shall not have the power to guaranty any debt of
other persons.
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3.2 General Administration.
(a) The Trustees shall act in accordance with the Bylaws. To the
extent not inconsistent with the terms of this Trust Agreement, the Bylaws
govern the affairs of the PI Trust.
(b) The Trustees shall timely file such income tax and other returns
and statements and comply with all withholding obligations, as required under
the applicable provisions of the Internal Revenue Code and of any state law and
the regulations promulgated thereunder.
(c) (i) The Trustees shall cause to be prepared and filed with the
Bankruptcy Court, as soon as available, and in any event within ninety
(90) days following the end of each fiscal year, an annual report
containing financial statements of the PI Trust (including, without
limitation, a balance sheet of the PI Trust as of the end of such fiscal
year and a statement of operations for such fiscal year) audited by a firm
of independent certified public accountants selected by the Trustees and
accompanied by an opinion of such firm as to the fairness of the financial
statements' presentation of the cash and investments available for the
payment of claims and as to the conformity of the financial statements
with generally accepted accounting principles. The Trustees shall provide
a copy of such report to the TAC and to Reorganized Eagle-Picher.
(ii) Simultaneously with delivery of each set of financial
statements referred to in Article 3.2(c)(i) above, the Trustees shall
cause to be prepared and filed with the Bankruptcy Court a report
containing a summary regarding the number and type of claims disposed of
during the period covered by the financial statements.
(iii) All materials required to be filed with the Bankruptcy
Court by this Article 3.2 shall be available for inspection by the public
in accordance with procedures established by the Bankruptcy Court.
(d) The Trustees shall cause to be prepared and submitted to the TAC
as soon as practicable prior to the commencement of each fiscal year a budget
and cash flow projections covering such fiscal year and the succeeding four
fiscal years.
(e) The Trustees shall consult with the TAC (as hereinafter defined)
on the appointment of successor Trustees, the implementation and administration
of the EPI Asbestos Claims Procedures, the expenditure of funds for research as
described in Article 3.1 (d), and the adoption and administration of the EPI
Lead Claims Procedures (herein the EPI Asbestos Claims Procedures and the EPI
Lead Claims Procedures are some times jointly referred to as the "PROCEDURES").
The Trustees shall be required to obtain the consent of a majority of the
members of the TAC in order:
(i) to amend materially the Procedures, unless such amendment
relates to the specific amounts or percentages to be paid to holders of
Toxic Personal Injury Claims who have not elected discounted payment, in
which case, TAC consent is not required; or
(ii) to merge or participate with any claims resolution
facility that was not specifically created under this Trust Agreement or
the Procedures; or
(iii) to amend any provision of Article 6 herein; or
(iv) to terminate the PI Trust pursuant to Article 7.2(a)(iii)
herein.
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The TAC shall not unreasonably withhold any consent required hereunder, and if
ever the TAC shall withhold any consent required hereunder, at the election of
the Trustees, the dispute between the Trustees and the TAC shall be resolved
through the implementation of binding alternative dispute resolution procedures
mutually agreed to by the Trustees and the TAC.
3.3 Claims Administration.
(a) General Principles.
The Trustees shall proceed quickly to implement the EPI Asbestos
Claims Procedures, and they shall proceed quickly to adopt the EPI Lead Claims
Procedures when, and if, Lead Personal Injury Claims become eligible for
processing by the PI Trust. The PI Trust shall pay holders of valid Toxic
Personal Injury Claims in accordance with the provisions hereof as promptly as
funds become available. In their administration of the Procedures, the Trustees
shall favor settlement over arbitration, arbitration over resort to the tort
system, and fair and efficient resolution of claims in all cases, while
endeavoring to preserve and enhance the PI Trust estate.
(b) Asbestos Personal Injury Claims.
(i) The Trustees shall employ mechanisms such as the review of
estimates of the numbers and values of Asbestos Personal Injury Claims, or
other comparable mechanisms, that provide reasonable assurance the PI
Trust will value, and be in a financial position to pay, similar present
asbestos personal injury Claims and future asbestos personal injury
Demands in substantially the same manner.
(ii) The Trustees shall administer the processing and payment
of Asbestos Personal Injury Claims in accordance with the EPI Asbestos
Claims Procedures, a copy of which is annexed hereto as Annex B, as the
same may be amended from time to time, in accordance with the provisions
hereof and thereof.
(c) Lead Personal Injury Claims.
(i) The Trustees shall employ mechanisms such as the review of
estimates of the numbers and values of Lead Personal Injury Claims, or
other comparable mechanisms, that provide reasonable assurance the PI
Trust will value, and be in a financial position to pay, similar present
lead personal injury Claims and future lead personal injury Demands in
substantially the same manner. Notwithstanding the foregoing, due to (x)
the present absence of any court judgment imposing personal injury
liability upon any lead pigment manufacturer like Eagle-Picher, and (y)
the difficult, expensive, and inherently uncertain task of estimating the
amount of valid Lead Personal Injury Claims, if any, that the PI Trust may
be required to pay some time in the future, the Trustees shall not be
required to estimate the PI Trust's possible liability for, or decide
whether to reserve funds or otherwise maintain sufficient resources for
the payment of, Lead Personal Injury Claims until the latest of the
following events:
(A) four years have passed after the Effective Date;
(B) the PI Trust has paid One Million Dollars
($1,000,000) in indemnity costs, as opposed to claim defense costs,
for Lead Personal Injury Claims in any one calendar year; or
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(C) holders of Lead Personal Injury Claims obtain final,
nonappealable liability judgments against lead pigment manufacturers
in more than one state.
(ii) The Trustees shall administer the processing and payment
of Lead Personal Injury Claims pursuant to the EPI Lead Claims Procedures
to be adopted by the Trustees. The EPI Lead Claims Procedures shall be
similar to the EPI Asbestos Claims Procedures. For example, like the EPI
Asbestos Claims Procedures, the EPI Lead Claims Procedures shall provide
that the holders of Lead Personal Injury Claims shall be prevented from
suing the PI Trust in the tort system until they have exhausted their
remedies against the PI Trust under the EPI Lead Claims Procedures.
However, due to (x) the present absence of any court judgment imposing
personal injury liability upon any lead pigment manufacturer like
Eagle-Picher, and (y) the difficult, expensive, and inherently uncertain
task of estimating the amount of valid Lead Personal Injury Claims, if
any, that the PI Trust may be required to pay some time in the future, the
EPI Lead Claims Procedures shall differ from the EPI Asbestos Claims
Procedures in at least the following respect:
(A) no Lead Personal Injury Claim or any claim for
contribution, indemnification, or reimbursement of liability for a
Lead Personal Injury Claim shall be eligible for processing by the
PI Trust unless the holder can demonstrate that either the holder or
a similarly situated lead personal injury claimant has obtained a
final, nonappealable judgment against a lead pigment manufacturer
under the state law applicable to the holder's claim;
The PI Trust's determination under (A) above as to whether a claim
is eligible for processing (i) shall be final and nonappealable and (ii)
shall not be deemed to be an exhaustion of the claim holder's remedies
against the PI Trust, so that any claims the PI Trust determines to be
ineligible for processing may be refiled against the PI Trust at such time
as eligibility can be established under (A) above.
(d) Bankruptcy Court Claims Bar Date Orders.
(i) As provided herein, the Trustees shall enforce the
Bankruptcy Court's claims' bar date orders that are applicable to Toxic
Personal Injury Claims.
(ii) The Trustees shall disallow any Toxic Personal Injury
Claim if they determine the claimant inexcusably failed to comply with an
applicable claims bar date order entered by the Bankruptcy Court, and any
such decision shall be final and non-appealable. Notwithstanding the
foregoing, the Trustees shall not disallow a Toxic Personal Injury Claim
for failure to comply with an applicable claims bar date order if the
holder of such Toxic Personal Injury Claim demonstrates that the asbestos
or lead related disease complained of first manifested itself after the
applicable claims bar date order. For example, an asbestos disease victim
(A) who first manifested any asbestos related disease after the applicable
claims' bar date or (B) who suffered from a less serious asbestos related
disease, such as pleural thickening, at the time of the applicable bar
date and who later developed a more serious asbestos related disease, such
as cancer, shall not have his claim disallowed for failure to comply with
the applicable claims bar date order.
(iii) The Trustees shall have complete discretion to determine
whether a claimant inexcusably failed to comply with an applicable claims
bar date order. In making this determination, the Trustees may be guided
by the "excusable neglect" standard developed under federal bankruptcy law
in connection with the adjudication of late filed proofs of claim in
bankruptcy cases.
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ARTICLE 4
ACCOUNTS, INVESTMENTS, AND PAYMENTS
4.1 Accounts. The Trustees may, from time to time, create such accounts
and reserves within the PI Trust estate as they may deem necessary, prudent or
useful in order to provide for the payment of expenses and valid Toxic Personal
Injury Claims and may, with respect to any such account or reserve, restrict the
use of monies therein.
4.2 Separate Reserve For Future Claims. The first Fifty Million
($50,000,000) paid on the Divestiture Notes and the Senior Unsecured Sinking
Fund Debentures held by the PI Trust shall be segregated and held in a separate
account as a reserve for the payment of valid Toxic Personal Injury Claims whose
holders first manifest a disease after the Effective Date. The segregation and
holding of such funds, however, shall not in any way alter the duties of the
Trustees to pay similar present and future Toxic Personal Injury Claims in
substantially the same manner.
4.3 Investments. Investment of monies held in the PI Trust shall be
administered in the manner in which individuals of ordinary prudence, discretion
and judgment would act in the management of their own affairs, subject to the
following limitations and provisions:
(a) The PI Trust may acquire and hold any stock or securities issued
by Reorganized Eagle-Picher and included in the Assets and any New Eagle-Picher
Common Stock issuable on the exercise or conversion thereof, without regard to
any of the limitations set forth in the other parts of this Article 4.
(b) Except with respect to entities owned and controlled by the PI
Trust for purposes of carrying out provisions of this Trust Agreement, the PI
Trust shall not acquire or hold any equity in any Person or business enterprise
unless such equity is in the form of securities that are traded on a national
securities exchange or major international securities exchange or over the
National Association of Securities Dealers Automated Quotation System.
(c) The PI Trust shall not acquire or hold any repurchase
obligations unless, in the opinion of the Trustees, they are adequately
collateralized.
4.4 Source of Payments. All PI Trust expenses, payments and all
liabilities with respect to Toxic Personal Injury Claims shall be payable solely
out of the PI Trust estate. Neither Eagle-Picher, Reorganized Eagle-Picher, any
Debtors, their subsidiaries, any successor in interest or the present or former
directors, officers, employees or agents of Eagle-Picher, Reorganized
Eagle-Picher, any Debtors or their subsidiaries, nor the Trustees, the TAC, or
any of their officers, agents, advisers or employees shall be liable for the
payment of any PI Trust expense or Toxic Personal Injury Claim or any other
liability of the PI Trust.
ARTICLE 5
TRUSTEES
5.1 Number. There initially shall be five (5) Trustees, two of whom shall
serve for a period of three (3) years from the effective date of the PI Trust
("THREE YEAR SERVICE PERIOD"). At the end of the Three Year Service Period, the
two trustee positions subject to the Three Year Service Period will
automatically terminate and the PI Trust will thereafter operate with three
Trustees until termination of the PI Trust pursuant to Article 7.2. The initial
Trustees shall be those persons named on the signature page hereof.
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5.2 Term of Service.
(a) Pursuant to Article 5.1, two of the initial Trustees shall serve
until the earlier of (i) the expiration of the Three Year Service Period, (ii)
his or her death, (iii) his or her resignation pursuant to Article 5.2(c), (iv)
his or her removal pursuant to Article 5.2(d), or (v) the termination of the PI
Trust pursuant to Article 7.2, at which time the term shall terminate
automatically.
(b) Trustees whose terms do not terminate upon the expiration of the
Three Year Service Period shall serve until the earlier of (i) the termination
of the PI Trust pursuant to Article 7.2 below, (ii) his or her death, (iii) his
or her resignation pursuant to Article 5.2(c) below, or (iv) his or her removal
pursuant to Article 5.2(d) below, at which time his or her term shall terminate
automatically.
(c) Any Trustee may resign at any time by written notice to each of
the remaining Trustees and the TAC. Such notice shall specify a date when such
resignation shall take effect, which shall not be less than 90 days after the
date such notice is given, where practicable.
(d) Any Trustee may be removed in the event that such Trustee
becomes unable to discharge his or her duties hereunder due to accident or
physical or mental deterioration, or for other good cause. Good cause shall be
deemed to include, without limitation, any failure to comply with Article 5.9, a
consistent pattern of neglect and failure to perform or participate in
performing the duties of the Trustees hereunder, or repeated nonattendance at
scheduled meetings. Such removal shall require the unanimous decision of the
other Trustees. Such removal shall take effect at such time as the other
Trustees shall determine.
5.3 Appointment of Successor Trustee.
(a) In the event of a vacancy in the position of a Trustee, the
vacancy shall be filled by majority vote of the remaining Trustees who shall
refrain from making any appointment that may result in the appearance of
impropriety; provided, however, that during the Three Year Service Period the
remaining Trustees, in their discretion, may decide not to appoint a successor
Trustee to fill such a vacancy so long as the remaining Trustees number no less
than three (3).
(b) Immediately upon the appointment of any successor Trustee, all
rights, titles, duties, powers and authority of the predecessor Trustee
hereunder shall be vested in, and undertaken by, the successor Trustee without
any further act. No successor Trustee shall be liable personally for any act or
omission of his or her predecessor Trustee.
5.4 Liability of Trustees. No Trustee, officer, or employee of the PI
Trust shall be liable to the PI Trust, to any person holding a Toxic Personal
Injury Claim, or to any other Person except for such Trustee's, officer's or
employee's own breach of trust committed in bad faith or for willful
misappropriation. No Trustee, officer, or employee of the PI Trust shall be
liable for any act or omission of any other officer, agent, or employee of the
PI Trust, unless the Trustee acted with bad faith or willful misconduct in the
selection or retention of such officer, agent, or employee.
5.5 Compensation and Expenses of Trustees.
(a) Each of the Trustees shall receive compensation from the PI
Trust for his or her services as Trustee in the amount of $ 35,000 per annum,
plus a per diem allowance for meetings attended in the amount of $1,000, or some
other amount as determined by the Trustees, payable as determined by the
Trustees. The Trustees shall determine the scope and duration of activities that
constitute a meeting and may
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provide for partial payment of per diem amounts for activities of less than a
full day's duration. The per annum compensation payable to the Trustees
hereunder may only be increased annually by the Trustees proportionately with
any increase in the Consumer Price Index -- All Cities (or any successor index)
for the corresponding annual period. Any increase in excess of that amount may
be made only with the approval of the Bankruptcy Court.
(b) The PI Trust will promptly reimburse the Trustees for all
reasonable out-of-pocket costs and expenses incurred by the Trustees in
connection with the performance of their duties hereunder.
5.6 Indemnification of Trustees and Others.
(a) The PI Trust shall indemnify and defend the Trustees, the PI
Trust's officers, agents, advisers or employees, to the fullest extent that a
corporation or trust organized under the laws of the PI Trust's domicile is from
time to time entitled to indemnify and defend its directors, trustees, officers,
employees, agents or advisers against any and all liabilities, expenses, claims,
damages or losses incurred by them in the performance of their duties hereunder.
Notwithstanding the foregoing, the Trustees shall not be indemnified or defended
in any way for any liability, expense, claim, damage or loss for which they are
liable under Article 5.4. Additionally, each member of the Injury Claimants'
Committee and its professionals, the Future Representative and his
professionals, and each member of the TAC (collectively, "ADDITIONAL
INDEMNITEES") who was or is a party, or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding of any kind, whether
civil, administrative or arbitrative, by reason of any act or omission of such
Additional Indemnitees with respect to (i) the Chapter 11 Cases, (ii) the
liquidation of any Toxic Personal Injury Claims, or (iii) the administration of
the PI Trust and the implementation of the Procedures, shall be indemnified and
defended by the PI Trust against expenses, costs and fees (including attorneys'
fees), judgments, awards, costs, amounts paid in settlement, and liabilities of
all kinds incurred by each Additional Indemnitee in connection with or resulting
from such action, suit, or proceeding, if he or she acted in good faith and in a
manner such Additional Indemnitee reasonably believed to be in, or not opposed
to, the best interests of the holders of Toxic Personal Injury Claims.
(b) Reasonable expenses, costs and fees (including attorneys' fees)
incurred by or on behalf of a Trustee or Additional Indemnitee in connection
with any action, suit, or proceeding, whether civil, administrative or
arbitrative from which they are indemnified by the PI Trust pursuant to this
Article 5.6, may be paid by the PI Trust in advance of the final disposition
thereof upon receipt of an undertaking by or on behalf of such Trustee or
Additional Indemnitee to repay such amount unless it shall be determined
ultimately that such Trustee or Additional Indemnitee is entitled to be
indemnified by the PI Trust.
(c) The Trustees shall have the power, generally or in specific
cases, to cause the PI Trust to indemnify the employees and agents of the PI
Trust to the same extent as provided in this Article 5.6 with respect to the
Trustees.
(d) Any indemnification under Article 5.6(c) of this Agreement shall
be made by the PI Trust upon a determination that indemnification of such Person
is proper in the circumstances. Such determination shall be made by a majority
vote of the Trustees who were not parties to such action, suit, or proceeding,
if at least two such Trustees were not parties; otherwise the determination will
be made by legal counsel to the PI Trust.
(e) The Trustees may purchase and maintain reasonable amounts and
types of insurance on behalf of an individual who is or was a Trustee, officer,
employee, agent or representative of the PI Trust or Additional Indemnitee
against liability asserted against or incurred by such individual in that
capacity or arising from his or her status as a Trustee, officer, employee,
agent or representative.
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5.7 Trustees' Lien. The Trustees shall have a prior lien upon the PI Trust
corpus to secure the payment of any amounts payable to them pursuant to Articles
5.5 and 5.6.
5.8 Trustees' Employment of Experts. The Trustees may, but shall not be
required to, consult with counsel, accountants, appraisers and other parties
deemed by the Trustees to be qualified as experts on the matters submitted to
them (regardless of whether any such party is affiliated with any of the
Trustees in any manner, except as otherwise expressly provided in this Trust
Agreement), and the opinion of any such parties on any matters submitted to them
by the Trustees shall be full and complete authorization and protection in
respect of any action taken or not taken by the Trustees hereunder in good faith
and in accordance with the written opinion of any such party.
5.9 Trustees' Independence. No Trustee shall, during the term of his
service, hold a financial interest in Reorganized Eagle-Picher or act as
attorney for Reorganized Eagle-Picher or as an attorney or advisor for any
person who holds a Toxic Personal Injury Claim.
5.10 Trustees' Service as Officers or Consultants to the Trust. The
Trustees may, but are not required to, select any Trustee to serve as an officer
or manager of the Trust or as a consultant to the Trust. In the event any
Trustee serves the Trust in such a capacity, the Trust shall compensate the
Trustee in an amount determined by the Trustees. Compensation for a Trustee's
service as an officer or manager of the Trust or as a consultant to the Trust
shall be in addition to compensation paid pursuant to Article 5.5.
5.11 Trustees' Service as Directors of Reorganized Eagle-Picher.
Notwithstanding the provisions of Article 5.9 above, the Trustees are not
prohibited from serving as directors of Reorganized Eagle-Picher. If any Trustee
serves as a director of Reorganized Eagle-Picher, he shall not receive for such
service compensation over and above the compensation received as Trustee under
Article 5.5, but he shall receive from the PI Trust a per diem allowance in the
amount that Reorganized Eagle-Picher pays its directors for their attendance at
meetings.
5.12 Bond. The Trustees shall not be required to post any bond or other
form of surety or security unless otherwise ordered by the Bankruptcy Court.
ARTICLE 6
TRUSTEES' ADVISORY COMMITTEE
6.1 Formation; Duties. A Trustees' Advisory Committee (the "TAC") shall be
formed. The Trustees shall consult with the TAC on the appointment of successor
Trustees and the implementation and administration of the Procedures. The
Trustees may consult with the TAC on any matter affecting the PI Trust, and
certain actions by the Trustees are subject to the prior consent of the TAC as
provided in Article 3.2(e) hereof. The TAC shall endeavor to act in the best
interests of the holders of all Toxic Personal Injury Claims.
6.2 Number; Chairperson.
(a) There shall be three members of the TAC. One of the initial TAC
members shall be the Future Representative; the two other initial TAC members
shall be Robert E. Sweeney and Robert B. Steinberg. The TAC shall act in all
cases by majority vote.
(b) There shall be a Chairperson of the TAC. The Chairperson shall
act as the TAC's liaison, he shall coordinate and schedule meetings of the TAC,
and he shall handle all administrative matters
A1.1.13-16
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that come before the TAC. The Future Representative shall serve as Chairperson
of the TAC for as long as he is a member of the TAC.
6.3 Term of Office.
(a) Each member of the TAC shall serve for the duration of the PI
Trust, subject to the earlier of his or her death, resignation, or removal.
(b) Subject to Article 6.4(b) hereof, any member of the TAC may
resign at any time by written notice to each of the remaining members specifying
the date when such resignation shall take place.
(c) Any member of the TAC may be removed in the event such member
becomes unable to discharge his or her duties hereunder due to accident,
physical deterioration, mental incompetence, or a consistent pattern of neglect
and failure to perform or to participate in performing the duties of such member
hereunder, such as repeated nonattendance at scheduled meetings. Such removal
shall be made by the unanimous decision of the other members of the TAC, and it
shall be effective at such time as all other members of the TAC determine.
6.4 Appointment of Successor.
(a) A vacancy in the TAC caused by the resignation of a TAC member
shall be filled with an individual nominated by the resigning TAC member and
approved by the unanimous vote of all TAC members. The resigning TAC member's
resignation shall not be effective until such approval is obtained and the
successor TAC member has accepted the appointment.
(b) In the event of a vacancy in the membership of the TAC other
than one caused by resignation, the vacancy shall be filled by the unanimous
vote of the remaining member(s) of the TAC; provided, however, that the Future
Representative shall have the exclusive right to predesignate his successor,
subject only to the unanimous approval of the remaining member(s) of the TAC.
6.5 Compensation and Expenses of TAC Members.
(a) Each member of the TAC shall receive compensation from the PI
Trust for his or her services in the amount of $2,500.00 per diem for meetings
attended by such member, payable as determined by the Trustees, but not less
frequently than quarterly. Such per diem amount shall be increased or decreased
annually pro rata with the amount that the per diem for meetings paid to the
Trustees is increased or decreased pursuant to Article 5.5(a). For purposes of
determining the per diem amount hereunder, the same definition of "meeting"
shall apply to the TAC as is adopted by the Trustees for meetings of the
Trustees.
(b) In the discretion of the Trustees, the Future Representative may
receive compensation from the PI Trust in addition to the per diem meeting
allowance paid to each member of the TAC, if they deem it appropriate to
compensate him for the additional duties imposed upon him as Chairperson of the
TAC. Such additional compensation shall be paid at the hourly rate previously
approved for the Future Representative by the Bankruptcy Court in the Chapter 11
Cases.
(c) All reasonable out-of-pocket costs and expenses incurred by TAC
members in connection with the performance of their duties hereunder will be
promptly reimbursed to such members by the PI Trust.
A1.1.13-17
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6.6 Procedure for Obtaining Consent of TAC. In the event a matter is
subject to the consent of the TAC pursuant to the terms hereof, the Trustees
shall provide the TAC with the appropriate information regarding the matter in
question. Upon receipt of such information, the TAC shall be given a period of
twenty (20) days to respond to the Trustees' request for consent. This twenty
(20) day period may be extended with the consent of the Trustees. In the event
that the TAC does not respond to the Trustees within such twenty (20) day
period, or any extension thereof, as to their approval or non-approval to such
matter, then approval by the TAC shall be deemed to have been granted. The
members of the TAC must consider in good faith any request by the Trustees prior
to any non-approval thereof, and no member of the TAC may withhold his consent
unreasonably.
ARTICLE 7
GENERAL PROVISIONS
7.1 Irrevocability. The PI Trust is irrevocable, but is subject to
amendment as provided in Article 7.3.
7.2 Termination.
(a) The PI Trust shall automatically terminate on the date (the
"TERMINATION DATE") 90 days after the first occurrence of any of the following
events:
(i) the Trustees in their sole discretion decide to terminate
the PI Trust because (A) they deem it unlikely that new Toxic Personal
Injury Claims will be filed against the PI Trust and (B) all Toxic
Personal Injury Claims duly filed with the PI Trust have been liquidated
and satisfied and twelve consecutive months have elapsed during which no
new Toxic Personal Injury Claim has been filed with the PI Trust;
(ii) if the Trustees have procured and have in place
irrevocable insurance policies and have established claims handling
agreements and other necessary arrangements with suitable third parties
adequate to discharge all expected remaining obligations and expenses of
the PI Trust in a manner consistent with this Trust Agreement and the
Procedures, the date on which the Bankruptcy Court enters an order
approving such insurance and other arrangements and such order becomes
final;
(iii) if in the judgment of two/thirds of the Trustees, with
the consent of the TAC (which consent shall not be unreasonably withheld),
the continued administration of the PI Trust is uneconomic or inimical to
the best interests of the persons holding Toxic Personal Injury Claims and
the termination of the PI Trust will not expose or subject Reorganized
Eagle-Picher or any other Reorganized Debtor or any successor in interest
to any increased or undue risk of having any Toxic Personal Injury Claims
asserted against it or them or in any way jeopardize the validity or
enforceability of the Asbestos and Lead PI Permanent Channeling
Injunction; or
(iv) 21 years less 91 days pass after the death of the last
survivor of all the descendants of Joseph P. Kennedy, Sr. of Massachusetts
living on the date hereof.
(b) On the Termination Date, after payment of all the PI Trust's
liabilities have been provided for, all monies remaining in the PI Trust estate
shall be transferred to charitable organization(s) exempt from federal income
tax under Section 501(c)(3) of the Internal Revenue Code, which tax-exempt
organization(s) shall be selected by the Trustees using their reasonable
discretion; provided, however, that (i)
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if practicable, the tax-exempt organization(s) shall be related to the treatment
of, research, or the relief of suffering of individuals suffering from asbestos
or lead caused disorders, and (ii) the tax-exempt organization(s) shall not bear
any relationship to Reorganized Eagle-Picher within the meaning of Section
468(d)(3) of the Internal Revenue Code.
7.3 Amendments. The Trustees, after consultation with the TAC, and subject
to the TAC's consent when so provided herein, may modify or amend this Trust
Agreement or any document annexed to it, including, without limitation, the
Bylaws, or the Procedures, except that Articles 2.2 (Purpose), 2.4 (Acceptance
of Assets and Assumption of Liabilities), 3.1(e) (precluding guaranty of others'
debt), 3.2(e) (Trustees' consultation with TAC), 3.3(a)-(c) (claims
administration), 5.1 (Number of Trustees), 5.2 (Term of Service), 5.3
(Appointment of Successor Trustees), 5.5 (Compensation and Expenses of
Trustees), 5.6 (Indemnification of Trustees and Others), 5.9 (Trustees'
Disinterestedness), 6.1 (TAC Formation and Duties), 6.2 (TAC Number and
Chairperson), 6.4 (Appointment of Successor (TAC)), 7.1 (Irrevocability), 7.2
(Termination) and 7.3 (Amendments) herein shall not be modified or amended in
any respect. No consent from the Settlors shall be required to modify or amend
this Trust Agreement or any document annexed to it. Any modification or
amendment made pursuant to this section must be done in writing. Notwithstanding
anything contained herein to the contrary, neither this Trust Agreement nor the
Procedures shall be modified or amended in any way that would jeopardize the
efficacy or enforceability of the Asbestos and Lead PI Permanent Channeling
Injunction.
7.4 Meetings. For purposes of Articles 5.5 and 6.5 of this Trust
Agreement, a TAC member or a Trustee shall be deemed to have attended a meeting
in the event such person spends a substantial portion of the day conferring, by
phone or in person, on PI Trust matters with TAC members or Trustees. The
Trustees shall have complete discretion to determine whether a meeting, as
described herein, occurred for purposes of Articles 5.5 and 6.5.
7.5 Severability. Should any provision in this Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Trust Agreement.
7.6 Notices. Notices to persons asserting claims shall be given at the
address of such person, or, where applicable, such person's legal
representative, in each case as provided on such person's claim form submitted
to the PI Trust with respect to his or her Toxic Personal Injury Claim. Any
notices or other communications required or permitted hereunder shall be in
writing and delivered at the addresses designated below, or sent by telecopy
pursuant to the instructions listed below, or mailed by registered or certified
mail, return receipt requested, postage prepaid, addressed as follows, or to
such other address or addresses as may hereafter be furnished by any of
Reorganized Eagle-Picher, the Trustees or the TAC to the others in compliance
with the terms hereof.
To the PI Trust
or the Trustees: _______________________________
_______________________________
_______________________________
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To the TAC: Robert E. Sweeney, Esq.
Robert E. Sweeney Co., L.P.A.
Suite 1500, Illuminating Building
55 Public Square
Cleveland, Ohio 44113
Telecopier: (216) 696-0732
Telephone Confirmation: (216) 696-0606
and
Robert B. Steinberg, Esq.
Rose, Klein & Marias
18th Floor
801 South Grand Avenue
Los Angeles, California 90017-4645
Telecopier: (213) 623-7755
Telephone Confirmation: (213) 626-0571
and
James J. McMonagle
24 Walnut Street
Chagrin Falls, Ohio 44022
Telecopier: (216) 844-5010
Telephone Confirmation: (216) 844-3817
To Reorganized
Eagle-Picher: Eagle-Picher Industries, Inc.
Attention: General Counsel
IF BY HAND OR OVERNIGHT DELIVERY:
Suite 1300, 580 Building
580 Walnut Street
Cincinnati, Ohio 45202
IF BY MAIL:
Post Office Box 779
Cincinnati, Ohio 45201
Telecopier: (513) 721-3404
Telephone Confirmation: (513) 629-2400
and
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Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen Karotkin, Esq.
Telecopier: (212) 310-8007
Telephone Confirmation: (212) 310-8888
and
Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
Attention: Edmund J. Adams, Esq.
Telecopier: (513) 651-6981
Telephone Confirmation: (513) 651-6800
All such notices and communications shall be effective when
delivered at the designated addresses or when the telecopy communication is
received at the designated addresses and confirmed by the recipient by return
telecopy in conformity with the provisions hereof.
7.7 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but such counterparts
shall together constitute but one and the same instrument.
7.8 Successors and Assigns. The provisions of this Trust Agreement shall
be binding upon and inure to the benefit of the Settlors, the PI Trust, and the
Trustees and their respective successors and assigns, except that neither the
Settlors nor the PI Trust nor any Trustee may assign or otherwise transfer any
of its, or his or her rights or obligations under this Trust Agreement except,
in the case of the PI Trust and the Trustees, as contemplated by Article 3.1.
7.9 Limitation on Claim Interests for Securities Laws Purposes. Toxic
Personal Injury Claims, and any interests therein, (a) shall not be assigned,
conveyed, hypothecated, pledged or otherwise transferred, voluntarily or
involuntarily, directly or indirectly, except by will or under the laws of
descent and distribution; (b) shall not be evidenced by a certificate or other
instrument; (c) shall not possess any voting rights; and (d) shall not be
entitled to receive any dividends or interest; provided, however, that the
foregoing shall not apply to the holder of an Asbestos or Lead Contribution
Claim that is subrogated to an Asbestos Personal Injury Claim or Lead Personal
Injury Claim as a result of its satisfaction of such Asbestos Personal Injury
Claim or Lead Personal Injury Claim.
7.10 Entire Agreement; No Waiver. The entire agreement of the parties
relating to the subject matter of this Trust Agreement is contained herein and
in the documents referred to herein, and this Trust Agreement and such documents
supersede any prior oral or written agreements concerning the subject matter
hereof. No failure to exercise or delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any further
exercise thereof or of any other right, power or privilege. The rights and
remedies herein provided are cumulative and are not exclusive of rights under
law or in equity.
A1.1.13-21
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7.11 Headings. The headings used in this Trust Agreement are inserted for
convenience only and neither constitute a portion of this Trust Agreement nor in
any manner affect the construction of the provisions of this Trust Agreement.
7.12 Governing Law. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio.
7.13 Settlors' Representative. Eagle-Picher is hereby irrevocably
designated as the representative of the Settlors, and it is hereby authorized to
take any action required of the Settlors in connection with the Trust Agreement.
7.14 Dispute Resolution. Any disputes that arise under this Agreement or
under the annexes hereto shall be resolved by the Bankruptcy Court pursuant to
Article 9 of the Plan, except as otherwise provided herein or in the annexes
hereto. Notwithstanding anything else herein contained, to the extent any
provision of this Trust Agreement is inconsistent with any provision of the
Plan, the Plan shall control.
7.15 Enforcement and Administration. The parties hereby acknowledge the
Bankruptcy Court's continuing exclusive jurisdiction to interpret and enforce
the terms of this Trust Agreement and the annexes hereto, pursuant to Article 9
of the Plan.
7.16 Effectiveness. This Trust Agreement shall not become effective until
it has been executed and delivered by all the parties hereto and until the
Effective Date.
IN WITNESS WHEREOF, the parties have executed this Trust Agreement this
____ day of __________________, 1996.
SETTLORS:
EAGLE-PICHER INDUSTRIES, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
DAISY PARTS, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
TRANSICOIL, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
A1.1.13-22
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MICHIGAN AUTOMOTIVE RESEARCH CORP.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
EDI, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
EAGLE-PICHER MINERALS, INC.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
HILLSDALE TOOL &
MANUFACTURING CO.
BY:
----------------------------
Name:
--------------------------
Title:
-------------------------
A1.1.13-23
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TRUSTEES:
-------------------------------
Name: Darius W. Gaskins, Jr.
-------------------------------
Name: Kevin O'Donnell
-------------------------------
Name: William J. Williams
-------------------------------
Name: Daniel M. Phillips
(3 Year Term)
-------------------------------
Name: Marshall Wright
(3 Year Term)
A1.1.13-24
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<PAGE>
ANNEX A
EPI PERSONAL INJURY SETTLEMENT TRUST
BYLAWS
ARTICLE I
OFFICES
SECTION 1. Principal Office. The initial principal office of the EPI
Personal Injury Settlement Trust (the "PI Trust") shall be in
____________________ or at such other place as the Trustees shall from time to
time select.
SECTION 2. Other Offices. The PI Trust may have such other offices at such
other places as the Trustees may from time to time determine to be necessary for
the efficient and cost-effective administration of the PI Trust.
ARTICLE II
TRUSTEES
SECTION 1. Control of Property, Business and Affairs. The property,
business and affairs of the PI Trust shall be managed by or under the direction
of the Trustees, provided that certain decisions of the Trustees shall be
subject to the consent of the Trustees' Advisory Committee (the "TAC") as
provided in the Trust Agreement to which these Bylaws are attached as Annex A.
SECTION 2. Number, Resignation and Removal. The number of Trustees and the
provisions governing the resignation and removal of a Trustee and the
appointment of a successor Trustee shall be governed by the provisions of
Article 5 of the Trust Agreement.
SECTION 3. Quorum and Manner of Acting. During the Three Year Service
Period described in Article 5.1 of the Trust Agreement, the presence of 3
Trustees shall constitute a quorum for the transaction of business; after the
Three Year Service Period described in Article 5.1 of the Trust Agreement, two
(2) Trustees shall constitute a quorum for the transaction of business. In the
absence of a quorum, the Trustee[s] present may adjourn the meeting from time to
time until a quorum shall be present. During the Three Year Service Period
described in Article 5.1 of the Trust Agreement, the vote, at a meeting at which
a quorum is present of at least three (3) Trustees shall be an act of the
Trustees; after the Three Year Service Period described in Article 5.1 of the
Trust Agreement, the vote, at a meeting at which a quorum is present of at least
two (2) Trustees shall be an act of the Trustees.
SECTION 4. Regular Meetings. Regular meetings of the Trustees may be held
at such time and place as shall from time to time be determined by the Trustees
provided that the Trustees shall meet at least once per calendar quarter. After
there has been such determination, and a notice thereof has been once given to
each Trustee, regular meetings may be held without further notice being given.
A1.1.13A-1
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SECTION 5. Special Meeting Notice. Special meetings of the Trustees shall
be held whenever called by one or more of the Trustees. Notice of each such
meeting shall be delivered by overnight courier to each Trustee, addressed to
him or her at his or her residence or usual place of business, at least three
days before the date on which the meeting is to be held, or shall be sent to him
or her at such place by personal delivery or by telephone or telecopy not later
than two (2) days before the day of which such meeting is to be held. Such
notice shall state the place, date and hour of the meeting and the purposes for
which it is called. In lieu of the notice to be given as set forth above, a
waiver thereof in writing, signed by the Trustee or Trustees entitled to receive
such notice, whether before or after the meeting, shall be deemed equivalent
thereto for purposes of this Section 5. No notice to or waiver by any Trustee
with respect to any special meeting shall be required if such Trustee shall be
present at said meeting.
SECTION 6. Action Without a Meeting; Meeting by Conference Call. Any
action required or permitted to be taken at any meeting of the Trustees may be
taken without a meeting if all Trustees consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Trustees.
The Trustees also may take any action required or permitted to be taken at
any meeting by means of conference telephone or similar communication equipment
provided that all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this paragraph shall constitute presence
in person at such meeting.
ARTICLE III
OFFICERS
SECTION 1. Principal Officers. The principal officer of the PI Trust shall
be an Executive Director. The PI Trust may also have such other principal
officers, including one or more Assistant Directors, a Secretary-Treasurer and a
Controller, as the Trustees may in their discretion appoint after determining
that such appointment will promote the efficient and cost-effective
administration of the PI Trust.
SECTION 2. Election and Term of Office. The principal officer(s) of the PI
Trust shall be chosen by the Trustees. Each such officer shall hold office until
his successor shall have been duly chosen and qualified or until his earlier
death, resignation or removal.
SECTION 3. Subordinate Officers. In addition to the principal officers
enumerated in Section 1 of this Article III, the PI Trust may have such other
subordinate officers, agents and employees as the Trustees may deem necessary
for the efficient and cost-effective administration of the PI Trust, each of
whom shall hold office for such period, have such authority, and perform such
duties as the Trustees may from time to time determine. The Trustees may
delegate to any principal officer the power to appoint and to remove any such
subordinate officers, agents or employees.
SECTION 4. Removal. The Executive Director or any other officer may be
removed with or without cause, at any time, by resolution adopted by the
Trustees at any regular meeting of the Trustees or at any special meeting of the
Trustees called for that purpose at which a quorum is present.
SECTION 5. Resignations. Any officer may resign at any time by giving
written notice to the Trustees. The resignation of any officer shall take effect
upon receipt of notice thereof or at such later
A1.1.13A-2
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time as shall be specified in such notice and unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective.
SECTION 6. Powers and Duties. The officers of the PI Trust shall have such
powers and perform such duties as may be conferred upon or assigned to them by
the Trustees.
ARTICLE IV
TRUSTEES' ADVISORY COMMITTEE
SECTION 1. Regular Meetings. Regular meetings of the TAC may be held at
such time and place as shall from time to time be determined by the TAC,
provided that the TAC shall meet as often as is necessary to respond promptly to
matters referred to it for consultation or consent by the Trustees. After a
schedule for regular meetings has been determined, and a notice thereof has been
once given to each TAC member, regular meetings may be held without further
notice being given.
SECTION 2. Special Meeting; Notice. Special meetings of the TAC shall be
held whenever called by one or more of the TAC members. Notice of each such
meeting shall be delivered by overnight courier to each TAC member, addressed to
him or her at his or her residence or usual place of business, at least three
days before the date on which the meeting is to be held, or shall be sent to him
or her at such place by personal delivery or by telephone or telecopy, not later
than two (2) days before the day on which such meeting is to be held. Such
notice shall state the place, date and hour of the meeting and the purposes for
which it is called. In lieu of the notice to be given as set forth above, a
waiver thereof in writing, signed by the TAC members entitled to receive such
notice, whether before or after the meeting, shall be deemed equivalent thereto
for purposes of this Section 2. No notice to or waiver by any TAC member with
respect to any special meeting shall be required if such TAC member shall be
present at such meeting.
SECTION 3. Action Without a Meeting; Meeting by Conference Call. Any
action required or permitted to be taken at any meeting of the TAC may be taken
without a meeting if all members of the TAC consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the TAC.
The TAC may take any action required or permitted to be taken at any
meeting by means of conference telephone or similar communication equipment
provided that all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this paragraph shall constitute presence
in person at such meeting.
SECTION 4. Reimbursement of Expenses. All reasonable out-of-pocket
expenses incurred by each member of the TAC in connection with the performance
of his duties hereunder will be reimbursed promptly to such member by the PI
Trust upon presentation of appropriate documentation.
ARTICLE V
AMENDMENTS
The Bylaws of the PI Trust, other than Article II, Article IV and this
Article V, may be amended by the Trustees at any meeting of the Trustees,
provided that notice of the proposed amendment is
A1.1.13A-3
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<PAGE>
contained in the notice of such meeting. The Bylaws contained in Article IV may
be amended by the Trustees only after receipt of the consent of the TAC to the
proposed amendment.
A1.1.13A-4
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<PAGE>
ANNEX B
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS INJURY CLAIMS RESOLUTION PROCEDURES
These Eagle-Picher Industries Asbestos Personal Injury Claims Resolution
Procedures (the "EPI ASBESTOS CLAIMS PROCEDURES") have been prepared in
connection with the First Amended Consolidated Joint Plan of Reorganization of
Eagle-Picher Industries, Inc. ("EAGLE-PICHER") and its affiliated Debtors (the
"PLAN") confirmed by order of the United States Bankruptcy Court for the
Southern District of Ohio, dated __________________, 1996 ("BANKRUPTCY COURT")
in In re Eagle-Picher Industries, Inc., et al., Consolidated Case No. 1-91-00100
("CHAPTER 11 CASES") and the Eagle-Picher Industries, Inc. Personal Injury
Settlement Trust Agreement (the "TRUST AGREEMENT") filed in connection with the
Plan.
These EPI Asbestos Claims Procedures provide for processing, liquidating,
paying, and satisfying all Asbestos Personal Injury Claims as provided in and
required by the Plan and the Trust Agreement. The trustees of the PI Trust (the
"TRUSTEES") shall implement and administer these EPI Asbestos Claims Procedures
in accordance with the Trust Agreement.
SECTION I
Definitions
Capitalized terms used herein and not otherwise defined shall have the
meanings assigned to them in the Trust Agreement.
SECTION II
Purpose and Interpretation
2.1 Purpose. These EPI Asbestos Claims Procedures are adopted pursuant to
the Trust Agreement. They are designed to provide prompt payment to holders of
similar, valid Asbestos Personal Injury Claims in substantially the same manner.
2.2 Interpretation. Nothing in these EPI Asbestos Claims Procedures shall
be deemed to create a substantive right for any claimant. Without limiting the
foregoing, these EPI Asbestos Claims Procedures specifically shall not create
any substantive right for any claimant to be afforded now, or in the future, a
discounted cash payment election, as described in Section 5.2 herein, in any
amount. These EPI Asbestos Claims Procedures are procedural, and they may be
amended, deleted, or added to pursuant to the terms of the Trust Agreement and
the terms of these EPI Asbestos Claims Procedures.
SECTION III
Trustees' Advisory Committee
The Trustees shall consult with the Trustees' Advisory Committee ("TAC"),
appointed pursuant to the Trust Agreement, on the implementation and
administration of these EPI Asbestos Claims Procedures,
A1.1.13.B-1
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<PAGE>
including, but not limited to, implementation of procedures under various
claimant payment programs, including any future programs offering discounted
payments; development of Asbestos Personal Injury Claims categories and values
of claims, as set forth in Section 5.3; auditing and monitoring claims;
alternative dispute resolution forms and procedures; releases; and
interpretation of these EPI Asbestos Claims Procedures. When consultation is
required under the Trust Agreement or these EPI Asbestos Claims Procedures, the
Trustees need only seek advice and counsel from the TAC and are free to accept
or reject any recommendation of the TAC. The Trustees shall be subject to the
consent of the TAC on the issues enumerated in Article 3.2(e) of the Trust
Agreement, consistent with the provisions of that Section.
SECTION IV
Payment Percentage; Periodic Estimates
There is inherent uncertainty regarding Eagle-Picher's total liability to
holders of Asbestos Personal Injury Claims as well as the total value of the
assets available to pay valid Asbestos Personal Injury Claims. Consequently,
there is inherent uncertainty regarding the amounts that claimants will receive.
To ensure substantially equivalent treatment of all present and future valid
Asbestos Personal Injury Claims, prior to making distributions to claimants,
other than those who have elected the discounted cash payment described in
Section 5.2, the Trustees must determine the percentage of full liquidated value
that valid Asbestos Personal Injury Claims would be likely to receive ("PAYMENT
PERCENTAGE"). No claimant shall receive payments under the individualized review
process that exceed the PI Trust's most recent determination of the Payment
Percentage. The Trustees must base this determination, on the one hand, on
estimates of the number, types, and values of present and future Asbestos
Personal Injury Claims and, on the other hand, on the value of the PI Trust's
assets, the liquidity of those assets, the PI Trust's expected future expenses
for administration and legal defense, and other material matters that are
reasonable and likely to affect the sufficiency of funds to pay a comparable
percentage of full value to all holders of Asbestos Personal Injury Claims.
Periodically, but no less frequently than once every two (2) years, the Trustees
shall reconsider their determination of the Payment Percentage to assure that it
is based on accurate, current information and may, after such reconsideration,
change the Payment Percentage, if necessary. When making these determinations,
the Trustees shall exercise common sense and flexibly evaluate all relevant
factors.
SECTION V
Claims Types; Processing and Payment
5.1 Prepetition Liquidated Claims.
(a) Processing and Payment. Unless not feasible after every
reasonable effort, no later than 60 days after the Effective Date the Trustees
shall pay Asbestos Personal Injury Claims that were liquidated by settlement
agreement entered into prior to January 7, 1991 or by judgment that became final
and nonappealable prior to January 7, 1991 ("PREPETITION LIQUIDATED CLAIMS").
These claims shall be paid in an order to be determined by the Trustees based on
a first-in first-out ("FIFO") principle. These claims may require no processing
other than verification of the holder's identity, payment, and release of the PI
Trust. The liquidated value of a Prepetition Liquidated Claim shall be the
amount awarded in the prepetition judgment or settlement agreement, and holders
of Prepetition Liquidated Claims shall be paid the appropriate Payment
Percentage based upon that liquidated value.
(b) Marshalling. Prepetition Liquidated Claims that are secured by
letters of credit, appeal bonds, or other security or sureties shall first
exhaust their rights against any applicable security or surety before making a
claim against the PI Trust. In the event that such security or surety is
insufficient to
A1.1.13.B-2
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pay the Prepetition Liquidated Claim in full, the deficiency shall be processed
and paid as a Prepetition Liquidated Claim.
5.2 Discounted Cash Payment Election.
(a) Rationale. The Plan provides for a discounted cash payment
election that may be made at the time the eligible holders of Asbestos Personal
Injury Claims vote to accept or reject the Plan. Those holders of valid Asbestos
Personal Injury Claims who so elect shall make a full and final settlement with
the PI Trust (except as provided in Section 5.2(c) herein) in exchange for a
single cash payment in the amounts shown below for each disease category:
Mesothelioma $6,500
Lung Cancer $2,000
Other Cancer $1,000
Non-malignancy $ 400
This discounted cash payment election is designed, in part, for claimants who
easily can be determined by the PI Trust to have valid Asbestos Personal Injury
Claims and who desire to have a fixed and certain payment made expeditiously
rather than wait for payment after individualized review. This discounted cash
payment election further is designed, in part, for claimants who easily can be
determined by the PI Trust to have valid Asbestos Personal Injury Claims for
non-malignant injuries and who wish to have a fixed payment now and the right to
receive a further payment if they should subsequently be diagnosed as having an
asbestos-related malignancy.
(b) Processing and Payment. Unless not feasible after every
reasonable effort, no later than 60 days after the Effective Date the Trustees
shall process and pay the holders of Asbestos Personal Injury Claims who elect
to receive a discounted cash payment in an order to be determined by the
Trustees based on a FIFO principle. The Trustees shall determine appropriate
procedures for ensuring that only holders of valid Asbestos Personal Injury
Claims are paid under the discounted cash payment election. These procedures for
ensuring payment only to holders of valid Asbestos Personal Injury Claims under
the discount ed cash payment election shall be based upon the guidelines set
forth in Section 7.1 herein.
(c) Subsequent Malignancy. The holder of a valid Asbestos Personal
Injury Claim based upon a non-malignant asbestos injury or condition who elects
to receive a discounted cash payment as provided herein may file a new Asbestos
Personal Injury Claim for an asbestos-related malignancy that is subsequently
diagnosed, and any additional payments to which such claimant may be entitled
shall not be reduced by the amount of the discounted cash payment.
(d) No Review. The Trustees' decision that the holder of an Asbestos
Personal Injury Claim should not receive a discounted cash payment is not
reviewable. However, the holder of an Asbestos Personal Injury Claim whose claim
is denied discounted cash payment may then elect individualized review as set
forth in Section 5.3.
(e) Future Discounted Payment Elections. In the future, the
Trustees, in their complete discretion, may, or may not, offer claimants
discounted cash payments for valid Asbestos Personal Injury Claims. In the event
they decide to offer claimants discounted cash payments in the future, they
shall have complete discretion to determine the amounts and procedures for such
future discounted cash payments and under no circumstances shall they be
obligated in the future to pay the same amounts set forth in Section 5.2(a)
herein for discounted cash payments.
A1.1.13.B-3
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5.3 Individually Reviewed Claims; Claims Categories.
(a) Rationale. A claimant (i) who initially elects individualized
review, or (ii) whose Asbestos Personal Injury Claim was rejected by the
Trustees for discounted cash payment and who then elects individualized review,
shall have his or her Asbestos Personal Injury Claim reviewed, based upon an
evaluation of exposure, loss, damages, injury, and other factors determinative
of claim value according to applicable tort law. The detailed examination and
individualized valuation of Asbestos Personal Injury Claims is designed for
claimants with serious or fatal asbestos-related injuries whose Asbestos
Personal Injury Claims require the added expense of individualized examination.
(b) Categories and Values. The PI Trust will categorize Asbestos
Personal Injury Claims by injury, and it may subcategorize Asbestos Personal
Injury Claims by occupation, medical criteria, or any other factor related to
the value of Asbestos Personal Injury Claims within each injury category. The PI
Trust shall use these categories and subcategories to resolve Asbestos Personal
Injury Claims as expeditiously and economically as possible. For each category
or subcategory, the PI Trust shall determine a limited range of liquidated
values representing average historical payments by Eagle-Picher to resolve
similar Asbestos Personal Injury Claims. Offers of payments to claimants shall
be determined by assigning to their valid Asbestos Personal Injury Claim an
appropriate value within the applicable range and multiplying that value by the
Payment Percentage. Because discounted cash payment elections are a more cost
effective means for determining the liquidated value of less serious, non-fatal
Asbestos Personal Injury Claims, the PI Trust shall reduce the range of values
for categories and subcategories of such Asbestos Personal Injury Claims to
reflect the cost for providing such review to those holders of less serious,
non-fatal Asbestos Personal Injury Claims who did not elect discounted cash
payment under either the Plan or any subsequent discounted cash payment program
made available to them by the PI Trust.
When a claimant's economic damages are exceptionally larger than the
normal range, that claimant's Asbestos Personal Injury Claim may be classified
as an extraordinary Asbestos Personal Injury Claim and such Asbestos Personal
Injury Claim may be liquidated in an amount that exceeds the limited range of
liquidated values for any given injury category or subcategory, but such a
classification shall not increase the Payment Percentage. The Trustees shall
determine the nature of the Asbestos Personal Injury Claims that they will
classify as extraordinary Asbestos Personal Injury Claims.
(c) Processing and Liquidation. Individually reviewed claims shall
be processed and liquidated pursuant to the following schedule:
(i) substantially all the claims whose holders had filed
lawsuits against Eagle-Picher prior to January 7, 1991, shall be processed and
liquidated no later than 18 months after the Effective Date;
(ii) substantially all the claims whose holders had not filed
lawsuits against Eagle-Picher prior to January 7, 1991 but whose holders had
filed timely proofs of claim in the Chapter 11 Cases, shall be processed and
liquidated no later than 36 months after the Effective Date;
(iii) substantially all the claims whose holders had not filed
lawsuits against Eagle-Picher prior to January 7, 1991 and whose holders had not
filed timely proofs of claim in the Chapter 11 Cases, but whose holders at any
time prior to the date of the Confirmation Order (A) had filed lawsuits in the
tort system against asbestos manufacturers other than Eagle-Picher, or (B) had
filed a proof of claim with any other asbestos victims' trust or claims
processing facility, or (C) had filed a registration of any asbestos claim on
any inactive docket or similar asbestos claims registry, shall be processed and
liquidated no later than 48 months after the Effective Date; and
A1.1.13.B-4
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(iv) claims not described in subsections (i) through (iii)
above, shall be processed and liquidated as soon as possible but not before the
claims described in subsections (i) through (iii) above.
(d) Payment. While payments to holders of valid Asbestos Personal
Injury Claims generally should be made in the same order in which claims are
liquidated, provided they act consistently with Section 524(g)(2)(B)(ii)(V) of
the Bankruptcy Code, the Trustees shall have complete discretion to determine
the timing and the appropriate method for making payments. Such methods may
include, in the discretion of the Trustees, a method for the payment on an
installment basis, in which case any installment payment shall be subject to the
Payment Percentage in effect at the time such installment payment is made.
(e) Disputes Over Individualized Review. Claimants who reject the
Trustees' offer after individualized review and who wish to dispute their
eligibility for payment, their categorization, or the amount of the Trustees'
offer under individualized review, must initiate one of the alternative dispute
resolution procedures established by the Trustees pursuant to Section 7.6. After
such alternative dispute resolution procedures have been exhausted, claimants
who still reject the PI Trust's offer must initiate arbitration pursuant to
procedures like those set forth in Section 7.8. Only after claimants have
rejected any non-binding arbitration award pursuant to procedures like those set
forth in Section 7.8, may they file suit against the PI Trust.
(f) Full Releases. Holders of Asbestos Personal Injury Claims who
receive an individualized payment shall execute and deliver to the Trustees a
general release in a form satisfactory to the Trustees and may not thereafter
file a new Asbestos Personal Injury Claim.
5.4 Exigent Health Claims; Extreme Hardship Claims. At any time the
Trustees may individually evaluate and pay Exigent Health Claims and Extreme
Hardship Claims, as defined in this Section 5.4. These claims may be considered
separately no matter what the order of processing otherwise would have been
under this Section V.
A claim qualifies as an Exigent Health Claim if the claimant provides: (i)
documentation that a physician has diagnosed the claimant as having an
asbestos-related illness and (ii) a declaration or affidavit made under penalty
of perjury by a physician who has examined the claimant within one hundred
twenty (120) days of the date of the declaration or affidavit in which the
physician states there is substantial medical doubt that the claimant will
survive beyond six (6) months from the date of the declaration or affidavit.
A claim qualifies for payment as an Extreme Hardship Claim if the
Trustees, in their complete discretion, determine the claimant needs financial
assistance on an immediate basis based on the claimant's expenses and all
sources of available income.
5.5 Asbestos Contribution Claims. Asbestos Personal Injury Claims asserted
against the PI Trust that fall within the Trust Agreement's definition of
Asbestos or Lead Contribution Claims, and which have not been disallowed,
discharged, or otherwise resolved, shall be processed, allowed or disallowed,
liquidated, paid, and satisfied in accordance with procedures to be developed
and implemented by the Trustees, which procedures (a) shall determine the
validity and allowance of such claims consistent with Section 502(e) of the
Bankruptcy Code; (b) shall require binding arbitration for the resolution of all
disputes and thereby foreclose resort to the tort system for dispute resolution;
and (c) shall otherwise provide the same processing and payment to the holders
of such claims that are allowed as the PI Trust would have afforded the holders
of any underlying valid Asbestos Personal Injury Claims under this Section V.
A1.1.13.B-5
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SECTION VI
Claims Materials
As soon as reasonably practicable, but not later than six months following
the Effective Date, the PI Trust shall mail claims materials ("CLAIMS
MATERIALS") to each person with an Asbestos Personal Injury Claim who has filed
a proof of claim in the Bankruptcy Court or has pending a lawsuit against
Eagle-Picher or otherwise has been identified to the Trustees as holding an
Asbestos Personal Injury Claim that is neither a Prepetition Liquidated Claim
defined in Section 5.1 nor an Asbestos Personal Injury Claim for which a
discounted cash payment election has been made as set forth in Section 5.2. For
any person holding an Asbestos Personal Injury Claim who is first identified to
Eagle-Picher or the Trustees any time subsequent to the Effective Date, the PI
Trust shall mail the Claims Materials no later than six months following such
identification. The PI Trust may send Claims Materials to a claimant care of an
attorney representing the claimant.
The Claims Materials will include descriptions of these EPI Asbestos
Claims Procedures, instructions, and a claim form. If feasible, the forms used
by the PI Trust to obtain claims information shall be the same or substantially
similar to those used by other asbestos claims resolution facilities. Instead of
collecting some or all claims information from a claimant or the claimant's
attorney, the PI Trust may obtain such information from electronic data bases
maintained by any other asbestos claims resolution organization, provided that
the PI Trust informs the claimant that it plans to obtain information as
available from such other organizations unless the claimant objects in writing
or provides such information directly to the PI Trust.
In order to be eligible for payment under these EPI Asbestos Claims
Procedures, a claimant must return all claims' information requested by the PI
Trust within the six month period following his or her receipt of the Claims
Materials. An Asbestos Personal Injury Claim shall be disallowed automatically
if a claimant required to provide claims information fails to provide all such
information within this period, unless the claimant demonstrates to the
satisfaction of the Trustees that such a failure should be excused.
SECTION VII
General Guidelines for Liquidating and
Paying Individually Reviewed Claims
7.1 Showing Required. In order to establish a valid Asbestos Personal
Injury Claim, a claimant must (a) make a conclusive demonstration of exposure to
an Eagle-Picher asbestos-containing product and (b) submit a medical report from
a qualified physician that (i) results from a physical examination by that
physician and (ii) contains a diagnosis of an asbestos-related injury. The PI
Trust may require the submission of evidence of exposure to an Eagle-Picher
asbestos-containing product, x-rays, laboratory tests, medical examinations or
reviews, other medical evidence, or any other evidence to support such Asbestos
Personal Injury Claims and require that medical evidence submitted comply with
recognized medical standards regarding equipment, testing methods, and
procedures to assure that such evidence is reliable.
7.2 Discretion To Alter Order Of Processing Or Suspend Payments. Provided
it is consistent with Section 524(g)(2)(B)(ii)(V) of the Bankruptcy Code, in
order to reduce transaction costs the Trustees may process, liquidate, and pay
valid Asbestos Personal Injury Claims in groups of claims or otherwise no matter
what the order of processing otherwise would have been under Section V. In the
event that the Trustees determine it advisable, they may suspend their normal
order of processing or payment in favor of claimants who elect discounted cash
payment under any future discounted cash payment election programs
A1.1.13.B-6
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offered by the PI Trust. Also, in the event that the PI Trust faces temporary
periods of limited liquidity, the Trustees may temporarily limit or suspend
payments altogether.
7.3 Costs Considered. Notwithstanding any provision of these EPI Asbestos
Claims Procedures to the contrary, the Trustees shall always give appropriate
consideration to the cost of investigating and uncovering invalid Asbestos
Personal Injury Claims so that the payment of valid Asbestos Personal Injury
Claims is not further impaired by such processes. In issues related to the
validity of Asbestos Personal Injury Claims, e.g., exposure and medical evidence
of injury, the Trustees shall have the latitude to make judgments regarding the
amount of transaction costs to be expended by the PI Trust so that valid
Asbestos Personal Injury Claims are not further impaired by the costs of
additional investigation. Nothing herein shall prevent the Trustees, in
appropriate circumstances, from contesting the validity of any Asbestos Personal
Injury Claim whatever the costs.
7.4 Discretion to Vary Payments. Consistent with the provisions hereof,
the Trustees shall proceed as quickly as possible to liquidate claims, and they
shall make payments to holders of valid Asbestos Personal Injury Claims promptly
as funds become available and as Asbestos Personal Injury Claims are liquidated,
while maintaining sufficient resources to pay future valid Asbestos Personal
Injury Claims in substantially the same manner. Because decisions about payments
must be based on estimates and cannot be done precisely, they may have to be
revised in light of experience over time, and a claimant who receives payment
early in the life of the PI Trust may receive a smaller or larger percentage of
the value of his Asbestos Personal Injury Claim than a claimant who receives
payment in the middle of or late in the life of the PI Trust. Therefore, there
can be no guarantee of any specific level of payment to claimants. However, the
Trustees shall use their best efforts to treat similar, valid Asbestos Personal
Injury Claims in substantially the same manner, consistent with their duties as
Trustees in these circumstances, the purposes of the PI Trust, and given the
practical limitations imposed by the inability to predict the future with
precision.
7.5 Punitive Damages. In determining the value of any Asbestos Personal
Injury Claim, punitive damages shall not be considered or allowed,
notwithstanding their availability in the tort system. Pre-judgment interest,
post-judgment interest, interest on deferred payments, or any other type of
interest, delay damages, or similar damages associated with Asbestos Personal
Injury Claims, shall not be paid or allowed.
7.6 Alternative Dispute Resolution. The Trustees shall establish an
appropriate alternative dispute resolution process so that the claimants and the
PI Trust shall have a full range of alternative dispute resolution devices
available for their use in the individualized review process, including reviews
by specialized panels, mediation and arbitration. If compensation of an
alternative dispute resolution provider becomes necessary, each side shall
equally share the obligation to pay such compensation and shall otherwise bear
its own costs.
7.7 Settlement Favored. Settlements shall be favored over all other forms
of Asbestos Personal Injury Claim resolution, and the lowest feasible
transaction costs for the PI Trust shall be incurred in order to conserve
resources and ensure funds to pay all valid Asbestos Personal Injury Claims.
7.8 Arbitration; Jury Trials. Holders of Asbestos Personal Injury Claims
may elect to submit their Asbestos Personal Injury Claims to binding or
non-binding arbitration only after other alternative dispute resolution
procedures established by the Trustees have been exhausted.
If arbitration becomes necessary, arbitrators shall (i) return awards
within the range of injury category value limits set by the PI Trust for the
injury category in which the Asbestos Personal Injury Claim properly falls, (ii)
determine that the Asbestos Personal Injury Claim falls in a higher or lower
category and determine an appropriate award within the range of value limits for
that category, or (iii) in cases involving an extraordinary Asbestos Personal
Injury Claim, return awards in excess of category limits. Arbitrators shall
A1.1.13.B-7
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not consider the Payment Percentage in determining the value of any Asbestos
Personal Injury Claim. If a claimant submits to binding arbitration or accepts
an award after non-binding arbitration, the award will establish the liquidated
value of the Asbestos Personal Injury Claim, which will be multiplied by the
then current Payment Percentage in order to determine the amount that the
claimant will receive. The claimant will then receive payments and execute and
deliver a general release in the same manner as a claimant who had accepted a
valuation of his Asbestos Personal Injury Claim by the PI Trust.
Only claimants who opt for non-binding arbitration and then reject their
arbitration awards retain the right to a jury trial to determine the liquidated
value of their Asbestos Personal Injury Claims against the PI Trust. All other
claimants shall and shall be deemed to have irrevocably waived any right to a
jury trial and any and all notices with respect to the filing or liquidation of
Asbestos Personal Injury Claims shall contain a provision that clearly and
conspicuously explains such jury trial waiver. A holder of an Asbestos Personal
Injury Claim desiring to file suit against the PI Trust may do so only after the
rejection of a non-binding arbitration award. In all cases, the statute of
limitations will be tolled as of the earlier of the date the Asbestos Personal
Injury Claim was filed with the PI Trust or the date the claimant filed his/her
complaint against Eagle-Picher, and the right to a jury trial shall be preserved
with the defendant being solely the PI Trust. To the extent the statute of
limitations has been tolled, it shall commence running 30 days after entry of a
non-binding arbitration award.
The Chapter 11 Cases and the EPI Asbestos Claims Procedures shall have no
effect on trial venue or choice of laws. All claims and defenses (including,
with respect to the PI Trust, all claims and defenses which could have been
asserted by Eagle-Picher) that exist under applicable law shall be available to
both sides at trial; provided, however, that the death of claimant while his/her
Asbestos Personal Injury Claim is pending against the PI Trust shall not reduce
the value of the deceased claimant's Asbestos Personal Injury Claim,
notwithstanding applicable state law to the contrary. The PI Trust may waive any
defense or concede any issue of fact or law. The award of an arbitrator or the
recommendation of a mediator and the positions and admissions of the parties
during compliance with alternative dispute resolution procedures shall not be
admissible for any purpose at trial by any party or third party and they are
expressly determined not to be admissions by either party.
If necessary, the Trustees may obtain an order from the U.S. District
Court for the Southern District of Ohio, Western Division ("DISTRICT COURT")
incorporating an offer of judgment to liquidate the amount of the claim,
scheduling discovery and trials in such a fashion as not to create an undue
burden on the PI Trust, or containing any other provisions, in order to ensure
that the PI Trust fulfills its obligations in accordance with the principles set
forth in the Trust Agreement.
A claimant who, in accordance with the EPI Asbestos Claims Procedures,
elects to resort to the legal system and obtains a judgment for money damages
shall have an Asbestos Personal Injury Claim with a liquidated value equal to
the judgment amount, less the amount of any prejudgment interest or punitive
damages contained therein, and no post-judgment interest shall accrue on such
judgment amount. A judgment creditor with a final, nonappealable judgment in
excess of the highest amount in the range of values for his/her injury category
or subcategory as determined by the Trustees will be paid, when funds are
reasonably available, the appropriate Payment Percentage of the highest amount
in the range for that injury category or subcategory; provided, however, that a
holder of an extraordinary Asbestos Personal Injury Claim who obtains a final,
nonappealable judgment in excess of the PI Trust's last offer or the
arbitrator's award will be paid, when funds are reasonably available, the
appropriate Payment Percentage of the PI Trust's last offer or the arbitrator's
award, whichever is greater. The appropriate Payment Percentage for the excess
of the judgment above the foregoing amounts will be paid no later than five (5)
years after the date the judgment is entered in the trial court, unless the
Trustees determine that such payment will adversely affect payment to other
claimants, in which event such payment shall be made in five (5) equal annual
installments beginning five (5) years after the date the judgment becomes final
and nonappealable.
A1.1.13.B-8
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7.9 Releases. The Trustees shall have the discretion to determine the form
and nature of the releases given to the PI Trust in order to maximize recovery
for claimants against other tort-feasors without increasing the risk or amount
of claims for indemnification or contribution from the PI Trust. As a condition
to making any payment to a claimant, the PI Trust shall obtain a general,
partial, or limited release as appropriate in accordance with the applicable
state or other law, consistent with the payment selection by the claimant. If
allowed by state law, the endorsing of a check or draft for payment by or on
behalf of a claimant shall constitute such a release. In addition, and as a
prerequisite, the claimant shall execute any documents necessary (i) for the PI
Trust to perfect its claims, if any, against Eagle-Picher's insurers to receive
indemnity for payments, (ii) to release any Asbestos Personal Injury Claim the
claimant may have against the insurer, and (iii) for the PI Trust to receive and
keep any and all payments made by such insurer for payment of such claim.
7.10 Auditing, Monitoring and Verifying. The Trustees shall conduct random
or other audits to verify information submitted in connection with these EPI
Asbestos Claims Procedures. In the event that an audit reveals that invalid
information has been provided to the PI Trust, the Trustees may penalize any
claimant or claimant's attorney by disallowing the Asbestos Personal Injury
Claims or seeking sanctions from the District Court including, but not limited
to, requiring the offending source to pay the costs associated with the audit
and any future audit or audits, reordering the priority of payment of the
affected claimants' Asbestos Personal Injury Claims, raising the level of
scrutiny of additional information submitted from the same source or sources, or
prosecuting the claimant or claimant's attorney for presenting a fraudulent
Asbestos Personal Injury Claim in violation of 18 U.S.C. 'SS' 152. The PI
Trust may develop methods for auditing the reliability of medical evidence,
including independent reading of x-rays. If its audits show an unacceptable
level of reliability for medical evidence submitted by specific doctors or
medical facilities, the PI Trust may refuse to accept medical evidence from such
doctors or facilities.
7.11 Claims' Bar Date. Notwithstanding anything to the contrary contained
herein, including, without limitation, Section 5.3(c) herein, in order to be
eligible for payment under these EPI Asbestos Claims Procedures, a claimant must
have complied with any applicable claims' bar date order issued by the
Bankruptcy Court or must have been excused from such compliance by the Trustees
pursuant to their discretion under Article 3.3(d) of the Trust Agreement.
7.12 Statute of Limitations. For purposes of determining the validity of
an Asbestos Personal Injury Claim, any applicable statute of limitations shall
be deemed to have been extended for a period of sixty (60) days beyond its
normal limit. This extension shall have no application, however, to any
applicable claims bar date set by an order of the Bankruptcy Court.
SECTION VIII
Miscellaneous
8.1 Amendments. The Trustees may amend, modify, delete, or add to any of
these EPI Asbestos Claims Procedures (including, without limitation, amendments
to conform these procedures to advances in scientific or medical knowledge or
other changes in circumstances) by a majority vote of the Trustees, provided
they first obtain any advice and consent of the TAC required by Article 3.2(e)
of the Trust Agreement. Notwithstanding anything contained herein to the
contrary, these EPI Asbestos Claims Procedures shall not be modified or amended
in any way that would jeopardize the validity or enforceability of the Asbestos
and Lead PI Permanent Channeling Injunction.
8.2 Severability. Should any provision contained in the EPI Asbestos
Claims Procedures be determined to be unenforceable, such determination shall in
no way limit or affect the enforceability and operative effect of any and all
other provisions of the EPI Asbestos Claims Procedures.
A1.1.13.B-9
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8.3 Governing Law. The EPI Asbestos Claims Procedures shall be governed
by, and construed in accordance with, the laws of the State of Ohio.
A1.1.13.B-10
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.16"
FORM OF ASBESTOS PD TRUST AGREEMENT
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[THIS PAGE LEFT BLANK INTENTIONALLY]
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EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS PROPERTY DAMAGE SETTLEMENT TRUST AGREEMENT
---------------------------------------------------
This Trust Agreement is among Eagle-Picher Industries, Inc., an Ohio
corporation and debtor in possession ("EAGLE-PICHER"), and its affiliates, Daisy
Parts, Inc., Transicoil Inc., Michigan Automotive Research Corp., EDI, Inc.,
Eagle-Picher Minerals, Inc., and Hillsdale Tool & Manufacturing Co. (the
"SETTLORS" or "DEBTORS"), and ______________, as Trustees ("TRUSTEES"), pursuant
to the Third Amended Consolidated Joint Plan of Reorganization of Eagle-Picher
and its affiliated debtors, dated August 28, 1996 (the "PLAN").
WHEREAS, at the time of the entry of the order for relief in the Chapter
11 Cases (as such term is hereinafter defined), Eagle-Picher was named as a
defendant in property damage actions seeking recovery for damages allegedly
caused by the presence of asbestos or asbestos-containing products in buildings
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and other facilities; and
WHEREAS, the Settlors have reorganized under the provisions of chapter 11
of the Bankruptcy Code (as hereinafter defined) in cases pending in the
Bankruptcy Court (as hereinafter defined) known as In re Eagle-Picher
Industries, Inc., et al., Consolidated Case No. 1-91-00100 (the "CHAPTER 11
CASES"); and
WHEREAS, the Plan, filed by the Debtors, the Legal Representative for
Future Claimants appointed by the Bankruptcy Court pursuant to its order of
October 31, 1991 ("FUTURE REPRESENTATIVE") and the Bankruptcy Court-appointed
committee composed of the representatives of certain tort claimants of the
Debtors (the "INJURY CLAIMANTS' COMMITTEE") has been confirmed; and
WHEREAS, the Plan provides, inter alia, for the creation of the
Eagle-Picher Industries, Inc. Asbestos Property Damage Settlement Trust (the
"ASBESTOS PD TRUST"); and
WHEREAS, pursuant to the Plan, the Asbestos PD Trust is to be funded in
whole in either debentures of Eagle-Picher or cash, depending upon whether Class
16 votes to accept the Plan; and
WHEREAS, the Plan provides, among other things, for the complete
settlement and satisfaction of all liabilities and obligations of the Debtors
with respect to Asbestos Property Damage Claims (as such term is hereinafter
defined); and
WHEREAS, the Asbestos PD Trust is intended to qualify as a "Qualified
Settlement Fund" within the meaning of Section 1.468B-1 of the Treasury
Regulations promulgated under Section 468B of the Internal Revenue Code;
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE 1
DEFINITIONS
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As used herein, the following terms shall have the meanings specified
below:
1.1 Asbestos Property Damage Claim: Any Claim against any of the Debtors
under any theory of law, equity, admiralty, or otherwise, for damages arising
from the presence in buildings or other structures of asbestos or
asbestos-containing products that was or were manufactured, sold, supplied,
produced, distributed, or in any way marketed by any of the Debtors prior to the
Petition Date, or for which any of the Debtors is otherwise liable due to the
acts or omissions of any of the Debtors, including, without express or implied
limitation, all such Claims for compensatory damages (such as proximate,
consequential, general, and special damages) and punitive damages, but excluding
Asbestos Property Damage Contribution Claims.
1.2 Asbestos Property Damage Contribution Claim: Any Claim against any of
the Debtors that is (i) held by (A) any Entity (other than a director or officer
entitled to indemnification pursuant to section 8.6 of the Plan) who has been,
is, or may be a defendant in an action seeking damages arising from the presence
in buildings or other structures of asbestos or asbestos-containing products
that was or were manufactured, sold, supplied, produced, distributed, or in any
way marketed by any of the Debtors prior to the Petition Date, or for which any
of the Debtors is otherwise liable due to the acts or omissions of any of the
Debtors or (B) any assignee or transferee of such Entity, and (ii) on account of
alleged liability by any of the Debtors for reimbursement or contribution of any
portion of any damages such Entity has paid or may pay to the plaintiff in such
action.
1.3 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, and as
codified in title 11 of the United States Code, as applicable to the Chapter 11
Cases.
1.4 Bankruptcy Court: The United States District Court for the Southern
District of Ohio, Western Division, having jurisdiction over the Chapter 11
Cases and, to the extent of any reference made pursuant to section 157 of title
28 of the United States Code, the unit of such District Court constituted
pursuant to section 151 of title 28 of the United States Code.
1.5 Business Day: Any day on which commercial banks are required to be
open for business in Cincinnati, Ohio.
1.6 Claim: (a) A "claim," as defined in section 101(5) of the Bankruptcy
Code, against any of the Debtors or Debtors in Possession, whether or not
asserted, whether or not the facts of or legal bases therefor are known or
unknown, and specifically including, without express or implied limitation, any
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rights under sections 502(g), 502(h), or 502(i) of the Bankruptcy Code, any
claim of a derivative nature, any potential or unmatured contract claims, and
any other Contingent Claim, and (b) any Environmental Claim or Product Liability
Tort Claim, whether or not it constitutes a "claim," as defined in section
101(5) of the Bankruptcy Code.
1.7 Confirmation Order: The order or orders of the Bankruptcy Court
confirming the Plan in accordance with the provisions of chapter 11 of the
Bankruptcy Code, which will contain, inter alia, the Asbestos and Lead PI
Permanent Channeling Injunction and the Claims Trading Injunction.
1.8 Debtors in Possession: The Debtors, each in its respective capacity as
a debtor in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy
Code.
1.9 Effective Date: The first Business Day after the date on which all of
the conditions precedent to the effectiveness of the Plan specified in section
7.10 of the Plan have been satisfied or waived or, if a stay of the Confirmation
Order is in effect on such date, the first Business Day after the expiration,
dissolution, or lifting of such stay.
1.10 Entity: An individual, corporation, partnership, association, joint
stock company, joint venture, estate, trust, unincorporated organization, or
government or any political subdivision thereof, or other person or entity.
1.11 Petition Date: January 7, 1991.
1.12 Reorganized Debtors: The Debtors, or any successors in interest
thereto, from and after the Effective Date.
1.13 Reorganized Eagle-Picher: Eagle-Picher, or any successor in interest
thereto, from and after the Effective Date.
All capitalized terms used herein and not defined in this Article 1 or in
another provision of this Trust Agreement shall have the meanings assigned to
them in the Plan and/or the Bankruptcy Code, which definitions are incorporated
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by reference herein.
ARTICLE 2
AGREEMENT OF TRUST
------------------
2.1 CREATION AND NAME. The Settlors hereby create a trust known as the
"Eagle-Picher Industries, Inc. Asbestos Property Damage Settlement Trust," which
is the Asbestos PD Trust provided for and referred to in the Plan. The Trustees
of the Asbestos PD Trust may transact the business and affairs of the Asbestos
PD Trust in the name, "Eagle-Picher Industries, Inc. Asbestos Property Damage
Settlement Trust."
2.2 PURPOSE. The purpose of the Asbestos PD Trust is to assume any and all
liabilities of the Debtors, their successors in interest, or their affiliates,
with respect to any and all Asbestos Property Damage Claims and to use the
Asbestos PD Trust's assets and income to pay holders of valid Asbestos Property
Damage Claims in such a way that holders of similar Asbestos Property Damage
Claims are paid in substantially the same manner. This purpose shall be
fulfilled through the provisions of this Trust Agreement and either the Asbestos
Property Damage Claims Resolution Procedures annexed as Exhibit 1.1.6.5 to the
Plan (if Class 16 votes to reject the Plan) or such other claims resolution
procedures as may be adopted by the Trustees (if and only if Class 16 votes to
accept the Plan) (the "ASBESTOS PD CLAIMS PROCEDURES").
2.3 TRANSFER OF ASSETS. The Settlors hereby transfer and assign to the
Asbestos PD Trust the property set forth in Article 11 of the Plan (the
"ASSETS").
2.4 ACCEPTANCE OF ASSETS AND ASSUMPTION OF LIABILITIES.
(a) In furtherance of the purposes of the Asbestos PD Trust, the Trustees,
on behalf of the Asbestos PD Trust, hereby expressly accept the transfer and
assignment to the Asbestos PD Trust of the Assets.
(b) In furtherance of the purposes of the Asbestos PD Trust, and
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subject to section 5.4 hereof, the Trustees, on behalf of the Asbestos PD Trust,
expressly assume all liability for all Asbestos Property Damage Claims as
provided for in Article 11 of the Plan. Except as otherwise provided in the
Asbestos PD Claims Procedures, the Asbestos PD Trust shall have all defenses,
cross-claims, offsets, and recoupments regarding Asbestos Property Damage Claims
that Eagle-Picher has or would have had under applicable law.
(c) Neither the Debtors nor their successors in interest or their
affiliates shall be entitled to any indemnification from the Asbestos PD Trust
for any expenses, costs, and fees (including attorneys' fees), judgments,
settlements, or other liabilities arising from or incurred in connection with,
any action related to an Asbestos Property Damage Claim, including, but not
limited to, indemnification or contribution for Asbestos Property Damage Claims
prosecuted against Reorganized Eagle-Picher. Nothing in this section or any
other section of this Trust Agreement shall be construed in any way to limit the
scope, enforceability, or effectiveness of the discharge and injunction arising
in favor of the Reorganized Debtors upon the Effective Date or the Asbestos PD
Trust's assumption of all liability with respect to Asbestos Property Damage
Claims.
ARTICLE 3
POWERS AND TRUST ADMINISTRATION
-------------------------------
3.1 POWERS.
(a) Subject to the limitations set forth in this Trust Agreement, the
Trustees shall have the power to take any and all actions that, in the judgment
of the Trustees, are necessary or proper to fulfill the purposes of the Asbestos
PD Trust, including, without limitation, each power expressly granted in this
section 3.1, any power reasonably incidental thereto, and any trust power now or
hereafter permitted under the laws of the State of Ohio.
(b) Except as otherwise specified herein, the Trustees need not obtain the
order or approval of any court in the exercise of any power or discretion
conferred hereunder.
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(c) Without limiting the generality of Article 3.1(a) above, the Trustees
shall have the power to:
(i) receive and hold the Assets, exercise all rights with respect
to, and sell any debentures issued by Reorganized Eagle-Picher that are
included in the Assets, subject to any restrictions set forth in the
articles of incorporation of Reorganized Eagle-Picher;
(ii) invest the monies held from time to time by the Asbestos PD
Trust;
(iii) sell, transfer or exchange any or all of the Assets at such
prices and upon such terms as they may consider proper, consistent with
the other terms of this Trust Agreement;
(iv) pay liabilities and expenses of the Asbestos PD Trust;
(v) change the state of domicile of the Asbestos PD Trust;
(vi) establish such funds, reserves and accounts within the Asbestos
PD Trust estate, as deemed by the Trustees to be useful in carrying out
the purposes of the Asbestos PD Trust;
(vii) sue and be sued and participate, as a party or otherwise, in
any judicial, administrative, arbitrative or other proceeding;
(viii) amend the Bylaws, a copy of which is annexed hereto as Annex
A (the "BYLAWS");
(ix) appoint such officers and hire such employees and engage such
legal, financial, accounting, investment and other advisers, alternative
dispute resolution panelists, and agents as the business of the Asbestos
PD Trust requires, and to delegate to such persons such powers and
authorities as the fiduciary duties of the Trustees permit and as the
Trustees, in their discretion, deem advisable or necessary in order to
carry out the terms of this Asbestos PD Trust;
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(x) pay employees, legal, financial, accounting, investment and
other advisers and agents reasonable compensation, including, without
limitation, compensation at rates approved by the Trustees for services
rendered prior to the execution hereof;
(xi) reimburse the Trustees, subject to section 5.5 hereof, and
reimburse such officers, employees, legal, financial, accounting,
investment and other advisers and agents all reasonable out-of-pocket
costs and expenses incurred by such persons in connection with the
performance of their duties hereunder, including, without limitation,
costs and expenses incurred prior to the execution hereof;
(xii) execute and deliver such deeds, leases and other instruments
as the Trustees consider proper in administering the Asbestos PD Trust;
(xiii) enter into such other arrangements with third parties as are
deemed by the Trustees to be useful in carrying out the purposes of the
Asbestos PD Trust, provided such arrangements do not conflict with any
other provision of this Trust Agreement;
(xiv) in accordance with section 5.6 hereof, indemnify (and purchase
insurance indemnifying) the Trustees and officers, employees, agents,
advisers and representatives of the Asbestos PD Trust to the fullest
extent that a corporation or trust organized under the law of the Asbestos
PD Trust's domicile is from time to time entitled to indemnify and/or
insure its directors, trustees, officers, employees, agents, advisers and
representatives;
(xv) delegate any or all of the authority herein conferred with
respect to the investment of all or any portion of the Assets to any one
or more reputable individuals or recognized institutional investment
advisers or investment managers without liability for any action taken or
omission made because of any such delegation, except as provided in
section 5.4 hereof;
(xvi) consult with Reorganized Eagle-Picher at such times and with
respect to such issues relating to the conduct of the Asbestos PD Trust as
the Trustees consider desirable;
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(xvii) make, pursue (by litigation or otherwise), collect,
compromise or settle any claim, right, action or cause of action included
in the Assets; and
(xviii) merge or contract with other claims resolution facilities
that are not specifically created by this Trust Agreement or the Asbestos
PD Claims Procedures; provided that such merger or contract shall not (a)
subject the Reorganized Debtors or any successor in interest to any risk
of having any Asbestos Property Damage Claim asserted against it or them;
or (b) otherwise jeopardize the validity or enforceability of the
discharge and injunction arising in favor of the Reorganized Debtors on
the Effective Date.
(d) The Trustees shall not have the power to guaranty any debt of other
persons.
3.2 GENERAL ADMINISTRATION.
(a) The Trustees shall act in accordance with the Bylaws. To the extent
not inconsistent with the terms of this Trust Agreement, the Bylaws govern the
affairs of the Asbestos PD Trust.
(b) The Trustees shall timely file such income tax and other returns and
statements and comply with all withholding obligations, as required under the
applicable provisions of the Internal Revenue Code and of any state law and the
regulations promulgated thereunder.
(c)(i) The Trustees shall cause to be prepared and filed with the
Bankruptcy Court, as soon as available, and in any event within ninety
(90) days following the end of each fiscal year, an annual report
containing financial statements of the Asbestos PD Trust (including,
without limitation, a balance sheet of the Asbestos PD Trust as of the end
of such fiscal year and a statement of operations for such fiscal year)
audited by a firm of independent certified public accountants selected by
the Trustees and accompanied by an opinion of such firm as to the fairness
of the financial statements' presentation of the cash and investments
available for the payment of claims and as to the conformity of the
financial statements with generally accepted accounting principles. The
Trustees shall provide a copy of such report to Reorganized Eagle-Picher.
(ii) Simultaneously with delivery of each set of financial
statements referred to in Article 3.2(c)(i) above, the Trustees shall
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cause to be prepared and filed with the Bankruptcy Court a report
containing a summary regarding the number and type of claims disposed of
during the period covered by the financial statements.
(iii) All materials required to be filed with the Bankruptcy Court
by this Article 3.2 shall be available for inspection by the public in
accordance with procedures established by the Bankruptcy Court.
3.3 CLAIMS ADMINISTRATION.
(a) General Principles. The Trustees shall proceed quickly to implement
(and, if Class 16 votes to accept the Plan, develop) the Asbestos PD Claims
Procedures. The Asbestos PD Trust shall pay holders of valid Asbestos Property
Damage Claims in accordance with procedures developed by the Trustees that are
consistent with the Asbestos PD Claims Procedures and the terms of this Trust
Agreement.
(b) Payment of Asbestos Property Damage Claims. The Trustees shall employ
mechanisms such as the review of estimates of the numbers and values of Asbestos
Property Damage Claims, or other comparable mechanisms, that provide reasonable
assurance the Asbestos PD Trust will value, and be in a financial position to
pay, similar Asbestos Property Damage Claims in substantially the same manner.
(c) Bankruptcy Court Claims Bar Date Orders. The Trustees shall enforce
the Bankruptcy Court's claims' bar date orders that are applicable to Asbestos
Property Damage Claims.
ARTICLE 4
ACCOUNTS, INVESTMENTS, AND PAYMENTS
-----------------------------------
4.1 ACCOUNTS. The Trustees may, from time to time, create such accounts
and reserves within the Asbestos PD Trust estate as they may deem necessary,
prudent or useful in order to provide for the payment of expenses and valid
Asbestos Property Damage Claims and may, with respect to any such account or
reserve,
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restrict the use of monies therein.
4.2 INVESTMENTS. Investment of monies held in the Asbestos PD Trust shall
be administered in the manner in which individuals of ordinary prudence,
discretion and judgment would act in the management of their own affairs,
subject to the following limitations and provisions:
(a) The Asbestos PD Trust may acquire and hold any debentures issued by
Reorganized Eagle-Picher and included in the Assets without regard to any of the
limitations set forth in the other parts of this Article 4.
(b) Except with respect to entities owned and controlled by the Asbestos
PD Trust for purposes of carrying out provisions of this Trust Agreement, the
Asbestos PD Trust shall not acquire or hold any equity in any Entity or business
enterprise unless such equity is in the form of securities that are traded on a
national securities exchange or major international securities exchange or over
the National Association of Securities Dealers Automated Quotation System.
(c) The Asbestos PD Trust shall not acquire or hold any repurchase
obligations unless, in the opinion of the Trustees, they are adequately
collateralized.
4.3 SOURCE OF PAYMENTS. All Asbestos PD Trust expenses, payments and all
liabilities with respect to Asbestos Property Damage Claims shall be payable
solely out of the Asbestos PD Trust estate. Neither Eagle-Picher, Reorganized
Eagle-Picher, any Debtors, their subsidiaries, any successor in interest or the
present or former directors, officers, employees or agents of Eagle-Picher,
Reorganized Eagle-Picher, any Debtors or their subsidiaries, nor the Trustees,
or any of their officers, agents, advisers or employees shall be liable for the
payment of any Asbestos PD Trust expense or Asbestos Property Damage Claim or
any other liability of the Asbestos PD Trust.
ARTICLE 5
TRUSTEES
--------
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5.1 NUMBER. There initially shall be between one (1) and four (4)
Trustees, the number being determined (a) by Reorganized Eagle-Picher if Class
16 votes to reject the Plan or (b) pursuant to the Plan if Class 16 votes to
accept the Plan.
5.2 TERM OF SERVICE.
(a) Each of the initial Trustees shall serve until the earlier of (i) his
or her death, (ii) his, her, or its resignation pursuant to section 5.2(b)
hereof, (iii) his or her removal pursuant to section 5.2(c) hereof, or (iv) the
termination of the Asbestos PD Trust pursuant to section 6.2 hereof, at which
time the term shall terminate automatically.
(b) Any Trustee may resign at any time by written notice to each of the
remaining Trustees. Such notice shall specify a date when such resignation shall
take effect, which shall not be less than ninety (90) days after the date such
notice is given, where practicable.
(c) Any Trustee may be removed in the event that such Trustee becomes
unable to discharge his or her duties hereunder due to accident or physical or
mental deterioration, or for other good cause. Good cause shall be deemed to
include, without limitation, a consistent pattern of neglect and failure to
perform or participate in performing the duties of the Trustees hereunder, or
repeated nonattendance at scheduled meetings. Such removal shall require the
unanimous decision of the other Trustees. Such removal shall take effect at such
time as the other Trustees shall determine.
5.3 APPOINTMENT OF SUCCESSOR TRUSTEE.
(a) In the event of a vacancy in the position of a Trustee, the vacancy
shall be filled by majority vote of the remaining Trustees who shall refrain
from making any appointment that may result in the appearance of impropriety.
(b) Immediately upon the appointment of any successor Trustee, all rights,
titles, duties, powers and authority of the predecessor Trustee hereunder shall
be vested in, and undertaken by, the successor Trustee without any further act.
No successor Trustee shall be liable personally for any act or
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omission of his or her predecessor Trustee.
5.4 LIABILITY OF TRUSTEES. No Trustee, officer, or employee of the
Asbestos PD Trust shall be liable to the Asbestos PD Trust, to any person
holding an Asbestos Property Damage Claim, or to any other Entity except for
such Trustee's, officer's or employee's own breach of trust committed in bad
faith or for willful misappropriation. No Trustee, officer, or employee of the
Asbestos PD Trust shall be liable for any act or omission of any other officer,
agent, or employee of the Asbestos PD Trust, unless the Trustee acted with bad
faith or willful misconduct in the selection or retention of such officer,
agent, or employee.
5.5 COMPENSATION AND EXPENSES OF TRUSTEES.
(a) Each of the Trustees, other than Reorganized Eagle-Picher if
Reorganized Eagle-Picher serves as a Trustee, shall receive compensation from
the Asbestos PD Trust for his or her services as Trustee in the amount of
$35,000 per annum, plus a per diem allowance for meetings attended in the amount
of $1,000, or some other amount as determined by the Trustees, payable as
determined by the Trustees. The Trustees shall determine the scope and duration
of activities that constitute a meeting and may provide for partial payment of
per diem amounts for activities of less than a full day's duration. The per
annum compensation payable to the Trustees hereunder shall be increased annually
by the Trustees proportionately with any increase in the Consumer Price Index --
All Cities (or any successor index) for the corresponding annual period. Any
increase in excess of that amount may be made only with the approval of the
Bankruptcy Court.
(b) The Asbestos PD Trust will promptly reimburse the Trustees for all
reasonable out-of-pocket costs and expenses incurred by the Trustees in
connection with the performance of their duties hereunder.
5.6 INDEMNIFICATION OF TRUSTEES AND OTHERS.
(a) The Asbestos PD Trust shall indemnify and defend the Trustees and the
Asbestos PD Trust's officers, agents, advisers, or employees, to the fullest
extent that a corporation or trust organized under the laws of the Asbestos PD
Trust's domicile is from time to time entitled to indemnify and defend its
directors, trustees, officers, employees, agents or
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advisers against any and all liabilities, expenses, claims, damages or losses
incurred by them in the performance of their duties hereunder. Notwithstanding
the foregoing, the Trustees shall not be indemnified or defended in any way for
any liability, expense, claim, damage or loss for which they are liable under
section 5.4 hereof.
(b) Reasonable expenses, costs and fees (including attorneys' fees)
incurred by or on behalf of a Trustee in connection with any action, suit, or
proceeding, whether civil, administrative or arbitrative, from which they are
indemnified by the Asbestos PD Trust pursuant to this section 5.6, may be paid
by the Asbestos PD Trust in advance of the final disposition thereof upon
receipt of an undertaking by or on behalf of such Trustee to repay such amount
unless it shall be determined ultimately that such Trustee is entitled to be
indemnified by the Asbestos PD Trust.
(c) The Trustees shall have the power, generally or in specific cases, to
cause the Asbestos PD Trust to indemnify the employees and agents of the
Asbestos PD Trust to the same extent as provided in this section 5.6 with
respect to the Trustees.
(d) Any indemnification under section 5.6(c) of this Trust Agreement shall
be made by the Asbestos PD Trust upon a determination that indemnification of
such Entity is proper in the circumstances. Such determination shall be made by
a majority vote of the Trustees who were not parties to such action, suit, or
proceeding, if at least two such Trustees were not parties; otherwise the
determination will be made by legal counsel to the Asbestos PD Trust.
(e) The Trustees may purchase and maintain reasonable amounts and types of
insurance on behalf of an individual who is or was a Trustee, officer, employee,
agent or representative of the Asbestos PD Trust against liability asserted
against or incurred by such individual in that capacity or arising from his or
her status as a Trustee, officer, employee, agent or representative.
5.7 TRUSTEES' LIEN. The Trustees shall have a prior lien upon the Asbestos
PD Trust corpus to secure the payment of any amounts payable to them pursuant to
sections 5.5 and 5.6.
5.8 TRUSTEES' EMPLOYMENT OF EXPERTS. The Trustees may, but shall not be
required to, consult with counsel, accountants, appraisers and other parties
deemed by the Trustees to be qualified as experts on the matters submitted to
them (regardless of whether any such party is affiliated with any of the
Trustees in any manner, except as otherwise expressly provided in this Trust
Agreement), and the opinion of any such parties on any matters submitted to them
by the Trustees shall be full and complete authorization and protection in
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respect of any action taken or not taken by the Trustees hereunder in good faith
and in accordance with the written opinion of any such party.
5.9 TRUSTEES' SERVICE AS OFFICERS OR CONSULTANTS TO THE ASBESTOS PD TRUST.
The Trustees may, but are not required to, select any Trustee to serve as an
officer or manager of the Asbestos PD Trust or as a consultant to the Asbestos
PD Trust. In the event any Trustee serves the Asbestos PD Trust in such a
capacity, the Asbestos PD Trust shall compensate the Trustee in an amount
determined by the Trustees. Compensation for a Trustee's service as an officer
or manager of the Asbestos PD Trust or as a consultant to the Asbestos PD Trust
shall be in addition to compensation paid pursuant to section 5.5 hereof.
5.10 TRUSTEES' SERVICE AS DIRECTORS OF REORGANIZED EAGLE-PICHER. The
Trustees are not prohibited from serving as directors of Reorganized
Eagle-Picher. If any Trustee serves as a director of Reorganized Eagle-Picher,
he or she shall not receive for such service compensation over and above the
compensation received as Trustee under section 5.5 hereof, but he may receive
from Reorganized Eagle-Picher a per diem allowance in the amount that
Reorganized Eagle-Picher pays its directors for their attendance at meetings.
5.11 BOND. The Trustees shall not be required to post any bond or other
form of surety or security unless otherwise ordered by the Bankruptcy Court.
ARTICLE 6
GENERAL PROVISIONS
------------------
6.1 IRREVOCABILITY. The Asbestos PD Trust is irrevocable, but is subject
to amendment as provided in section 6.3 hereof.
6.2 TERMINATION.
(a) The Asbestos PD Trust shall automatically terminate on the date (the
"TERMINATION DATE") ninety (90) days after the first occurrence of any of
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the following events:
(i) the Trustees in their sole discretion decide to terminate the
Asbestos PD Trust because all Asbestos Property Damage Claims duly filed
with the Asbestos PD Trust have been liquidated and satisfied;
(ii) if the Trustees have procured and have in place irrevocable
insurance policies and have established claims handling agreements and
other necessary arrangements with suitable third parties adequate to
discharge all expected remaining obligations and expenses of the Asbestos
PD Trust in a manner consistent with this Trust Agreement and the Asbestos
PD Claims Procedures, the date on which the Bankruptcy Court enters an
order approving such insurance and other arrangements and such order
becomes final;
(iii) if in the judgment of two-thirds of the Trustees, the
continued administration of the Asbestos PD Trust is uneconomic or
inimical to the best interests of the persons holding Asbestos Property
Damage Claims, and the termination of the Asbestos PD Trust will not
expose or subject Reorganized Eagle-Picher or any other Reorganized Debtor
or any successor in interest to any increased or undue risk of having any
Asbestos Property Damage Claims asserted against it or them or in any way
jeopardize the validity or enforceability of the discharge and injunction
arising in favor of the Reorganized Debtors upon the Effective Date; or
(iv) 21 years less 91 days pass after the death of the last survivor
of all the descendants of Joseph P. Kennedy, Sr. of Massachusetts living
on the date hereof.
(b) On the Termination Date, after payment of all the Asbestos PD Trust's
liabilities have been provided for, all monies remaining in the Asbestos PD
Trust estate shall be transferred to charitable organization(s) exempt from
federal income tax under Section 501(c)(3) of the Internal Revenue Code, which
tax-exempt organization(s) shall be selected by the Trustees using their
reasonable discretion; provided, however, that the tax-exempt organization(s)
shall not bear any relationship to Reorganized Eagle-Picher within the meaning
of Section 468(d)(3) of the Internal Revenue Code.
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6.3 AMENDMENTS. The Trustees may modify or amend this Trust Agreement or
any document annexed to it, including, without limitation, the Bylaws, except
that Articles 2.2 (Purpose), 2.4 (Acceptance of Assets and Assumption of
Liabilities), 3.1(d) (precluding guaranty of others' debt), 3.3(a)-(c) (claims
administration), 5.2 (Term of Service), 5.3 (Appointment of Successor Trustees),
5.5 (Compensation and Expenses of Trustees), 5.6 (Indemnification of Trustees
and Others), 6.1 (Irrevocability), 6.2 (Termination) and 6.3 (Amendments)
herein, and, if Class 16 votes to reject the Plan, the Asbestos PD Claims
Resolution Procedures shall not be modified or amended in any respect. No
consent from the Settlors shall be required to make the modifications or
amendments permitted by the foregoing sentence. Any modification or amendment
made pursuant to this section must be done in writing.
6.4 MEETINGS. For purposes of section 5.5 of this Trust Agreement, a
Trustee shall be deemed to have attended a meeting in the event such person
spends a substantial portion of the day conferring, by phone or in person, on
Asbestos PD Trust matters with Trustees. The Trustees shall have complete
discretion to determine whether a meeting, as described herein, occurred for
purposes of section 5.5 hereof.
6.5 SEVERABILITY. Should any provision in this Trust Agreement be
determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this Trust Agreement.
6.6 NOTICES. Notices to persons asserting claims shall be given at the
address of such person, or, where applicable, such person's legal
representative, in each case as provided on such person's claim form submitted
to the Asbestos PD Trust with respect to his, her, or its Asbestos Property
Damage Claim. Any notices or other communications required or permitted
hereunder shall be in writing and delivered at the addresses designated below,
or sent by telecopy pursuant to the instructions listed below, or mailed by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows, or to such other address or addresses as may hereafter be
furnished by any of Reorganized Eagle-Picher, or the Trustees to the others in
compliance with the terms hereof.
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To the Asbestos PD Trust
or the Trustees:
---------------------------------------
---------------------------------------
---------------------------------------
To Reorganized
Eagle-Picher: Eagle-Picher Industries, Inc.
Attention: General Counsel
IF BY HAND OR OVERNIGHT DELIVERY:
Suite 1300, 580 Building
580 Walnut Street
Cincinnati, Ohio 45202
IF BY MAIL:
Post Office Box 779
Cincinnati, Ohio 45201
Telecopier: (513) 721-3404
Telephone Confirmation: (513) 629-2400
and
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Stephen Karotkin, Esq.
Telecopier: (212) 310-8007
Telephone Confirmation: (212) 310-8888
and
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Frost & Jacobs
2500 PNC Center
201 East Fifth Street
Cincinnati, Ohio 45202-4182
Attention: Edmund J. Adams, Esq.
Telecopier: (513) 651-6981
Telephone Confirmation: (513) 651-6800
All such notices and communications shall be effective when delivered at
the designated addresses or when the telecopy communication is received at the
designated addresses and confirmed by the recipient by return telecopy in
conformity with the provisions hereof.
6.7 COUNTERPARTS. This Trust Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but such counterparts
shall together constitute but one and the same instrument.
6.8 SUCCESSORS AND ASSIGNS. The provisions of this Trust Agreement shall
be binding upon and inure to the benefit of the Settlors, the Asbestos PD Trust,
and the Trustees and their respective successors and assigns, except that
neither the Settlors nor the Asbestos PD Trust nor any Trustee may assign or
otherwise transfer any of its, or his or her rights or obligations under this
Trust Agreement except, in the case of the Asbestos PD Trust and the Trustees,
as contemplated by section 3.1.
6.9 LIMITATION ON CLAIM INTERESTS FOR SECURITIES LAWS PURPOSES. Asbestos
Property Damage Claims, and any interests therein, (a) shall not be assigned,
conveyed, hypothecated, pledged or otherwise transferred, voluntarily or
involuntarily, directly or indirectly, except by will or under the laws of
descent and distribution; (b) shall not be evidenced by a certificate or other
instrument; (c) shall not possess any voting rights; and (d) shall not be
entitled to receive any dividends or interest.
6.10 ENTIRE AGREEMENT; NO WAIVER. The entire agreement of the parties
relating to the subject matter of this Trust Agreement is contained herein and
in the documents referred to herein, and this Trust Agreement and such documents
supersede any prior oral or written agreements concerning the subject matter
hereof. No failure to exercise or delay in exercising any right, power or
privilege hereunder shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, power or privilege hereunder preclude any further
exercise thereof or of any other right, power or privilege. The rights and
remedies herein provided are cumulative and are not exclusive of rights under
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law or in equity.
6.11 HEADINGS. The headings used in this Trust Agreement are inserted for
convenience only and neither constitute a portion of this Trust Agreement nor in
any manner affect the construction of the provisions of this Trust Agreement.
6.12 GOVERNING LAW. This Trust Agreement shall be governed by, and
construed in accordance with, the laws of the State of Ohio.
6.13 SETTLORS' REPRESENTATIVE. Reorganized Eagle-Picher is hereby
irrevocably designated as the representative of the Settlors, and it is hereby
authorized to take any action required of the Settlors in connection with the
Trust Agreement.
6.14 DISPUTE RESOLUTION. Any disputes that arise under this Trust
Agreement or under the annexes hereto shall be resolved by the Bankruptcy Court
pursuant to Article 9 of the Plan, except as otherwise provided herein or in the
annexes hereto. Notwithstanding anything else herein contained, to the extent
any provision of this Trust Agreement is inconsistent with any provision of the
Plan, the Plan shall control.
6.15 ENFORCEMENT AND ADMINISTRATION. The parties hereby acknowledge the
Bankruptcy Court's continuing exclusive jurisdiction to interpret and enforce
the terms of this Trust Agreement and the annexes hereto, pursuant to Article 9
of the Plan.
6.16 EFFECTIVENESS. This Trust Agreement shall not become effective until
it has been executed and delivered by all the parties hereto and until the
Effective Date.
IN WITNESS WHEREOF, the parties have executed this Trust Agreement this
____ day of __________________, 1996.
SETTLORS:
EAGLE-PICHER INDUSTRIES, INC.
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BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
DAISY PARTS, INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
TRANSICOIL INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
MICHIGAN AUTOMOTIVE RESEARCH CORP.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EDI, INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
EAGLE-PICHER MINERALS, INC.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
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HILLSDALE TOOL & MANUFACTURING CO.
BY:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
TRUSTEES:
ANNEX A
EAGLE-PICHER INDUSTRIES, INC.
ASBESTOS PROPERTY DAMAGE SETTLEMENT TRUST BYLAWS
------------------------------------------------
ARTICLE I
OFFICES
-------
SECTION 1. PRINCIPAL OFFICE. The initial principal office of the
Eagle-Picher Industries, Inc. Asbestos Property Damage Settlement Trust (the
"Asbestos PD Trust") shall be in ____________________ or at such other place as
the Trustees shall from time to time select.
SECTION 2. OTHER OFFICES. The Asbestos PD Trust may have such other
offices at such other places as the Trustees may from time to time determine to
be necessary for the efficient and cost-effective administration of the Asbestos
PD Trust.
ARTICLE II
TRUSTEES
--------
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SECTION 1. CONTROL OF PROPERTY, BUSINESS AND AFFAIRS. The property,
business and affairs of the Asbestos PD Trust shall be managed by or under the
direction of the Trustees.
SECTION 2. NUMBER, RESIGNATION AND REMOVAL. The number of Trustees and the
provisions governing the resignation and removal of a Trustee and the
appointment of a successor Trustee shall be governed by the provisions of
Article 5 of the Trust Agreement.
SECTION 3. QUORUM AND MANNER OF ACTING. The presence of a majority of the
Trustees shall constitute a quorum for the transaction of business. In the
absence of a quorum, the Trustee[s] present may adjourn the meeting from time to
time until a quorum shall be present. The vote, at a meeting at which a quorum
is present, of the majority of the Trustees present shall be an act of the
Trustees.
SECTION 4. REGULAR MEETINGS. Regular meetings of the Trustees may be held
at such time and place as shall from time to time be determined by the Trustees.
SECTION 5. SPECIAL MEETING NOTICE. Special meetings of the Trustees shall
be held whenever called by one or more of the Trustees. Notice of each such
meeting shall be delivered by overnight courier to each Trustee, addressed to
him, her, or it at his, her, or its residence or usual place of business, at
least three (3) days before the date on which the meeting is to be held, or
shall be sent to him, her, or it at such place by personal delivery or by
telephone or telecopy not later than two (2) days before the day of which such
meeting is to be held. Such notice shall state the place, date and hour of the
meeting and the purposes for which it is called. In lieu of the notice to be
given as set forth above, a waiver thereof in writing, signed by the Trustee or
Trustees entitled to receive such notice, whether before or after the meeting,
shall be deemed equivalent thereto for purposes of this Section 5. No notice to
or waiver by any Trustee with respect to any special meeting shall be required
if such Trustee shall be present at said meeting.
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SECTION 6. ACTION WITHOUT A MEETING; MEETING BY CONFERENCE CALL. Any
action required or permitted to be taken at any meeting of the Trustees may be
taken without a meeting if all Trustees consent thereto in writing, and the
writing or writings are filed with the minutes of proceedings of the Trustees.
The Trustees also may take any action required or permitted to be taken at any
meeting by means of conference telephone or similar communication equipment
provided that all persons participating in the meeting can hear each other.
Participation in a meeting pursuant to this paragraph shall constitute presence
in person at such meeting.
ARTICLE III
OFFICERS
--------
SECTION 1. PRINCIPAL OFFICERS. The principal officer of the Asbestos PD
Trust shall be an Executive Director. The Asbestos PD Trust may also have such
other principal officers, including one or more Assistant Directors, a
Secretary-Treasurer and a Controller, as the Trustees may in their discretion
appoint after determining that such appointment will promote the efficient and
cost-effective administration of the Asbestos PD Trust.
SECTION 2. ELECTION AND TERM OF OFFICE. The principal officer(s) of the
Asbestos PD Trust shall be chosen by the Trustees. Each such officer shall hold
office until his successor shall have been duly chosen and qualified or until
his earlier death, resignation or removal.
SECTION 3. SUBORDINATE OFFICERS. In addition to the principal officers
enumerated in Section 1 of this Article III, the Asbestos PD Trust may have such
other subordinate officers, agents and employees as the Trustees may deem
necessary for the efficient and cost-effective administration of the Asbestos PD
Trust, each of whom shall hold office for such period, have such authority, and
perform such duties as the Trustees may from time to time determine. The
Trustees may delegate to any principal officer the power to appoint and to
remove any such subordinate officers, agents, or employees.
SECTION 4. REMOVAL. The Executive Director or any other officer may be
removed with or without cause, at any time, by resolution adopted by the
Trustees at any regular meeting of the Trustees or at any special meeting of the
Trustees called for that purpose at which a quorum is present.
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SECTION 5. RESIGNATIONS. Any officer may resign at any time by giving
written notice to the Trustees. The resignation of any officer shall take effect
upon receipt of notice thereof or at such later time as shall be specified in
such notice and unless otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
SECTION 6. POWERS AND DUTIES. The officers of the Asbestos PD Trust shall
have such powers and perform such duties as may be conferred upon or assigned to
them by the Trustees.
ARTICLE IV
AMENDMENTS
----------
The Bylaws of the Asbestos PD Trust, other than Article II and this
Article IV, may be amended by the Trustees at any meeting of the Trustees,
provided that notice of the proposed amendment is contained in the notice of
such meeting.
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.38"
FORM OF CONNECTICUT MUTUAL NOTE
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
[CONNECTICUT MUTUAL NOTE SECURED CLAIM]
SECURED NOTE AND SECURITY AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN VIOLATION OF SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
10% Secured Installment Note
HILLSDALE TOOL & MANUFACTURING CO., a Michigan corporation ("Hillsdale"),
and EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation (the "Company")
(Hillsdale and the Company are sometimes referred to herein individually as an
"Obligor" and collectively as the "Obligors"), for value received, hereby
promise jointly and severally to pay to MASSACHUSETTS MUTUAL LIFE INSURANCE
COMPANY, or registered assigns (the "Payee"), on or before June 1, 2001 (the
"Maturity Date"), as hereinafter provided, the principal sum of
[____________________________________ (____________)] and to pay interest on the
unpaid principal amount thereof from the date hereof to maturity at the rate of
10% per annum computed as if each year consisted of 360 days and each month
consisted of 30 days. Such principal and interest shall be payable without
presentation of this Note, by bank wire transfer of Federal or other immediately
available funds (identifying each payment as Hillsdale Tool & Manufacturing Co.
and Eagle-Picher Industries, Inc. 10% Secured Installment Note due 2001,
principal or interest) to the Payee pursuant to instructions provided by the
Payee to the Company from time to time, in ___________ consecutive payments of
principal and interest, in the respective amounts of and payable on the dates
indicated in the schedule annexed hereto as Schedule A (collectively, the
"Installment Payments"). The first of the Installment
<PAGE>
<PAGE>
Payments will be made on [the first Business Day of the second month following
the date of the issuance of the Note]. Whenever any Installment Payment is not
made when due and such default shall continue for more than ten (10) days, the
Obligors shall pay interest on such amount at a rate equal to the lesser of (a)
12% per annum or (b) the maximum rate allowed by law.
Each Installment Payment, when paid, shall be applied first to the payment
of all interest accrued and unpaid on this Note and then to payment on account
of the principal hereof.
SECTION 1. The following terms have the following meanings when used in
this Note:
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in Cincinnati, Ohio are authorized or required by
law to close.
"Collateral" shall have the meaning set forth in Section 3 hereof.
"MATURITY DATE" shall have the meaning set forth in the opening paragraph
of this Note.
"NOTES" shall have the meaning set forth in Section 18 hereof.
"Payee" shall have the meaning set forth in the opening paragraph of this
Note.
SECTION 2. PRINCIPAL PAYMENTS. (a) SCHEDULED PAYMENT. On the Maturity
Date, the Obligors shall pay to the Payee, in cash or other immediately
available funds, the entire unpaid principal amount of this Note plus all
accrued and unpaid interest thereon.
(b) MANDATORY PREPAYMENT. In the event of condemnation or of destruction
by fire or other casualty of substantially all of the Collateral, the Note shall
be prepaid in full (but not in part) at a price equal to 100% of the then
outstanding principal amount of the Note, together with all interest then
accrued and unpaid thereon, but without any prepayment penalty or premium.
(c) Optional Prepayment. The Obligors may, at any time and from time to
time, without premium or penalty, prepay (in multiples of $1,000)
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<PAGE>
all or a portion of the unpaid principal amount of this Note or all or a portion
of accrued and unpaid interest, together with unpaid accrued interest on the
amount so prepaid to the date chosen for prepayment, payable in cash or other
immediately available funds. The Obligors shall give written notice of
prepayment of this Note or any portion hereof not less than 10 but not more than
30 days prior to the date chosen for prepayment, which notice shall specify the
amount thereof to be prepaid and the date fixed for prepayment.
SECTION 3. Security. This Note is secured by the following property
(collectively, the "Collateral"):
(a) The equipment described in Schedule B hereto (whether or not
constituting fixtures) and all additions and accessions thereto and
substitutions therefor;
(b) All books and records of the Obligors relating to any of the
foregoing; and
(c) All proceeds and products of any of the foregoing, including insurance
payable by reason of loss or damage.
The Obligors herewith confirm the grant of a security interest in the
Collateral to the Payee.
SECTION 4. AFFIRMATIVE COVENANTS. For as long as any principal or interest
remains unpaid under this Note:
(a) Financial Statements. The Company shall deliver to the Payee:
(i) a balance sheet and income statement of the Company within 45 days
after the close of each fiscal quarter other than the last fiscal quarter for
the fiscal year and (ii) a balance sheet and income statement of the Company
within 90 days after the close of each fiscal year. All such financial
statements will be prepared in accordance with generally accepted accounting
principles consistently applied. All statements will be in the same form as
those provided to creditors and shareholders of the Company generally. The
Company will also furnish to the Payee promptly copies of any Forms 10-Q, 10-K
and 8-K that are filed with the Securities and Exchange Commission as well as
copies of any other special mailings to shareholders.
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(b) Reporting Requirements. The Company or Hillsdale, as the case may be,
shall furnish to the Payee:
(i) as soon as possible and in any event within 10 days after
becoming aware of the occurrence of any event of default as defined in
Section 10 hereof or any event that with notice or passage of time or both
would, if unremedied, constitute an event of default, a written statement
of the chief executive officer or chief financial officer of the Company
or Hillsdale, as the case may be, setting forth details of such event of
default or event, stating whether or not the same is continuing and, if
so, the action that the Company or Hillsdale, as the case may be, proposes
to take with respect thereto;
(ii) immediately after receiving knowledge thereof, notice in
writing of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that directly affect or affects
Hillsdale based on financial exposure to Hillsdale of $10 million or that
directly affect or affects the Company based on financial exposure to the
Company of $25 million or more or that directly affect or affects the
Collateral or that seek or seeks injunctive relief that will materially
adversely affect the operations of either of the Obligors or the
Collateral;
(iii) as soon as possible and in any event within 5 days after the
Obligors become aware of the occurrence of a material adverse change in
the business, properties or the operations and condition (financial or
otherwise) of either of the Obligors, a statement by the chief executive
officer or chief financial officer of the Company or Hillsdale, as the
case may be, setting forth details of such material adverse change and the
action that the Company or Hillsdale, as the case may be, proposes to take
with respect thereto, except as otherwise disclosed in public
announcements of the Obligors issued in the ordinary course of business;
and
(iv) such other information respecting the business, properties,
condition and operations (financial or otherwise) of the Obligors as the
Payee may from time to time reasonably request be
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furnished to the Payee.
(c) FURTHER ASSURANCES.
(i) The Obligors agree that from time to time, at their expense,
they will promptly execute and deliver all further instruments and
documents, and take all further action that may be reasonably necessary or
desirable, or that the Payee may reasonably request, in order to perfect
and protect any security interest granted or purported to be granted
hereby and the priority thereof or to enable the Payee to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.
Without limiting the generality of the foregoing, the Obligors will
execute and file such financing or continuation statements or amendments
thereto and such other instruments or notices as may be necessary or
desirable or as the Payee may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby.
(ii) The Obligors hereby authorize the Payee to file one or more
financing or continuation statements and amendments thereto relative to
all or any part of the Collateral without the signature of the Obligors
where permitted by law. A carbon, photographic or other reproduction of
this Note or any part thereof shall be sufficient as a financing statement
where permitted by law.
(iii) The Obligors will furnish to the Payee from time to time
statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as the Payee may
reasonably request, all in reasonable detail.
(d) INSURANCE.
The Obligors shall, at their own expense, maintain liability and property
insurance with respect to their respective businesses and property, including
the Collateral, with responsible and reputable insurance companies or
associations satisfactory to the Payee in such amounts and covering such risks
as are acceptable to or specified by the Payee, taking into account, among other
factors, such amounts and risks as are usually carried by persons engaged in
similar
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businesses and owning similar properties in the same general areas in which the
Obligors operate. Each policy for liability insurance and property damage
insurance shall provide for payment to or on behalf of the Obligors and the
Payee as their interests may appear. Each policy of property damage insurance
shall in addition (i) name the Payee as an insured party thereunder (without any
representation or warranty by or obligation upon the Payee), (ii) contain an
agreement by the insurer that any loss thereunder shall be payable to, or on
behalf of the Obligors or the Payee as their interests may appear, (iii) provide
that there shall be no recourse against the Payee for payment of premiums or
other amounts with respect thereto, and (iv) provide that at least 30 days'
prior written notice of cancellation or of lapse shall be given to the Payee by
the insurer. The Obligors shall deliver to the Payee certificates evidencing the
insurance maintained pursuant hereto.
(e) CERTAIN COVENANTS AS TO THE COLLATERAL. The Obligors shall:
(i) Keep the Collateral at the places identified therefor on
Schedule B hereto or, upon 15 days' prior written notice to the Payee, at
such other places as shall be identified in such notice (such notice to
identify the record owner of the new location) and which are in
jurisdictions where all actions required by subparagraph (c) above shall
have been taken with respect to such Collateral.
(ii) Cause the Collateral to be maintained and preserved in the same
condition, repair, and working order as when new, ordinary wear and tear
excepted, and, in the case of any loss or damage to the Collateral, as
quickly as practicable after the occurrence thereof make or cause to be
made all repairs, replacements, and other improvements in connection
therewith which are necessary or desirable to such end, provided, however,
that in the event of condemnation or of the destruction by fire or other
casualty of substantially all the Collateral, have the option to repay the
Note in full (but not in part) as provided in Section 2(b) hereof.
(iii) Pay promptly when due all property and other taxes,
assessments, and governmental charges or levies imposed upon it, and all
claims (including claims for labor, materials and supplies) against the
Collateral.
(iv) After the occurrence and during the continuance of an Event of
Default (as defined in Section 10 hereof) receive in trust for the benefit
of the Payee hereunder all amounts and proceeds
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received or collected by the Obligors in respect of the Collateral,
segregate such amounts and proceeds from other funds of Debtor, and
forthwith pay such amounts and proceeds over to the Payee in the same form
as so received (with any necessary endorsement) to be held as cash
collateral and applied as provided in Section 10(c) hereof.
SECTION 5. Substitution of Collateral; Liens. During the term of the Note:
(a) The Obligors may substitute other collateral for the Collateral
identified in Schedule B hereto, provided, however, that the value of the
Collateral, including any substituted Collateral, shall at the time of such
substitution be equal to or greater than the value of the Collateral identified
in Schedule B hereto, such value to be determined by an independent appraisal
provided at the Obligors' expense and satisfactory to the Payee.
(b) The Obligors shall not create or suffer to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Collateral.
SECTION 6. Appointed Attorney-in-Fact. The Obligors hereby irrevocably
appoint Payee as their attorney-in-fact, with full authority in the place and
stead of the Obligors and in the name of the Obligors, the Payee, or otherwise,
to from time to time take any action which may be reasonably necessary to
protect the Payee's interest under this Note, including, without limitation:
(a) to sign in the name and on behalf of the Obligors any financing
statements or other papers required under Section 4(c) hereof;
(b) to obtain and adjust insurance required to be paid to the Payee
pursuant to Section 4(d) hereof;
(c) to ask, demand, collect, sue for, recover, compound, receive, and give
acquittance and receipts for moneys due and to become due in respect of any of
the Collateral;
(d) to receive, endorse, and collect any drafts or other
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instruments in connection with subsection (b) or (c) above; and
(e) to file any claims or take any action or institute any proceedings
which the Payee may deem necessary or desirable to enforce the rights of the
Payee with respect to any of the Collateral.
The Obligors hereby ratify and approve all acts of the Payee as such
attorney-in-fact. The Payee shall not, in its capacity as such attorney-in-fact,
be liable for any acts or omissions, nor for any error of judgment or mistake of
fact or law, but only for gross negligence or willful misconduct.
This power, being coupled with an interest, is irrevocable until the Note shall
have been fully satisfied. Any amounts received or collected by the Payee in its
capacity as such attorney-in-fact shall be held as cash collateral and applied
as provided in Section 10(c) hereof.
SECTION 7. THE PAYEE MAY PERFORM. If the Obligors fail to perform any
agreement contained herein, the Payee may itself perform, or cause performance
of, such agreement, and the expenses of the Payee incurred in connection
therewith shall be payable by the Obligors under Section 17(b) hereof.
SECTION 8. THE PAYEE'S DUTIES. The powers conferred on the Payee hereunder
are solely to protect its interest in the Collateral and shall not impose any
duty to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by it
hereunder, the Payee shall not have any duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral.
SECTION 9. INSPECTION RIGHTS. The Payee, upon 24 hours' notice and during
normal business hours, shall have access to inspect, audit, and make extracts
from all of the Obligors' records, files, and books of account relating to the
Collateral, and the Obligors shall deliver any document or instrument necessary
for the Payee to obtain records from any service bureau maintaining records for
the Obligors. The Payee may also, at all reasonable times, examine and inspect
the Collateral. The Obligors shall, at the Payee's request, take all steps
necessary to facilitate such inspection.
SECTION 10. EVENTS OF DEFAULT. (a) Each of the following shall be an Event
of Default:
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(i) If default shall be made in the payment of any installment of
principal and interest due from the Obligors under the Note when and as
the same shall become due and payable, whether at maturity or by
acceleration or prepayment or otherwise, and such default shall continue
for more than ten (10) days;
(ii) If there shall be default in the due observance or performance
of any other provision of this Note and such default shall continue for
more than thirty (30) days after written notice thereof shall have been
given by the Payee to the Company and Hillsdale, as the case may be;
(iii) If an event of default shall occur and continue with respect
to any borrowing in excess of $5,000,000 by the Company or Hillsdale,
exclusive of any alleged event of default that is being contested in good
faith by the Company or Hillsdale;
(iv) If at any time prior to payment in full of the Note there are
unsatisfied judgments against the Company and Hillsdale which aggregate in
excess of $5,000,000, exclusive of judgments as to which the Company or
Hillsdale has filed or is preparing to file and is actively prosecuting
timely appeals;
(v) If any representation or warranty of the Company or Hillsdale
made in this Note or in any writing delivered pursuant hereto shall prove
to be incorrect in any material respect as of the time when the same shall
have been made;
(vi) If either the Company or Hillsdale shall make an assignment for
the benefit of its creditors or file a petition in bankruptcy or for
reorganization or for an arrangement or any composition, readjustment,
liquidation, dissolution or similar relief pursuant to the Bankruptcy Code
or under any similar present or future federal or state law or shall be
adjudicated a bankrupt;
(vii) If a petition or answer shall be filed proposing the
adjudication of the Company or Hillsdale as a bankrupt or the
reorganization or arrangement of either of them or any composition,
readjustment, liquidation, dissolution or similar relief
9
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with respect to either of them pursuant to the Bankruptcy Code or any
similar present or future federal or state law, and the Company or
Hillsdale, as the case may be, shall consent to the filing thereof, or
such petition or answer shall not be discharged or denied within sixty
(60) days after the filing thereof; or
(viii) If a receiver, trustee or liquidator (or other similar
official) of the Company or Hillsdale or of all or substantially all of
the assets of the Company or Hillsdale or any portion thereof shall be
appointed and shall not be discharged within sixty (60) days thereafter,
or if the Company or Hillsdale, as the case may be, shall consent to or
acquiesce in such appointment.
(b) Upon the occurrence and during the continuance of any Event of Default
described in Section 10(a) hereof other than in clause (vi), (vii) or (viii)
thereof, the holders of a majority of the outstanding principal amount of the
Notes may, by written notice to the Obligors, declare all or any portion of the
unpaid principal amount of the Notes and all interest accrued thereon to be
immediately due and payable. Upon the occurrence and during the continuance of
any Event of Default described in clauses (vi), (vii) or (viii) of Section 10(a)
hereof, the unpaid principal amount of the Notes and all interest accrued
thereon shall automatically become due and payable, without any action or notice
by the Payee. Demand, presentment, protest and notice of non-payment are hereby
waived by the Obligors. All payments made following an Event of Default shall be
applied first to payment of all accrued and unpaid interest and then to
principal.
(c) In addition, upon the occurrence and during the continuance of an
Event of Default described in Section 10(a), the Payee may exercise in respect
of the Collateral, in addition to other rights and remedies provided for herein
or otherwise available to it, all the rights and remedies of a Secured Party on
default under the Uniform Commercial Code (the "Code") and other applicable laws
and agreements and also may (i) require the Obligors to, and the Obligors hereby
agree that they will at their expense and upon request of the Payee forthwith,
assemble the Collateral as directed by the Payee and make it available to the
Payee at a place or places to be designated by the Payee, which is or are
reasonably convenient to the Payee and the Obligors and (ii) without notice
except as specified below, sell the Collateral or any part thereof in one or
more parcels at public or private sale, at any of
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the Payee's offices or elsewhere, for cash, on credit or for future delivery and
upon such other terms as the Payee may deem commercially reasonable. The
Obligors agree that, to the extent notice of sale shall be required by law, at
least five days' notice to the Obligors of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. The Payee shall not be obligated to make any sale of
the Collateral regardless of notice of sale having been given. The Payee may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor and such sale may, without further notice, be made at
the time and place to which it was so adjourned.
All cash proceeds received by the Payee in respect of any sale of,
collection from or other realization upon all or any part of the Collateral may,
in the discretion of the Payee, be held by the Payee (without interest) as
collateral for and/or then or at any time thereafter applied in whole or in part
by the Payee against payment of the Note. Any surplus of such cash or cash
proceeds held by the Payee and remaining after payment in full of the Note shall
be paid over to the Obligors or to whosoever may be lawfully entitled to receive
such surplus.
SECTION 11. Continuing Security Interest; etc. This Note shall create a
continuing security interest in the Collateral. The execution and delivery of
this Note shall in no manner impair or affect any other security (by endorsement
or otherwise) for the payment or performance of the Note and no security taken
hereafter as security for payment or performance of the Note shall impair in any
manner or affect this Note or the security interest granted hereby, all such
present and future additional security to be considered as one general,
continuing security interest. Any of the Collateral may be released from this
Note without altering, varying, or diminishing in any way this Note or the
security interest granted hereby as to the Collateral not expressly released,
and this Note and such security interest shall continue in full force and effect
as to all of the Collateral not expressly released.
SECTION 12. Entire Agreement; No Oral Change. This Note embodies the
entire agreement and understanding between the Payee and the Obligors relating
to the subject matter hereof, and supersedes all prior agreements and
understandings relating thereto. None of the provisions hereof may be waived,
altered or amended, except by a written instrument signed by the holders of a
majority of the outstanding principal amount of the Notes and by the Obligors.
In the case of any waiver, the Obligors and the holders of a
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majority of the outstanding principal amount of the Notes shall be restored to
their former respective positions and rights hereunder and any Event of Default
waived shall be deemed to be cured and not continuing, but no such waiver shall
extend to any subsequent or other Event of Default or impair any right
consequent thereon except to the extent expressly provided in such waiver.
SECTION 13. Remedies Cumulative. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 14. NOTICES. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Obligors, and if to the Obligors, at the address of the Company,
Attention: Treasurer, at P.O. Box 779, Cincinnati, Ohio 45201 (if by mail) or
580 Walnut Street, Suite 1300, Cincinnati, Ohio 45202 (if personally delivered),
or any other address notified in writing by the Obligors to the Payee. Any
notice given in conformity with the foregoing shall be deemed given when
personally delivered or upon the date of delivery specified in the registered
mail receipt.
SECTION 15. Governing Law. This Note shall be governed by, and construed
and enforced in accordance with, the law of the State of Indiana.
SECTION 16. Consent To Jurisdiction. The parties hereto irrevocably agree
that any legal action or proceeding with respect to this Note shall be brought
in the courts of the State of Indiana in the County of Steuben or in the courts
of the United States of America sitting in Indiana. By the execution and
delivery of this Note, the parties hereto irrevocably submit to the jurisdiction
of such courts. The Obligors hereby waive to the fullest extent permitted by law
any objection they may now or hereafter have to the laying of venue in any such
action or proceeding in any such court as well as any right they may now or
12
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hereafter have to remove any such action or proceeding, once commenced, to
another court on the grounds of forum non conveniens or otherwise or to remove
an action brought in a state court to a court of the United States of America.
The Obligors hereby irrevocably agree that service of process in any such action
or proceeding may be made either by mailing or delivering a copy of the summons
and complaint in any such action or proceeding to the Obligors at the address
provided herein by certified mail, return receipt requested. Service of process
in any such action or proceeding, effected as aforesaid, shall be deemed
personal service upon the Obligors and shall be legal and binding upon the
Obligors for all purposes notwithstanding any failure on the part of the
Obligors to receive copies of such process mailed directly to the Obligors in
accordance with the provisions of this Section.
SECTION 17. INDEMNITY AND EXPENSES. (a) The Obligors agree to indemnify
the Payee from and against any and all claims, losses, and liabilities growing
out of or resulting from and after the date hereof from this Note (including,
without limitation, enforcement of this Note), except claims, losses or
liabilities resulting from the Payee's gross negligence or willful misconduct.
(b) The Obligors will upon demand pay to the Payee the amount of any and
all reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, which the Payee may incur from and after
the date hereof in connection with (i) the administration of this Note, (ii) the
custody, preservation, use, or operation of, or the sale of, collection from, or
other realization upon, any of the Collateral, (iii) the exercise or enforcement
of any of the rights of the Payee, or (iv) the failure by the Obligors to
perform or observe any of the provisions hereof.
SECTION 18. Successors and Assigns; Transferability. This Note shall be
binding upon and inure to the benefit of the Payee and the Obligors and their
respective transferees, successors and assigns; PROVIDED, HOWEVER, that the
Obligors may not transfer or assign any of their rights or obligations hereunder
without the prior written consent of the Payee. Within five (5) Business Days
after receipt of notice of any assignment by the Payee to any person or entity
(an "Assignee") of all or any part of this Note, the Obligors shall execute and
deliver to such Assignee, in exchange for the surrendered Note, a new Note to
the order of such Assignee in an amount equal to the amount of this Note
assigned to it, and if the Payee has retained any amount owing to it hereunder,
a new Note to the order of the Payee in an amount equal to the amount retained
by it hereunder, which new Note shall be dated the same date as the surrendered
Note and be in substantially the form of this Note, and such Assignee will be
deemed the Payee
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under the Note issued to it. References herein to "Notes" shall include all
outstanding Notes issued in substitution for or upon any assignment of this
Note.
SECTION 19. No Set-Off. The obligations of the Obligors under this Note
are absolute and not subject to any right of set-off, counterclaim, recoupment
or defenses against the Payee of any kind whatsoever.
SECTION 20. Miscellaneous. The headings of the sections of this Note have
been inserted for convenience and shall not modify, define, limit or expand the
express provisions of this Note.
IN WITNESS WHEREOF, the Obligors have duly executed this Note this ____
day of __________________, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By:
-------------------------------
HILLSDALE TOOL & MANUFACTURING CO.
By:
-------------------------------
SCHEDULE A
Installment Payment Schedule
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SCHEDULE B
Collateral
15
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.56"
FORM OF DIVESTITURE NOTES
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[THIS PAGE LEFT BLANK INTENTIONALLY]
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EAGLE-PICHER INDUSTRIES, INC.
AND
[ ] TRUSTEE
--------------------
INDENTURE
DATED AS OF
--------------------
$50,000,000
[____]% SENIOR UNSECURED DIVESTITURE NOTES DUE __________, _____
CROSS-REFERENCE TABLE
TIA SECTION INDENTURE SECTION
----------- -----------------
310(a)(1) 7.10
(a)(2) 7.10
(a)(3) N.A.
(a)(4) N.A.
(b) 7.08
(c) N.A.
311(a) 7.11
(b) 7.11
(c) N.A.
312(a) 2.05
(b) 10.03
(c) 10.03
313(a) 7.06
(b)(1) N.A.
(b)(2) 7.06
(c) 10.02
(d) 7.06
314(a) 4.02; 10.02
(b) N.A.
(c)(1) 10.04
(c)(2) 10.04
(c)(3) N.A.
(d) N.A.
(e) 10.05
(f) N.A.
315(a) 7.01(b)
(b) 7.05; 10.02
(c) 7.01(a)
(d) 7.01(c)
(e) 6.11
316(a)(last sentence) 2.09
(a)(1)(A) 6.05
(a)(1)(B) 6.04
(a)(2) N.A.
(b) 6.07
<PAGE>
<PAGE>
317(a)(1) 6.08
(a)(2) 6.09
(b) 2.04
318(a) 10.01
N.A. means not applicable.
Note: This Cross-Reference Table shall not, for any purpose, be deemed to be a
part of this Indenture.
TABLE OF CONTENTS
Article Section Heading Page
- ------- ------- ------- ----
1 DEFINITIONS AND INCORPORATION BY REFERENCE .................. 1
1.01. Definitions ................................................. 1
1.02. Other Definitions ........................................... 4
1.03. Rules of Construction ....................................... 4
2 THE SECURITIES .............................................. 4
2.01. Form and Dating ............................................. 4
2.02. Execution and Authentication ................................ 4
2.03. Registrar, Transfer Agent and Paying Agent .................. 5
2.04. Paying Agent to Hold Money in Trust ......................... 5
2.05. Securityholder Lists ........................................ 5
2.06. Transfer and Exchange ....................................... 6
2.07. Replacement Securities ...................................... 6
2.08. Outstanding Securities ...................................... 6
2.09. Treasury Securities ......................................... 7
2.10. Temporary Securities ........................................ 7
2.11. Cancellation ................................................ 7
2.12. Defaulted Interest .......................................... 7
3 REDEMPTION .................................................. 7
3.01. Notices to Trustee .......................................... 7
3.02. Selection of Securities to be Redeemed ...................... 8
3.03. Notice of Redemption ........................................ 8
3.04. Effect of Notice of Redemption .............................. 8
3.05. Deposit of Redemption Price ................................. 8
3.06. Securities Redeemed in Part ................................. 9
3.07. Mandatory Redemption ........................................ 9
3.08. Investment of Asset Account ................................. 9
4 COVENANTS ................................................... 9
4.01. Payment of Securities ....................................... 9
4.02. SEC Reports ................................................. 9
4.03. Compliance Certificate ..................................... 10
4.04. Asset Sale Account .......................................... 10
5 SUCCESSORS .................................................. 10
5.01. When Company May Merge, etc. ................................ 10
6 DEFAULTS AND REMEDIES ....................................... 10
6.01. Events of Default ........................................... 10
6.02. Acceleration ................................................ 11
6.03. Other Remedies .............................................. 12
6.04. Waiver of Past Defaults ..................................... 12
6.05. Control by Majority ......................................... 12
6.06. Limitation on Suits ......................................... 12
6.07. Rights of Holders to Receive Payment ........................ 13
6.08. Collection Suit by Trustee .................................. 13
6.09. Trustee May File Proofs of Claim ............................ 13
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6.10. Priorities .................................................. 13
6.11. Undertaking for Costs ....................................... 13
7 TRUSTEE ..................................................... 14
7.01. Duties of Trustee ........................................... 14
7.02. Rights of Trustee ........................................... 15
7.03. Individual Rights of Trustee ................................ 15
7.04. Trustee's Disclaimer ........................................ 15
7.05. Notice of Defaults .......................................... 15
7.06. Reports by Trustee to Holders ............................... 16
7.07. Compensation and Indemnity .................................. 16
7.08. Replacement of Trustee ...................................... 16
7.09. Successor Trustee by Merger, etc ............................ 17
7.10. Eligibility; Disqualification ............................... 18
7.11. Preferential Collection of Claims
Against Company ............................................. 18
8 DISCHARGE OF INDENTURE ...................................... 18
8.01. Termination of Company's Obligations ........................ 18
8.02. Application of Trust Money .................................. 19
8.03. Repayment to Company ........................................ 19
9 AMENDMENTS .................................................. 19
9.01. Without Consent of Holders .................................. 19
9.02. With Consent of Holders ..................................... 19
9.03. Compliance with Trust Indenture Act ......................... 20
9.04. Revocation and Effect of Consents ........................... 20
9.05. Notation on or Exchange of Securities ....................... 20
9.06. Trustee Protected ........................................... 20
10 MISCELLANEOUS ............................................... 21
10.01. Trust Indenture Act Controls ................................ 21
10.02. Notices ..................................................... 21
10.03. Communication by Holders and Other Holders .................. 21
10.04. Certificate and Opinion as to Conditions Precedent .......... 22
10.05. Statements Required in Certificate or Opinion. .............. 22
10.06. Rules by Company and Agents ................................. 22
10.07. Legal Holidays .............................................. 22
10.08. No Recourse Against Others .................................. 22
10.09. Duplicate Originals ......................................... 22
10.10. Variable Provisions ......................................... 23
10.11. Governing Law ............................................... 23
INDENTURE, dated as of [ ], between EAGLE-PICHER INDUSTRIES, INC.,
an Ohio corporation ("Company"), and [ ], a
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_____________ corporation ("Trustee").
Each party agrees as follows for the benefit of the other party and for
the equal and ratable benefit of the Holders of the Company's [____]% Senior
Unsecured Divestiture Notes Due [three years from the Effective Date]
("Securities").
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. DEFINITIONS.
"Affiliate" means any person directly or indirectly controlling or
controlled by or under direct or indirect common control with the Company.
"Agent" means any Registrar, Transfer Agent or Paying Agent.
"Asset Sale" means any sale or other disposition, or series of related
sales or other dispositions, made after the Effective Date by the Company or any
Subsidiary to any Person of any divisions, subsidiaries, plants, or product
lines or other operating assets in excess of $1,000,000 of the Debtors.
"Asset Sale Account" means that trust account (account no.
_______________) maintained with, and under the sole dominion and control of,
the Trustee.
"Board of Directors" means the Board of Directors of the Company or any
authorized committee of the Board.
"Business Day" means any day other than a Legal Holiday.
"Capital Lease" means, at the time any determination thereof is made, any
lease of property, real or personal, in respect of which the present value of
the minimum rental commitment would be capitalized on a balance sheet of the
lessee in accordance with GAAP.
"Capital Lease Obligation" means, at the time any determination thereof is
to be made, the amount of the liability in respect of a Capital Lease that would
at such time be so required to be capitalized on the balance sheet in accordance
with GAAP.
"Capital Stock" means any and all shares, interests, participations,
rights or other equivalents (however designated) of corporate stock, including,
without limitation, partnership interests.
"Company" means the party named as such above until a successor replaces
it, and thereafter means the successor.
"Debtors" means the Debtors as defined in the Plan.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Effective Date" means [the Effective Date under the Plan].
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"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, which are in effect on the Issue Date.
"Holder" or "Securityholder" means a person in whose name a Security is
registered.
"Indebtedness" means, with respect to any Person, any indebtedness of such
Person, whether or not contingent, in respect of borrowed money or evidenced by
bonds, notes, debentures or similar instruments or letters of credit or similar
instruments (or reimbursement agreements in respect thereof) or representing the
balance deferred and unpaid of the purchase price of any property (including
Capital Lease Obligations), except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of the foregoing Indebtedness
would appear as a liability upon a balance sheet of such Person prepared in
accordance with GAAP, and also includes, to the extent not otherwise included,
all Indebtedness of others secured by a Lien on any asset of such Person,
whether or not the Indebtedness is assumed by such Person.
"Indenture" means this Indenture as amended from time to time.
"Issue Date" means the date of first issuance of the Securities hereunder.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law
(including any conditional sale or other title retention agreement).
"Net Proceeds" means the aggregate cash proceeds received by the Company
or any Subsidiary in respect of any Asset Sale, including, without limitation,
the aggregate cash proceeds from the sale of the real estate of the Company's
Orthane Division, net of the direct costs relating to such Asset Sale
(including, without limitation, legal, accounting and investment banking fees,
and sales commissions) and any expenses related to the relocation of assets on
personnel incurred as a result thereof, taxes paid or payable as a result
thereof (after taking into account any available tax credits or deductions and
any tax sharing arrangements), amounts applied to the repayment of Indebtedness
secured by a Lien on the asset or assets that are the subject of such Asset Sale
and any other Indebtedness (other than the Securities) required to be repaid in
connection with such transaction and any reserve for adjustment in respect of
the sale price or representations, warranties and indemnities, if any, made in
connection with the sale, of such asset or assets. Net Proceeds shall exclude
any non-cash proceeds received from any Asset Sale until converted by the
Company or any Subsidiary to cash.
"Officers' Certificate" means a certificate signed by two Officers, one of
whom must be the President, the Treasurer or a Vice-President of the Company.
"Opinion of Counsel" means a written opinion from legal counsel who is
acceptable to the Trustee. The counsel may be an employee of or counsel to the
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Company or the Trustee.
"Person" means any individual, corporation, partnership, joint venture,
entity, association, joint-stock company, trust or unincorporated organization
(including any subdivision or ongoing business of any such entity or
substantially all of the assets of any such entity, subdivision or business).
"Plan" means the Third Amended Consolidated Plan of Reorganization in the
Chapter 11 cases of the Company and certain of its affiliates dated August 28,
1996.
"SEC" means the Securities and Exchange Commission.
"Securities" means the Securities described above issued under this
Indenture.
"Subsidiary" means any corporation, association or other business entity
of which more than 50% of the total voting power of shares of Capital Stock
entitled (without regard to the occurrence of any contingency) to vote in the
election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by the Company or one or more of the other
Subsidiaries of the Company or a combination thereof.
"TIA" means the Trust Indenture Act of 1939 (15 U.S. Code Sections
77aaa-77bbbb) as in effect on the date shown above.
"Trustee" means the party named as such above until a successor replaces
it and thereafter means the successor.
"Trust Officer" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
SECTION 1.02. OTHER DEFINITIONS.
Term Defined in Section
---- ------------------
"Bankruptcy Law" 6.01
"Custodian" 6.01
"Event of Default" 6.01
"Legal Holiday" 10.07
"Officer" 10.10
"Paying Agent" 2.03
"Quoted Price 10.10
"Registrar" 2.03
"Transfer Agent" 2.03
"U.S. Government Obligations" 8.01
SECTION 1.03. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP;
(3) "or" is not exclusive;
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(4) All terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC
rule under the TIA have the meanings assigned to them by such
definition; and
(5) words in the singular include the plural, and in the
plural include the singular.
ARTICLE 2
THE SECURITIES
SECTION 2.01. FORM AND DATING. The Securities shall be substantially in
the form of Exhibit A, which is part of this Indenture. The Securities may have
notations, legends or endorsements required by law, stock exchange rule or
usage. Each Security shall be dated the date of its authentication.
SECTION 2.02. EXECUTION AND AUTHENTICATION. Two Officers shall sign the
Securities for the Company by manual or facsimile signature. The Company's seal
shall be reproduced on the Securities.
If an Officer whose signature is on a Security no longer holds that office
at the time the Security is authenticated, the Security shall nevertheless be
valid.
A Security shall not be valid until authenticated by the manual signature
of the Trustee. The signature shall be conclusive evidence that the Security has
been authenticated under this Indenture.
The Trustee shall authenticate Securities for original issue up to the
aggregate principal amount stated in paragraph 4 of Exhibit A upon a written
order of the Company signed by two Officers. The aggregate principal amount of
Securities outstanding at any time may not exceed that amount except as provided
in Section 2.07 below.
SECTION 2.03. REGISTRAR, TRANSFER AGENT AND PAYING AGENT. The Company
shall maintain an office or agency where Securities may be authenticated
("Registrar"), where Securities may be presented for registration of transfer or
for exchange ("Transfer Agent") and where Securities may be presented for
payment ("Paying Agent"). The Transfer Agent shall keep a register of the
Securities and of their transfer and exchange. The Company may appoint more than
one Registrars, Transfer Agents and Paying Agents. The Company shall notify the
Trustee of the name and address of any Agent not a party to this Indenture. If
the Company fails to maintain a Registrar, Transfer Agent or Paying Agent, the
Trustee shall act as such.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the benefit of Securityholders or the
Trustee all money held by the Paying Agent for the payment of principal or
interest on the Securities, and will notify the Trustee of any default by the
Company in making any such payment. While any such default continues, the
Trustee may require a Paying Agent to pay all money held by it
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to the Trustee. The Company at any time may require a Paying Agent to pay all
money held by it to the Trustee. Upon payment over to the Trustee, the Paying
Agent shall have no further liability for the money. The Company shall not serve
as Paying Agent.
SECTION 2.05. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Securityholders. If the Trustee is not the
Transfer Agent, the Company shall furnish to the Trustee semiannually and at
such other times as the Trustee may request in writing a list in such form and
as of such date as the Trustee may reasonably require of the names and addresses
of the Securityholders.
SECTION 2.06. TRANSFER AND EXCHANGE. Where Securities are presented to the
Transfer Agent with a request to register the transfer or to exchange them for
an equal principal amount of Securities of other denominations, the Transfer
Agent shall register the transfer or make the exchange if its requirements for
such transactions are met. The Transfer Agent may require a Holder to pay a sum
sufficient to cover any taxes imposed on a transfer or exchange. To permit
registrations of transfer and exchanges, the Trustee shall authenticate
Securities at the Transfer Agent's request. The Company may charge a reasonable
fee for any registration of transfer or exchange but not for any exchange
pursuant to Section 2.10, 3.06 and 9.05 hereof.
SECTION 2.07. REPLACEMENT SECURITIES. If the Holder of a Security claims
that the Security has been lost, destroyed or wrongfully taken, then, in the
absence of notice to the Company or the Trustee that the Security has been
acquired by a bona fide purchaser, the Company shall issue a replacement
Security if the Company and the Trustee receive:
(1) evidence satisfactory to them of the loss, destruction or
taking;
(2) an indemnity bond satisfactory to them; and
(3) payment of a sum sufficient to cover their expenses and any
taxes for replacing the Security.
Every replacement Security is an additional obligation of the Company.
SECTION 2.08. OUTSTANDING SECURITIES. The Securities outstanding at any
time are all the Securities authenticated by the Trustee except for those
cancelled by it, those delivered to it for cancellation, and those described in
this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07 above, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
If Securities are considered paid under Section 4.01 hereof, they cease to
be outstanding and interest on them ceases to accrue.
A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
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SECTION 2.09. TREASURY SECURITIES. In determining whether the Holders of
the required principal amount of Securities have concurred in any direction,
waiver or consent, Securities owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities which the Trustee knows are so owned shall be so disregarded.
SECTION 2.10. TEMPORARY SECURITIES. Until definitive Securities are ready
for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities in
exchange for temporary Securities.
SECTION 2.11. CANCELLATION. The Company at any time may deliver Securities
to the Registrar for cancellation. The Transfer Agent and Paying Agent shall
forward to the Registrar any Securities surrendered to them for registration of
transfer, exchange or payment. The Registrar shall cancel all Securities
surrendered for registration of transfer, exchange, payment or cancellation and
shall dispose of cancelled Securities as the Company directs. The Company may
not issue new Securities to replace Securities that it has paid or delivered to
the Registrar for cancellation.
SECTION 2.12. DEFAULTED INTEREST. If the Company defaults in a payment of
interest on the Securities, it shall pay the defaulted interest in any lawful
manner. It may pay the defaulted interest, plus any interest payable on the
defaulted interest, to the persons who are Securityholders on a subsequent
special record date. The Trustee shall fix the record date and payment date. At
least 15 days before the record date, the Trustee shall mail to Securityholders
a notice that states the record date, payment date and amount of interest to be
paid.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE. If the Company wants to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee of the redemption date and the principal amount of Securities to be
redeemed. If the Company is required to redeem Securities pursuant to Section
3.07 below and paragraph 6 of the Securities, it shall notify the Trustee of the
principal amount of Securities to be redeemed. The Company's notice shall
specify the paragraph of the Securities pursuant to which it wants to redeem
Securities.
The Company shall give each notice provided for in this Section at least
75 days before the redemption date unless a shorter notice is satisfactory to
the Trustee.
SECTION 3.02. SELECTION OF SECURITIES TO BE REDEEMED. If less than all the
Securities are to be redeemed, the Trustee shall select the Securities to be
redeemed in the inverse order of aggregate principal amount of each
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Security outstanding. In the event that some but not all Securities of equal
principal amount are to redeemed, such redemption shall be pro rata of all such
Securities of equal principal amount outstanding. The Trustee shall make the
selection not more than 75 days before the redemption date from Securities
outstanding not previously called for redemption. Provisions of this Indenture
that apply to Securities called for redemption also apply to portions of
Securities called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION. At least 30 days but not more than 60
days before a redemption date, the Trustee shall mail a notice of redemption by
first-class mail to each Holder whose Securities are to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the redemption date;
(2) the redemption price;
(3) the name and address of the Paying Agent;
(4) that Securities called for redemption must be surrendered to the
Paying Agent to collect the redemption price; and
(5) that interest on Securities called for redemption ceases to
accrue on and after the redemption date.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. Once notice of redemption is
given, Securities called for redemption become due and payable on the redemption
date at the redemption price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE. On or before the redemption
date, the Company shall deposit with the Paying Agent money sufficient to pay
the redemption price of and accrued interest on all Securities to be redeemed on
that date. The Paying Agent shall return to the Company any money not required
for that purpose.
SECTION 3.06. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part, the Company shall deliver the Holder a new Security
equal in principal amount to the unredeemed portion of the Security surrendered.
SECTION 3.07. MANDATORY REDEMPTION. If at any time the cumulative amount
on deposit in the Asset Sale Account and not to be used for the redemption of
the Securities pursuant to this Section 3.07 as specified in a notice previously
filed with the Trustee by the Company pursuant to Section 3.01 above, equals or
exceeds $10 million, the Company shall redeem the maximum principal amount of
Securities that, together with accrued and unpaid interest thereon, may be
redeemed out of such Net Proceeds at an redemption price equal to 100% of the
outstanding principal amount thereof plus accrued and unpaid interest, if any,
to the date fixed for such redemption. Notice of such redemption will be
governed by Section 3.07 hereof.
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SECTION 3.08. INVESTMENT OF ASSET ACCOUNT. Pending application thereof to
the redemption of the Securities, amounts in the Asset Sales Account shall be
invested in U.S. government obligations. At such time as there are no Securities
outstanding, the Trustee shall pay over to the Company any remaining balances in
the Asset Sale Account.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF SECURITIES. The Company shall pay the principal
of and interest on the Securities on the dates and in the manner provided in the
Securities. Principal and interest shall be considered paid on the date due if
the Paying Agent holds on that date money sufficient to pay all principal and
interest then due. The Company shall pay a default rate of interest on overdue
principal at the rate borne by the Securities plus 3%; it shall pay interest on
overdue installments of interest at the same rate to the extent lawful.
SECTION 4.02. SEC REPORTS. The Company shall file with the Trustee within
15 days after it files them with the SEC copies of the annual reports and of the
information, documents and other reports (or copies of such portions of any of
the foregoing as the SEC may by rules and regulations prescribe) that the
Company is required to file with the SEC pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 (the "Exchange Act"). The Company shall provide
to each Holder within 15 days after it files them with the SEC copies of the
annual reports and quarterly reports that the Company is required to file with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. The Company also
shall comply with the other provisions of TIA Section 314(a).
SECTION 4.03. COMPLIANCE CERTIFICATE. The Company shall deliver to the
Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating whether or not the signers know of any Default
that occurred during the fiscal year. If they do, the certificate shall describe
the Default and its status. The certificate need not comply with Section 10.05
hereof.
SECTION 4.04. ASSET SALE ACCOUNT. The Company shall deposit all Net
Proceeds in the Asset Sale Account within five (5) days after receipt of same.
In addition, the Company shall transfer to the Asset Sale Account any cash
proceeds held in Star Bank Account #19-0170A (if such account does not become
the Asset Sale Account) as of the Issue Date.
ARTICLE 5
SUCCESSORS
SECTION 5.01. WHEN COMPANY MAY MERGE, ETC. The Company shall not
consolidate or merge into, or transfer or lease all or substantially all of its
assets to, any person unless:
(1) the person is a corporation;
(2) the person assumes by supplemental indenture all the obligations
of the Company under the Securities and this Indenture;
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and
(3) immediately after the transaction no Default exists.
The successor shall be substituted for the Company, and thereafter all
obligations of the Company under this Indenture and the Securities and shall
terminate.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT. An "Event of Default" occurs if:
(1) the Company fails to make a deposit for the payment of interest
on any Security when the same becomes due and payable and the Default
continues for a period of five (5) business days;
(2) the Company defaults in the payment of the principal of any
Security when the same becomes due and payable at maturity, upon
redemption, acceleration or otherwise, or the Company defaults in payment
of the Net Proceeds required by Section 4.04 hereof;
(3) the Company fails to comply with any of its other agreements in
the Securities or this Indenture and the Default continues for 30 days
after notice either from the Trustee or the Holders of at least 25% in
principal amount of the Securities, which notice must specify the Default,
demand that it be remedied, and state that the notice is a "Notice of
Default," and which notice, if sent by the Holders, shall also be served
on the Trustee;
(4) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for
all or substantially all of its property, or
(D) makes a general assignment for the benefit of its
creditors; or
(5) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that:
(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company, and the order or
decree remains unstayed and in effect for 60 days.
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The term "Bankruptcy Law" means title 11, U.S. Code, or any similar
Federal or State law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
SECTION 6.02. ACCELERATION. If an Event of Default occurs and is
continuing, the Trustee by notice to the Company, or the Holders of at least 25%
in principal amount of the Securities by notice to the Company and the Trustee,
may declare the principal of and accrued interest on all the Securities to be
due and payable. Upon such declaration the principal and interest shall be due
and payable immediately. The Holders of a majority in principal amount of the
Securities by notice to the Trustee may rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of the
acceleration.
SECTION 6.03. OTHER REMEDIES. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.
The Trustee may maintain a proceeding even if it does not possess any of
the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS. The Holders of a majority in
principal amount of the Securities by notice to the Trustee may waive an
existing Default and its consequences, except a Default in the payment of the
principal of or interest on any Security or a Default in respect of a provision
that under Section 9.02 cannot be amended without the consent of each
Securityholder affected.
SECTION 6.05. CONTROL BY MAJORITY. The Holders of a majority in principal
amount of the Securities may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it. However, the Trustee may refuse to follow any direction
that conflicts with law or this Indenture or is unduly prejudicial to the rights
of other Securityholders.
SECTION 6.06. LIMITATION ON SUITS. A Securityholder may pursue a remedy
with respect to this Indenture or the Securities only if:
(1) the Holder gives to the Trustee notice of a continuing Event of
Default;
(2) the Holders of at least 25% in principal amount of the
Securities make a request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense; and
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(4) the Trustee does not comply with the request within 60 days
after receipt of the request and the offer of indemnity.
A Securityholder may not use this Indenture to prejudice the rights of another
Securityholder or to obtain a preference or priority over another
Securityholder.
SECTION 6.07. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Holder of a Security to
receive payment of principal and interest on the Security, on or after the
respective due dates expressed in the Security, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not be
impaired or affected without the consent of the Holder.
SECTION 6.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default specified
in Section 6.01(1) or (2) above occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount of principal and interest remaining unpaid.
SECTION 6.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Securityholders allowed in
any judicial proceedings relative to the Company, its creditors or its property.
SECTION 6.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article, it shall pay out the money in the following order:
First: to the Trustee for amounts due under Section 7.07 below;
Second: to Securityholders for amounts due and unpaid on the
Securities for principal and interest, ratably, without preference or
priority of any kind, according to the amounts due and payable on the
Securities for principal and interest, respectively; and
Third: to the Company.
The Trustee may fix a record date and payment date for any payment to
Securityholders.
SECTION 6.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by a
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Holder pursuant to Section 6.07 above, or a suit by Holders of more than 10% in
principal amount of the Securities.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent man would
exercise or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture and no others.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act, or its own wilful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of
this Section.
(2) The Trustee shall not be liable for any error of judgment made
in good faith by a Trust Officer, unless it is proved that the Trustee was
negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith and in accordance with a direction
received by it pursuant to Section 6.05 above.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) Subject to paragraph (c) of this Section, the Trustee may refuse to
perform any duty or exercise any right or power unless it receives indemnity
satisfactory to it against any loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
SECTION 7.02. RIGHTS OF TRUSTEE.
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(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel. The Trustee shall not be liable
for any action it takes or omits to take in good faith in reliance on the
Officers' Certificate or Opinion of Counsel.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the owner or pledgee of Securities and may
otherwise deal with the Company or an Affiliate with the same rights it would
have if it were not Trustee. Any Agent may do the same with like rights.
However, the Trustee is subject to Sections 7.10 and 7.11 below.
SECTION 7.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation as
to the validity or adequacy of this Indenture or the Securities, it shall not be
accountable for the Company's use of the proceeds from the Securities, and it
shall not be responsible for any statement in the Securities other than its
authentication.
SECTION 7.05. NOTICE OF DEFAULTS. If a Default occurs and is continuing
and if it is known to the Trustee, the Trustee shall mail to Securityholders a
notice of the Default within 90 days after it occurs. Except in the case of a
Default in payment on any Security, the Trustee may withhold the notice if and
so long as a committee of its Trust Officers in good faith determines that
withholding the notice is in the interests of Securityholders.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS. Any report required by TIA
Section 313(a) to be mailed to Securityholders shall be mailed by the Trustee on
or before May 31 of each year. The Trustee also shall comply with TIA Section
313(b)(2). A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange on which the Securities are
listed. The Company shall notify the Trustee when the Securities are listed on
any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY. The Company shall pay to the
Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred by it. Such expenses
shall include the reasonable compensation and out-of-pocket expenses of the
Trustee's agents and counsel.
The Company shall indemnify the Trustee against any loss or liability
incurred by it. The Trustee shall notify the Company promptly of any claim for
which it may seek indemnity. The Company shall defend the claim, and the Trustee
shall cooperate in the defense. The Trustee may have separate counsel, and the
Company shall pay the reasonable fees and expenses of such counsel. The Company
need not pay for any settlement made without its consent.
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The Company need not reimburse any expense or indemnify against any loss
or liability incurred by the Trustee through negligence or bad faith.
To secure the Company's payment obligations in this Section, the Trustee
shall have a lien prior to the Securities on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Securities.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) above occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section.
The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the Securities may remove the Trustee by so
notifying the Trustee and the Company. The Company may remove the Trustee if:
(1) the Trustee fails to comply with TIA Section 310(a) or Section 310(b)
or with Section 7.10 below;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee or
its property;
(4) the Trustee becomes incapable of acting; or
(5) an event of the kind described in Section 6.01(4) or (5) occurs with
respect to the Trustee.
The Company also may remove the Trustee with cause if the Company so
notifies the Trustee six months in advance and if no Default occurs during the
six-month period.
If the Trustee resigns or is removed or if a vacancy exists in the office
of Trustee for any reason, the Company shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in principal amount of the Securities may appoint a successor
Trustee to replace the successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the Securities may petition any
court of competent jurisdiction for the appointment of a successor Trustee.
If the Trustee fails to comply with TIA Section 310(a) or Section 310(b)
or with Section 7.10, any Securityholder may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its appointment
to the retiring Trustee and to the Company. Thereupon the
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resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07 above.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, the successor corporation
without any further act shall be the successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION. This Indenture shall always
have a Trustee who satisfies the requirements of TIA Section 310(a)(1). The
Trustee shall always have a combined capital and surplus of at least $50,000,000
as set forth in its most recent published report of condition.
SECTION 7.11. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY. The
Trustee is subject to TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or been removed is
subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. TERMINATION OF COMPANY'S OBLIGATIONS. The Company may
terminate all of its obligations under this Indenture if:
(1) the Securities mature within one year or all of them are to be
called for redemption within one year under arrangements satisfactory to
the Trustee for giving the notice of redemption; and
(2) the Company irrevocably deposits in trust with the Trustee money
or U.S. Government Obligations sufficient to pay principal and interest on
the Securities to maturity or redemption, as the case may be. The Company
may make the deposit only during the one-year period.
However, the Company's obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07,
4.01, 7.07, 7.08 and 8.03 hereof shall survive until the Securities are no
longer outstanding. Thereafter, the Company's obligations in Sections 7.07 and
8.03 hereof shall survive.
After a deposit the Trustee upon request shall acknowledge in writing the
discharge of the Company's obligations under this Indenture except for those
surviving obligations specified above.
In order to have money available on a payment date to pay principal or
interest on the Securities, the U.S. Government Obligations shall be payable as
to principal or interest on or before such payment date in such amounts as will
provide the necessary money. U.S. Government Obligations shall not be callable
at the Company's option.
"U.S. Government Obligations" means direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged.
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SECTION 8.02. APPLICATION OF TRUST MONEY. The Trustee shall hold in trust
money or U.S. Government Obligations deposited with it pursuant to Section 8.01
above. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal and interest on the Securities.
SECTION 8.03. REPAYMENT TO COMPANY. The Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess money or securities held by
them at any time.
The Trustee and the Paying Agent shall pay to the Company upon request any
money held by them for the payment of principal or interest that remains
unclaimed for two years. After payment to the Company, Securityholders entitled
to the money must look to the Company for payment as general creditors unless an
applicable abandoned property law designates another person.
ARTICLE 9
AMENDMENTS
SECTION 9.01. WITHOUT CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities without the consent of any
Securityholder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 5.01 above;
(3) to provide for uncertificated Securities in addition to
certificated Securities; or
(4) to make any change that does not adversely affect the rights of
any Securityholder.
SECTION 9.02. WITH CONSENT OF HOLDERS. The Company and the Trustee may
amend this Indenture or the Securities with the written consent of the Holders
of at least a majority in principal amount of the Securities. However, without
the consent of each Securityholder affected, an amendment under this Section may
not:
(1) reduce the amount of Securities whose Holders must consent to an
amendment;
(2) reduce the rate of or change the time for payment of interest on
any Security;
(3) reduce the principal of or change the fixed maturity of any
Security;
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(4) make any Security payable in money other than that stated in the
Security; or
(5) make any change in Section 3.02, 3.07, 4.04, 6.04, 6.07 or 9.02
(second sentence) hereof; or
(6) create a privilege or priority of any Security over another
Security.
After an amendment under this Section becomes effective, the Trustee shall
mail to Securityholders a notice briefly describing the amendment.
Securityholders need not consent to the exact text of a proposed amendment
or waiver; it is sufficient if they consent to the substance thereof.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT. Every amendment to this
Indenture or the Securities shall be set forth in a supplemental indenture that
complies with the TIA as then in effect.
If a provision of the TIA requires or permits a provision of this
Indenture and the TIA provision is amended, then the Indenture provision shall
be automatically amended to like effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS. Until an amendment or
waiver becomes effective, a consent to it by a Holder of a Security is a
continuing consent by the Holder and every subsequent Holder of a Security or
portion of a Security that evidences the same debt as the consenting Holder's
Security, even if notation of the consent is not made on any Security. However,
any such Holder or subsequent Holder may revoke the consent as to his Security
or portion of a Security if the Trustee receives the notice of revocation before
the date the amendment or waiver becomes effective. An amendment or waiver
becomes effective in accordance with its terms and thereafter binds every
Securityholder.
SECTION 9.05. NOTATION ON OR EXCHANGE OF SECURITIES. The Trustee may place
an appropriate notation about an amendment or waiver on any Security thereafter
authenticated. The Company in exchange for all Securities may issue and the
Trustee shall authenticate new Securities that reflect the amendment or waiver.
SECTION 9.06. TRUSTEE PROTECTED. The Trustee need not sign any
supplemental indenture that adversely affects its rights.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. TRUST INDENTURE ACT CONTROLS. The provisions of TIA Section
Sections 310 through 317 that impose duties on any Person (including the
provisions automatically deemed included herein unless expressly excluded by
this Indenture) are a part of and govern this Indenture, whether or not
physically contained herein. If any provision of this Indenture limits,
qualifies or conflicts with another provision which is required to be included
in this Indenture by the TIA, the required provision shall control.
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SECTION 10.02. NOTICES. Any notice or communication by the Company or the
Trustee to the other is duly given if in writing and delivered in person, sent
by facsimile transmission and confirmed by mail or mailed by first-class mail to
the other's address stated in Section 10.10 below. The Company or the Trustee by
notice to the other may designate additional or different addresses for
subsequent notices or communications.
Any notice or communication to a Securityholder shall be mailed by
first-class mail to his address shown on the register kept by the Transfer
Agent. Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders.
If a notice or communication is mailed in the manner provided above within
the time prescribed, it is duly given, whether or not the addressee receives it.
If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and each Agent at the same time.
If in the Company's opinion it is impractical to mail a notice required to
be mailed or to publish a notice required to be published, the Company may give
such substitute notice as the Trustee approves. Failure to publish a notice as
required or any defect in it shall not affect the sufficiency of any mailed
notice.
All other notices or communications shall be in writing.
SECTION 10.03. COMMUNICATION BY HOLDERS AND OTHER HOLDERS. Securityholders
may communicate pursuant to TIA Section 312(b) with other Securityholders with
respect to their rights under this Indenture or the Securities. The Company, the
Trustee, the Registrar, the Transfer Agent and anyone else shall have the
protection of TIA Section 312(c)
SECTION 10.04. CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. STATEMENTS REQUIRED IN CERTIFICATE OR OPINION. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
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(3) a statement that, in the opinion of such person, he has made
such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant or condition has
been complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 10.06. RULES BY COMPANY AND AGENTS. The Company may make
reasonable rules for action by or a meeting of Securityholders. Any Agent may
make reasonable rules and set reasonable requirements for its functions.
SECTION 10.07. LEGAL HOLIDAYS. A "Legal Holiday" is a Saturday, a Sunday
or a day on which banking institutions are not required to be open in
Cincinnati, Ohio. If a payment date is a Legal Holiday at a place of payment,
payment may be made at that place on the next succeeding day that is not a Legal
Holiday, and no interest shall accrue for the intervening period.
SECTION 10.08. NO RECOURSE AGAINST OTHERS. All liability described in the
Securities of any director, officer, employee or stockholder, as such, of the
Company is waived and released.
SECTION 10.09. DUPLICATE ORIGINALS. The parties may sign any number of
copies of this Indenture. One signed copy is enough to prove this Indenture.
SECTION 10.10. VARIABLE PROVISIONS.
"Officer" means President, any Vice-President, the Treasurer, the
Secretary, any Assistant Treasurer or any Assistant Secretary of the Company.
The Trustee initially appoints [ ] as authenticating agent.
The Company initially appoints the Trustee as Paying Agent, Transfer Agent
and Registrar.
The first certificate pursuant to Section hereof 4.03 shall be for the
fiscal year ending on , 19 .
The Company's address is:
Eagle-Picher Industries, Inc., Attention: Treasurer
If by Hand or Overnight Delivery:
580 Building
580 Walnut Street
Suite 1300
Cincinnati, Ohio 45202
If by Mail:
Post Office Box 779
Cincinnati, Ohio 45201
The Trustee's address is:
[ ]
[ ]
[ ]
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SECTION 10.11. GOVERNING LAW. The law of the State of New York shall
govern this Indenture and the Securities.
SIGNATURES
Dated: EAGLE-PICHER INDUSTRIES, INC.
By
Attest:
Secretary (SEAL)
Dated:
By
Trust Officer
Attest:
Assistant Secretary (SEAL)
EXHIBIT A
(Face of Security)
THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT THAT SUCH
REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
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No. $
EAGLE-PICHER INDUSTRIES, INC.
promises to pay to ,
or registered assigns, the principal sum of
Dollars on
[____]% Senior Unsecured Divestiture Notes Due _____
Interest Payment Dates:
Record Dates:
Dated:
Authenticated:
[ ] EAGLE-PICHER INDUSTRIES, INC.
as Trustee
By By
Authorized Officer
(Back of Security)
EAGLE-PICHER INDUSTRIES, INC.
[____]% Senior Unsecured Divestiture Notes Due _____
1. Interest. Eagle-Picher Industries, Inc. (the "Company"), an Ohio
corporation, promises to pay interest on the principal amount of this Security
at the rate per annum shown above. The Company will pay interest semiannually on
and of each year, commencing at least six months after the
Effective Date or if any such day is not a Business Day on the next succeeding
Business Day (each an "Interest Payment Date") to Holders of record of the
Securities at the close of business on the immediately preceding [ ] and
[ ], whether or not a Business Day. Interest on the Securities will
accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from . Interest will be computed on the basis of a
360-day year of twelve 30-day months.
2. Method of Payment. The Paying Agent will pay interest on the Securities
(except defaulted interest) to the persons who are registered holders of
Securities at the close of business on the record date for the next interest
payment date even though Securities are cancelled after the record
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date and on or before the interest payment date. Holders must surrender
Securities to a Paying Agent to collect principal payments. The Paying Agent
will pay principal and interest in money of the United States that at the time
of payment is legal tender for payment of public and private debts. However, the
Paying Agent may pay principal and interest by check payable in such money. It
may mail an interest check to a holder's registered address; provided however,
the Paying Agent shall make payments to a registered holder of Securities in the
aggregate principal amount greater than $500,000.00 by wire transfer if such
registered holder has on or before the record date for such payment provided the
Paying Agent with wire transfer instructions.
3. Transfer Agent, Paying Agent and Registrar. Initially, [ ] (the
"Trustee"), will act as Transfer Agent, Paying Agent and Registrar. The Company
may change any Agent without notice. The Company may act as Transfer Agent.
4. Indenture. The Company issued the Securities under an Indenture dated
as of [the Effective Date] (the "Indenture") between the Company and the
Trustee. The terms of the Securities include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of 1939
(15 U.S. Code Section Sections 77aaa-77bbbb) as in effect on the date of the
Indenture. The Securities are subject to all such terms, and Securityholders are
referred to the Indenture and the Act for a statement of such terms. The
Securities are unsecured general obligations of the Company limited to
$50,000,000 in aggregate principal amount.
5. Optional Redemption. The Company may redeem all Securities at any time
or some of them from time to time upon not less than 30 nor more than 60 days'
notice, at par plus accrued and unpaid interest thereon to the applicable
redemption date.
6. Mandatory Redemption. If at any time the cumulative amount of Net
Proceeds on deposit in the Asset Sale Account and not to be used for the
redemption of Securities pursuant to Section 3.07 of the Indenture equals or
exceeds $10 million, the Company shall redeem the maximum principal amount of
Securities that, together with accrued and unpaid interest thereon, may be
redeemed out of such Net Proceeds at 100% of the outstanding principal amount
thereof plus accrued and unpaid interest, if any, to the date fixed for such
redemption. Unless such Net Proceeds are sufficient to redeem all the
outstanding Securities, the aggregate principal amount of Securities to be
redeemed shall be selected by the Trustee in the inverse order of aggregate
principal amount of each Security outstanding. In the event that some but not
all Securities of equal principal amount are to redeemed, such redemption shall
be pro rata of all such Securities of equal principal amount outstanding.
7. Notice of Redemption. Notice of redemption will be mailed at least 30
days but not more than 60 days before the redemption date to each holder of
Securities to be redeemed at his registered address. On and after the redemption
date interest ceases to accrue on Securities or portions of them called for
redemption.
8. Transfer, Exchange. The transfer of Securities may be registered, and
Securities may be exchanged, as provided in the Indenture. The Transfer Agent
may require a holder, among other things, to furnish appropriate endorsements
and transfer documents and to pay any taxes and fees required by law or
permitted by the Indenture. The Transfer Agent need not exchange or
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register the transfer of any Security or portion of a Security selected for
redemption. Also, it need not exchange or register the transfer of any
Securities for a period of 15 days before a selection of Securities to be
redeemed.
9. Persons Deemed Owners. The registered holder of a Security may be
treated as its owner for all purposes.
10. Amendments and Waivers. Subject to certain exceptions, the Indenture
or the Securities may be amended with the consent of the holders of at least 51%
in principal amount of the Securities, and any existing default may be waived
with the consent of the holders of a majority in principal amount of the
Securities. Without the consent of any Securityholder, the Indenture or the
Securities may be amended to cure any ambiguity, defect or inconsistency, to
provide for assumption of Company obligations to Securityholders or to make any
change that does not adversely affect the rights of any Securityholder.
11. Defaults and Remedies. An Event of Default is: default for 5 business
days in payment of interest on the Securities; default in payment of principal
on them or in the payment of Net Proceeds required by Section 4.04 of the
Indenture; failure by the Company for 30 days after notice to it to comply with
any of its other agreements in the Indenture or the Securities; and certain
events of bankruptcy or insolvency. If an Event of Default occurs and is
continuing, the Trustee or the holders of at least 25% in principal amount of
the Securities may declare all the Securities to be due and payable immediately.
Securityholders may not enforce the Indenture or the Securities except as
provided in the Indenture. The Trustee may require indemnity satisfactory to it
before it enforces the Indenture or the Securities. Subject to certain
limitations, holders of a majority in principal amount of the Securities may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Securityholders notice of any continuing default (except a default
in payment of principal or interest) if it determines that withholding notice is
in their interests. The Company must furnish an annual compliance certificate to
the Trustee.
12. Trustee Dealings with Company. [ ], the Trustee under the
Indenture, in its individual or any other capacity, may make loans to, accept
deposits from, and perform services for the Company or its Affiliates, and may
otherwise deal with the Company or its Affiliates, as if it were not Trustee.
13. No Recourse Against Others. A director, officer, employee or a
stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Securities or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creation. Each Securityholder by accepting a Security waives and releases all
such liability. The waiver and release are part of the consideration for the
issuance of the Securities.
14. Authentication. This Security shall not be valid until authenticated
by the manual signature of the Registrar or an authenticating agent.
15. Abbreviations. Customary abbreviations may be used in the name of a
Securityholder or an assignee, such as: TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
23
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<PAGE>
(= Uniform Gifts to Minors Act).
THE COMPANY WILL FURNISH TO ANY SECURITYHOLDER UPON WRITTEN REQUEST AND
WITHOUT CHARGE A COPY OF THE INDENTURE, WHICH HAS IN IT THE TEXT OF THIS
SECURITY IN LARGER TYPE. REQUESTS MAY BE MADE TO: SECRETARY, EAGLE-PICHER
INDUSTRIES, INC., POST OFFICE BOX 779, CINCINNATI, OHIO 45201.
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ASSIGNMENT FORM
To assign this Security, fill in the form below:
I/we assign and transfer this Security to:
- -------------------------------------------------------------------------------
(Insert assignee's soc. sec. or tax I.D. no.)
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
(Print or type assignee's name, address and zip code)
and irrevocably appoint
- --------------------------------------------------------
- -------------------------------------------------------------------------------
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
25
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<PAGE>
Date: ____________________________
Your Signature:
-------------------------------------------------------------
(Sign exactly as your name appears on the other side of
this Security)
================================================================================
26
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<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.82"
FORM OF INTER-MARKET NOTE
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
[INTER-MARKET NOTE SECURED CLAIM]
SECURED NOTE AND SECURITY AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN VIOLATION OF SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
10% Secured Installment Note
EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation (the "Company"), for
value received, hereby promises to pay to COMAC PARTNERS, L.P. AND COMAC
INTERNATIONAL N.V. or registered assigns (collectively, the "Payee"), on or
before June 1, 2001 (the "Maturity Date"), as hereinafter provided, the
principal sum of [___________________________________ (_____________)] and to
pay interest on the unpaid principal amount thereof from the date hereof to
maturity at the rate of 10% per annum computed as if each year consisted of 360
days and each month consisted of 30 days. Such principal and interest shall be
payable without presentation of this Note, by bank wire transfer of Federal or
other immediately available funds (identifying each payment as Eagle-Picher
Industries, Inc. 10% Secured Installment Note due 2001, principal or interest)
to the Payee pursuant to instructions provided by the Payee to the Company from
time to time in _________ (__) consecutive payments of principal and interest,
in the respective amounts of and payable on the dates indicated in the schedule
annexed hereto as Schedule A (collectively, the "Installment Payments"). The
first of the Installment Payments will be made on [the first Business Day of the
second month following the date of the issuance of the Note]. Whenever any
Installment Payment is not made when due and such default shall continue for
more than ten (10) days, the Company shall pay interest on such amount at a rate
equal to th e lesser of (a) 12% per annum or (b) the maximum rate allowed by
law.
Each Installment Payment, when paid, shall be applied first to the payment
of all interest accrued and unpaid on this Note and then to payment on account
of the principal hereof.
SECTION 1. The following terms have the following meanings when used in
<PAGE>
<PAGE>
this Note:
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in Cincinnati, Ohio are authorized or required by
law to close.
"COLLATERAL" shall have the meaning set forth in Section 3 hereof.
"Company" shall have the meaning set forth in the opening paragraph of
this Note.
"CONSOLIDATED NET WORTH" of any corporation shall mean, at any date, the
sum of the capital stock (excluding treasury stock and capital stock subscribed
and unissued) and surplus (including retained earnings, additional paid-in
capital and the balance of the current profit and loss account not transferred
to surplus) of such corporation and its Subsidiaries, consolidated in accordance
with generally accepted accounting principles.
"MATURITY DATE" shall have the meaning set forth in the opening paragraph
of this Note.
"NOTES" shall have the meaning set forth in Section 12 hereof.
"Officers' Certificate" shall mean a certificate signed on behalf of the
Company by its President or one of its Vice Presidents and its Treasurer or one
of its Assistant Treasurers.
"Payee" shall have the meaning set forth in the opening paragraph of this
Note.
"PERSON" shall mean an individual or corporation, a partnership or joint
venture, a business, a trust, an unincorporated organization or a government or
any agency or political subdivision thereof.
"PREPAYMENT OFFER" shall have the meaning specified in Section 2.
"Subsidiary" of any corporation shall mean any Person a majority (by number of
votes) of the Voting Stock of which is owned by such corporation or by one or
more Subsidiaries or by such corporation and one or more Subsidiaries.
"Voting Stock", when used with reference to any corporation, shall mean
shares (however designated) of such corporation having ordinary voting power for
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the election of a majority of the members of the board of directors (or other
governing body) of such corporation other than shares having such power only by
reason of the happening of a contingency.
SECTION 2. Principal Payments. (a) Scheduled Payment. On the Maturity Date,
the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Note plus all accrued and
unpaid interest thereon.
(b) Mandatory Prepayment. In the event of condemnation or of destruction
by fire or other casualty of substantially all of the Collateral, the Note shall
be prepaid in full (but not in part) at a price equal to 100% of the then
outstanding principal amount of the Note, together with all interest then
accrued and unpaid thereon, but without any prepayment penalty or premium.
(c) Optional Prepayment. The Company may, at any time and from time to
time, without premium or penalty, prepay (in multiples of $1,000) all or a
portion of the unpaid principal amount of this Note or all or a portion of
accrued and unpaid interest, together with unpaid accrued interest on the amount
so prepaid to the date chosen for prepayment, payable in cash or other
immediately available funds. The Company shall give written notice of prepayment
of this Note or any portion hereof not less than 10 but not more than 30 days
prior to the date chosen for prepayment, which notice shall specify the amount
thereof to be prepaid and the date fixed for prepayment.
(d) OFFER TO PREPAY IN THE EVENT OF CERTAIN TRANSACTIONS. In the event
that: (a) the Company shall take any action looking to any merger, consolidation
or other reorganization of the Company or any sale of all or substantially all
of its assets; or (b) any Person or any group of Persons acting together, other
than the Eagle-Picher Industries, Inc. Personal Injury Settlement Trust, shall
acquire twenty percent or more of the outstanding Voting Stock of the Company;
and the effect of such transaction described in the foregoing clause (a) or (b)
either in and of itself or together with any other transactions effected in
connection therewith or in response thereto, is or would be to reduce the
Consolidated Net Worth of the Company to an amount which is less than 66 2/3% of
the amount of the Consolidated Net Worth of the Company as of the end of the
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fiscal year of the Company next preceding such transaction, as shown on the
financial statements for such fiscal year, the Company shall offer to prepay the
Note without premium (any such offer being hereinafter referred to as a
"Prepayment Offer"). Such Prepayment Offer shall be made in writing to the
holder of the Note not less than 30 nor more than 60 days prior to the date of
such proposed transaction. In the event that the holder of the Note has not
accepted such Prepayment Offer in writing within 20 days after such Prepayment
Offer is made, the holder of the Note shall be deemed to have declined such
Prepayment Offer. Each prepayment under this section shall be made concurrently
with the consummation of such proposed transaction.
SECTION 3. Security. This Note is secured by the following property
(collectively, the "Collateral"):
(a) The equipment described in Schedule B hereto (whether or not
constituting fixtures) and all additions and accessions thereto and
substitutions therefor;
(b) All books and records of the Company relating to any of the foregoing;
and
(c) All proceeds and products of any of the foregoing, including insurance
payable by reason of loss or damage.
The Company herewith confirms the grant of a security interest in the
Collateral to the Payee.
SECTION 4. Affirmative Covenants. For as long as any principal or interest
remains unpaid under this Note:
(a) FINANCIAL STATEMENTS. The Company shall deliver to the Payee promptly
after the same are available, copies of (i) all such notices, proxy statements,
financial statements, reports and documents as the Company shall send or make
available generally to its stockholders and (ii) all periodic and special
reports, documents and registration statements (other than on Form S-8) which
the Company may furnish to or file with the Securities and Exchange Commission
(or any governmental authority succeeding to any or all of its functions) or any
securities exchange;
(b) REPORTING REQUIREMENTS. The Company shall deliver to the Payee as
promptly as practicable (but in any event not later than 5 days) after any
officer of the Company obtains knowledge of the occurrence of any condition or
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event which (i) in the operation or management of the Company would have a
material adverse effect on the business, condition (financial or otherwise),
operations, management or prospects of the Company and its Subsidiaries taken as
a whole (other than any condition or event described in this paragraph,
disclosure regarding which has been made in information previously provided to
the Payee pursuant to paragraph (a) above) or (ii) constitutes or, after notice
or lapse of time or both, would constitute an Event of Default, an Officers'
Certificate specifying the nature of such condition or event, the period of
existence thereof, what action the Company has taken and is taking and proposes
to take with respect thereto and the date, if any, on which it is estimated the
same will be remedied; and (c) such other information relating to the Company
and its Subsidiaries as shall be furnished to any other institutional lender or
as from time to time may reasonably be requested.
(c) Special Covenants of Company. The Company hereby covenants to the
Payee that:
(i) The Company will not change its principal place of business or
the location of the Collateral. The Company will not change its principal
place of business or the location of the Collateral from those shown on
Schedule B hereto, without at least thirty (30) days' prior written notice
to the Payee.
(ii) The Company will defend its ownership of the Collateral free
from any lien, security interest or encumbrance except for the security
interest hereunder against all claims and demands of all persons at any
time claiming the same or any interest therein.
(iii) The Company will not sell or otherwise dispose of the
Collateral or any interest therein nor will the Company create, incur or
permit to exist any mortgage, lien, charge, encumbrance or security
interest whatsoever with respect to the Collateral.
(iv) The Company will keep the Collateral in good order and repair
and adequately insured at all times against loss or damage of the kinds
customarily insured against by corporations of established reputation
engaged in the same or similar business and similarly situated. Each
insurance policy pertaining to any of the Collateral shall: (a) name the
Payee as insured pursuant to a so-called "standard mortgagee clause"; (b)
provide that no action of the Company or any tenant or sub-tenant shall
void such policy as to the Payee; and (c) provide that the Payee shall be
notified of any
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proposed cancellation of such policy at least 30 days in advance of such
proposed cancellation and will have sufficient time to correct any
deficiencies justifying such proposed cancellation. All such policies
shall be delivered to the Payee upon request. The Company will pay
promptly when due all taxes and assessments on the Collateral or for its
use or operation. The Payee may at its option discharge any taxes, liens,
security interests or other encumbrances to which any Collateral is at any
time subject, and may, upon the failure of the Company so to do, purchase
insurance on any Collateral and pay for the repair, maintenance or
preservation thereof, and the Company agrees to reimburse the Payee on
demand for any payments or expenses incurred by the Payee pursuant to the
foregoing authorization, and any unreimbursed amounts shall constitute
secured obligations for all purposes hereof.
(d) Further Assurances.
(i) The Company will promptly execute and deliver to the Payee such
financing statements, certificates and other documents or instruments as
may be necessary to enable the Payee to perfect or from time to time renew
the security interest granted hereby, including, without limitation, such
financing statements, certificates and other documents as may be necessary
to perfect a security interest in any additional Collateral hereafter
acquired by the Company or in any replacements or proceeds thereof. The
Company authorizes and appoints the Payee, in case of need, to execute
such financing statements, certificates and other documents in its stead,
with full power or substitution, as the Company's attorney in fact. The
Company further agrees that a carbon, photographic or other reproduction
of a security agreement or financing statement is sufficient as a
financing statement under this Agreement.
(ii) The Company will take all such reasonable action or actions as
may be necessary to prevent any of the Collateral from becoming fixtures.
Without limiting the generality of the foregoing, the Company will use its
best efforts to obtain waivers of lien, in form satisfactory to the Payee,
from each lessor of real property on which any of the Collateral is to be
located.
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SECTION 5. EVENTS OF DEFAULT. (a) Each of the following shall be an Event
of Default:
(i) If default shall be made in the payment of any installment of
principal and interest due from the Company under the Note when and as the
same shall become due and payable, whether at maturity or by acceleration
or prepayment or otherwise, and such default shall continue for more than
five (5) days;
(ii) If there shall be default in the due observance or performance
of any other provision of this Note and such default shall continue for
more than thirty (30) days after the earlier to occur of (i) the Company's
obtaining actual knowledge of such default or (ii) the Company's receipt
of written notice of such default;
(iii) If the Company attempts to remove, sell, transfer, encumber,
sublet or part with possession of the Collateral or any part thereof, or
permits any other Person to take any such action, except as expressly
permitted herein;
(iv) If, unless specifically permitted by the terms hereof, the
Company ceases doing business as a going concern, makes an assignment for
the benefit of creditors, admits in writing its inability to pay its debts
as they become due, files a voluntary petition in bankruptcy, is
adjudicated a bankrupt or an insolvent, files a petition seeking for
itself any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar arrangement under any present or
future statute, law or regulation, or files an answer admitting the
material allegations of a petition filed against it in any such
proceeding, consents to, or acquiesces in the appointment of, a trustee,
receiver, or liquidator of it or of all or any substantial part of its
assets or properties, or if it or its shareholders shall take any action
looking to its dissolution or liquidation; or
(v) If within sixty (60) days after the commencement of any
proceedings against the Company seeking reorganization, arrangement,
readjustment, liquidation,
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dissolution or similar relief under any present or future statute, law or
regulation, such proceedings shall not have been dismissed, or if within
sixty (60) days after the appointment without the consent or acquiescence
of the Company of any trustee, receiver or liquidator of either of them or
of all or any substantial part of their respective assets and properties,
such appointment shall not be vacated.
(b) Upon the occurrence and during the continuance of any Event of Default
described in Section 5(a) hereof other than in clause (iv) or (v) thereof, the
holders of a majority of the outstanding principal amount of the Notes may, by
written notice to the Company, declare all or any portion of the unpaid
principal amount of the Notes and all interest accrued thereon to be immediately
due and payable. Upon the occurrence and during the continuance of any Event of
Default described in clauses (iv) or (v) of Section 5(a) hereof, the unpaid
principal amount of the Notes and all interest accrued thereon, shall
automatically become due and payable, without any action or notice by the Payee.
Demand, presentment, protest and notice of non-payment are hereby waived by the
Company. All payments made following an Event of Default shall be applied first
to payment of all accrued and unpaid interest and then to principal.
(c) In addition, upon the occurrence and during the continuance of an
Event of Default described in Section 5(a), the Payee may exercise in respect of
the Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a Secured Party on
default under the Uniform Commercial Code (the "Code") and other applicable laws
and agreements and also shall have the right to take possession of the
Collateral and, in addition thereto, the right to enter upon any premises on
which the Collateral or any part thereof may be situated and remove the same
therefrom. The Payee may require the Company to make the Collateral (to the
extent the same is moveable) available to the Payee at a place to be designated
by the Payee which is reasonably convenient to both parties. Unless the
Collateral is perishable or threatens to decline speedily in value or is of a
type customarily sold on a recognized market, the Payee will give the Company at
least ten (10) days' prior written notice at the address of the Company set
forth below (or at such other address or addresses as the Company shall specify
in writing to the Payee) of the time and place of any public sale thereof or of
the time after which any private sale or any other intended disposition thereof
is to be made. Any such notice shall be deemed to meet any requirement hereunder
or under any applicable law (including the Uniform Commercial Code) that
reasonable notification be given of the time and place of such sale or other
disposition. After deducting all costs and expenses of collection, storage,
custody, sale or other disposition and delivery (including legal costs and
attorneys' fees) and all other charges against the Collateral, the residue of
the proceeds of any such sale or disposition shall be applied to the payment of
the Note and, unless otherwise provided by law or by a court of competent
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jurisdiction, any surplus shall be returned to the Company or to any person or
party lawfully entitled thereto (including, if applicable, any subordinated
creditors of the Company). In the event the proceeds of any sale, lease or other
disposition of the Collateral hereunder are insufficient to pay the Note in
full, the Company will be liable for the deficiency, together with interest
thereon at the maximum rate provided in the Note, and the cost and expenses of
collection of such deficiency, including (to the extent permitted by law),
without limitation, reasonable attorneys' fees, expenses and disbursements. The
Payee, may, at its option, take control of any and all proceeds to which it is
entitled under Section 9-306 of the Uniform Commercial Code, and the Company
agrees to cooperate fully in executing any commercially reasonable direction
made in the exercise of this right.
SECTION 6. ENTIRE AGREEMENT; NO ORAL CHANGE. This Note embodies the entire
agreement and understanding between the Payee and the Company relating to the
subject matter hereof, and supersedes all prior agreements and understandings
relating thereto. None of the provisions hereof may be waived, altered or
amended, except by a written instrument signed by the holders of a majority of
the outstanding principal amount of the Notes and by the Company. In the case of
any waiver, the Company and the holders of a majority of the outstanding
principal amount of the Notes shall be restored to their former respective
positions and rights hereunder and any Event of Default waived shall be deemed
to be cured and not continuing, but no such waiver shall extend to any
subsequent or other Event of Default or impair any right consequent thereon
except to the extent expressly provided in such waiver.
SECTION 7. REMEDIES CUMULATIVE. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege. The rights,
remedies, powers and privileges herein provided are cumulative and not exclusive
of any rights, remedies, powers and privileges provided by law.
SECTION 8. Notices. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
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receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, addressed to the Treasurer of the
Company at the Company's address at P.O. Box 779, Cincinnati, Ohio 45201 (if by
mail) or 580 Walnut Street, Suite 1300, Cincinnati, Ohio 45202 (if personally
delivered), or any other address notified in writing by the Company to the
Payee. Any notice given in conformity with the foregoing shall be deemed given
when personally delivered or upon the date of delivery specified in the
registered mail receipt.
SECTION 9. GOVERNING LAW. This Note shall be governed by, and construed
and enforced in accordance with, the law of the State of Connecticut.
SECTION 10. CONSENT TO JURISDICTION. Any legal action or proceeding with
respect to this Note shall be brought in the courts of the State of Connecticut
or in the courts of the United States of America sitting in the State of
Connecticut. The Company hereby waives to the fullest extent permitted by law
any objection it may now or hereafter have to the laying of venue in any such
action or proceeding in any such court as well as any right it may now or
hereafter have to remove any such action or proceeding, once commenced, to
another court on the grounds of forum non conveniens or otherwise or to remove
an action brought in a state court to a court of the United States of America.
The Company hereby irrevocably agrees that service of process in any such action
or proceeding may be made either by mailing or delivering a copy of the summons
and complaint in any such action or proceeding to the Company at the address
provided herein by certified mail, return receipt requested. Service of process
in any such action or proceeding, effected as aforesaid, shall be deemed
personal service upon the Company and shall be legal and binding upon the
Company for all purposes notwithstanding any failure on the part of the Company
to receive copies of such process mailed directly to the Company in accordance
with the provisions of this Section.
SECTION 11. COSTS OF COLLECTION. If the Payee is required to commence suit
to recover any amount due under this Note following an Event of Default, the
Payee shall be entitled to collect from the Company reimbursement of such
reasonable attorneys' fees and expenses of counsel selected by the Payee.
SECTION 12. SUCCESSORS AND ASSIGNS; TRANSFERABILITY. This Note shall be
binding upon and inure to the benefit of the Payee and the Company and their
respective transferees, successors and assigns; provided, however, that the
Company may not transfer or assign any of its rights or obligations hereunder
without the prior written consent of the Payee. Within five (5) Business Days
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after receipt of notice of any assignment by the Payee to any person or entity
(an "Assignee") of all or any part of this Note, the Company shall execute and
deliver to such Assignee, in exchange for the surrendered Note, a new Note to
the order of such Assignee in an amount equal to the amount of this Note
assigned to it, and if the Payee has retained any amount owing to it hereunder,
a new Note to the order of the Payee in an amount equal to the amount retained
by it hereunder, which new Note shall be dated the same date as the surrendered
Note and be in substantially the form of this Note, and such Assignee will be
deemed the Payee under the Note issued to it. References herein to "Notes" shall
include all outstanding Notes issued in substitution for or upon any assignment
of this Note.
SECTION 13. No Set-Off. The obligations of the Company under this Note are
absolute and not subject to any right of set-off, counterclaim, recoupment or
defenses against the Payee of any kind whatsoever.
SECTION 14. MISCELLANEOUS. The headings of the sections of this Note have
been inserted for convenience and shall not modify, define, limit or expand the
express provisions of this Note.
IN WITNESS WHEREOF, the Company has duly executed this Note this ____ day
of __________________, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By:
------------------------------
SCHEDULE A
Installment Payment Schedule
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SCHEDULE B
Collateral
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- --------------------------------------
EXHIBIT "1.1.94"
FORM OF NORTHWESTERN GROUP NOTE
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[THIS PAGE LEFT BLANK INTENTIONALLY]
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[NORTHWESTERN GROUP SECURED CLAIMS]
SECURED NOTE AND SECURITY AGREEMENT
THIS NOTE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
SOLD OR OTHERWISE TRANSFERRED IN VIOLATION OF SUCH
ACT AND THE RULES AND REGULATIONS THEREUNDER.
10% Secured Installment Note
EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation (the "Company"), for
value received, hereby promises to pay to COMAC PARTNERS L.P. and COMAC
INTERNATIONAL N.V., or registered assigns (collectively, the "Payee"), on or
before May 1, 2001 (the "Maturity Date"), as hereinafter provided, the principal
sum of [__________________________________ (_____________)] and to pay interest
on the unpaid principal amount thereof from the date hereof to maturity at the
rate of 10% per annum computed as if each year consisted of 360 days and each
month consisted of 30 days. Such principal and interest shall be payable without
presentation of this Note, by bank wire transfer of Federal or other immediately
available funds (identifying each payment as Eagle-Picher Industries, Inc. 10%
Secured Installment Note due 2001, principal or interest) to the Payee pursuant
to instructions provided by the Payee to the Company from time to time, in
___________________ (___) consecutive payments of principal and interest, in the
respective amounts of and payable on the dates indicated in the schedule annexed
hereto as Schedule A (collectively, the "Installment Payments"). The first of
the Installment Payments will be made on [the first Business Day of the second
month following issuance of the Note]. Whenever any Installment Payment is not
made when due and such default shall continue for more than ten (10) days, the
Company shall pay interest on such amount at a rate equal to the lesser of (a)
12% per annum or (b) the maximum rate allowed by law.
Each Installment Payment, when paid, shall be applied first to the payment
of all interest accrued and unpaid on this Note and then to payment on account
of the principal hereof.
SECTION 1. The following terms have the following meanings when used in
this Note:
"Business Day" shall mean any day other than a Saturday, Sunday or other
day on which commercial banks in Cincinnati, Ohio are authorized or required by
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law to close.
"COLLATERAL" shall have the meaning set forth in Section 3 hereof.
"Company" shall have the meaning set forth in the opening paragraph of
this Note.
"MATURITY DATE" shall have the meaning set forth in the opening paragraph
of this Note.
"Payee" shall have the meaning set forth in the opening paragraph of this
Note.
SECTION 2. PRINCIPAL PAYMENTS. (a) SCHEDULED PAYMENT. On the Maturity
Date, the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Note plus all accrued and
unpaid interest thereon.
(b) PREPAYMENT UPON CONDEMNATION OR DESTRUCTION. In the event of
condemnation or of destruction by fire or other casualty of the Collateral, the
Note may be prepaid in an amount equal to the value of the Collateral so
condemned or destroyed, together with all interest then accrued and unpaid
thereon, but without any prepayment penalty or premium.
(c) Optional Prepayment. This Note may be prepaid at any time in full (but
not in part) at a price equal to 100% of the then outstanding principal amount
of this Note, together with all interest then accrued and unpaid thereon, but
without any prepayment penalty or premium.
SECTION 3. SECURITY. This Note is secured by the following property
(collectively, the "Collateral"):
(a) The equipment described in Schedule B hereto (whether or not
constituting fixtures) and all additions and accessions thereto and
substitutions therefor;
(b) All books and records of the Company relating to any of the foregoing;
and
(c) All proceeds and products of any of the foregoing, including insurance
payable by reason of loss or damage.
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The Company herewith confirms the grant of a security interest in the Collateral
to the Payee. As security for this Note, the Company will maintain an existing
first lien in favor of the Payee on the Collateral.
SECTION 4. Affirmative Covenants. For as long as any principal or interest
remains unpaid under this Note, the Company hereby covenants that, unless the
Payee shall otherwise consent in writing:
(a) The Company shall deliver to the Payee (i) a consolidated balance
sheet, income statement, and cash flow statement of the Company within 60 days
after the close of each fiscal quarter other than the last fiscal quarter of the
fiscal year and (ii) an audited consolidated balance sheet, income statement,
and cash flow statement of the Company certified by an independent certified
public accountant of recognized standing and suitable to the Payee within 90
days after the close of each fiscal year. All such financial statements will be
prepared in accordance with generally accepted accounting principles
consistently applied. All statements will be in the same form as those provided
to creditors and shareholders of the Company generally. The Company will also
furnish to the Payee promptly copies of any Forms 10-Q, 10-K and 8-K that are
filed with the Securities and Exchange Commission as well as copies of any other
special mailings to shareholders.
(b) The Company will not dispose of all or substantially all of its assets
or such other portion of its assets as to materially adversely affect the
Company's ability to conduct its business as presently conducted.
(c) The Company shall not enter into any merger or consolidation with any
other entity nor may any subsidiary of the Company enter into any merger or
consolidation with the Company unless (i) the Company is the survivor and (ii)
there exists no event which with or without the passing of time or giving of
notice, or both, would constitute an event of default hereunder.
(d) The Company shall furnish to the Payee:
(i) as soon as possible and in any event within 10 days after
becoming aware of the occurrence of any event of default as defined in
Section 13 hereof, or any event that with notice or passage of time or
both would, if unremedied, constitute an event of default, a
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written statement of the chief executive officer, chief financial officer,
or treasurer of the Company, setting forth details of such event of
default or event, stating whether or not the same is continuing and, if
so, the action that the Company proposes to take with respect thereto;
(ii) immediately after receiving knowledge thereof, notice in
writing of all actions, suits and proceedings before any court or
governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, that directly affect or affects the
Company based on financial exposure to the Company of $25 million, or that
directly affect or affects the Collateral or that seek or seeks injunctive
relief that will materially adversely affect the operations of the Company
or the Collateral;
(iii) as soon as possible and in any event within 30 days
after the Company knows or has reason to know that any Reportable Event
has occurred with respect to any Plan (as such terms are used in the
Employee Retirement Income Security Act of 1974), a written statement by
the chief executive officer, chief financial officer, or treasurer of the
Company setting forth details of the Reportable Event and indicating what
action, if any, the Company proposes to take with respect thereto,
together with a copy of any required notice of such Reportable Event to
the Pension Benefit Guaranty Corporation;
(iv) as soon as possible and in any event within 5 days after
the Company becomes aware of the occurrence of a material adverse change
in the business, properties or the operations and condition (financial or
otherwise) of the Company, a statement by the chief executive officer,
chief financial officer, or treasurer of the Company, setting forth
details of such material adverse change and the action that the Company
proposes to take with respect thereto, except as otherwise disclosed in
public announcements of the Company issued in the ordinary course of
business; and
(v) such other information respecting the business,
properties, condition and operations (financial or otherwise) of the
Company as the Payee may from time to time reasonably request be furnished
to the Payee.
(e) The Company shall not enter into, or permit any subsidiary to enter
into, any agreement containing any provision that would be violated or breached
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by this Note or by the performance by the Company of its obligations in
connection herewith.
SECTION 5. FURTHER ASSURANCES. (a) The Company agrees that from time to
time, at its expense, it will promptly execute and deliver all further
instruments and documents, and take all further action that may be reasonably
necessary or desirable, or that the Payee may reasonably request, in order to
perfect and protect any security interest granted or purported to be granted
hereby and the priority thereof or to enable the Payee to exercise and enforce
its rights and remedies hereunder with respect to any Collateral. Without
limiting the generality of the foregoing, the Company will execute and file such
financing or continuation statements or amendments thereto and such other
instruments or notices as may be necessary or desirable or as the Payee may
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby.
(b) The Company hereby authorizes the Payee to file one or more financing
or continuation statements and amendments thereto relative to all or any part of
the Collateral without the signature of the Company where permitted by law. A
carbon, photographic or other reproduction of this Note or any part thereof
shall be sufficient as a financing statement where permitted by law.
(c) The Company will furnish to the Payee from time to time statements and
schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Payee may reasonably request,
all in reasonable detail.
SECTION 6. Insurance. The Company shall, at its own expense, maintain
liability and property insurance with respect to its business and property,
including the Collateral, with responsible and reputable insurance companies or
associations satisfactory to the Payee in such amounts and covering such risks
as are acceptable to or specified by the Payee, taking into account, among other
factors, such amounts and risks as are usually carried by persons engaged in
similar businesses and owning similar properties in the same general areas in
which the Company operates. Each policy for liability insurance and property
damage insurance shall provide for payment to or on behalf of the Company and
the payee as their interests may appear. Each policy of property damage
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insurance shall in addition (ii) name the Payee as an insured party thereunder
(without any representation or warranty by or obligation upon the Payee), (iii)
contain an agreement by the insurer that any loss thereunder shall be payable to
or on behalf of the Company or the Payee as their interests may appear, (iv)
provide that there shall be no recourse against the Payee for payment of
premiums or other amounts with respect thereto, and (v) provide that at least 30
days' prior written notice of cancellation or of lapse shall be given to the
Payee by the insurer. The Company shall deliver to the Payee certificates
evidencing the insurance maintained pursuant hereto.
SECTION 7. CERTAIN COVENANTS AS TO THE COLLATERAL. The Company shall:
(a) Keep the Collateral at the places identified therefor on Schedule B
hereto or, upon 15 days' prior written notice to the Payee, at such other places
as shall be identified in such notice (such notice to identify the record owner
of the new location) and which are in jurisdictions where all actions required
by Section hereof shall have been taken with respect to such Collateral.
(b) Cause the Collateral to be maintained and preserved in the same
condition, repair, and working order as when new, ordinary wear and tear
excepted, and, in the case of any loss or damage to the Collateral, as quickly
as practicable after the occurrence thereof make or cause to be made all
repairs, replacements, and other improvements in connection therewith which are
necessary or desirable to such end, provided, however, that in the event of
condemnation or of the destruction by fire or other casualty of the Collateral,
the Company shall have the option to prepay the Note to the extent of the value
of the Collateral so condemned or destroyed as provided in Section 2(b) hereof.
(c) Pay promptly when due all property and other taxes, assessments, and
governmental charges or levies imposed upon it, and all claims (including claims
for labor, materials and supplies) against the Collateral.
(d) After the occurrence and during the continuance of an Event of Default
(as hereinafter defined), receive in trust for the benefit of the Payee all
amounts and proceeds received or collected by the Company in respect of the
Collateral, segregate such amounts and proceeds from other funds of the Company,
and forthwith pay such amounts and proceeds over to the Payee in the same form
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as so received (with any necessary endorsement) to be held as cash collateral
and applied as provided in Section 13(b)(iii) hereof.
SECTION 8. Substitution of Collateral; Liens. During the term of this
Note:
(a) The Company may substitute other equipment for the Collateral
identified in Schedule B hereto provided, however, that the aggregate value of
the Collateral remaining subject to the lien hereunder shall at all times be
equal to or greater than the value of the Collateral identified in Schedule B as
of the date of such substitution, such value to be determined by an independent
appraisal provided at the Company's expense and satisfactory to the Payee.
(b) The Company shall not create or suffer to exist any lien, security
interest, or other charge or encumbrance upon or with respect to any of the
Collateral.
SECTION 9. PAYEE APPOINTED ATTORNEY-IN-FACT. The Company hereby
irrevocably appoints the Payee as its attorney-in-fact, with full authority in
the place and stead of the Company and in the name of the Company, the Payee, or
otherwise, from time to time to take any action which may be reasonably
necessary to protect the Payee's interest under this Note, including, without
limitation:
(a) to sign in the name and on behalf of the Company any financing
statements or other papers required under Section hereof;
(b) to obtain and adjust insurance required to be paid to the Payee
pursuant to Section hereof;
(c) to ask, demand, collect, sue for, recover, compound, receive, and give
acquittance and receipts for moneys due and to become due in respect of any of
the Collateral;
(d) to receive, endorse, and collect any drafts or other instruments in
connection with subsection (b) or (c) above; and
(e) to file any claims or take any action or institute any proceedings
that the Payee may deem necessary or desirable to enforce the respective rights
of the Payee with respect to any of the Collateral.
The Company hereby ratifies and approves all acts of the Payee as such
attorney-in-fact. The Payee shall not, in its capacity as such attorney-in-fact,
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be liable for any acts or omissions, nor for any error of judgment or mistake of
fact or law, but only for gross negligence or willful misconduct. This power,
being coupled with an interest, is irrevocable until the Note shall have been
fully satisfied. Any amounts received or collected by the Payee in its capacity
as such attorney-in-fact shall be held as cash collateral and applied as
provided in Section 13(b)(iii).
SECTION 10. Payee May Perform. If the Company fails to perform any
agreement contained herein, the Payee may itself perform, or cause performance
of, such agreement, and the expenses of the Payee incurred in connection
therewith shall be payable by the Company under Section hereof.
SECTION 11. Payee's Duties. The powers conferred on the Payee hereunder
are solely to protect its interests in the Collateral and shall not impose any
duty to exercise any such powers. Except for the safe custody of any Collateral
in its possession and the accounting for moneys actually received by the Payee
hereunder, the Payee shall not have any duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against any parties or any
other rights pertaining to any Collateral.
SECTION 12. Inspection Rights. The Payee, upon 24 hours' notice and during
normal business hours, shall have access to inspect, audit, and make extracts
from all of the Company's records, files, and books of account relating to the
Collateral, and the Company shall deliver any document or instrument necessary
for the Payee to obtain records from any service bureau maintaining records for
the Company. The Payee may also, at all reasonable times, examine and inspect
the Collateral. The Company shall, at the Payee's request, take all steps
necessary to facilitate such inspection.
SECTION 13. Events of Default. (a) Any of the following occurrences or
acts shall constitute an Event of Default hereunder:
(i) If default shall be made in the payment of any installment of
principal and interest due from the Company under the Note when and as the
same shall become due and payable, whether at maturity or by acceleration
or prepayment or otherwise, and such default shall continue for more than
ten (10) days;
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(ii) If there shall be default in the due observance or performance
of any other provision of this Note and such default shall continue for
more than thirty (30) days after written notice thereof shall have been
given by the Payee to the Company;
(iii) If an event of default shall occur and continue with respect
to any borrowing in excess of $5,000,000 by the Company, exclusive of any
alleged event of default that is being contested in good faith by the
Company;
(iv) If the Company shall make an assignment for the benefit of its
creditors or file a petition in bankruptcy or for reorganization or for an
arrangement or any composition, readjustment, liquidation, dissolution or
similar relief pursuant to the Bankruptcy Code or under any similar
present or future federal or state law, or shall be adjudicated a
bankrupt;
(v) If a petition or answer shall be filed proposing the
adjudication of the Company as a bankrupt or the reorganization or
arrangement of it, or any composition, readjustment, liquidation,
dissolution or similar relief with respect to it pursuant to the
Bankruptcy Code or any similar present or future federal or state law, and
the Company shall consent to the filing thereof, or such petition or
answer shall not be discharged or denied within sixty (60) days after the
filing thereof; or
(vi) If a receiver, trustee or liquidator (or other similar
official) of the Company, or of all or substantially all of the assets of
the Company or any portion thereof shall be appointed and shall not be
discharged within sixty (60) days thereafter, or if the Company shall
consent to or acquiesce in such appointment.
(b) If an Event of Default shall have occurred and be continuing:
(i) The Payee may give notice to the Company declaring the entire
unpaid principal amount of the Notes, together with all accrued interest
accrued and other sums then owing under this Note, to be forthwith
payable, and demanding that the same be paid, and thereupon all such
amounts shall be forthwith payable, together with all costs and expenses
of collection, notwithstanding any contrary provision contained in this
Note, and institute proceedings for the collection of all amounts then
payable on this Note, whether by declaration or otherwise, enforce any
judgment obtained, and exercise such lawful
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remedies as may be necessary or desirable for the enforcement of each of
the Payee's rights hereunder.
(ii) The Payee may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise
available to it, all the rights and remedies of a Secured Party on default
under the Uniform Commercial Code (the "Code") and other applicable laws
and agreements and also may (i) require the Company to, and the Company
hereby agrees that it will at its expense and upon request of the Payee
forthwith, assemble the Collateral as directed by the Payee and make it
available to the Payee at a place or places to be designated by the Payee,
which is or are reasonably convenient to the Payee and the Company and
(ii) without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any of
the Payee's offices or elsewhere, for cash, on credit or for future
delivery and upon such other terms as the Payee may deem commercially
reasonable. The Company agrees that, to the extent notice of sale shall be
required by law, at least five days' notice to the Company of the time and
place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Payee shall not be
obligated to make any sale of the Collateral regardless of notice of sale
having been given. The Payee may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor and such
sale may, without further notice, be made at the time and place to which
it was so adjourned.
(iii) All cash proceeds received by the Payee in respect of any sale
of, collection from or other realization upon all or any part of the
Collateral may, in the discretion of the Payee, be held by the Payee
(without interest) as collateral for and/or then or at any time thereafter
applied in whole or in part by the Payee against payment of this Note. Any
surplus of such cash or cash proceeds held by the Payee and remaining
after payment in full of this Note shall be paid over to the Company or to
whosoever may be lawfully entitled to receive such surplus.
SECTION 14. Entire Agreement; No Oral Change. This Note embodies the
entire agreement and understanding between the Payee and the Company relating to
the subject matter hereof, and supersedes all prior agreements and
understandings relating thereto. This Note may not be changed orally, but only
by an instrument in writing signed by the party against whom enforcement of any
waiver, change, modification or discharge is sought.
SECTION 15. NOTICES. Any notices or other communications required or
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permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, Attention: Treasurer, at the
Company's address at P.O. Box 779, Cincinnati, Ohio 45201 (if by mail) or 580
Walnut Street, Suite 1300, Cincinnati, Ohio 45202 (if personally delivered), or
any other address notified in writing by the Company to the Payee. Any notice
given in conformity with the foregoing shall be deemed given when personally
delivered or upon the date of delivery specified in the registered mail receipt.
SECTION 16. Continuing Security Interest; Etc. This Note confirms the
grant of a continuing security interest in the Collateral and shall (a) be
binding upon the Company, its heirs, administrators, successors, and assigns and
(b) inure to the benefit of the Payee and its respective successors,
transferees, and assigns. No security taken hereafter as security for the
payment or performance of this Note shall impair in any manner or affect this
Note or the security interest confirmed hereby, all present and future
additional security to be considered as one general, continuing security
interest. Any of the Collateral may be released from this Note without altering,
varying, or diminishing in any way this Note or the security interest confirmed
hereby as to the Collateral not expressly released, and this Note and such
security interest shall continue in full force and effect as to all of the
Collateral not expressly released.
SECTION 17. Governing Law. This Note shall be governed by, and construed
and enforced in accordance with, the law of the State of Connecticut applicable
to contracts made and wholly performed in that state (without giving effect to
principles relating to conflict of laws).
SECTION 18. Consent To Jurisdiction. The parties hereto irrevocably agree
that any legal action or proceeding with respect to this Note shall be brought
in the courts of the State of Connecticut or in the courts of the United States
of America sitting in Connecticut. The Company hereby waives to the fullest
extent permitted by law any objection it may now or hereafter have to the laying
of venue in any such action or proceeding in any such court as well as any right
it may now or hereafter have to remove any such action or proceeding, once
commenced, to another court on the grounds of FORUM NON CONVENIENS or otherwise
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or to remove an action brought in a state court to a court of the United States
of America. The Company hereby irrevocably agrees that service of process in any
such action or proceeding may be made either by mailing or delivering a copy of
the summons and complaint in any such action or proceeding to the Company at the
address provided herein by certified mail, return receipt requested. Service of
process in any such action or proceeding, effected as aforesaid, shall be deemed
personal service upon the Company and shall be legal and binding upon the
Company for all purposes notwithstanding any failure on the part of the Company
to receive copies of such process mailed directly to the Company in accordance
with the provisions of this Section.
SECTION 19. Indemnity and Expenses. (a) The Company agrees to indemnify
the Payee from and against any and all claims, losses, and liabilities growing
out of or resulting from this Note (including, without limitation, enforcement
of this Note), except claims, losses, or liabilities resulting from the Payee's
gross negligence or willful misconduct.
(b) The Company will upon demand pay to the Payee the amount of any and
all reasonable expenses, including the reasonable fees and disbursements of its
counsel and of any experts and agents, that the Payee may after the date hereof
incur in connection with (i) the custody, preservation, use, or operation of, or
the sale of, collection from, or other realization upon, any of the Collateral,
(ii) the exercise or enforcement of any of the rights of the Payee, or (iii) the
failure by the Company to perform or observe any of the provisions hereof.
SECTION 20. SEVERABILITY. The provisions of this Note are independent of
and separable from each other, and no such provision shall be affected or
rendered invalid or unenforceable by virtue of the fact that for any reason any
other such provision may be invalid or unenforceable in whole or in part.
SECTION 21. MISCELLANEOUS. The headings of the sections of this Note have
been inserted for convenience and shall not modify, define, limit or expand the
express provisions of this Note.
IN WITNESS WHEREOF, the Company has duly executed this Note this ____ day
of __________________, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By: ______________________________
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SCHEDULE A
Installment Payment Schedule
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SCHEDULE B
Collateral
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.114"
FORM OF SENIOR UNSECURED SINKING FUND DEBENTURES
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[THIS PAGE LEFT BLANK INTENTIONALLY]
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THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
[____]% SENIOR UNSECURED SINKING FUND DEBENTURES DUE _____
U.S. $250,000,000 Cincinnati, Ohio
[Effective Date]
FOR VALUE RECEIVED, the undersigned, EAGLE-PICHER INDUSTRIES, INC.,
an Ohio corporation (the "Company"), hereby promises to pay to the order of [ ]
or to any other holder of this Debenture (such holder being the "Payee") the
principal amount of TWO HUNDRED FIFTY MILLION DOLLARS ($250,000,000) on [date
that is 10 years from the Effective Date] (the "Maturity Date") and interest
thereon as hereinafter provided. Both principal and interest hereunder are
payable in lawful money of the United States of America to the Payee at such
place as the Payee may designate from time to time in writing in cash or other
immediately available funds.
This Debenture is one of an issue of [____]% Senior Unsecured
Sinking Fund Debentures Due [ten years from the Effective Date] of the Company
issued in an aggregate principal amount limited to $250,000,000 (the
"Debentures") and the holder hereof is entitled equally and ratably with the
holders of all other Debentures outstanding to the benefits provided for hereby.
SECTION 1. (a) The following terms have the following meanings when
used in this Debenture:
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Cincinnati, Ohio are authorized or
required by law to close.
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"COMPANY" shall have the meaning set forth in the opening paragraph
of this Debenture.
"EVENT OF DEFAULT" shall mean any of the events set forth in Section
4(a).
"MATURITY DATE" shall have the meaning set forth in the opening
paragraph of this Debenture.
"PAYEE" shall have the meaning set forth in the opening paragraph of
this Debenture.
(b) Unless otherwise provided herein, (i) the word "from" shall mean
from and including, and (ii) the words "to" or "until" shall mean to and until
but excluding.
SECTION 2. INTEREST. The Company will pay interest at a rate of
[____]% per annum semiannually on ___________ and _____________ of each year,
commencing six months after ___________ (the "Effective Date") or if any such
day is not a Business Day on the next succeeding Business Day (each an "Interest
Payment Date"). Interest on the Debentures will accrue from the most recent date
to which interest has been paid or, if no interest has been paid, from
_____________. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
SECTION 3. PAYMENTS. (a) SCHEDULED PAYMENTS. On the Maturity Date,
the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Debenture plus all accrued and
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unpaid interest thereon. Holders must surrender Debentures to the Company to
collect principal payments.
(b) SINKING FUND. The Company will redeem $20,000,000 of the
aggregate principal amount of the original issuance of the Debentures on each of
the third through ninth anniversaries of the Effective Date, in each case at
100% of the principal amount to be redeemed plus accrued interest to the
redemption date, by paying such amounts as a sinking fund payment, before each
such anniversary of the Effective Date. The Company may reduce the principal
amount of Debentures to be redeemed by subtracting 100% of the principal amount
of any Debenture that the Company redeemed or repurchased otherwise than
pursuant to this Section. The Company may so subtract the same Debenture only
once.
(c) OPTIONAL REDEMPTION. The Company at its option may on each date
it is required to redeem Debentures pursuant to paragraph (b) above redeem up to
an additional $20,000,000 of the outstanding aggregate principal amount of the
Debentures by paying the principal amount to be redeemed plus accrued and unpaid
interest thereon to the applicable redemption date. In addition, the Company at
its option may redeem after [date that is three years from the Effective Date]
all or, from time to time, part of the Debentures at the following redemption
prices (expressed as a percentage of the principal amount thereof) plus accrued
interest to the redemption date (the "Redemption Price"):
If redeemed during the If redeemed during the
twelve month period twelve month period
beginning [Month and date Redemption beginning [Month and date Redemption
of Effective Date], Price of Effective Date], Price
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- -------------------------------------------------------------------------------
[3 years from 105.25% [7 years from 101.25%
Effective Date] Effective Date]
[4 years from 104.25% [8 years from 100.25%
Effective Date] Effective Date]
[5 years from 103.25% [9 years from
Effective Date] Effective Date] and
[6 years from 102.25% thereafter 100%
Effective Date]
(d) NOTICE OF REDEMPTION. A notice of redemption will be mailed at
least 20 days but not more than 60 days before the redemption date to each
holder of Debentures to be redeemed at its registered address. Debentures in
denominations larger than $1,000 may be redeemed in part, but only in whole
multiples of $1,000. If any Debenture is to be redeemed in part only, a new
Debenture in principal amount equal to the unredeemed portion thereof will be
issued in the name of the holder thereof upon cancellation of the original
Debenture. If less than all of the Debentures outstanding are to be redeemed,
the Debentures to be redeemed will be selected on a pro rata basis (with such
adjustments as may be deemed appropriate so that only Debentures in
denominations of $1,000, or integral multiples thereof, shall be redeemed). Once
notice of redemption is given, Debentures called for redemption become due and
payable on the redemption date at the redemption price.
SECTION 4. EVENTS OF DEFAULT. (a) Each of the following shall be an
Event of Default:
(i) any failure by the Company for ninety days to pay all or any
portion of principal under the Debentures when the same shall be due
and payable in accordance with the terms hereof, whether on the
Maturity Date, by acceleration or otherwise;
(ii) any failure by the Company for ninety days to pay (by delivery
of cash or other immediately available funds) all or any portion of
any interest under the Debentures when the same shall be due and
payable.
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(ii) any default by the Company for ninety days after notice to it
in the due and punctual performance or observance of any of the
agreements of the Company contained in the Debentures;
(iii) (A) the filing by the Company of a voluntary petition seeking
liquidation, reorganization, arrangement or readjustment, in any
form, of its debts under title 11 of the United States Code (or
corresponding provisions of future laws) or any other applicable
bankruptcy, insolvency or similar law, (B) the making by the Company
of any assignment for the benefit of its creditors, or the admission
by the Company in writing of its inability to pay its debts as they
become due, (C) the filing of (x) an involuntary petition against
the Company under title 11 of the United States Code, or any other
applicable bankruptcy, insolvency or similar law (or corresponding
provisions of future laws), (y) an application for the appointment
of a custodian, receiver, trustee or other similar official for the
Company for all or a substantial part of the assets of the Company
or (z) an involuntary petition against the Company seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of the Company or any of the
Company's debts under any other federal or state insolvency law,
provided that any such filing under (x), (y) or (z) above shall not
have been vacated, set aside or stayed within a 60-day period from
the date thereof unless the Company shall have filed an answer
consenting to or acquiescing therein, or (D) the entry against the
Company of a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect;
(b) Upon the occurrence and during the continuance of any Event of
Default described in paragraph (a) above, the holders of a majority of the
outstanding principal amount of the Debentures may, by written notice to the
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Company, declare all or any portion of the unpaid principal amount of the
Debentures and all interest accrued thereon to be immediately due and payable.
Demand, presentment, protest and notice of non-payment are hereby waived by the
Company. All payments made following an Event of Default shall be applied first
to payment of all accrued and unpaid interest and then to principal.
SECTION 5. WAIVER OR ALTERATION. Without the consent of the Company
and each holder affected, an amendment to the Debentures may not: reduce the
amount of Debentures whose holders must consent to an amendment; reduce the rate
of or change the time for payment of interest on any Debenture; reduce the
principal of or change the fixed maturity of any Debenture; or make any
Debenture payable in money other than that stated in the Debenture. Subject to
the exceptions listed in the preceding sentence, the Debentures may be amended
by a written instrument signed by the Company and the holders of a majority of
the outstanding principal amount of the Debentures. In the case of any waiver,
the Company and the holders of a majority of the outstanding principal amount of
the Debentures shall be restored to their former respective positions and rights
hereunder, and any Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Event of
Default or impair any right consequent thereon except to the extent expressly
provided in such waiver. Without the consent of any holder, the Debentures may
be amended to cure any ambiguity, defect or inconsistency, to provide for
assumption of Company obligations to holders or to make any change that does not
adversely affect the rights of any holder.
SECTION 6. REMEDIES CUMULATIVE. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof, nor shall any single or partial exercise of any
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right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
SECTION 7. NOTICES. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, Attention: Treasurer, at the
Company's address at Post Office Box 779, Cincinnati, Ohio 45201 (if by mail) or
580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202 (if personally delivered),
or any other address notified in writing by the Company to the Payee. Any notice
given in conformity with the foregoing shall be deemed given when personally
delivered or upon the date of delivery specified in the registered mail receipt.
SECTION 8. NO RECOURSE AGAINST OTHERS. A director, officer, employee
or a stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Debentures or for any claim based on, in
respect of or by reason of such obligations or their creation. Each holder by
accepting a Debenture waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Debentures.
SECTION 9. GOVERNING LAW. The Debentures shall be governed by, and
construed and enforced in accordance with, the law of the State of Ohio.
SECTION 10. COSTS OF COLLECTION. If the Payee is required to
commence suit to recover any amount due under the Debentures following an Event
of Default, the Payee shall be entitled to collect from the Company
reimbursement of such reasonable attorneys' fees and expenses of counsel
selected by the Payee.
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SECTION 11. SUCCESSORS AND ASSIGNS; TRANSFERABILITY. The Debentures
shall be binding upon and inure to the benefit of the Payee and the Company and
their respective transferees, successors and assigns; PROVIDED, HOWEVER, that
the Company may not transfer or assign any of its rights or obligations
hereunder without the prior written consent of the Payee. Within five Business
Days after receipt of notice of any assignment by the Payee to any person or
entity (an "Assignee") of all or any part of a Debenture, the Company shall
execute and deliver to such Assignee, in exchange for the surrendered Debenture,
a new Debenture to the order of such Assignee in an amount equal to the amount
of the Debenture assigned to it, and if the Payee has retained any amount owing
to it hereunder, a new Debenture to the order of the Payee in an amount equal to
the amount retained by it hereunder, which new Debenture shall be dated the same
date as the surrendered Debenture and be in substantially the form of this
Debenture, and such Assignee will be deemed the Payee under the Debenture issued
to it. In the event that the Payee proposes to transfer the Debentures in a
transaction that would require qualification of an indenture under the Trust
Indenture Act of 1939, the Company shall cooperate with the Payee in the
preparation and qualification of such indenture and the replacement of the
Debentures with a comparable instrument evidencing the indebtedness represented
hereby and providing the holder thereof with substantially comparable terms.
References herein to "Debentures" shall include all outstanding Debentures
issued in substitution for or upon any assignment of this Debenture.
SECTION 12. REPLACEMENT OF DEBENTURE. Upon receipt of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of a Debenture, and the Company's receipt of an indemnity agreement
of the Payee reasonably satisfactory to the Company, the Company will, at the
expense of the Payee, execute and deliver, in lieu thereof, a new Debenture of
like terms.
SECTION 13. NO SET-OFF. The obligations of the Company under the
Debentures are absolute and not subject to any right of set-off, counterclaim,
recoupment or defenses against the Payee of any kind whatsoever.
SECTION 14. DESCRIPTIVE HEADINGS. The descriptive headings of the
Debentures are inserted for convenience only and do not constitute a part of
this Debenture.
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IN WITNESS WHEREOF, the Company has caused this Debenture to be
executed by its duly authorized officer as of the day and year first written
above.
EAGLE-PICHER INDUSTRIES, INC.
By: ________________________
Name:
Title:
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "1.1.119"
FORM OF TAX REFUND NOTES
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THE SECURITIES REPRESENTED BY THIS INSTRUMENT HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION AND MAY NOT BE SOLD, OFFERED
FOR SALE, OR OTHERWISE TRANSFERRED UNLESS REGISTERED
OR QUALIFIED UNDER SAID ACT AND APPLICABLE STATE
SECURITIES LAWS OR UNLESS THE COMPANY RECEIVES AN
OPINION OF COUNSEL REASONABLY SATISFACTORY TO IT
THAT SUCH REGISTRATION OR QUALIFICATION IS NOT REQUIRED.
[__]% TAX REFUND NOTE DUE _____
U.S. $[___________] Cincinnati, Ohio
[Effective Date]
FOR VALUE RECEIVED, the undersigned, EAGLE-PICHER INDUSTRIES, INC.,
an Ohio corporation (the "Company"), hereby promises to pay to the order of the
Eagle-Picher Industries, Inc. Personal Injury Settlement Trust or to any other
holder (such holder being the "Payee") of this note (the "Note") the principal
amount of [_______________________] on June 1, 1998 (the "Maturity Date") and
interest thereon as hereinafter provided. Both principal and interest hereunder
are payable in lawful money of the United States of America to the Payee at such
place as the Payee may designate from time to time in writing in cash or other
immediately available funds.
SECTION 1. (a) The following terms have the following meanings when
used in this Note:
"BUSINESS DAY" shall mean any day other than a Saturday, Sunday or
other day on which commercial banks in Cincinnati, Ohio are authorized or
required by law to close.
"COMPANY" shall have the meaning set forth in the opening paragraph
of this Note.
"EVENT OF DEFAULT" shall mean any of the events set forth in
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Section 5(a).
"MATURITY DATE" shall have the meaning set forth in the opening
paragraph of this Note.
"PAYEE" shall have the meaning set forth in the opening paragraph of
this Note.
(b) Unless otherwise provided herein, (i) the word "from" shall mean
from and including, and (ii) the words "to" or "until" shall mean to and until
but excluding.
SECTION 2. INTEREST. The Company will pay interest at a rate of
[__]% per annum semiannually on __________ and ___________ of each year,
commencing six months after _______________ (the "Effective Date") or if any
such day is not a Business Day on the next succeeding Business Day (each an
"Interest Payment Date"). Interest on the Note will accrue from the most recent
date to which interest has been paid or, if no interest has been paid, from
_____________________. Interest will be computed on the basis of a 360- day year
of twelve 30-day months.
SECTION 3. PAYMENTS. (a) SCHEDULED PAYMENTS. On the Maturity Date,
the Company shall pay to the Payee, in cash or other immediately available
funds, the entire unpaid principal amount of this Note plus all accrued and
unpaid interest thereon. The Payee must surrender the Note to the Company to
collect principal payments.
(b) MANDATORY REDEMPTION. The Company will redeem all of the
aggregate principal amount of the Note outstanding plus accrued interest to the
redemption date as soon as practicable after its receipt of its federal income
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tax refund (the "Tax Refund") for the fiscal year ending _______ (in the
aggregate principal amount of such tax refunds).
(c) OPTIONAL PREPAYMENT. The Company may, at any time and from time
to time, without premium or penalty, prepay (in multiples of $1,000) all or a
portion of the unpaid principal amount of the Note or all or a portion of
accrued and unpaid interest, together with unpaid accrued interest on the amount
so prepaid to the date chosen for prepayment, payable in cash or other
immediately available funds. A notice of redemption under this subsection will
be mailed at least 20 days but not more than 60 days before the redemption date
to the Payee at its registered address. The Note may be redeemed in part, but
only in whole multiples of $1,000. Once notice of redemption is given, the Note
becomes due and payable on the redemption date at the redemption price.
SECTION 4. LIENS. The Company shall not create or suffer to exist
any lien, security interest, or other charge or encumbrance upon or with respect
to, or grant any right to a party other than the Eagle-Picher Industries, Inc.
Personal Injury Settlement Trust in, the Tax Refund.
SECTION 5. EVENTS OF DEFAULT. (a) Each of the following shall be an
Event of Default:
(i) any failure by the Company for ninety days to pay all or any
portion of principal under the Note when the same shall be due and
payable in accordance with the terms hereof, whether on the Maturity
Date, by acceleration or otherwise;
(ii) any failure by the Company for ninety days to pay (by delivery
of cash or other immediately available funds) all or any portion of
any interest under the Note when the same shall
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be due and payable;
(ii) any default by the Company for ninety days after notice to it
in the due and punctual performance or observance of any of the
agreements of the Company contained in the Note;
(iii) (A) the filing by the Company of a voluntary petition seeking
liquidation, reorganization, arrangement or readjustment, in any
form, of its debts under title 11 of the United States Code (or
corresponding provisions of future laws) or any other applicable
bankruptcy, insolvency or similar law, (B) the making by the Company
of any assignment for the benefit of its creditors, or the admission
by the Company in writing of its inability to pay its debts as they
become due, (C) the filing of (x) an involuntary petition against
the Company under title 11 of the United States Code, or any other
applicable bankruptcy, insolvency or similar law (or corresponding
provisions of future laws), (y) an application for the appointment
of a custodian, receiver, trustee or other similar official for the
Company for all or a substantial part of the assets of the Company
or (z) an involuntary petition against the Company seeking
liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of the Company or any of the
Company's debts under any other federal or state insolvency law,
provided that any such filing under (x), (y) or (z) above shall not
have been vacated, set aside or stayed within a 60-day period from
the date thereof unless the Company shall have filed an answer
consenting to or acquiescing therein, or (D) the entry against the
Company of a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect;
(b) Upon the occurrence and during the continuance of any Event of
Default described in paragraph (a) above, the Payee may, by written notice to
the Company, declare all or any portion of the unpaid principal amount of the
Note and all interest accrued thereon to be immediately due and payable. Demand,
presentment, protest and notice of non-payment are hereby waived by the Company.
All payments made following an Event of Default shall be applied first to
payment of all accrued and unpaid interest and then to principal.
SECTION 6. REMEDIES CUMULATIVE. No failure to exercise or delay in
exercising any right, remedy, power or privilege hereunder shall operate as a
waiver thereof,
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nor shall any single or partial exercise of any right, remedy, power or
privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege. The rights, remedies,
powers and privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
SECTION 7. NOTICES. Any notices or other communications required or
permitted hereunder shall be given in writing and personally delivered with
receipt acknowledged or mailed, postage prepaid, via registered mail, return
receipt requested, if to the Payee, at its address notified in writing by the
Payee to the Company, and if to the Company, Attention: Treasurer, at the
Company's address at Post Office Box 779, Cincinnati, Ohio 45201 (if by mail) or
580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202 (if personally delivered),
or any other address notified in writing by the Company to the Payee. Any notice
given in conformity with the foregoing shall be deemed given when personally
delivered or upon the date of delivery specified in the registered mail receipt.
SECTION 8. NO RECOURSE AGAINST OTHERS. A director, officer, employee
or a stockholder, as such, of the Company shall not have any liability for any
obligations of the Company under the Note or for any claim based on, in respect
of or by reason of such obligations or their creation. The Payee by accepting
the Note waives and releases all such liability. The waiver and release are part
of the consideration for the issuance of the Note.
SECTION 9. GOVERNING LAW. The Note shall be governed by, and
construed and enforced in accordance with the law of the State of Ohio.
SECTION 10. COSTS OF COLLECTION. If the Payee is required to
commence suit to recover any amount due under the Note following an Event of
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Default, the Payee shall be entitled to collect from the Company reimbursement
of such reasonable attorneys' fees and expenses of counsel selected by the
Payee.
SECTION 11. SUCCESSORS AND ASSIGNS; TRANSFERABILITY. The Note shall
be binding upon and inure to the benefit of the Payee and the Company and their
respective transferees, successors and assigns; PROVIDED, HOWEVER, that the
Company may not transfer or assign any of its rights or obligations hereunder
without the prior written consent of the Payee. Within five Business Days after
receipt of notice of any assignment by the Payee to any person or entity (an
"Assignee") of all or any part of the Note, the Company shall execute and
deliver to such Assignee, in exchange for the surrendered Note, a new Note to
the order of such Assignee in an amount equal to the amount of the Note assigned
to it, and if the Payee has retained any amount owing to it hereunder, a new
Note to the order of the Payee in an amount equal to the amount retained by it
hereunder, which new Note shall be dated the same date as the surrendered Note
and be in substantially the form of this Note, and such Assignee will be deemed
the Payee under the Note issued to it. References herein to "Notes" shall
include all outstanding Notes issued in substitution for or upon any assignment
of this Note.
SECTION 12. REPLACEMENT OF NOTE. Upon receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction or mutilation of the
Note, and the Company's receipt of an indemnity agreement of the Payee
reasonably satisfactory to the Company, the Company will, at the expense of the
Payee, execute and deliver, in lieu thereof, a new Note of like terms.
SECTION 13. NO SET-OFF. The obligations of the Company under
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the Note are absolute and not subject to any right of set-off, counterclaim,
recoupment or defenses against the Payee of any kind whatsoever.
SECTION 14. DESCRIPTIVE HEADINGS. The descriptive headings of the
Note are inserted for convenience only and do not constitute a part of the Note.
IN WITNESS WHEREOF, the Company has caused this Note to be executed
by its duly authorized officer as of the day and year first written above.
EAGLE-PICHER INDUSTRIES, INC.
By: ________________________
Name:
Title:
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "5.2"
FORM OF AMENDED CLAIMS SETTLEMENT GUIDELINES
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AMENDED GUIDELINES FOR THE
COMPROMISE AND SETTLEMENT
OF CLAIMS AND CONTROVERSIES
---------------------------
Notwithstanding any requirements that may be imposed pursuant to Bankruptcy Rule
9019, Eagle-Picher Industries, Inc., Daisy Parts, Inc., Transicoil Inc.,
Michigan Automotive Research Corporation, EDI, Inc., Eagle-Picher Minerals,
Inc., and Hillsdale Tool and Manufacturing Co. (the "Debtors") may compromise or
settle as allowed claims (i) all claims asserted against the Debtors as to which
the Debtors have the power and authority to file and prosecute objections
pursuant to section 5.1 of the Third Amended Consolidated Plan of
Reorganization, dated August 28, 1996 and (ii) all claims that the Debtors have
asserted against other parties prior to [insert Effective Date of Plan]
("Claims") according to the following procedures:
1. Subject to section 2(b) hereof, the following settlements or compromises
do not require the review or approval of the United States Bankruptcy
Court for the Southern District of Ohio (the "Bankruptcy Court") or any
other party in interest:
(a) The settlement or compromise of a Claim against the Debtors or their
estates pursuant to which such Claim is allowed in an amount of
$1,000,000 or less;
(b) The settlement or compromise of a Claim against the Debtors or their
estates where the difference between the amount of the Claim listed
on the Debtors' schedules and the amount of the
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Claim proposed to be allowed under the settlement is $1,000,000 or
less; and
(c) The settlement or compromise of a Claim asserted by one or more of
the Debtors against a party, where the difference between the amount
sought to be recovered by the Debtors and the amount to be paid to
the Debtors under the proposed settlement is $1,000,000 or less.
2. The following settlements or compromises shall be submitted to the
Bankruptcy Court for approval:
(a) Any settlement or compromise not described in section 1 hereof; and
(b) Any settlement or compromise of Claims that involve an "insider," as
defined in 11 U.S.C. Section 101(3).
2
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "7.11"
FORM OF MANAGEMENT CONTRACTS
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EMPLOYMENT AGREEMENT
AGREEMENT, dated as of ________________, 1995, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and _____________________________ (the
"Executive"), residing at _________________________.
W I T N E S S E T H:
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as __________ ________________ of the Company;
and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated __________ __, 1995 (the "Confirmation
Order") the Bankruptcy Court confirmed the Consolidated Plan of Reorganization,
dated _________ __, 1995 (the "Plan"), in the Debtors' chapter 11 cases; and
WHEREAS, the Plan contemplates that the Company and the Executive
will enter into this Agreement which is to become effective on the Effective
Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto agree as follows:
1. EMPLOYMENT; EFFECTIVENESS OF AGREEMENT. The obligation of the
Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the Effective
Date.
2. TERM. The term of Executive's employment hereunder (hereinafter
referred to as the "Term") shall commence on the Effective Date and shall
continue thereafter until the date which is thirty (30) months from and after
the date on which the Confirmation Order was entered by the Bankruptcy Court,
unless terminated earlier as hereinafter provided.
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3. Duties and Extent of Services. During the Term, Executive agrees
to continue to serve as the _______ _______________ of the Company faithfully
and to the best of his ability under the direction of the [Chief Executive
Officer and the] Board of Directors of the Company (the "Board"), and agrees to
devote substantially all of his business time, energy and skill to such
employment. Executive agrees to perform the duties commensurate with the
position of ___________ of the Company, which shall include,without limitation,
the duties set forth on Annex A hereto. Executive agrees also to perform such
specific duties and services of a senior executive nature as the [Chief
Executive Officer of the Company or the] Board shall reasonably request
consistent with Executive's position as ___________. The principal place of
employment of Executive shall be Cincinnati, Ohio and, subject to such
reasonable travel as the performance of his duties may require, such principal
place of employment shall not be changed unless the Executive otherwise
consents.
4. COMPENSATION.
4.1 BASE SALARY. The Company agrees to pay or cause to be paid to
Executive during the Term, a base salary equal to the amount of his base salary
as at the date immediately preceding the Effective Date, subject to adjustment
as provided below (as so adjusted, the "Base Salary"). The Base Salary shall be
payable in accordance with the regular payroll policies of the Company from time
to time in effect, less such deductions as shall be required to be withheld by
applicable law and regulations. On each December 1 during the Term, the Board or
a committee thereof, shall review Executive's Base Salary as then in effect and
may, but shall not be obligated to, increase such salary by such amount as the
Board (or such committee), in its sole discretion, shall determine.
[4.2 DISCRETIONARY BONUS. In addition to Base Salary, the
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Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.]
4.3 BENEFITS AND PERQUISITES. During the Term, the Company shall
provide Executive with and Executive shall be entitled to the following benefits
and perquisites:
(a) participation in and the receipt of benefits under (i) all of
the Company's employee benefit plans and arrangements in effect from time to
time applicable to salaried employees of the Company, (ii) all short-term and
long-term incentive plans of the Company as in effect from time to time, (iii) a
supplemental executive retirement plan (the "SERP") substantially in accordance
with and no less favorable to Executive than the terms, provisions and benefits
under the supplemental executive retirement plan currently provided by the
Company, and (iv) any life insurance, health and accident plan or arrangement
made available by the Company, now or in the future, to its executives and key
management employees, subject to and on a basis consistent with the terms,
conditions and overall administration of such plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar year.
(c) an automobile paid for by the Company for use in the performance
of his services under this Agreement, in a manner substantially consistent with
past practices.
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(d) membership fees paid for by the Company with respect to any of
the Executive's business-related club memberships (it being understood that such
membership fees shall not include any fees for country clubs or other similar,
primarily social, clubs).
The Company also shall implement, as soon as reasonably practicable
after the Effective Date, a long-term incentive plan. Although the ability to
receive stock of the Company may not be available for such plan, the plan
nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those provided by similar companies, many
of which do provide stock options and/or other types of stock grants as
components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from time to time be
established by the Board, the Company shall pay or reimburse Executive for all
reasonable expenses actually incurred or paid by Executive during the Term in
the performance of his services under this Agreement, upon presentation of
expense statements or vouchers or such other supporting information as the
Company may require.
5. TERMINATION.
5.1 Cause. The Company may terminate Executive's employment
hereunder for Cause. For the purposes of this Agreement, the Company shall have
"Cause" to terminate Executive's employment hereunder only by reason of any one
or more of the following:
(i) Executive's conviction, by a court of competent and final
jurisdiction, of any crime (whether or not involving the Company or
any of its subsidiaries) which constitutes a felony in the
jurisdiction involved; or
(ii) Executive's commission of an act of fraud upon the
Company or any or its
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subsidiaries; or
(iii) Executive's repeated willful failure to perform in all
material respects his duties hereunder in accordance with the terms
of this Agreement which failure (other than by reason of death or
disability) continues uncorrected for a period of ten (10) days
after Executive shall have received written notice from the Board
stating with specificity the nature of such failure or refusal.
5.2 TERMINATION BY THE EXECUTIVE. Executive may terminate his
employment hereunder upon [thirty (30)] days' prior written notice to the
Company for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean (i) the material diminution of the nature or scope of the duties assigned
to Executive from that contemplated by Section 3 hereof, (ii) a reduction in
Executive's Base Salary, or a material reduction in Executive's fringe benefits
or any other material failure by the Company to comply with Section 4 hereof,
other than any such reduction or failure as shall apply to all executive
officers of the Company generally, (iii) ceased participation by Executive, for
any reason other than as a result of any action by Executive, in any employee
benefit plan of the Company with respect to which Executive is or was, prior to
such time, eligible to participate, (iv) the relocation of Executive's principal
place of employment more than twenty (20) miles from the location specified in
Section 3 hereof without Executive's consent, (v) the requirement that Executive
engage in a substantial amount of additional travel (as compared to Executive's
past practices) in the performance of his duties hereunder without Executive's
consent, or (vi) any other material breach by the Company of its obligations
under this Agreement. Good Reason shall not exist in the event of a sale or
disposition of a subsidiary or division of the Company and Executive either (a)
voluntarily agrees to be employed by such subsidiary or division, or (b) is
offered a comparable position with the Company. For purposes hereof, comparable
shall encompass such items as salary, benefits, duties and geographic location.
5.3 NOTICE OF TERMINATION. Any termination by the Company pursuant
to Section 5.1 above or by Executive pursuant to Section 5.2 above shall be
communicated by written notice (the "Notice of Termination"), which notice shall
indicate the specific termination provision in this Agreement relied upon for
such termination.
5.4 DATE OF TERMINATION. "Date of Termination" shall mean (i) if
Executive's employment is terminated pursuant to Section 5.1 or 5.2 hereof, the
date
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specified in the Notice of Termination, and (ii) if Executive's employment is
terminated by the Company other than for Cause or by Executive other than for
Good Reason, the date on which a Notice of Termination is given.
5.5 PAYMENTS UPON TERMINATION. (a) If the employment of Executive
with the Company is terminated (i)by the Company other than for Cause or (ii) by
the Executive for Good Reason, then Executive shall be entitled to receive from
the Company, and the Company shall pay to Executive, a lump sum severance
payment equal to the greater of (x) the aggregate Base Salary (at the rate in
effect at the Date of Termination) that Executive would have received for the
remainder of the Term if his employment had not been terminated, and (y) the
aggregate amount of the Base Salary (at the rate in effect at the Date of
Termination) which would be paid for a period of twenty-four (24) months, plus,
in either case, such other benefits or reimbursement of expenses payable to the
Executive pursuant to Sections 4.3 and 4.4 hereof (including, without
limitation, the SERP), and less such amounts as shall be required to be withheld
by the Company pursuant to applicable laws and regulations (the "Severance
Amount"). The Severance Amount shall not be present-valued and shall be payable
by the Company to Executive within thirty (30) days after Executive's
termination. Executive shall not be required to mitigate the Company's
obligation to pay the full Severance Amount by seeking employment or otherwise
and the Severance Amount shall not be decreased or otherwise offset as a result
of any compensation received by Executive from employment in any capacity. The
Severance Amount shall be deemed compensation payable to Executive for the
purpose of determining the total amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is terminated
(i) by the Company for Cause, or (ii) by the Executive other than for Good
Reason, then the Executive shall be entitled to receive, and the Company shall
pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
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under this Agreement.
6. Death or Disability.
6.1 DEATH. If Executive dies during the Term, this Employment
Agreement, other than the provisions of Section 6.3 hereof, shall terminate.
6.2 Disability. If, during the Term, Executive becomes physically or
mentally disabled, whether totally or partially, so that he is unable
substantially to perform his services hereunder for (i) a period of six (6)
consecutive months or (ii) for shorter periods aggregating six (6) months during
any eighteen (18) month period, the Company may at any time after the last day
of the six (6) consecutive months of disability or the day on which the shorter
periods of disability equal an aggregate of six (6) months, by written notice to
Executive (the "Disability Notice"), terminate the Term of the Executive's
employment hereunder.
6.3 Payments upon Death or Disability. Upon a termination due to the
death or disability of Executive, Executive (or, in the event of a termination
as a result of the death of Executive, Executive's estate (or a designated
beneficiary thereof)) shall be entitled to receive from the Company, and the
Company shall pay to Executive (or Executive's estate, if applicable) the amount
of any accrued and unpaid Base Salary and other benefits and reimbursement of
expenses payable to the Executive hereunder pursuant to Sections 4.3 and 4.4
hereof as of the date of Executive's death or the date of the Disability Notice,
as applicable. In addition, for a period of thirty (30) months following the
date of such termination, the Company shall continue to pay and provide to
Executive and Executive's dependents at the Date of Termination all medical
benefits pursuant to any plans and programs in which Executive was entitled to
participate immediately prior to the Date of Termination as if Executive were
still employed by the Company pursuant hereto. If Executive's participation in
any plan or program pursuant to which such medical benefits are provided to
Executive is barred as a result of such termination, the Company shall arrange
to provide Executive and Executive's dependents with benefits substantially
similar on an after tax basis to those which Executive was entitled to receive
under such plan or program.
7. Non-Competition; Confidentiality.
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7.1 NON-COMPETITION. Executive agrees that, during the Term and for
a period of [two years] following the date of termination of Executive's
employment hereunder (the "Restricted Period"), he will not, directly or
indirectly, own, manage, operate or control, or participate in the ownership,
management, operation or control of, or be connected as an officer, employee,
partner, director or otherwise with, or have any financial interest in, or aid
or assist anyone else in the conduct of, any entity or business which competes
with any material business conducted by the Company or by any group, division or
subsidiary of the Company, in any area where such business is being conducted,
or for which negotiations to conduct business are pending, at the date of such
termination (a "Competitive Operation"); PROVIDED, HOWEVER, that Executive may
acquire, solely as an investment and through market purchases, securities of any
corporation that are traded on any national securities exchange or listed on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), if Executive is not a controlling person of, or a member of a group
which controls, such corporation; and Executive does not, directly or
indirectly, own more than [one percent (1%)] of any class of securities of such
corporation.
7.2 Confidential Information; Personal Relationships. Executive
agrees that, during the Term and thereafter, he shall keep secret and retain in
strictest confidence, and shall not use for his benefit or the benefit of
others, any and all confidential information relating to the Company, including,
without limitation, trade secrets, customer lists, financial plans or
projections, pricing policies, marketing plans or strategies, business
acquisition or divestiture plans, new personnel acquisition plans, technical
processes, inventions and other research projects heretofore or hereafter
learned by Executive, and he shall not disclose any such information to anyone
outside the Company or any of its subsidiaries, except as required by law in
connection with any judicial or administrative proceeding or inquiry (provided
prior written notice thereof is given by Executive to the Company) or except
with the Company's prior written consent, unless such information is known
generally to the public or the trade through sources other than Executive's
unauthorized disclosure.
7.3 PROPERTY OF THE COMPANY. All memoranda, notes, lists, records
and other documents or papers (and all copies thereof), including such items
stored in computer memories, or microfiche or by any other means, made or
compiled by or on behalf of Executive, or made available to Executive, relating
to the Company or any successors thereto, are and shall be
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the property of the Company or any such successor and shall be delivered to the
Company or any such successor promptly at any time on request.
7.4 EMPLOYEES OF THE COMPANY. During the Restricted Period, the
Executive shall not, directly or indirectly, hire, solicit or encourage to leave
the employment of the Company, any of its employees or hire any such employee
who has left the employment of the Company.
7.5 RIGHTS AND REMEDIES UPON BREACH. If Executive breaches, or
threatens to commit a breach of, any of the provisions of this Section 7 (the
"Restrictive Covenants"), the Company and any successor thereto shall have the
following rights and remedies, each of which shall be independent of the other
and severally enforceable, and all of which shall be in addition to, and not in
lieu of, any other rights and remedies available to the Company under law or in
equity.
(a) SPECIFIC PERFORMANCE. The right and remedy to have the
Restrictive Covenants specifically enforced by any arbitrator or any court
having equity jurisdiction, it being acknowledged and agreed by Executive that
any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
(b) Accounting. The right and remedy to require Executive to account
for and pay over to the Company all compensation, profits, monies, accruals,
increments or other benefits (collectively, "Benefits") derived or received by
Executive as the result of any transactions constituting a breach of any of the
Restrictive Covenants, and Executive shall account for and pay over such
Benefits to the Company.
7.6 SEVERABILITY OF COVENANTS. Executive acknowledges and agrees
that the Restrictive Covenants are reasonable and valid in geographical and
temporal scope and in all other respects. Notwithstanding the foregoing, if any
arbitrator or court determines that any of the Restrictive Covenants, or any
part thereof, is invalid or unenforceable or should be reduced, the remainder of
the Restrictive Covenants shall not thereby be affected and shall be given full
effect without regard to the invalid Restrictive Covenants or portions thereof.
9
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8. INSURANCE. The Company may, from time to time, apply for and take
out, in its own name and at its own expense, naming itself or others as the
designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate to protect its interest. Executive
agrees to aid the Company in procuring such insurance by submitting to
reasonable medical examinations and by filling out, executing and delivering
such applications and other instruments in writing as may reasonably be required
by any insurance company to which the Company may apply for insurance.
9. INDEMNIFICATION. To the fullest extent permitted or required by
the laws of the State of Ohio, the Company shall indemnify and hold harmless
Executive, in accordance with the terms of such laws, if Executive is made a
party, or threatened to be made a party, to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and expenses associated
therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or related to this
Agreement shall be resolved by arbitration. Such arbitration shall be conducted
by an arbitrator mutually selected by the Company and Executive (or, if the
Company and Executive are unable to agree upon an arbitrator within ten (10)
days, then the Company and Executive shall each select an arbitrator, and the
arbitrators so selected shall mutually select a third arbitrator, who shall
resolve such dispute). Such arbitration shall be conducted in accordance with
the applicable rules of the American Arbitration Association. Any decision
rendered by an arbitrator pursuant hereto may be enforced by a court of
competent jurisdiction without review of such decision by such court. The
Company shall pay all of the fees and expenses of the arbitrators and the other
costs of arbitration. The Company also shall pay Executive's reasonable legal
fees and expenses incurred in connection with any successful enforcement by
Executive of his rights hereunder.
11. Miscellaneous.
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11.1 NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally,
telecopied or sent by certified or registered mail, postage prepaid, or by
Federal Express or similar overnight courier. Any such notice shall be deemed
given when delivered:
(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn:
Telecopy No.:
(ii) if to Executive, to:
----------------------------------
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11.2 WAIVERS AND AMENDMENTS. This Agreement may not be amended,
modified, superseded or cancelled except by a written instrument signed by the
Company and Executive. No delay on the part of any party in exercising any right
or remedy hereunder shall operate as a waiver thereof, nor shall any waiver on
the part of any party of any such right or remedy, nor any single or partial
exercise of any such right or remedy preclude any other or further exercise
thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9 hereof shall
survive the Term, irrespective of the reasons for termination of Executive's
employment hereunder.
11.4 Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
11.5 Entire Agreement. This Agreement (including the schedules,
annexes and exhibits hereto) contain the entire agreement between
11
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the parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and obligations
hereunder, may not be assigned by any party hereto without the prior written
consent of the other party.
11.7 Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original but all of which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By __________________________
Name:
Title:
_____________________________
[Executive]
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ANNEX A
TO EMPLOYMENT AGREEMENT OF
THOMAS E. PETRY
POSITION: Chairman and Chief Executive Officer
DUTIES: Serves as presiding officer of the Board of Directors. In that
capacity guides the deliberations and activities of that group.
Responsible for directing the Company toward the objective of
providing maximum profit and return on invested capital. Establishes
short-term and long-range objectives, plans, and policies, subject
to the approval of the Board of Directors. Represents the Company
before all of its constituencies, including, without limitation,
major customers, the financial community, the Company's operations
and host communities, and the public.
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ANNEX A
TO EMPLOYMENT AGREEMENT OF
ANDRIES RUIJSSENAARS
POSITION: President and Chief Operating Officer
DUTIES: Directs, administers and coordinates the activities of the Company
in accordance with policies, goals and objectives established by the
Chief Executive Officer and the Board of Directors. Assists the
Chief Executive Officer in the development of Company policies and
goals for, among others, operations, personnel, financial
performance and growth. Has direct line responsibility for all
operating units.
ANNEX A
TO EMPLOYMENT AGREEMENT OF
WAYNE R. WICKENS
POSITION: Senior Vice President and Group Executive
DUTIES: Plans, directs and controls all activities in certain profit centers
(currently ten Automotive Divisions) through the general managers of
those entities. Those general managers are in turn responsible for
production, research, engineering, marketing/sales, purchasing and
human resources in their operations.
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ANNEX A
TO EMPLOYMENT AGREEMENT OF
DAVID N. HALL
POSITION: Senior Vice President and Chief Financial Officer
DUTIES: Plans, directs and controls the Company's overall financial plans
and policies, and its accounting practices, and conducts the
Company's relationship with lending institutions and the financial
community. Directs treasury, budgeting, audit, tax, accounting,
information management, insurance and certain administrative
functions. Develops and coordinates necessary and appropriate
accounting and statistical data for all departments.
ANNEX A
TO EMPLOYMENT AGREEMENT OF
CARROLL D. CURLESS
POSITION: Vice President and Controller
DUTIES: Directs and has responsibility for the Company's accounting
practices, the maintenance of its fiscal records, and the
preparation of its financial reports. Directs and has overall
supervisory responsibility for general and property accounting,
internal auditing, cost accounting, and budgetary controls.
Appraises operating results in terms of costs, budgets, policies of
operations, trends and increased profit opportunities.
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ANNEX A
TO EMPLOYMENT AGREEMENT OF
JAMES A. RALSTON
POSITION: Vice President, General Counsel and Secretary
DUTIES: As chief legal officer directs the legal affairs of the Company.
Provides legal counsel and guidance in the ordinary and special
activities of the Company to insure maximum protection of its legal
rights utilizing broad familiarity with most legal disciplines.
Participates in senior management policy deliberations. Directs the
defense of suits or claims and manages the prosecution of the
Company's claims against others. Supervises the legal aspects of
Company transactions and the preparation of reports and statements
of a legal nature. Supervises the environmental compliance function
within the Company. Serves as Secretary in accordance with the
charter, by-laws, and other legal requirements. Coordinates meetings
of the Board of Directors and keeps minutes of such meetings.
Attends to Company notices and correspondence, and conducts
relations with shareholders on matters concerning meetings of
shareholders or share holdings.
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "7.12"
FORM OF AMENDMENTS TO SUPPLEMENTAL SEVERANCE PROGRAM
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[THIS PAGE LEFT BLANK INTENTIONALLY]
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AMENDMENT AND RESTATEMENT OF THE
EAGLE-PICHER INDUSTRIES, INC. SEVERANCE PLAN
EFFECTIVE ___________
SECTION 1. THE AMENDMENT
1.1 THE AMENDMENT. Effective upon entry of an order confirming the Third
Amended Consolidated Plan of Reorganization, Eagle-Picher
Industries, Inc. ("Company") amends the severance plan (the "Plan"),
adopted effective May 13, 1991, to read as follows:
SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used in the Plan, the following terms shall
mean:
(a) "ADMINISTRATOR" means the Company's Director of Taxes or his
designee. The Administrator shall be a named fiduciary under the
Plan.
(b) "AFFILIATES" means Daisy Parts, Inc., Transicoil Inc., Michigan
Automotive Research Corporation, Eagle-Picher Fluid Systems, Inc.,
Eagle-Picher Minerals, Inc. and Hillsdale Tool & Manufacturing
Company.
(c) "ANNUAL COMPENSATION" means the total of all compensation, including
wages, salary, and any other benefit of monetary value, whether paid
in the form of cash or otherwise, which was paid as consideration
for the participant's service during the 12-month
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period preceding the participant's severance, or the total which
would have been so paid at the participant's usual rate of
compensation for any participant who did not work for the Company or
an Affiliate for the full 12-month period preceding the
participant's severance.
(d) "BASE PAY" means the participant's base annual pay rate at the date
of his termination of employment.
(e) "BUSINESS DAY" means any day on which commercial banks are required
to be open for business in Cincinnati, Ohio.
(f) "COMPANY" means Eagle-Picher Industries, Inc., or any successor
thereto.
(g) "CONFIRMATION DATE" means the date of entry of an order confirming
the Reorganization Plan.
(h) "CONFIRMATION ORDER" means the order or orders of the court
confirming the Reorganization Plan.
(i) "EFFECTIVE DATE" means May 13, 1991 pursuant to Judge Burton
Perlman's order entered that date.
(j) "ELIGIBLE EMPLOYEES" means division presidents (including the
presidents of wholly-owned subsidiaries), all persons employed in
the Cincinnati, Ohio General Office as salaried employees except
Officers, and those employees designated by the Chief Executive
Officer of the Company as key division employees.
(k) "OFFICERS" means officers of Eagle-Picher Industries, Inc.
(l) "REORGANIZATION EFFECTIVE DATE" means the first Business Day after
the date on which all of the conditions precedent to the
effectiveness of the Reorganization Plan specified in Section 7.9 of
the Reorganization Plan have been satisfied or waived, or if a stay
of the Confirmation Order is in effect on such date, the first
Business Day after the expiration, dissolution, or lifting of such
stay.
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(m) "REORGANIZATION PLAN" means the Third Amended Consolidated Plan of
Reorganization of the Company and its affiliated debtors, either in
its present form or as it may be amended, supplemented, or otherwise
modified from time to time, and the exhibits and schedules to the
foregoing, as the same may be in effect at the time such reference
becomes operative.
(n) "SERVICE" means Vesting Service as defined in the Eagle-Picher
Retirement Income Plan for Salaried Employees.
(o) "WEEK'S PAY" means a participant's Base Pay divided by 52.
2.2 GENDER REFERENCE. Any words in this Plan document (or amendments to
it) which are used in one gender shall be read and construed to mean
or include the other gender wherever they would so apply.
SECTION 3. PARTICIPATION
3.1 PARTICIPANTS. Eligible Employees employed on the Effective Date
shall become participants on that date.
3.2 NEW PARTICIPANTS. Anyone meeting the definition of Eligible Employee
hired or designated by the Chief Executive Officer after the
Effective Date shall become a participant after completion of three
months of Service. The Company's Chief Executive Officer can waive
any service period required of a new participant by a written letter
to the participant with a copy to the Administrator.
SECTION 4. BENEFITS
4.1 SEVERANCE BENEFIT. Participants terminated by the Company or an
Affiliate after the Effective Date other than for cause will receive
a Base Severance Benefit, a Supplemental Severance Benefit and Group
Medical and Life Insurance Benefits as described herein. The
eligibility for, and the level of, benefits will be determined by
the employee's status as a division president or key employee at the
date of the employee's termination of employment. If the operation
for which a
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participant is working is sold and the participant continues to work
with the operation, or another entity affiliated with the buyer,
after the sale, the participant will not be eligible for the Base
Severance Benefit, the Supplemental Severance Benefit, or the Group
Medical and Insurance Benefits.
4.2 BASE SEVERANCE BENEFIT. The Base Severance Benefit will provide one
Week's Pay for each completed year of Service and, for any partial
year of Service, one-twelfth Week's Pay for each completed month of
Service. Payments shall be reduced dollar for dollar by compensation
earned for services rendered by a participant for a subsequent
employer during the period Base Severance Benefits are being paid.
The minimum Base Severance Benefit shall be two Week's Pay. Payments
under the Base Severance Benefit will be made under the general
payroll practice for the unit in which the participant was employed.
4.3 SUPPLEMENTAL SEVERANCE BENEFIT. The Supplemental Severance Benefit
will provide one year's Base Pay for division presidents; six
months' Base Pay for salaried General Office and division employees
designated as key employees by the Chief Executive Officer; and
three months' Base Pay for all other salaried General Office
employees. The Supplemental Severance Benefit for a salaried
employee employed in the Cincinnati, Ohio, General Office who
becomes entitled to a benefit under Section 4.1 after age 50 and
before the first anniversary of the Reorganization Effective Date
will be twice the Supplemental Severance Benefit otherwise provided
under this Section. The Supplemental Severance Benefit shall be paid
in a lump sum on termination of employment.
4.4 GROUP MEDICAL AND LIFE INSURANCE BENEFITS. The Group Medical and
Life Insurance Benefits will provide continued participation in the
medical indemnity benefits, self-funded medical benefits, health
maintenance organizations, and group term life insurance benefits
(including the additional group term life insurance available at
employee cost) as if the participant were an active employee of the
Company or an Affiliate. These benefits will continue for one week
for each year of Service unless similar coverage is obtained from a
subsequent employer. Any period for which medical benefits are
provided hereunder shall reduce the period for which COBRA benefits
are available. These benefits shall continue under the participant's
election in force when his severance occurs, subject to any new
election that would be available to him as an active employee. If
the HMO or medical
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indemnity provider refuses to continue coverage for the participant,
the participant will receive coverage under the self-funded medical
benefit program available to employees at his location.
4.5 VACATION PAY. Any existing practices of the Company or Affiliates
with respect to payment for unused vacation time at termination of
employment shall not be affected by this Plan.
4.6 MAXIMUM SEVERANCE BENEFITS. Payments under the Plan shall not exceed
twice the participant's Annual Compensation.
4.7 DEATH OF PARTICIPANT. No benefits shall be payable upon the death of
a participant except for any payment which may have been due prior
to his date of death.
SECTION 5. ADMINISTRATION
5.1 POWERS AND DUTIES. The Administrator shall have the power and the
duty to take all action, and to make all decisions necessary or
proper to carry out the Plan, including, without limitation, the
following:
(a) To interpret the Plan, which interpretations shall be final
and conclusive;
(b) To compute the benefit to be paid to any person under the
Plan;
(c) To provide procedures for withholding of any income or
employment taxes from benefits payable hereunder.
5.2 CLAIMS PROCEDURE.
(a) CLAIM, DENIAL AND NOTICE: Any participant who disagrees with
the Administrator's determination of his right to benefits or
the amount of the benefits shall file a written claim for the
benefits he believes he is entitled to. If the Administrator
denies the claim, in whole or in part, he
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shall furnish the participant with written notice of the
denial of his claim within sixty (60) days of receipt of the
claim. Such notice shall be written in a manner calculated to
be understood by the participant and shall contain the
specific reasons for such denial, specific references to
pertinent Plan provisions on which the denial is based, a
description of additional material or information which is
needed to complete the claim and why such is necessary, and an
explanation of the Plan's appeal procedure.
(b) APPEAL: Within sixty (60) days after the receipt of a notice
that his claim was denied, the claimant may appeal the denial
of his claim to the Administrator in writing stating the
reason for his appeal and submitting any issues or comments
for the Administrator's review.
(c) DECISION ON APPEAL: Within sixty (60) days of receipt of an
appeal, the Administrator shall mail to the applicant a
written notice of his decision setting forth, in a manner
calculated to be understood by the applicant, the specific
reasons for his decision and the specific references to the
pertinent Plan provisions on which his decision was based.
5.3 INDEMNITY FOR LIABILITY. The Company shall indemnify the
Administrator against any and all claims, losses, damages, expenses,
including counsel fees, incurred by the Administrator and any
liability, including any amounts paid in settlement with the
Company's approval, arising from the Administrator's action or
failure to act, except when the same is judicially determined to be
attributable to the gross negligence or willful misconduct of the
Administrator.
SECTION 6. MISCELLANEOUS
6.1 PLAN YEAR. The plan year shall be the calendar year.
6.2 AMENDMENT OR TERMINATION. The Company reserves the right to amend,
extend or terminate this Plan at any time. However, the
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<PAGE>
benefits provided in Section 4.1 shall remain in effect for at least
one year subsequent to the Reorganization Effective Date. A
participant whose employment terminates after the termination or
amendment of this Plan shall be entitled only to the benefits
available under the Plan, if any, in existence at his termination of
employment.
In Witness Whereof, Eagle-Picher Industries, Inc. has caused this
amendment and restatement of the plan to be executed by its duly authorized
corporate officers this _________ day of November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By: _______________________
Attest: Thomas E. Petry
Chairman of the Board and
Chief Executive Officer
___________________________
EAGLE-PICHER INDUSTRIES, INC. OFFICERS' SEVERANCE PLAN
SECTION 1. THE PLAN
1.1 THE PLAN. Effective upon entry of an order confirming the Third
Amended Consolidated Plan of Reorganization, Eagle-Picher
Industries, Inc. ("Company") adopts the following severance plan
(the "Plan"). The Plan is intended to be an employee welfare benefit
plan under Section 201(1) of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"). To the extent it may be
determined to be a pension plan, it is an unfunded plan maintained
to provide benefits to certain individuals described in Section
201(2) of ERISA.
SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used in the Plan, the following terms shall
mean:
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(a) "ADMINISTRATOR" means the Company's Director of Taxes or his
designee. The Administrator shall be a named fiduciary under the
Plan.
(b) "BASE PAY" means the participant's base annual pay rate at the date
of his termination of employment.
(c) "BUSINESS DAY" means any day on which commercial banks are required
to be open for business in Cincinnati, Ohio.
(d) "COMPANY" means Eagle-Picher Industries, Inc., or any successor
thereto.
(e) "CONFIRMATION DATE" means the date of entry of an order confirming
the Reorganization Plan.
(f) "CONFIRMATION ORDER" means the order or orders of the court
confirming the Reorganization Plan.
(g) "ELIGIBLE EMPLOYEES" means Officers of the Company employed in the
Cincinnati, Ohio General Office.
(h) "EXECUTIVE OFFICERS" means Thomas E. Petry, Andries Ruijssenaars,
David N. Hall, Wayne R. Wickens, Carroll D. Curless and James
A.Ralston.
(i) "OFFICERS" means officers of Eagle-Picher Industries, Inc.
(j) "REORGANIZATION EFFECTIVE DATE" means the first Business Day after
the date on which all of the conditions precedent to the
effectiveness of the Reorganization Plan specified in Section 7.9 of
the Reorganization Plan have been satisfied or waived, or if a stay
of the Confirmation Order is in effect on such date, the first
Business Day after the expiration, dissolution, or lifting of such
stay.
(k) "REORGANIZATION PLAN" means the Third Amended Consolidated Plan of
Reorganization of the Company and its affiliated debtors, either in
its present form or as it may be amended, supplemented,
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or otherwise modified from time to time, and the exhibits and
schedules to the foregoing, as the same may be in effect at the time
such reference becomes operative.
(l) "SERVICE" means Vesting Service as defined in the Eagle-Picher
Retirement Income Plan for Salaried Employees.
(m) "WEEK'S PAY" means a participant's Base Pay divided by 52.
2.2 GENDER REFERENCE. Any words in this Plan document (or amendments to
it) which are used in one gender shall be read and construed to mean
or include the other gender wherever they would so apply.
SECTION 3. PARTICIPATION
3.1 PARTICIPANTS. Eligible Employees employed on the Confirmation Date
shall become participants on that date. Participation by the
Executive Officers shall cease upon the effective date of the
employment contracts described in Section 7.11 of the Reorganization
Plan.
3.2 NEW PARTICIPANTS. Anyone meeting the definition of Eligible Employee
after the Confirmation Date shall become a participant after
completion of three months of Service. The Company's Chief Executive
Officer can waive any service period required of a new participant
by a written letter to the participant with a copy to the
Administrator.
SECTION 4. BENEFITS
4.1 SEVERANCE BENEFIT. Participants terminated by the Company on or
after the Confirmation Date other than for cause will receive a Base
Severance Benefit, a Supplemental Severance Benefit and Group
Medical and Life Insurance Benefits as described herein.
4.2 BASE SEVERANCE BENEFIT. The Base Severance Benefit will provide one
Week's Pay for each completed year of Service and, for any partial
year of Service, one-twelfth Week's Pay for each completed month of
Service. Payments shall be reduced dollar for dollar by compensation
earned for services rendered by a participant for a subsequent
employer during the period Base Severance Benefits are being paid.
The minimum Base Severance Benefit shall be two Week's Pay. Payments
under the Base Severance Benefit will be made under
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the general payroll practice for the unit in which the participant
was employed.
4.3 SUPPLEMENTAL SEVERANCE BENEFIT. The Supplemental Severance Benefit
will provide one year's Base Pay. The Supplemental Severance Benefit
will provide two years' Base Pay for an Officer employed in the
Cincinnati, Ohio, General Office who becomes entitled to a benefit
under Section 4.1
(i) before the first anniversary of the Reorganization Effective
Date, and
(ii) after the Officer reaches age 50.
The Supplemental Severance Benefit shall be paid in a lump sum on
termination of employment.
4.4 GROUP MEDICAL AND LIFE INSURANCE BENEFITS. The Group Medical and
Life Insurance Benefits will provide continued participation in the
medical indemnity benefits, self-funded medical benefits, health
maintenance organizations, and group term life insurance benefits
(including the additional group term life insurance available at
employee cost) as if the participant were an active employee of the
Company or an Affiliate. These benefits will continue for one week
for each year of Service unless similar coverage is obtained from a
subsequent employer. Any period for which medical benefits are
provided hereunder shall reduce the period for which COBRA benefits
are available. These benefits shall continue under the participant's
election in force when his severance occurs, subject to any new
election that would be available to him as an active employee. If
the HMO or medical indemnity provider refuses to continue coverage
for the participant, the participant will receive coverage under the
self-funded medical benefit program available to employees at his
location.
4.5 VACATION PAY. Any existing practices of the Company or Affiliates
with respect to payment for unused vacation time at termination of
employment shall not be affected by this Plan.
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4.6 DEATH OF PARTICIPANT. No benefits shall be payable upon the death of
a participant except for any payment which may have been due prior
to his date of death.
SECTION 5. ADMINISTRATION
5.1 POWERS AND DUTIES. The Administrator shall have the power and the
duty to take all action, and to make all decisions necessary or
proper to carry out the Plan, including, without limitation, the
following:
(a) To interpret the Plan, which interpretations shall be final
and conclusive;
(b) To compute the benefit to be paid to any person under the
Plan;
(c) To provide procedures for withholding of any income or
employment taxes from benefits payable hereunder.
5.2 CLAIMS PROCEDURE.
(a) CLAIM, DENIAL AND NOTICE: Any participant who disagrees with
the Administrator's determination of his right to benefits or
the amount of the benefits shall file a written claim for the
benefits he believes he is entitled to. If the Administrator
denies the claim, in whole or in part, he shall furnish the
participant with written notice of the denial of his claim
within sixty (60) days of receipt of the claim. Such notice
shall be written in a manner calculated to be understood by
the participant and shall contain the specific reasons for
such denial, specific references to pertinent Plan provisions
on which the denial is based, a description of additional
material or information which is needed to complete the claim
and why such is necessary, and an explanation of the Plan's
appeal procedure.
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(b) APPEAL: Within sixty (60) days after the receipt of a notice
that his claim was denied, the claimant may appeal the denial
of his claim to the Administrator in writing stating the
reason for his appeal and submitting any issues or comments
for the Administrator's review.
(c) DECISION ON APPEAL: Within sixty (60) days of receipt of an
appeal, the Administrator shall mail to the applicant a
written notice of his decision setting forth, in a manner
calculated to be understood by the applicant, the specific
reasons for his decision and the specific references to the
pertinent Plan provisions on which his decision was based.
5.3 INDEMNITY FOR LIABILITY. The Company shall indemnify the
Administrator against any and all claims, losses, damages, expenses,
including counsel fees, incurred by the Administrator and any
liability, including any amounts paid in settlement with the
Company's approval, arising from the Administrator's action or
failure to act, except when the same is judicially determined to be
attributable to the gross negligence or willful misconduct of the
Administrator.
SECTION 6. MISCELLANEOUS
6.1 PLAN YEAR. The plan year shall be the calendar year.
6.2 AMENDMENT OR TERMINATION. The Company reserves the right to amend,
extend or terminate this Plan at any time. However, the benefits
provided in Section 4.1 shall remain in effect for at least one year
subsequent to the Reorganization Effective Date. A participant whose
employment terminates after the termination or amendment of this
Plan shall be entitled only to the benefits available under the
Plan, if any, in existence at his termination of employment.
6.3 UNFUNDED PLAN. The Plan shall be unfunded and all benefit payments
shall be made from the general assets of Eagle-Picher Industries,
Inc.
In Witness Whereof, Eagle-Picher Industries, Inc. has caused this
plan
<PAGE>
<PAGE>
to be executed by its duly authorized corporate officers this _________ day of
November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By:
--------------------------
Attest: Thomas E. Petry
Chairman of the Board and
Chief Executive Officer
- ------------------------
/s/ James A. Ralston
--------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.1"
EXECUTORY CONTRACTS OR UNEXPIRED LEASES
TO BE ASSUMED
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: CINCINNATI INDUSTRIAL MACHINERY
- --------------------------------------------------------------------------------
Herman Engineering Inc Sales Representative 0.00
5011 28th Street, S.E. Agreement
Grand Rapids, MI 45912
- --------------------------------------------------------------------------------
Holloway & Assoc Sales Representative 0.00
P.O. Box 100 Agreement
501 Archdale Dr., Ste. 225
Charlotte, NC 28217
- --------------------------------------------------------------------------------
Lohrer, Larry Sales Representative 0.00
260 Northland Blvd., Ste. 224 Agreement
Cincinnati, OH 45246-3651
- --------------------------------------------------------------------------------
Mechanics Laundry Service Agreement 31.66
711 E. Vermont Ave. 10/19/90
Indianapolis, IN 46202
- --------------------------------------------------------------------------------
A8.1-1
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: CONSTRUCTION EQUIPMENT
- --------------------------------------------------------------------------------
Caterpillar, Inc. Warranty Agreement 0.00
600 W. Washington St.
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
Equipos de Acuna SA de CV Intercompany Agreement undetermined
Carretera Presa La Amistad, KM 9 07/23/86
CD Acuna, Coahuila Mexico
- --------------------------------------------------------------------------------
Weaver, David Real Estate Lease 139.38
500 E. 50th Street 01/01/80
Lubbock, TX 79404-3726
- --------------------------------------------------------------------------------
A8.1-2
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: EAGLE-PICHER MINERALS, INC.
- --------------------------------------------------------------------------------
ACF Industries Inc. RR Hopper Car Lease 0.00
3301 Rider Trail South 08/01/79
Earth City, MO 63045-1309
- --------------------------------------------------------------------------------
ACF Industries Inc. RR Hopper Car Lease 0.00
3301 Rider Trail South 06/01/88
Earth City, MO 63045-1309
- --------------------------------------------------------------------------------
Anderson, Virginia C. Mining Lease 0.00
6861 N. Ocean Blvd. 01/01/80
Ocean Ridge, FL 33435
- --------------------------------------------------------------------------------
Bohanan, James A. Mining Lease 0.00
208 Parkview 01/01/80
PO Box 293
Luling, TX 78648
- --------------------------------------------------------------------------------
Brown, Lola K. Mining Lease 150.00
Route 1, Box 357 04/16/74
Fernely, NV 89408-9746
- --------------------------------------------------------------------------------
Brown, Lola K. Mining Lease 0.00
Route 1, Box 357 03/01/84
Fernely, NV 89408-9746
- --------------------------------------------------------------------------------
Catellus Development Corp Mining Lease 0.00
201 Mission Street, Ste. 250 12/01/71
San Francisco, CA 94105
- --------------------------------------------------------------------------------
Catellus Development Corp Commercial Lease 0.00
201 Mission Street, Ste. 250 02/01/80
San Francisco, CA 94105
- --------------------------------------------------------------------------------
Copeland, Ella Mae Mining Lease 0.00
1452 Plymouth Rock 01/01/80
Clovis, CA 93612-2444
- --------------------------------------------------------------------------------
Cowie, Elizabeth Herrmann Mining Lease 1,530.08
4 Hawk Lane, North Oaks 01/01/80
St. Paul MN 55127
- --------------------------------------------------------------------------------
Diatomite Products Co Mining Lease 0.00
5 Greenwood Ave., N.W. 07/18/79
Bend, OR 97701-2028
- --------------------------------------------------------------------------------
Eagle-Picher Industries Inc Agency Agreement undetermined
580 Walnut St. 12/01/86
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Eagle-Picher Industries Inc Export Management Agreement undetermined
580 Walnut St. 12/01/86
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
A8.1-3
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Fischer, Dalmar Mining Lease 0.00
618 Beacon St. 01/01/80
Newton Centre, MA 02159
- --------------------------------------------------------------------------------
Fischer, Jeannette Mining Lease 0.00
618 Beacon Street 01/01/80
Newton Center, MA 02159
- --------------------------------------------------------------------------------
Fisk, Walter M. Mining Lease 400.00
P.O. Box 458 07/27/87
Lovelock, NV 89419-0458
- --------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 04/01/89
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 09/01/90
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------
GE Rail Car Service Corp. RR Hopper Car Lease 0.00
33 W. Monroe Street 10/01/90
Chicago, IL 60603-5302
- --------------------------------------------------------------------------------
Grove, Robert E. Farm Lease 1,331.45
2331 Loop Road 04/01/87
Vale, OR 97918-5636
- --------------------------------------------------------------------------------
Knight, James A. Mining Lease 4,131.23
135 S. Elm St. 01/01/80
Hinsdale, IL 60521
also:
- -----
c/o S. Duhl, Schwarts & Freeman
401 N. Michigan #1900
Chicago, IL 60611-4206
- --------------------------------------------------------------------------------
Moore, Leonard W. Farm Lease 0.00
Route 1, Box 451 04/01/87
Vale, OR 97918-9801
- --------------------------------------------------------------------------------
Moran, Richard T. Residential Lease 0.00
2558 Graham Blvd. 12/22/89
Vale, OR 97918-5625
- --------------------------------------------------------------------------------
Rauch, John Rental Agreement 0.00
1340 Nixon Avenue 01/29/80
Reno, NV 89509-2640
- --------------------------------------------------------------------------------
Savage, Louise Mining Lease 0.00
Savage, Thomas & Thomas Jr. 01/01/80
Trust of T. Savage
1949/T.C. Savage, Trustee
1700 1st Bank Building
St. Paul, MN 55101
- --------------------------------------------------------------------------------
A8.1-4
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
SFP Minerals Corp. Mineral Lease 0.00
P.O. Box 27019 12/01/66
Albuquerque, NM 87125-7019
- --------------------------------------------------------------------------------
SFP Minerals Corp. Sand & Gravel Lease 4,364.32
P.O. Box 27019 11/14/85
Albuquerque, NM 87125-7019
- --------------------------------------------------------------------------------
Southern Pacific Trans Co Commercial Lease 17.28
One Market Plaza 12/01/70
San Francisco, CA 94105
- --------------------------------------------------------------------------------
Southern Pacific Trans Co. Industrial Lease 0.00
One Market Plaza 03/14/80
San Francisco, CA 94105
- --------------------------------------------------------------------------------
State of Oregon Mining Lease 0.00
Division of State Lands 09/02/82
1600 State Street
Salem, OR 97310-0302
- --------------------------------------------------------------------------------
Terminal Mini Warehouse Lease 12/15/83 61.94
2900 Vassar Street
Reno, NV 89502-3224
- --------------------------------------------------------------------------------
Terminal Mini Warehouse Rental Agreement 0.00
2900 Vassar Street 04/01/84
Reno, NV 89502-3224
- --------------------------------------------------------------------------------
Terminal Mini Warehouse Rental Agreement 0.00
2900 Vassar Street 04/01/84
Reno, NV 89502-3224
- --------------------------------------------------------------------------------
Tweedt, Andre M., Jr. Mining Lease 16.67
P.O. Box 59 03/01/84
Durham, CA 95938-0059
- --------------------------------------------------------------------------------
Tweedt, John A. Mining Lease 16.67
11895 Parey Avenue 03/01/84
Red Bluff, CA 96080-8982
- --------------------------------------------------------------------------------
Tweedt, Peter Mining Lease 16.67
424 Stanford Drive 03/01/84
Arcadia, CA 91006
- --------------------------------------------------------------------------------
Twiname, John & Carolyn A. Mining Lease 0.00
60 East End Avenue 01/01/80
New York, NY 10028-7907
- --------------------------------------------------------------------------------
US Postmaster Post Office Box Rental 0.00
2000 Vassar 03/20/80
Reno, NV 89510
- --------------------------------------------------------------------------------
A8.1-5
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: ELECTRONICS
- --------------------------------------------------------------------------------
Abel Lemon et al Distributor Sales Agreement 0.00
Division of La Porte Group 02/15/90
Australia, Ltd.
26 Fariola Street
Silverwater, New South Wales,
2141 Australia
- --------------------------------------------------------------------------------
Albright, Lawrence Consultant Agreement 58.06
Route 1, Box 365 10/15/84
Neosho, MO 64850-9801
- --------------------------------------------------------------------------------
Chemag Aktiengesellschaft Distributor Sales Agreement 0.00
Postfach 970167 08/21/90
Senckenbergenlage 10/12
D-6000 Frankfurt AM Main
97 Germany
- --------------------------------------------------------------------------------
City of Joplin Real Estate Lease 0.00
P.O. Box 1355 10/01/90
303 E. 3rd Street
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH License 0.00
Bahnhofsplatz 6 06/26/89
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH Customer Sales Contract 0.00
Bahnhofsplatz 6 06/26/90
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------
Diehl & Eagle-Picher GMBH Customer Sales Contract 0.00
Bahnhofsplatz 6 08/29/90
D-8500 Nuernberg 70
Germany
- --------------------------------------------------------------------------------
Diehl GMBH & C Cooperation Agreement 0.00
Stephanstrassr 49 06/09/89
D-8500 Nuernberg 30
Germany
- --------------------------------------------------------------------------------
Dons Machine Shop Lease 0.00
1021 Moffet Street 07/07/77
Joplin, MO 64801-1024
- --------------------------------------------------------------------------------
Evode Laboratories Secrecy Agreement 0.00
Stafford St. 16 3 EH 02/10/89
United Kingdom
- --------------------------------------------------------------------------------
A8.1-6
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Flexibulk Ltd. Distributor Sales Agreement 0.00
Davidson House Upper St. John's 05/14/90
Street
Lichfield, Staffordshire
WS14 9DU United Kingdon
- --------------------------------------------------------------------------------
HB Fuller Co, Research & Dev. Confidentiality Agreement 0.00
Laboratory 09/07/89
1200 Wolters Blvd.
Vadnais Heights, MN 55110-5146
- --------------------------------------------------------------------------------
Le Clanche SA License 0.00
48 Avenue De Grandson
Ch 1401 Yuerdon, Switzerland
- --------------------------------------------------------------------------------
Massey Machine Shop Lease 0.00
1915 Iron Gates Road 01/01/78
Joplin, MO 64801
- --------------------------------------------------------------------------------
Meheffy, Orville A. Medical Services Agreement 0.00
2817 McClelland Blvd., Ste. 108 02/01/86
Joplin, MO 64801
- --------------------------------------------------------------------------------
Morton International Secrecy Agreement 0.00
1275 Lake Avenue 01/01/83
Woodstock, IL 60098-7415
- --------------------------------------------------------------------------------
Swiss Federal Aircraft Factory License 0.00
CH 6032 Emmen, Switzerland
- --------------------------------------------------------------------------------
Union Carbide Chemicals & Plastics License Agreement 0.00
39 Old Ridgebury Road 10/01/82
Danbury, CT 06817-0001
- --------------------------------------------------------------------------------
A8.1-7
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: FABRICON PRODUCTS
- --------------------------------------------------------------------------------
Davies Packing Manufacturer Representative 0.00
P.O. Box 3825 07/19/81
2901 Brixham Drive
Richmond, VA 23235-7825
- --------------------------------------------------------------------------------
Jackson & Assoc. Manufacturer Representative 0.00
5826 Castle Lane 03/26/90
Norcross, GA 30093-3801
- --------------------------------------------------------------------------------
Marks, George Manufacturer Representative 0.00
310 Bok Road 05/01/83
Wyncote, PA 19095-2004
- --------------------------------------------------------------------------------
Pierce, Earl Manufacturer Representative 0.00
7 N. Gate Road 05/01/83
West Chester, PA 19380
- --------------------------------------------------------------------------------
A8.1-8
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: GENERAL OFFICE
- --------------------------------------------------------------------------------
BIS Offsite Records Real Property Lease - 32.28
318 W. Third St. Storage
Cincinnati, Ohio 45202-3408
- --------------------------------------------------------------------------------
Brooks, BB Mineral Rights Interest - 0.00
1501 Mission 07/30/80
Bartlesville, OK 74003
- --------------------------------------------------------------------------------
Bunting Bearings Corp. Subordination Agreement - 0.00
P.O. Box 729 02/23/89
1001 Holland Park Blvd.
Holland, OH 43528-0729
- --------------------------------------------------------------------------------
Bunting Bearings Corp. Indemnity Agreement - 0.00
P.O. Box 729 02/23/89
1001 Holland Park Blvd.
Holland, OH 43528-0729
- --------------------------------------------------------------------------------
City of Joplin Lease & Operation Agreement 0.00
303 E. Third Street - 12/18/90
P.O. Box 1355
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------
City of Joplin Lease & Operation Agreement 0.00
303 E. Third Street - 12/18/90
P.O. Box 1355
Joplin, MO 64802-1355
- --------------------------------------------------------------------------------
Cooper, Geoffrey Vernon Acquisition of Shares (GVC) 189,825.80
Green Hayes, Broad Street - 08/25/88 (British pounds
Brixworth sterling)
Northamptonshire, England, U.K.
- --------------------------------------------------------------------------------
Donlen Corporation Master Agreement 44 0.00
500 Lake Cook Road
Deerfield, IL 60015-4996
- --------------------------------------------------------------------------------
Eagle-Picher, Inc. Export Management Agreement undetermined
580 Walnut Street - 01/01/85
Suite 1300
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Eagle-Picher, Inc. Agency Agreement - 01/01/85 undetermined
580 Walnut Street
Suite 1300
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Firm Diehl Incorporation of Joint 0.00
Stephenstrasse 49 Company, amendments 1978,
8500 Nuernberg 30 1986, 1989 - 05/19/71
Federal Republic of Germany
- --------------------------------------------------------------------------------
A8.1-9
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Foundation Technology Ltd. License Agreement - 0.00
28 Nerang Centre 06/28/89
Price Street, Nerange,
Queensland, 4211 Australia
- --------------------------------------------------------------------------------
Goldman Sachs Group Industrial Revenue Bond 932.40
85 Broad Street (Remarketing Agent-Oregon
New York, NY 10005 IRB) - 12/01/84
- --------------------------------------------------------------------------------
Lane, Vincent G.J. Acquisition of Shares; 126,860.00
The Beeches, Burnmill Road Indemnity (GVC) - 08/25/88 (British pounds
Market Harborough sterling)
Leicestershire, England LE16 7JG
- --------------------------------------------------------------------------------
Ohio Office Machines Maintenance Agreement - 0.00
124 Burkhart Avenue 08/15/90
Cincinnati, OH 45215
- --------------------------------------------------------------------------------
Pitney Bowes Credit Corp. Equipment Lease - 06/01/88 12.77
P. O. Box 5151
Norwalk, CT 06851
- --------------------------------------------------------------------------------
Pitney Bowes Corp. Maintenance Agreement - 0.00
P.O. Box 14447 01/01/91
Cincinnati, OH 45214
- --------------------------------------------------------------------------------
Powers Energy, Inc. Mineral Rights Interest - 0.00
11930 Menaul Blvd., N.E. 07/30/80
Suite 223
Albuquerque, NM 87112-2461
- --------------------------------------------------------------------------------
Rozai Kogyo Kaisha License Agreement - 0.00
5, 1-Chome Minami 04/18/70
Horeidori Nishiku
Osaka, Japan
- --------------------------------------------------------------------------------
Security Water & Sanitation Dist. Test Well License & Land 1,431.50
231 Security Blvd. Use Agreement - 04/01/90
P.O. Box 5156
Joplin, MO 64802
- --------------------------------------------------------------------------------
Sun Refining & Marketing Co. Mineral Rights Interest - 0.00
P.O. Box 2039 07/30/80
Tulsa, OK 74102-2039
- --------------------------------------------------------------------------------
Veluwse Machine Industries BV License Agreements - 0.00
P. O. Box 161 05/30/73
816 AD EDE
The Netherlands
- --------------------------------------------------------------------------------
A8.1-10
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: HILLSDALE TOOL
- --------------------------------------------------------------------------------
Grede Vassar Inc. Real Estate Lease 0.00
P.O. Box 26499 06/01/89
Milwaukee, WI 53226-0499
- --------------------------------------------------------------------------------
A8.1-11
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: INJECTION MOLDING (PARIS)
- --------------------------------------------------------------------------------
Future Three Software Inc. Software Support Agreement 0.00
33031 Schoolcraft Rd. 03/22/90
Livonia, MI 48150-1604
- --------------------------------------------------------------------------------
Mid American Telephone Supply Telephone System Service 0.00
1628 Wabash 02/18/90
Terre Haute, IN 47807-3321
- --------------------------------------------------------------------------------
A8.1-12
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: MAT
- --------------------------------------------------------------------------------
Kalcor Coatings Co. Use of Land - 05/01/80 0.00
37721 Stevens Boulevard
Willoughby, OH 44094-6231
- --------------------------------------------------------------------------------
A8.1-13
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: MICHIGAN AUTOMOTIVE RESEARCH CORP (MARCO)
- --------------------------------------------------------------------------------
Creative Investment Assoc. Real Estate Lease 0.00
P.O. Box 7209 09/15/88
1254 N. Main Street
Ann Arbor, MI 48107-7209
- --------------------------------------------------------------------------------
Detroit Edison Co. Primary Supply Rate 13.38
2000 Second Avenue Schedule D6
Detroit, MI 48226 05/15/90
- --------------------------------------------------------------------------------
Detroit Edison Co. Parallel Operation & 0.00
2000 Second Avenue Standby Service
Detroit, MI 48226 07/23/90
- --------------------------------------------------------------------------------
Detroit Edison Co. Parallel Operation 0.00
2000 Second Avenue Interconnection Agreement
Detroit, MI 48226 08/01/90
- --------------------------------------------------------------------------------
Federal Energy Regulatory Comm Qualification as a 0.00
Security of the Commission Cogeneration Facility
825 North Capital St., N.E. 07/03/90
Washington, DC 20426
- --------------------------------------------------------------------------------
A8.1-14
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: ORCOMATIC
- --------------------------------------------------------------------------------
Iron Mountain Group Inc. Service Agreement 1.20
P.O. Box 1772 01/01/91
Albany, NY 12201-1772
- --------------------------------------------------------------------------------
Unifirst Corp. Rental of Uniforms & rugs 2,101.35
205 Garfield Avenue 01/02/91
Stratford, CT 06497-7103
Claim Assigned to:
- ------------------
Amroc Investments Inc.
Sonia Gardner
335 Madison Ave., 26th Floor
New York, NY 10017
- --------------------------------------------------------------------------------
A8.1-15
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: PLASTICS
- --------------------------------------------------------------------------------
Adams/Remco Inc. Maintenance Agreement 0.00
1109 Sherman Drive 11/03/90
Ft. Wayne, IN 46808-3430
- --------------------------------------------------------------------------------
ADT Security Systems Service Agreement 0.00
P.O. Box 6720 01/01/91
8770 Manchester
St. Louis, MO 63144
- --------------------------------------------------------------------------------
Arrow Service Inc. Service Agreement 0.00
4121 Northrup 01/01/91
Ft. Wayne, IN 46805-1034
- --------------------------------------------------------------------------------
B Safe Extinguishers Service Agreement 0.00
310 Railroad Street 01/01/91
Huntington, IN 46750-2845
- --------------------------------------------------------------------------------
Bertsch Coffee Service Agreement 6,099.79
P.O. Box 815 01/01/91
Warsaw, IN 46580
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------
Dekalb Fire & Safety Inc Service Agreement 709.93
P.O. Box 406 10/01/90
103 Depot Street
Auburn, IN 46706-0406
- --------------------------------------------------------------------------------
GTE Telephone Operations North Utility Agreement 4,616.96
Area 08/15/90
11611 N. Meridian, Ste 600 MMI
Carmel, IN 46032
- --------------------------------------------------------------------------------
IBM Information Network Service Agreement 0.00
P.O. Box 30104 01/23/89
Tampa, FL 33630-3104
- --------------------------------------------------------------------------------
Jims Auto Care Service Agreement 0.00
P.O. Box 78 01/01/91
Grabill, IN 46741-0078
- --------------------------------------------------------------------------------
A8.1-16
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Medec Inc. Service Agreement 225.00
1012 LaFort 01/01/91
Ft. Wayne, IN 46805-4333
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------
Mid City Office Systems Maintenance Agreement 489.30
P.O. Box 403 07/20/90
138 E. Seventh Street
Auburn, IN 46706-0403
Claim Assigned to:
- ------------------
Debt Acquisition Co. of America
Kirsen Kuykendall
2120 W. Washington St.
San Diego, CA 92110
- --------------------------------------------------------------------------------
National Serv All Waste Disposal Agreement 0.00
P.O. Box 2234 01/01/91
Ft. Wayne, IN 46809
- --------------------------------------------------------------------------------
Northern Indiana Trading Co. Utility Agreement 67,819.72
P.O. Box 526 10/28/88
Auburn, IN 46706-0526
- --------------------------------------------------------------------------------
Northern Indiana Trading Co. Utility Agreement 0.00
P. O. Box 526 10/28/88
Auburn, IN 46706-0526
- --------------------------------------------------------------------------------
Nowak & Williams Supply Service Agreement 0.00
302 W. Superior Street 01/01/91
Ft. Wayne, IN 46802-1112
- --------------------------------------------------------------------------------
Nowak & Williams Supply Service Agreement 0.00
302 W. Superior Street 01/01/91
Ft. Wayne, IN 46802-1112
- --------------------------------------------------------------------------------
TDJ Snow Plowing Service Agreement 0.00
7791 N. Goshen Road 01/01/91
Huntington, IN 46750-8879
- --------------------------------------------------------------------------------
VanDyne Crotty Service Agreement 0.00
3115 Independence Drive 01/01/91
Ft. Wayne, IN 46808-4502
- --------------------------------------------------------------------------------
Welding Services Inc. Service Agreement 0.00
836 Market Street 01/01/91
Huntington, IN 46750-2870
- --------------------------------------------------------------------------------
A8.1-17
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: ROSS ALUMINUM FOUNDRIES
- --------------------------------------------------------------------------------
Aktiengesellschaft Customer PO 80493 0.00
Kuhnle Kopp & Kausch 11/23/90
Postfach 265, 6710 Frankenthal
Pfalz, Germany
- --------------------------------------------------------------------------------
Cummins Engine Company Inc Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Cummins Engine Company Inc. Customer PO 940024 0.00
P.O. Box 1789 01/04/90
Columbus, IN 47202-1789
- --------------------------------------------------------------------------------
Decision Data Service Inc. Maintenance Agreement 175.91
One Progress Avenue 09/09/83
Worsham, PA 19044-3502
- --------------------------------------------------------------------------------
Gardner, Mary G., Trustee Royalty Agreement 23,481.08
2500 N. Kuther Rd., Apt. 301 02/17/89
Sidney, OH 45365
- --------------------------------------------------------------------------------
JC Sales Company Inc. Sales Representative 0.00
P.O. Box 2566, 200 East Howard St. Agreement
Des Plaines, IL 60018 09/01/82
- --------------------------------------------------------------------------------
John P Winn Assoc. Sales Representative 0.00
10164 Bear Valley Road Agreement
Jacksonville, FL 32257-5960 12/01/89
- --------------------------------------------------------------------------------
A8.1-18
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: SPECIALTY MATERIALS
- --------------------------------------------------------------------------------
Alco Capital Resource Inc. Copier Lease - 12/19/90 372.26
P.O. Box 9915
Macon, GA 31298-2099
- --------------------------------------------------------------------------------
Ameritech Operator Lease 4,697.63
7255 W. 98th Terrace, Ste. 200 12/04/89
Overland Park, KS 66210
- --------------------------------------------------------------------------------
Ameritech Operator Lease 0.00
7255 W. 98th Terrace, Ste. 200 12/08/89
Overland Park, KS 66210
- --------------------------------------------------------------------------------
Ameritech Operator Lease 0.00
7255 W. 98th Terrace, Ste. 200 03/01/90
Overland Park, KS 66210
- --------------------------------------------------------------------------------
Eagle Picher Indus Material GMBH Sales Commission undetermined
P.O. Box 1549, D-74605 10/01/90
Ohringen, Germany
- --------------------------------------------------------------------------------
Theresa A. Meyers Government Contract-Cost 0.00
P. O. Box 29396 Plus Fixed Fee
Brookland Station 07/18/90
Washington, D.C. 20017
- --------------------------------------------------------------------------------
National Cancer Institute Cost Plus Fixed Fee 0.00
Research Contracts Branch 03/16/87
Executive Plaza South, Room 620
Bethesda, MD 20892
- --------------------------------------------------------------------------------
National Cancer Institute DOD Cost Plus Fixed Fee 0.00
Research Contracts Branch 06/18/86
Executive Plaza South, Room 620
Bethesda, MD 20892
- --------------------------------------------------------------------------------
Pitney Bowes Operator Lease 0.00
23 Barney Place 05/01/85
Stamford, CT 06926
- --------------------------------------------------------------------------------
A8.1-19
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: TRANSICOIL, INC.
- --------------------------------------------------------------------------------
A Tech Instruments Ltd Sales Representative 0.00
50 Weybright Court Agreement
Unit 24 02/16/90
Scarborough, Ontario
M1S5A8 Canada
- --------------------------------------------------------------------------------
Advance Control Equip Co Sales Representative 0.00
6404 Mallory Drive Agreement
Richmond, VA 23226-2912 12/01/82
- --------------------------------------------------------------------------------
Advent Components Corp Sales Representative 0.00
3080 N. Civic Center Plaza #30 Agreement
Scottsdale, AZ 85251-7930 08/01/88
- --------------------------------------------------------------------------------
AMJ Equipment Corp Sales Representative 0.00
P.O. Box 6320 Agreement
Lakeland, FL 33807-6320 11/03/89
- --------------------------------------------------------------------------------
Douglas Lee Associates Inc. Sales Representative 0.00
249 Ayer Rd., Ste. 304 Agreement
Harvard, MA 01451-1133 04/16/90
- --------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Export Management Agreement undetermined
580 Walnut St. 10/01/87
Cincinnati, OH 45202-3159
- --------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Agency Agreement undetermined
580 Walnut St. 12/01/87
Cincinnti, OH 45202-3159
- --------------------------------------------------------------------------------
FLW Inc Sales Representative 0.00
2930 C Grace Lane Agreement
Costa Mesa, CA 92626-4194 07/01/81
- --------------------------------------------------------------------------------
FLW Southeast Inc Sales Representative 0.00
1400 Marietta Pkwy., Ste. 108 Agreement
Marietta, GA 30067-8269 10/01/85
- --------------------------------------------------------------------------------
Intl. Precision Products Sales Representative 0.00
28 Blvd. Belgique Agreement
MC 98000 12/16/88
Monaco
- --------------------------------------------------------------------------------
J&B Technical Sales Sales Representative 0.00
211 Lexsington Avenue Agreement
Pssiac, NJ 07055-6206 04/16/90
- --------------------------------------------------------------------------------
Keystone Precision Machining Lease Purchase Agreement 0.00
220 N. Center Street 05/02/90
North Wales, PA 19454-3326
- --------------------------------------------------------------------------------
A8.1-20
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
National Guardian Security Security System 0.00
Services Lease/Service
1816 W. Point Pike 07/01/90
West Point, PA 19486
- --------------------------------------------------------------------------------
Raddatz Aero Dynamic Vertriebs Sales Representative 0.00
GMBH Agreement
Otto-Wagner Str. 16 03/15/89
D-8034 Germering, Germany
- --------------------------------------------------------------------------------
Raeco Rep Inc. Sales Representative 0.00
253 West Joe Orr Road Agreement
Chicago Heights, IL 60411-1744 09/03/85
- --------------------------------------------------------------------------------
RDP Corp. Sales Representative 0.00
5877 Huberville Ave. Agreement
Dayton, OH 45431-1218 09/22/90
- --------------------------------------------------------------------------------
Russell Associates Inc Sales Representative 0.00
P. O. Box 6000 Agreement
Pinellas Park, FL 34664-6000 11/01/90
- --------------------------------------------------------------------------------
Synergic Engr Corp Sales Representative 0.00
7100 OHMS Lane Agreement
Edina, MN 55435 08/30/78
- --------------------------------------------------------------------------------
A8.1-21
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.1
EXECUTORY CONTRACTS
- --------------------------------------------------------------------------------
Creditor Contract Proposed
Name Type Cure
and Address and Date Amount ($)
- --------------------------------------------------------------------------------
Division: WOLVERINE GASKET
- --------------------------------------------------------------------------------
LDI Corporation Equipment Schedule No. 9, 758.16
30033 Clemens Road as replaced and renewed by
Westlake, OH 44145-1021 Equipment Schedule No. 23-
91, to Master Lease
Agreement No. 7044, dated
01/08/88
================================================================================
A8.1-22
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.4"
PREVIOUSLY SCHEDULED CONTRACTS
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: CINCINNATI INDUSTRIAL MACHINERY
- --------------------------------------------------------------------------------
Lohre & Associates Printing/Advertising 0.00
Suite 101 - 2330 Victory Parkway Agreement
Cincinnati, OH 45206-2809 06/28/90
- --------------------------------------------------------------------------------
A8.4-1
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: CONSTRUCTION EQUIPMENT
- --------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 08/30/65
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 11/20/68
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
Caterpillar Inc. License Agreement 0.00
600 W. Washington St. 05/19/81
E. Peoria, IL 61630-0001
- --------------------------------------------------------------------------------
A8.4-2
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: EAGLE-PICHER EUROPE
- --------------------------------------------------------------------------------
Eagle-Picher Europe, Inc. Loan Agreement - 8/23/88 0.00
P. O. Box 779
580 Walnut St.
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
NBD Bank N.A. - London Loan Agreement - 8/23/88 0.00
28 Finsbury Circus
London EC2M 7AU
United Kingdom
- --------------------------------------------------------------------------------
A8.4-3
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- ------------------------------------------------------------------------------
Division: EAGLE-PICHER MINERALS, INC.
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza, 26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Central Trust Co. N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Fifth-Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Suite 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- --------------------------------------------------------------------------------
NBD Bank NA Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Street 11/02/88
Pittsburgh, PA 15265
- --------------------------------------------------------------------------------
Star Bank N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-4
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: EDI
- --------------------------------------------------------------------------------
Chrysler Credit Installment Loan 0.00
40 Oak Hollow, Ste. 155 09/01/89
Southfield, MI 48034-7470
- --------------------------------------------------------------------------------
Star Bank N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-5
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: ELECTRONICS
- --------------------------------------------------------------------------------
IBM Boston Remarketer Lease - 05/01/90 470,000.00
404 Wyman Street (also listed under
Waltham, MA 02254 Plastics Division)
- --------------------------------------------------------------------------------
A8.4-6
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: GENERAL OFFICE
- --------------------------------------------------------------------------------
Amvestors Investment GRP Loan Agreement, Security 0.00
415 S.W. 8th Avenue Agreement
Topeka, KS 66603-3913 03/21/89
- --------------------------------------------------------------------------------
Bank of New York (Trustee) 9 1/2 Sinking Fund 51,662,500.00
21 W. Street, 12th Floor Debentures
New York, NY 10286 02/24/87
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement - 0.00
One Liberty Plaza 11/02/88
26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Bank of Nova Scotia Industrial Revenue Bond - 0.00
One Liberty Plaza 12/01/84
26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Bankers Trust Industrial Revenue Bond being
(Trustee & Tender Agt) (Oregon) - reinstated
4 Albany Street 12/01/84 under the Plan
New York, NY 10006-1592
- --------------------------------------------------------------------------------
Blue Dove Development Assn. Guarantee of Transicoil 0.00
1352 Bobarn Drive Lease
Narberth, PA 19072-1147 04/21/89
- --------------------------------------------------------------------------------
Central Trust Co., N.A. (Trustee) Industrial Development Bonds 0.00
201 East Fifth Street (Loudon Cty.) - 05/01/80
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Central Trust Co., N.A. Loan 0.00
201 East Fifth Street
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Central Trust Co., N.A. Credit & Agency Agreement - 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
City of Mansfield Industrial Revenue Bond - 2,052,000.00
30 N. Diamond Street 10/01/80
Mansfield, OH 44902-1716
- --------------------------------------------------------------------------------
Connecticut Mutual Life Ins. Co. Note Agreement, Guarantee - see below
Private Placement Division 07/29/88
140 Garden Street
Hartford, CT 06154
- --------------------------------------------------------------------------------
Connecticut Mutual Life Ins. Co. Note Agreement, Security 927,100.60
Private Placement Division Agreement - 07/29/88
140 Garden Street
Hartford, CT 06154
- --------------------------------------------------------------------------------
A8.4-7
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement - 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
First Fidelity Leasing Corp. Capitalized Lease - 10/31/90 70,932.99
255 Business Center Dr. #250
Horsham, PA 19044-3473
- --------------------------------------------------------------------------------
Grove Industrial Development Auth. Secured Note - Mortgage - 0.00
P. O. Box 1268 08/09/89
Grove, OK 74344-1268
- --------------------------------------------------------------------------------
Henry County Development Auth. Industrial Development 2,630,000.00
345 Phillips Drive Revenue Bonds - 08/01/81
McDonough, GA 30253-3425
- --------------------------------------------------------------------------------
IBM Capitalized Lease - 05/01/89 446,230.87
1300 E. Ninth Street (also listed
Cleveland, OH 44114-1502 under Mat
Division)
- --------------------------------------------------------------------------------
Industrial Dev. Board Industrial Development Bonds 0.00
of Loudon Cty. - 05/01/80
Loudon County Courthouse
Lenoir City, TN 37771
- --------------------------------------------------------------------------------
JD Manly Construction Trust Mortgage - 12/01/83 0.00
P.O. Box 491611
Leesburg, FL 34749
- --------------------------------------------------------------------------------
LDI Corporation Capitalized Lease - 02/01/90 177,796.97
30033 Clemens Road (Equipment Schedule No. 14 (also listed
Westlake, OH 44145-1021 to Master Lease Agreement under
No. 7044, dated 01/08/88) Wolverine
Gasket
Division)
- --------------------------------------------------------------------------------
LDI Corporation Capitalized Lease - 03/01/90 70,089.19
30033 Clemens Road (Equipment Schedule No. 16- (also listed
Westlake, OH 44145-1021 90 to Master Lease Agreement under
No. 7044, dated 01/08/88) Wolverine
Gasket
Division)
- --------------------------------------------------------------------------------
Lister, Roy D. Patent License Agreement - 0.00
457 Pine Tree 12/04/89 (also listed
Keller, TX 76248 under Orthane
Division)
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement - 0.00
600 Vine Street, Ste. 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
A8.4-8
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
National City Bank Industrial Revenue Bond 0.00
P.O. Box 5756 (Huntington) - 10/1/84
Reference Account 66688
Cleveland, OH 44101-0756
- --------------------------------------------------------------------------------
NBD Bank NA - London Loan Agreement - 08/23/88 0.00
28 Finsbury Circus
London EC2M 7AU
England
- --------------------------------------------------------------------------------
NBD Bank N.A. Credit & Agency Agreement - 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
New England Mutual Life Ins. Co. Note Agreement - 07/07/88 891,723.30
501 Boylston Street
Boston, MA 02117
Claim Assigned to:
- ------------------
certain affiliates of Morgens
Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
New England Mutual Life Ins. Co. Guarantee of E-P Note see above
501 Boylston Street Agreement - 09/14/89
Boston, MA 02117
Claim Assigned to:
- ------------------
certain affiliates of
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
Northern Atlantic Life Ins. Co. Loan Agreement, Security 1,546,907.11
Robbins Lane Agreement - 03/21/89
Jericho, NY 11753
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
A8.4-9
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Northern Life Ins. Co. Loan Agreement, Security see above
1110 Third Avenue Agreement - 03/21/89
Seattle, WA 98111
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
Northwestern Natl. Life Ins. Co. Loan Agreement, Security see above
20 Washington Avenue, South Agreement - 03/21/89
Minneapolis, MN 55401-1908
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
Norwich Cmty. Development Corp. Community Development Loan - 0.00
One Thomas Plaza 03/01/71
Norwich, CT 06360-5314
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement - 0.00
Fifth & Wood Street 11/02/88
Pittsburgh, PA 15265
- --------------------------------------------------------------------------------
Port Development Corp. Industrial Development 3,078,000.00
1519 Capitol Avenue Revenue Bonds - 10/01/80
Houston TX 77002-3613
- --------------------------------------------------------------------------------
Societe Generale Financial Corp. Guarantee of Capitalized 0.00
50 Rockefeller Plaza Lease - 04/19/90
New York, NY 10020-1675
- --------------------------------------------------------------------------------
Societe Generale Financial Corp. Capitalized Lease - 04/19/90 0.00
50 Rockefeller Plaza
New York, NY 10020-1675
- --------------------------------------------------------------------------------
Star Bank, N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street -08/03/89
Mail Location 8160
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Star Bank, N.A. Guarantee of Loan Agreement 0.00
425 Walnut Street - 08/03/89
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Star Bank, N.A. of Cinti. (Trustee) Industrial Revenue Bonds see City of
P.O. Box 1118 (Mansfield) - 10/01/80 Mansfield
Cincinnati, OH 45202 above
- --------------------------------------------------------------------------------
A8.4-10
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Star Bank, N.A. of Cinti. (Trustee) Industrial Revenue Bonds 0.00
425 Walnut Street (Storey Cty. IRB) - 04/26/83
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Star Bank, N.A. Credit & Agency Agreement - 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
State of Oregon Industrial Revenue Bond - see Bankers
Economic Development Dept. 12/01/84 Trust above
595 Cottage Street, NE
Salem, OR 97410
- --------------------------------------------------------------------------------
Storey County Industrial Revenue Bonds - 0.00
"B" Street County Courthouse 04/26/83
Virginia City, NV 89440
- --------------------------------------------------------------------------------
Texas Commerce Bank (Trustee) Industrial Development see Port
P. O. Box 2558 Revenue Bonds (Port Development
Attn: Corporate Trust Development) - 10/01/80 above
Houston, TX 77001
- --------------------------------------------------------------------------------
Trust Company Bank (Trustee) Industrial Development see Henry
P. O. Box 4625 Revenue Bonds (Henry County) County above
Atlanta, GA 30302-4625 - 08/01/81
- --------------------------------------------------------------------------------
U.S. Dept. of Commerce Community Development Loan 0.00
Economic Development Administration (Norwich) - 03/01/71
105 S. 7th Street, 1st Floor
Philadelphia, PA 19106-3324
- --------------------------------------------------------------------------------
Washington Square Capital Inc. Loan Agreement, Security see Northern
625 Marquette Ave., South Agreement - 03/21/89 Atlantic
1500 North Star West above
Minneapolis, MN 55402-1702
Claim Assigned to:
- ------------------
Morgens Waterfall Vintiades & Co.
Jouko Tamminen
10 E. 50th St.
New York, NY 10022
- --------------------------------------------------------------------------------
A8.4-11
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: HILLSDALE TOOL
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza, 26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Central Trust Co. N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Ste. 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- --------------------------------------------------------------------------------
NBD Bank N.A. Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Streets 11/02/88
Pittsburgh, PA 15222
- --------------------------------------------------------------------------------
Star Bank N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-12
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: MAT
- --------------------------------------------------------------------------------
IBM Credit Corp. Lease Agreement - 05/16/89 446,230.87
18000 W. Nine Mile Road (also listed
B/O YR6 - 14th Fl. under General
Southfield, MI 48086 Office
Division)
- --------------------------------------------------------------------------------
Pansophic Systems Inc. License Agreement - 04/14/89 0.00
P. O. Box 95372
Chicago, IL 60694-5372
- --------------------------------------------------------------------------------
A8.4-13
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: MICHIGAN AUTOMOTIVE RESEARCH CORP (MARCO)
- --------------------------------------------------------------------------------
Eagle-Picher Industries, Inc. Unsecured Loan Agreement undetermined
580 Walnut Street 09/27/88
Cincinnati, OH 45202
- --------------------------------------------------------------------------------
Fleet Credit Corp. Capitalized Equipment Lease 152,280.03
P. O. Box 37144M Agreement
Pittsburgh, PA 15251 01/28/88
- --------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 03/24/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- --------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 05/19/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- --------------------------------------------------------------------------------
Fleet Credit Corp. Lease Agreement - 05/25/88 see above
111 Westminster St., 9th Fl.
Providence, RI 02903-2303
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 07/20/88 0.00
101 S. Main Street
Ann Arbor, MI 48107
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 04/21/89 0.00
101 S. Main Street
Ann Arbor, MI 48107
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 09/29/89 0.00
101 S. Main Street
Ann Arbor, MI 48017
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 02/20/90 0.00
101 S. Main Street
Ann Arbor, MI 48017
- --------------------------------------------------------------------------------
First of America Bank-Ann Arbor Loan Agreement - 02/28/90 0.00
101 S. Main Street
Ann Arbor, MI 48017
- --------------------------------------------------------------------------------
Ford Motor Credit Co. Equipment Loan Agreement 0.00
P. O. Box 371065 09/01/88
Pittsburgh, PA 15251-7065
- --------------------------------------------------------------------------------
Star Bank, N.A. Equipment Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
Star Bank, N.A. Loan Agreement - 08/03/89 0.00
425 Walnut Street
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-14
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: ORTHANE
- --------------------------------------------------------------------------------
Lister, Roy D. License Agreement 0.00
457 Pine Tree 12/04/89 (also listed under
Keller, TX 76248-4421 General Office
Division)
- --------------------------------------------------------------------------------
A8.4-15
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: PLASTICS
- --------------------------------------------------------------------------------
Future Three Software Inc. License Agreement - 10/26/88 0.00
33031 Schoolcraft Road
Livonia, MI 48150-1604
- --------------------------------------------------------------------------------
GE Capital Corp. Equipment Lease - 02/07/90 0.00
P.O. Box 94916
Cleveland, OH 44101-4916
- --------------------------------------------------------------------------------
IBM Credit Corp. Equipment & Software Lease 470,000.00
200 E. Main Street 11/22/88 (also listed
Fort Wayne, IN 46801 under
Electronics
Division)
- --------------------------------------------------------------------------------
Pansophic Systems Inc. License Agreement - 04/25/89 0.00
P. O. Box 95372
Chicago, IL 60694-5372
- --------------------------------------------------------------------------------
A8.4-16
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: SPECIALTY MATERIALS
- --------------------------------------------------------------------------------
Southwestern Bell Finance Lease - 04/01/90 5,913.92
P.O. Box 18767
St. Louis, MO 63178-0767
- --------------------------------------------------------------------------------
A8.4-17
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: TRANSICOIL
- --------------------------------------------------------------------------------
Bank of Nova Scotia Credit & Agency Agreement 0.00
New York Agency 11/02/88
One Liberty Plaza - 26th Floor
New York, NY 10006-1401
- --------------------------------------------------------------------------------
Bell Savings Bank Pasa Subordination Agreement 0.00
9 South 69th Street 07/28/89
Upper Darby, PA 19082-2416
- --------------------------------------------------------------------------------
Blue Dove Development Assn. Subordination Agreement 0.00
c/o Ronald Bluestein 07/28/89
1352 Bobarn Drive
Narberth, PA 19072-1147
- --------------------------------------------------------------------------------
Central Trust Co., N.A. Credit & Agency Agreement 0.00
201 East Fifth Street 11/02/88
Cincinnati, OH 45202-4117
- --------------------------------------------------------------------------------
Fidelcor Services Inc. Lease of Citizen- Cuncom 16,946.00
1700 Market St., 9th Floor 08/29/86
Philadelphia, PA 19103-3913
- --------------------------------------------------------------------------------
Fidelcor Services Inc. Equipment Lease see above
1700 Market St., 9th Floor 02/25/87
Philadelphia, PA 19103-3913
- --------------------------------------------------------------------------------
Fifth Third Bank Credit & Agency Agreement 0.00
38 Fountain Square Plaza 11/02/88
Fifth Third Center
Cincinnati, OH 45263
- --------------------------------------------------------------------------------
National City Bank Credit & Agency Agreement 0.00
600 Vine Street, Suite 304 11/02/88
Cincinnati Commerce Center
Cincinnati, OH 45202-4425
- --------------------------------------------------------------------------------
NBD Bank, N.A. Credit & Agency Agreement 0.00
611 Woodward Avenue 11/02/88
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
Pittsburgh National Bank Credit & Agency Agreement 0.00
Fifth Ave. & Wood Streets 11/02/88
Pittsburgh, PA 15222
- --------------------------------------------------------------------------------
Star Bank, N.A. Credit & Agency Agreement 0.00
425 Walnut Street 11/02/88
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
Star Bank, N.A. Loan Agreement 0.00
425 Walnut Street 08/03/89
Mail Location 8160
Cincinnati, OH 45202-3912
- --------------------------------------------------------------------------------
A8.4-18
<PAGE>
<PAGE>
================================================================================
EXHIBIT 8.4
- --------------------------------------------------------------------------------
Creditor Contract Allowed
Name and Address Type and Date Unsecured
Claim ($)
- --------------------------------------------------------------------------------
Division: WOLVERINE GASKET
- --------------------------------------------------------------------------------
LDI Corporation Equipment Lease 177,796.97
30033 Clemens Road (Equipment Schedule No. 14 (also listed
Westlake, OH 44145-1021 to Master Lease Agreement under General
No. 7044, dated 01/08/88) Office
Division)
- --------------------------------------------------------------------------------
LDI Corporation Equipment Lease 70,089.19
30033 Clemens Road (Equipment Schedule No. 16- (also listed
Westlake, OH 44145-1021 90 to Master Lease Agreement under General
No. 7044, dated 01/08/88) Office
Division)
- --------------------------------------------------------------------------------
NBD Bank, N.A. Equipment Lease - 0.00
611 Woodward Avenue 04/01/87
Detroit, MI 48226-3408
- --------------------------------------------------------------------------------
A8.4-19
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.5.1"
INSURANCE POLICIES TO BE ASSUMED
All insurance policies and related agreements as to which any
insurer may still have obligations to any of the Debtors so
long as such policies and agreements are not listed on Exhibit
"8.5.2."
<PAGE>
<PAGE>
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<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- -------------------------------------- )
EXHIBIT "8.5.2"
INSURANCE AGREEMENTS TO BE REJECTED
Liberty Mutual Insurance Company
Liberty Mutual Fire Insurance Company
Liberty Mutual Insurance Corporation
c/o William F. Cupelo, Esq.
Home Office Legal Department
175 Berkeley Street
Boston, Massachusetts 02117: All retrospective premium agreements with
respect to workers' compensation,
automobile, and comprehensive general
liability insurance policies issued by
Liberty Mutual Insurance Company, Liberty
Mutual Fire Insurance Company, and Liberty
Insurance Corporation for all years prior to
June 1, 1986.
<PAGE>
<PAGE>
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<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
- ------------------------------------
EXHIBIT "B"
Order of the Bankruptcy Court, dated August 28, 1996, approving this
Disclosure Statement
<PAGE>
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[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re: )
EAGLE-PICHER INDUSTRIES, ) CONSOLIDATED CASE NO.
INC., et al., ) 1-91-00100
) Chapter 11 - Judge Perlman
Debtors. )
ORDER (A) APPROVING THE DEBTORS' JOINT DISCLOSURE
STATEMENT, (B) SCHEDULING HEARING ON CONFIRMATION OF
DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION, AND (C) APPROVING NOTICE OF (i) LAST DAY
FOR RECEIPT OF BALLOTS WITH RESPECT TO DEBTORS' THIRD
AMENDED CONSOLIDATED PLAN OF REORGANIZATION,
(ii) LAST DAY FOR FILING OBJECTIONS TO CONFIRMATION OF
DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION, AND (iii) HEARING ON CONFIRMATION
OF DEBTORS' THIRD AMENDED CONSOLIDATED PLAN OF
REORGANIZATION
Upon the record of the hearings held on August 12, 1996, and
August 28, 1996 (collectively, the "Disclosure Hearing"), to consider approval
of the Proposed Joint Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code (the "Disclosure Statement") with respect to the Third Amended
Consolidated Plan of Reorganization (as such plan may be modified, the "Plan")
of Eagle-Picher Industries, Inc. and its affiliated debtors in the
above-captioned chapter 11 cases (collectively, the "Debtors"); and each of the
objections to the Disclosure Statement having been withdrawn, overruled by the
Court, or rendered moot by reason of modifications made to the Disclosure
Statement and/or the Plan; and the Debtors having revised the Disclosure
Statement to make certain technical changes thereto; and it appearing that no
further notice of the approval of the Disclosure Statement, as modified, need be
given; and upon the record of the Disclosure Hearing and all of the proceedings
had before the Court; and the Court
B-1
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<PAGE>
having determined after due deliberation that the Disclosure Statement contains
adequate information, as such term is defined in section 1125 of title 11 of the
United States Code (the "Bankruptcy Code"); and sufficient cause appearing
therefor, it is
ORDERED that, in accordance with section 1125 of the
Bankruptcy Code and Bankruptcy Rule 3017(b), the Disclosure Statement be, and it
hereby is, approved in all respects; and it is further
ORDERED that the forms of ballot (the "Ballots") filed with
the Court on August 27, 1996, be, and they hereby are, approved in all respects;
and it is further
ORDERED that compliance with Local Bankruptcy Rule 3.15(a) and
(b) be, and it hereby is, waived; and it is further
ORDERED that, pursuant to Bankruptcy Rules 3017(c) and
3018(a), the holders of Bearer Unsecured Debt Securities (as such term is
defined in the Plan), the holders of Registered Unsecured Debt Securities (as
such term is defined in the Plan) as of the date that is five (5) business days
after the entry of this Order (the "Voting Record Date"), and other holders of
claims in each of Classes, 3, 4, 10, 12, 16, 17, 18, 19, 20, and 21 of the Plan
as of the Voting Record Date may vote to accept or reject the Plan by indicating
their acceptance or rejection of the Plan on the Ballots provided therefor; and
it is further
ORDERED that, the Voting Deadline, as such term is used in the
Ballot Solicitation and Tabulation Procedures approved by an order of the Court,
dated July 23, 1996 (the "Voting Procedures"), shall be 5:00 p.m., Cincinnati,
Ohio, time on November 4, 1996; and it is further
ORDERED that a hearing (the "Confirmation Hearing") to
consider (i) confirmation of the Plan and (ii) approval of any and all
compromises and settlements embodied in or contemplated by the Plan shall be
held before the Court at the United States Bankruptcy Court, Room 817, 221 East
4th Street, Atrium Two, Cincinnati, Ohio, on November 13, 1996, at 9:30 a.m., or
as soon thereafter as counsel may be heard; and it is further
B-2
<PAGE>
<PAGE>
ORDERED that objections, if any, to confirmation of the Plan
shall be in writing, and shall (a) state the name and address of the objecting
party and the nature of the claim or interest of such party, (b) state with
particularity the basis and nature of each objection to confirmation of the
Plan, and (c) be filed, together with proof of service, with the Court (with a
copy delivered directly to the Honorable Burton Perlman) and served so that such
objections are received no later than November 4, 1996 at 4:00 p.m., Cincinnati,
Ohio, time, by the Court, Judge Perlman, and the following parties: (i) Weil,
Gotshal & Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue, New York,
New York 10153, Attention: Stephen Karotkin, Esq., (ii) Frost & Jacobs,
Co-Attorneys for the Debtors, 2500 PNC Center, 201 E. Fifth Street, Cincinnati,
Ohio 45202-4183, Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher
Industries, Inc., (if by courier) 580 Walnut Street, 13th Floor, Cincinnati,
Ohio 45202, Attention: James A. Ralston, Esq., or (if by mail) P.O. Box 1847,
Cincinnati, Ohio 45201, Attention: James A. Ralston, Esq.; (iv) Squire, Sanders
& Dempsey, 4900 Society Center, 127 Public Square, Cleveland, Ohio 44114-3404,
Attention: Carolyn J. Buller, Esq.; (v) Keating, Muething & Klekamp, 1800
Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202, Attention:
Kevin E. Irwin, Esq.; (vi) McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800
Midland Building, 101 Prospect Avenue, West, Cleveland, Ohio 44115, Attention:
Robert S. Balantzow, Esq.; and (vii) the Office of the United States Trustee, 36
East 7th Street, Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill,
Esq.; and it is further
ORDERED that replies, if any, to any objections to
confirmation shall be filed, together with proof of service, with the Court
(with a copy delivered directly to the Honorable Burton Perlman) and served so
that such replies are received no later than November 8, 1996 at 4:00 p.m.,
Cincinnati, Ohio, time, by the Court, Judge Perlman, and the following parties:
(i) Weil, Gotshal & Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue,
New York, New York 10153, Attention: Stephen Karotkin, Esq., (ii) Frost &
Jacobs, Co-Attorneys for the Debtors, 2500 PNC Center, 201 E. Fifth Street,
Cincinnati,
B-3
<PAGE>
<PAGE>
Ohio 45202-4183, Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher
Industries, Inc., (if by courier) 580 Walnut Street, 13th Floor, Cincinnati,
Ohio 45202, Attention: James A. Ralston, Esq., or (if by mail) P.O. Box 1847,
Cincinnati, Ohio 45201, Attention: James A. Ralston, Esq.; (iv) Squire, Sanders
& Dempsey, 4900 Society Center, 127 Public Square, Cleveland, Ohio 44114-3404,
Attention: Carolyn J. Buller, Esq.; (v) Keating, Muething & Klekamp, 1800
Provident Tower, One East Fourth Street, Cincinnati, Ohio 45202, Attention:
Kevin E. Irwin, Esq.; (vi) McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800
Midland Building, 101 Prospect Avenue, West, Cleveland, Ohio 44115, Attention:
Robert S. Balantzow, Esq.; and (vii) the Office of the United States Trustee, 36
East 7th Street, Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill,
Esq.; and it is further
ORDERED that the Confirmation Hearing may be adjourned from
time to time without prior notice to holders of claims, holders of equity
interests, or parties in interest other than the announcement of the adjourned
hearing date at the Confirmation Hearing; and it is further
ORDERED that the Debtors be, and they hereby are, authorized
and directed to mail or cause to be mailed by first-class mail within fifteen
(15) business days after the date of entry of this Order a copy of the notice
(the "Notice") of, among other things, the Confirmation Hearing, substantially
in the form annexed hereto as Exhibit "A," and the Disclosure Statement,
including a copy of the Plan and this Order annexed as exhibits thereto, to all
entities as provided in the Ballot Tabulation and Solicitation Procedures (the
"Voting Procedures"), as approved by the order of the Court dated July 23, 1996,
and also to (i) the indenture trustees under any debt instruments of the Debtors
and (ii) the Office of the United States Trustee; and it is further
ORDERED that the Debtors be, and they hereby are, directed to
cause the Notice to be published two (2) times no less than twenty (20) days
prior to the date of the Confirmation Hearing in the national editions of The
Wall Street Journal and The New York Times; and it is further
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<PAGE>
<PAGE>
ORDERED that the provision of notice in accordance with the
procedures set forth in this Order and the Voting Procedures shall be deemed
good and sufficient notice of the Confirmation Hearing, the time fixed for
filing objections to confirmation of the Plan, and the time within which holders
of claims may vote to accept or reject the Plan; and it is further
ORDERED that the Debtors be, and they hereby are, authorized
and empowered to take such steps and perform such acts as may be necessary to
implement and effectuate this Order.
Dated: Cincinnati, Ohio
August 28, 1996
/s/ Burton Perlman
-------------------------------
United States Bankruptcy Judge
B-5
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<PAGE>
<PAGE>
EXHIBIT "A"
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
)
- ---------------------------------
NOTICE OF (A) SOLICITATION OF VOTES TO ACCEPT OR
REJECT THE DEBTORS' THIRD AMENDED CONSOLIDATED
PLAN OF REORGANIZATION AND (B) HEARING TO
CONSIDER CONFIRMATION OF DEBTORS' THIRD AMENDED
CONSOLIDATED PLAN OF REORGANIZATION
TO ALL CREDITORS, INDENTURE TRUSTEES, EQUITY
SECURITY HOLDERS, AND PARTIES IN INTEREST:
NOTICE IS HEREBY GIVEN that on August 28, 1996, the United States
Bankruptcy Court for the Southern District of Ohio (the "Court") entered an
order (the "Order") approving the disclosure statement (the "Disclosure
Statement") with respect to the Third Amended Consolidated Plan of
Reorganization dated August 28, 1996, (the "Plan") for Eagle-Picher Industries,
Inc., Daisy Parts, Inc., Transicoil Inc., Michigan Automotive Research
Corporation, EDI, Inc., Eagle-Picher Minerals, Inc., and Hillsdale Tool and
Manufacturing Co., Inc. (collectively, the "Debtors"). Pursuant to the Order,
copies of the Plan and Disclosure Statement have been mailed to all known
creditors and equity security holders of the Debtors. Ballots for voting to
accept or reject the Plan have been mailed to all known creditors entitled to
vote to accept or reject the Plan. If you are a creditor of the Debtors and have
not received a copy of the Plan, Disclosure Statement or, if applicable, a
ballot, you may obtain a copy of same by telephoning the Debtors' solicitation
agent, Hill and Knowlton, Inc., at (212) 885-0555. IF YOU HOLD DEBT SECURITIES
ISSUED BY ANY OF THE DEBTORS IN BEARER FORM, YOU MUST CALL HILL AND KNOWLTON,
INC. IN ORDER TO RECEIVE A BALLOT.
NOTICE IS FURTHER GIVEN that all ballots cast to accept or reject
the Plan must be properly completed, executed and mailed or delivered to (i) for
all ballots relating to any debt securities issued by any of the Debtors, Hill
and Knowlton, Inc., 466 Lexington Avenue, New York, New York 10017 and (ii) for
all other claims, the Federated Claims Service Group, 9111 Duke Blvd., P.O. Box
8041, Mason, Ohio 45040, so that they are RECEIVED no later than 5:00 p.m.,
Cincinnati Ohio, time, on November 4, 1996. Owners of debt securities that are
registered in "street name" or that are on deposit with a depositary should
follow the instructions on the ballot for
BA-1
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<PAGE>
the completion and return of the ballot. If your ballot is not properly
completed or received within such time, it will not be counted as a vote to
accept or reject the Plan.
NOTICE IS FURTHER GIVEN that the Court has fixed November 13, 1996,
at 9:30 a.m. as the date and time for the hearing to consider confirmation of
the Plan and related matters (the "Confirmation Hearing"). The Confirmation
Hearing will be held in Room 817 of the United States Bankruptcy Court, 221 East
4th Street, Atrium Two, Cincinnati, Ohio. The Confirmation Hearing may be
adjourned from time to time without further notice other than announcement made
at the Confirmation Hearing or any adjourned hearing.
NOTICE IS FURTHER GIVEN that objections, if any, to the confirmation
of the Plan shall be in writing, and (a) shall state the name and address of the
objecting party and the nature of the claim or interest of such party, (b) shall
state with particularity the basis and nature of each objection to confirmation
of the Plan and (c) be filed, together with proof of service, with the Court
(with a copy to the Honorable Burton Perlman) and served so that they are
received not later than 4:00 p.m., Cincinnati, Ohio, time, on November 4, 1996,
1996, by the Court, Judge Perlman, and the following parties: (i) Weil, Gotshal
& Manges LLP, Co-Attorneys for the Debtors, 767 Fifth Avenue, New York, New York
10153, Attention: Stephen Karotkin, Esq., (ii) Frost & Jacobs, Co- Attorneys for
the Debtors, 2500 PNC Center, 201 E. Fifth Street, Cincinnati, Ohio 45202-4183,
Attention: Edmund J. Adams, Esq., (iii) Eagle-Picher Industries, Inc., (if by
courier) 580 Walnut Street, 13th Floor, Cincinnati, Ohio 45202, Attention: James
A. Ralston, Esq., or (if by mail) P.O. Box 1847, Cincinnati, Ohio 45201,
Attention: James A. Ralston, Esq.; (iv) Squire, Sanders & Dempsey, 4900 Society
Center, 127 Public Square, Cleveland, Ohio 44114-3404, Attention: Carolyn J.
Buller, Esq.; (v) Keating, Muething & Klekamp, 1800 Provident Tower, One East
Fourth Street, Cincinnati, Ohio 45202, Attention: Kevin E. Irwin, Esq.; (vi)
McCarthy, Lebit, Crystal & Haiman, Co., L.P.A., 1800 Midland Building, 101
Prospect Avenue, West, Cleveland, Ohio 44115, Attention: Robert S. Balantzow,
Esq.; and (vii) the Office of the United States Trustee, 36 East 7th Street,
Suite 2030, Cincinnati, Ohio 45202, Attention: Neal J. Weill, Esq.
Dated: Cincinnati, Ohio
August 28, 1996
BY ORDER OF THE UNITED STATES
BANKRUPTCY COURT FOR THE
SOUTHERN DISTRICT OF OHIO
WEIL GOTSHAL & MANGES LLP FROST & JACOBS
Co-Attorneys for the Debtors Co-Attorneys for the Debtors
767 Fifth Avenue 2500 PNC Center
New York, New York 10153 201 E. Fifth Street
(212) 310-8000 Cincinnati, Ohio 45202-4183
(513) 651-6800
BA-2
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<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
)
- -----------------------------------
EXHIBIT "C"
FINANCIAL APPENDIX
A. HISTORICAL FINANCIAL INFORMATION:
Report on Form 10-K for the Fiscal Year Ended November 30, 1995
Report on Form 10-Q for Quarter Ended May 31, 1996
B. PROJECTED FINANCIAL INFORMATION:
Pro Forma Consolidated Balance Sheet of Reorganized
Eagle-Picher as of December 1, 1996;
Projected Consolidated Balance Sheets of Reorganized
Eagle-Picher as of December 1, 1996, and November 30 of each
of the years from 1997 through 2001;
Projected Consolidated Statements of Income of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 20, 2001;
Projected Consolidated Statements of Cash Flow of Reorganized
Eagle-Picher for each of the six fiscal years in the period
ended November 30, 2001; and
Projected Capital Structure of Reorganized Eagle-Picher as of
December 1, 1996.
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================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE FISCAL YEAR ENDED NOVEMBER 30, 1995
COMMISSION FILE NUMBER 1-1499
EAGLE-PICHER INDUSTRIES, INC.
AN OHIO CORPORATION
I.R.S. EMPLOYER IDENTIFICATION
NO. 31-0268670
580 BUILDING, 580 WALNUT STREET, P. O. BOX 779, CINCINNATI, OHIO 45201
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 513-721-7010
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
TITLE OF CLASS
Common Capital Stock,
Par Value $1.25 per Share
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days.
YES [X] NO [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]
The aggregate market value of the voting stock held by non-affiliates of
the registrant as of February 23, 1996 was $1,313,029 based upon the average of
the bid and asked prices as of such date. On February 23, 1996, 11,040,932
shares of the registrant's Common Stock were outstanding. The registrant had and
has no other classes of stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Excerpts from registrant's Annual Report for the fiscal year ended
November 30, 1995 -- Incorporated in Part I and Part II.
================================================================================
<PAGE>
<PAGE>
NOTE
This copy of Eagle-Picher's Form 10-K for 1995 includes only Exhibits 13,
21, 23, 24(a), 24(b) and 99.
In accordance with SEC requirements, copies of the following exhibits will
be furnished upon payment of a fee of ten cents per page. Please remit the
proper amount with your request to:
James A. Ralston, Vice President,
General Counsel and Secretary
Eagle-Picher Industries, Inc.
P. O. Box 779
Cincinnati, Ohio 45201.
Exhibits not included in this Form 10-K for 1995 have the following number
of pages (see list of Exhibits in Part IV, Item 14(a)(3)):
3. (i) -- 10 4. (a) -- 99 10. (a) -- 6
(ii) -- 12 (b)(i) -- 120 (b) -- 6
(b)(ii) -- 5 (c) -- 9
(d) -- 4
TABLE OF CONTENTS
ITEM PAGE
- ---- ----
PART I
1. Business............................................................ 3
2. Properties.......................................................... 5
3. Legal Proceedings................................................... 6
4. Submission of Matters to a Vote of Security Holders................. 12
PART II
5. Market for the Registrant's Common Equity and Related Stockholder
Matters............................................................. 13
6. Selected Financial Data............................................. 13
7. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 13
8. Financial Statements and Supplementary Data......................... 13
9. Changes In and Disagreements with Accountants on Accounting and
Financial Disclosure................................................ 13
PART III
10. Directors and Executive Officers of the Registrant.................. 14
11. Executive Compensation.............................................. 17
12. Security Ownership of Certain Beneficial Owners and Management...... 20
13. Certain Relationships and Related Transactions...................... 20
PART IV
14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.... 21
Signatures............................................................... 22
Exhibit Index............................................................ 23
2
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PART I
ITEM 1. BUSINESS.
General Development of Business.
Eagle-Picher Industries, Inc. (the "Company") was incorporated in 1867
under the laws of the State of Ohio as an outgrowth of a business enterprise
founded in Cincinnati in 1843. It conducts its business through unincorporated
operating divisions and separately incorporated subsidiaries, both of which are
referred to herein as divisions.
On January 7, 1991, the Company and seven of its domestic subsidiaries
each filed a voluntary petition for relief under chapter 11 of the United States
Bankruptcy Code ("chapter 11"). The chapter 11 filings were the consequence of a
cash shortfall resulting from the Company's inability to satisfy certain
immediate asbestos litigation liabilities. See Item 3.(a) below.
Financial Information About Industry Segment.
The Company's major industry segments are:
1. Industrial;
2. Machinery; and
3. Automotive.
Industry Segment Data is incorporated herein by reference to Exhibit 13, the
Company's Annual Report for the fiscal year ended November 30, 1995, pages
29-30.
Narrative Description of Business.
The Industrial Group, which is composed of three divisions and operations
in three other divisions, produces a variety of products for industrial markets,
principally manufacturers of consumer products. The Minerals Division mines and
refines diatomaceous earth products used for high purity filtration primarily by
the food and beverage industry and also for general industrial applications. The
Fabricon Products Division produces printed packaging materials for the dairy
and confectionery industries. The Specialty Materials Division refines rare
metals, such as high purity germanium and gallium compounds, and is a major
source of boron isotopes for nuclear applications. This Division also produces a
wide range of super-clean containers, which meet strict EPA protocols, for
environmental sampling. Other products manufactured in the Industrial Group
include custom designed cast plastic parts, injection molded rubber parts and
industrial chemicals.
The methods of distribution and competitive positions of the divisions of
the Industrial Group vary widely. For example, the Minerals Division is second
to the Alleghany Corporation in the sale of certain filter aid products which
are sold both directly and through distributors to many large and small
customers. By contrast, the Fabricon Products Division conducts its sales
through sales personnel and competes against many other firms in a highly
price-sensitive market. Other products are sold under competitive conditions
which vary widely from plant to plant.
The Machinery Group consists of five divisions, which are involved in
manufacturing products for various industrial markets. The Construction
Equipment Division produces earthmoving equipment for Caterpillar Inc. and a
line of heavy-duty industrial forklift trucks. The Electronics Division is a
leading supplier of sophisticated special purpose batteries for aerospace and
defense applications. The Cincinnati Industrial Machinery Division produces
specialized high-volume metal cleaning and finishing systems. The Ross Aluminum
Foundries Division manufactures complex aluminum castings in sand and plaster.
Transicoil Inc. manufactures sophisticated electronic components for aerospace,
shipboard, ground-based, and industrial applications.
The principal products manufactured by the Machinery Group are distributed
through various methods and in a variety of competitive environments. The
Electronics Division bids competitively for numerous fixed price government
contracts for special purpose batteries. The Division is a recognized leader in
this business
3
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and has a few competitors for some highly technological products, but many large
and small competitors for other products. The Construction Equipment Division is
the sole supplier of four lines of earthmoving equipment to its longstanding
largest customer, Caterpillar Inc. The forklift trucks are distributed through a
dealer network.
The Automotive Group consists of ten divisions, which are involved largely
in the production and sale of mechanical, structural and trim parts for
passenger cars, trucks, vans, and recreational and sport utility vehicles. The
Hillsdale Tool Division specializes in the manufacture of precision-machined
aluminum and steel parts. Typical machined products include torsional vibration
dampers and a variety of castings and forgings. The Division also produces the
entire front pump assembly for Ford Motor Co.'s electronic four-speed overdrive
transmission primarily used on one-half and three-quarter ton pick-up trucks,
vans and sport utility vehicles. The Plastics Division is a major supplier of
fiberglass reinforced molded plastic parts to automotive and other customers.
The Division also produces the fiberglass reinforced plastic roof panels for
General Motors Corporation's all-plastic body, all-purpose vehicle. The
Wolverine Gasket Division coats steel and aluminum with elastomeric compounds
and produces materials which are particularly suitable for high compression
applications. The International Operations Division includes Eagle-Picher
Industries Europe GmbH, with responsibility over three plants in Europe which
manufacture sealing and insulating products, elastomeric extrusions, and
injection molded parts for the European automotive market. The Division also
includes a sales and engineering office in Japan that serves the Asian market.
The Trim Division manufactures automotive interior trim including headliners,
rear package trays, spare tire covers and door panels. The Michigan Automotive
Research Corporation Division offers vehicle and vehicle system manufacturers a
comprehensive range of testing programs for engines, power trains and power
train components. The Rubber Molding Division manufactures small rubber
precision-molded parts. The Suspension Systems Division, which was formerly part
of the Rubber Molding Division, manufactures engineered rubber and rubber-to-
metal products. The department of the Orthane Division which produces
injection-molded plastic parts for automotive and industrial applications was
sold in January 1996. Certain assets of the Orthane Division, related to the
elastomeric extrusion process, were transferred to the new Fluid Systems
Division.
The Automotive Group distributes its products primarily to the "Big Three"
automotive manufacturers, or to other suppliers to those manufacturers, directly
through internal sales personnel. With respect to the hundreds of products
manufactured by the Automotive Group, competition varies widely as to the number
and type of competitors, the methods of competition and the Group's competitive
positions. Divisions producing precision-machined parts, such as Hillsdale Tool
Division, tend to have a few strong competitors (including among others the
automotive manufacturers themselves) and compete on the basis of quality and
price. Divisions such as Trim and Wolverine Gasket tend to have many competitors
of varying sizes and compete primarily on the basis of price. Generally,
competitive conditions for this Group are characterized by a decreasing number
of competitors, an increasing amount of foreign competition (particularly from
the Far East), an increased emphasis on quality and intense pricing pressures
from major customers.
No product accounted for more than 7%, and no customer accounted for more
than 10%, of total sales of the Company for fiscal 1993 through fiscal 1995
except Ford Motor Co., for which sales were $166.8 million in 1995, $165.3
million in 1994, and $148.0 million in 1993, and General Motors Corporation, in
1994 and 1993, when sales were $81.4 million and $73.1 million, respectively. In
addition, the Company is not dependent upon any individual raw material source
for a substantial part of its business and believes that its sources of raw
materials are adequate.
In the Machinery Group, order backlog was approximately $182.5 million as
of November 30, 1995, $190.1 million as of November 30, 1994 and $148.1 million
as of November 30, 1993. The decrease from the prior year is due primarily to
softer demand for capital equipment and heavy-duty forklift trucks and better
efficiencies in producing forklift trucks which worked off the prior year
backlog. A substantial portion of the order backlog outstanding at November 30,
1995 is expected to be filled within the current fiscal year. In no other
segment is order backlog of significance, except in the Specialty Materials
Division which had order backlogs of $34.4 million as of November 30, 1995, and
$25.1 million and $19.9 million as of November 30, 1994 and 1993, respectively.
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In fiscal 1995, the Company spent approximately $19.9 million for research
and development and related activities, primarily for the development of new
products or the improvement of existing products. Comparable costs were $21.1
million and $17.1 million for 1994 and 1993, respectively.
The Company owns or is licensed under patents relating to methods and
products in several areas of its business. Although these have been of value and
are expected to be of value in the future, the loss of any individual patent or
group of patents would not materially affect the conduct of the Company's
business.
In the fiscal years 1995, 1994, and 1993, for current operations the
Company spent approximately $10.9 million, $9.6 million and $8.6 million,
respectively, to comply with federal, state and local regulatory provisions
relating to the protection of the environment. This level of expenditures has
had no material effect on the earnings or competitive position of the Company or
its operations during the period described. The Company expects these
expenditures to be approximately $12.3 million in fiscal 1996. See Item 3.(d)
for information with respect to various other environmental proceedings.
As of November 30, 1995, the Company employed approximately 7,500 persons
in its operations, of whom approximately 1,900 were salaried employees and
approximately 5,600 were hourly employees. Approximately 20% of the Company's
hourly employees are represented by eight labor organizations under twelve
separate contracts. The thirteenth contract is currently being negotiated. The
Company believes that its relations with its employees generally are good.
Export sales totaled approximately $92.5 million, $76.9 million and $73.2
million in fiscal 1995, 1994 and 1993, respectively. The revenues generated by
foreign operations do not exceed 10% of consolidated revenues, nor do their
identifiable assets exceed 10% of consolidated total assets.
The Company's debtor-in-possession financing expires on the earlier of
December 31, 1996 or the effective date of a plan of reorganization. Should a
plan not become effective by the end of 1996, the Company would expect to have
the current facility extended as long as necessary.
ITEM 2. PROPERTIES.
Eagle-Picher Industries, Inc. manufactures at 57 locations a wide variety
of products primarily for other manufacturers. Types of manufacturing include,
among others, chemical processing, mining, metal fabricating, aluminum casting,
precision machining, electronic and electrical assembling, and rubber and
plastic molding and extruding.
The plants are fully utilized for the purposes intended and generally have
capacity for expansion of existing buildings on owned real estate. Plants range
in size from 425,000 square feet of floor area to under 50,000 square feet and
generally are located away from large urban centers.
Information on the locations of all manufacturing plants is contained in
Exhibit 99 attached hereto, which is incorporated by reference into this report.
The Company considers the following plants to be its most important
physical properties:
LOCATION GENERAL CHARACTER
-------------- ---------------------
INDUSTRIAL GROUP
Minerals Division........................ Lovelock, NV Processing facility
MACHINERY GROUP
Electronics Division..................... Joplin, MO Manufacturing plants
(six locations)
Construction Equipment Division.......... Lubbock, TX Fabrication and
assembly facility
AUTOMOTIVE GROUP
Hillsdale Tool Division.................. Hillsdale, MI Manufacturing plants
(four locations)
Plastics Division........................ Grabill, IN Manufacturing plant.
All of such properties are held in fee and none of them is subject to any major
encumbrances.
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ITEM 3. LEGAL PROCEEDINGS.
(a) Chapter 11 Proceedings.
On January 7, 1991 ("petition date"), the Company and seven of its
domestic subsidiaries each filed a voluntary petition for relief under chapter
11 of the United States Bankruptcy Code in the United States Bankruptcy Court
for the Southern District of Ohio, Western Division, in Cincinnati, Ohio
("Bankruptcy Court"). The subsidiaries that filed chapter 11 petitions are Daisy
Parts, Inc., Transicoil Inc., Michigan Automotive Research Corporation
("MARCO"), EDI, Inc., Eagle-Picher Minerals, Inc., Eagle-Picher Europe, Inc.,
and Hillsdale Tool & Manufacturing Co. On November 30, 1991, substantially all
of the assets of EDI, Inc. were sold pursuant to authority granted by the
Bankruptcy Court. All of the chapter 11 cases have been consolidated for
procedural purposes only under the caption: "In re Eagle-Picher Industries,
Inc., et al.," Consolidated Case No. 1-91-00100, before the Honorable Burton
Perlman, United States Bankruptcy Judge. The Company and its petitioning
subsidiaries, other than EDI, Inc., are operating their businesses and managing
their properties as debtors in possession, in accordance with the provisions of
the Bankruptcy Code.
The filing of a chapter 11 petition operates as an automatic stay of all
litigation against the debtor that was or could have been commenced before the
filing of the chapter 11 petition and of any act to collect or recover a claim
against the debtor that arose before the commencement of the chapter 11 case.
While claimants or the Company may petition the Bankruptcy Court for a
modification of the stay to permit such litigation or claim recovery to proceed,
the Company believes that it is unlikely that the Bankruptcy Court will grant
such permission except in certain limited instances to permit the liquidation of
a pre-petition claim, but not any payment or collection efforts with respect
thereto. Consistent with the provisions of chapter 11, the Company intends to
address all of the pre-petition claims in a plan of reorganization.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC") and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business.
At the Company's request, the Bankruptcy Court established a bar date of
October 31, 1991 for all pre-petition claims against the Company other than
those arising from the sale of asbestos-containing products and other than those
arising from any future rejection of executory contracts or unexpired leases in
the chapter 11 cases. The bar date is the date by which claimants who disagree
with the amounts recorded by the Company as owing to such claimants must file a
proof of claim against the Company in the Bankruptcy Court. The Company notified
all known or potential claimants subject to the October 31, 1991 bar date of
their possible need to file a proof of claim with the Bankruptcy Court. Of the
5,600 claims filed pursuant to this bar date, 2,675 were general claims (e.g.
vendor, note holder and other miscellaneous claims), 1,325 were
litigation-related claims and environmental claims, and 1,600 were
asbestos-related claims.
Substantially all of the general claims have been reconciled by the
Company. Such claims, as reconciled, have been allowed as pre-petition claims
against the Company's estate. The impact of these reconciliations on the
Company's financial statements was not material. The Company continues to
attempt to negotiate settlements for the remaining unreconciled general claims.
If they cannot be resolved by a negotiated settlement, the Company intends to
have them resolved by the Bankruptcy Court. The Company does not expect that the
impact of the resolution of these claims will be material. The
litigation-related and environmental claims are discussed in subsections (c) and
(d) respectively, below.
The Bankruptcy Court also established a bar date of September 30, 1992 for
all present asbestos-related claims. Approximately 161,000 asbestos-related
claims were filed with the Bankruptcy Court pursuant to the bar date.
Approximately 1,000 of these claims alleged property damage. The 1,600
asbestos-related claims referred to above filed prior to the October 31, 1991
bar date will be treated in the reorganization cases in the same manner as the
asbestos-related claims filed in connection with the September 30, 1992 bar
date. The asbestos-related claims are discussed more fully in subsection (b),
below.
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The Bankruptcy Court has approved five extensions of the periods during
which the Company has the exclusive right to file and confirm a chapter 11 plan
under section 1121(a) of the Bankruptcy Code ("Exclusive Periods"). The most
recent order of the Bankruptcy Court, entered on May 23, 1995, provides that the
Exclusive Periods are extended until further order of the Bankruptcy Court.
On June 5, 1992, a mediator was appointed by the Bankruptcy Court to
assist the Company, the ICC, the UCC, the RFC and the ESC in their efforts to
negotiate a consensual plan of reorganization. On November 9, 1993, the Company
reached an agreement ("Agreement") on the principal elements of a joint plan of
reorganization with the ICC and the RFC, the representatives of the holders of
present and future asbestos-related and other toxic tort claims in the Company's
chapter 11 case. The Agreement was reached with the assistance of the mediator
appointed by the Bankruptcy Court.
As a consequence of the Agreement, the Company recorded a provision in the
fourth quarter of 1993 of $1.135 billion to increase the asbestos liability
subject to compromise to $1.5 billion. The Company also recorded a provision of
$41.4 million in 1993 for environmental and other litigation claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization. On February 28, 1995, the Company and
its petitioning subsidiaries filed a plan of reorganization and accompanying
disclosure statement with the Bankruptcy Court ("Original Plan"). The Original
Plan was proposed jointly with the ICC and the RFC.
The Original Plan was premised on the settlement of the Company's
liability for all present and future asbestos-related personal injury claims and
certain other tort claims contemplated by the Agreement. Pursuant to the
Original Plan, these claims were to be channeled to and resolved by an
independently administered claims trust ("Trust") and the Bankruptcy Court would
issue an injunction with respect to such claims. The injunction would forever
stay, restrain and enjoin actions against the Company for the purpose of,
directly or indirectly, collecting, recovering, or receiving payment of, on or
with respect to any personal injury claims resulting from exposure to
asbestos-containing products allegedly manufactured or sold by the Company. In
1994, the Bankruptcy Code was amended to add, among others, new subsections
524(g) and (h), which authorize the issuance of a permanent injunction to
supplement the existing injunctive relief afforded by section 524 of the
Bankruptcy Code in asbestos-related reorganizations under chapter 11. The new
subsections provide that, if certain specified conditions are satisfied, a court
may issue a supplemental permanent injunction barring the assertion of
asbestos-related claims or demands against the reorganized company and
channeling those claims to an independent trust. The issuance of such a
channeling injunction was a condition precedent to confirmation of the Original
Plan.
The Original Plan provided for the distribution of cash, notes,
debentures, and common stock of the reorganized Company ("Plan Consideration")
to the Trust and to holders of allowed unsecured claims on a pro-rata basis
proportionate to their share of the aggregate amount of allowed pre-petition
unsecured claims against the Company and the other debtor entities. The Original
Plan also provided that claims entitled to priority in payment under the
Bankruptcy Code and convenience claims (general unsecured claims of $500 or less
or claims that will be reduced to that amount) would be paid in full, in cash.
Under the Bankruptcy Code, shareholders are not entitled to any distribution
under a plan of reorganization unless all classes of pre-petition creditors
receive satisfaction in full of their allowed claims or accept a plan which
allows shareholders to participate in the reorganized company or to receive a
distribution. The Original Plan did not provide that all classes of pre-petition
creditors would receive satisfaction in full of their allowed claims.
Consequently, the Original Plan did not provide for any distribution to
shareholders and their equity interests were to be canceled.
The Original Plan did not have the support of the UCC or the ESC because
neither the UCC or the ESC agreed with the amount of the aggregate asbestos
liability which had been negotiated and which was used in the proposed Plan to
determine the allocation of the consideration to be distributed to the unsecured
creditor and shareholder classes. As a result of the dispute, the Company was
unable to move forward with the Original Plan. In order to resolve this dispute,
the Company filed a motion in July 1995, requesting that the Bankruptcy Court
estimate the Company's aggregate liability on account of present and future
asbestos-related personal injury claims. The Bankruptcy Court ruled in December
1995 that the Company's estimated liability with
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respect to such claims is $2.5 billion ("Estimation Ruling"). The UCC and the
ESC and two individual members of the UCC have filed notices of appeal of the
Estimation Ruling. The Company does not know whether the appellate court will
hear the appeals or, if it does, when any decision will be rendered.
Following the Estimation Ruling, the Company recorded a provision of $1.0
billion to increase the asbestos liability subject to compromise to the amount
found by the Bankruptcy Court. This resulted in negative shareholders' equity in
excess of $2.2 billion. As a result, the Company filed a motion in the
Bankruptcy Court in December 1995 seeking an order directing the United States
Trustee to disband the ESC on the basis that existing equity holders do not have
an economic interest in the chapter 11 cases. In January 1996, the Bankruptcy
Court ruled that the ongoing activities of the ESC shall be limited to pursuing
its appeal of the Estimation Ruling.
In August 1995, certain entities that had, since the petition date,
purchased claims held by certain trade creditors of Hillsdale Tool &
Manufacturing Co., filed with the Bankruptcy Court a complaint seeking to
preclude the use of substantive consolidation as an element of any plan of
reorganization of the Company and its subsidiaries. Under the principles of
substantive consolidation, the assets of all debtors are used to satisfy claims
against all debtors. In its answer, the Company requested that the Bankruptcy
Court substantively consolidate the estates of the Company and its subsidiaries.
The Company believes that substantive consolidation is warranted in the chapter
11 cases. The Bankruptcy Court has scheduled an evidentiary hearing to commence
on March 4, 1996.
The Company intends to file with the Bankruptcy Court as soon as
practicable an amended plan of reorganization ("Amended Plan") and an
accompanying proposed amended disclosure statement. It is anticipated that the
Amended Plan essentially will modify the Original Plan so as to reflect in the
allocation of the distributions of Plan Consideration the effect of the
Estimation Ruling. More specifically, based upon an aggregate amount of allowed
pre-petition unsecured claims to share in the Plan Consideration of
approximately $2.663 billion, it is anticipated that under the Amended Plan the
Trust would receive approximately 94 percent of the Plan Consideration and the
other unsecured creditors the balance.
Each class of creditors and equity security holders that is impaired under
a plan of reorganization is entitled to vote to accept or reject the plan. The
Bankruptcy Code defines acceptance of a plan by a class of creditors as
acceptance by holders of two-thirds in dollar amount and more than one-half in
number of claims of that class that have timely voted to accept or reject the
plan. The Bankruptcy Code defines acceptance of a plan by a class of equity
security holders as acceptance by holders of equity interests that hold at least
two-thirds in amount of the allowed equity interests in such class who have
timely voted to accept or reject the plan. The Bankruptcy Code further provides
that any class that does not receive a distribution under a plan is deemed to
have rejected the plan, and, accordingly, does not vote. Thus, because the
Amended Plan will not provide for any distribution to the Company's existing
shareholders, that class will not vote on the Amended Plan and will be deemed to
reject the Amended Plan. The Bankruptcy Court will confirm a plan only if all of
the requirements of section 1129 of the Bankruptcy Code are met. Among the
requirements for confirmation of a plan are that the plan is (i) accepted by all
impaired classes of claims and equity interests or, if rejected by an impaired
class, that the plan "does not discriminate unfairly" and is "fair and
equitable" as to such class, (ii) feasible, and (iii) in the "best interest" of
creditors and stockholders impaired under the plan.
Additional information concerning the Original Plan, the Amended Plan and
the chapter 11 cases can be found in Note B to the Consolidated Financial
Statements in the Company's Annual Report for the fiscal year ended November 30,
1995, which is attached as Exhibit 13 to this Form 10-K and which is
incorporated herein by reference. Additional information concerning the chapter
11 proceedings can be found in subsections (b) through (d), inclusive, of this
Item 3.
(b) Asbestos.
Prior to its chapter 11 filing, the Company had been named as a
co-defendant in a substantial number of lawsuits alleging personal injury from
exposure to asbestos-containing insulation products. As of the petition date,
there were approximately 67,800 asbestos-related claims outstanding against the
Company. The claims, which were pending in 48 states, British Columbia, Guam,
the Virgin Islands, and the District of Columbia,
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alleged, in general, that the Company and other defendant manufacturers failed
to warn of the potential hazard to health from the inhalation of asbestos fiber
contained in their products. As a result of the chapter 11 filing by the
Company, all of such litigation was automatically stayed pursuant to section 362
of the Bankruptcy Code and additional suits were not allowed to be filed against
the Company.
Since the first asbestos case was filed in 1966, the Company has disposed
of approximately 73,500 claims through trial, dismissal or settlement. On
average, the Company spent approximately $7,800 per claim, including attorneys'
fees and other defense costs, to dispose of these claims.
All persons with a pre-petition asbestos-related claim were required to
file a proof of claim by the September 30, 1992 bar date. Approximately 160,000
proofs of claim were filed alleging personal injury. The Company believes that
approximately 11,000 of these claims are duplicates or were filed by persons
whose lawsuits were previously disposed of through trial, dismissal or
settlement. The Company expects that additional asbestos-related personal injury
claims will arise for several decades into the future. Such future claims were
not subject to the September 30, 1992 bar date.
The Company recorded a provision in the fourth quarter of 1993 of $1.135
billion to increase the asbestos liability subject to compromise on its books to
$1.5 billion, as a consequence of the proposed settlement discussed in
subsection (a), above. In July 1995, the Company filed a motion requesting that
the Bankruptcy Court estimate the Company's aggregate liability on account of
present and future asbestos-related personal injury claims. The motion was filed
because the UCC and the ESC appointed in the Company's chapter 11 cases had not
agreed with the amount of such liability previously negotiated for settlement
purposes among the Company, the ICC and the RFC. Utilizing information available
from the Company and from other sources, the Company's expert and the experts
retained by the committees and the RFC appointed in the chapter 11 cases gave
opinions as to this liability at the hearing before the Bankruptcy Court on this
matter. In December 1995, the Bankruptcy Court ruled that the Company's
estimated liability for such claims is $2,502,511,000. Specifically, the
Bankruptcy Court found the value of the asbestos-related personal injury claims
asserted prior to the petition date to be $478,000,000 and the value of future
such claims, claims which will be filed after the petition date, to be
$2,024,511,000. Appeals have been filed by certain creditors, the UCC and the
ESC, seeking to have the Bankruptcy Court's ruling overturned. The Company does
not know whether the appellate court will hear the appeals or, if it does, when
any decision may be rendered.
The Company, and numerous others, also were sued in both state and federal
courts by various entities that own or operate commercial properties and public
buildings, such as school districts, counties, cities, states, libraries and
hospitals, based on allegations that asbestos or asbestos-containing products
are or may be in the buildings. The typical demand in such suits is that the
defendants compensate the plaintiffs for any costs incurred in identifying,
repairing, encapsulating or removing the asbestos-containing products, or that
defendants perform such remedial action. Many suits seek an injunction requiring
abatement and punitive damages on the basis that the defendants allegedly knew
of the hazards and, in concert with one another, concealed and misrepresented
the dangers. Many such suits also seek indemnification from the defendants for
all claims for personal injury brought against plaintiffs resulting from the
presence of asbestos-containing products in plaintiffs' buildings. These suits
too have been stayed as against the Company as a result of the commencement of
the chapter 11 cases.
One hundred forty-nine such lawsuits were instituted against the Company
prior to the filing of its chapter 11 petition, including two which were
certified as class actions. Two of such suits were consolidated into one. One
hundred and one were disposed of through dismissals by the court following
rulings on pre-trial motions, or voluntarily by the plaintiffs. The Company
settled seven of these cases for less than $22,000 in the aggregate, prior to
filing its chapter 11 petition. Forty of such suits remain pending, but have
been stayed as a consequence of the chapter 11 filing.
The class actions that were certified pre-petition are a national school
class action consisting of all public and private elementary and secondary
school systems in the United States that have not excluded themselves from the
suit; and a Michigan school class action consisting of all public and private
elementary and secondary school systems in Michigan that have excluded
themselves from the national school class action and included themselves in the
state class action. In four lawsuits, class certification petitions were pending
pre-petition. One of these suits has since been dismissed; one suit has been
suspended; and the remaining two suits, one
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involving a class of colleges and universities and the other a class of
buildings leased to the government, have been certified as class actions. Many
of the claimants which voluntarily dismissed their individual claims as set
forth above did so to pursue them in one of the certified class actions.
Approximately 1,000 proofs of claim alleging asbestos property damage were
filed in the chapter 11 cases pursuant to the bar date. Certain of these claims
have been withdrawn by the claimants or disallowed by the Bankruptcy Court. The
remaining, approximately 930 proofs of claim assert claims in the aggregate
amount of approximately $11.5 billion. These claims include most of those
asserted in the lawsuits described above that were pending as of the petition
date.
It is anticipated that the Amended Plan will provide for the establishment
of a second trust to resolve asbestos-related property damage claims and
alternative mechanisms relating to such trust. More specifically, if the class
of asbestos-related property damage claimants votes to accept the Amended Plan,
the Company will fund the trust with $3 million in cash, the trustees for the
trust will be selected by the representatives of the claimants, and such
trustees will develop claims resolution procedures. If such class votes to
reject the Amended Plan, but the Amended Plan is nevertheless confirmed, the
trust will be funded with its pro rata share of the Plan Consideration, based
upon an estimate of the aggregate value of asbestos-related property damage
claims by the Bankruptcy Court, and such claims will be resolved and discharged
pursuant to claims resolution procedures contained in the Amended Plan. These
procedures will require such claimants to prove by application of a scientific
protocol that the asbestos-containing insulation products for which they are
seeking damages were manufactured by the Company.
In February 1996, after the close of the fiscal year, the hospital members
of the American Hospital Association, which filed asbestos-related property
damage claims against the Company in the alleged approximate amount of $300
million ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
(a) estimating the aggregate value of all asbestos-related property damage
claims against the Company, and (b) temporarily allowing such claims for
purposes of voting on a plan of reorganization. The motion states that the
relief requested is not intended to be a determination by the Bankruptcy Court
of the Company's liability, if any, on account of such claims or to assign a
permanently fixed value for such claims, but is sought in order to determine the
appropriate distribution to creditor classes under a plan of reorganization.
Because the motion was just filed, the Company has not yet made a determination
as to how it intends to respond. On February 15, 1996, however, the Company
filed with the Bankruptcy Court an objection on various grounds to the allowance
of many asbestos-related property damage claims, including the claims filed by
the Hospitals.
Additional information concerning the asbestos litigation can be found in
Note K to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(c) Other.
In June 1989, the City of New York filed suit against the Company and
others in New York state court seeking indemnity for costs New York had incurred
and would incur because residents of housing owned by the city were allegedly
injured by ingesting paint in that housing. Counts in this suit alleging
negligence and strict product liability have been dismissed. Certain other
counts are still pending. The City of New York did not file a proof of claim in
the Company's chapter 11 case with respect to the claims asserted in such
lawsuit by the 1991 bar date. In November 1993, however, it filed three proofs
of claim with respect to the litigation each seeking $50 million in damages. The
Company's objection to these claims, seeking to have them disallowed on the
basis that they were filed after the bar date, was sustained in November 1994,
and the claims were disallowed. As a result, and given the voluntary withdrawal
of three other lead-related property damage claims, the Company has disposed of
all lead-related property damage claims that were asserted in its chapter 11
case.
In addition to the foregoing, late in 1987, litigation was initiated
against the Company and numerous other defendants, which alleged claims for
personal injuries resulting from ingestion of lead-containing paint. Such suits
have been stayed as to the Company as a consequence of the filing of the chapter
11 cases.
One hundred twenty-eight (128) non-duplicative proofs of claim were timely
filed in the Bankruptcy Court asserting liability for personal injuries from
lead chemicals allegedly manufactured and sold by the
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Company. Four of such claims have been voluntarily withdrawn at the Company's
request. One of such claims was dismissed by the Bankruptcy Court. The Company
filed objections with the Bankruptcy Court to seven of such claims. Pursuant to
the objections, the Company sought an order of the Bankruptcy Court disallowing
such claims because the claimants' lawsuits asserting similar claims against
other defendants which were not in bankruptcy had been dismissed. Prior to the
filing of its chapter 11 case, the Company also had been a defendant in these
lawsuits. In June 1995, the Bankruptcy Court disallowed all seven of such
claims. Currently, there are 113 remaining timely-filed, lead-related personal
injury claims that have not been resolved.
The Company believes that it has valid grounds to object to the allowance
of all of the remaining lead-related personal injury claims. However, in
December 1994, the Eighth District Court of Appeals, Cleveland, Ohio, ruled that
the plaintiff in a lawsuit filed in state court in Cuyahoga County, Ohio, may
pursue certain claims against defendants, such as the Company, that manufactured
lead pigment. The trial court had dismissed the plaintiffs' enterprise
liability, market share and alternative liability theories pursuant to a defense
motion to dismiss. The Ohio Appeals Court upheld the dismissal of the enterprise
liability count, but reversed the dismissal as to the market share and
alternative liability counts and remanded the case to the trial court. The case
is currently proceeding before the trial court on the market share and
alternative liability counts. It is not possible to predict how or when the
trial court will rule on these counts or whether its rulings will be appealed.
It is currently contemplated that all lead-related personal injury claims
that were filed that are not disposed of pursuant to an objection filed by the
Company, and all such claims which may be filed in the future, will be channeled
to and resolved by the Trust that will be established under the Amended Plan for
the benefit of holders of asbestos-related and certain other personal injury
claims discussed in subsection (a), above.
On June 18, 1993, the Company, together with its wholly-owned subsidiary,
Transicoil Inc., commenced an adversary proceeding in the Bankruptcy Court
against Blue Dove Development Associates ("Blue Dove"), the landlord for
Transicoil's domestic manufacturing facility in Valley Forge, Pennsylvania, and
against K-Jem, Inc., Blue Dove's general partner. The suit seeks to recover
excess rent that the Company and Transicoil believe has been paid to the
landlord. The landlord filed a counterclaim in the adversary proceeding seeking
a determination that Transicoil has breached the lease and, therefore, the
entire rent through June 30, 2005 should be accelerated and due. The landlord
made similar claims in a suit filed against Transicoil in October 1993, in the
United States District Court for the Eastern District of Pennsylvania
("Pennsylvania Action"). Prosecution of the Pennsylvania Action which seeks
approximately $10.3 million in damages has been enjoined by the Bankruptcy
Court. The parties filed cross motions for Summary Judgment in the adversary
proceeding in the Bankruptcy Court, which the Bankruptcy Court denied in
December 1995. The Company and Transicoil are seeking leave of the United States
District Court for the Southern District of Ohio to appeal the denial of their
Motion for Summary Judgment, which sought as a matter of law and without a trial
an order requiring repayment of the excess rent that was paid, on the grounds
that the Bankruptcy Court misread the lease in denying their Motion. The Company
cannot predict when the District Court will rule on this request for leave to
appeal the Bankruptcy Court's decision. The Company believes that the
counterclaim asserted by the landlord and the claims asserted in the
Pennsylvania Action are without merit and that the resolution of the dispute
with respect to the lease will not have a materially adverse impact on the
financial condition of the Company or Transicoil Inc.
Additional information concerning such litigation claims can be found in
Note L to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(d) Environmental.
The Company received 1,102 proofs of claim in its chapter 11 cases
alleging a right to payment because of environmental matters. Many of these
claims were filed in connection with environmental matters reported in Form 10-K
reports for prior fiscal years. These include claims with respect to numerous
waste disposal sites previously discussed. They also include claims with respect
to the Tri-State mining district of Kansas, Missouri and Oklahoma previously
disclosed: Ottawa County, Oklahoma; Cherokee County, Kansas; Jasper
11
<PAGE>
<PAGE>
County, Missouri; and the Baxter Springs, Treece, and Galena Subsites in Kansas.
The Company has resolved the majority of these environmental claims through
negotiations with the EPA and the United States Department of Interior. Pursuant
to a negotiated agreement, the agencies and certain states will be granted
allowed pre-petition general unsecured claims in the Company's chapter 11 case
aggregating approximately $43.0 million in full satisfaction of all of the
Company's alleged liability at most of its known Superfund sites, including any
liability for any natural resource damage.
In exchange for these allowed claims, the agencies will release the
Company from liability at such Superfund sites and the Company will be protected
from contribution claims of other parties with potential liability at the sites.
Accordingly, the Company's settlement should completely resolve all claims with
respect to these sites. Further, the agreement provides a process which will
permit any liability, which may arise with respect to a small number of sites as
to which the EPA believes that it does not have sufficient information to
negotiate a meaningful settlement at this time, to be resolved in the future
when additional information is available.
During fiscal 1995, following execution of the settlement agreement by all
parties, the settlement agreement was lodged with the Bankruptcy Court and
notice of it was published in the Federal Register as required by law. In April
and September 1995, respectively, the Company and the United States filed
motions seeking approval of the settlement by the Bankruptcy Court.
Certain parties that may be liable at certain of the sites resolved by the
settlement agreement opposed Bankruptcy Court approval of the settlement. Such
opposition basically seeks increases in the amount of the allowed claims
provided in the settlement agreement attributable to the sites where the
objector may have liability. The UCC also opposed approval of the settlement,
arguing that the potential repeal of the retroactive liability provisions of the
Superfund laws could substantially reduce the Company's pre-petition liability,
and, accordingly, the allowed pre-petition claims of $43.0 million should be
reduced. The Company believes, however, that the terms and provisions of the
settlement agreement are fair and equitable and that the objections raised have
no basis. In November 1995, a hearing was held before the Bankruptcy Court on
the motions seeking the approval of the settlement agreement. The Court has not
yet ruled on the motions.
Additional information concerning the environmental claims can be found in
Note L to the Consolidated Financial Statements in the Company's Annual Report
for the fiscal year ended November 30, 1995, which is attached as Exhibit 13 to
this Form 10-K and which is incorporated herein by reference.
(e) Summary - Environmental And Other Claims.
The Company intends to defend all remaining litigation claims vigorously
in the manner permitted by the Bankruptcy Code and/or applicable law. All
pre-petition claims against the Company arising from litigation must be
liquidated or otherwise addressed in the context of the chapter 11 cases.
Further, all such claims against the Company will be addressed in a plan of
reorganization. During the pendency of the chapter 11 cases, any unresolved
litigation with respect to pre-petition claims can proceed against the Company
only with the express permission of the Bankruptcy Court.
The Company has resolved most of the litigation claims that were asserted
pursuant to the October 31, 1991 bar date, other than those claims arising from
the sale of asbestos-containing products. The Company has filed objections to
certain of the unresolved litigation-based claims seeking to reduce the amount
of such claims or eliminate them entirely. These objections have not yet been
resolved. The Company anticipates filing additional objections to other such
claims if they cannot be resolved through negotiation. These objections will be
litigated vigorously by the Company pursuant to the provisions of the Bankruptcy
Code and applicable law.
The Company expects that all such claims will be resolved without material
adverse effect on the Company, its operations or its financial condition. In
addition, the Company may have insurance coverage for certain of these claims
and may have factual and legal defenses available to it.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
No matter was submitted to a vote of security holders during the fourth
quarter of the fiscal year covered by this report.
12
<PAGE>
<PAGE>
PART II
CROSS REFERENCE SHEET
TO ANNUAL REPORT FOR THE FISCAL YEAR ENDED
NOVEMBER 30, 1995
MARKED AS EXHIBIT 13
EXHIBIT 13
<TABLE>
<CAPTION>
PAGES CAPTIONS
------ --------------------------------------
<S> <C> <C>
ITEM 5. MARKET FOR THE REGISTRANT'S
COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) Market Information 18 -- Quarterly Data
(b) Holders of Common Stock -- 5,932 holders of record at February
23, 1996
(c) Dividends 35 -- Selected Financial Data
32-34 -- Management's Discussion and
Analysis of Results of Operations
and Financial Condition
20-21 -- Note B to the Consolidated
Financial Statements
ITEM 6. SELECTED FINANCIAL DATA 35 -- Selected Financial Data
ITEM 7. MANAGEMENT'S DISCUSSION AND
ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 32-34 -- Management's Discussion and
Analysis of Results of Operations
and Financial Condition
ITEM 8. FINANCIAL STATEMENTS AND
SUPPLEMENTARY DATA 13 -- Consolidated Statement of Income
(Loss) for the Three Years Ended
November 30, 1995
16 -- Consolidated Statement of Cash
Flows for the Three Years Ended
November 30, 1995
14-15 -- Consolidated Balance Sheet as of
November 30, 1995 and 1994
17 -- Consolidated Statement of
Shareholders' Equity (Deficit) for
the Three Years Ended November 30,
1995
19-29 -- Notes to Consolidated Financial
Statements
32 -- Report of Management
31 -- Independent Auditors' Report
18 -- Quarterly Data
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
13
<PAGE>
<PAGE>
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Directors.
The name and age; the positions and offices held with the registrant;
principal occupation during the past five years and present employer; other
boards of directors on which he serves; the year in which he first became a
director of the Company and the committees on which he serves, follow for each
director:
<TABLE>
<CAPTION>
PRESENT
FIRST TERM
BECAME OF OFFICE
DIRECTOR EXPIRES
-------- ---------
<S> <C> <C>
PAUL W. CHRISTENSEN, JR., 71.............................................. 1969 1996
Retired, 1987; Chairman of the Board 1978-87, and President prior thereto,
of The Cincinnati Gear Company, Cincinnati, Ohio, a manufacturer of custom
gears and enclosed drives.
Member of Audit, Executive and Stock Option/Compensation Committees.
Chairman of Audit Committee.
MELVIN F. CHUBB, JR., 62.................................................. 1990 (1)
Senior Vice President 1988-96, of Eagle-Picher Industries, Inc.;
Lieutenant General, United States Air Force and Commander of the
Electronic Systems Division at Hanscom Air Force Base, Massachusetts,
1984-88. Director of Empire District Electric Co.
V. ANDERSON COOMBE, 69.................................................... 1974 1996
Chairman of the Board since March 1991, and President prior thereto
(through April 1991), of The Wm. Powell Company, Cincinnati, Ohio, a valve
manufacturer. Director of Star Banc Corp., The Starflo Corp., Union
Central Life Insurance Co. and The Wm. Powell Company.
Member of Audit, Executive and Stock Option/Compensation Committees.
ROGER L. HOWE, 61......................................................... 1986 (2)
Chairman of the Board of U.S. Precision Lens, Inc., Cincinnati, Ohio, a
manufacturer of optics for video projection, instrumentation, and
photographic applications.
Director of Cintas Corporation, Star Banc Corp. and Baldwin Piano & Organ
Co.
Member of Executive and Stock Option/Compensation Committees.
DANIEL W. LEBLOND, 69..................................................... 1965 (2)
Chairman of the Board of LeBlond Makino Machine Tool Company, Cincinnati,
Ohio, a manufacturer of machine tools.
Director of The Ingersoll Milling Machine Company, LeBlond Makino Machine
Tool Company and The Ohio National Life Insurance Co.
Member of Executive and Stock Option/Compensation Committees. Chairman of
Stock Option/Compensation Committee.
POWELL MCHENRY, 69........................................................ 1991 (2)
Of Counsel to Dinsmore & Shohl, a law firm, Cincinnati, Ohio, as of
October 1, 1991; Senior Vice President and General Counsel of The Procter
& Gamble Company, Cincinnati, Ohio, a manufacturer of consumer and
industrial products, 1983-91.
Member of Audit Committee.
</TABLE>
14
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PRESENT
FIRST TERM
BECAME OF OFFICE
DIRECTOR EXPIRES
-------- ---------
<S> <C> <C>
THOMAS E. PETRY, 56....................................................... 1981 (2)
Chairman of the Board and Chief Executive Officer 1994, Chairman of the
Board, President, and Chief Executive Officer 1992, Chairman of the Board
and Chief Executive Officer 1989, President and Chief Executive Officer
1982, President and Chief Operating Officer 1981, Group Vice President
1978, President, Akron Standard Division 1977, Vice President and
Treasurer 1974, of Eagle-Picher Industries, Inc. Director of Cinergy
Corp., Star Banc Corp., Union Central Life Insurance Co. and Insilco Corp.
Member and Chairman of Executive Committee.
EUGENE P. RUEHLMANN, 71................................................... 1991 1996
Of Counsel to Vorys, Sater, Seymour & Pease, a law firm, Cincinnati, Ohio
as of January 1, 1996; Partner of that firm 1989-1996, Chairman, Hamilton
County (Ohio) Republican Central Committee, 1991.
Director of Western-Southern Life Insurance Company.
Member of Audit Committee.
ANDRIES RUIJSSENAARS, 53.................................................. 1994 (2)
President and Chief Operating Officer as of December 1, 1994, Senior Vice
President 1989-94, President, the Ohio Rubber Company Division 1987-89,
Executive Vice President, the Ohio Rubber Company Division 1986-87, General
Manager of the subsidiary, Eagle-Picher Industries GmbH in Ohringen, Germany
1980-86, of Eagle-Picher Industries, Inc.
</TABLE>
- ----------
(1) Mr. Chubb retired from the Company's Board of Directors effective February
1, 1996.
(2) Messrs. LeBlond and Petry were elected directors to hold office for terms
expiring at the annual meeting of shareholders in 1994 or when their
successors are elected and qualified. Messrs. Howe and McHenry were elected
directors to hold office for terms expiring at the annual meeting of
shareholders in 1995 or when their successors are elected and qualified. As
the Company did not hold an annual meeting of shareholders in 1994 or 1995,
these directors continue to hold office until their successors are elected
and qualified. Mr. Ruijssenaars was elected director by the incumbent
directors on November 2, 1994 to serve in the same class as Messrs. LeBlond
and Petry, and accordingly will hold office until his successor is elected
and qualified.
(b) Executive Officers.
The name and age, the positions and offices held with the registrant and
employment history with the registrant, term of office as officer and period
during which each has served as such, follow for each executive officer:
<TABLE>
<CAPTION>
YEAR ELECTED
OR ASSUMED
PRESENT
AGE DUTIES
--- ------------
<S> <C> <C> <C>
Thomas E. Petry.......... Chairman of the Board of Directors and Chief
Executive Officer 56 1982
Andries Ruijssenaars..... President and Chief Operating Officer,
Director 53 1994
Melvin F. Chubb, Jr...... Senior Vice President and Director* 62 1988
David N. Hall............ Senior Vice President-Finance 56 1987
Wayne R. Wickens......... Senior Vice President 49 1994
Carroll D. Curless....... Vice President and Controller 57 1984
James A. Ralston......... Vice President, General Counsel and Secretary 49 1982
</TABLE>
- ----------
* Retired effective February 1, 1996.
15
<PAGE>
<PAGE>
Thomas E. Petry was first employed by the Company in 1968. He was elected
Assistant Treasurer in 1971, Treasurer in 1973 and Vice President and Treasurer
in 1974. He served as President of the Akron Standard Division from 1977 to
1978. He was elected Group Vice President in 1978, a Director, President and
Chief Operating Officer in 1981, and President and Chief Executive Officer in
1982. He served as President from 1981-89 and from 1992-94. He has been serving
as Chief Executive Officer since 1982 and as Chairman of the Board since 1989.
Andries Ruijssenaars was first employed by the Company in 1980 as General
Manager of Eagle-Picher Industries GmbH in Ohringen, Germany. He served as
Executive Vice President of The Ohio Rubber Company Division from 1986 to 1987
and as President of The Ohio Rubber Company Division from 1987 to 1989. He was
elected Senior Vice President in 1989 and was appointed a Director in November,
1994. He was elected President and Chief Operating Officer effective December 1,
1994 and has been serving in those capacities since December 1, 1994.
Melvin F. Chubb, Jr., was first employed by the Company in 1988 and was
elected and served as Senior Vice President from 1988 until his retirement
effective February 1, 1996. In 1990 Mr. Chubb was elected a Director. Prior to
joining the Company, he completed a career in the United States Air Force,
having attained the rank of Lieutenant General and having served most recently
as commander of the Electronic Systems Division, Air Force Systems Command at
Hanscom Air Force Base.
David N. Hall was first employed by the Company and elected Treasurer in
1977. He was elected Vice President and Treasurer in 1979, and he was elected
and has been serving as Senior Vice President-Finance since 1987.
Wayne R. Wickens was first employed by the Company in 1976 as a management
trainee with the former Fabricon Automotive Division, was promoted to Plant
Manager in 1979, Vice President in 1981 and then President of Fabricon
Automotive in 1986. He was named President of the Wolverine Gasket Division in
1988, Vice President of the Eagle-Picher Automotive Group in 1989, and Division
President of Hillsdale Tool & Manufacturing Co. in 1990. He was elected Senior
Vice President of the Company effective December 1, 1994.
Carroll D. Curless was first employed by the Company in 1964. He was
elected Assistant Controller in 1978 and Controller in 1984. He was elected and
has been serving as Vice President and Controller since 1986.
James A. Ralston was first employed by the Company as an attorney in the
Legal Department in 1979. He was elected Assistant Secretary in 1982, General
Counsel in 1982, Vice President and General Counsel in 1984, and Secretary in
1994. He has been serving as Vice President, General Counsel and Secretary since
1994.
Executive officers serve during the pleasure of the Board, or until their
successors are elected and qualified. There are no family relationships existing
between or among the above executive officers and directors of the registrant.
16
<PAGE>
<PAGE>
ITEM 11. EXECUTIVE COMPENSATION.
The following Summary Compensation Table sets forth for the last three
fiscal years the compensation provided by the Company to the Chief Executive
Officer and each of the other four most highly compensated executive officers
(collectively, "named executive officers"):
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION
----------------------------------------------
OTHER
FISCAL ANNUAL ALL OTHER
NAME AND YEAR COMPENSATION COMPENSATION
PRINCIPAL POSITION ENDED SALARY($) BONUS($) ($)(2) ($)(3)
- ----------------------------------------- --------- --------- -------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Thomas E. Petry.......................... 11/30/95 575,000 244,000 255,296 285,611
Chairman and 11/30/94 575,000 216,000 150,149 169,763
Chief Executive Officer 11/30/93 575,000 100,000 149,492 178,154
Andries Ruijssenaars..................... 11/30/95 390,000 145,000 87,298 102,571
President and Chief Operating Officer 11/30/94 300,000 100,000 86,033 101,197
11/30/93 275,000 75,000 22,760 31,420
Melvin F. Chubb, Jr...................... 11/30/95 290,000 100,000 129,387 149,692
Senior Vice President(1) 11/30/94 280,000 75,000 326,853 370,313
11/30/93 275,000 45,000 0 4,497
David N. Hall............................ 11/30/95 345,000 110,000 120,284 136,415
Senior Vice President -- Finance 11/30/94 320,000 95,000 193,447 216,177
11/30/93 310,000 65,000 50,133 62,692
Wayne R. Wickens......................... 11/30/95 280,000 85,000 24,377 31,109
Senior Vice President 11/30/94 205,000 60,000 20,272 29,512
11/30/93 195,000 60,000 7,150 25,202
</TABLE>
- ----------
(1) Mr. Chubb retired effective February 1, 1996.
(2) This column includes nothing for perquisites since in no case did they
exceed the reporting thresholds (the lesser of 10% of salary plus bonuses or
$50,000), but includes amounts for the payment of taxes on purchases of
annuities under the Supplemental Executive Retirement Plan.
(3) All Other Compensation:
<TABLE>
<CAPTION>
COST OF
ANNUITY UNDER COMPANY
NON-QUALIFIED CONTRIBUTIONS
SUPPLEMENTAL TO EAGLE-PICHER
EXECUTIVE RETIREMENT
YEAR RETIREMENT SAVINGS
ENDED PLAN($) PLAN($) TOTAL($)
--------- ------------- ---------------- --------
<S> <C> <C> <C> <C>
Thomas E. Petry.................. 11/30/95 280,991 4,620 285,611
Andries Ruijssenaars............. 11/30/95 97,951 4,620 102,571
Melvin F. Chubb, Jr.............. 11/30/95 145,072 4,620 149,692
David N. Hall.................... 11/30/95 131,795 4,620 136,415
Wayne R. Wickens................. 11/30/95 26,489 4,620 31,109
</TABLE>
17
<PAGE>
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR-END OPTION/SAR VALUES
NOTE: Registrant has never granted Stock Appreciation Rights (SARs), so
there are no SARs outstanding. There were no exercises of options by, or grants
of options to, the named executive officers during fiscal 1995.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF
UNDERLYING UNEXERCISED UNEXERCISED IN-THE-MONEY
OPTIONS AT FISCAL OPTIONS AT FISCAL
YEAR-END(#) YEAR-END($)
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
- ---------------------------------------- ------------------------- -------------------------
<S> <C> <C>
Thomas E. Petry......................... 0/100,000 **
Andries Ruijssenaars.................... 0/50,000 **
David N. Hall........................... 0/50,000 **
Melvin F. Chubb, Jr.*................... 0/50,000 **
Wayne R. Wickens........................ 0/10,000 **
</TABLE>
- ----------
* Retired effective February 1, 1996.
** None of the unexercised options held by any of the named executive
officers was "In-the-Money" as of November 30, 1995. Further, the
options were exercisable only if the last selling price per share on the
New York Stock Exchange ("NYSE") or its successor prior to the date on
which the Company received written notice of the exercise was at least
20% above the option price per share. Trading in the Company's shares on
the NYSE was suspended on November 15, 1993, and the NYSE delisted the
Company's shares effective June 9, 1994. All of the unexercised options
are at a price of $2.50 per share.
PENSION BENEFITS
The following table shows the estimated total combined annual benefits to
named executive officers upon retirement at age 62 payable under Social
Security, the Eagle-Picher Salaried Plan, and the Supplemental Executive
Retirement Plan:
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
-------------------------------------------------------------
REMUNERATION 15 20 25 30 35
- ---------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 250,000................... $ 90,000 $ 120,000 $ 150,000 $ 150,000 $ 150,000
300,000................... 108,000 144,000 180,000 180,000 180,000
350,000................... 126,000 168,000 210,000 210,000 210,000
400,000................... 144,000 192,000 240,000 240,000 240,000
450,000................... 162,000 216,000 270,000 270,000 270,000
500,000................... 180,000 240,000 300,000 300,000 300,000
550,000................... 198,000 264,000 330,000 330,000 330,000
600,000................... 216,000 288,000 360,000 360,000 360,000
650,000................... 234,000 312,000 390,000 390,000 390,000
700,000................... 252,000 336,000 420,000 420,000 420,000
750,000................... 270,000 360,000 450,000 450,000 450,000
800,000................... 288,000 384,000 480,000 480,000 480,000
850,000................... 306,000 408,000 510,000 510,000 510,000
900,000................... 324,000 432,000 540,000 540,000 540,000
950,000................... 342,000 456,000 570,000 570,000 570,000
1,000,000................... 360,000 480,000 600,000 600,000 600,000
</TABLE>
The Eagle-Picher Salaried Plan, a non-contributory defined benefit pension
plan in which the named executive officers are participants, provides benefits
after retirement based on the highest average monthly compensation during five
consecutive years of the last ten years preceding retirement. For purposes of
the Plan, compensation includes base salary, bonuses, commissions, and severance
payments; salary and bonus included are as reported in the Summary Compensation
Table, and commissions and severance payments, if
18
<PAGE>
<PAGE>
there had been any, would have been included in that Table. The benefits shown
by the Pension Plan Table above include amounts payable under Social Security
and the Company's Supplemental Executive Retirement Plan as well as those
payable under the Eagle-Picher Salaried Plan. Benefits are computed on the basis
of straight-life annuity amounts.
The estimated credited years of service with the Company for the named
executive officers at age 62 are:
<TABLE>
<S> <C>
Thomas E. Petry............................................ 33
David N. Hall.............................................. 24
Andries Ruijssenaars....................................... 24
Melvin F. Chubb, Jr........................................ 12
Wayne R. Wickens........................................... 32
</TABLE>
SEVERANCE PLAN
On February 6, 1991, the Board of Directors adopted a Severance Plan for
certain employees, including the named executive officers, which was approved by
the Bankruptcy Court on May 13, 1991. Under the Severance Plan, a participant
whose employment is terminated by the Company other than for cause receives: a
Base Severance Benefit of one week's pay for each year of Company service,
payable under general payroll pay practices, but reduced dollar for dollar by
any compensation earned from a subsequent employer during the period such
benefits are being paid; a Supplemental Severance Benefit ranging from three
months' salary up to one year's salary, payable in a lump sum upon termination;
and continuation of certain insurance benefits for up to one week for each year
of service. Currently, the Severance Plan provides that the payment of
Supplemental Severance Benefits will terminate upon confirmation of a plan of
reorganization. It is anticipated, however, that the Amended Plan that the
Company intends to file will provide for the continuation of the Severance Plan
for a period of at least twelve months after the effective date of the Amended
Plan.
COMPENSATION OF DIRECTORS
During fiscal 1995, directors were paid a retainer of $18,000 per year, a
fee of $750 for each Board meeting attended and a fee of $750 for each Board
committee meeting attended. Effective December 1, 1995, this retainer was
increased to $24,000 per year, and the fee for attending a meeting of the Board
or a Board committee was increased to $1,000 for each meeting attended. Board
committee members, excluding committee chairmen, are paid a retainer of $3,000
per year for each committee on which they serve; the chairman of each Board
committee is paid a retainer of $5,000 per year. The Company does not pay
director retainers or attendance fees, or committee retainers or attendance
fees, to directors who are also employees of the Company.
Directors who are not also employees of the Company who retire with ten or
more years of service as members of the Board are paid an annual advisory fee
for life in an amount equal to the annual retainer paid to active directors at
the time of their retirement.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1995, Messrs. LeBlond (Chairman), Christensen, Coombe and
Howe, directors of the Company, constituted the Stock Option/Compensation
Committee.
During fiscal 1995 and as of February 23, 1996, Mr. Petry, Chairman and
Chief Executive Officer of the Company, served as a director and as a member of
the compensation committee of The Wm. Powell Company. During fiscal 1995 and as
of February 23, 1996, Mr. Coombe was Chairman of the Board of The Wm. Powell
Company.
19
<PAGE>
<PAGE>
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
As of February 23, 1996, beneficial ownership of the Company's Common
Stock by all directors; each of the named executive officers (except Mr. Chubb
who retired effective February 1, 1996); and all directors and executive
officers as a group, was:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
BENEFICIAL PERCENT
OWNERSHIP OF CLASS
----------- ---------
<S> <C> <C>
DIRECTORS
Paul W. Christensen, Jr....................................... 38,000(1) *
V. Anderson Coombe............................................ 3,480(1) *
Roger L. Howe................................................. 0 *
Daniel W. LeBlond............................................. 0 *
Powell McHenry................................................ 1,000 *
Thomas E. Petry............................................... 129,102(2)(3) 1.17%
Eugene P. Ruehlmann........................................... 1,000 *
Andries Ruijssenaars.......................................... 52,433(2)(3) *
NAMED EXECUTIVE OFFICERS
David N. Hall................................................. 62,482(3) *
Wayne R. Wickens.............................................. 10,000(3) *
DIRECTORS AND EXECUTIVE OFFICERS AS A GROUP (12 PERSONS)...... 369,027(4) 3.34%
</TABLE>
- ----------
* Less than 1%.
(1) The following persons disclaim beneficial ownership as to the following
numbers of shares included herein which are beneficially owned by family
members: Mr. Christensen -- 13,000 shares; Mr. Coombe -- 1,520 shares.
(2) Messrs. Petry and Ruijssenaars are also executive officers of the Company;
their holdings of Company stock are listed here and not duplicated under the
Named Executive Officers individual listing immediately below.
(3) Includes shares subject to options to purchase within 60 days: Mr. Petry --
100,000; Mr. Ruijssenaars -- 50,000; Mr. Hall -- 50,000; Mr. Wickens --
10,000. The terms of the option grants make the options exercisable if the
last selling price per share on the New York Stock Exchange or its successor
is at least $3.00 on the day prior to the date on which the Company receives
written notice of the exercise.
(4) This figure includes 270,000 shares subject to options to purchase within 60
days on the same terms as set forth in footnote (3), above.
All shares shown above as owned were directly owned except as footnoted.
Directors and executive officers are considered control persons of the Company.
There were as of February 23, 1996 no beneficial owners of more than 5% of
the Company's Common Stock.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
The Board of Directors has no knowledge of any significant transaction or
proposed significant transaction to which the Company or any subsidiary and any
director, officer or nominee for director, or any associate of such director,
officer, or nominee, were or are to be parties.
20
<PAGE>
<PAGE>
<TABLE>
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
<S> <C>
(a) 1. All Financial Statements
Eagle-Picher Industries, Inc. (Incorporated by reference to the
Company's Annual Report for the fiscal year ended November 30, 1995,
Exhibit 13 -- See Part II above)
Independent Auditors' Report -- Incorporated by reference to Exhibit
13, page 36
3. Exhibits (numbers keyed to Item 601, Regulation S-K).
* 3.(i) Amended Articles of Incorporation as adopted May 1, 1985 and amended
May 28, 1986. Incorporated by reference to Exhibit 1 to Form S-8
Registration Statement No. 33-45179 for the Registrant's Stock
Option Plan of 1990.
* (ii) Code of Regulations of Eagle-Picher Industries, Inc., last amended
March 26, 1985. Incorporated by reference to Exhibit 3(b) to Report
on Form 10-K of Registrant for the fiscal year ended November 30,
1992.
* 4.(a) Form of Indenture relating to the $50,000,000 Eagle-Picher
Industries, Inc. 9 1/2% Sinking Fund Debentures due March 1, 2017,
dated as of March 1, 1987, between Eagle-Picher Industries, Inc. and
The Bank of New York. Incorporated by reference to Report on Form
8-K of Registrant dated March 5, 1987 (on file with the SEC; SEC
File No. 1-1499).
* (b)(i) Credit and Agency Agreement (debtor-in-possession financing
agreement) dated as of November 5, 1992. Incorporated by reference
to Exhibit 4(b) to Form 10-K of Registrant for the fiscal year ended
November 30, 1992.
* (ii) First Amendment to Credit Agreement dated as of August 29, 1994
incorporated by reference to Exhibit 4(b)(ii) to Report on Form 10-K
of Registrant for the fiscal year ended November 30, 1994.
*10.(a) Eagle-Picher Industries, Inc. Stock Option Plan of 1983, as amended.
Incorporated by reference to Exhibit 28 to Post Effective Amendment
No. 1 dated April 10, 1990 and Appendix 2 dated May 30, 1991 to
Registrant's Form S-8 Registration Statement No. 33-5792.
* (b) Eagle-Picher Industries, Inc. Stock Option Plan of 1990.
Incorporated by reference to Appendix A to Registrant's Proxy
Statement for Annual Meeting of Shareholders, March 27, 1990 (on
file with the SEC; SEC File No. 1-1499).
* (c) Eagle-Picher Supplemental Executive Retirement Plan. Incorporated by
reference to Report on Form 10-Q of Registrant for the quarter ended
May 31, 1995.
* (d) Eagle-Picher Industries, Inc. Severance Plan dated as of June 25,
1991. Incorporated by reference to Report on Form 10-K of Registrant
for the fiscal year ended November 30, 1994.
13. Excerpts from Eagle-Picher Industries, Inc. Annual Report for the
fiscal year ended November 30, 1995.
21. Subsidiaries of the Registrant.
23. Independent Auditors' Consent.
24.(a),(b) Powers of Attorney.
27. Financial Data Schedules (submitted electronically to the SEC for
its information).
99. Plants and Locations.
</TABLE>
(b) Reports on Form 8-K.
* (i) December 7, 1995 - Reporting December 4, 1995 decision of the U.S.
Bankruptcy Court presiding over chapter 11 cases of the Company and
seven of its domestic subsidiaries that the Company's estimated
aggregate liability on account of present and future
asbestos-related personal injury claims is $2,502,511,000.
- ----------
* Incorporated by reference.
21
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the Requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Eagle-Picher Industries, Inc.
By /s/ Thomas E. Petry
----------------------------
Thomas E. Petry
Chairman of the Board
and Chief Executive Officer
Date: February 27, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C>
/s/ Thomas E. Petry Date: February 27, 1996
- -------------------------------------------
Thomas E. Petry, Chairman of the
Board and Chief Executive Officer
/s/ David N. Hall Date: February 27, 1996
- --------------------------------------------
David N. Hall, Senior Vice President-Finance
(Principal Financial Officer)
/s/ Carroll D. Curless* Date: February 27, 1996
- --------------------------------------------
Carroll D. Curless, Vice President
and Controller (Principal Accounting Officer)
/s/ Paul W. Christensen, Jr.* Date: February 27, 1996
- --------------------------------------------
Paul W. Christensen, Jr., Director
/s/ V. Anderson Coombe* Date: February 27, 1996
- --------------------------------------------
V. Anderson Coombe, Director
/s/ Roger L. Howe* Date: February 27, 1996
- --------------------------------------------
Roger L. Howe, Director
/s/ Daniel W. LeBlond* Date: February 27, 1996
- --------------------------------------------
Daniel W. LeBlond, Director
/s/ Powell McHenry* Date: February 27, 1996
- --------------------------------------------
Powell McHenry, Director
/s/ Eugene P. Ruehlmann* Date: February 27, 1996
- --------------------------------------------
Eugene P. Ruehlmann, Director
/s/ Andries Ruijssenaars* Date: February 27, 1996
- --------------------------------------------
Andries Ruijssenaars, Director
- ---------------
* By /s/ James A. Ralston
- --------------------------------------------
James A. Ralston
Attorney-in-fact
</TABLE>
22
<PAGE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER
- ---------
<S> <C>
3(i) -- Articles of Incorporation*
3(ii) -- Code of Regulations*
4(a) -- Form of Indenture, $50,000,000 9 1/2% Sinking Fund Debentures
due March 1, 2017*
4(b)(i) -- Credit and Agency Agreement dated as of November 5, 1992*
4(b)(ii) -- First Amendment to Credit Agreement, dated as of August 29,
1994*
10(a),(b) -- Eagle-Picher Industries, Inc. Stock Option Plans of 1983 and
1990*
10(c) -- Eagle-Picher Supplemental Executive Retirement Plan*
10(d) -- Eagle-Picher Industries, Inc. Severance Plan dated as of June
25, 1991*
13 -- Excerpts from Annual Report for the Fiscal Year Ended November
30, 1995
21 -- Subsidiaries of the Registrant
23 -- Independent Auditors' Consent
24(a),(b) -- Powers of Attorney
27 -- Financial Data Schedules (Submitted electronically to the SEC
for its information.)
99 -- Plants and Locations
</TABLE>
- ----------
* Incorporated by reference. See page 21 above.
23
<PAGE>
<PAGE>
EXHIBIT 13
<PAGE>
<PAGE>
CONSOLIDATED STATEMENT OF INCOME (LOSS)
<TABLE>
<CAPTION>
Years Ended November 30
-----------------------------------------
(In thousands of dollars, except per share) 1995 1994 1993
- ----------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES $ 848,548 $ 756,741 $ 661,452
OPERATING COSTS AND EXPENSES
Cost of products sold 706,586 622,907 548,605
Selling and administrative 78,875 75,553 69,093
- ----------------------------------------------------------------------------------------
785,461 698,460 617,698
- ----------------------------------------------------------------------------------------
OPERATING INCOME 63,087 58,281 43,754
Provision for asbestos litigation (1,005,511) -- (1,135,500)
Provision for environmental and other claims -- -- (41,436)
Interest expense (contractual
interest of $8,897 in 1995, $8,940
in 1994 and $9,369 in 1993) (1,926) (1,809) (2,070)
Gain on sale of investment 11,505 -- --
Other income (expense) 199 703 (174)
- ----------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE REORGANIZATION
ITEMS, TAXES AND CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (932,646) 57,175 (1,135,426)
REORGANIZATION ITEMS (2,225) (3,426) (4,344)
- ----------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE TAXES AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE (934,871) 53,749 (1,139,770)
INCOME TAXES 9,300 5,000 5,000
- ----------------------------------------------------------------------------------------
INCOME (LOSS) BEFORE CUMULATIVE
EFFECT OF ACCOUNTING CHANGE (944,171) 48,749 (1,144,770)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR POSTRETIREMENT BENEFITS -- -- (12,598)
- ----------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (944,171) $ 48,749 $(1,157,368)
========================================================================================
INCOME (LOSS) PER SHARE:
INCOME (LOSS) BEFORE CUMULATIVE EFFECT
OF ACCOUNTING CHANGE $ (85.51) $ 4.42 $ (103.78)
CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING
FOR POSTRETIREMENT BENEFITS -- -- (1.14)
- ----------------------------------------------------------------------------------------
NET INCOME (LOSS) $ (85.51) $ 4.42 $ (104.92)
========================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
13.
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
November 30
-----------------------
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 93,330 $ 92,606
Receivables, less allowances of $1,860
in 1995 and $1,445 in 1994 127,044 109,130
Income tax refund receivable 4,402 2,246
Inventories 83,647 81,982
Prepaid expenses 17,695 10,295
- --------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 326,118 296,259
- --------------------------------------------------------------------------------
PROPERTY, PLANT AND EQUIPMENT
Land and land improvements 12,482 11,940
Buildings 84,549 79,937
Machinery and equipment 319,987 301,518
Construction in progress 24,939 14,623
- --------------------------------------------------------------------------------
441,957 408,018
Less accumulated depreciation 286,139 263,369
- --------------------------------------------------------------------------------
NET PROPERTY, PLANT AND EQUIPMENT 155,818 144,649
- --------------------------------------------------------------------------------
DEFERRED INCOME TAXES 62,824 43,924
OTHER ASSETS 35,313 36,275
- --------------------------------------------------------------------------------
TOTAL ASSETS $580,073 $521,107
================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
14. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
November 30
--------------------------
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 40,318 $ 43,691
Compensation and employee benefits 13,759 14,005
Long-term debt - current portion 1,525 1,726
Income taxes 4,789 5,223
Taxes other than income 4,772 4,611
Other accrued liabilities 17,460 16,705
- --------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 82,623 85,961
- --------------------------------------------------------------------------------------
LIABILITIES SUBJECT TO COMPROMISE 2,662,530 1,657,265
LONG-TERM DEBT, less current portion 19,103 19,896
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 21,720 21,070
OTHER LONG-TERM LIABILITIES 5,405 3,608
- --------------------------------------------------------------------------------------
TOTAL LIABILITIES 2,791,381 1,787,800
- --------------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY (DEFICIT)
Preference stock - no par value
Authorized 873,457 shares; none issued -- --
Common stock - $1.25 par value per share
Authorized 30,000,000 shares; issued
11,125,000 shares 13,906 13,906
Additional paid-in capital 36,378 36,378
Accumulated deficit (2,261,289) (1,317,118)
Unrealized gain on investments 333 --
Foreign currency translation 1,277 2,054
- --------------------------------------------------------------------------------------
(2,209,395) (1,264,780)
Cost of 84,068 common treasury shares (1,913) (1,913)
- --------------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY (DEFICIT) (2,211,308) (1,266,693)
- --------------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) $ 580,073 $ 521,107
======================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
15.
<PAGE>
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended November 30
-----------------------------------------
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (944,171) $ 48,749 $(1,157,368)
Adjustments to reconcile net income (loss)
to net cash provided by operating
activities:
Provision for asbestos litigation 1,005,511 -- 1,135,500
Provision for environmental and
other claims -- -- 41,436
Cumulative effect of accounting change -- -- 12,598
Depreciation and amortization 28,708 26,143 24,955
Gain on sale of investment (11,505) -- --
Changes in assets and liabilities:
Receivables (17,914) (11,544) (10,764)
Inventories (1,665) (13,676) (4,098)
Deferred income taxes (18,900) (14,000) (12,137)
Accounts payable (3,373) 11,326 5,539
Other (6,235) (1,905) 2,015
- --------------------------------------------------------------------------------------------
Net cash provided by
operating activities 30,456 45,093 37,676
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investment 11,505 -- --
Capital expenditures (40,558) (35,887) (28,512)
Other 340 1,800 335
- --------------------------------------------------------------------------------------------
Net cash used in investing
activities (28,713) (34,087) (28,177)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of long-term debt 1,240 -- 810
Reduction of long-term debt (2,259) (2,974) (4,007)
Issuance of common shares -- -- 156
- --------------------------------------------------------------------------------------------
Net cash used in financing
activities (1,019) (2,974) (3,041)
- --------------------------------------------------------------------------------------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 724 8,032 6,458
- --------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 92,606 84,574 78,116
- --------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 93,330 $ 92,606 $ 84,574
============================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
16. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
TOTAL
ADDITIONAL UNREALIZED FOREIGN SHAREHOLDERS'
COMMON PAID-IN ACCUMULATED GAIN ON CURRENCY TREASURY EQUITY
STOCK CAPITAL DEFICIT INVESTMENTS TRANSLATION STOCK (DEFICIT)
-----------------------------------------------------------------------------------------------
(In thousands of dollars)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE NOVEMBER 30, 1992 $ 13,906 $ 37,644 $ (208,499) $ -- $ 1,326 $ (3,335) $ (158,958)
Net loss -- -- (1,157,368) -- -- -- (1,157,368)
Stock options -- (1,266) -- -- -- 1,422 156
Foreign currency translation -- -- -- -- (1,036) -- (1,036)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1993 13,906 36,378 (1,365,867) -- 290 (1,913) (1,317,206)
Net income -- -- 48,749 -- -- -- 48,749
Foreign currency translation -- -- -- -- 1,764 -- 1,764
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1994 13,906 36,378 (1,317,118) -- 2,054 (1,913) (1,266,693)
Cumulative effect of change in
accounting for marketable
securities -- -- -- 5,377 -- -- 5,377
Net loss -- -- (944,171) -- -- -- (944,171)
Realized gain on investment -- -- -- (5,044) -- -- (5,044)
Foreign currency translation -- -- -- -- (777) -- (777)
- ----------------------------------------------------------------------------------------------------------------------------------
BALANCE NOVEMBER 30, 1995 $ 13,906 $ 36,378 $(2,261,289) $ 333 $ 1,277 $ (1,913) $(2,211,308)
==================================================================================================================================
</TABLE>
See accompanying notes to consolidated financial statements.
17.
<PAGE>
<PAGE>
QUARTERLY DATA
<TABLE>
<CAPTION>
(Unaudited)
(In thousands of dollars, except per share)
- -----------------------------------------------------------------------------------------
1995 FIRST SECOND THIRD FOURTH YEAR
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET SALES $197,603 $225,378 $210,723 $214,844 $848,548
- -----------------------------------------------------------------------------------------
OPERATING INCOME 15,113 19,147 14,022 14,805 63,087
- -----------------------------------------------------------------------------------------
NET INCOME (LOSS) 13,032 16,776 23,394(1) (997,373)(2) (944,171)
- -----------------------------------------------------------------------------------------
NET INCOME (LOSS) PER SHARE 1.18 1.52 2.12 (90.33)(2) (85.51)
- -----------------------------------------------------------------------------------------
BID PRICES (3)
HIGH 23/32 9/32 3/16 7/32 23/32
- -----------------------------------------------------------------------------------------
LOW 1/16 1/32 1/16 3/32 1/32
- -----------------------------------------------------------------------------------------
ASK PRICES (3)
HIGH 1-1/32 1/2 11/32 11/32 1-1/32
- -----------------------------------------------------------------------------------------
LOW 3/16 5/32 3/16 7/32 5/32
- -----------------------------------------------------------------------------------------
1994 First Second Third Fourth Year
- -----------------------------------------------------------------------------------------
Net Sales $177,754 $196,994 $186,191 $195,802 $756,741
- -----------------------------------------------------------------------------------------
Operating Income 13,781 17,537 14,226 12,737 58,281
- -----------------------------------------------------------------------------------------
Net Income 11,039 14,669 11,733 11,308 48,749
- -----------------------------------------------------------------------------------------
Net Income Per Share 1.00 1.33 1.06 1.03 4.42
- ----------------------------------------------------------------------------------------
Bid Prices (3)
High 7/8 13/16 1/2 7/16 7/8
- ------------------------------------------------------------------------------------------
Low 1/16 1/4 7/32 1/16 1/16
- -----------------------------------------------------------------------------------------
Ask Prices (3)
High 1-3/8 1-1/4 7/8 11/16 1-3/8
- -----------------------------------------------------------------------------------------
Low 5/32 9/16 15/32 1/4 5/32
- -----------------------------------------------------------------------------------------
</TABLE>
(1) The Company realized an $11.5 million gain on the sale of certain equity
investments in June 1995.
(2) In December 1995, the Bankruptcy Court ruled that the estimated aggregate
liability on account of present and future asbestos-related personal
injury claims is $2.5 billion. Accordingly, the Company recorded a
provision of approximately $1.0 billion to increase its asbestos liability
subject to compromise to $2.5 billion.
(3) Effective June 9, 1994, the Company's Common Stock was delisted from the
New York Stock Exchange. It is now trading on the Over-the-Counter Market
(trading symbol is EPIHQ). The sources of all prices are quotations from
the pink sheets and the OTC Bulletin Board. The bid and ask quotations
represent prices between dealers, do not include retail markup, markdown
or commission, and do not represent actual transactions.
18. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
A. SIGNIFICANT ACCOUNTING POLICIES
The significant accounting policies used in the preparation of the consolidated
financial statements are summarized below. These policies conform to generally
accepted accounting principles and have been consistently applied.
The Company has accounted for all transactions related to the chapter 11
proceedings in accordance with Statement of Position 90-7 ("SOP 90-7"),
"Financial Reporting by Entities in Reorganization Under the Bankruptcy Code,"
issued by the American Institute of Certified Public Accountants. Accordingly,
Liabilities Subject to Compromise under the chapter 11 proceedings have been
segregated on the Consolidated Balance Sheet and are recorded at the amounts
that have been or are expected to be allowed on known claims rather than
estimates of consideration those claims may receive in a plan of reorganization.
In addition, the Consolidated Statement of Income (Loss) separately discloses
expenses related to the chapter 11 proceedings.
Principles of Consolidation
The consolidated financial statements include the accounts of all of the
Company's subsidiaries which are more than 50% owned and controlled.
Intercompany accounts and transactions have been eliminated. Investments in
nonconsolidated companies which are at least 20% owned are accounted for using
the equity method.
Separate condensed combined financial statements of the entities in
chapter 11 have not been presented because they represent a substantial portion
of the Company. Additionally, entities not in chapter 11 represent identifiable
investments of those entities in chapter 11 and are therefore subject to the
chapter 11 process.
Cash and Cash Equivalents
Marketable securities with original maturities of three months or less are
considered to be cash equivalents. The carrying amount reported in the
Consolidated Balance Sheet approximates fair value.
Marketable Securities
Effective December 1, 1994, the Company adopted the provisions of Statement of
Financial Accounting Standards No. 115 ("FAS 115"), "Accounting for Certain
Investments in Debt and Equity Securities." On November 30, 1995, these
investments have been categorized as available for sale and, as a result, are
stated at fair value, based generally on quoted market prices. Unrealized
holding gains and losses are included as a component of Shareholders' Equity
(Deficit) until realized. Realized gains and losses on sales of investments, as
determined on a specific identification basis, are included in the Consolidated
Statement of Income.
Concentrations of Credit Risk
Financial instruments which potentially expose the Company to concentrations of
credit risk consist primarily of trade accounts receivable. The Company's
customer base includes all significant automotive manufacturers and their first
tier suppliers in North America and Europe. Although the Company is directly
affected by the well-being of the automotive industry, management does not
believe significant credit risk existed at November 30, 1995.
Inventories
Inventories are valued at the lower of cost or market, which approximates
current replacement cost. A substantial portion of domestic inventories are
valued using the last-in first-out ("LIFO") method while the balance of the
Company's inventories are valued using the first-in first-out method.
Property, Plant and Equipment
The Company records investments in plant, property and equipment at cost. The
Company provides for depreciation of plant and equipment using the straight-line
method over the estimated lives of the assets which are generally 20 to 40 years
for buildings and 3 to 12 years for machinery and equipment. Improvements which
extend the useful life of property are capitalized, while repair and maintenance
costs are charged to operations as incurred.
Cost in Excess of Net Assets Acquired
Amounts are being amortized using the straight-line method primarily over 40
years.
Income Taxes
Income taxes are provided based upon income for financial statement purposes.
Deferred tax assets and liabilities are established based on the difference
between the financial statement and income tax bases of assets and liabilities
using existing tax rates.
19.
<PAGE>
<PAGE>
Foreign Currency Translation
Assets and liabilities of foreign subsidiaries are translated at current
exchange rates, and income and expenses are translated using weighted average
exchange rates. Adjustments resulting from translation of financial statements
stated in local currencies generally are excluded from the results of operations
and accumulated in a separate component of Shareholders' Equity (Deficit). Gains
and losses from foreign currency transactions are included in the determination
of net income (loss) and were not material.
Reclassifications
Certain prior year amounts have been reclassified to conform with current year
financial statement presentation.
B. PROCEEDINGS UNDER CHAPTER 11
On January 7, 1991 ("petition date"), Eagle-Picher Industries, Inc. ("Company")
and seven of its domestic subsidiaries each filed a voluntary petition for
relief under chapter 11 of the United States Bankruptcy Code ("chapter 11") with
the United States Bankruptcy Court for the Southern District of Ohio, Western
Division, in Cincinnati, Ohio ("Bankruptcy Court"). Each filing entity, other
than EDI, Inc., currently is operating its business as a debtor in possession in
accordance with the provisions of the Bankruptcy Code.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC") and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business. The official committees
and the RFC typically are the entities with which the Company would negotiate
the terms of a plan of reorganization. In June 1992, a mediator was appointed by
the Bankruptcy Court to assist the constituencies in their negotiations.
On November 9, 1993, the Company reached an agreement on the principal
elements of a joint plan of reorganization. The agreement was with the ICC and
the RFC, the representatives of the holders of present and future
asbestos-related personal injury and other toxic tort claims in the Company's
chapter 11 case, and was reached with the assistance of the mediator. One of the
principal elements of the agreement was a negotiated settlement of the Company's
aggregate liability for such claims in the amount of $1.5 billion. As a
consequence of this agreement, the Company recorded a provision in the fourth
quarter of 1993 of $1.135 billion to increase the asbestos liability subject to
compromise to $1.5 billion. The Company also recorded a provision of $41.4
million in 1993 for environmental and other litigation claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization ("Original Plan"). The Original Plan
was filed with the Bankruptcy Court on February 28, 1995. The Original Plan did
not have the support of the UCC or the ESC because they did not agree with the
amount of the aggregate asbestos liability which had been negotiated and which
was used in the Original Plan to determine the allocation of the consideration
to be distributed to the unsecured creditor and shareholder classes. As a result
of the dispute, the Company was unable to move forward with the Original Plan.
In order to resolve this dispute, the Company filed a motion in July 1995
requesting that the Bankruptcy Court estimate the Company's aggregate liability
on account of present and future asbestos-related personal injury claims. The
Bankruptcy Court ruled in December 1995 that the Company's liability is $2.5
billion ("Estimation Ruling"). The UCC, the ESC and two individual members of
the UCC have filed notices of appeal of the Estimation Ruling. The Company does
not know whether the Appellate Court will hear the appeals or, if it does, when
any decision will be rendered.
The Company intends to file a First Amended Consolidated Plan of
Reorganization ("Amended Plan") which will reflect the Estimation Ruling. The
Company anticipates that the only substantive modification to the Original Plan
will relate to the allocation of the consideration to be distributed under the
plan to the various classes of unsecured claims.
The Amended Plan, like the Original Plan, contemplates a resolution of the
Company's liability for all present and future asbestos-related personal injury
claims and certain other tort claims. These claims will be channeled to and
resolved by an independently administered claims trust ("Trust"). The Amended
Plan also will provide for the distribution of cash, notes, debentures, and
common stock
20. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
of the reorganized Company to the Trust and to holders of allowed unsecured
claims on a pro-rata basis proportionate to the percentage of their claims to
the total of the Liabilities Subject to Compromise. Claims entitled to priority
under the Bankruptcy Code and convenience claims (general unsecured claims of
$500 or less or claims that will be reduced to that amount) will be paid in
full, in cash. In addition, it is contemplated that the Amended Plan will
resolve and discharge all asbestos property damage claims. Under the Bankruptcy
Code, shareholders are not entitled to any distribution under a plan of
reorganization unless all classes of pre-petition creditors receive satisfaction
in full of their allowed claims or accept a plan which allows shareholders to
participate in the reorganized company or to receive a distribution. It is
anticipated that under the Amended Plan, existing shareholders will receive no
distributions and their shares will be canceled.
Following the Estimation Ruling, the Company recorded a provision of $1.0
billion to increase the asbestos liability subject to compromise to the amount
found by the Bankruptcy Court. This resulted in negative shareholders' equity in
excess of $2.2 billion. As a result, the Company filed a motion in the
Bankruptcy Court in December 1995 seeking an order to direct the United States
Trustee to disband the ESC on the basis that existing equity holders do not have
an economic interest in the chapter 11 cases. In January 1996, the Bankruptcy
Court ruled that the ongoing activities of the ESC shall be limited to pursuing
its appeal of the Estimation Ruling.
The accompanying consolidated financial statements have been prepared on a
going concern basis which contemplates continuity of operations, realization of
assets and liquidation of liabilities in the ordinary course of business. The
Liabilities Subject to Compromise have been reported on the basis of the amount
of the allowed claims even though it is expected that the distributions under a
plan of reorganization with respect to such claims will be lesser amounts. Upon
confirmation of a plan of reorganization, the Company would utilize the
"fresh-start" reporting principles contained in SOP 90-7, which would result in
adjustments relating to the amounts and classification of recorded assets and
liabilities, determined as of the plan confirmation date. Pursuant to the
Amended Plan, the ultimate consideration to be received by all unsecured
creditors will be substantially less than the amounts shown in the accompanying
Consolidated Balance Sheet. Until a plan of reorganization is confirmed,
however, the Company cannot be certain of the final terms thereof or the
ultimate amount creditors will receive.
Liabilities incurred by the Company as of the petition date and subject to
compromise under a plan of reorganization are separately classified in the
Consolidated Balance Sheet and include the following:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Asbestos liability - Note K $2,502,511 $1,499,993
Long-term debt - Note E 62,003 62,004
Accounts payable 41,236 41,074
Accrued liabilities - Note L 56,780 54,194
- --------------------------------------------------------------------------------
$2,662,530 $1,657,265
- --------------------------------------------------------------------------------
</TABLE>
The net expense resulting from the Company's chapter 11 filings has been
segregated from expenses related to ordinary operations in the accompanying
Consolidated Statement of Income (Loss) and includes the following:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Professional fees $ 7,047 $ 6,218 $ 5,865
Debt financing costs -- 200 --
Other expenses 181 296 863
Interest income (5,003) (3,288) (2,384)
- --------------------------------------------------------------------------------
$ 2,225 $ 3,426 $ 4,344
- --------------------------------------------------------------------------------
</TABLE>
Interest income is attributable to the accumulation of cash and cash equivalents
subsequent to the petition date.
C. INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Raw materials and supplies $49,358 $52,146
Work-in-process 27,943 24,907
Finished goods 19,470 15,853
- --------------------------------------------------------------------------------
96,771 92,906
Allowance to value inventory at
cost on the LIFO method 13,124 10,924
- --------------------------------------------------------------------------------
$83,647 $81,982
- --------------------------------------------------------------------------------
</TABLE>
The percentage of inventories valued using the LIFO method was 75% in 1995 and
81% in 1994. The effects of liquidations of LIFO inventory quantities carried at
lower costs prevailing in prior years were not material.
21.
<PAGE>
<PAGE>
D. OTHER ASSETS
Other assets consisted of:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Cost in excess of net assets acquired,
net of accumulated amortization of
$4,385 in 1995 and $3,973 in 1994 $12,382 $12,507
Notes receivable 5,137 5,778
Prepaid pension cost - Note I 7,545 7,879
Other 10,249 10,111
- --------------------------------------------------------------------------------
$35,313 $36,275
- --------------------------------------------------------------------------------
</TABLE>
Notes receivable include $4,550,000 received as partial consideration for the
sale of a division. This note is payable in two equal installments in 1997 and
1998 and bears interest at 8%. Pursuant to the terms of the note, interest is
payable semiannually commencing in August 1994. The Company is receiving
interest payments in accordance with the terms of the note.
E. LONG-TERM DEBT AND SHORT-TERM BORROWINGS
The Company has a Bankruptcy Court approved debtor in possession financing
agreement which provides a $40,000,000 committed revolving credit facility
("Facility"). The entire amount of the Facility is available for both cash
borrowings and letters of credit. The Facility expires on the earlier of
December 31, 1996 or the effective date of a plan of reorganization. Letters of
credit totaling $30,205,000 and $32,941,000 were outstanding on November 30,
1995 and 1994, respectively, leaving the Company with $9,795,000 and $7,059,000,
respectively, in available borrowing capacity under the Facility. There were no
cash borrowings under the Facility at any time in 1995 or 1994.
The annual rate of interest under the Facility is the agent bank's prime
rate plus 1-1/2%. Fees for letters of credit range up to 2-1/2% per annum and a
commitment fee equal to 1/2% per annum is due on the unused portion. The
obligations are secured by accounts receivable and inventories and are afforded
administrative priority under the Bankruptcy Code. The Company has had
sufficient collateral to borrow the maximum amount under the Facility. The
Facility also contains affirmative and negative covenants which include, among
other things, limitations on capital expenditures and additional borrowings and
minimum quarterly and annual cash flow requirements. The Company has been in
compliance with these covenants throughout the term of the Facility.
The Company's foreign subsidiaries entered into agreements with various
banks which provided lines of credit in the amount of $17,100,000 that expire in
1998. At November 30, 1995, there were $1,200,000 in borrowings outstanding
leaving $15,900,000 in available borrowing capacity. The annual rates of
interest on these lines of credit range from 3/4% to 1-1/2% over the banks' base
rates. Some have no commitment fees; the fees on the others range from .25% to
.65% per annum on the unused portion. These agreements also contain covenants
which include restrictions on dividends and minimum financial requirements. The
Company is in compliance with these covenants at November 30, 1995.
Repayments of pre-petition debt obligations may be made only with the
approval of the Bankruptcy Court. The Bankruptcy Court has approved payments by
the Company with respect to certain pre-petition secured debt obligations in
order to provide the holders of such obligations with adequate protection of
their interests in their collateral security. These adequate protection payments
generally have been in the form of principal payments paid over the remaining
lives of the collateral assets in an aggregate amount equal to the determined
market value of those assets. The amount by which the original obligation and
pre-petition accrued interest exceeds the collateral value is deemed to be a
general unsecured claim. These claims are included in Liabilities Subject to
Compromise. Interest expense has not been recorded on these obligations for the
post-petition period because interest is not payable. Interest on undersecured
and other unsecured pre-petition debt obligations would have been $6,971,000,
$7,131,000 and $7,299,000 in 1995, 1994, and 1993, respectively.
Due to the chapter 11 filings and the anticipated reorganization, it is
not practicable to estimate the fair value of long-term debt which is described
below.
22. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Long-term debt consisted of:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
9-1/2% Sinking fund debentures, due 2017 $50,000 $50,000
Industrial revenue bonds 18,050 18,125
Secured notes 12,161 13,683
Debt of foreign subsidiaries 1,949 1,304
Other 471 514
- --------------------------------------------------------------------------------
82,631 83,626
Less:
Current portion 1,525 1,726
Subject to compromise 62,003 62,004
- --------------------------------------------------------------------------------
Long-term debt, less current portion $19,103 $19,896
- --------------------------------------------------------------------------------
Unsecured debt included in Liabilities
Subject to Compromise consisted of:
Sinking fund debentures $50,000 $50,000
Industrial revenue bonds 7,500 7,500
Unsecured portion of secured notes 4,131 4,132
Other 372 372
- --------------------------------------------------------------------------------
$62,003 $62,004
- --------------------------------------------------------------------------------
</TABLE>
Interest rates averaged 5% in 1995, 4% in 1994, and 5% in 1993 on the industrial
revenue bonds, foreign and other long-term debt on which the Company is
obligated to pay interest. These long-term debt amounts are to mature at various
dates through 2004.
Long-term debt (excluding amounts subject to compromise) is scheduled to
mature as follows: $1,525,000 in 1996, $2,203,000 in 1997, $2,721,000 in 1998,
$1,179,000 in 1999, and $877,000 in 2000. The unsecured portion of long-term
debt will be resolved in a plan of reorganization.
During 1995, 1994, and 1993, the Company paid interest of $1,966,000,
$1,765,000, and $2,075,000, respectively.
F. INCOME TAXES
The Company adopted Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" ("FAS 109"), in 1993. The cumulative effect of
this change in accounting for income taxes was not material and prior year
financial statements were not restated to apply the provisions of FAS 109.
Total income tax benefit for the year ended November 30, 1993 of
$1,490,000 consisted of $5,000,000 expense from operations and $6,490,000 tax
benefit of the cumulative effect of the change in accounting for postretirement
benefits. The following is a summary of the components of income taxes (benefit)
from operations:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal - current $ 20,900 $ 15,600 $ 12,500
- deferred (18,900) (14,000) (11,800)
Foreign 3,400 900 2,700
State and local 3,900 2,500 1,600
- --------------------------------------------------------------------------------
$ 9,300 $ 5,000 $ 5,000
- --------------------------------------------------------------------------------
</TABLE>
The sources of income (loss) before income tax expense (benefit) and cumulative
effect of accounting change are as follows:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
United States $ (941,971) $ 47,670 $(1,143,312)
Foreign 7,100 6,079 3,542
- --------------------------------------------------------------------------------
$ (934,871) $ 53,749 $(1,139,770)
- --------------------------------------------------------------------------------
</TABLE>
The significant components of deferred income tax expense (benefit) attributable
to income from operations are as follows:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Deferred tax benefit (exclusive of the
effects of other components listed
below) $(351,800) $ (400) $(412,900)
Adjustments to deferred tax assets and
liabilities for enacted changes in
tax laws and rates -- -- (3,800)
Change in beginning-of-the-year balance
of the valuation allowance for
deferred tax assets 332,900 (13,600) 404,900
- --------------------------------------------------------------------------------
$ (18,900) $ (14,000) $ (11,800)
- --------------------------------------------------------------------------------
</TABLE>
Components of deferred tax balances as of November 30 are as follows:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Deferred tax liabilities:
Property, plant and equipment $ (7,820) $ (6,608)
Prepaid pension (2,641) (2,758)
Other (3,338) (3,371)
- --------------------------------------------------------------------------------
Total deferred tax liabilities (13,799) (12,737)
- --------------------------------------------------------------------------------
Deferred tax assets:
Asbestos liability 877,171 524,998
Accrued liabilities (including amounts
subject to compromise) 26,246 26,223
Postretirement benefit liability 7,602 7,375
Other 4,483 4,048
- --------------------------------------------------------------------------------
Total deferred tax assets 915,502 562,644
- --------------------------------------------------------------------------------
Valuation allowance (838,879) (505,983)
- --------------------------------------------------------------------------------
Net deferred tax assets $ 62,824 $ 43,924
- --------------------------------------------------------------------------------
</TABLE>
23.
<PAGE>
<PAGE>
Given the uncertainties surrounding the chapter 11 cases, the Company does not
believe that recognition of a significant portion of the deferred tax assets
relating to the asbestos liability and other pre-petition liabilities is
appropriate at this time. These liabilities have been recorded at the expected
amounts of the allowed claims; if the liabilities are settled for lesser
amounts, there will be a corresponding reduction in the deferred tax assets and
related valuation allowance. A significant portion of the net deferred tax asset
recognized at November 30, 1995 is expected to be recovered through the
carryback of amounts which will become deductible when the related liabilities
are paid. It is expected that the Company will realize the benefits related to
these deductions when it emerges from chapter 11. The changes in the valuation
allowance result from increased amounts provided for asbestos litigation and
other claims net of increases in the amounts recoverable through these
carrybacks.
The differences between the total income tax expense from operations and
the income tax expense (benefit) computed using the Federal income tax rate were
as follows:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Computed "expected" tax
expense (benefit) $(327,200) $ 18,800 $(398,900)
Change in valuation allowance 332,900 (13,600) 404,900
Change in Federal income tax rate -- -- (3,800)
Foreign tax rate differential 600 (1,500) 1,300
State and local taxes, net of
Federal benefit 2,500 1,600 1,000
Other 500 (300) 500
- --------------------------------------------------------------------------------
Total income tax expense $ 9,300 $ 5,000 $ 5,000
- --------------------------------------------------------------------------------
</TABLE>
The Company paid income taxes, net of refunds received, in 1995, 1994, and 1993
of $28,800,000, $18,200,000, and $16,500,000, respectively.
G. INCOME (LOSS) PER SHARE
The calculation of net income (loss) per share is based upon the average number
of common shares outstanding assuming the exercise of stock options. The average
number of shares used in the computation of net income (loss) per share was
11,040,932 in 1995 and 1994 and 11,030,515 in 1993.
H. COMMON STOCK OPTIONS
At November 30, 1995, there were outstanding common stock options under a 1990
and a 1983 plan each authorizing 450,000 shares. The options expire at various
dates through 2000. No options could be exercised as of November 30, 1995.
Stock option transactions are summarized as follows:
<TABLE>
<CAPTION>
Shares Option Price
- --------------------------------------------------------------------------------
<S> <C> <C>
Outstanding at November 30, 1992 597,000 $ 2.50 to $14.25
Exercised (62,500) $ 2.50
Expired (15,000) $ 2.50
- --------------------------------------------------------------------------------
Outstanding at November 30, 1993 519,500 $ 2.50 to $14.25
Expired (20,000) $ 2.50
- --------------------------------------------------------------------------------
Outstanding at November 30, 1994 499,500 $ 2.50 to $14.25
Expired (5,000) $ 2.50
- --------------------------------------------------------------------------------
Outstanding at November 30, 1995 494,500 $ 2.50 to $14.25
- --------------------------------------------------------------------------------
</TABLE>
There were 284,274 shares available for future grants at November 30, 1995.
I. RETIREMENT BENEFIT PLANS
Substantially all employees of the Company and its subsidiaries are covered by
various pension or profit sharing retirement plans. The cost of providing
retirement benefits was $1,900,000 in 1995, $998,000 in 1994, and $849,000 in
1993.
Plan benefits for salaried employees are based primarily on employees'
highest five consecutive years' earnings during the last ten years of
employment. Plan benefits for hourly employees typically are based on a dollar
unit multiplied by the number of service years.
Net periodic pension expense for the Company's defined benefit plans
included the following components:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 4,001 $ 4,684 $ 3,924
Interest cost on projected
benefit obligation 12,972 12,144 12,490
Actual gain on plan assets (40,975) (635) (20,658)
Net amortization and deferral 24,336 (17,052) 3,943
- --------------------------------------------------------------------------------
Net periodic pension costs $ 334 $ (859) $ (301)
- --------------------------------------------------------------------------------
</TABLE>
The plans' assets consist primarily of listed equity securities and publicly
traded notes and bonds. The actual net return on plan assets was 21.2% in 1995,
.3% in 1994,
24. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
and 11.3% in 1993, and generally reflects the performance of the equity and
bond markets.
The following table sets forth the plans' funded status and amounts recognized
in the Company's Consolidated Balance Sheet at November 30:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation $(167,376) $(143,249)
- --------------------------------------------------------------------------------
Accumulated benefit obligation $(174,515) $(148,243)
- --------------------------------------------------------------------------------
Projected benefit obligation $(191,831) $(161,089)
Plan assets at fair value 208,256 178,216
- --------------------------------------------------------------------------------
Projected benefit obligation
less than plan assets 16,425 17,127
Unrecognized net gain (1,942) (72)
Unrecognized prior service cost 2,244 1,192
Unrecognized net asset (9,182) (10,368)
- --------------------------------------------------------------------------------
Prepaid pension cost recognized $ 7,545 $ 7,879
- --------------------------------------------------------------------------------
</TABLE>
The discount rate and weighted average rate of increase in future compensation
levels used in determining the actuarial present value of the projected benefit
obligation were 7.0% and 4.2%, and 8.0% and 4.2%, respectively, at November 30,
1995 and 1994, respectively. The expected long-term rate of return on assets was
9.0% in 1995 and in 1994. The Company's funding policy is to fund amounts on an
actuarial basis to provide for current and future benefits in accordance with
the funding guidelines of ERISA.
J. EMPLOYEE BENEFITS OTHER THAN PENSIONS
In addition to providing pension retirement benefits, the Company makes health
care and life insurance benefits available to certain retired employees on a
limited basis. Generally, the medical plans pay a stated percentage of medical
expenses reduced by deductibles and other coverages. Eligible employees may
elect to be covered by these health and life insurance benefits if they reach
early or normal retirement age while working for the Company. In most cases, a
retiree contribution for health insurance coverage is required. The Company
funds these benefit costs primarily on a pay-as-you-go basis.
In the fourth quarter of 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions" ("FAS 106"). The Company recognized
the accumulated postretirement benefit obligation of $19,088,000 retroactively
to December 1, 1992 as an accounting change. On an aftertax basis, this charge
was $12,598,000 or $1.14 per share. Previously reported quarterly results in
1993 were restated to reflect the adoption of FAS 106 as of December 1, 1992.
The adoption of FAS 106 had no impact on consolidated cash flows. The components
of expense were as follows:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994 1993
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Service cost - benefits earned
during the period $ 396 $ 510 $ 467
Interest cost on accumulated
postretirement benefit obligation 1,202 1,327 1,394
Amortization of unrecognized net gain (179) -- --
- --------------------------------------------------------------------------------
Net periodic postretirement benefit costs $ 1,419 $ 1,837 $ 1,861
- --------------------------------------------------------------------------------
</TABLE>
The accumulated postretirement benefit obligation at November 30 consisted of
the following components:
<TABLE>
<CAPTION>
(In thousands of dollars) 1995 1994
- --------------------------------------------------------------------------------
<S> <C> <C>
Retirees and dependents $12,021 $13,017
Eligible active participants 1,650 1,602
Other active participants 5,862 4,823
- --------------------------------------------------------------------------------
Accumulated postretirement
benefit obligation 19,533 19,442
Unrecognized net gain 2,187 1,628
- --------------------------------------------------------------------------------
Accrued postretirement benefit costs $21,720 $21,070
- --------------------------------------------------------------------------------
</TABLE>
Benefit costs were estimated assuming retiree health care costs would initially
increase at an 11% annual rate which decreases to an ultimate rate of 6% in 5
years. If this annual trend rate would increase by 1%, the accumulated
postretirement obligation as of November 30, 1995 would increase by $2,021,000
with a corresponding increase of $267,000 in the postretirement benefit expense
in 1995. The discount rates used in determining the accumulated postretirement
obligation at November 30, 1995 and 1994 were 6.5% and 7.5%, respectively.
K. ASBESTOS LITIGATION AND CLAIMS
As discussed above in Note B, the Company currently intends to file a First
Amended Consolidated Plan of Reorganization ("Amended Plan") with the ICC and
the RFC. Like the Original Plan filed in 1995, the Amended Plan will provide,
among other things, that all present and future asbestos-related personal injury
claims
25.
<PAGE>
<PAGE>
will be channeled to and resolved by an independently administered claims trust.
Similar plans of reorganization have been confirmed in the chapter 11 cases of
certain other companies involved in asbestos litigation. It is also currently
contemplated that the Amended Plan will resolve and discharge all asbestos
property damage claims.
The asbestos-related claims, which consist of personal injury and property
damage claims, are discussed below.
Personal Injury
Prior to its chapter 11 filing, the Company had been named as a co-defendant in
a substantial number of lawsuits brought by present or former insulators,
shipyard workers, steel workers, tire workers and other persons alleging damage
to their health from exposure to dust from asbestos-containing industrial
insulation products. As a result of the chapter 11 filing by the Company, all
such litigation is automatically stayed pursuant to section 362 of the
Bankruptcy Code. As of the petition date, there were approximately 67,800
asbestos-related personal injury claims outstanding against the Company.
The Bankruptcy Court set September 30, 1992 as the bar date for present
asbestos-related claims. The Company implemented the Court-approved plan to
notify known and potential claimants of the bar date. All persons with a
pre-petition asbestos-related claim were required to file a proof of claim by
the bar date in order to participate in the reorganization cases. Approximately
160,000 proofs of claim were filed alleging personal injury. The Company
believes that approximately 11,000 of these claims are duplicates or were filed
by persons whose lawsuits were previously closed.
The vast majority of persons who had filed pre-petition lawsuits against
the Company, and whose lawsuits were pending as of the petition date, filed
proofs of claim in the reorganization cases. Therefore, approximately 81,200
previously undisclosed claims were filed as a result of the bar date. The
Company believes that most of the approximately 40,000 claimants who in 1991,
pursuant to a previous Bankruptcy Court order, notified the Company of their
intent to assert a claim against the Company, also filed claims pursuant to the
bar date. The Company expects that additional asbestos-related personal injury
claims will arise for several decades into the future. Holders of these claims
were not required to file claims pursuant to the bar date.
In July 1995, the Company filed a motion requesting that the Bankruptcy
Court estimate the Company's aggregate liability on account of present and
future asbestos-related personal injury claims. The motion was filed because the
UCC and the ESC appointed in the Company's chapter 11 cases had not agreed with
the amount of such liability previously negotiated for settlement purposes among
the Company, the ICC and the RFC. In December 1995, the Bankruptcy Court ruled
that the Company's estimated liability for such claims is $2,502,511,000.
Appeals have been filed by certain creditors, the UCC and the ESC seeking to
have the Bankruptcy Court's ruling overturned. The Company does not know whether
the Appellate Court will hear the appeals or, if it does, when any decision may
be rendered.
Property Damage
There were forty-one lawsuits pending against the Company at the end of fiscal
1991 arising from the alleged presence of asbestos-containing products in
buildings. The pending lawsuits typically named numerous defendants, were filed
in both state and federal courts, and were brought by school districts, cities,
states, counties, universities, hospitals and commercial building owners. The
lawsuits typically demanded compensation for any costs incurred in identifying,
repairing, encapsulating or removing asbestos-containing products, or sought to
have the defendants do these things directly. Many lawsuits also sought punitive
damages. A few of the pending cases were certified as class actions. Prior to
filing its chapter 11 petition, the Company settled seven building related cases
for less than $22,000 in the aggregate.
Approximately 1,000 proofs of claim alleging such property damage claims
were filed in the chapter 11 cases pursuant to the bar date. These claims
include most of those asserted in the lawsuits described above that were pending
on the petition date. Many of the other claims also appear to be asserted by
claimants similar to those which had commenced pre-petition lawsuits.
In February 1996, after the close of the fiscal year, the hospital members
of the American Hospital Association, which filed asbestos-related property
damage claims against the Company in the alleged approximate amount of $300
million ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
(a) estimating the aggregate value of
26. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
all asbestos-related property damage claims against the Company and (b)
temporarily allowing such claims for purposes of voting on a plan of
reorganization. The motion states that the relief requested is not intended to
be a determination by the Bankruptcy Court of the Company's liability, if any,
on account of such claims or to assign a permanently fixed value for such
claims, but is sought in order to determine the appropriate distribution to
creditor classes under a plan of reorganization. Because the motion was just
filed, the Company has not yet made a determination as to how it intends to
respond. The Company does, however, intend to file with the Bankruptcy Court
shortly an objection on various grounds to many asbestos-related property damage
claims, including claims filed by the hospitals.
It is anticipated that the Amended Plan will provide alternative methods
for treatment of the asbestos-related property damage claims. If the class of
asbestos-related property damage claimants votes to accept the Amended Plan, a
second trust will be established to resolve the claims and the Company will fund
the trust with $3 million in cash. If such class votes to reject the Amended
Plan, but the Amended Plan is nevertheless confirmed, such claims will be
resolved and discharged pursuant to claims resolution procedures contained in
the Amended Plan. These procedures will require such claimants to prove by
application of a scientific protocol that the asbestos-containing insulation
products for which they are seeking damages were manufactured by the Company.
If the class of asbestos-related property damage claimants rejects the
Amended Plan and has its claims resolved through the claims resolution
procedures discussed above, the eventual outcome of its claims cannot be
reasonably predicted at this time. It should also be noted that the Company may
have insurance coverage for certain of these claims.
L. ENVIRONMENTAL AND OTHER LITIGATION CLAIMS
The Bankruptcy Court established a bar date of October 31, 1991 for all
pre-petition claims against the Company other than those arising from the sale
of asbestos-containing products. Pursuant to this general claims bar date,
numerous proofs of claim were filed alleging a right to payment from the estate
due to litigation matters. Certain of such claims are discussed below.
Environmental
The Company received 1,102 proofs of claim alleging a right to payment because
of environmental matters. These claims, relating primarily to various Superfund
sites, sought payment aggregating $27.9 billion, of which readily identifiable
duplicate claims approximated $27.5 billion. The Company has resolved the
majority of these environmental claims through negotiations with the United
States Environmental Protection Agency ("USEPA") and the United States
Department of Interior ("USDOI"). The USEPA is responsible for resolving, among
other things, claims arising from Superfund sites and the USDOI is responsible
for resolving the Company's liability for any natural resource damage that may
have occurred at the Superfund sites. Natural resource damage is damage caused
to the environment or to plants or animals by the release of hazardous materials
at Superfund sites. Pursuant to an agreement among the Company, USEPA, USDOI,
and certain states, which is subject to the approval of the Bankruptcy Court,
the agencies would be afforded allowed pre-petition general unsecured claims
aggregating approximately $43.0 million in full satisfaction of all of the
Company's alleged liability at most of its known Superfund sites, including any
liability for any natural resource damage. This amount has been provided for and
is included in Liabilities Subject to Compromise. In exchange for these allowed
claims, the agencies and such states would release the Company from liability at
these sites and grant the Company protection from claims of other parties that
may be co-liable at the sites. The intent of the settlement agreement is to
completely resolve all claims against the Company with respect to these sites.
With respect to the small number of sites as to which the USEPA believes
that it does not have sufficient information to negotiate a meaningful
settlement with the Company, the settlement agreement provides a process which
permits any liability with respect to these sites to be resolved in the future
when additional information is available. Pursuant to this process, the Company
retains all of its rights and defenses as to these sites and may settle or
litigate its liability at such future time. The settlement agreement also
provides that any future liability of the Company, when fixed, will be satisfied
essentially with the same type and amount of consideration that pre-petition
general unsecured
27.
<PAGE>
<PAGE>
creditors receive pursuant to a confirmed plan of reorganization in the
Company's chapter 11 case.
In November 1995, a hearing was held before the Bankruptcy Court on the
Company's motion seeking the approval of the settlement agreement. USEPA and
USDOI joined in the motion. Certain parties that may be liable at certain of the
sites resolved by the settlement agreement opposed the Company's motion. Such
opposition basically seeks increases in the amount of the allowed claims
provided in the settlement agreement attributable to the sites where the
objectants may have liability. The Company believes, however, that the terms and
provisions of the settlement agreement are fair and equitable and that the
objections raised have no basis. The Court has not yet ruled on the motion.
Lead Chemicals
The Bankruptcy Court received 131 timely proofs of claim asserting liability
based on personal injury or property damage from lead chemicals allegedly
manufactured and sold by the Company. Three additional claims were filed in
November 1993, after the 1991 bar date. While some of the timely filed claims
did not specify an amount, those that did sought an aggregate of $165 million.
All of the timely filed claims which specified an amount of damages have been
fully withdrawn without the allowance of any amount by the Company.
The three late filed claims referred to above were filed by the City of
New York or its agencies which had filed a pre-petition lawsuit against the
Company. In November 1994, the Bankruptcy Court sustained the Company's
objection to these claims and disallowed them because they were late filed. No
appeal of this ruling was sought by the claimants. As a result, the Company has
disposed of all filed lead-related property damage claims. The Company had also
filed objections to seven other claims that were filed against it seeking
damages for bodily injuries resulting from exposure to lead. Pursuant to the
objections, the Company sought an order of the Bankruptcy Court disallowing such
claims because the claimants' lawsuits asserting similar claims against other
defendants which were not in bankruptcy had been dismissed in the trial court.
In June 1995, the Bankruptcy Court disallowed all seven of such claims.
Currently, there are 113 remaining timely-filed lead-related personal injury
claims that have not been resolved.
The Company believes that it has valid grounds to object to the allowance
of all of the remaining lead-related personal injury claims. It is currently
contemplated that all lead-related personal injury claims that were filed that
are not disposed of pursuant to an objection filed by the Company, and all
future lead-related personal injury claims, will be channeled to and resolved by
the trust referred to in Note K above, to be established under the Amended Plan
for the benefit of holders of personal injury claims resulting from exposure to
asbestos or lead- containing products.
Other Litigation
The Company received, by the 1991 bar date, ninety-two claims arising out of
litigation matters other than those related to lead, asbestos or environmental
issues. These claims aggregated approximately $1.1 billion. The majority of
these claims have been resolved by disallowance, settlement pursuant to
Bankruptcy Court authority or by the allowance of a pre-petition general
unsecured claim for amounts that are not material to the Company or its
operations.
Summary
During the pendency of the chapter 11 cases, any unresolved litigation with
respect to pre-petition claims can proceed against the Company only with the
express permission of the Bankruptcy Court. The Company intends to defend all
litigation claims vigorously in the manner permitted by the Bankruptcy Code
and/or applicable law. All pre-petition claims against the Company arising from
litigation must be liquidated or otherwise addressed in the context of the
chapter 11 cases. Further, all such claims against the Company will be treated
in a plan of reorganization.
The Company has resolved most of the litigation claims that were asserted
by the October 31, 1991 bar date for claims other than those arising from the
sale of asbestos-containing products. The Company has filed objections to
certain of these litigation-based claims which have not been resolved, seeking
to reduce the amount of such claims or eliminate them entirely. The Company
anticipates filing additional objections to other such claims if they cannot be
resolved through negotiation. These objections will be vigorously litigated by
the Company pursuant to the provisions of the Bankruptcy Code and applicable
law.
28. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The eventual outcome of the environmental and other litigation claims
described herein cannot be reasonably predicted due to numerous uncertainties
that are inherent in the reorganization process. However, the Company believes
that its provision for these claims is adequate. In addition, the Company may
have insurance coverage for certain of these claims and other factual and legal
defenses available to it.
M. OTHER INCOME
The Company held certain equity investments having no cost basis, but which had
a fair value of approximately $5.4 million when FAS 115 was adopted. A
substantial portion of these investments related to shares of stock in a
Canadian mining concern that the Company received in 1990 in settlement of
certain indebtedness. The Company had previously deemed the investment to be
permanently impaired and had recorded a loss on the investment in the amount of
its full book value. The price of the stock, however, had recently increased
significantly. Substantially all of these investments were sold in June, 1995,
resulting in a realized gain of $11.5 million.
N. INDUSTRY SEGMENT INFORMATION
A general description of the products manufactured by the Company's three
industry segments is:
Industrial
Diatomaceous earth products, rubber products, rare metals, fiberglass reinforced
plastic parts and industrial chemicals.
Machinery
Earth moving machines, heavy-duty forklift trucks, aerospace and defense parts,
metal cleaning and finishing systems and aluminum castings.
Automotive
Mechanical, structural, and trim parts for passenger cars, trucks, vans and
utility vehicles for the OEM and replacement markets.
Sales between segments and foreign operations were not material.
Consolidated sales to Ford Motor Company amounted to $166,800,000 in 1995,
$165,300,000 in 1994, and $148,000,000 in 1993. No other customer accounted for
10% or more of consolidated sales with the exception of General Motors
Corporation ("GMC") in 1994 and 1993 when consolidated sales to GMC amounted to
$81,400,000 and $73,100,000, respectively.
Consolidated export sales were $92,500,000 in 1995, $76,900,000 in 1994
and $73,200,000 in 1993.
29.
<PAGE>
<PAGE>
INDUSTRY SEGMENT INFORMATION
<TABLE>
<CAPTION>
Industrial Machinery Automotive
Years ended November 30 -----------------------------------------------------------------------------------------------
(In millions of dollars) 1995 1994 1993 1995 1994 1993 1995 1994 1993
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $ 160.6 $ 141.4 $ 132.6 $ 254.7 $ 217.0 $ 171.7 $ 433.2 $ 398.3 $ 357.2
- ----------------------------------------------------------------------------------------------------------------------------------
Operating income 15.6 14.5 15.0 24.1 18.8 9.1 42.1 43.7 37.4
- ----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets 80.6 78.2 72.7 112.0 109.8 92.8 217.1 190.6 168.2
- ----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 6.1 5.5 4.9 4.7 4.0 3.4 17.6 16.2 16.2
- ----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 4.4 7.7 5.6 7.6 6.9 7.4 28.3 21.2 15.4
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
Segment Total Corporate Total
-------------------------------------------------------------------------------------------------
1995 1994 1993 1995 1994 1993 1995 1994 1993
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Sales $ 848.5 $ 756.7 $ 661.5 $ -- $ -- $ -- $ 848.5 $ 756.7 $ 661.5
- -----------------------------------------------------------------------------------------------------------------------------------
Operating income (loss) 81.8 77.0 61.5 (18.7) (18.7) (17.7) 63.1 58.3 43.8
- ----------------------------------------------------------------
Provision for asbestos ligitation (1,005.5) -- (1,135.5) (1,005.5) -- (1,135.5)
Provision for environmental and
other claims -- -- (41.4) -- -- (41.4)
Interest expense (1.9) (1.8) (2.1) (1.9) (1.8) (2.1)
Other income (expense) 11.6 .6 (.2) 11.6 .6 (.2)
Reorganization items (2.2) (3.4) (4.4) (2.2) (3.4) (4.4)
- ------------------------------------------------------------------------------------------------- --------------------------------
Income (loss) before taxes (934.9) 53.7 (1,139.8)(1)
- -----------------------------------------------------------------------------------------------------------------------------------
Identifiable assets 409.7 378.6 333.7 170.4 142.5 125.7 580.1 521.1 459.4
- -----------------------------------------------------------------------------------------------------------------------------------
Depreciation and amortization 28.4 25.7 24.5 .3 .4 .5 28.7 26.1 25.0
- -----------------------------------------------------------------------------------------------------------------------------------
Capital expenditures 40.3 35.8 28.4 .3 .1 .1 40.6 35.9 28.5
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Before cumulative effect of accounting changes.
30. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
THE BOARD OF DIRECTORS
EAGLE-PICHER INDUSTRIES, INC.:
We have audited the accompanying consolidated balance sheet of Eagle-Picher
Industries, Inc. and subsidiaries (debtor in possession, as of January 7, 1991)
as of November 30, 1995 and 1994, and the related consolidated statements of
income (loss), shareholders' equity (deficit), and cash flows for each of the
years in the three-year period ended November 30, 1995. These consolidated
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Eagle-Picher
Industries, Inc. and subsidiaries as of November 30, 1995 and 1994, and the
results of their operations and their cash flows for each of the years in the
three-year period ended November 30, 1995 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
B to the consolidated financial statements, on January 7, 1991, Eagle-Picher
Industries, Inc. and seven of its domestic subsidiaries each filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code with
the United States Bankruptcy Court. Although the Company and its operating
subsidiaries, other than EDI, Inc., are currently operating their businesses as
debtors in possession under the jurisdiction of the Bankruptcy Court, the
continuation of their businesses as going concerns is contingent upon, among
other things, the ability to formulate a plan of reorganization which will gain
approval of the creditors and confirmation by the Bankruptcy Court. The filing
under chapter 11 and the continued uncertainty related to claims associated with
the Company's sale of asbestos products and certain other litigation, raise
substantial doubt about the Company's ability to continue as a going concern.
The consolidated financial statements do not include any adjustments that may be
required in connection with restructuring the Company and its subsidiaries as
they reorganize under chapter 11 of the United States Bankruptcy Code.
As discussed in Note J, the Company adopted the provisions of the
Financial Accounting Standards Board's SFAS No. 106, Employers' Accounting for
Postretirement Benefits Other than Pensions, on December 1, 1992.
KPMG Peat Marwick LLP
- -------------------------
KPMG Peat Marwick LLP
Cincinnati, Ohio
February 14, 1996
31.
<PAGE>
<PAGE>
REPORT OF MANAGEMENT
The Company's management is responsible for the preparation and presentation of
the consolidated financial statements and related financial data included in
this annual report. The financial information has been prepared in conformity
with generally accepted accounting principles and as such includes amounts based
on judgments and estimates made by management.
The Company's system of internal accounting controls is designed to
provide reasonable assurance at reasonable costs that assets are safeguarded
from loss or unauthorized use, and that the financial records may be relied upon
for the preparation of the consolidated financial statements.
The consolidated financial statements have been audited by our independent
auditors, KPMG Peat Marwick LLP. Their audit is conducted in accordance with
generally accepted auditing standards and provides an independent assessment as
to the fair presentation, in all material respects, of the Company's
consolidated financial statements.
The Audit Committee of the Board of Directors, composed solely of outside
directors, meets periodically with management and the independent auditors to
review internal accounting controls and the quality of financial reporting.
Financial management and the independent auditors have full and free access to
the Audit Committee.
Thomas E. Petry
- ------------------------
Thomas E. Petry
Chairman and Chief
Executive Officer
Andries Ruijssenaars
- ------------------------
Andries Ruijssenaars
President and Chief
Operating Officer
David N. Hall
- ------------------------
David N. Hall
Senior Vice President -
Finance
Cincinnati, Ohio
February 14, 1996
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
1995 COMPARED TO 1994
On a 12% sales increase, operating income increased 8% to $63.1 million in 1995
from $58.3 million in 1994. Comparative sales volume by industry segment showed
increases of 14% in the Industrial segment, 17% in the Machinery segment, and 9%
in the Automotive segment. Operating income increased 8% in the Industrial
segment and 28% in the Machinery segment, but decreased 4% in the Automotive
segment. The increase in operating income in the Industrial Segment was shared
by all operations within the segment. This segment tends not to experience
cyclical swings as its customers serve a range of consumer nondurable markets.
The increase in operating income in the Machinery segment was attributable
solely to the continuing improvements in both volume and operating efficiencies
in the operations making earth moving and material handling equipment. The
decrease in operating income in the Automotive segment was due to: 1) intense
pricing pressure by major customers demanding price concessions; 2) inability to
pass on raw material cost increases on a timely basis; and 3) start-up costs
associated with new business.
In December 1995, the Bankruptcy Court estimated the Company's aggregate
liability on account of present and future asbestos-related personal injury
claims to be $2.5 billion. As a result, the Company recorded a provision in the
fourth quarter of 1995 of $1.0 billion to increase the asbestos liability
subject to compromise to $2.5 billion.
Interest expense was $1.9 million in 1995 compared to $1.8 million in
1994.
A gain on sale of investments of $11.5 million resulted from the sale of
securities which the Company had received several years ago in settlement of
financing it had provided to a supplier.
Reorganization items are described in Note B.
The primary components of the income tax provision are described in Note
F.
1994 COMPARED TO 1993
On a 14% sales increase, operating income increased 33% to $58.3 million in 1994
from $43.8 million in 1993.
32. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
Comparative sales volume by industry segment showed increases of 7% in the
Industrial segment, 26% in the Machinery segment, and 12% in the Automotive
segment. Operating income decreased 3% in the Industrial segment, but increased
107% in the Machinery segment and 17% in the Automotive segment. The decrease in
operating income in the Industrial segment was attributable to pricing pressures
on diatomaceous earth products. The increase in operating income in the
Machinery segment was primarily associated with improvements in production of a
line of heavy-duty forklift trucks. An increase in sales volumes of metal
cleaning and finishing equipment also contributed to the increase in operating
income in the Machinery segment. The increase in operating income in the
Automotive segment was due to: 1) an increase in export sales and stronger
performance of our operations in Great Britain and Spain; 2) broader market
penetration coupled with record domestic auto production; and 3) favorable
product mix heavily weighted toward the light truck, van, and sport utility
segment of the market for which several divisions produce components.
In November 1993, the Company reached an agreement on the principal
elements of a plan of reorganization with the Injury Claimants' Committee and
the Legal Representative for Future Claimants, the representatives of the
holders of present and future asbestos-related personal injury and other toxic
tort claims in the Company's chapter 11 case. The agreement contemplated a
settlement of the Company's liability for all present and future
asbestos-related personal injury claims. As a consequence of the proposed
settlement, the Company recorded an additional provision of $1.135 billion for
all present and future asbestos-related personal injury claims, thereby
increasing the asbestos liability subject to the compromise on the Consolidated
Balance Sheet to $1.5 billion. In addition, in 1993 a provision of $41.4 million
was made for environmental and other litigation claims.
Interest expense decreased to $1.8 million from $2.1 million due primarily
to the repayment of certain foreign debt in 1994.
Reorganization items are described in Note B.
The primary components of the income tax provision are described in Note
F.
INDUSTRY SEGMENT DATA
Industry segment data for 1995, 1994 and 1993 is summarized on page 30.
FINANCIAL CONDITION
The filing of the petitions for reorganization under chapter 11 on January 7,
1991 had a significant positive impact on the Company's liquidity. The filing
stayed all litigation against the Company with respect to pre-petition claims
and reduced the cash drain for asbestos litigation. In the third quarter of
1995, the Company filed a motion with the Bankruptcy Court presiding over the
Company's chapter 11 case asking the Court to estimate its aggregate liability
on account of present and future asbestos-related personal injury claims. In
December 1995, the Court ruled on the motion and estimated this liability to be
$2.5 billion. As a result, the Company recorded a provision in the fourth
quarter of 1995 of $1.0 billion to increase the asbestos liability subject to
compromise to $2.5 billion. At November 30, 1995, the balance of Liabilities
Subject to Compromise was $2.663 billion. These amounts were recorded based on
the expected amount of the allowed claims, not the amounts of consideration that
such allowed claims may receive pursuant to a plan of reorganization.
During 1995, there was a $.7 million increase in cash. Operating
activities provided $30.5 million. Items which affected cash provided by
operations include the following:
1) There was a significant increase in customer tooling costs from $15.0
million at the end of fiscal 1994, to $26.5 million at November 30, 1995. It is
common practice in the automotive industry to accumulate customer tooling costs
while the tooling is under construction and bill the customer upon its
completion. It is anticipated that customer tooling will return to a more
traditional level of $10.0 to $12.0 million by the end of 1996, which would
generate $14.5 to $16.5 million in cash in the coming fiscal year.
2) There was an increase in working capital, other than customer tooling
costs, which was in line with the 12% increase in sales volume.
3) While income tax expense for financial statement purposes was $9.3
million, the Company paid income taxes, net of a small refund, of $28.8 million.
4) The Company incurred interest expenses of $1.9 million and
reorganization costs of $2.2 million.
33.
<PAGE>
<PAGE>
In addition, the Company used cash of $28.7 million, net of an $11.5
million sale of an investment (Note M), for investing activities. The Company
had near record ($43.0 million in 1988) capital expenditures of $40.6 million in
1995. This compares to $35.9 million spent in 1994. The capital expenditures in
1995 included $10.3 of an approved $12.0 million expansion of a new coating line
for the manufacture of gasket materials which is to be completed in early 1996.
Finally, the Company used $1.0 million of cash for financing activities
which included repayment of debt in accordance with adequate protection payments
authorized by the Bankruptcy Court, combined with the financing activities of
the foreign subsidiaries. As of November 30, 1995, the Company had $82.6 million
of long-term debt compared to $83.6 million at the end of the prior year. The
disposition of unsecured debt included in liabilities subject to compromise of
$62.0 million will be treated in a plan of reorganization.
The Company has a Bankruptcy Court approved debtor in possession financing
agreement which provides a $40.0 million committed revolving credit facility.
This facility expires the earlier of December 31, 1996 or the effective date of
a plan of reorganization. Should a plan not become effective by the end of 1996,
the Company would expect to have the current facility extended for as long as
necessary. At November 30, 1995, $30.2 million in letters of credit were
outstanding under the facility leaving the Company with $9.8 million in
available borrowing capacity. There were no cash borrowings in 1995 under the
facility.
While the Company is reorganizing under chapter 11, it is prohibited from
paying interest or principal on pre-petition obligations without the approval of
the Bankruptcy Court. To the extent cash generated from operations exceeds
capital expenditures, working capital requirements, approved payments of secured
debt and administrative expenses of the reorganization, the Company will
continue to accumulate cash. Consequently, the liquidity of the Company should
improve.
The Company intends to file an amended plan of reorganization with the
Bankruptcy Court as soon as practicable. It is contemplated that such plan will
provide for a discharge of the Company's pre-petition liabilities (Liabilities
Subject to Compromise) and provide the reorganized Company with a capital
structure appropriate for an industrial products company which will enable the
Company to access financing in the credit and debt markets.
RECENT FASB PRONOUNCEMENTS
During the year, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" ("FAS 121"). This
statement requires that long-lived assets and certain identifiable intangibles
to be held and used by an entity be reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. Measurement of an impairment loss on these assets should be
based on the fair value of the assets. FAS 121 is required to be adopted for
fiscal years beginning after December 15, 1995. As such, the Company will adopt
this standard the sooner of the fiscal year ended November 30, 1997 or the
effective date of a plan of reorganization. Management has not fully assessed
the impact of FAS 121; however, it is not anticipated that its adoption will
have a material impact on the financial statements.
Statement of Accounting Standards No. 123, "Accounting for Stock-Based
Compensation" ("FAS 123"), was also issued in 1995. This statement establishes a
fair value method of accounting for stock-based compensation plans. Adoption of
the fair value method is encouraged; however, entities may elect to continue to
account for stock-based compensation plans according to the provisions of
Accounting principles Bulletin No. 25, "Accounting for Stock Issued to
Employees" ("APB 25"), but provide the disclosures related to FAS 123. FAS 123
is effective for transactions entered into in fiscal years that begin after
December 15, 1995. Accordingly, the Company will adopt this standard the sooner
of the fiscal year ended November 30, 1997 or the effective date of a plan of
reorganization. As a result of the numerous uncertainties that are inherent in
the reorganization process, Management has not assessed the impact that adoption
of FAS 123 would have on the financial statements.
34. Eagle-Picher Industries, Inc.
<PAGE>
<PAGE>
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(Unaudited)
(In thousands of dollars, except per share) 1995 1994 1993 1992 1991
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales $ 848,548 $ 756,741 $ 661,452 $ 611,458 $ 598,631
- ------------------------------------------------------------------------------------------------------------------------------
Operating Income 63,087 58,281 43,754 46,560 18,849
- ------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before
Reorganization Items
and Taxes (932,646)(1) 57,175 (1,135,426)(2) 40,924 (788)
- ------------------------------------------------------------------------------------------------------------------------------
Reorganization Items(3) (2,225) (3,426) (4,344) (9,038) (12,124)
- ------------------------------------------------------------------------------------------------------------------------------
Income (Loss) Before Taxes (934,871) 53,749 (1,139,770) 31,886 (12,912)
- ------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) (944,171) 48,749 (1,144,770)(4) 28,886 (15,812)
- ------------------------------------------------------------------------------------------------------------------------------
Net Income (Loss) Per Share (85.51) 4.42(4) (103.78)(4) 2.63 (1.44)
- ------------------------------------------------------------------------------------------------------------------------------
Common Dividend Per Share -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets 580,073 521,107 459,360 419,435 398,990
- ------------------------------------------------------------------------------------------------------------------------------
Long-Term Debt, less current portion 19,103(5) 19,896(5) 21,712(5) 25,033(5) 32,001(5)
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Includes a provision for asbestos litigation of $1.0 billion in 1995.
(2) Includes a provision for asbestos litigation of $1.135 billion and a
provision for environmental and other claims of $41.4 million in 1993.
(3) On January 7, 1991, the Company and seven of its domestic subsidiaries
each filed a petition for relief under chapter 11 of the U.S. Bankruptcy
Code.
(4) Excludes cumulative adjustment for adoption of FAS 106 in 1993 which
decreased net income by $12.6 million ($1.14 per share).
(5) Long-term debt of $62.0 million in 1995, 1994 and 1993 and $61.7 million
in 1992, and 1991 has been included in liabilities subject to compromise.
35.
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
EXHIBIT 21
EAGLE-PICHER INDUSTRIES, INC.
SUBSIDIARIES OF THE REGISTRANT
Cincinnati Industrial Machinery Sales Company [Ohio]
Daisy Parts, Inc. [Michigan]
Eagle-Picher Development Company, Inc. [Delaware]
Transicoil Inc. [Pennsylvania]
Transicoil (Malaysia) SDN. BHD. [Malaysia]
Michigan Automotive Research Corporation (MARCO) [Michigan]
EDI, Inc. [Michigan]
Eagle-Picher Espana, S.A. [Spain]
Eagle-Picher Europe, Inc. [Delaware]
Eagle-Picher Fluid Systems Ltd [England and Wales]
Eagle-Picher Far East, Inc. [Delaware]
Eagle-Picher, Inc. [Virgin Islands]
Eagle-Picher Industries of Canada Limited [Canada]
Eagle-Picher Industries GmbH [Germany]
Eagle-Picher Industries Materials GmbH [Germany]
Eagle-Picher Minerals, Inc. [Nevada]
Eagle-Picher Minerals International S.A.R.L. [France]
United Minerals Verwaltungs- und Beteiligungs GmbH [Germany]
United Minerals GmbH & Co. KG [Germany]
Equipos de Acuna, S.A. de C.V. [Mexico]
Hillsdale Tool & Manufacturing Co. [Michigan]
Eagle-Picher Industries Europe GmbH [Germany]
EPTEC, S.A. de C.V. [Mexico]
Eagle-Picher Fluid Systems, Inc. [Michigan]
- -----------
[ ] Brackets indicate state or country of incorporation and do not form part of
corporate name.
<PAGE>
<PAGE>
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Eagle-Picher Industries, Inc.:
We consent to incorporation by reference in Registration Statement Nos. 2-50595,
33-5792, 33-31975 and 33-37518 on Form S-8 of Eagle-Picher Industries, Inc. of
our report, with explanatory paragraphs, dated February 14, 1996 relating to the
consolidated balance sheet of Eagle-Picher Industries, Inc. and subsidiaries
(debtor in possession, as of January 7, 1991) as of November 30, 1995 and 1994,
and the related consolidated statements of income (loss), shareholders' equity
(deficit), and cash flows for each of the years in the three-year period ended
November 30, 1995, which reports appear in the Company's 1995 Annual Report on
Form 10-K and in the 1995 Annual Report, which is incorporated by reference in
the Company's 1995 Annual Report on Form 10-K. Our report on the consolidated
financial statements refers to a change in accounting for postretirement
benefits other than pensions in 1993.
/s/ KPMG Peat Marwick LLP
Cincinnati, Ohio
February 27, 1996
<PAGE>
<PAGE>
EXHIBIT 24(a)
POWER OF ATTORNEY
Each of the undersigned officers and/or directors of Eagle-Picher Industries,
Inc. hereby consents to and appoints Thomas E. Petry and James A. Ralston, and
each of them, as his true and lawful attorneys-in-fact and agents with all power
of substitution, for him and in his name, place and stead, in any and all
capacities, to sign the Annual Report on Form 10-K for the 1995 fiscal year of
Eagle-Picher Industries, Inc., a corporation organized and existing under the
laws of the State of Ohio, and any and all amendments thereto, and to file the
same, with all exhibits thereto, and all documents in connection therewith, with
the Securities and Exchange Commission pursuant to the requirements of the
Securities Exchange Act of 1934, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the same as
fully to all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or either
of them, or their or his substitute or substitutes, may lawfully do or cause to
be done by virtue thereof.
In Witness Whereof, each of the undersigned has hereunto set his hand on this
14th day of February, 1996.
/s/ Thomas E. Petry
------------------------------------------------------
Thomas E. Petry
Director, Chairman of the Board
and Chief Executive Officer
/s/ Andries Ruijssenaars
------------------------------------------------------
Andries Ruijssenaars
Director, President and Chief
Operating Officer
/s/ David N. Hall
------------------------------------------------------
David N. Hall
Senior Vice President-Finance
(Principal Financial Officer)
/s/ Paul W. Christensen, Jr.
------------------------------------------------------
Paul W. Christensen, Jr.
Director
/s/ V. Anderson Coombe
------------------------------------------------------
V. Anderson Coombe
Director
/s/ Roger L. Howe
------------------------------------------------------
Roger L. Howe
Director
/s/ Daniel W. LeBlond
------------------------------------------------------
Daniel W. LeBlond
Director
/s/ Powell McHenry
------------------------------------------------------
Powell McHenry
Director
/s/ Eugene P. Ruehlmann
------------------------------------------------------
Eugene P. Ruehlmann
Director
<PAGE>
<PAGE>
EXHIBIT 24(b)
POWER OF ATTORNEY
The undersigned officer of Eagle-Picher Industries, Inc. hereby consents to and
appoints Thomas E. Petry and James A. Ralston, and each of them, as his true and
lawful attorneys-in-fact and agents with all power of substitution, for him and
in his name, place and stead, in any and all capacities, to sign the Annual
Report on Form 10-K for the 1995 fiscal year of Eagle-Picher Industries, Inc., a
corporation organized and existing under the laws of the State of Ohio, and any
and all amendments thereto, and to file the same, with all exhibits thereto, and
all documents in connection therewith, with the Securities and Exchange
Commission pursuant to the requirements of the Securities Exchange Act of 1934,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the same as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their or his substitute or
substitutes, may lawfully do or cause to be done by virtue thereof.
In Witness Whereof, the undersigned has hereunto set his hand on this 20th day
of February, 1996.
/s/ Carroll D. Curless
- ------------------------------------
Carroll D. Curless
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
<PAGE>
EXHIBIT 99
<TABLE>
<CAPTION>
EPI OPERATIONS (DIVISIONS) PLANT LOCATIONS
- -------------------------- ---------------
<S> <C>
Cincinnati Industrial Machinery Sharonville, Ohio
3280 Hageman Street
Sharonville, Ohio 45241
Construction Equipment Lubbock, Texas
1802 E. 50th Street Acuna, Coahuila, Mexico
Lubbock, Texas 79404
Eagle-Picher Fluid Systems, Inc. Brighton, Michigan*
7854 Lochlin Drive
Brighton, Michigan 48116
Electronics Joplin, Missouri (6)
"C" and Porter Streets Colorado Springs, Colorado (2)
Joplin, Missouri 64801 Galena, Kansas
Grove, Oklahoma
Seneca, Missouri
Stella, Missouri
Socorro, New Mexico**
Fabricon Products River Rouge, Michigan
1721 West Pleasant Avenue Philadelphia, Pennsylvania
River Rouge, Michigan 48218 Riverton, New Jersey
Hillsdale Tool & Manufacturing Co. Hillsdale, Michigan (4)**
135 E. South Street Hamilton, Indiana
Hillsdale, Michigan 49242 Jonesville, Michigan
Vassar, Michigan
San Luis Potosi, Mexico
Michigan Automotive Ann Arbor, Michigan
Research Corporation (MARCO)
1254 North Main Street
Ann Arbor, Michigan 48104
Minerals Clark Station, Nevada
6110 Plumas Street Lovelock, Nevada
Reno, Nevada 89509 Vale, Oregon
</TABLE>
- ----------
* Effective approximately March 1, 1996.
** The New Mexico plant and one of the Hillsdale, Michigan plants have
little, if any, manufacturing activity at this time.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
EPI OPERATIONS (DIVISIONS) PLANT LOCATIONS
- -------------------------- ---------------
<S> <C>
Orthane Denton, Texas***
1500 I-35 W. (at Airport Road)
Denton, Texas 76202
Plastics Grabill, Indiana
14123 Roth Road Ashley, Indiana
Grabill, Indiana 46741 Huntington, Indiana
Ross Aluminum Foundries Sidney, Ohio (2)
815 North Oak Avenue
Sidney, Ohio 45365
Rubber Molding Norwich, Connecticut
19 Ohio Avenue Pine Bluff, Arkansas
Norwich, Connecticut 06360 Stratford, Connecticut
Specialty Materials Quapaw, Oklahoma (2)
One Mile NE of Quapaw on Hwy. 69A Miami, Oklahoma (3)
Quapaw, Oklahoma 74363 Harrisonville, Missouri
Lenexa, Kansas
Suspension Systems Paris, Illinois
Route 133 West
Paris, Illinois 61944
Transicoil Inc. Trooper, Pennsylvania
2560 General Armistead Avenue Melaka, Malaysia
Trooper, Pennsylvania 19403
Trim Kalkaska, Michigan
829 U.S. Hwy. 131 NW
Kalkaska, Michigan 49646
Wolverine Gasket Inkster, Michigan
2638 Princess Street Blacksburg, Virginia
Inkster, Michigan 48141 Leesburg, Florida
Garden City, Michigan
Eagle-Picher Industries Europe GmbH Market Harborough, England
Soria, Spain
Ohringen, Germany
</TABLE>
- ----------
*** A substantial portion of the business of the Denton, Texas facility was
sold on January 31, 1996. The remainder will be transferred to the
Brighton, Michigan plant, listed above.
<PAGE>
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended May 31, 1996 Commission file number 1-1499
EAGLE-PICHER INDUSTRIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
OHIO 31-0268670
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
580 Walnut Street, P. O. Box 779, Cincinnati, Ohio 45201
- --------------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code 513-721-7010
(Not Applicable)
- --------------------------------------------------------------------------------
Former name, former address and former fiscal year,
if changed since last report
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such filing
requirements for the past 90 days. Yes |X| No [ ]
11,040,932 shares of common capital stock, par value $1.25 per share, were
outstanding at July 12, 1996.
1
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements.................................... 3
Consolidated Statement of Income............................ 3
Consolidated Balance Sheet.................................. 4
Consolidated Statement of Cash Flows........................ 6
Notes to Consolidated Financial Statements.................. 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................... 12
PART II. OTHER INFORMATION
Item 1. Legal Proceedings....................................... 14
Item 3. Defaults Upon Senior Securities......................... 14
Item 6. Exhibits and Reports on Form 8-K........................ 15
Signature........................................................ 16
Exhibit Index.................................................... 17
</TABLE>
2
<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF INCOME
(Dollars in thousands except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
May 31 May 31
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $ 235,126 $ 225,378 $ 443,708 $ 422,981
--------- --------- --------- ---------
Operating Costs and Expenses:
Cost of products sold 194,276 186,658 368,640 349,946
Selling and administrative 21,569 19,573 42,416 38,775
--------- --------- --------- ---------
215,845 206,231 411,056 388,721
--------- --------- --------- ---------
Operating Income 19,281 19,147 32,652 34,260
Interest expense (462) (500) (949) (987)
Other income 30 21 357 406
--------- --------- --------- ---------
Income Before Reorganization
Items and Taxes 18,849 18,668 32,060 33,679
Reorganization items 22 (331) 90 (756)
--------- --------- --------- ---------
Income Before Taxes 18,871 18,337 32,150 32,923
Income Taxes 2,115 1,561 3,886 3,115
--------- --------- --------- ---------
Net Income $ 16,756 $ 16,776 $ 28,264 $ 29,808
========= ========= ========= =========
Income per Share $ 1.52 $ 1.52 $ 2.56 $ 2.70
========= ========= ========= =========
</TABLE>
See accompanying notes to the consolidated financial statements.
3
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
ASSETS May 31 Nov. 30
1996 1995
---------- ----------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 109,719 $ 93,330
Receivables, less allowances 131,289 127,044
Income tax refund receivable 679 4,402
Inventories:
Raw materials and supplies 37,060 42,140
Work in process 30,842 23,349
Finished goods 17,069 18,158
---------- ----------
84,971 83,647
Prepaid expenses 12,057 17,695
---------- ----------
Total current assets 338,715 326,118
---------- ----------
PROPERTY, PLANT AND EQUIPMENT 452,153 441,957
Less accumulated depreciation 294,861 286,139
---------- ----------
Net property, plant and equipment 157,292 155,818
DEFERRED INCOME TAXES 70,024 62,824
OTHER ASSETS 35,493 35,313
---------- ----------
Total Assets $ 601,524 $ 580,073
========== ==========
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES
Accounts payable $ 35,026 $ 40,318
Long-term debt - current portion 2,611 1,525
Income taxes 4,836 4,789
Other current liabilities 36,666 35,991
---------- ----------
Total current liabilities 79,139 82,623
---------- ----------
LIABILITIES SUBJECT TO COMPROMISE 2,662,414 2,662,530
LONG-TERM DEBT - less current portion 17,572 19,103
POSTRETIREMENT BENEFITS OTHER THAN PENSIONS 22,278 21,720
OTHER LONG TERM LIABILITIES 4,714 5,405
---------- ----------
Total liabilities 2,786,117 2,791,381
---------- ----------
</TABLE>
4
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEET
(Dollars in thousands)
<TABLE>
<CAPTION>
May 31 Nov. 30
1996 1995
----------- -----------
<S> <C> <C>
SHAREHOLDERS' EQUITY (DEFICIT)
Common shares - par value $1.25 per share
authorized 30,000,000 shares, issued
11,125,000 shares $ 13,906 $ 13,906
Additional paid-in capital 36,378 36,378
Accumulated deficit (2,233,025) (2,261,289)
Unrealized gain on investments 396 333
Foreign currency translation (335) 1,277
----------- -----------
(2,182,680) (2,209,395)
Cost of 84,068 common treasury shares (1,913) (1,913)
----------- -----------
Total Shareholders' Equity (Deficit) (2,184,593) (2,211,308)
----------- -----------
Total Liabilities and Shareholders' Equity
(Deficit) $ 601,524 $ 580,073
=========== ===========
</TABLE>
See accompanying notes to the consolidated financial statements.
5
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
May 31
-----------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 28,264 $ 29,808
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 15,299 14,572
Changes in assets and liabilities:
Receivables (4,245) (8,538)
Inventories (1,324) (5,300)
Deferred taxes (7,200) (9,500)
Accounts payable (5,292) (492)
Accrued liabilities 675 4,122
Other 8,834 (6,394)
-------- --------
Net cash provided by
operating activities 35,011 18,278
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (19,109) (13,978)
Other 687 908
-------- --------
Net cash used in
investing activities (18,422) (13,070)
CASH FLOWS FROM FINANCING ACTIVITIES:
Reduction of long-term debt (200) (980)
-------- --------
Net cash used in
financing activities (200) (980)
</TABLE>
6
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in thousands)
<TABLE>
<CAPTION>
Six Months Ended
May 31
----------------------
1996 1995
---- ----
<S> <C> <C>
Net increase in cash and cash equivalents 16,389 4,228
Cash and cash equivalents, beginning of period 93,330 92,606
-------- --------
Cash and cash equivalents, end of period $109,719 $ 96,834
======== ========
Supplemental cash flow information:
Cash paid during the year:
Interest paid $ 842 $ 955
Income taxes paid (net of refunds received) $ 7,316 $ 10,119
Cash paid during the quarter:
Interest paid $ 432 $ 462
Income taxes paid (net of refunds received) $ 6,216 $ 9,478
See accompanying notes to consolidated financial statements.
</TABLE>
7
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
Notes to Consolidated Financial Statements
A. PROCEEDINGS UNDER CHAPTER 11
On January 7, 1991 ("petition date"), Eagle-Picher Industries, Inc.
("Company") and seven of its domestic subsidiaries each filed a voluntary
petition for relief under chapter 11 of the United States Bankruptcy Code
("chapter 11") in the United States Bankruptcy Court for the Southern District
of Ohio, Western Division, in Cincinnati, Ohio ("Bankruptcy Court"). Each filing
entity, other than EDI, Inc., is currently operating its business as a debtor in
possession in accordance with the provisions of the Bankruptcy Code.
An Unsecured Creditors' Committee ("UCC"), an Injury Claimants' Committee
("ICC"), an Equity Security Holders' Committee ("ESC"), and a Legal
Representative for Future Claimants ("RFC") have been appointed in the chapter
11 cases. An unofficial asbestos co-defendants' committee has also been
participating in the chapter 11 cases. In accordance with the provisions of the
Bankruptcy Code, these parties have the right to be heard with respect to
transactions outside the ordinary course of business. The official committees
and the RFC typically are the entities with which the Company would negotiate
the terms of a plan of reorganization. In June 1992, a mediator was appointed by
the Bankruptcy Court to assist the constituencies in their negotiations.
On November 9, 1993, the Company reached an agreement on the principal
elements of a joint plan of reorganization. The agreement was with the ICC and
the RFC, the representatives of the holders of present and future
asbestos-related personal injury and other toxic tort claims in the Company's
chapter 11 case, and was reached with the assistance of the mediator. One of the
principal elements of the agreement was a negotiated settlement of the Company's
aggregate liability for such claims in the amount of $1.5 billion. As a
consequence of this agreement, the Company recorded a provision in the fourth
quarter of 1993 of $1.135 billion to increase the asbestos liability subject to
compromise to $1.5 billion. The Company also recorded a provision of $41.4
million in 1993 for environmental and other litigation claims in anticipation of
settlement of such claims.
Throughout 1994, the Company, the ICC and the RFC continued to refine the
details of a joint plan of reorganization ("Original Plan"). The Original Plan
was filed with the Bankruptcy Court on February 28, 1995. The Original Plan did
not have the support of the UCC or the ESC because they did not agree with the
amount of the aggregate asbestos liability which had been negotiated and which
was used in the Original Plan to determine the allocation of the consideration
to be distributed to the unsecured creditor and shareholder classes. As a result
of the dispute, the Company was unable to move forward with the Original Plan.
In order to resolve this dispute, the Company filed a motion in July 1995
requesting that the Bankruptcy Court estimate the Company's aggregate liability
on account of present and future asbestos-related personal injury claims. The
Bankruptcy Court ruled in December 1995 that such estimated liability is $2.5
billion ("Estimation Ruling"). The UCC, the ESC and two individual members of
the UCC have appealed the Estimation Ruling. The U.S. District Court for the
Southern District of Ohio, Western Division heard oral argument on these appeals
in June 1996. A decision is pending.
On April 9, 1996, the Company filed a First Amended Consolidated Plan of
Reorganization ("Amended Plan") reflecting the Estimation Ruling, and a proposed
First Amended Joint Disclosure Statement ("Disclosure Statement"). The principal
substantive modification to the Original Plan relates to the allocation of the
consideration to be distributed under the plan to the various classes of
unsecured claims. A hearing before the Bankruptcy Court to consider approval of
the Disclosure Statement has been scheduled for July 22, 1996. Pursuant
8
<PAGE>
<PAGE>
to the Bankruptcy Code, the acceptance or rejection of a plan of reorganization
may not be solicited from the holder of a claim unless at the time of or before
such solicitation there is transmitted to such holder the plan or a summary of
the plan and a disclosure statement approved by the Bankruptcy Court as
containing information of a kind and in sufficient detail that would enable a
hypothetical reasonable investor typical of holders of claims to make an
informed judgment about the plan.
The Amended Plan, like the Original Plan, contemplates a resolution of the
Company's liability for all present and future asbestos-related personal injury
claims and certain other tort claims. These claims will be channeled to and
resolved by an independently administered claims trust ("Trust"). The Amended
Plan provides for the distribution of cash, notes and common stock of the
reorganized Company to the Trust and to holders of allowed unsecured claims on a
pro-rata basis proportionate to the percentage of their claims to the total of
the Liabilities Subject to Compromise. Accordingly, pursuant to the Amended
Plan, it is anticipated that the Trust will be distributed approximately 94% of
such cash, notes and stock, and claimants holding environmental-related and
other pre-petition unsecured claims will be distributed approximately 6% of such
cash, notes and stock.
Pursuant to the Amended Plan, claims entitled to priority under the
Bankruptcy Code and "convenience claims" (pre-petition general unsecured claims
of $500 or less or claims that are reduced to that amount) will be paid in full,
in cash. The Amended Plan also provides for the resolution of all
asbestos-related property damage claims, as further discussed in Note B below.
Under the Bankruptcy Code, shareholders are not entitled to any distribution
under a plan of reorganization unless all classes of pre-petition creditors
receive satisfaction in full of their allowed claims or accept a plan which
allows shareholders to participate in the reorganized company or to receive a
distribution. Under the Amended Plan, existing shareholders will receive no
distributions and their shares will be canceled.
Following the Estimation Ruling, the Company recorded a provision of
approximately $1.0 billion to increase the asbestos liability subject to
compromise to the amount estimated by the Bankruptcy Court. This resulted in a
negative shareholders' equity in excess of $2.2 billion. As a result, the
Company filed a motion in the Bankruptcy Court in December 1995 seeking an order
directing the United States Trustee to disband the ESC on the basis that
existing equity holders do not have an economic interest in the chapter 11
cases. In January 1996, the Bankruptcy Court ruled that the ongoing activities
of the ESC shall be limited to pursuing its appeal of the Estimation Ruling.
The accompanying consolidated financial statements have been prepared on a
going concern basis which contemplates continuity of operations, realization of
assets and liquidation of liabilities in the ordinary course of business. The
liabilities subject to compromise listed above have been reported on the basis
of the expected amount of the allowed claims even though they may be settled for
lesser amounts. Upon confirmation of a plan of reorganization, the Company would
utilize the "fresh-start" reporting principles contained in the AICPA's
Statement of Position 90-7, which would result in adjustments relating to the
amounts and classification of recorded assets and liabilities, determined as of
the plan confirmation date. Pursuant to the Amended Plan, the ultimate
consideration to be received by unsecured creditors will be substantially less
than the amounts shown in the accompanying Consolidated Balance Sheet. Until a
plan of reorganization is confirmed, however, the Company cannot be certain of
the final terms and provisions thereof or the ultimate amount creditors will
receive.
9
<PAGE>
<PAGE>
Liabilities incurred by the Company as of the petition date and subject to
compromise under a plan of reorganization are separately classified in the
Consolidated Balance Sheet and include the following (in thousands of dollars):
<TABLE>
<CAPTION>
May 31, November 30,
1996 1995
---------- ----------
<S> <C> <C>
Asbestos liability $2,502,511 $2,502,511
Long-term debt (unsecured portion) 62,003 62,003
Accounts payable 41,181 41,236
Accrued and other liabilities 56,719 56,780
---------- ----------
$2,662,414 $2,662,530
========== ==========
</TABLE>
The net expense (income) resulting from the Company's administration of
the chapter 11 cases has been segregated from expenses related to ordinary
operations in the accompanying financial statements and includes the following
(in thousands):
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
May 31 May 31
------------------ --------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Professional fees and other
expenses directly related
to bankruptcy $ 1,248 $ 1,563 $ 2,401 $ 3,078
Interest income (1,270) (1,232) (2,491) (2,322)
------- ------- ------- -------
$ (22) $ 331 $ (90) $ 756
======= ======= ======= =======
</TABLE>
Interest income is attributable to the accumulation of cash and short-term
investments subsequent to the petition date.
B. LITIGATION
As discussed in Note K to the Consolidated Financial Statements included
in the Company's Annual Report and Form 10-K for the fiscal year ended November
30, 1995 and Note A above, the accompanying Consolidated Financial Statements
include an estimated liability related to personal injury claims resulting from
the Company's sale of asbestos-containing insulation products. Litigation with
respect to asbestos-related claims was stayed by reason of the chapter 11
filing.
Approximately 1,000 proofs of claim alleging asbestos-related property
damage were filed in the chapter 11 cases pursuant to the September 30, 1992 bar
date for asbestos-related claims. Under the Amended Plan, a second trust will be
established to resolve asbestos-related property damage claims. If the class of
asbestos-related property damage claims votes to accept the Amended Plan, such
trust will be funded with $3 million in cash. If such class votes to reject the
Amended Plan, but the Amended Plan is nevertheless confirmed, the trust will be
funded with the pro-rata share of plan consideration allocable to
asbestos-related property damage claims in the aggregate, based upon the
Bankruptcy Court's estimate of the aggregate value of such claims. It cannot be
reasonably predicted at this time what the Bankruptcy Court's estimate of the
aggregate value of such claims would be. The Company may have insurance coverage
for certain of these claims.
In February 1996, the hospital members of the American Hospital
Association, which had filed asbestos-related property damage claims against the
Company ("Hospitals"), filed a motion in the Bankruptcy Court seeking an order
estimating the aggregate value of all
10
<PAGE>
<PAGE>
asbestos-related property damage claims against the Company and temporarily
allowing such claims for purposes of voting on a plan of reorganization. The
Company and the RFC opposed the motion on the basis that, should the class of
asbestos-related property damage claims accept the Amended Plan, an estimation
of these claims would be unnecessary. The Company also argued that voting issues
should be addressed in connection with the Company's motion for an order from
the Bankruptcy Court establishing the voting procedures with respect to the
Amended Plan. At a hearing held in May 1996, the Bankruptcy Court denied the
Hospitals' motion.
In February and May 1996, the Company filed with the Bankruptcy Court
objections to many asbestos-related property damage claims, including claims
filed by the Hospitals, because the claims are barred by the applicable time
limitations under state laws for prosecuting the claims, the claims fail to
state the requisite legal and factual bases therefor, and/or the claims fail to
provide any evidence that the Company's products were located in the claimants'
facilities. The holders of approximately 365 claims did not respond to the
objections; some of these claims have been disallowed by the Bankruptcy Court
and the Company's request for disallowance of the other such claims is pending
with the Bankruptcy Court. With respect to the remaining claims that were
objected to, the Bankruptcy Court has not yet issued a ruling.
The Company is a defendant in other litigation which was pending as of the
petition date which was discussed in Note L to the Consolidated Financial
Statements for the fiscal year ended November 30, 1995. The Company intends to
defend all litigation claims vigorously in the manner permitted by the
Bankruptcy Code and/or applicable law. All pre-petition claims against the
Company arising from litigation must be liquidated or otherwise addressed in the
context of the chapter 11 cases and will be treated in any plan of
reorganization.
The Company has resolved most of the litigation-based claims that were
asserted pursuant to the October 31, 1991 bar date for claims other than those
arising from the sale of asbestos-containing products. In June 1996, the
Bankruptcy Court approved the settlement agreement among the Company, the EPA,
the U.S. Department of Interior and certain states which resolves the majority
of the environmental claims asserted against the Company. The terms of the
settlement agreement were discussed in Note L to the Consolidated Financial
Statements included in the Company's Annual Report and Form 10-K for the fiscal
year ended November 30, 1995. Certain parties that may be liable at certain of
the sites resolved by the settlement agreement have appealed the Bankruptcy
Court's decision.
The Company has filed objections to certain of the litigation-based claims
that have not yet been resolved, seeking to reduce the amount of such claims or
eliminate them entirely. The Company anticipates filing additional objections to
other such claims if they cannot be resolved through negotiation. These
objections will be vigorously pursued by the Company. The Company believes that
its provisions for these claims is adequate, and, in addition, the Company may
have insurance coverage for certain of them.
C. BASIS OF REPORTING FOR INTERIM FINANCIAL STATEMENTS
The unaudited financial statements included herein have been prepared by
the Company pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the information
presented not misleading. These financial statements should be read in
conjunction with the financial statements and notes thereto included in the
Company's Annual Report and Form 10-K for the fiscal year ended November 30,
1995.
The financial statements presented herewith reflect all adjustments
(consisting of normal and recurring accruals) which, in the opinion of
management, are necessary to fairly state the results of operations for the
three month and six month periods ended May 31, 1996 and 1995. Results of
operations for interim periods are not necessarily indicative of results to be
expected for an entire year.
11
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
Sales for the second quarter ended May 31, 1996 were $235.1 million
compared with $225.4 million for the second quarter of 1995. Operating income
was $19.3 million compared with $19.1 million for the same period last year. Net
income for the second quarter of 1996 was $16.8 million or $1.52 per share which
was equal to that of the second quarter of 1995.
There was an organizational change during the second quarter of 1996. The
Electronics Division was merged with the Specialty Materials Division to form
the Eagle-Picher Technologies Division. Those operations of the Eagle-Picher
Technologies Division which are included within the Machinery Group (formerly
the operations of the Electronics Division) constitute the largest international
supplier of power systems for commercial, military and weather satellites. These
operations also produce special purpose batteries for a variety of other
purposes. Those operations of the Eagle-Picher Technologies Division which are
included within the Industrial Group (formerly the operations of the Specialty
Materials Division) produce germanium substrates for solar cells which are used
on satellites, boron isotopic components and certified clean sample containers
for environmental testing.
Sales for the Automotive Group for the second quarter of 1996 were ahead
of the levels for the second quarter of 1995, while operating income was
essentially the same as that of the second quarter of 1995. Despite a strike at
the General Motor's Delphi Division, increased production levels in the North
American market and a favorable product mix were important factors in the
improving trend during the second quarter of 1996. European operations did well
during the second quarter as these operations continue to increase market share.
Start-up costs associated with expansions, and continued delays by one customer
in meeting anticipated production schedules, placed pressure on profit margins
during the quarter.
Sales for the Machinery Group were essentially equal to those for the
second quarter of last year, while operating income declined. The primary reason
for the decline in operating income was reduced shipments of earth moving
machinery by the Construction Equipment Division. Shipments of special purpose
batteries by the Eagle-Picher Technologies Division were strong. Results for the
remaining operations in the Machinery Group were mixed.
Sales and operating income for the Industrial Group increased in the
second quarter of 1996 over the results for last year's second quarter.
Shipments of diatomaceous earth products, both to the domestic and to the
international markets, continue to be at a high level. Diatomaceous earth
products are used for high purity filtration in the food and beverage industry
and in a variety of general industrial applications. Eagle-Picher Technologies'
operations in the Industrial Group enjoyed an outstanding quarter. The increase
in cellular communications has expanded demand for satellite components.
Additionally, although the price of certain raw materials has increased over the
past year, it has had a minimal impact on margins as the raw material price
increases were absorbed by the customer. Shipments of boron isotopic compounds
were also at a high level. Recent penetration of the European nuclear market has
provided an excellent growth opportunity for boron products.
It is expected that economic activity will be at a reasonably high level
during the second half of 1996. Several operations are serving growing markets
and/or are increasing market share, while others are serving sluggish segments
of the economy. On balance, and based on forecasts from the Company's Divisions,
results for the second half of 1996 should approximate those of the second half
of 1995.
Interest expense did not change appreciably in the second quarter or the
first six months of 1996 compared to the same periods in 1995. Contractual
interest on debt outstanding was $2.2 million in the second quarters of 1996 and
1995 and $4.4 and $4.5 million in the six
12
<PAGE>
<PAGE>
month periods ended May 31, 1996 and 1995, respectively.
Interest income on the cash balances accumulated as a result of the
reorganization slightly exceeded the expenses of the reorganization effort
throughout 1996.
FINANCIAL CONDITION
The cash balance of the Company increased from $93.3 million at November
30, 1995 to $109.7 million at May 31, 1996, an increase of $16.4 million. One
component of this increase was the reduction in the amount of customer tooling
carried on the balance sheet to $16.7 million at May 31, 1996 from $26.5 million
at November 30, 1995. It is custom practice in the automotive industry to
accumulate customer tooling costs while the tooling is under construction and
bill the customer upon its completion. It is anticipated that the amount of
customer tooling on the balance sheet will decline further throughout the
remainder of the year. There were increases in working capital, which are
typical in periods in which sales growth is experienced, which partially offset
the effects of the decrease in tooling.
Capital expenditures totaled $9.4 million in the second quarter of 1996
and $19.1 million for the six months ended May 31, 1996 compared to $7.5 million
and $14.0 million in the respective periods of 1995. The Company presently
expects, however, that the total amount of capital expenditures in the 1996
fiscal year will be comparable to that of 1995.
On April 9, 1996, the Company filed a First Amended Consolidated Plan of
Reorganization with the Bankruptcy Court. Such plan provides for the
satisfaction and discharge of the Company's pre-petition liabilities
(Liabilities Subject to Compromise) and for the reorganized Company to have a
capital structure appropriate for an industrial products company that is
intended to enable the Company to access financing in the credit and debt
markets. Decisions with respect to the appeals of the Estimation Ruling and the
hearing on the Disclosure Statement, as further discussed in Note A to the
Consolidated Financial Statements contained herein, will have a direct impact on
the reorganization process. Accordingly, at this time it is not possible to
predict when a plan of reorganization will be confirmed and become effective.
13
<PAGE>
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In May 1996, the Bankruptcy Court denied the motion of the Hospitals
seeking an order estimating the aggregate value of all asbestos-related property
damage claims against the Company and temporarily allowing such claims for
purposes of voting on a plan of reorganization. This motion, as well as
objections the Company has filed with the Bankruptcy Court to many of the
asbestos-related property damage claims, are discussed in Note B to the
Consolidated Financial Statements contained herein.
Following the close of the quarter, on June 6, 1996, the Bankruptcy Court
issued a judgment and decision in which it granted the motions of the Company
and the United States seeking an order approving the settlement agreement among
the Company, the EPA, the U.S. Department of Interior and certain states
relating to certain environmental claims asserted against the Company. The
settlement agreement provides, among other things, that the agencies and certain
states will be granted allowed pre-petition unsecured claims in the Company's
chapter 11 case aggregating approximately $43.0 million in full satisfaction of
all of the Company's alleged liability at 23 specified Superfund sites,
including any liability for any natural resource damage. The settlement
agreement also provides that the liability, if any, of the Company at certain
other sites will be determined in the future and be satisfied at that time in
substantially the same manner and with the same value as such claims would have
been satisfied if they had been treated under a reorganization plan. The
settlement agreement was discussed in the Company's Report on Form 10-K for the
fiscal year ended November 30, 1995. Certain parties that may be liable at
certain of the sites resolved by the settlement agreement have filed a notice of
appeal of the Bankruptcy Court's decision.
Following the close of the quarter, on June 14, 1996, the U.S. District
Court for the Southern District of Ohio heard oral argument on the appeals of
the Estimation Ruling filed by the UCC, the ESC and two individual members of
the UCC. The Estimation Ruling is further discussed in Note A to the
Consolidated Financial Statements contained herein. The parties who filed the
appeals argued, among other things, that the Bankruptcy Court lacked
jurisdiction to estimate the Company's liability with respect to
asbestos-related personal injury claims and that it erred in its determination
of the amount of such liability. The Company, the ICC and the FRC have opposed
the appeals. The District Court has not yet ruled on the appeals.
Following the close of the quarter, on June 21, 1996, the UCC withdrew the
motion it had filed with the Bankruptcy Court seeking relief from the Estimation
Ruling. In its motion, the UCC had argued that, through inadvertence or mistake,
the Bankruptcy Court overestimated the Company's liability for future
asbestos-related personal injury claims by approximately $500 million. Because
this issue was also raised in the appeal filed by the UCC to the Estimation
Ruling, the UCC withdrew it from present consideration by the Bankruptcy Court.
This motion was reported in the Company's Report on Form 10-Q for the quarter
ended February 29, 1996.
The Bankruptcy Court has scheduled a hearing for July 22, 1996 to consider
the adequacy of the Debtors' First Amended Joint Disclosure Statement, which the
Company submitted in connection with the filing of the Amended Plan, as further
discussed in Note A to the Consolidated Financial Statements contained herein.
Following the close of the quarter, at a hearing in June 1996, the Bankruptcy
Court granted the Company's Motion for an Order Establishing Procedures for
Solicitation and Tabulation of Votes to Accept or Reject the Consolidated Plan
of Reorganization, subject to such procedures being modified to provide that
individual creditors holding multiple claims shall have a separate vote for each
allowed claim they hold.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
The chapter 11 filings constituted a default under substantially all of
the
14
<PAGE>
<PAGE>
Company's and its 'affiliates' senior securities. The obligations under the
Company's pre-petition credit facility and other obligations owing to the
lenders who were party to the pre-petition credit facility have been addressed
in the debtor in possession financing agreement approved by the Bankruptcy Court
on May 24, 1991. At that time, certain of such obligations were repaid and the
remaining of such obligations were deemed to be post-petition.
With respect to certain other secured obligations, the Company (or its
affiliates) have been making settlements or "adequate protection" payments
approved by orders of the Bankruptcy Court.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27 - Financial Data Schedule.
(b) Reports on Form 8-K
Report on Form 8-K (File 1-1499), dated April 9, 1996, in which the
Company reported that on April 9, 1996 the Company and seven of its
domestic subsidiaries filed a First Amended Consolidated Plan of
Reorganization in their chapter 11 cases pending before the U.S.
Bankruptcy Court for the Southern District of Ohio, Western Division.
15
<PAGE>
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
EAGLE-PICHER INDUSTRIES, INC.
/s/ David N. Hall
-------------------------------
David N. Hall,
Senior Vice President - Finance and
Chief Financial Officer
DATE July 12, 1996
16
<PAGE>
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
27 Financial Data Schedule (submitted
electronically to the Securities
and Exchange Commission for its
information)
17
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[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
SIGNIFICANT ASSUMPTIONS FOR FINANCIAL PROJECTIONS
For purposes of developing the Plan of Reorganization (the "Plan") and
evaluating its feasibility, the following financial projections were prepared.
These financial projections reflect the Debtors' estimate of their expected
consolidated financial position, results of operations and cash flows.
Accordingly, the projections reflect Management's judgment, as of the date of
this Disclosure Statement, of expected future operating and business conditions,
which are subject to change.
All estimates and assumptions shown within the projections were developed by
Management. The assumptions disclosed herein are those that Management believes
to be significant to the projections. Although the Debtors are of the opinion
that these assumptions are reasonable in the circumstances, such assumptions are
subject to significant uncertainties, such as the cyclical nature of the
automotive industry. There will be differences between projected and actual
results because events and circumstances frequently do not occur as expected.
Further, such assumptions may be affected by other events and circumstances
outside of the Debtors' control. Consequently, actual financial results could
vary significantly from projected results.
THE PROJECTIONS SHOULD NOT BE REGARDED AS A REPRESENTATION OR WARRANTY BY THE
DEBTORS OR ANY OTHER PERSON AS TO THE ACCURACY OF THE PROJECTIONS OR THAT THE
PROJECTIONS WILL BE REALIZED.
The financial projections were prepared by the Debtors; they have not been
audited or reviewed by independent accountants. The significant assumptions used
in the preparation of the financial projections are stated below.
THE FINANCIAL PROJECTIONS, INCLUDING THE UNDERLYING ASSUMPTIONS, SHOULD BE
CAREFULLY REVIEWED IN EVALUATING THE PLAN.
It is projected that the Debtors will emerge from chapter 11 December 1, 1996
(the "Effective Date"). The reorganization will be accounted for in accordance
with the American Institute of Certified Public Accountants' Statement of
Position 90-7, "Financial Reporting by Entities in Reorganization Under the
Bankruptcy Code" ("SOP 90-7").
The projections included herein are:
1. Pro Forma Consolidated Balance Sheet of Reorganized Eagle-Picher as of the
Effective Date which reflects the projected accounting effects of the
Plan's consummation and of "fresh start" accounting as promulgated by SOP
90-7.
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<PAGE>
2. Projected Consolidated Balance Sheets of Reorganized Eagle- Picher as of
the Effective Date and November 30 for each of the years from 1997 through
2001.
3. Projected Consolidated Statements of Income of Reorganized Eagle-Picher
for each of the six fiscal years in the period ended November 30, 2001.
4. Projected Consolidated Statements of Cash Flow of Reorganized Eagle-Picher
for each of the six fiscal years in the period ended November 30, 2001.
5. Projected Capital Structure of Reorganized Eagle-Picher as of the
Effective Date.
The projections have been prepared on the basis of generally accepted accounting
principles consistent with those currently utilized by Eagle-Picher in the
preparation of its consolidated financial statements except as noted in the
following assumptions. The projections should be read in conjunction with the
significant assumptions, qualifications and notes set forth below and with the
audited consolidated financial statements for the fiscal year ended November 30,
1995 contained in the 1995 Annual Report included in Exhibit C.
WHILE MANAGEMENT BELIEVES THE ASSUMPTIONS UNDERLYING THE PROJECTED FINANCIAL
INFORMATION, WHEN CONSIDERED ON AN OVERALL BASIS, ARE REASONABLE IN LIGHT OF
CURRENT CIRCUMSTANCES AND EXPECTATIONS, NO ASSURANCE CAN BE GIVEN THAT THE
PROJECTIONS WILL BE REALIZED.
A. GENERAL ASSUMPTIONS
The sales volumes of many of the Debtors' operations fluctuate with general
economic cycles. In the interest of presenting a balanced view of their
prospects, the Debtors have assumed that there will be an economic recession in
the years 1997 and 1998.
Other factors considered in formulating the projections are discussed below:
Automotive Segment
The Debtors' automotive operations serve the automotive industry worldwide as a
tier one supplier to the original equipment manufacturers or as a supplier to
other manufacturers that supply automotive manufacturers with component parts or
assemblies. Major factors considered in developing the projections for the
Automotive Segment include:
1. Automotive industry production in North America in 1995 was approximately
15.3 million units of passenger cars, vans, utility vehicles and light
trucks. A new record of 15.7
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million units was reached in 1994, surpassing the record of 15.1 million
units in 1978.
2. Projections for 1996 assume North American automotive production levels
will be down 2%.
3. The effects of the cyclical recession projected in 1997 and 1998 are
comparable to those of the last two downturns of the automotive industry.
4. Economic recovery will begin in the last few months of 1998 moving toward
record automotive production worldwide by 2000.
5. The Debtors will achieve broader market penetration of their products,
particularly in the light truck, van, and sport utility vehicle segment of
the automotive market.
6. There will be increased emphasis on growth opportunities within the
European automotive market.
7. The intense pricing pressure from the automotive manufacturers will
continue and, on occasion, Eagle-Picher will be unable to recover cost
increases from customers on a timely basis.
Machinery Segment
The Debtors' operations in the Machinery Segment manufacture several lines of
earth moving, material handling and other industrial machinery and equipment,
components for a wide range of capital goods and systems and components for
aerospace and commercial aviation markets as well as the defense industry.
Specific factors considered in developing the projections of the Machinery
Segment include:
1. The U.S. Government will continue to cut defense spending. However,
significant operations of the Debtors are more dependent on certain
portions of the defense budget which are less subject to funding cuts than
other areas.
2. The level of worldwide commercial and industrial activity will decline
with the projected economic recession in 1997 and 1998 and will begin
recovery thereafter.
3. Government and commercial aerospace spending, particularly in the
communication satellite area, will remain healthy over the next several
years.
Industrial Segment
The Debtors' operations in the Industrial Segment can be characterized as
serving niche markets where they enjoy a position
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of market leadership based on technical capabilities, proprietary advantages,
manufacturing know-how or marketing skills. These operations generally are not
impacted by fluctuations of the general economy. Specific factors considered in
developing the projections for the Industrial Segment include:
1. Recent historic trends in the performance of individual product lines were
analyzed to develop these projections.
2. Opportunities exist in certain niche markets where the Debtors have a
specific competitive advantage.
3. Since the demand for the Industrial products is not impacted by economic
fluctuations, these products are characterized as being somewhat
"recession proof."
4. In 1997, construction will be completed and production will begin at a new
$14 million facility which will process diatomaceous earth products,
primarily for export markets.
B. DISTRIBUTIONS UNDER THE PLAN
Cash, debt securities and common stock of Reorganized Eagle-Picher will be
distributed pursuant to the Plan.
Cash Distributions
The Debtors expect to distribute cash on the Effective Date as follows:
a) Approximately $10.3 million will be distributed with respect to
Priority Claims, Convenience Claims, certain Secured Claims and certain
Administrative Expenses;
b) Assuming the class of asbestos property damage claimants votes to
approve the Plan, $3.0 million will be used to establish a Qualified
Settlement Fund which will be responsible for satisfying asbestos property
damage claims (the "PD Trust").
c) Approximately $89.0 million will be distributed with respect to the PI
Trust and other unsecured creditors.
Debt Securities
It is anticipated that existing secured debt of Eagle-Picher approximating $6.0
million will be restructured. Such indebtedness will bear interest at an
appropriate market rate and, for the most part, be repaid in installments. An
existing $10 million secured industrial revenue bond financing is expected to be
reinstated. In addition, debt securities, as described below, will be issued on
the Effective Date:
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a) Tax Refund Notes in the anticipated principal amount of $71 million. It
is assumed that these notes will mature on June 1, 1998 based on the
assumed Effective Date of December 1, 1996.
b) Divestiture Notes in the principal amount of $50 million which will
mature three years after the Effective Date. These Divestiture Notes will
be redeemed in the event the Debtors consummate major asset sales.
c) Senior Unsecured Sinking Fund Debentures ("Debentures") in the
principal amount of $250 million, which will mature 10 years after the
Effective Date. The Debentures will have a mandatory sinking fund of $20
million per year on each of the third through ninth anniversaries of the
Effective Date with a final maturity of $110 million.
The assumed interest rates for each of the foregoing is set forth in
Section C below.
Common Stock
Common stock of the Reorganized Eagle-Picher will also be issued pursuant to the
Plan. Based on, among other things, its analysis of the projections, the market
value of securities of other companies serving similar markets and their
capitalization rates, the Debtors' financial advisors, McDonald & Company
Securities, Inc. ("McDonald & Co."), have calculated that the residual value of
such common stock is $254.8 million.
The stockholders' existing Eagle-Picher Common Stock will not receive any
distribution under the Plan, and their equity will be canceled.
Pursuant to the Plan, the holders of Unsecured Claims and Environmental Claims
will receive 50% of their distribution value in Divestiture Notes and 50% cash.
The PI Trust will receive the balance of the cash and Divestiture Notes as
consideration, as well as the entire issues of the Tax Refund Notes and the
Debentures and all of the common stock of the Reorganized Eagle-Picher.
C. OTHER SPECIFIC ASSUMPTIONS
Cash
It is assumed interest of 6% will be earned on cash balances exceeding $15
million. It is also assumed Eagle-Picher will have a line of credit available to
it for certain letters of credit and, if necessary, working capital and
operating needs. Any borrowings on this line of credit will carry an interest
rate of 8%. For these purposes, borrowings will be made on December 1 to fund
cash
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<PAGE>
needs on that day and payments on those borrowings will be made the
following December 1. Interest was calculated accordingly.
Property, Plant and Equipment
To adjust net property, plant and equipment to an estimate of its fair value in
accordance with the fresh-start accounting provisions of SOP 90-7, Eagle-Picher
plans to review its property, plant and equipment and obtain appraisals to
determine what revisions, if any, should be made to individual accounts. Since
the appraisal process is not yet complete, $20 million is an estimate used for
purposes of the projections. The actual adjustment at the Effective Date could
be higher or lower. Any adjustment to this allocation would have no impact on
cash flow.
For purposes of this projection, the fair value adjustment of the property,
plant and equipment is to be amortized over eight years, which approximates the
estimated remaining useful life of the assets. However, actual amortization
periods used at the Effective Date could be shorter or longer.
Reorganization Goodwill
In accordance with SOP 90-7, the reorganization value in excess of amounts
allocable to identifiable assets is an intangible asset. The amortization period
of this intangible asset is assumed for these purposes to be 7 years, but the
actual amortization period utilized at the Effective Date could be shorter or
longer. This item has no tax or cash flow implications.
Debt
The Tax Refund Notes, the Divestiture Notes and the Debentures will bear
interest at a rate these debt securities should bear in order to have a market
value of 100% of their principal amount on the Effective Date. For purposes of
these projections, it is assumed that such interest rates would be 8% for the
Tax Refund Notes, 9 1/2% for the Divestiture Notes and 10 1/2% for the
Debentures.
All payments of principal are assumed to be made on the anniversary of the
Effective Date and interest will be paid semiannually, unless otherwise
specified.
It is assumed the the Tax Refund Notes will be repaid when the majority of the
tax refunds are received, approximately June 1, 1998.
For these purposes, it was assumed the Divestiture Notes will be repaid by their
maturity date.
It is assumed that sinking fund payments on the Debentures will be made as
scheduled throughout the projections.
C-6
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<PAGE>
Income Taxes
It is assumed that Eagle-Picher will receive tax deductions for cash and the
value of stock distributed to the PI Trust upon such distribution. With respect
to Debt Securities distributed to the PI Trust, deductions are received as the
Debt Securities are repaid or refunded. These deductions will result in
substantial tax net operating losses.
An income tax receivable of $67.8 million will result from the carryback of tax
net operating losses to years in which income is available for carryback. An
additional refund of $3.2 million, which arose from results of prior years'
audits, is expected to be received in 1997. Assuming the Effective Date is
December 1, 1996, $55.4 million will be received approximately June 1, 1998,
$9.3 million will be received in 1999, $2.7 million will be received in 2001 and
$.4 million will be received in 2002.
A deferred income tax asset results from tax net operating losses and deferred
deductions available to offset income tax payments in future years. General
business credit carryforwards have been ignored, since it is expected that they
will expire unutilized. For purposes of these projections, it is assumed that
all other tax benefits are available upon the Effective Date and no valuation
allowance is necessary.
A statutory federal income tax rate of 35% is assumed throughout the projection
period. The differences between the statutory and the effective tax rates for
the projection period are due primarily to the amortization of the
reorganization gain, depletion deductions and foreign and state taxes. Due to
the large tax net operating loss carryforward, the Debtor's current Federal tax
liability will be limited to alternative minimum taxes. Approximately $6.6
million of alternative minimum taxes will be paid in 1999; however, of this
amount, $5.9 million will be refunded in 2002.
Liabilities Subject to Compromise
Liabilities Subject to Compromise will be discharged at the Effective Date. This
will result in a gain for forgiveness of debt. This, along with the
establishment of the deferred taxes and reorganization gain will offset the
retained deficit.
C-7
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<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
PRO FORMA CONSOLIDATED BALANCE SHEET
DECEMBER 1, 1996
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
BEFORE REORGANIZATION AFTER
REORGANIZATION ADJUSTMENTS REORGANIZATION
<S> <C> <C> <C>
Cash $118,237 ($102,338)(1) $15,899
Escrow cash 5,125 5,500 (2) 10,625
Accts receivable, net 129,000 (1,800)(2) 127,200
Inventories, net 82,600 11,800 (2,3) 94,400
Income tax receivable 3,200 67,800 (4) 71,000
Prepaid expenses 14,700 (50)(2) 14,650
----------------------------------------------
Total current assets 352,862 (19,088) 333,774
Property, plant &
equipment, net 164,318 18,750 (2,5) 183,068
Deferred income taxes 80,124 42,360 (4) 122,484
Reorganization goodwill -- 75,438 (6) 75,438
Other assets 34,000 (4,000)(7) 30,000
----------------------------------------------
Total assets $631,304 $113,460 $744,764
==============================================
Accounts payable $38,000 (600)(2) $37,400
Accr. liabilities 32,999 (3,049)(1,2) 29,950
Short-term debt -- 71,000 (8) 71,000
Secured debt - current 2,163 (20)(1) 2,143
New debt - current -- --
Income tax payable 5,289 5,289
----------------------------------------------
Total current liab 78,451 67,331 145,782
Secured debt 17,676 (615)(1) 17,061
New debt-10 year -- 250,000 (8) 250,000
New debt-3 year -- 50,000 (8) 50,000
Other long-term liabilities 27,125 27,125
Liabilities subject to
compromise 2,160,493 (2,160,493)(8) --
Equity (1,652,441) 1,907,237 (9) 254,796
----------------------------------------------
Total liab. & equity $631,304 $113,460 $744,764
==============================================
</TABLE>
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EAGLE-PICHER INDUSTRIES, INC.
NOTES TO PRO-FORMA CONSOLIDATED BALANCE SHEET
1. Cash projected to be paid at the Effective Date of the Plan includes
distributions with respect to Priority Claims, Convenience Claims, certain
Secured Claims and Administrative Expenses of approximately $10.3 million,
the Asbestos Property Damage Claim of $3.0 million, and approximately
$89.0 million to be distributed to the unsecured creditors and the PI
Trust.
2. To reflect the sale of the Fabricon Products Division for $5.5 million,
which approximates the book value of the assets. The proceeds will be
deposited to an Escrow Cash account, which is held for the purpose of
repaying the Divestiture Notes due December 1, 1999. The proceeds from the
sale of the Orthane Division, which took place in early 1996, are also
included in the Escrow cash account.
3. To adjust inventory to its approximated fair value through elimination of
the LIFO reserve. Inventory will continue to be calculated on the LIFO
method for tax purposes, which results in a deferred tax liability. For
purposes of this statement, this has been treated as a reduction of
deferred tax assets existing at the Effective Date.
4. Eagle-Picher will receive tax deductions for cash and the value of equity
securities contributed to the PI Trust. An income tax receivable of $67.8
million will result from carryback of losses to years with available
income. Additional deferred income tax assets of $57.4 million result from
net operating losses and deferred deductions available to offset income
tax payments in future years. For purposes of these projections, it was
assumed that all tax benefits, other than general business credit
carryforwards, are available upon the Effective Date and no valuation
allowance is necessary. General business credit carryforwards were ignored
because they are expected to expire unutilized.
5. To adjust net property, plant and equipment to an estimate of its fair
value in accordance with the fresh-start accounting provisions of SOP
90-7. Since the appraisal process is not yet complete, $20 million is an
estimate used for purposes of the projections.
6. To record reorganization value in excess of amounts allocable to
identifiable assets in accordance with SOP 90-7.
7. To write off existing goodwill of approximately $12.0 million. This is
offset by a $8.0 million increase to the prepaid pension asset to the
amount by which the plan assets exceed the projected benefit obligations.
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8. To record the discharge of Liabilities Subject to Compromise through the
distribution pursuant to the Plan of debt securities, common stock, and
the cash previously mentioned in Note 1. This will result in a gain for
forgiveness of debt.
a) Eagle-Picher will issue Tax Refund Notes in the principal amount of
$71.0 million.
b) Eagle-Picher will issue three-year Divestiture Notes in the principal
amount of $50 million.
c) Eagle-Picher will issue Senior Unsecured Sinking Fund Debentures in the
principal amount of $250 million.
d) New Eagle-Picher Common Stock with an estimated value of $254.8 million
will be issued. Existing Eagle-Picher Common Stock will be canceled and
the holders thereof will receive no distribution.
9. To eliminate the retained deficit and record the new equity of
Eagle-Picher.
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<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED BALANCE SHEETS
AS OF NOVEMBER 30 UNLESS OTHERWISE NOTED
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
DEC. 1 REORGANIZED COMPANY
---------------------- ----------------------------------------------------
1996 1996 1997 1998 1999 2000 2001
<S> <C> <C> <C> <C> <C> <C> <C>
Cash $118,237 $15,899 $49,738 $46,350 $67,850 $58,046 $69,605
Escrow cash 5,125 10,625 11,225 11,875 12,575 -- --
Accts receivable, net 129,000 127,200 127,700 129,000 135,000 141,000 148,000
Inventories, net 82,600 94,400 94,200 94,600 96,100 97,600 98,600
Income tax receivable 3,200 71,000 67,800 12,400 3,100 3,100 6,300
Prepaid expenses 14,700 14,650 14,650 15,650 16,150 16,650 17,150
---------------------- ----------------------------------------------------
Total current assets 352,862 333,774 365,313 309,875 330,775 316,396 339,655
Property, plant &
equipment, net 164,318 183,068 185,568 186,668 186,368 184,668 181,568
Deferred income taxes 80,124 122,484 118,112 113,084 111,674 100,998 80,974
Reorganization goodwill -- 75,438 64,661 53,884 43,107 32,330 21,553
Other assets 34,000 30,000 28,000 26,500 27,500 28,000 28,000
---------------------- ----------------------------------------------------
Total assets $631,304 $744,764 $761,654 $690,011 $699,424 $662,392 $651,750
====================== ====================================================
Accounts payable $38,000 $37,400 $36,400 $37,400 $38,400 $39,400 $39,900
Accr. liabilities 32,999 29,950 48,140 45,300 45,800 43,675 42,725
Short-term debt -- 71,000 71,000 -- -- 20,000 10,000
Secured debt - current 2,163 2,143 2,237 1,159 856 1,490 80
New debt - current -- -- -- -- 70,000 20,000 20,000
Income tax payable 5,289 5,289 5,289 5,289 5,289 5,289 5,289
---------------------- ----------------------------------------------------
Total current liab 78,451 145,782 163,066 89,148 160,345 129,854 117,994
Secured debt 17,676 17,061 14,824 13,666 12,809 11,320 11,240
New debt-10 year -- 250,000 250,000 250,000 230,000 210,000 190,000
New debt-3 year -- 50,000 50,000 50,000 -- -- --
Other long-term liabilities 27,125 27,125 26,825 26,825 26,325 26,325 25,825
Liabilities subject to
compromise 2,160,493 -- -- -- -- -- --
Equity (1,652,441) 254,796 256,939 260,372 269,945 284,893 306,691
---------------------- ----------------------------------------------------
Total liab. & equity $631,304 $744,764 $761,654 $690,011 $699,424 $662,392 $651,750
====================== ====================================================
</TABLE>
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EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED STATEMENTS OF INCOME
FISCAL YEARS ENDED NOVEMBER 30
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
REORGANIZED COMPANY
-------- ------------------------------------------------------------------
1996 1997 1998 1999 2000 2001
<S> <C> <C> <C> <C> <C> <C>
Net sales $865,923 $854,000 $855,500 $912,000 $963,000 $1,017,000
Operating Costs and Expenses
Cost of products sold 724,071 711,325 713,350 762,225 805,900 849,775
Selling and administrative 80,100 81,600 82,500 83,700 86,300 88,900
-------- ------------------------------------------------------------------
804,171 792,925 795,850 845,925 892,200 938,675
-------- ------------------------------------------------------------------
Operating Income 61,752 61,075 59,650 66,075 70,800 78,325
Amortization:
Reorganization asset -- (10,777) (10,777) (10,777) (10,777) (10,777)
Property, plant and equipment
adjustment -- (2,500) (2,500) (2,500) (2,500) (2,500)
Interest expense (2,000) (39,155) (35,540) (32,525) (27,175) (24,150)
Interest income 500 2,400 2,200 2,400 1,000 1,300
Other income (expense) 502,515 -- -- -- -- --
Reorganization items (500) -- -- -- -- --
-------- ------------------------------------------------------------------
Income before income taxes
and non-recurring item 562,267 11,043 13,033 22,673 31,348 42,198
Income taxes 3,400 8,900 9,600 13,100 16,400 20,400
-------- ------------------------------------------------------------------
Income before non-
recurring item 558,867 2,143 3,433 9,573 14,948 21,798
Gain on discharge of debt -- 1,561,853 -- -- -- --
Fresh start adjustments -- 91,388 -- -- -- --
Administrative items related
to reorganization -- (800) -- -- -- --
-------- ------------------------------------------------------------------
Net income 558,867 1,654,584 3,433 9,573 14,948 21,798
======== ==================================================================
BY INDUSTRY SEGMENT:
Sales
Automotive 432,136 450,370 451,680 491,700 532,220 569,740
Machinery 248,481 233,140 230,110 240,050 244,990 255,930
Industrial 185,306 170,490 173,710 180,250 185,790 191,330
-------- ------------------------------------------------------------------
Total sales 865,923 854,000 855,500 912,000 963,000 1,017,000
======== ==================================================================
Operating Income
Automotive 32,462 36,785 37,560 42,835 48,095 52,895
Machinery 20,086 16,855 15,780 17,455 17,145 18,895
Industrial 12,555 12,495 13,020 14,145 15,240 16,215
Corporate items (3,351) (5,060) (6,710) (8,360) (9,680) (9,680)
-------- ------------------------------------------------------------------
Total operating income 61,752 61,075 59,650 66,075 70,800 78,325
======== ==================================================================
</TABLE>
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EAGLE-PICHER INDUSTRIES, INC.
PROJECTED CONSOLIDATED STATEMENTS OF CASH FLOWS
FISCAL YEARS ENDED NOVEMBER 30
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
REORGANIZED COMPANY
------- -------------------------------------------------------------
1996 1997 1998 1999 2000 2001
<S> <C> <C> <C> <C> <C> <C>
Operating Cash:
Net income 558,867 1,654,584 3,433 9,573 14,948 21,798
Reduction of asbestos liability (502,511) -- -- -- -- --
Gain on discharge of debt -- (1,561,853) -- -- -- --
Fresh start adjustments -- (91,388) -- -- -- --
Administrative items related
to reorganization -- 800 -- -- -- --
Depreciation & amortization 31,200 43,277 44,677 46,077 47,477 48,877
Deferred taxes (17,300) 4,372 5,028 1,410 10,676 20,024
Working capital (637) 18,590 (3,040) (8,000) (9,625) (9,450)
Income tax refunds 1,202 3,200 55,400 9,300 -- (3,200)
------- -------------------------------------------------------------
Operating cash 70,821 71,582 105,498 58,360 63,476 78,049
Investing Cash:
Capital expenditures (40,000) (35,000) (35,000) (35,000) (35,000) (35,000)
Financing Cash:
Escrow activity (5,125) (600) (650) (700) 12,575 --
Short-term borrowings -- -- (71,000) -- 20,000 (10,000)
Repayments (789) (2,143) (2,236) (1,160) (70,855) (21,490)
------- -------------------------------------------------------------
Financing cash (5,914) (2,743) (73,886) (1,860) (38,280) (31,490)
Cash Payments Pursuant
to the Plan -- (102,338) -- -- -- --
Increase (decrease) in cash 24,907 (68,499) (3,388) 21,500 (9,804) 11,559
Beginning cash balance 93,330 118,237 49,738 46,350 67,850 58,046
------- -------------------------------------------------------------
118,237 49,738 46,350 67,850 58,046 69,605
======= =============================================================
</TABLE>
C-13
<PAGE>
<PAGE>
EAGLE-PICHER INDUSTRIES, INC.
CALCULATION OF EQUITY VALUE
NOVEMBER 30 1996
<TABLE>
<CAPTION>
Total Value of Estate* $734.0 million
<S> <C> <C>
Less: Cash Distributed 89.0
Secured Debt 19.2
Tax Refund Notes 71.0
Divestiture Notes 50.0
Debentures 250.0
------
Value of Equity $254.8 million
</TABLE>
* Excludes Priority Claims and Remaining Expenses of Administration
CAPITAL STRUCTURE OF REORGANIZED COMPANY
<TABLE>
<CAPTION>
Value Percentage
<S> <C> <C>
Secured Notes $19.2 3.0%
Tax Refund Notes 71.0 11.0
Divestiture Notes 50.0 7.8
Debentures 250.0 38.8
Common Equity 254.8 39.5
------ -----
$645.0 100.0%
</TABLE>
C-14
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ----------------------------------- )
EXHIBIT "D"
BALLOT SOLICITATION AND TABULATION PROCEDURES, AS APPROVED BY AN ORDER OF
THE BANKRUPTCY COURT, DATED JULY 23, 1996
PLEASE CALL THE SOLICITATION AGENT,
HILL AND KNOWLTON, INC., AT (212) 885-0555,
IF YOU HAVE ANY QUESTIONS ABOUT THESE PROCEDURES.
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C> <C>
1. Definitions................................................................ D-1
2. Publication Notice......................................................... D-3
3. Distribution of Solicitation Packages by the Tabulation Agent.............. D-3
a. Scheduled Claims............................................. D-3
b. Filed Claims................................................. D-4
c. Primary Asbestos Personal Injury Claims...................... D-4
i. Proofs of Claim Signed by Individual Claimants.... D-4
ii. Proofs of Claim Signed by Disqualified
Attorneys......................................... D-4
iii. Proofs of Claim Signed by Attorneys............... D-4
d. Asbestos Property Damage Claims:............................. D-6
e. Unimpaired Claims............................................ D-6
f. Determination of Holders of Record........................... D-6
4. Distribution of Solicitation Packages by the Solicitation Agent............ D-7
a. Registered Debt Securities................................... D-7
i. List of Record Holders............................ D-7
ii. Determination of Number of Beneficial Owners...... D-7
iii. Distribution to Record Holders other than Debt
Nominees.......................................... D-7
iv. Distribution to Debt Nominees in Unimpaired
Classes........................................... D-7
v. Distribution to Debt Nominees in Impaired
Classes........................................... D-8
(1) Options for Obtaining Votes........... D-8
(2) Reimbursement of Expenses............. D-9
b. Bearer Debt Securities....................................... D-9
i. Lists of Holders of Bearer Debt Securities........ D-9
ii. Notices........................................... D-10
iii. Contents of Individual, Non-Prevalidated Ballots
for Bearer Debt Securities........................ D-10
iv. Bearer Debt Securities Held by a Depositary....... D-11
v. Reimbursement of Expenses......................... D-12
c. Equity Interests............................................. D-12
i. List of Equity Holders............................ D-12
ii. Distribution of Solicitation Packages to Holders
of Equity Interests............................... D-13
5. Return of Ballots.......................................................... D-13
a. Claimants That Are Entitled to Vote.......................... D-13
b. Place to Send Completed Ballots.............................. D-13
c. Deadline for Receiving Completed Ballots..................... D-13
i. Deadline For Receipt By Tabulation Agent.......... D-13
ii. Deadline For Receipt By Solicitation Agent........ D-14
</TABLE>
D-i
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
6. Tabulation of Ballots...................................................... D-14
a. Determination of Amount of Claims Voted...................... D-14
i. Bearer Debt Securities............................ D-14
ii. Registered Debt Securities:....................... D-15
iii. Claims other than Debt Securities, Asbestos
Property Damage Claims, Asbestos Personal
Injury Claims, Environmental Claims, and Lead
Personal Injury Claims............................ D-16
iv. Asbestos Property Damage Claims, Asbestos
Personal Injury Claims, and Lead Personal
Injury Claims..................................... D-17
v. Environmental Claims.............................. D-17
b. Determination of Number of Claims Voted...................... D-17
i. Specific Rules Relating to Registered Debt
Securities and Bearer Debt Securities............. D-18
ii. Specific Rules Relating to Class Asbestos
Property Damage Claims:........................... D-18
c. Ballots Excluded:............................................ D-18
d. General Voting Procedures and Standard Assumptions........... D-18
</TABLE>
D-ii
<PAGE>
<PAGE>
BALLOT SOLICITATION AND TABULATION PROCEDURES
The following procedures (these "Voting Procedures") are adopted with respect to
(a) the distribution of ballot solicitation materials with respect to the
chapter 11 plan jointly proposed by the Debtors, the Official Injury Claimants'
Committee, and the Future Claimants' Representative (as such plan may be amended
from time to time, the "Plan") and (b) the return and tabulation of ballots and
master ballots.
1. DEFINITIONS:
a. "ASBESTOS BAR DATE ORDER" means the order of the Bankruptcy Court,
dated June 11, 1992, which fixed the deadline for filing proofs of
claim against the Debtors' estates for all Asbestos Property Damage
Claims and Primary Asbestos Personal Injury Claims.
b. "BANKRUPTCY COURT" means the United States Bankruptcy Court for the
Southern District of Ohio, Western Division.
c. "BEARER DEBT SECURITIES" means debt securities of the Debtors that
are not registered as to principal or are registered to "bearer."
d. "BEARER DEBT SECURITIES TRUSTEE" means the indenture trustee for any
issue of debt securities of the Debtors as to which some or all of
such debt securities constitute Bearer Debt Securities.
e. "CONFIRMATION HEARING" means the hearing on the confirmation of the
Plan, as such hearing may be adjourned from time to time.
f. "DEBT NOMINEES" means institutional holders of record of Registered
Debt Securities who hold Registered Debt Securities in "street name"
on behalf of beneficial owners or otherwise represent such
beneficial holders.
g. "DEPOSITARY" means a trust company, bank, or other depositary having
trust powers recognized by the Federal Reserve System of the United
States.
h. "DISCLOSURE STATEMENT" means the disclosure statement in connection
with the Plan, as approved by the Bankruptcy Court in the Disclosure
Statement Order.
i. "DISCLOSURE STATEMENT ORDER" means the Order of the Bankruptcy Court
approving the Disclosure Statement.
j. "EQUITY NOMINEE" means an institutional holder of record that may
hold shares of common stock of Eagle-Picher in "street name" on
behalf of beneficial owners or otherwise represent such beneficial
owners.
D-1
<PAGE>
<PAGE>
k. "GENERAL BAR DATE ORDER" means the order of the Bankruptcy Court,
dated July 19, 1991, which fixed the deadline for filing proofs of
claim against the Debtors' estates for all Claims other than
Asbestos Property Damage Claims and Primary Asbestos Personal Injury
Claims.
l. "MASTER BALLOT" means a ballot (a) filed on behalf of one or more
beneficial owners of Registered Debt Securities or Bearer Debt
Securities in accordance with the procedures set forth in section
4.a.v.(1) or section 4.b.iv. respectively, of these Voting
Procedures, (b) filed on behalf of one or more holders of Primary
Asbestos Personal Injury Claims pursuant to section of these Voting
Procedures, or (c) filed by an Asbestos Property Damage Claim class
member pursuant to section 3.d of these Voting Procedures.
m. "PRIMARY ASBESTOS PERSONAL INJURY CLAIM" means an Asbestos Personal
Injury Claim other than an Asbestos or Lead Contribution Claim.
n. "PUBLICATION NOTICE" means a published notice of (a) the approval of
the Disclosure Statement and the scheduling of the Confirmation
Hearing and (b) the procedure for holders of Claims and Equity
Interests to obtain a Solicitation Package.
o. "RECORD AMOUNT" means the amount shown on the records of the
Registered Debt Securities Trustees and the Debt Nominees (as
confirmed by record and depositary listings) as of the Voting Record
Date.
p. "REGISTERED DEBT SECURITIES" means debt securities of the Debtors
that are either fully registered or registered as to principal only,
but excluding debt securities registered to "bearer."
q. "REGISTERED DEBT SECURITIES TRUSTEE" means the indenture trustee for
any issue of debt securities of the Debtors as to which all or some
of such debt securities constitute Registered Debt Securities.
r. "SCHEDULES" means the Debtors' schedules of liabilities previously
filed with the Bankruptcy Court, as amended or reconstituted.
s. "SOLICITATION AGENT" means Hill and Knowlton, Inc., or such other
firm that may be retained by the Debtors to act as the Solicitation
Agent with respect to the Plan.
t. "SOLICITATION PACKAGE" means, and will consist of, all of the
following:
i. Disclosure Statement Order.
ii. Disclosure Statement (with the Plan attached as an exhibit
thereto).
iii. For entities entitled to vote, appropriate ballots and voting
instructions.
D-2
<PAGE>
<PAGE>
iv. For entities entitled to vote, pre-addressed, postage-paid,
return envelopes.
v. Any other materials ordered by the Bankruptcy Court to be
included as part of the Solicitation Package.
u. "TABULATION AGENT" means Federated Claims Service Group, or such
other firm that may be retained by the Debtors to act as the
Tabulation Agent with respect to the Plan.
v. "TRANSFER AGENT" means Key Corp., the transfer agent for
Eagle-Picher's common stock, or such other transfer agent as may be
acting for Eagle-Picher at the relevant time.
w. "UNIMPAIRED CLASSES SOLICITATION PACKAGE" means, collectively, (a)
notice that the class in which an entity's Claim is classified is
designated in the Plan as unimpaired and that, upon written request
by such entity to the Solicitation Agent, a copy of the Solicitation
Package shall be furnished to such entity at the Debtors' expense
and (b) notice of the Confirmation Hearing and the time fixed for
filing objections to confirmation or the Plan.
x. "VOTING DEADLINE" means the date that is established by the
Bankruptcy Court as the deadline for the return of ballots on the
Plan.
y. "VOTING RECORD DATE" means the date that is five (5) business days
after the date on which the Disclosure Statement Order is entered by
Bankruptcy Court.
Any capitalized term used but not defined herein shall have the meaning
ascribed to such term in the Plan.
2. PUBLICATION NOTICE:
The Debtors will cause the Publication Notice to be published twice in The
Wall Street Journal (all U.S. editions) and The New York Times (national
edition).
3. DISTRIBUTION OF SOLICITATION PACKAGES BY THE TABULATION AGENT:
The Tabulation Agent will cause Solicitation Packages to be served as
follows:
a. SCHEDULED CLAIMS:
Upon each holder of a Claim (in a class that is not rendered
unimpaired under the Plan) listed in the Schedules as of the Voting
Record Date as liquidated,
D-3
<PAGE>
<PAGE>
undisputed, and not contingent (other than holders of Registered
Debt Securities and Bearer Debt Securities).
b. FILED CLAIMS:
Upon each holder of a Claim (in a class that is not rendered
unimpaired under the Plan) represented by a proof of claim against
any of the Debtors that has not been disallowed by an order entered
on or before the Voting Record Date, other than a proof of claim
asserting (a) Claims under, or evidenced by, any Registered Debt
Securities or Bearer Debt Securities, (b) Primary Asbestos Personal
Injury Claims, or (c) Asbestos Property Damage Claims.
c. PRIMARY ASBESTOS PERSONAL INJURY CLAIMS:
Upon the holders of Primary Asbestos Personal Injury Claims, as
follows:
i. PROOFS OF CLAIM SIGNED BY INDIVIDUAL CLAIMANTS:
Each holder of a Primary Asbestos Personal Injury Claim that
filed a proof of claim asserting a Primary Asbestos Personal
Injury Claim against any of the Debtors that has not been
disallowed by an order entered on or before the Voting Record
Date and who personally signed such proof of claim shall
receive a Solicitation Package.
ii. PROOFS OF CLAIM SIGNED BY DISQUALIFIED ATTORNEYS:
If a proof of claim asserting a Primary Asbestos Personal
Injury Claim against any of the Debtors was signed and filed
by an attorney purporting to represent the holder of such
Claim, and (a) the Debtors know that such attorney has been
disqualified from representing such holder, and (b) such
Primary Asbestos Personal Injury Claim has not been disallowed
by an order entered on or before the Voting Record Date, the
Solicitation Package shall be served directly upon the holder
of such Primary Asbestos Personal Injury Claim, if such
holder's address is known. Otherwise, the Solicitation Package
shall be served upon the last-known attorney of record for
such holder, with instructions for such attorney to forward
the Solicitation Package to the holder of such Primary
Asbestos Personal Injury Claim within two (2) business days
after receipt of the Solicitation Package.
iii. PROOFS OF CLAIM SIGNED BY ATTORNEYS:
If any proofs of claim asserting Primary Asbestos Personal
Injury Claims against any of the Debtors were signed and filed
by an attorney purporting to represent the holders of such
Claims, and such Primary Asbestos Personal Injury Claims have
not been disallowed by an order or orders entered on or before
the Voting Record Date, a single Solicitation Package
D-4
<PAGE>
<PAGE>
shall be served upon such attorney, and (except to the extent
that individual holders of such Primary Asbestos Personal
Injury Claims also signed such proofs of claims) Solicitation
Packages WILL NOT be served upon the individual holders
thereof. The Solicitation Package will contain a separate copy
of these Voting Procedures and a Master Ballot for the
computation of votes on the Plan. The following procedures
will govern the completion and return of such Master Ballot:
(1) The Master Ballot to be sent to each such attorney will
contain as an exhibit thereto a computer-generated
listing of each individual holder of a Primary Asbestos
Personal Injury Claim for whom such attorney signed and
filed a proof of claim, by name and Claim number, with a
separate box next to each entry to note, if necessary,
whether such individual holder accepts or rejects the
Plan.
(2) The Master Ballot will contain a certification to be
completed by such attorney pursuant to which such
attorney will certify that, except as otherwise noted on
the exhibit thereto by the striking of the name of the
holder of a Primary Asbestos Personal Injury Claim, such
attorney has the authority to cast a ballot on the Plan
on behalf of the holders of Primary Asbestos Personal
Injury Claims listed on such exhibit. If such attorney
is unable to make such certification with respect to any
holders of Primary Asbestos Personal Injury Claims on
whose behalf such attorney signed and filed proofs of
claim, such attorney shall, within ten (10) business
days after the receipt of the Solicitation Package,
furnish the Tabulation Agent with the names and
addresses of such holders, on a preprinted form to be
included with the Solicitation Package.
(3) The Master Ballot shall contain, in substantially
similar form, the following options for voting, one of
which shall be marked by the attorney:
(a) "All claimants listed on the exhibit accompanying
this ballot ACCEPT the Plan."
(b) "All claimants listed on the exhibit accompanying
this ballot REJECT the Plan."
(c) "All claimants listed on the exhibit accompanying
this ballot ACCEPT the Plan, EXCEPT as marked on
such exhibit."
(d) "All claimants listed on the exhibit accompanying
this ballot REJECT the Plan, EXCEPT as marked on
such exhibit."
D-5
<PAGE>
<PAGE>
(4) If any exceptions to the certification are noted
pursuant to section 3.c.iii.(2), or if any exceptions
are noted pursuant to section 3.c.iii.(3)(c) or
3.c.iii.(3)(d), the attorney shall note such exceptions
on the exhibit accompanying the ballot and shall return
the ENTIRE exhibit, together with the completed Master
Ballot, to the Tabulation Agent in accordance with
section of these Voting Procedures. Otherwise, the
attorney need only return the completed Master Ballot,
without the exhibit, to the Tabulation Agent in
accordance with section of these Voting Procedures.
d. ASBESTOS PROPERTY DAMAGE CLAIMS:
Upon each holder of an Asbestos Property Damage Claim that filed a
proof of claim asserting an Asbestos Property Damage Claim that (i)
does not purport to constitute a class proof of claim and (ii) has
not been disallowed by an order entered on or before the Voting
Record Date. With respect to Asbestos Property Damage Claims filed
by representatives of classes of Asbestos Property Damage Claims
that have been certified or conditionally certified in pending
federal or state court actions, the Tabulation Agent will select 100
members of each class at random from a list of class members
provided to the Tabulation Agent by the class representative. The
class representative shall provide such list to the Tabulation Agent
within ten (10) business days after receipt by such class
representative of a written request therefor from Eagle-Picher. If
the class representative does not timely provide such list,
Eagle-Picher shall have no obligation to solicit the votes of such
class. The Tabulation Agent will send a Solicitation Package to each
randomly selected class member and to the class representative, and,
unless individual class members filed separate proofs of claim in
accordance with the Asbestos Bar Date Order, individual class member
shall not receive Solicitation Packages.
e. UNIMPAIRED CLAIMS:
Each entity that, as of the Voting Record Date, has a Claim (other
than a Claim pursuant to Registered Debt Securities or Bearer Debt
Securities) that is unimpaired under the Plan will receive an
Unimpaired Classes Solicitation Package.
f. DETERMINATION OF HOLDERS OF RECORD:
Except with respect to Primary Asbestos Personal Injury Claims and
Claims under, or evidenced by, any Registered Debt Securities or
Bearer Debt Securities, the Solicitation Package or Unimpaired
Solicitation Package, as the case may be, will be served upon the
entity that holds a Claim as of the Voting Record Date, and the
Debtors will have no obligation to cause a Solicitation Package or
Unimpaired Solicitation Package, as the case may be, to be served
upon any subsequent holder of such Claim (as evidenced by any notice
of assignment of such Claim entered on the Bankruptcy Court's docket
after the Voting Record Date or otherwise).
D-6
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<PAGE>
4. DISTRIBUTION OF SOLICITATION PACKAGES BY THE SOLICITATION AGENT:
The Solicitation Agent will cause Solicitation Packages to be served as
follows:
a. REGISTERED DEBT SECURITIES:
To all holders of Registered Debt Securities, according to the
following procedures:
i. LIST OF RECORD HOLDERS:
Pursuant to Bankruptcy Rules 1007(i) and 3017(e), within five
(5) business days after the Voting Record Date, the Registered
Debt Securities Trustee shall provide to the Solicitation
Agent (a) a copy of the list of the names, addresses, and
holdings of the holders of Registered Debt Securities as of
the Voting Record Date, (b) a set of mailing labels for such
holders, and (c) such other information as the Solicitation
Agent deems reasonably necessary to perform its duties
hereunder. Upon request by the Solicitation Agent, the
Registered Debt Securities Trustee shall provide additional
sets of mailing labels. The Solicitation Agent shall use such
lists, mailing labels, and other information only for purposes
consistent with these Voting Procedures.
ii. DETERMINATION OF NUMBER OF BENEFICIAL OWNERS:
As soon as practicable after the entry of the Disclosure
Statement Order, the Solicitation Agent shall attempt to
contact the institutional holders of record of the Registered
Debt Securities to determine whether such holders hold as Debt
Nominees and to ascertain the number of beneficial owners of
such Registered Debt Securities holding through each such Debt
Nominee.
iii. DISTRIBUTION TO RECORD HOLDERS OTHER THAN DEBT NOMINEES:
The Solicitation Agent will cause to be served upon each
record holder (other than Debt Nominees), as of the Voting
Record Date, of any Registered Debt Securities either (a) a
Solicitation Package (if the Registered Debt Securities are in
a class that is impaired under the Plan) or (b) an Unimpaired
Classes Solicitation Package (if the Registered Debt
Securities are in a class that is not impaired under the
Plan).
iv. DISTRIBUTION TO DEBT NOMINEES IN UNIMPAIRED CLASSES:
For Registered Debt Securities that are in a class that is not
impaired under the Plan, the Solicitation Agent will cause to
be served upon each Debt Nominee materials comprising
Unimpaired Classes Solicitation Packages, in sufficient
numbers estimated to allow dissemination of Unimpaired Classes
Solicitation Packages to each of the beneficial owners of
Registered
D-7
<PAGE>
<PAGE>
Debt Securities for which they serve, together with a copy of
these Voting Procedures, and with instructions to such Debt
Nominee to (i) contact the Solicitation Agent for additional
sets of Unimpaired Classes Solicitation Packages, if
necessary, and (ii) promptly (within five (5) business days
after receipt of the Unimpaired Classes Solicitation Packages)
distribute the Unimpaired Classes Solicitation Packages to the
beneficial owners for which they serve.
v. DISTRIBUTION TO DEBT NOMINEES IN IMPAIRED CLASSES:
For Registered Debt Securities that are in a class that is
impaired under the Plan, the Solicitation Agent will cause to
be served upon each Debt Nominee materials comprising
Solicitation Packages, in sufficient numbers estimated to
allow dissemination of Solicitation Packages to each of the
beneficial owners of Registered Debt Securities for which they
serve, together with a copy of these Voting Procedures, and
with instructions to such Debt Nominee to (i) contact the
Solicitation Agent for additional sets of Solicitation
Packages, if necessary, and (ii) promptly (within five (5)
business days after receipt of the Solicitation Packages)
distribute the Solicitation Packages to the beneficial owners
for which they serve. Upon request by a Registered Debt
Securities Trustee or an entity purporting to be a Debt
Nominee or a beneficial owner of Registered Debt Securities,
the Solicitation Agent shall send any such entity a
Solicitation Package.
(1) OPTIONS FOR OBTAINING VOTES:
Debt Nominees will have two options for obtaining the
votes of beneficial owners of Registered Debt Securities
in impaired classes, consistent with customary practices
for obtaining the votes of securities held in street
name:
(a) The Debt Nominee may "prevalidate" the individual
ballot contained in the Solicitation Package and
then forward the Solicitation Package to the
beneficial owner of the Registered Debt Securities
for voting, with the beneficial owner then
returning the individual ballot directly to the
Solicitation Agent in the return envelope to be
provided in the Solicitation Package. A Debt
Nominee "prevalidates" a beneficial owner's ballot
by indicating thereon the record holder of the
Registered Debt Securities voted, the amount of
Registered Debt Securities held by the beneficial
owner, and the appropriate account numbers through
which the beneficial owner's holdings are derived.
(b) The Debt Nominee may forward the Solicitation
Package to the beneficial owner of the Registered
Debt Securities
D-8
<PAGE>
<PAGE>
for voting along with a return envelope provided
by and addressed to the Debt Nominee, with the
beneficial owner then returning the individual
ballot to the Debt Nominee. In such case, the Debt
Nominee will summarize the votes of its respective
beneficial owners on a Master Ballot that will be
provided to the Debt Nominee separately by the
Solicitation Agent, in accordance with any
instructions set forth in the instructions to the
Master Ballot, and then return the Master Ballot
to the Solicitation Agent. THE DEBT NOMINEE SHOULD
ADVISE THE BENEFICIAL OWNERS TO RETURN THEIR
INDIVIDUAL BALLOTS TO THE DEBT NOMINEE BY A DATE
CALCULATED BY THE DEBT NOMINEE TO ALLOW IT TO
PREPARE AND RETURN THE MASTER BALLOT TO THE
SOLICITATION AGENT SO THAT THE MASTER BALLOT IS
ACTUALLY RECEIVED BY THE SOLICITATION AGENT BY THE
VOTING DEADLINE.
(c) Debt Nominees that elect to use the Master Ballot
voting process are required to retain the ballots
cast by their respective beneficial owners for
inspection for one (1) year following the Voting
Deadline, unless otherwise instructed in writing
by the Debtors or ordered by the Bankruptcy Court.
Each Debt Nominee that elects to "prevalidate"
ballots must maintain a list of those beneficial
owners as of the Voting Record Date to whom
ballots were sent for one (1) year following the
Voting Deadline, unless otherwise instructed in
writing by the Debtors or ordered by the
Bankruptcy Court.
(2) REIMBURSEMENT OF EXPENSES:
The Debtors will, upon written request, reimburse Debt
Nominees (or their agents) for their reasonable, actual,
and necessary out-of-pocket expenses incurred in
performing the tasks described above.
b. BEARER DEBT SECURITIES:
To all holders of Bearer Debt Securities, according to the following
procedures:
i. LISTS OF HOLDERS OF BEARER DEBT SECURITIES:
Pursuant to Bankruptcy Rules 1007(i) and 3017(e), within five
(5) business days after the Voting Record Date, the Bearer
Debt Securities Trustee shall provide to the Solicitation
Agent (a) a copy of any list of the last-known names,
addresses, and holdings of the holders of Bearer Debt
Securities and the identity and address of each Depositary
believed to hold Bearer Debt Securities, (b) a set of mailing
labels to such holders or Depositaries,
D-9
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<PAGE>
if practicable and appropriate, and (c) such other information
as the Solicitation Agent deems reasonably necessary to
perform its duties hereunder. Upon request by the Solicitation
Agent, the Bearer Debt Securities Trustee shall provide
additional sets of mailing labels. The Solicitation Agent
shall use such lists, mailing labels, and other information
only for purposes consistent with these Voting Procedures.
ii. NOTICES:
In addition to the Publication Notice, the Solicitation Agent
will provide notice of the approval of the Disclosure
Statement and the scheduling of the Confirmation Hearing and
will solicit votes concerning the Plan from the holders of
Bearer Debt Securities in the following manner:
(1) The Solicitation Agent shall cause to be mailed to each
last-known holder of Bearer Debt Securities, whose name
and address is furnished by the Bearer Debt Securities
Trustee pursuant to section 4.b.i above, a copy of the
Publication Notice.
(2) The Solicitation Agent will cause to be mailed to each
Depositary whose name and address is furnished by the
Bearer Debt Securities Trustee pursuant to section 4.b.i
above or who is otherwise believed to hold Bearer Debt
Securities on behalf of customers a copy of the
Publication Notice and will provide Solicitation
Packages to any such Depositary, as requested in
accordance with section 4.b.ii.(2)(a) below.
(a) The Publication Notice will provide that to obtain
a Solicitation Package, holders of Bearer Debt
Securities or Depositaries may either (i) call the
Solicitation Agent at the number that will be
listed in the Publication Notice or (ii) request a
Solicitation Package in writing, either addressed
to the Solicitation Agent at the address specified
in the Publication Notice or telecopied to the
Solicitation Agent at the telecopy number
specified in the Publication Notice. Upon being
contacted by entities purporting to be either
holders of Bearer Debt Securities or Depositaries,
the Solicitation Agent will provide such purported
holders or Depositaries with Solicitation Packages
and will make reasonable efforts to encourage such
purported holders or Depositaries to return their
ballots.
iii. CONTENTS OF INDIVIDUAL, NON-PREVALIDATED BALLOTS FOR BEARER
DEBT SECURITIES:
All ballots to be completed directly by holders of Bearer Debt
Securities (i.e., other than a Master Ballot submitted by a
Depositary or an individual
D-10
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<PAGE>
ballot that is not prevalidated in accordance with section
4.b.iv.(1)) will require the holder, inter alia, to sign and
date the ballot and to list the aggregate amount and the
individual certificate numbers of such holder's Bearer Debt
Securities. Signature of such ballot will constitute a
certification by such holder that such holder, as of the date
thereof, holds the Bearer Debt Securities listed on such
ballot. In addition, each holder of Bearer Debt Securities
that submits a ballot directly will be required to have a
Depositary certify on the ballot that the holder identified
therein presented the original Bearer Debt Securities bearing
the certificate numbers listed on such ballot to the
Depositary for verification by such Depositary as of the date
of such certification.
iv. BEARER DEBT SECURITIES HELD BY A DEPOSITARY:
If a holder has deposited its Bearer Debt Securities with a
Depositary, the Depositary will have two options for obtaining
the votes of holders of Bearer Debt Securities:
(1) The Depositary may "prevalidate" the individual ballot
contained in the Solicitation Package and then forward
the Solicitation Package to the holder of the Bearer
Debt Securities for voting, with the holder then
returning the individual ballot directly to the
Solicitation Agent in the return envelope to be provided
in the Solicitation Package. A Depositary "prevalidates"
a holder's ballot by dating the ballot and (i) listing
thereon the identity of the holder and the certificate
numbers of all the Bearer Debt Securities deposited by
such holder with the Depositary, or (ii) (A) listing
thereon the holder's account number and the certificate
numbers of all the Bearer Debt Securities deposited by
such holder and (B) stating that the appropriate number
of Bearer Debt Securities has been "blocked" with
respect to such holder. The ballot will provide for the
certification of such information by the Depositary.
(a) Bearer Debt Securities will only be considered
"blocked" when the Depositary prevents the Bearer
Debt Securities from being withdrawn, moved, or
used for any purpose, other than allowing the
holder to vote on the Plan, until after entry of
the order confirming the Plan.
(b) When requested by the Solicitation Agent, each
Depositary will be required to provide to the
Solicitation Agent a list of the certificate
numbers of all Bearer Debt Securities being
blocked by such Depositary.
(2) The Depositary may forward the Solicitation Package to
the holder of the Bearer Debt Securities for voting,
along with a return
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envelope provided by and addressed to the Depositary,
with such holder then returning the individual ballot to
the Depositary. In such case, the Depositary will
summarize the votes of its respective holders on a
Master Ballot that will be provided separately to the
Depositary, in accordance with the instructions set
forth in the instructions to the Master Ballot, and then
return the Master Ballot to the Solicitation Agent.
Among other things, the instructions will direct the
Depositary to list (i) by beneficial owner, the
certificate numbers of all Bearer Debt Securities on
deposit with the Depositary as of the Voting Deadline or
(ii) only if the Bearer Debt Securities are blocked as
of the Voting Deadline, by account number, the
certificate numbers of all Bearer Debt Securities on
deposit with the Depositary as of the Voting Deadline.
Only votes with respect to Bearer Debt Securities that
are held by the Depositary as of the date of such ballot
may be listed on the ballot. THE DEPOSITARY SHOULD
ADVISE THE INDIVIDUAL HOLDERS TO RETURN THEIR BALLOTS TO
THE DEPOSITARY BY A DATE CALCULATED BY THE DEPOSITARY TO
ALLOW IT TO PREPARE AND RETURN THE MASTER BALLOT SO THAT
THE MASTER BALLOT IS ACTUALLY RECEIVED BY THE
SOLICITATION AGENT BY THE VOTING DEADLINE.
Each Depositary will maintain a photocopy of each
"prevalidated" ballot and each individual ballot for a period
of one (1) year after the Confirmation Date, unless otherwise
instructed by the Debtors or ordered by the Bankruptcy Court.
v. REIMBURSEMENT OF EXPENSES:
The Debtors will, upon written request, reimburse Depositaries
(or their agents) for their reasonable, actual, and necessary
out-of-pocket expenses incurred in performing the tasks
described above.
c. EQUITY INTERESTS:
i. LIST OF EQUITY HOLDERS:
Within five (5) business days after the Voting Record Date,
the Transfer Agent shall furnish to the Solicitation Agent (a)
a list of the names and addresses of all holders of record of
Eagle-Picher common stock as of the Voting Record Date, (b) a
set of mailing labels for such holders, and (c) such other
information as the Solicitation Agent deems reasonably
necessary to perform its duties hereunder. Upon request by the
Solicitation Agent, the Transfer Agent shall provide
additional sets of mailing labels. The Solicitation Agent
shall use such lists, mailing labels, and other information
only for purposes consistent with these Voting Procedures.
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ii. DISTRIBUTION OF SOLICITATION PACKAGES TO HOLDERS OF EQUITY
INTERESTS:
The Solicitation Agent will cause a Solicitation Package to be
served upon each such holder of record. In addition, the
Solicitation Agent shall notify each Equity Nominee that it
may receive additional Solicitation Packages by contacting the
Solicitation Agent. The Equity Nominees shall promptly (within
five (5) business days after receipt of the Solicitation
Packages) distribute the Solicitation Packages to the
beneficial owners for which they serve.
5. RETURN OF BALLOTS:
a. CLAIMANTS THAT ARE ENTITLED TO VOTE:
Each claimant that has a Claim for which a Claim amount may be
determined pursuant to section hereof and which Claim is not treated
as unimpaired under the Plan as of the Voting Deadline is entitled
to vote to accept or reject the Plan.
b. PLACE TO SEND COMPLETED BALLOTS:
i. All ballots (other than ballots with respect to Registered
Debt Securities or Bearer Debt Securities) will be accompanied
by return envelopes addressed to the Eagle-Picher Ballot
Tabulation Center c/o Federated Claims Service Group, P.O. Box
8041, 9111 Duke Blvd., Mason, Ohio 45040.
ii. All ballots with respect to Registered Debt Securities or
Bearer Debt Securities (i.e., record holder ballots, master
ballots and prevalidated owner ballots), except those
beneficial owner ballots that are to be returned to the Debt
Nominees or Depositaries, will be accompanied by return
envelopes addressed to Hill and Knowlton, Inc., 466 Lexington
Avenue, 3rd Floor, New York, New York 10007, Attention:
Eagle-Picher Ballot Tabulation Center.
c. DEADLINE FOR RECEIVING COMPLETED BALLOTS:
i. DEADLINE FOR RECEIPT BY TABULATION AGENT
All ballots, except ballots with respect to Registered Debt
Securities or Bearer Debt Securities (i.e., record holder
ballots, master ballots and prevalidated owner ballots), must
be ACTUALLY RECEIVED at the Eagle-Picher Ballot Tabulation
Center by 5:00 p.m., Cincinnati, Ohio, time, by the Voting
Deadline. Such ballots may be received at the Eagle-Picher
Ballot Tabulation Center at the address set forth on the
return envelope. The Tabulation Agent will NOT accept ballots
submitted by facsimile transmission. The Tabulation Agent will
date and time-stamp all ballots when it receives them. In
addition, the Tabulation Agent will make a
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photocopy of all such ballots it receives (including all
ballots forwarded to it by the Solicitation Agent) and will
retain a copy of such ballots for a period of one (1) year
after the Effective Date of the Plan, unless otherwise
instructed by the Debtors, in writing.
ii. DEADLINE FOR RECEIPT BY SOLICITATION AGENT
All ballots with respect to Registered Debt Securities or
Bearer Debt Securities (i.e., record holder ballots, master
ballots and prevalidated owner ballots) must be ACTUALLY
RECEIVED by the Solicitation Agent by the Voting Deadline.
Such ballots may be received by the Solicitation Agent at the
address set forth on the return envelope. The Solicitation
Agent will NOT accept ballots submitted by facsimile
transmission. The Solicitation Agent will date and time-stamp
all such ballots when it receives them. In addition, after the
Voting Deadline and after tabulation of the ballots received
with respect to Registered Debt Securities and Bearer Debt
Securities, the Solicitation Agent will forward to the
Tabulation Agent the tabulation of the ballots relating to the
Registered Debt Securities and Bearer Debt Securities and all
such ballots it receives.
6. TABULATION OF BALLOTS:
a. DETERMINATION OF AMOUNT OF CLAIMS VOTED:
i. BEARER DEBT SECURITIES:
With respect to the tabulation of ballots cast by Depositaries
and holders of Bearer Debt Securities, the amount that will be
used to tabulate acceptance or rejection of the Plan will be
the amount shown on the ballot, except as follows:
(1) To the extent that the aggregate amount of Bearer Debt
Securities voted exceeds the amount outstanding, the
Solicitation Agent will attempt to resolve such overvote
prior to the date of the Confirmation Hearing. In
resolving such overvote, the Solicitation Agent may
require Depositaries to provide certificate numbers for
all Bearer Debt Securities held by the Depositaries as
of the Voting Deadline.
(2) In the event that blocked Bearer Debt Securities are
"unblocked" (i.e., withdrawn, moved, or otherwise
transferred) prior to the Voting Deadline, the
Depositary will notify the Solicitation Agent
immediately, in writing, by providing the Solicitation
Agent with, among other things, the request by the
holder to unblock the Bearer Debt Securities, a
photocopy of the ballot corresponding to the unblocked
Bearer Debt Securities, the account number of the
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holder of such unblocked Bearer Debt Securities, and the
certificate numbers of the unblocked Bearer Debt
Securities.
(3) In the event the Solicitation Agent receives conflicting
ballots (i.e., ballots received from different holders
of Bearer Debt Securities with respect to Bearer Debt
Securities having the same certificate numbers) and in
the absence of contrary information, the holder
submitting the latest-dated ballot, as evidenced by the
Depositary's certification (whether by separate
certification, prevalidation, or completion of a master
ballot), prior to the Voting Deadline shall be deemed to
be the holder of the Bearer Debt Securities that are the
subject of such conflict for voting purposes. In
attempting to resolve such conflict, the Solicitation
Agent may require such holders to furnish such evidence
as the Solicitation Agent deems reasonably necessary.
ii. REGISTERED DEBT SECURITIES:
With respect to the tabulation of ballots cast by record
holders and beneficial owners of Registered Debt Securities,
for purposes of voting, the amount that will be used to
tabulate acceptance or rejection of the Plan will be the
Record Amount. The following additional rules will apply to
the tabulation of ballots cast by record holders and
beneficial owners of Registered Debt Securities:
(1) Votes cast by beneficial owners holding Registered Debt
Securities through a Debt Nominee will be applied
against the positions held by such entities in the
applicable Registered Debt Securities as of the Voting
Record Date, as evidenced by the record and depositary
listings. Votes submitted by a Debt Nominee, whether
pursuant to a Master Ballot or prevalidated ballots,
will not be counted in excess of the Record Amount of
Registered Debt Securities held by such Debt Nominee.
(2) To the extent that conflicting votes or "overvotes" are
submitted by a Debt Nominee, whether pursuant to a
Master Ballot or prevalidated ballots, the Solicitation
Agent will attempt to resolve the conflict or overvote
prior to the Confirmation Hearing.
(3) To the extent that overvotes on a Master Ballot or
prevalidated ballots are not reconcilable prior to the
Confirmation Hearing, the Solicitation Agent will apply
the votes to accept and to reject the Plan in the same
proportion as the votes to accept and reject the Plan
submitted on the Master Ballot or prevalidated ballot
that contained the overvote, but only to the extent of
the Debt Nominee's position in the applicable Registered
Debt Security.
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(4) Multiple Master Ballots may be completed by a single
Debt Nominee and delivered to the Solicitation Agent.
Votes reflected by multiple Master Ballots will be
counted, except to the extent that they are duplicative
of other Master Ballots. If two or more Master Ballots
are inconsistent, the latest Master Ballot received
prior to the Voting Deadline will, to the extent of such
inconsistency, supersede and revoke any prior Master
Ballot.
(5) For purposes of tabulating votes, each record holder or
beneficial owner of a Registered Debt Security will be
deemed to have voted the full amount of its Claim
relating to such Registered Debt Security.
iii. CLAIMS OTHER THAN DEBT SECURITIES, ASBESTOS PROPERTY DAMAGE
CLAIMS, ASBESTOS PERSONAL INJURY CLAIMS, ENVIRONMENTAL CLAIMS,
AND LEAD PERSONAL INJURY CLAIMS:
With respect to the tabulation of ballots for all Claims other
than (a) Registered Debt Securities, (b) Bearer Debt
Securities, (c) Asbestos Property Damage Claims, (d) Asbestos
Personal Injury Claims, (e) Environmental Claims, and (f) Lead
Personal Injury Claims, for purposes of voting, the amount to
be used to tabulate acceptance or rejection of the Plan is as
follows (in order of priority):
(1) If, prior to the Voting Deadline, (i) the Bankruptcy
Court enters an order fully or partially allowing a
Claim, whether for all purposes or for voting purposes
only, (ii) a Claim is fully or partially allowed for all
purposes in accordance with the Claims Settlement
Guidelines, or (iii) the Debtors and the holder of a
Claim agree to fully or partially allow such Claim for
voting purposes only and no objection to such allowance
is received by the Debtors within seven (7) days after
service by first-class mail of notice of such agreement
to the Primary Recipients' List (as such term is defined
in the First Amended Case Management Order, entered on
November 20, 1991, as amended from time to time), the
amount allowed thereunder.
(2) The liquidated amount specified in a proof of claim
timely filed in accordance with the General Bar Date
Order, so long as such proof of claim has not been
disallowed by the Bankruptcy Court and is not the
subject of an objection pending as of the Voting Record
Date.
(3) The Claim amount listed in the Schedules as
unliquidated, undisputed, and not contingent.
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<PAGE>
(4) If a proof of claim has been timely filed in accordance
with the General Bar Date Order and such Claim is wholly
contingent or unliquidated, the Claim amount, for voting
purposes only, shall be $1.00 so long as such proof of
claim has not been disallowed by the Court and is not
the subject of an objection pending as of the Voting
Record Date.
iv. ASBESTOS PROPERTY DAMAGE CLAIMS, ASBESTOS PERSONAL INJURY
CLAIMS, AND LEAD PERSONAL INJURY CLAIMS:
With respect to the tabulation of ballots for all Asbestos
Property Damage Claims, Asbestos Personal Injury Claims and
Lead Personal Injury Claims, for voting purposes only, the
amount to be used to tabulate acceptance or rejection of the
Plan will be $1.00 for each Asbestos Property Damage Claim,
Asbestos Personal Injury Claim, and Lead Personal Injury Claim
proof of which was filed in accordance with the General Bar
Date Order or, in the case of Primary Asbestos Personal Injury
Claims and Asbestos Property Damage Claims, the Asbestos Bar
Date Order, so long as any such Claim is not the subject of an
objection that is pending as of the Voting Record Date. With
respect to Claims filed by representatives of classes of
Asbestos Property Damage Claims that have been certified or
conditionally certified in pending federal or state court
actions, each of the class members that is selected in
accordance with section of these Voting Procedures shall have
votes in the aggregate amount of $1.00 times the number of
members in the class of Asbestos Property Damage Claims of
which such Claimant is a member divided by 100.
v. ENVIRONMENTAL CLAIMS:
With respect to the tabulation of ballots for Environmental
Claims, for voting purposes only, the amount to be used to
tabulation acceptance or rejection of the Plan will be (i) as
to each holder of an Environmental Claim that is a party to
the Environmental Settlement Agreement, the amount of the
claim allowed to each such holder on account of the Liquidated
Sites (as such term is defined in the Environmental Settlement
Agreement) and (ii) as to any other holder of an Environmental
Claim, the amount of any liquidated claim allowed pursuant to
the settlement agreement between any of the Debtors and such
holder plus the amount of any additional claims that such
holder, pursuant to such agreement, may be entitled to assert
in the future.
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<PAGE>
b. DETERMINATION OF NUMBER OF CLAIMS VOTED:
i. SPECIFIC RULES RELATING TO REGISTERED DEBT SECURITIES AND
BEARER DEBT SECURITIES:
Each beneficial owner of Registered Debt Securities or Bearer
Debt Securities is entitled to one (1) vote on account of its
holdings of Registered Debt Securities and Bearer Debt
Securities.
ii. SPECIFIC RULES RELATING TO CLASS ASBESTOS PROPERTY DAMAGE
CLAIMS:
With respect to Claims filed by representatives of classes of
Asbestos Property Damage Claims that have been certified or
conditionally certified in pending federal or state court
actions, each of the class members that is selected in
accordance with section of these Voting Procedures shall have
a number of votes equal to the number of members in the class
of Asbestos Property Damage Claims of which such Claimant is a
member divided by 100. The ballot to be supplied to such
members will allow them to specify how many votes they are
voting to accept the plan and how many votes they are voting
to reject the Plan.
c. BALLOTS EXCLUDED:
A ballot will not be counted if any of the following applies to such
ballot:
i. The holder submitting the ballot is not entitled to vote,
pursuant to section 5.a.
ii. The ballot is not ACTUALLY RECEIVED at the Eagle-Picher Ballot
Tabulation Center or by the Solicitation Agent, as the case
may be, in the manner set forth in section 5.b hereof by the
Voting Deadline.
iii. A ballot that is not completed - including, without
limitation, a master ballot with respect to a Primary Asbestos
Personal Injury Claim on which the attorney fails to make the
required certification - but other than a ballot that is
otherwise complete but on which the acceptance or rejection of
the Plan is not noted.
d. GENERAL VOTING PROCEDURES AND STANDARD ASSUMPTIONS:
In addition, the following voting procedures and standard
assumptions will be used in tabulating ballots:
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<PAGE>
i. Each holder of Claims will be deemed to have voted the full
amount of its Claims in each class in which it submits a
ballot.
ii. If multiple ballots are received for a holder of Claims, the
last ballot received from such holder prior to the Voting
Deadline will be the ballot that is counted.
iii. If multiple ballots are received from different holders
purporting to hold the same Claim, in the absence of contrary
information establishing which claimant held such Claim as of
the Voting Deadline or, in the case of Registered Debt
Securities, the Voting Record Date, the latest-dated ballot
that is received prior to the Voting Deadline will be the
ballot that is counted.
iv. If multiple ballots are received from a holder of a Claim and
someone purporting to be his, her, or its attorney or agent,
the ballot received from the holder of the Claim will be the
ballot that is counted, and the vote of the purported attorney
or agent will not be counted.
v. A ballot that is completed, but on which the claimant did not
note whether to accept or reject the Plan shall be counted as
a vote to accept the Plan.
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UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
EXHIBIT "E"
THE DEBTORS' LIQUIDATION ANALYSIS
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EAGLE-PICHER INDUSTRIES, INC.
LIQUIDATION ANALYSIS
The Liquidation Analysis reflects the Debtors' estimate of the proceeds that
would be realized if the Debtors were to be liquidated under chapter 7 of the
Bankruptcy Code. Underlying the Liquidation Analysis are a number of estimates
and assumptions that, although developed and considered reasonable by
Management, are inherently subject to significant business, economic and
competitive uncertainties and contingencies beyond the control of the Debtors
and their Management, and upon assumptions with respect to the liquidation
decisions which could be subject to change. THERE CAN BE NO ASSURANCE THAT THE
VALUES REFLECTED IN THE LIQUIDATION ANALYSIS WOULD BE REALIZED IF THE DEBTORS
WOULD UNDERGO SUCH A LIQUIDATION, AND ACTUAL RESULTS COULD VARY MATERIALLY FROM
THOSE SHOWN HERE.
For the purposes of preparing the Liquidation Analysis, the liquidation was
assumed to commence on December 1, 1996 and the sales of the Operating
Businesses (as defined below) were assumed to be completed within six months of
that date. At that point, on May 31, 1997 (the "Liquidation Distribution Date"),
distributions would be made to unsecured creditors. Any funds received
subsequent to the Liquidation Distribution Date would be applied to separate
accounts set up to fund the Debtors' liabilities for workers' compensation,
postretirement benefits and indemnification liabilities resulting from the sales
of the Operating Businesses. Depending on actual circumstances, the six-month
sale and liquidation period ("Liquidation Period") could be significantly longer
or, while the Debtors believe it highly unlikely, shorter.
The Debtors have assumed, for purposes of making distributions to the PI Trust,
in the Liquidation Analysis, that the aggregate value of Asbestos Personal
Injury Claims and Lead Personal Injury Claims that would be allowed in a chapter
7 case is equal to the $2.5 billion that was ruled to be the aggregate value by
the Bankruptcy Court. The Debtors also have assumed, in the Liquidation
Analysis, that in a chapter 7 case the value of the Environmental Claims
addressed in the Environmental Settlement Agreement would be as reflected
therein. There can be no assurance that the EPA, the DOI, and the states listed
therein would agree to the liquidated amounts of their claims set forth in the
Environmental Settlement Agreement in the context of a chapter 7 liquidation.
The following notes describe the significant assumptions used in the Liquidation
Analysis.
A. ESTIMATED LIQUIDATION PROCEEDS
The businesses of the Debtors are conducted through various subsidiaries and
divisions (the "Operating Businesses"). For
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purposes of the Liquidation Analysis, it is assumed that the assets of the
subsidiaries and divisions would be sold on a going concern basis. It is
believed that the sales of the Operating Businesses on a going concern basis
would result in greater proceeds than liquidating the assets of the Operating
Businesses themselves. There can be no assurance, however, that any such going
concern sales could be consummated. The Debtors' financial advisors, McDonald &
Co., estimated the potential proceeds from such dispositions of the Operating
Businesses.
The following information and factors, not listed in any order of importance,
were, among others, considered by McDonald & Co. in estimating the proceeds
which might be received from the sale of the Operating Businesses:
1) The historical financial statements, relevant historical operating
information and projected financial operating performance of the Operating
Businesses;
2) Market valuations of public companies in the same or similar businesses
as the Operating Businesses;
3) The product lines, manufacturing expertise, operating advantages and
disadvantages of the Operating Businesses;
4) The limited base of potential buyers for certain Operating Businesses;
5) The potential impact of a chapter 7 proceeding upon the Operating
Businesses themselves and upon potential buyers' pricing strategies;
6) The relatively short period of time in which the sales of the Operating
Businesses would take place; and
7) The point in the economic cycle in which the sales of the Operating
Businesses would take place.
General economic conditions as well as current conditions in the Operating
Business' industries were also considered in estimating the liquidation
proceeds. However, significant uncertainties exist, such as the cyclical nature
of the automotive industry and the political nature of defense funding. Just as
these items could have an adverse effect on sales and operating income, they
could also adversely affect the price which could be realized in the short-term
from the dispositions of Operating Businesses depending on the timing of these
dispositions.
Transaction costs on the sales of the Operating Businesses were estimated to be
5% of the gross proceeds.
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For purposes of the Liquidation Analysis, it has been assumed that all
subsidiary and division level employees will be retained by the buyers of the
respective Operating Businesses. In the event of actual sale, it is likely that
substantial employee severance costs would reduce sale proceeds.
B. NOTES RECEIVABLE
Eagle-Picher is holding several notes receivable received as partial
consideration for the sale of assets previously consummated. Those that are due
after the Liquidation Distribution Date would be used to fund the
indemnification liability resulting from the sales of the Operating Businesses.
C. INCOME TAXES
Sale of the Operating Businesses will trigger taxable gains for Eagle-Picher,
and Eagle-Picher will receive tax deductions for cash paid to unsecured
creditors on the Liquidation Distribution Date. The resulting tax net operating
loss will be fully absorbed by carryback to years in which income is available
for carryback, resulting in income tax refunds of $70.9 million. Since these
refunds will not be available until after the Liquidation Distribution Date,
they will be assigned to the accounts for Indemnification. The present value of
such refunds is $56.7 million.
Since Eagle-Picher will cease to exist under this scenario, the tax benefit for
deferred deductions for workers' compensation, postretirement benefits and
indemnification liabilities will expire.
D. CLAIMS AND EXPENSES PAID AT THE EFFECTIVE DATE
Under the Liquidation Analysis, it has been assumed that all Administrative
Expenses (including expenses of a chapter 7 trustee and any related professional
fees) and Priority Claims aggregating $8.8 million are paid in full. It is also
assumed that Secured Claims totaling $21.8 million are repaid in full from
proceeds of the collateral securing such sums.
E. ASBESTOS PROPERTY DAMAGE CLAIMS
It has been assumed that the Court values Asbestos Property Damage Claims in the
aggregate approximate amount of $12.0 million.
F. CASHFLOW FROM OPERATIONS DURING THE LIQUIDATION PERIOD
The Debtors estimate that there will be a decrease in cash from operations of
approximately $5 million resulting from adverse effects of a chapter 7
situation. Interest income expected to be
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earned on excess cash held during the Liquidation Period is included in this
estimate.
G. OVERHEAD COSTS OF LIQUIDATION
It has been assumed that overhead costs of a liquidation, including severance
costs associated with general office personnel, will approximate $8 million.
Terminations would take place as reduction of properties permitted.
H. WORKERS' COMPENSATION OBLIGATIONS
The Debtors estimate workers' compensation obligations to be approximately $20
million. This includes existing liabilities and liabilities that will not be
assumed by buyers when the Operating Businesses are sold. The Debtors have
assumed that any buyer of an Operating Business would not assume any obligations
for workers' compensation claims for injuries occurring prior to the date a sale
of the Operating Business is consummated.
I. PENSION AND POSTRETIREMENT BENEFIT OBLIGATIONS
The Debtors currently make health care and life insurance benefits available to
certain retired employees on a limited basis. In most cases, retirees are
required to contribute to the cost of their health insurance coverage. These
benefits are funded on a pay-as-you-go basis. For purposes of this Liquidation
Analysis, it has been assumed that the Debtors' policy would be amended to
exclude current active employees from this benefit. Therefore, the Debtors would
be liable only for the portion of this liability relating to current retirees
and those eligible for retirement.
The pension plans are currently over funded. It is unlikely, however, that there
would be excess funds available to the Debtors in the event of a liquidation
after transfers of pension assets and related liabilities were made to pension
plans of buyers of the Operating Businesses.
J. CANCELLATION OF LEASE OBLIGATIONS
It has been assumed that the Debtors will be liable for claims associated with
the cancellation of certain lease obligations, primarily that of the General
Office in Cincinnati, Ohio. It has also been assumed that the leases of
operating plants would be assumed by buyers of the respective Operating
Businesses.
K. INDEMNIFICATION OF THE SALE OF THE OPERATING BUSINESSES
It has been assumed that the buyer of any Operating Business would require
certain amounts held in escrow for the indemnification of existing and potential
liabilities at the date of the sale. Potential indemnification items include
environmental liabilities
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and warranty obligations for incidents occurring prior to the date the Operating
Businesses were sold.
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EAGLE-PICHER INDUSTRIES, INC.
LIQUIDATION PROCEEDS COMPUTATION
AS OF DECEMBER 1, 1996
(IN THOUSANDS - UNAUDITED)
<TABLE>
<CAPTION>
LIQUIDATION PROCEEDS:
<S> <C>
Proceeds from asset sales $ 496,000
Less transaction costs (24,800)
---------
Net liquidation proceeds 471,200
Add: Cash and cash equivalents 118,200
Notes receivable and other investments 7,500
Present value of tax refunds receivable 56,700
---------
Cash available 653,600
Less distributions:
Priority claims 3,000
Administrative expenses 5,800
Secured debt 21,800
After-tax net decrease in cash from operations
during six-month disposition period 5,000
Corporate payroll and overhead costs of
liquidation 8,000
Worker's compensation obligation 20,000
Postretirement benefit obligation 13,700
Cancelation of lease obligations 700
Indemnification resulting from disposition
of businesses 50,000
---------
Total distributions 128,000
---------
Net estimated liquidation proceeds available
to unsecured creditors $ 525,600
=========
</TABLE>
<TABLE>
<CAPTION>
PAYMENT OF PREPETITION UNSECURED CLAIMS:
Percentage
Claims Proceeds Recovery
---------- -------- ----------
<S> <C> <C> <C>
Asbestos and lead personal injury claims $2,502,511 $493,547 20%
Unsecured claims 150,521 29,686 20%
Asbestos property damage claims 12,000 2,367 20%
Equity interests 0 0 0%
</TABLE>
E-6
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
EXHIBIT "F"
THE DEBTORS' SUBSIDIARIES AND DIVISIONS
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
7/15/96
================================================================================
EAGLE-PICHER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
WHOLLY-OWNED SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CINCINNATI INDUSTRIAL MACHINERY SALES COMPANY EAGLE-PICHER ESPANA, S.A.
- ----------------------------------------------------------------------------------------------------------------------------------
DAISY PARTS, INC. EAGLE-PICHER FLUID SYSTEMS LTD
- ----------------------------------------------------------------------------------------------------------------------------------
EDI, INC. EAGLE-PICHER HILLSDALE LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER DEVELOPMENT COMPANY, INC. EAGLE-PICHER HOLDING B.V.
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER EUROPE, INC. EAGLE-PICHER INDUSTRIES OF CANADA LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER FAR EAST, INC. EAGLE-PICHER, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER FLUID SYSTEMS, INC. EAGLE-PICHER INDUSTRIES GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
EAGLE-PICHER MINERALS, INC. EAGLE-PICHER INDUSTRIES EUROPE GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
HILLSDALE TOOL & MANUFACTURING CO. EAGLE-PICHER INDUSTRIES MATERIALS GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION EAGLE-PICHER MINERALS INTERNATIONAL S.A.R.L.
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSICOIL INC. EAGLE-PICHER UK LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
EPTEC, S.A. DE C.V.
- ----------------------------------------------------------------------------------------------------------------------------------
EQUIPOS DE ACUNA, S.A. DE C.V.
- ----------------------------------------------------------------------------------------------------------------------------------
TRANSICOIL (MALAYSIA) SDN. BHD.
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
PARTIALLY-OWNED SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
NONE DIEHL & EAGLE-PICHER GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
DONG YANG EAGLE-PICHER LIMITED
- ----------------------------------------------------------------------------------------------------------------------------------
UNITED MINERALS VERWALTUNGS- UND BETEILIGUNGS GMBH
- ----------------------------------------------------------------------------------------------------------------------------------
UNITED MINERALS GMBH & CO. KG
- ----------------------------------------------------------------------------------------------------------------------------------
YAMANAKA EP CORPORATION
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
F-1
<PAGE>
<PAGE>
================================================================================
EAGLE-PICHER INDUSTRIES, INC.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
PARTIALLY-OWNED PARTNERSHIPS
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
CREATIVE INVESTMENTS ASSOCIATES NONE
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
NAMEHOLDER SUBSIDIARIES
- ----------------------------------------------------------------------------------------------------------------------------------
DOMESTIC FOREIGN
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
FABRICON CORPORATION NONE
- ----------------------------------------------------------------------------------------------------------------------------------
FABRICON PRODUCTS CORPORATION OF PENNSYLVANIA
- ----------------------------------------------------------------------------------------------------------------------------------
ROSS ALUMINUM FOUNDRIES, INC.
- ----------------------------------------------------------------------------------------------------------------------------------
WOLVERINE FABRICATING AND MANUFACTURING COMPANY
- ----------------------------------------------------------------------------------------------------------------------------------
WOLVERINE GASKET AND MANUFACTURING COMPANY
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------------------------------------------------------
DIVISIONS
- --------------------------------------------------------------------------------
CINCINNATI INDUSTRIAL MACHINERY
CONSTRUCTION EQUIPMENT
FABRICON PRODUCTS
PLASTICS
ROSS ALUMINUM FOUNDRIES
RUBBER MOLDING
SUSPENSION SYSTEMS
TECHNOLOGIES
TRIM
WOLVERINE GASKET
================================================================================
F-2
<PAGE>
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In re ) Consolidated Case No. 1-91-00100
)
)
EAGLE-PICHER INDUSTRIES, ) Chapter 11
INC., et al., )
) JUDGE PERLMAN
Debtors. )
)
- ------------------------------------)
EXHIBIT "G"
THE DIRECTORS AND OFFICERS OF THE DEBTORS (OTHER THAN EAGLE-PICHER)
<PAGE>
<PAGE>
EAGLE-PICHER SUBSIDIARIES WHICH FILED BANKRUPTCY-OFFICERS & DIRECTORS 9/9/1996
<TABLE>
<CAPTION>
NAME- DIRECTORS- PRESIDENT SR.V.P. V.P. V.P.
- --------------------------- ----------------- -------------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C> <C>
DAISY PARTS, INC. WAYNE R. WICKENS MICHAEL E. ASLANIAN STEPHEN M. ROSS WAYNE R. WICKENS
JAMES A. RALSTON
HARRY A. NEELY
EAGLE-PICHER MINERALS, INC. ANDRIES RUIJSSENAARS WESLEY D. LEE JAMES A. RALSTON HARRY A. NEELY
JAMES A. RALSON
HARRY A. NEELY
EDI, INC. WAYNE R. WICKENS MICHAEL J. BOERMA TERENCE J. RHOADES HARRY A. NEELY
MICHAEL J. BOERMA
JAMES A. RALSTON
HILLSDALE TOOL & HARRY A. NEELY MICHAEL E. ASLANIAN STEPHEN M. ROSS WAYNE R. WICKENS
MANUFACTURING CO. WAYNE R. WICKENS
JAMES A. RALSTON
MICHIGAN AUTOMOTIVE WAYNE R. WICKENS MICHAEL J. BOERMA TERENCE J. RHOADES HARRY A. NEELY
RESEARCH CORPORATION MICHAEL J. BOERMA
JAMES A. RALSTON
TRANSICOIL INC. ANDRIES RUIJSSENAARS ROBERT N. CARLSON MARK M. JOHNSON HARRY A. NEELY
JAMES A. RALSTON
HARRY A. NEELY
<CAPTION>
NAME- TREASURER V.P.1 SECRETARY ASST.TREAS. ASST.SEC. OTHER
- -------------------------- ------------------- --------------- ------------------- ----------- --------------- -------
<S> <C> <C> <C> <C> <C> <C>
DAISY PARTS, INC. HARRY A. NEELY HARRY A. NEELY JAMES A. RALSTON
EAGLE-PICHER MINERALS, INC. HARRY A. NEELY DAVID N. EVANS JAMES A. RALSTON
EDI, INC. TERENCE J. RHOADES TERENCE J. RHOADES JAMES A. RALSTON
HILLSDALE TOOL & HARRY A. NEELY HARRY A. NEELY JAMES A. RALSTON
MANUFACTURING CO.
MICHIGAN AUTOMOTIVE TERENCE J. RHOADES TERENCE J. RHOADES JAMES A. RALSTON
RESEARCH CORPORATION
TRANSICOIL INC. HARRY A. NEELY MARK M. JOHNSON JAMES A. RALSTON
</TABLE>
G-1
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
[THIS PAGE LEFT BLANK INTENTIONALLY]
<PAGE>
<PAGE>
PLEASE CALL HILL AND KNOWLTON, INC.,
AT (212) 885-0555, IF YOU HAVE ANY
QUESTIONS ABOUT THIS DISCLOSURE
STATEMENT, THE VOTING PROCEDURES,
OR THE PLAN.
<PAGE>
<PAGE>
CERTIFICATE OF ADOPTION
OF
AMENDMENT TO ARTICLES OF INCORPORATION
OF
EAGLE-PICHER INDUSTRIES, INC.
James A. Ralston, Vice President, General Counsel and Secretary of
Eagle-Picher Industries, Inc., an Ohio corporation, with its principal office
located in Cincinnati, Hamilton County, Ohio (the "Corporation"), does hereby
certify that the following resolution was duly adopted pursuant to Sections
1701.71 and 1701.54 of the Ohio General Corporation Law by the written consent
of the Corporation's sole shareholder dated December 12, 1997:
"RESOLVED, that the Amended and Restated Articles of Incorporation of
the Corporation (the "Articles") be amended to delete Article Sixth
thereof, and that the proper officers of the Corporation be and hereby are
authorized and directed to execute and file with the Secretary of State of
the State of Ohio, in the name of the Corporation, a Certificate of
Amendment to the Articles (and any documents ancillary thereto) setting
forth this Resolution."
IN WITNESS WHEREOF, James A. Ralston, Vice President, General Counsel
and Secretary of Eagle-Picher Industries, Inc. has hereunto subscribed his
name this 2nd day of February, 1998.
/s/ James A. Ralston
----------------------------
James A. Ralston
Vice President, General Counsel
and Secretary
<PAGE>
<PAGE>
CERTIFICATE OF REORGANIZATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Thomas E. Petry, Chairman of the Board and Chief
Executive Officer, and James A. Ralston, Vice President, General Counsel and
Secretary, of Eagle-Picher Industries, Inc. (the "Corporation"), do hereby
certify that: (1) the Corporation is the Debtor in that certain Chapter 11 case
identified as Consolidated Case No. 1-91-00100 in the United States Bankruptcy
Court for the Southern District of Ohio, Western Division (the "Case"), (2) in
the Case, the Corporation has filed a Consolidated Plan of Reorganization that
provides for the adoption of Amended and Restated Articles of Incorporation for
the Corporation in the form set forth as Exhibit A to this Certificate, (3) the
Consolidated Plan of Reorganization, including the Amended and Restated Articles
of Incorporation that are Exhibit A hereto, was confirmed by the order of the
United States District Court for the Southern District of Ohio, Western
Division, and the United States Bankruptcy Court for the Southern District of
Ohio, Western Division, entered on November 18, 1996, and (4) such order remains
in full force and effect at the date hereof.
The Amended and Restated Articles of Incorporation annexed hereto may be
certified by the office of the Secretary of State of Ohio separately from this
Certificate of Reorganization.
IN WITNESS WHEREOF, the undersigned Chairman of the Board and Chief
Executive Officer and Vice President, General Counsel and Secretary of
Eagle-Picher Industries, Inc., have executed this Certificate of Reorganization
this 29th day of November, 1996.
/s/ THOMAS E. PETRY
-----------------------------------
Name: Thomas E. Petry
Title: Chairman of the Board
and Chief Executive
Officer
/s/ JAMES A. RALSTON
-----------------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
<PAGE>
<PAGE>
EXHIBIT A
CERTIFICATE OF AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
EAGLE-PICHER INDUSTRIES, INC.
The undersigned, Thomas E. Petry, Chairman of the Board and Chief
Executive Officer, and James A. Ralston, Vice President, General Counsel and
Secretary, of Eagle-Picher Industries, Inc. (the "Corporation"), do hereby
certify that in connection with a Plan of Reorganization confirmed by the
United States District Court for the Southern District of Ohio, Western
Division, and the United States Bankruptcy Court for the Southern District
of Ohio, Western Division, in the chapter 11 case of the Corporation (the
"Plan"), the Articles of the Corporation were amended and restated, pursuant
to such Plan and the authority granted by Section 1701.75 of the Ohio Revised
Code ("O.R.C."), to read as follows:
FIRST: The name of the Corporation is Eagle-Picher Industries, Inc.
SECOND: The place in Ohio where the principal office of the Corporation is
to be located is Cincinnati, Hamilton County, Ohio.
THIRD: The purpose for which the Corporation is formed is to engage in any
lawful act or activity for which corporations may be formed under Sections
1701.01 to 1701.98 inclusive, of the O.R.C.
FOURTH: (a) All shares of the Corporation that are authorized for issuance
immediately prior to the time as of which these Amended and Restated Articles of
Incorporation become effective (the "Effective Time") are hereby canceled. As of
the Effective Time, the number of shares that the Corporation is authorized to
have outstanding is 20,000,000 common shares, without par value (the "Common
Stock").
(b) Pursuant to the requirements of Section 1123(a)(6) of the Bankruptcy
Code, the Corporation shall not issue nonvoting equity securities, subject,
however, to further amendment of these Amended and Restated Articles of
Incorporation as and to the extent permitted by applicable law.
FIFTH: The Corporation, by action of its Board of Directors, may purchase
its own shares at any time and from time-to-time to the extent permitted by law.
2
<PAGE>
<PAGE>
SIXTH: The shares of the Corporation's Common Stock, other rights or
options to purchase shares of the Corporation's Common Stock and any other
interests that would be treated as "stock" of the Corporation under Section 382
of the Internal Revenue Code (collectively, the "Corporate Securities") are
subject to the following restrictions:
1. During the period beginning on the Effective Time and ending
twenty-five (25) months thereafter, any attempted sale, purchase, transfer,
assignment, conveyance, pledge or other disposition of any share or shares of
Corporate Securities ("Transfer") to any person or entity or to any group of
persons or entities acting in concert ("Transferee") who directly or indirectly
owns, or is treated as owning (within the meaning of the attribution rules
applicable under Section 382 of the Internal Revenue Code ("Own")), 4.75% or
more of any class of Corporate Securities, or after giving effect to the
Transfer, would directly or indirectly Own more than 4.75% of the outstanding
shares of any class of Corporate Securities, shall be void AB INITIO and shall
not be effective to Transfer any of such shares to the extent the Transfer
increases the Transferee's direct or indirect ownership of the Corporate
Securities above 4.75% of the total outstanding shares of such class of
Corporate Securities; provided, however, that the foregoing restriction shall
not apply to the original issuance of 10,000,000 shares of the Corporation's
Common Stock pursuant to the Plan. Similarly, any Transfer by a transferor who
directly or indirectly Owns 5% or more of the outstanding shares of any class
of Corporate Securities shall be void AB INITIO and shall not be effective
to Transfer any of such shares to the purported Transferee.
2. (a) If the Board of Directors of the Corporation determines that a
Transfer of Corporate Securities constitutes a Transfer prohibited by Section 1
hereof (a "Prohibited Transfer"), then upon written demand made by any officer
of the Corporation, the purported Transferee shall transfer or cause to be
transferred any certificate or other evidence of ownership of Corporate
Securities that are the subject of the Prohibited Transfer ("Prohibited
Securities"), together with any dividends or other distributions that were
received by the Transferee from the Corporation with respect to such Prohibited
Securities ("Prohibited Distributions"), to an agent designated by the Board of
Directors of the Corporation (the "Agent"). The Agent shall then sell to a buyer
or buyers the Prohibited Securities so transferred to it. If, before receiving
the demand of the Corporation to transfer the Prohibited Securities to the
Agent, the purported Transferee has resold the Prohibited Securities, the
purported Transferee shall be deemed to have sold the Prohibited Securities for
and on behalf of the Agent and, in lieu of transferring the Prohibited
Securities to the Agent, shall transfer to the Agent any Prohibited
Distributions and the proceeds of such sale. If the purported Transferee fails
to surrender the Prohibited Securities or the proceeds of a sale
3
<PAGE>
<PAGE>
thereof, together with any Prohibited Distributions, to the Agent within thirty
(30) business days from the date on which the Corporation makes its demand for
surrender hereunder, the Corporation shall institute legal proceedings to compel
the surrender. The costs of any such proceeding in which the court shall compel
such surrender or award damages shall be borne by the purported Transferee.
(b) Upon the receipt of the proceeds of any sale of Prohibited Securities
by the Agent or, upon the receipt from the purported Transferee thereof of the
proceeds from any previous sale of such Prohibited Securities by such
Transferee, the amount so received shall be applied by the Agent as follows: (i)
first, to the payment of the reasonable expenses of the Agent incurred in
connection with the performance of its duties hereunder; (ii) second, to the
purported Transferee up to the amount paid by the purported Transferee for the
Prohibited Securities, which amount shall be determined by the Board of
Directors of the Corporation in its sole discretion; and (iii) third, to one or
more organizations that shall then be qualified under Section 501(c)(3) of the
Internal Revenue Code as selected by the Board of Directors of the Corporation.
3. Neither the Corporation nor any transfer agent or other person on its
behalf shall effect a Prohibited Transfer on the stock record books of the
Corporation and the purported Transferee thereof shall not be recognized as a
shareholder of the Corporation for any purpose whatsoever in respect of the
Prohibited Securities. Until the Prohibited Securities are acquired by another
person in a Transfer that is not a Prohibited Transfer, the purported Transferee
shall not be entitled with respect to such Prohibited Securities to any rights
of shareholders of the Corporation, including, without limitation, the right to
vote such Prohibited Securities and to receive dividend distributions, whether
liquidating or otherwise, in respect thereof, if any. Once the Prohibited
Securities have been acquired in a Transfer that is not a Prohibited Transfer,
the Corporate Securities shall cease to be Prohibited Securities.
4. All certificates evidencing any Corporate Securities issued by the
Corporation after the Effective Time, shall bear a conspicuous legend reading
substantially as follows:
THE TRANSFER OF THE SECURITIES REPRESENTED HEREBY IS SUBJECT TO
RESTRICTION PURSUANT TO THE AMENDED AND RESTATED ARTICLES OF INCORPORATION
OF REORGANIZED EAGLE-PICHER, WHICH RESTRICTION IS REPRINTED IN ITS
ENTIRETY ON THE BACK OF THIS CERTIFICATE.
With respect to any Corporate Securities that are not evidenced by a
certificate, but are uncertificated securities, the foregoing legend shall be
set forth in the initial transaction statement
4
<PAGE>
<PAGE>
required for restrictions on transfer by Section 1308.11 of the O.R.C.
5. Notwithstanding any other provisions of these Amended and Restated
Articles of Incorporation or the Regulations of the Corporation (and
notwithstanding the fact that a lesser percentage may be specified by law, these
Amended and Restated Articles of Incorporation or the Regulations), the
affirmative vote of the holders of 80% or more of the outstanding shares, voting
together as a single class, shall be required to amend or repeal, or adopt any
provisions inconsistent with this Article Sixth; provided, however, that
shareholder action without a meeting shall require the unanimous written consent
of all shareholders entitled to vote thereon.
SEVENTH: These Amended and Restated Articles of Incorporation supersede
and take the place of all prior Articles of Incorporation of the Corporation.
IN WITNESS WHEREOF, the undersigned Chairman of the Board and Chief
Executive Officer and Vice President, General Counsel and Secretary of
Eagle-Picher Industries, Inc. have executed this Certificate this 29th day of
November, 1996.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ THOMAS E. PETRY
-----------------------------
Name: Thomas E. Petry
Title: Chairman of the Board
and Chief Executive
Officer
/s/ JAMES A. RALSTON
-------------------------------
Name: James A. Ralston
Title: Vice President, General
Counsel and Secretary
5
<PAGE>
<PAGE>
REGULATIONS OF
EAGLE-PICHER INDUSTRIES, INC.
(THE "CORPORATION")
(AMENDED AS OF APRIL 14, 1997)
ARTICLE I
SHAREHOLDERS
SECTION 1.1. PLACE OF MEETINGS. Meetings of shareholders, whether annual or
special, shall be held at such place within or outside of the State of Ohio as
shall be determined by the Board of Directors. In the absence of such
determination, meetings shall be held at the principal office of the
Corporation.
SECTION 1.2. ANNUAL MEETING. The annual meeting of shareholders of the
Corporation shall be held on such date as shall be designated by the Board of
Directors. In the absence of such designation, the annual meeting shall be held
at 2:00 P.M. on the fourth Tuesday of March in each year if not a legal holiday,
and, if a legal holiday, then on the next day not a legal holiday. At the annual
meeting, directors shall be elected, reports of the affairs of the Corporation
shall be considered, and such other business shall be transacted as may properly
be brought before the meeting.
SECTION 1.3. SPECIAL MEETINGS. Special meetings of the shareholders may be
called at any time by any of the following:
(i) the Chairman of the Board or the President, or in case of the
President's absence, death or disability, the Vice President
authorized to exercise the President's authority;
(ii) the Board of Directors by action at a meeting or by a majority of
the directors acting without a meeting;
(iii) the Secretary or Assistant Secretary of the Corporation; or
(iv) at the request of persons holding twenty-five percent of all
outstanding shares entitled to vote.
SECTION 1.4. ACTIONS WITHOUT MEETING. Any action that may be authorized or
taken at a meeting of the shareholders may be authorized or taken without a
meeting with the affirmative vote or approval of, and in a writing or writings
signed by, all the shareholders who would be entitled to vote at a meeting of
the
1
<PAGE>
<PAGE>
shareholders held for such purpose, which writing or writings shall be filed
with or entered upon the records of the Corporation.
SECTION 1.5. NOTICE OF MEETINGS. Written notice of each meeting of
shareholders, stating the time, place and purposes of the meeting, shall be
given not less than ten nor more than sixty days before the date of the meeting
by or at the direction of the President, the Secretary or any other officer
designated by the Board of Directors. Notice of adjournment of a meeting need
not be given if the time and place to which it is adjourned are fixed and
announced at the meeting.
SECTION 1.6. WAIVER OF NOTICE. Notice of the time, place and purposes of
any meeting of shareholders may be waived in writing by any shareholder, either
before or after the holding of such meeting. Such writing shall be filed with or
entered upon the records of the meeting. The attendance of any shareholder at
any meeting without protesting, prior to or at the commencement of the meeting,
the lack of proper notice shall be deemed to be a waiver by the shareholder of
notice of the meeting.
SECTION 1.7. QUORUM. The holders of a majority of the shares of the
Corporation, present in person or by proxy, shall constitute a quorum at such
meetings. If a quorum is not present at a meeting of the shareholders, those
shareholders present in person or by proxy shall have the power to adjourn the
meeting without notice other than announcement at the meeting of the place, date
and hour of the adjourned meeting, until a quorum is present in person or by
proxy at the adjourned meeting. At an adjourned meeting at which a quorum is
present in person or by proxy, the Corporation may transact any business which
might have been transacted at the original meeting.
SECTION 1.8. VOTING. When a quorum is present at any meeting, except as
otherwise expressly required by statute, the Articles of Incorporation or these
Regulations, a majority of the votes cast at a meeting of shareholders shall
control. Unless the express terms of the shares of the Corporation provide
otherwise, each share shall entitle the holder of such share to one vote upon
each matter properly submitted to the shareholders for their vote at a meeting
of shareholders.
SECTION 1.9. PROXIES. Persons entitled to vote shares or to act with
respect to shares may vote or act in person or by proxy. The person appointed as
a proxy need not be a shareholder. A proxy must be appointed in a writing signed
by the shareholder. No appointment of a proxy is valid after the expiration of
eleven months after it is made, unless the writing specifies the date on which
it is to expire or the length of time for which it is to continue in force.
Every appointment of a proxy shall be revocable, unless the appointment is
coupled with an interest.
2
<PAGE>
<PAGE>
ARTICLE II
DIRECTORS
SECTION 2.1. GENERAL POWERS. All of the authority of the Corporation
shall be exercised by or under the direction of the Board of Directors, subject
to limitations imposed by law, the Articles of Incorporation or these
Regulations.
SECTION 2.2. NUMBER, CLASSES AND ELECTION. The election of directors shall
take place at the annual meeting of shareholders or at a special meeting called
for that purpose. The number of directors of the Corporation shall be five,
which number may be adjusted, as determined from time to time by action of the
Board of Directors of the Corporation; provided, however, that in no event shall
the number of directors of the Corporation be less than three.
SECTION 2.3 VACANCIES. All vacancies in the Board of Directors, whether
caused by resignation, death or removal of any director, or by the failure of
the shareholders at any time to elect the whole authorized number of directors,
may be filled by a majority of the remaining directors. A director thus elected
to fill any vacancy shall hold office for the unexpired term of such director's
predecessor.
SECTION 2.4 REMOVAL. Any director may be removed from office as provided by
law.
SECTION 2.5. PLACE OF MEETINGS. All meetings of the Board of Directors
shall be held at the principal office of the Corporation or at such place,
within or outside of the State of Ohio, as may be designated from time to time
by a majority of the directors, or as may be designated in the notice or in the
waiver of notice of such meeting.
SECTION 2.6. ORGANIZATIONAL MEETINGS. An organizational meeting of the
Board of Directors may be held, without call or notice, immediately following
each annual meeting of the shareholders of this Corporation or at such
alternative time as may be provided in a notice of meeting.
SECTION 2.7. OTHER MEETINGS; NOTICE. Other meetings of the Board of
Directors may be held at any time on the call of the Chairman of the Board, the
President, any Vice President or any two directors. Written notice of any such
meeting, unless waived, shall be given not less than two days prior to the day
of the meeting. Notice also may be given personally or by telephone at least two
days prior to such meeting. The notice shall state the time and place, but need
not state the purposes, of the meeting. If the Secretary fails or refuses to
give such notice promptly, the notice may be given by the person who called the
meeting. Notice
3
<PAGE>
<PAGE>
of adjournment of a meeting of the Board of Directors need not be given if the
time and place to which it is adjourned are fixed and announced at such meeting.
SECTION 2.8. WAIVER OF NOTICE. Notice of the time and place of any meeting
of the Board of Directors may be waived in writing, either before or after the
meeting takes place, by any director, which writing shall be filed with or
entered upon the records of the meeting. The attendance of any director at any
meeting without protesting, prior to or at the commencement of the meeting, the
lack of proper notice, shall be deemed to be a waiver by such director of notice
of the meeting.
SECTION 2.9. QUORUM. A majority of the whole authorized number of directors
is necessary to constitute a quorum for a meeting of the Board of Directors,
except that a majority of the directors in office constitutes a quorum for
filling a vacancy in the Board of Directors. The act of a majority of the
directors present at a meeting at which a quorum is present is the act of the
Board of Directors, except as otherwise provided by law, the Articles of
Incorporation or these Regulations.
SECTION 2.10. TELEPHONIC MEETINGS. Meetings of the directors may be held by
means of any communications equipment if all persons participating can hear each
other, and participation in a meeting in such manner shall constitute presence
at such meeting.
SECTION 2.11. ACTIONS WITHOUT MEETING. Any action that may be authorized or
taken at a meeting of the Board of Directors of the Corporation may be
authorized or taken without a meeting with the affirmative vote or approval of,
and in a writing or writings signed by, all the directors, which writing or
writings shall be filed with or entered upon the records of the Corporation.
SECTION 2.12. EXECUTIVE AND OTHER COMMITTEES. When the number of directors
authorized pursuant to Section 2.2 is greater than three, the Board of Directors
may create an executive committee and/or other committees, of the Board, each of
which shall consist of no fewer than three members. Such committees shall have
and may exercise such powers of the Board of Directors in the management of the
Corporation as may be conferred or authorized by the resolutions appointing
them; however, no committee shall have the power to fill vacancies among the
directors or in any committee. The Board of Directors shall have the power at
any time to fill vacancies in, to change the membership of, or to discharge any
such committee. All such committees shall be discharged and shall cease to
function at such time as the authorized number of directors is three or less.
Such committees shall act only during the intervals between meetings of the
Board of Directors and subject to the direction of the Board of Directors. Acts
of any committee within
4
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<PAGE>
the authority delegated to it shall be effective for all purposes as the act or
authorization of the directors. A majority of the members of any committee may
fix the time and place of its meetings. Committee members may participate at
meetings by means of communications equipment if all participants can hear each
other, and such participation shall constitute presence at the meeting. Such
committees may act by a majority of their respective members at meetings or by a
writing or writings signed by all members of such committee.
ARTICLE III
OFFICERS
SECTION 3.1. OFFICERS; TERMS; DUTIES. The officers of the Corporation shall
consist of a President, Secretary and Treasurer; and the Board of Directors may,
in its discretion, elect a Chairman of the Board and such Vice Presidents,
Assistant Secretaries, Assistant Treasurers, a Controller and such other
officers and agents as the Board of Directors may determine. All officers shall
be elected by the Board of Directors, and they shall hold office for such
period, exercise such authority and perform such duties as the Board of
Directors may from time to time determine. Any two or more offices may be held
by the same person, but no officers shall execute, acknowledge, or verify any
instrument in more than one capacity if such instrument is required by law, the
Articles of Incorporation or these Regulations to be executed, acknowledged or
verified by two or more officers.
SECTION 3.2. ELECTION, TERM, ELIGIBILITY AND REMOVAL. The officers of the
Corporation shall be elected annually by the Board of Directors at its
organizational meeting held pursuant to Section 2.6 or at a special meeting held
for such purpose. New or additional officers may be elected at any meeting of
the Board of Directors. Each officer shall serve at the pleasure of the Board of
Directors, and each officer shall hold office until his or her successor is
chosen or until his or her death, resignation or removal. Only the Chairman of
the Board need be a member of the Board of Directors. Any officer may be
removed, with or without cause, by the Board of Directors without prejudice to
the contract rights of such officer.
SECTION 3.3. VACANCIES. If any office shall become vacant by reason of
death, resignation, removal or otherwise, the Board of Directors shall elect a
successor to fill such office.
SECTION 3.4. DELEGATION OF DUTIES. In case of the absence of any officer of
the Corporation or for any other reason that may seem sufficient to the Board of
Directors, the Board of Directors may, for such time as the Board of Directors
determines, delegate powers and duties of such officer to any other officer or
to any director.
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ARTICLE IV
SHARES
SECTION 4.1. SHARE CERTIFICATES. Certificates for shares of the
Corporation shall be in such form and style as the Board of Directors may
determine, and each certificate shall set forth the following:
(a) the name of the Corporation and that the Corporation is organized under
the laws of the State of Ohio;
(b) the name of the holder of the shares represented by the certificate;
(c) the number of shares represented by such certificate;
(d) a statement that such shares are without par value; and
(e) any restrictions upon transfer of the shares represented by such
certificate.
Certificates for shares of the Corporation shall be numbered serially as they
are issued, and shall be signed by any of the Chairman of the Board, the
President or a Vice President, and by any of the Secretary, an Assistant
Secretary, the Treasurer or an Assistant Treasurer. When the certificate is
countersigned by an incorporated transfer agent or registrar, the signature of
any officer may be facsimile, engraved, stamped or printed.
SECTION 4.2. UNCERTIFICATED SHARES. The Board of Directors may provide by
resolution that some or all of the shares of the Corporation shall be
uncertificated shares, provided that such resolution shall not apply to shares
represented by a certificate until such certificate is surrendered to the
Corporation as provided in division (B) of Section 1308.43 of the Ohio Revised
Code, and that such resolution shall not apply to a certificated security issued
in exchange for an uncertificated security as provided in division (C) of
Section 1308.43 of the Ohio Revised Code. Within a reasonable time after the
issuance or transfer of uncertificated shares, the Corporation shall send to the
registered owner a written notice containing the information described in
Section 4.1 hereof. Except as otherwise expressly provided by law, the rights
and obligations of the holders of uncertificated shares and the rights and
obligations of the holders of certificates representing shares of the same class
shall be identical.
SECTION 4.3. LOST CERTIFICATE. Any shareholder claiming that a
certificate for shares has been lost, stolen or destroyed may make an affidavit
or affirmation of the fact. Subject to any requirement established by the
Board of Directors, a new certificate may be issued of the same tenor and
representing the
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same number of shares, or any combination thereof, as were represented by the
certificate alleged to have been lost, stolen or destroyed.
ARTICLE V
INDEMNIFICATION
SECTION 5.1. INDEMNIFICATION OF DIRECTORS AND OFFICERS. Any person who is a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), by reason of the fact that he or she is or was a
director or officer of the Corporation or, as a director or officer of the
Corporation, is or was serving at the request of the Corporation as a director,
officer, trustee, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise (including service with respect to employee
benefit plans), whether the basis of such Proceeding is alleged action in an
official capacity as a director, officer, trustee, employee or agent or in any
other capacity (and whether or not he or she continues as such director or
officer), shall be indemnified and held harmless by the Corporation to the
fullest extent authorized by law, as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than such law
permitted the Corporation to provide prior to such amendment), against all
expenses, liability and loss (including attorneys' fees, and, in respect of
claims not made by or in the right of the Corporation, judgments, fines, ERISA
excise taxes or penalties and amounts paid in settlement) actually and
reasonably incurred by such person in connection with the Proceeding; PROVIDED,
HOWEVER, that the Corporation shall indemnify any person seeking indemnity in
connection with a Proceeding initiated by such person only if such Proceeding
was authorized by the Board of Directors.
SECTION 5.2. INDEMNIFICATION OF EMPLOYEES AND AGENTS. The Corporation may,
to such extent and in such manner as is determined by the Board of Directors,
but in no event to an extent greater than is permitted by the General
Corporation Law of Ohio, indemnify any employees and agents of the Corporation
and any other persons permitted to be indemnified by the General Corporation Law
of Ohio, but whose right to indemnification is not covered by Section 5.1,
above.
SECTION 5.3. ADVANCEMENT OF EXPENSES. Unless the only liability asserted
against a director in an action, suit or proceeding governed by this Article V
or applicable law is pursuant to Section 1701.95 of the Ohio Revised Code,
expenses, including attorneys' fees, incurred by a director or officer in
defending the action, suit or proceeding shall be paid by the Corporation as
they are incurred, in advance of the final disposition of the action,
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suit or proceeding, upon receipt of a written undertaking by which the director
agrees to do both of the following:
(i) repay the amount or amounts advanced if it is proved by clear and
convincing evidence in a court of competent jurisdiction that his
action or failure to act involved an act or omission undertaken
with deliberate intent to cause injury to the Corporation or
undertaken with reckless disregard for the best interests of the
Corporation; and
(ii) reasonably cooperate with the Corporation concerning the action,
suit or proceeding.
Expenses, including attorneys' fees, incurred by a director, officer, employee
or agent in defending any action, suit or proceeding governed by this Article V
or applicable law may be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding, as authorized by the Board of
Directors in the specific case, upon receipt of a written undertaking by which
the director, officer, employee or agent agrees to repay the amount or amounts
if it is ultimately determined that he or she is not entitled to be indemnified
by the Corporation.
SECTION 5.4. RIGHT OF CLAIMANT TO BRING SUIT. If a claim under Section 5.1
hereof is not paid in full by the Corporation within 30 days after a written
claim therefor has been received by the Corporation, the claimant may bring suit
against the Corporation to recover the unpaid amount of the claim. If the
claimant is successful in whole or in part, he or she also shall be entitled to
be paid the expense of prosecuting such claim. It shall be a defense to any such
action (other than an action brought to enforce a claim for expenses incurred in
a Proceeding in advance of its final disposition where the required undertaking
has been tendered to the Corporation) that the claimant has not met the
standards of conduct which make it permissible under the applicable law for the
Corporation to indemnify the claimant for the amount claimed, but the burden of
proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including the Board of Directors, independent legal counsel, or the
shareholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he or she has met the applicable standard of conduct, nor an actual
determination by the Corporation (including the Board of Directors, independent
legal counsel, or the shareholders) that the claimant has not met such
applicable standard of conduct, shall be a defense to the action or create a
presumption that the claimant has not met the applicable standard of conduct.
SECTION 5.5. CONTRACTUAL RIGHTS. The right to be indemnified
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under Section 5.1 (but not Section 5.2), including any right to the
reimbursement or advancement of expenses pursuant thereto, (i) is a contract
right based upon good and valuable consideration, pursuant to which the person
entitled thereto may bring suit as if the provisions hereof were set forth in a
separate written contract between the Corporation and the director or officer,
(ii) is intended to be retroactive and shall be available with respect to events
occurring prior to the adoption hereof, and (iii) shall continue to exist after
the rescission or restrictive modification hereof with respect to events
occurring prior thereto.
SECTION 5.6. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any person
by this Article V shall not be exclusive, and shall be in addition to, any other
right of indemnification or reimbursement which such person may have under any
statute, provision of the Articles of Incorporation of the Corporation,
agreement, vote of shareholders or disinterested directors or otherwise.
SECTION 5.7. INSURANCE. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation against expenses, liability or loss incurred in respect of the
Proceeding, whether or not the Corporation would have the power to indemnify
such person against such expense, liability or loss under the Ohio General
Corporation Law.
SECTION 5.8. DETERMINATIONS. Any determination to be made under this
Article V by the Board of Directors shall be made as follows:
(a) by a majority vote of a quorum consisting of directors of the
Corporation who were not and are not parties to or threatened with
any such action, suit, or proceeding;
(b) if the quorum described in paragraph (a) of this Section 5.7 is not
obtainable or if a majority vote of a quorum of disinterested
directors so directs, in a written opinion by independent legal
counsel other than an attorney, or a firm having associated with it
an attorney, who has been retained by or who has performed services
for the Corporation or any person to be indemnified within the past
five years;
(c) by the shareholders; or
(d) by the court of common pleas or the court in which such action,
suit, or proceeding was brought.
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ARTICLE VI
NOTICE
Whenever provisions of law, the Articles of Incorporation or these
Regulations require notice to be given to any director or shareholder, personal
or hand delivery of such notice shall not be required. Any such notice may be
given in writing, by mail (by deposit in a post office or letter box, in an
envelope with postage affixed), by courier, by overnight package delivery, by
telegraph or by telecopier, in any case addressed to such director or
shareholder at such address as appears on the records of the Corporation. Notice
given by any one of the above methods shall be sufficient, and the method of
giving notice to all directors or to all shareholders, as the case may be, need
not be uniform. If otherwise permitted by these Regulations, notice to directors
may also be given by telephone call. Such notice shall be deemed to be given at
the time when it is so mailed, or delivered to a courier, an overnight package
delivery company or a telegraph company, or, in the case of a telecopy, when
transmission has been confirmed. Notice given by telephone shall be deemed to
have been given only when communicated directly to the person to whom such
notice is to be given (and not when left by voice mail or other recording
device). In computing the period of time for the giving of notice, the day on
which notice is given shall be excluded, and the day when the act for which
notice is given is to be done is included, unless the instrument calling for the
notice otherwise provides.
ARTICLE VII
SEAL
A corporate seal shall not be required. If the Board of Directors elects to
provide a seal, failure to affix such seal to any document shall not affect the
validity thereof.
ARTICLE VIII
AMENDMENT
These Regulations may be altered, amended or repealed, or new Regulations
may be adopted, (i) at any annual or special meeting of the shareholders called
for that purpose, by the affirmative vote of the holders of shares entitling
them to exercise a majority of the voting power of the Corporation on the
proposal, or (ii) without a meeting by the written consent of the holders of the
Corporation's common shares entitling them to exercise two-thirds of the voting
power of the Corporation on such proposal.
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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
EAGLE-PICHER HOLDINGS, INC.
It is hereby certified that Eagle-Picher Holdings, Inc. (the
"Corporation"), existing pursuant to the provisions of the Delaware General
Corporation Law, as from the time amended (the "Act"), hereby is amending its
Certificate of Incorporation, as amended, by amending and restating the original
Certificate of Incorporation in its entirety, and further certifies as follows:
The original Certificate of Incorporation was filed on December
5, 1997 under the name of E-P Holdings, Inc., and was subsequently amended by an
amendment filed on February 6, 1998. The exact text of the entire Certificate of
Incorporation, as amended and restated (the "Certificate"), is set forth in its
entirety below:
1. Name. The name of the Corporation is Eagle-Picher Holdings,
Inc.
2. Address. The address of the Corporation's registered office in
the State of Delaware is 1209 Orange Street in the City of Wilmington, County of
New Castle. The name of its registered agent at such address is The Corporation
Trust Company.
3. Purpose. The purpose of the Corporation is to engage in any
lawful act or activity for which a corporation may be organized under the Act.
4. Capital Stock. The total number of shares of capital stock
which the Corporation is authorized to issue is (i) 1,000,000 shares of common
stock having a par value of $0.01 per share (the "Common Stock"), of which
625,001 of such shares shall be Class A Common Stock, par value $0.01 per share
(the "Class A Common Stock") and 374,999 of such shares shall be Class B Common
Stock, par value $0.01 per share (the "Class B Common Stock") and (ii) 50,000
shares of Preferred Stock, par value $0.01 per share (the "Preferred Stock"),
which Preferred Stock the Board of Directors of the Corporation is hereby
expressly authorized to issue from time to time in one or more series, each
series having such voting powers, dividends, designations, preferences and other
rights, qualifications, limitations and restrictions as designated by the Board
of Directors from time to time. The holders of shares of Class A Common Stock
shall be entitled to one vote per share on all matters which may be submitted to
the holders of common stock of the Corporation. Each share of Class B Common
Stock shall be identical to each share of Class A Common Stock except that the
holders of shares of Class B Common Stock shall have no voting rights, other
than any voting rights provided by law.
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5. In furtherance and not in limitation of the powers conferred
by statute, the board of directors of the Corporation is expressly authorized to
adopt, amend or repeal by-laws of the Corporation.
6. Meetings of stockholders may be held within or outside of the
State of Delaware, as the by-laws of the Corporation may provide. The books of
the Corporation may be kept outside the State of Delaware at such places as may
be designated from time to time by the board of directors or in the by-laws of
the Corporation. Election of directors need not be by written ballot except and
to the extent provided in the by-laws of the Corporation.
7. Any director or the entire board of directors of the
Corporation may be removed, with or without cause, by the holders of a majority
of the shares at the time entitled to vote at an election of directors, whether
or not the board of directors is classified as provided in Section 141(d) of the
Delaware General Corporation Law.
8. To the fullest extent permitted by the Act as currently in
effect or as the same may hereafter be amended, no director of the Corporation
shall be liable to the Corporation or its stockholders for monetary damages for
breach of fiduciary duty as a director. No amendment, modification or repeal of
this Article 9 shall adversely affect any right or protection of a director that
exists at the time of such amendment, modification or repeal.
9. The Corporation expressly elects not to be governed by Section
203 of the Act.
10. The Corporation reserves the right to amend, alter, restate,
change or repeal any provision contained in this Certificate of Incorporation in
the manner now or hereafter prescribed herein and by the laws of the State of
Delaware, and all rights conferred upon stockholders herein are granted subject
to this reservation.
This Certificate has been duly adopted in accordance with the
provisions of Section 242 and 245 of the Act.
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IN WITNESS WHEREOF, the Corporation has caused this Certificate
to be executed pursuant to Section 103(a)(2) of the Act by the undersigned duly
authorized officer of the Corporation on this 23rd day of February, 1998.
EAGLE-PICHER HOLDINGS, INC
By: /s/ Joel P. Wyler
___________________________
Name: Joel P. Wyler
Title: Chairman and President
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BY-LAWS
OF
E-P Holdings, Inc
ARTICLE I
Stockholders
Section 1.1. Annual Meetings. An annual meeting of stockholders
of E-P Holdings, Inc. (the "Corporation") shall be held for the election of
directors at such date, time and place either within or without the State of
Delaware as may be designated by the Board of Directors from time to time. Any
other proper business may be transacted at the annual meeting.
Section 1.2. Special Meetings. Special meetings of stockholders
may be called at any time by the Chairman of the Board, if any, the Vice
Chairman of the Board, if any, the President or the Board of Directors, to be
held at such date, time and place either within or without the State of Delaware
as may be stated in the notice of the meeting. A special meeting of stockholders
shall be called by the Secretary upon the written request, stating the purpose
of the meeting, of stockholders who together own of record a majority of the
outstanding shares of each class of stock entitled to vote at such meeting.
Section 1.3. Notice of Meetings. Whenever stockholders are
required or permitted to take any action at a meeting, a written notice of the
meeting shall be given which shall state the place, date and hour of the
meeting, and, in the case of a special meeting, the purpose or purposes for
which the meeting is called. Unless otherwise provided by law, the written
notice of any meeting shall be given not less than ten nor more than sixty days
before the date of the meeting to each stockholder entitled to vote at such
meeting. If mailed, such notice shall be deemed to be given when deposited in
the United States mail, postage prepaid, directed to the stockholder at such
stockholder's address as it appears on the records of the Corporation.
Section 1.4. Adjournments. Any meeting of stockholders, annual or
special, may be adjourned from time to time, to reconvene at the same or some
other place, and notice need not be given of any such adjourned meeting if the
time and place thereof are announced at the meeting at which the adjournment is
taken. At the adjourned meeting, the Corporation may transact any business which
might have been transacted at the original meeting. If the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, a notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 1.5. Quorum. At each meeting of stockholders, except
where otherwise provided by law or the certificate of incorporation or these
by-laws, the holders of a majority of
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the outstanding shares of stock entitled to vote on a matter at the meeting,
present in person or represented by proxy, shall constitute a quorum. For
purposes of the foregoing, where a separate vote by class or classes is required
for any matter, the holders of a majority of the outstanding shares of such
class or classes, present in person or represented by proxy, shall constitute a
quorum to take action with respect to that vote on that matter. Two or more
classes or series of stock shall be considered a single class if the holders
thereof are entitled to vote together as a single class at the meeting. In the
absence of a quorum of the holders of any class of stock entitled to vote on a
matter, the holders of such class so present or represented may, by majority
vote, adjourn the meeting of such class from time to time in the manner provided
by Section 1.4 of these by-laws until a quorum of such class shall be so present
or represented. Shares of its own capital stock belonging on the record date for
the meeting to the Corporation or to another corporation, if a majority of the
shares entitled to vote in the election of directors of such other corporation
is held, directly or indirectly, by the Corporation, shall neither by entitled
to vote nor be counted for quorum purposes; provided, that the foregoing shall
not limit the right of the Corporation to vote stock, including but not limited
to its own stock, held by it in a fiduciary capacity.
Section 1.6. Organization. Meetings of stockholders shall be
presided over by the Chairman of the Board if any, or in the absence of the
Chairman of the Board by the Vice Chairman of the Board, if any, or in the
absence of the Vice Chairman of the Board by the President, or in the absence of
the President by a Vice President, or in the absence of the foregoing persons by
a chairman designated by the Board of Directors, or in the absence of such
designation by a chairman chosen at the meeting. The Secretary, or in the
absence of the Secretary an Assistant Secretary, shall act as secretary of the
meeting, but in the absence of the Secretary and any Assistant Secretary the
chairman of the meeting may appoint any person to act as secretary of the
meeting.
Section 1.7. Voting; Proxies. Unless otherwise provided in the
certificate of incorporation, each stockholder entitled to vote at any meeting
of stockholders shall be entitled to one vote for each share of stock held by
such stockholder which has voting power upon the matter in question. If the
certificate of incorporation provides for more or less than one vote for any
share on any matter, every reference in these by-laws to a majority or other
proportion of stock shall refer to such majority or other proportion of the
votes of such stock.
Each stockholder entitled to vote at a meeting of stockholders or
to express consent or dissent to corporate action in writing without a meeting
may authorize another person or persons to act for such stockholder by proxy,
but no such proxy shall be voted or acted upon after three years from its date,
unless the proxy provides for a longer period. A duly executed proxy shall be
irrevocable if it states that it is irrevocable and if, and only as long as, it
is coupled with an interest sufficient in law to support an irrevocable power,
regardless of whether the interest with which it is coupled is an interest in
the stock itself or an interest in the Corporation generally. A stockholder may
revoke any proxy which is not irrevocable by attending the meeting and voting in
person or by filing an instrument in writing revoking the proxy or another duly
executed proxy bearing a later date with the Secretary of the Corporation.
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Voting at meetings of stockholders need not be by written ballot
and need not be conducted by inspectors unless the holders of a majority of the
outstanding shares of all classes of stock entitled to vote thereon present in
person or represented by proxy at such meeting shall so determine. Directors
shall be elected by a plurality of the votes of the shares present in person or
represented by proxy at the meeting and entitled to vote on the election of
directors. In all other matters, unless otherwise provided by law or by the
certificate of incorporation or these by-laws, the affirmative vote of the
holders of a majority of the shares present in person or represented by proxy at
the meeting and entitled to vote on the subject matter shall be the act of the
stockholders. Where a separate vote by class or classes is required, the
affirmative vote of the holders of a majority of the shares of such class or
classes present in person or represented by proxy at the meeting shall be the
act of such class, except as otherwise provided by law or by the certificate of
incorporation or these by-laws.
Section 1.8. Fixing Date for Determination of Stockholders of
Record. In order that the Corporation may determine the stockholders entitled to
notice of or to vote at any meeting of stockholders or any adjournment thereof,
the Board of Directors may fix a record date, which record date shall not
precede the date upon which the resolution fixing the record date is adopted by
the Board of Directors, and which record date shall not be more than sixty nor
less than ten days before the date of such meeting. If no record date is fixed
by the Board of Directors, the record date for determining stockholders entitled
to notice of or to vote at a meeting of stockholders shall be at the close of
business on the day next preceding the day on which notice is given, or, if
notice is waived, at the close of business on the day next preceding the day on
which the meeting is held. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, that the Board of Directors may fix a new record date
for the adjourned meeting.
In order that the Corporation may determine the stockholders
entitled to consent to corporate action in writing without a meeting, the Board
of Directors may fix a record date, which record date shall not precede the date
upon which the resolution fixing the record date is adopted by the Board of
Directors, and which date shall not be more than ten days after the date upon
which the resolution fixing the record date is adopted by the Board of
Directors. If no record date has been fixed by the Board of Directors, the
record date for determining stockholders entitled to consent to corporate action
in writing without a meeting, when no prior action by the Board of Directors is
required by law, shall be the first date on which a signed written consent
setting forth the action taken or proposed to be taken is delivered to the
Corporation by delivery to its registered office in the State of Delaware, its
principal place of business, or an officer or agent of the Corporation having
custody of the book in which proceedings of meetings of stockholders are
recorded. Delivery made to the Corporation's registered office shall be by hand
or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of
Directors is required by law, the record date for determining stockholders
entitled to consent to corporate action in writing without a meeting shall be at
the close of business on the day on which the Board of Directors adopts the
resolution taking such prior action.
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In order that the Corporation may determine the stockholders
entitled to receive payment of any dividend or other distribution or allotment
of any rights or the stockholders entitled to exercise any rights in respect of
any change, conversion or exchange of stock, or for the purpose of any other
lawful action, the Board of Directors may fix a record date, which record date
shall not precede the date upon which the resolution fixing the record date is
adopted, and which record date shall be not more than sixty days prior to such
action. If no record date is fixed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day on which the
Board of Directors adopts the resolution relating thereto.
Section 1.9. List of Stockholders Entitled to Vote. The Secretary
shall prepare and make, at least ten days before every meeting of stockholders,
a complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof and may be inspected by any stockholder who is present.
Section 1.10. Consent of Stockholders in Lieu of Meeting. Unless
otherwise provided in the certificate of incorporation or by law, any action
required by law to be taken at any annual or special meeting of stockholders of
the Corporation, or any action which may be taken at any annual or special
meeting of such stockholders, may be taken without a meeting, without prior
notice and without a vote, if a consent or consents in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted and shall be delivered to the Corporation by delivery to
(a) its registered office in the State of Delaware by hand or by certified mail
or registered mail, return receipt requested, (b) its principal place of
business, or (c) an officer or agent of the Corporation having custody of the
book in which proceedings of meetings of stockholders are recorded.
Every written consent shall bear the date of signature of each
stockholder who signs the consent and no written consent shall be effective to
take the corporate action referred to therein unless, within sixty days of the
earliest dated consent delivered in the manner required by this by-law to the
Corporation, written consents signed by a sufficient number of holders to take
action are delivered to the Corporation by delivery to (a) its registered office
in the State of Delaware by hand or by certified or registered mail, return
receipt requested, (b) its principal place of business, or (c) an officer or
agent of the Corporation having custody of the book in which proceedings of
meetings of stockholders are recorded.
Prompt notice of the taking of the corporate action without a
meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.
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ARTICLE II
Board of Directors
Section 2.1. Powers; Number; Qualifications. The business and
affairs of the Corporation shall be managed by or under the direction of the
Board of Directors, except as may be otherwise provided by law or in the
certificate of incorporation. The Board of Directors shall consist of one or
more members, the number thereof to be determined from time to time by the
Board. Directors need not be stockholders.
Section 2.2. Election; Term of Office; Resignation; Removal;
Vacancies. Each director shall hold office until his or her successor is elected
and qualified or until his or her earlier resignation or removal. Any director
may resign at any time upon written notice to the Board of Directors or to the
President or the Secretary of the Corporation. Such resignation shall take
effect at the time specified therein, and unless otherwise specified therein no
acceptance of such resignation shall be necessary to make it effective. Any
director or the entire Board of Directors may be removed, with or without cause,
by the holders of a majority of the shares then entitled to vote at an election
of directors. Whenever the holders of any class or series of stock are entitled
to elect one or more directors by the certificate of incorporation, the
provisions of the preceding sentence shall apply, in respect to the removal
without cause of a director or directors so elected, to the vote of the holders
of the outstanding shares of that class or series and not to the vote of the
outstanding shares as a whole. Unless otherwise provided in the certificate of
incorporation or these by-laws, vacancies and newly created directorships
resulting from any increase in the authorized number of directors elected by all
of the stockholders having the right to vote as a single class or from any other
cause may be filled by a majority of the directors then in office, although less
than a quorum, or by the sole remaining director. Whenever the holders of any
class or classes of stock or series thereof are entitled to elect one or more
directors by the certificate of incorporation, vacancies and newly created
directorships of such class or classes or series may be filled by a majority of
the directors elected by such class or classes or series thereof then in office,
or by the sole remaining director so elected.
Section 2.3. Regular Meetings. Regular meetings of the Board of
Directors may be held at such places within or without the State of Delaware and
at such times as the Board may from time to time determine, and if so determined
notice thereof need not be given.
Section 2.4. Special Meetings. Special meetings of the Board of
Directors may be held at any time or place within or without the State of
Delaware whenever called by the Chairman of the Board, if any, by the Vice
Chairman of the Board, if any, by the President or by any two directors.
Reasonable notice thereof shall be given by the person or persons calling the
meeting.
Section 2.5. Participation in Meetings by Conference Telephone
Permitted. Unless otherwise expressly restricted by the certificate of
incorporation or these by-laws, members of the Board of Directors, or any
committee designated by the Board, may participate in
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a meeting of the Board or of such committee, as the case may be, by means of
conference telephone or similar communications equipment by means of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this by-law shall constitute presence in person at such
meeting.
Section 2.6. Quorum; Vote Required for Action. At all meetings of
the Board of Directors a majority of the entire Board shall constitute a quorum
for the transaction of business. The vote of a majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board unless
the certificate of incorporation or these by-laws shall require a vote of a
greater number. In case at any meeting of the Board a quorum shall not be
present, the members of the Board present may adjourn the meeting from time to
time until a quorum shall be present.
Section 2.7. Organization. Meetings of the Board of Directors
shall be presided over by the Chairman of the Board, if any, or in the absence
of the Chairman of the Board by the Vice Chairman of the Board, if any, or in
the absence of the Vice Chairman of the Board by the President, or in their
absence by a chairman chosen at the meeting. The Secretary, or in the absence of
the Secretary an Assistant Secretary, shall act as secretary of the meeting, but
in the absence of the Secretary and any Assistant Secretary the chairman of the
meeting may appoint any person to act as secretary of the meeting.
Section 2.8. Action by Directors Without a Meeting. Unless
otherwise restricted by the certificate of incorporation or these by-laws, any
action required or permitted to be taken at any meeting of the Board of
Directors, or of any committee thereof, may be taken without a meeting if all
members of the Board or of such committee, as the case may be, consent thereto
in writing, and the writing or writings are filed with the minutes of
proceedings of the Board or committee.
Section 2.9. Compensation of Directors. Unless otherwise
restricted by the certificate of incorporation or these by-laws, the Board of
Directors shall have the authority to fix the compensation of directors.
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ARTICLE III
Committees
Section 3.1. Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board, designate one or more
committees, each committee to consist of one or more of the directors of the
Corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member at any
meeting of the committee. In the absence or disqualification of a member of a
committee, the member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or members constitute a
quorum, may unanimously appoint another member of the Board to act at the
meeting in the place of any such absent or disqualified member. Any such
committee, to the extent provided in the resolution of the Board of Directors or
in these by-laws, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation (except that
a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board of Directors,
fix the designations and any of the preferences or rights of such shares
relating to dividends, redemption, dissolution, any distribution of assets of
the Corporation or the conversion into, or the exchange of such shares for,
shares of any other class or classes or any other series of the same or any
other class or classes of stock of the Corporation or fix the number of shares
of any series of stock or authorize the increase or decrease of the shares of
any series), adopting an agreement of merger or consolidation, recommending to
the stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, recommending to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, removing or
indemnifying directors or amending these by-laws; and, unless the resolution,
these by-laws or the certificate of incorporation expressly so provides, no such
committee shall have the power or authority to declare a dividend, to authorize
the issuance of stock or to adopt a certificate of ownership and merger.
Section 3.2. Committee Rules. Unless the Board of Directors
otherwise provides, each committee designated by the Board may adopt, amend and
repeal rules for the conduct of its business. In the absence of a provision by
the Board or a provision in the rules of such committee to the contrary, a
majority of the entire authorized number of members of such committee shall
constitute a quorum for the transaction of business, the vote of a majority of
the members present at a meeting at the time of such vote if a quorum is then
present shall be the act of such committee, and in other respects each committee
shall conduct its business in the same manner as the Board conducts its business
pursuant to Article II of these by-laws.
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ARTICLE IV
Officers
Section 4.1. Officers; Election. As soon as practicable after the
annual meeting of stockholders in each year, the Board of Directors shall elect
a President and a Secretary, and it may, if it so determines, elect from among
its members a Chairman of the Board and a Vice Chairman of the Board. The Board
may also elect one or more Vice Presidents, one or more Assistant Vice
Presidents, one or more Assistant Secretaries, a Treasurer and one or more
Assistant Treasurers and such other officers as the Board may deem desirable or
appropriate and may give any of them such further designations or alternate
titles as it considers desirable. Any number of offices may be held by the same
person unless the certificate of incorporation or these by-laws otherwise
provide.
Section 4.2. Term of Office; Resignation; Removal; Vacancies.
Unless otherwise provided in the resolution of the Board of Directors electing
any officer, each officer shall hold office until his or her successor is
elected and qualified or until his or her earlier resignation or removal. Any
officer may resign at any time upon written notice to the Board or to the
President or the Secretary of the Corporation. Such resignation shall take
effect at the time specified therein, and unless otherwise specified therein no
acceptance of such resignation shall be necessary to make it effective. The
Board may remove any officer with or without cause at any time. Any such removal
shall be without prejudice to the contractual rights of such officer, if any,
with the Corporation, but the election of an officer shall not of itself create
contractual rights. Any vacancy occurring in any office of the Corporation by
death, resignation, removal or otherwise may be filled by the Board at any
regular or special meeting.
Section 4.3. Powers and Duties. The officers of the Corporation
shall have such powers and duties in the management of the Corporation as shall
be stated in these by-laws or in a resolution of the Board of Directors which is
not inconsistent with these by-laws and, to the extent not so stated, as
generally pertain to their respective offices, subject to the control of the
Board.
Section 4.4. Chairman of the Board. The Chairman of the Board, if
any, shall preside at all meeting of the Board of Directors and of the
stockholders at which he or she shall be present and shall have and may exercise
such powers as may, from time to time, be assigned to him or her by the Board or
as may be provided by law.
Section 4.5. Vice Chairman of the Board. In the absence of the
Chairman of the Board, the Vice Chairman of the Board, if any, shall preside at
all meetings of the Board of Directors and of the stockholders at which he or
she shall be present and shall have and may exercise such powers as may, from
time to time, be assigned to him or her by the Board or as may be provided by
law.
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Section 4.6. President. In the absence of the Chairman of the
Board and Vice Chairman of the Board, the President shall preside at all
meetings of the Board of Directors and of the stockholders at which he or she
shall be present. The President shall be the chief executive officer and shall
have general charge and supervision of the business of the Corporation and, in
general, shall perform all duties incident to the office of president of a
corporation and such other duties as may, from time to time, be assigned to him
or her by the Board or as may be provided by law.
Section 4.7. Vice Presidents. The Vice President or Vice
Presidents, at the request or in the absence of the President or during the
President's inability to act, shall perform the duties of the President, and
when so acting shall have the powers of the President. If there be more than one
Vice President, the Board of Directors may determine which one or more of the
Vice Presidents shall perform any of such duties; or if such determination is
not made by the Board, the President may make such determination; otherwise any
of the Vice Presidents may perform any of such duties. The Vice President or
Vice Presidents shall have such other powers and shall perform such other duties
as may, from time to time, be assigned to him or her or them by the Board or the
President or as may be provided by law.
Section 4.8. Secretary. The Secretary shall have the duty to
record the proceedings of the meetings of the stockholders, the Board of
Directors and any committees in a book to be kept for that purpose, shall see
that all notices are duly given in accordance with the provisions of these
by-laws or as required by law, shall be custodian of the records of the
Corporation, may affix the corporate seal to any document the execution of
which, on behalf of the Corporation, is duly authorized, and when so affixed may
attest the same, and, in general, shall perform all duties incident to the
office of secretary of a corporation and such other duties as may, from time to
time, be assigned to him or her by the Board or the President or as may be
provided by law.
Section 4.9. Treasurer. The Treasurer shall have charge of and be
responsible for all funds, securities, receipts and disbursements of the
Corporation and shall deposit or cause to be deposited, in the name of the
Corporation, all moneys or other valuable effects in such banks, trust companies
or other depositories as shall, from time to time, be selected by or under
authority of the Board of Directors. If required by the Board, the Treasurer
shall give a bond for the faithful discharge of his or her duties, with such
surety or sureties as the Board may determine. The Treasurer shall keep or cause
to be kept full and accurate records of all receipts and disbursements in books
of the Corporation, shall render to the President and to the Board, whenever
requested, an account of the financial condition of the Corporation, and, in
general, shall perform all the duties incident to the office of treasurer of a
corporation and such other duties as may, from time to time, be assigned to him
or her by the Board or the President or as may be provided by law.
Section 4.10. Other Officers. The other officers, if any, of the
Corporation shall have such powers and duties in the management of the
Corporation as shall be stated in a resolution of the Board of Directors which
is not inconsistent with these by-laws and, to the extent not so stated, as
generally pertain to their respective offices, subject to the control of the
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Board. The Board may require any officer, agent or employee to give security for
the faithful performance of his or her duties.
Section 4.11. Fidelity Bonds. If required by the Board of
Directors, any officer shall give the Corporation a bond in a sum and with one
or more sureties satisfactory to the Board, for the faithful performance of the
duties of his or her office, and for the restoration to the Corporation, in case
of his or her death, resignation, retirement or removal from office, of all
books, papers, vouchers, money and other property of whatever kind in his or her
possession or under his or her control belonging to the Corporation.
ARTICLE V
Stock
Section 5.1. Certificates. Every holder of stock in the
Corporation shall be entitled to have a certificate signed by or in the name of
the Corporation by the Chairman or Vice Chairman of the Board of Directors, if
any, or the President or a Vice President, and by the Treasurer or an Assistant
Treasurer, or the Secretary or an Assistant Secretary, of the Corporation,
representing the number of shares of stock in the Corporation owned by such
holder. If such certificate is manually signed by one officer or manually
countersigned by a transfer agent or by a registrar, any other signature on the
certificate may be facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon a certificate
shall have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the Corporation with the same effect
as if such person were such officer, transfer agent or registrar at the date of
issue.
Each certificate representing shares shall state upon the face
thereof that the Corporation is formed under the laws of the State of Delaware,
the name of the person or persons to whom such shares have been issued and the
number and class of such shares, and the designation of the class or series, if
any, which such certificate represents.
If the Corporation is authorized to issue more than one class of
stock or more than one series of any class, the powers, designations,
preferences and relative, participating, optional or other special rights of
each class of stock or series thereof and the qualifications or restrictions of
such preferences and/or rights shall be set forth in full or summarized on the
face or back of the certificate which the Corporation shall issue to represent
such class or series of stock; provided, that, except as otherwise provided by
law, in lieu of the foregoing requirements, there may be set forth on the face
or back of the certificate which the Corporation shall issue to represent such
class or series of stock a statement that the Corporation will furnish without
charge to each stockholder who so requests the powers, designations, preferences
and relative, participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or restrictions of
such preferences and/or rights.
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Section 5.2. Lost, Stolen or Destroyed Stock Certificates;
Issuance of New Certificates. The Corporation may issue a new certificate of
stock in the place of any certificate theretofore issued by it, alleged to have
been lost, stolen or destroyed, and the Corporation may require the owner of the
lost, stolen or destroyed certificate, or such owner's legal representative, to
give the Corporation a bond sufficient to indemnify it against any claim that
may be made against it on account of the alleged loss, theft or destruction of
any such certificate or the issuance of such new certificate.
Section 5.3. Transfers of Stock. Transfers of stock shall be made
on the books of the Corporation only by the person named in the certificate or
by his attorney, lawfully constituted in writing, and upon surrender of the
certificate therefor, together with such evidence of the payment of transfer
taxes and compliance with other provisions of law as the Corporation or its
transfer agent may require.
Section 5.4. Registered Stockholders. The Corporation may treat
the holder of record of any share or shares of stock as the holder thereof, and
shall not be bound to recognize any equitable or other claim to or interest in
such share on the part of any other person, whether or not it shall have express
or other notice thereof, save as expressly provided by the laws of Delaware.
ARTICLE VI
Miscellaneous
Section 6.1. Fiscal Year. The fiscal year of the Corporation
shall be determined by the Board of Directors.
Section 6.2. Seal. The Corporation may have a corporate seal
which shall have the name of the Corporation inscribed thereon and shall be in
such form as may be approved from time to time by the Board of Directors. The
corporate seal may be used by causing it or a facsimile thereof to be impressed
or affixed or in any other manner reproduced.
Section 6.3. Waiver of Notice of Meetings of Stockholders,
Directors and Committees. Whenever notice is required to be given by law or
under any provision of the certificate of incorporation or these by-laws, a
written waiver thereof, signed by the person entitled to notice, whether before
or after the time stated therein, shall be deemed equivalent to notice.
Attendance of a person at a meeting shall constitute a waiver of notice of such
meeting, except when the person attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. Neither the business to
be transacted at, nor the purpose of, any regular or special meeting of the
stockholders, directors or members of a committee of directors need be specified
in any written waiver of notice unless so required by the certificate of
incorporation or these by-laws.
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Section 6.4. Indemnification of Directors, Officers and
Employees. The Corporation shall indemnify to the full extent permitted by law
any person made or threatened to be made a party to any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by reason
of the fact that such person or such person's testator or intestate is or was a
director, officer or employee of the Corporation or serves or served at the
request of the Corporation any other enterprise as a director, officer or
employee. Expenses incurred by any such person in defending any such action,
suit or proceeding shall be paid or reimbursed by the Corporation promptly upon
receipt by it of an undertaking of such person to repay such expenses if it
shall ultimately be determined that such person is not entitled to be
indemnified by the Corporation. The rights provided to any person by this by-law
shall be enforceable against the Corporation by such person who shall be
presumed to have relied upon it in serving or continuing to serve as a director,
officer or employee as provided above. No amendment of this by-law shall impair
the rights of any person arising at any time with respect to events occurring
prior to such amendment. For purposes of this by-law, the term "Corporation"
shall include any predecessor of the Corporation and any constituent corporation
(including any constituent of a constituent) absorbed by the Corporation in a
consolidation or merger; the term "other enterprise" shall include any
corporation, partnership, joint venture, trust or employee benefit plan; service
"at the request of the Corporation" shall include service as a director, officer
or employee of the Corporation which imposes duties on, or involves services by,
such director, officer or employee with respect to an employee benefit plan, its
participants or beneficiaries; any excise taxes assessed on a person with
respect to an employee benefit plan shall be deemed to be indemnifiable
expenses; and action by a person with respect to an employee benefit plan which
such person reasonably believes to be in the interest of the participants and
beneficiaries of such plan shall be deemed to be action not opposed to the best
interests of the Corporation.
Section 6.5. Interested Directors; Quorum. No contract or
transaction between the Corporation and one or more of its directors or
officers, or between the Corporation and any other corporation, partnership,
association or other organization in which one or more of its directors or
officers are directors or officers, or have a financial interest, shall be void
or voidable solely for this reason, or solely because the director or officer is
present at or participates in the meeting of the Board of Directors or committee
thereof which authorizes the contract or transaction, or solely because his or
her or their votes are counted for such purpose, if: (1) the material facts as
to his or her relationship or interest and as to the contract or transaction are
disclosed or are known to the Board or the committee, and the Board or committee
in good faith authorizes the contract or transaction by the affirmative vote of
a majority of the disinterested directors, even though the disinterested
directors be less than a quorum; or (2) the material facts as to his or her
relationship or interest and as to the contract or transaction are disclosed or
are known to the stockholders entitled to vote thereon, and the contract or
transaction is specifically approved in good faith by vote of the stockholders;
or (3) the contract or transaction is fair as to the Corporation as of the time
it is authorized, approved or ratified, by the Board, a committee thereof or the
stockholders. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
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Section 6.6. Form of Records. Any records maintained by the
Corporation in the regular course of its business, including its stock ledger,
books of account and minute books, may be kept on, or be in the form of, punch
cards, magnetic tape, photographs, microphotographs or any other information
storage device, provided that the records so kept can be converted into clearly
legible form within a reasonable time. The Corporation shall so convert any
records so kept upon the request of any person entitled to inspect the same.
Section 6.7. Amendment of By-Laws. These by-laws may be amended
or repealed, and new by-laws adopted, by the Board of Directors, but the
stockholders entitled to vote may adopt additional by-laws and may amend or
repeal any by-law whether or not adopted by them.
ARTICLE VII
Offices
Section 7.1. Registered Office. The registered office of the
Corporation in the State of Delaware shall be at 1209 Orange Street, City of
Wilmington, County of New Castle, and the registered agent in charge thereof
shall be The Corporation Trust Company.
Section 7.2. Other Offices. The Corporation may also have an
office or offices at other places within or without the State of Delaware.
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E-P ACQUISITION, INC.
AS ISSUER
THE GUARANTORS
NAMED HEREIN
AND
THE BANK OF NEW YORK
AS TRUSTEE
$220,000,000
9 3/8% SENIOR SUBORDINATED NOTES DUE 2008
INDENTURE
Dated as of February 24, 1998
<PAGE>
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TABLE OF CONTENTS
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ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.....................................................1
SECTION 1.02. Other Definitions..............................................23
SECTION 1.03. Incorporation by Reference of TIA..............................24
SECTION 1.04. Rules of Construction..........................................24
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating................................................24
SECTION 2.02. Execution and Authentication; Authentication Agent.............28
SECTION 2.03. Registrar and Paying Agent.....................................28
SECTION 2.04. Paying Agent to Hold Money in Trust............................29
SECTION 2.05. Holder Lists...................................................29
SECTION 2.06. Transfer and Exchange..........................................29
SECTION 2.07. Book-entry Provisions for Global Notes.........................31
SECTION 2.08. Special Transfer Provisions....................................32
SECTION 2.09. Replacement Notes..............................................35
SECTION 2.10. Outstanding Notes..............................................35
SECTION 2.11. Treasury Notes.................................................36
SECTION 2.12. Temporary Notes................................................36
SECTION 2.13. Cancellation...................................................36
SECTION 2.14. Defaulted Interest.............................................36
SECTION 2.15. Record Date....................................................37
SECTION 2.16. CUSIP and CINS Numbers.........................................37
ARTICLE 3
REDEMPTIONS AND OFFERS TO PURCHASE
SECTION 3.01. Notices to Trustee.............................................37
SECTION 3.02. Selection of Notes to Be Redeemed or Purchased.................38
SECTION 3.03. Notice of Redemption...........................................38
SECTION 3.04. Effect of Notice of Redemption.................................39
SECTION 3.05. Deposit of Redemption Price....................................39
SECTION 3.06. Notes Redeemed in Part.........................................39
SECTION 3.07. Redemption Provisions..........................................39
SECTION 3.08. Mandatory Offers...............................................40
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ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes...............................................42
SECTION 4.02. Reports........................................................43
SECTION 4.03. Compliance Certificate.........................................43
SECTION 4.04. Stay, Extension and Usury Laws.................................44
SECTION 4.05. Limitation on Restricted Payments..............................44
SECTION 4.06. Corporate Existence............................................46
SECTION 4.07. Limitations on Additional Indebtedness.........................47
SECTION 4.08. Limitation on the Issuance of Capital Stock of Restricted
Subsidiaries................................................47
SECTION 4.09. Limitations on Layering Debt...................................47
SECTION 4.10. Limitation on Transactions with Affiliates.....................47
SECTION 4.11. Limitations on Liens...........................................48
SECTION 4.12. Taxes..........................................................49
SECTION 4.13. Limitations on Restrictions on Distributions from Restricted
Subsidiaries................................................49
SECTION 4.14. Maintenance of Office or Agencies..............................50
SECTION 4.15. Change of Control..............................................50
SECTION 4.16. Limitations on Asset Sales.....................................51
SECTION 4.17. Additional Note Guarantees.....................................53
ARTICLE 5
SUCCESSORS
SECTION 5.01. Limitations on Mergers and Certain Other Transactions..........53
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default..............................................54
SECTION 6.02. Acceleration...................................................56
SECTION 6.03. Other Remedies.................................................56
SECTION 6.04. Waiver of Past Defaults........................................56
SECTION 6.05. Control by Majority of Holders.................................57
SECTION 6.06. Limitations on Suits by Holders................................57
SECTION 6.07. Rights of Holders to Receive Payment...........................57
SECTION 6.08. Collection Suit by Trustee.....................................57
SECTION 6.09. Trustee May File Proofs of Claim...............................57
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SECTION 6.10. Priorities.....................................................58
SECTION 6.11. Undertaking for Costs..........................................59
SECTION 6.12. Willful Default................................................59
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee..............................................59
SECTION 7.02. Rights of Trustee..............................................60
SECTION 7.03. Individual Rights of Trustee...................................61
SECTION 7.04. Trustee's Disclaimer...........................................61
SECTION 7.05. Notice to Holders of Defaults and Events of Default............61
SECTION 7.06. Reports by Trustee to Holders..................................61
SECTION 7.07. Compensation and Indemnity.....................................61
SECTION 7.08. Replacement of Trustee.........................................62
SECTION 7.09. Successor Trustee by Merger, Etc...............................63
SECTION 7.10. Eligibility; Disqualification..................................63
SECTION 7.11. Preferential Collection of Claims Against Company..............63
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Notes; Defeasance....................64
SECTION 8.02. Conditions to Defeasance.......................................65
SECTION 8.03. Application of Trust Money.....................................66
SECTION 8.04. Repayment to Company...........................................66
SECTION 8.05. Indemnity for Government Securities............................67
SECTION 8.06. Reinstatement..................................................67
ARTICLE 9
AMENDMENTS
SECTION 9.01. Amendments and Supplements Permitted without Consent of
Holders.....................................................67
SECTION 9.02. Amendments and Supplements Requiring Consent of Holders........68
SECTION 9.03. Compliance with TIA............................................68
SECTION 9.04. Revocation and Effect of Consents..............................68
SECTION 9.05. Notation or Exchange of Notes..................................69
SECTION 9.06. Trustee Protected..............................................69
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ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement to Subordinate......................................70
SECTION 10.02. Liquidation; Dissolution; Bankruptcy..........................70
SECTION 10.03. No Payment on Notes in Certain Circumstances..................70
SECTION 10.04. Acceleration of Notes.........................................71
SECTION 10.05. When Distributions Must Be Paid Over..........................72
SECTION 10.06. Notice........................................................72
SECTION 10.07. Subrogation...................................................73
SECTION 10.08. Relative Rights...............................................73
SECTION 10.09. The Company, Guarantors and Holders May Not Impair
Subordination...............................................74
SECTION 10.10. Distribution or Notice to Representative......................74
SECTION 10.11. Rights of Trustee and Paying Agent............................75
SECTION 10.12. Authorization to Effect Subordination.........................75
ARTICLE 11
GUARANTEE
SECTION 11.01. Guarantee.....................................................75
SECTION 11.02. Trustee to Include Paying Agent...............................76
SECTION 11.03. Subordination of Guarantee....................................76
SECTION 11.04. Senior Subordinated Debt of Guarantor.........................77
SECTION 11.05. Limits of Guarantee...........................................77
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls..................................77
SECTION 12.02. Notices.......................................................77
SECTION 12.03. Communication by Holders with Other Holders...................78
SECTION 12.04. Certificate and Opinion As to Conditions Precedent............78
SECTION 12.05. Statements Required in Certificate or Opinion.................79
SECTION 12.06. Rules by Trustee and Agents...................................79
SECTION 12.07. Legal Holidays................................................79
SECTION 12.08. No Recourse Against Others....................................79
SECTION 12.09. Counterparts..................................................79
SECTION 12.10. Initial Appointments, Compliance Certificates.................79
SECTION 12.11. Governing Law.................................................79
SECTION 12.12. No Adverse Interpretation of Other Agreements.................80
SECTION 12.13. Successors....................................................80
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SECTION 12.14. Severability..................................................80
SECTION 12.15. Third Party Beneficiaries.....................................80
SECTION 12.16. Table of Contents, Headings, Etc..............................80
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INDENTURE, dated as of February 24, 1998, is by and among E-P
Acquisition, Inc. (as further defined below, the "Company"), the Guarantors and
The Bank of New York, a New York banking corporation, as trustee (the
"TRUSTEE").
The Company, the Guarantors and the Trustee agree as follows for the
benefit of each other and for the equal and ratable benefit of the holders of
the Notes:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"ACQUIRED INDEBTEDNESS" means (a) with respect to any Person that
becomes a Restricted Subsidiary after the date of this Indenture, Indebtedness
of such Person and its Subsidiaries existing at the time such Person becomes a
Restricted Subsidiary that was not incurred in connection with, or in
contemplation of, such Person becoming a Restricted Subsidiary and (b) with
respect to the Company or any of its Restricted Subsidiaries, any Indebtedness
of a Person (other than the Company or a Restricted Subsidiary) existing at the
time such Person is merged with or into the Company or a Restricted Subsidiary,
or Indebtedness assumed by the Company or any of its Restricted Subsidiaries in
connection with the acquisition of an asset or assets from another Person, which
Indebtedness was not, in any case, incurred by such other Person in connection
with, or in contemplation of, such merger or acquisition.
"ACQUISITION" means the acquisition by E-P Acquisition, Inc. and Parent
of Eagle Picher Industries, Inc., from Eagle-Picher Industries, Inc. Personal
Injury Settlement Trust (the "SETTLEMENT TRUST") as contemplated under the
Merger Agreement, dated as of December 23, 1997 (the "MERGER AGREEMENT"), among
the Settlement Trust, Eagle-Picher Industries, Inc., E-P Acquisition, Inc. and
Parent.
"ACQUISITION MERGER" means the merger upon the closing of the
Acquisition between E- P Acquisition, Inc. and Eagle-Picher Industries, Inc.,
with Eagle-Picher Industries, Inc. as the surviving corporation.
"AFFILIATE" of any Person means any Person (i) which directly or
indirectly controls or is controlled by, or is under direct or indirect common
control with, the referent Person, (ii) which beneficially owns or holds,
directly or indirectly, 10% or more of any class of the Voting Stock, or more
than 20% of all classes of Capital Stock (other than preferred stock) in the
aggregate, of the referent Person, (iii) of which 10% or more of the Voting
Stock, or more than 20% of all classes of Capital Stock (other than preferred
stock) in the aggregate, is beneficially owned or held, directly or indirectly,
by the referent Person or (iv) with respect to an individual, any
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immediate family member of such Person. For purposes of this definition, control
of a Person shall mean the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise.
"AGENT" means any Registrar, Paying Agent, or co-registrar appointed
pursuant to Section 2.03.
"ASSET SALE" means any sale, issuance, conveyance, transfer, lease,
assignment or other disposition to any Person other than the Company or any of
its Restricted Subsidiaries (including, without limitation, by means of a Sale
and Leaseback Transaction or a merger or consolidation) (collectively, for
purposes of this definition, a "transfer"), directly or indirectly, in one
transaction or a series of related transactions, of (a) any Capital Stock of any
Subsidiary or (b) any other properties or assets of the Company or any of its
Subsidiaries other than transfers of cash, Cash Equivalents, accounts
receivable, inventory or other properties or assets in the ordinary course of
business. For the purposes of this definition, the term "Asset Sale" shall not
include any of the following: (i) any transfer of properties or assets
(including Capital Stock) that is governed by, and made in accordance with, the
provisions of Article 5; (ii) any transfer of properties or assets to an
Unrestricted Subsidiary, if permitted under Section 4.05; (iii) sales of
damaged, worn-out or obsolete equipment or assets that, in the Company's
reasonable judgment, are either no longer used or useful in the business of the
Company or its Subsidiaries, provided that the proceeds thereof are used to
purchase replacement or similar assets for use in the business of the Company
and its Subsidiaries; and (iv) any transfers that, but for this clause (iv),
would be Asset Sales, if after giving effect to such transfers, the aggregate
Fair Market Value of the properties or assets transferred in such transaction or
any such series of related transactions does not exceed $500,000.
"ATTRIBUTABLE INDEBTEDNESS," when used with respect to any Sale and
Leaseback Transaction, means, as at the time of determination, property subject
to such Sale and Leaseback Transaction and the present value (discounted at a
rate equivalent to the Company's then-current weighted average cost of funds for
borrowed money as at the time of determination, compounded on a semi-annual
basis) of the total obligations of the lessee for rental payments during the
remaining term of the lease included in any such Sale and Leaseback Transaction.
"BANKRUPTCY CODE" means Title 11 of the United States Code, as amended.
"BANKRUPTCY LAW" means the Bankruptcy Code or any similar federal or
state law for the relief of debtors.
"BOARD OF DIRECTORS" means, with respect to any Person, the Board of
Directors of such Person, or any authorized committee of the Board of Directors
of such Person.
"BOARD RESOLUTION" means a duly adopted resolution of the Board of
Directors of the Company.
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"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day
on which banking institutions in the City of New York, the State of Ohio or at a
place of payment are authorized by law, regulation or executive order to remain
closed.
"CAPITAL STOCK" of any Person means (i) any and all shares or other
equity interests (including without limitation common stock, preferred stock and
partnership interests) in such Person and (ii) all rights to purchase, warrants
or options (whether or not currently exercisable), participations or other
equivalents of or interests in (however designated) such shares or other
interests in such Person.
"CAPITALIZED LEASE OBLIGATIONS" of any Person means the obligations of
such Person to pay rent or other amounts under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP, and the
amount of such obligation shall be the capitalized amount thereof determined in
accordance with GAAP.
"CASH EQUIVALENTS" means (i) marketable obligations with a maturity of
360 days or less issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof (provided that
the full faith and credit of the United States of America is pledged in support
thereof); (ii) U.S. dollar denominated time deposits and certificates of deposit
of any financial institution (a) that is a member of the Federal Reserve System
having combined capital and surplus and undivided profits of not less than $500
million or (b) whose short-term commercial paper rating or that of its parent
company is at least A-1 or the equivalent thereof from S&P or P-1 or the
equivalent thereof from Moody's (any such bank, an "APPROVED BANK"), in each
case with a maturity of 360 days or less from the date of acquisition; (iii)
commercial paper issued by any Approved Bank or by the parent company of any
Approved Bank and commercial paper issued by, or guaranteed by, any industrial
or financial company with a short-term commercial paper rating of at least A-1
or the equivalent thereof by S&P or at least P-1 or the equivalent thereof by
Moody's, or guaranteed by any industrial company with a long term unsecured debt
rating of at least A or A2, or the equivalent of each thereof, from S&P or
Moody's, as the case may be, and in each case maturing no more than 360 days
from the date of acquisition; (iv) repurchase obligations with a term of not
more than seven days for underlying securities of the types described in clause
(i) above entered into with any commercial bank meeting the specifications of
clause (ii)(a) above; (v) investments in money market or other mutual funds
substantially all of whose assets comprise securities of the types described in
clauses (i) through (iv) above; and (vi) time deposits and certificates of
deposit of any commercial bank of recognized standing having capital and surplus
in excess of the local currency equivalent of $100,000,000 incorporated in a
country where the Company has one or more locally operating Foreign
Subsidiaries, and that is, as of the Issue Date, providing banking services to
the Company or any of its Foreign Subsidiaries.
"CHANGE OF CONTROL" means the occurrence of any of the following: (i)
the consummation of any transaction the result of which is (x) if such
transaction occurs prior to the first sale of Voting Stock of Parent or the
Company pursuant to a registration statement under the
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Securities Act that results in at least 20% of the then outstanding Voting Stock
of Parent or the Company having been sold to the public, that either (A) Control
Group Members beneficially own, directly or indirectly, less than 51% of the
Voting Stock of the Company or Parent (such percentage determined, for purposes
of this definition, as a percentage of the total voting power of all Voting
Stock of the relevant Person) or (B) any other Person or group (as such term is
used in Section 13(d)(3) of the Exchange Act) is or becomes the beneficial owner
(as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of 51%
of the Voting Stock of the Company or Parent (including in any event through
direct or indirect beneficial ownership of Capital Stock of Control Group
Members referred to in clause (ii) of the definition thereof) and (y) if such
transaction occurred thereafter, that any Person or group (as such term is used
in Section 13(d)(3) of the Exchange Act) (other than Control Group Members), is
or becomes the beneficial owner (as defined in Rule 13d-3 of the Exchange Act),
directly or indirectly, of 40% of the Voting Stock of the Company or Parent at
any time at which Control Group Members do not beneficially own, directly or
indirectly, at least 51% of the Voting Stock of the Company and Parent, (ii) the
Company or Parent consolidates with, or merges with or into, another Person or
sells, assigns, conveys, transfers, leases or otherwise disposes of all or
substantially all of the assets of the Company or Parent and their Subsidiaries,
in either case taken as a whole, to any Person, or any Person consolidates with,
or merges with or into, the Company or Parent, in any such event pursuant to a
transaction in which the outstanding Voting Stock of the Company or Parent, as
the case may be, is converted into or exchanged for cash, securities or other
property, other than any such transaction where the outstanding Voting Stock of
the Company or Parent, as the case may be, is converted into or exchanged for
Voting Stock (other than Disqualified Capital Stock) of the surviving or
transferee corporation and the beneficial owners of the Voting Stock of the
Company or Parent, as the case may be, immediately prior to such transaction
own, directly or indirectly, not less than a majority of the Voting Stock of the
surviving or transferee corporation immediately after such transaction, or (iii)
during any consecutive two-year period, individuals who at the beginning of such
period constituted the Board of Directors of the Company or Parent (together
with any new directors whose election by such Board of Directors or whose
nomination for election by the stockholders of the Company or Parent, as the
case may be, was approved by either (i) a vote of a majority of the directors
then still in office who were either directors at the beginning of such period
or whose election or nomination for election was previously so approved or (ii)
a Control Group Member) cease for any reason to constitute a majority of the
Board of Directors of the Company or Parent, as the case may be, then in office.
"CLOSING DATE" means the Issue Date.
"COMPANY" means E-P Acquisition, Inc., a Delaware corporation, and its
successor Eagle-Picher Industries, Inc., an Ohio corporation, as survivor of the
Acquisition Merger, unless and until a subsequent successor replaces it in
accordance with Article 5 and thereafter means such successor.
"CONSOLIDATED AMORTIZATION EXPENSE" for any period means the
amortization expense of the Company and its Restricted Subsidiaries for such
period (to the extent included in the
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computation of Consolidated Net Income), determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED DEPRECIATION EXPENSE" for any period means the
depreciation expense of the Company and its Restricted Subsidiaries for such
period (to the extent included in the computation of Consolidated Net Income),
determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED INCOME TAX EXPENSE" for any period means the provision
for taxes based on income and profits of the Company and its Restricted
Subsidiaries to the extent such income or profits were included in computing
Consolidated Net Income for such period.
"CONSOLIDATED INTEREST COVERAGE RATIO" means, with respect to any
determination date, the ratio of (a) EBITDA for the four full fiscal quarters
immediately preceding the determination date (for any determination, the
"Reference Period"), to (b) Consolidated Interest Expense for such Reference
Period. In making such computations, (i) EBITDA and Consolidated Interest
Expense shall be calculated on a pro forma basis assuming that (A) the
Indebtedness to be incurred or the Disqualified Capital Stock to be issued (and
all other Indebtedness incurred or Disqualified Capital Stock issued after the
first day of such Reference Period referred to in Section 4.07, through and
including the date of determination), and (if applicable) the application of the
net proceeds therefrom (and from any other such Indebtedness or Disqualified
Capital Stock), including the refinancing of other Indebtedness, had been
incurred on the first day of such Reference Period and, in the case of Acquired
Indebtedness, on the assumption that the related transaction (whether by means
of purchase, merger or otherwise) also had occurred on such date with the
appropriate adjustments with respect to such acquisition being included in such
pro forma calculation and (B) any acquisition or disposition by the Company or
any Restricted Subsidiary of any properties or assets outside the ordinary
course of business or any repayment of any principal amount of any Indebtedness
of the Company or any Restricted Subsidiary prior to the stated maturity
thereof, in either case since the first day of such Reference Period through and
including the date of determination, had been consummated on such first day of
such Reference Period; (ii) the Consolidated Interest Expense attributable to
interest on any Indebtedness required to be computed on a pro forma basis in
accordance with Section 4.07 and (A) bearing a floating interest rate shall be
computed as if the rate in effect on the date of computation had been the
applicable rate for the entire period and (B) which was not outstanding during
the period for which the computation is being made but which bears, at the
option of the Company, a fixed or floating rate of interest, shall be computed
by applying, at the option of the Company, either the fixed or floating rate;
(iii) the Consolidated Interest Expense attributable to interest on any
Indebtedness under a revolving credit facility required to be computed on a pro
forma basis in accordance with Section 4.07 shall be computed based upon the
average daily balance of such Indebtedness during the applicable period,
provided that such average daily balance shall be reduced by the amount of any
repayment of Indebtedness under a revolving credit facility during the
applicable period, which repayment permanently reduced the commitments or
amounts available to be reborrowed under such facility; (iv) notwithstanding the
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foregoing clauses (ii) and (iii), interest on Indebtedness determined on a
floating rate basis, to the extent such interest is covered by agreements
relating to Hedging Obligations, shall be deemed to have accrued at the rate per
annum resulting after giving effect to the operation of such agreements; and (v)
if after the first day of the applicable Reference Period and before the date of
determination, the Company has permanently retired any Indebtedness out of the
net proceeds of the issuance and sale of shares of Capital Stock (other than
Disqualified Capital Stock) of the Company within 60 days of such issuance and
sale, Consolidated Interest Expense shall be calculated on a pro forma basis as
if such Indebtedness had been retired on the first day of such period.
"CONSOLIDATED INTEREST EXPENSE" for any period means the sum, without
duplication, of the total interest expense of the Company and its consolidated
Restricted Subsidiaries for such period, determined on a consolidated basis in
accordance with GAAP and including, without limitation (i) imputed interest on
Capitalized Lease Obligations and Attributable Indebtedness, (ii) commissions,
discounts and other fees and charges owed with respect to letters of credit
securing financial obligations and bankers' acceptance financing, (iii) the net
costs associated with Hedging Obligations, (iv) amortization of other financing
fees and expenses, (v) the interest portion of any deferred payment obligations,
(vi) amortization of debt discount or premium, if any, (vii) all other non-cash
interest expense, (viii) capitalized interest, (ix) all cash dividend payments
(and non-cash dividend payments in the case of a Restricted Subsidiary) on any
series of preferred stock of the Company or any Restricted Subsidiary (x) all
interest payable with respect to discontinued operations, and (xi) all interest
on any Indebtedness of any other Person guaranteed by the Company or any
Restricted Subsidiary.
"CONSOLIDATED NET INCOME" for any period means the net income (or loss)
of the Company and its consolidated Restricted Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; provided that there
shall be excluded from such net income (to the extent otherwise included
therein), without duplication (i) the net income (or loss) of any Person (other
than a Restricted Subsidiary) in which any Person other than the Company and its
Restricted Subsidiaries has an ownership interest, except to the extent that any
such income has actually been received by the Company and its Restricted
Subsidiaries in the form of cash dividends during such period; (ii) except to
the extent includible in the consolidated net income of the Company pursuant to
the foregoing clause (i), the net income (or loss) of any Person that accrued
prior to the date that (a) such Person becomes a Restricted Subsidiary or is
merged into or consolidated with the Company or any Restricted Subsidiary or (b)
the assets of such Person are acquired by the Company or any Restricted
Subsidiary; (iii) the net income of any Restricted Subsidiary during such period
to the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary of that income (a) is not permitted
by operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Subsidiary during such period or (b) would be subject to any taxes payable on
such dividend or distribution; (iv) any gain (or, only in the case of a
determination of Consolidated Net Income as used in EBITDA, any loss), together
with any related provisions for taxes on any such gain (or, if applicable, the
tax effects
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of such loss), realized during such period by the Company or any Restricted
Subsidiary upon (a) the acquisition of any securities, or the extinguishment of
any Indebtedness, of the Company or any Restricted Subsidiary or (b) any Asset
Sale by the Company or any of its Restricted Subsidiary; (v) any extraordinary
gain (or, only in the case of a determination of Consolidated Net Income as used
in EBITDA, any extraordinary loss), together with any related provision for
taxes on any such extraordinary gain (or, if applicable, the tax effects of such
extraordinary loss), realized by the Company or any Restricted Subsidiary during
such period; (vi) any non-cash loss during the fiscal year ended November 30,
1998 reflecting the decrease in deferred tax assets resulting from the
Acquisition and transactions consummated in connection therewith; and (vii) in
the case of a successor to the Company by consolidation, merger or transfer of
its assets, any earnings of the successor prior to such merger, consolidation or
transfer of assets; and provided, further, that (A) any gain referred to in
clauses (iv) and (v) above that relates to a Restricted Investment and which is
received in cash by the Company or a Restricted Subsidiary during such period
shall be included in the consolidated net income of the Company, (B) to the
extent deducted in determining consolidated net income for such period and not
otherwise added back pursuant to the foregoing clauses of this definition, the
amount of expenses in respect of Specified Transaction Payments attributable to
such period shall be added back in determining Consolidated Net Income for such
period, and (C) to the extent not otherwise deducted in determining such
consolidated net income for any period, all payments made to Parent pursuant to
any Tax Sharing Agreement or otherwise (including pursuant to Section 4.05) in
respect of taxes for such period shall be deducted from the consolidated net
income of the Company.
"CONSOLIDATED NET WORTH" means, with respect to any Person as of any
date, the consolidated equity of the common stockholders of such Person and its
consolidated Subsidiaries as of such date, less all write-ups (other than
write-ups resulting from foreign currency translations and write-ups of tangible
assets of a going concern business made within twelve months after the
acquisition of such business) subsequent to the date of this Indenture in the
book value of any asset owned by such Person or a Subsidiary of such Person.
"CONTROL GROUP MEMBERS" means (i) the natural person or persons who are
the ultimate beneficial owners of Granaria Holdings N.V. on the Issue Date, as
disclosed under "Security Ownership and Certain Beneficial Owners and Management
of Parent" in the Offering Memorandum and members of their immediate families
and any spouse, parent or descendant of any such person, or a trust the
beneficiaries of which include only any of the foregoing, and any corporation or
other entity all of the Capital Stock of which (other than directors' qualifying
shares) is owned by any of the foregoing or (ii) any corporation or other entity
at least 51% of the Voting Stock of which is owned by any of the Persons
referred to in clause (i).
"CORPORATE TRUST OFFICE" shall be at the address of the Trustee
specified in Section 12.02 or such other address as the Trustee may give notice
to the Company.
"COVERAGE RATIO INCURRENCE CONDITION" would be met at any specified
time only if the Company (or its Successor, as the case may be) would be able to
incur $1.00 of additional
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Indebtedness at such specified time pursuant to the Consolidated Interest
Coverage Ratio test set forth in Section 4.07.
"CREDIT FACILITY AGENT" means ABN AMRO Bank N.V. in its capacity as
agent for the lenders who are party to the New Credit Agreement, or any
successor or successors thereto of whom the Trustee has received notice.
"CUSTODIAN" means any custodian, receiver, trustee, assignee,
liquidator or similar official under any Bankruptcy Law.
"DEFAULT" means any event, act or condition that is, or after notice or
the passage of time or both would be, an Event of Default.
"DEPOSITARY" means, with respect to the Notes issuable or issued in
whole or in part in global form, The Depository Trust Company, until a successor
shall have been appointed and becomes such Depositary, and, thereafter,
"Depositary" shall mean or include such successor.
"DESIGNATED SENIOR INDEBTEDNESS" means (i) Indebtedness under the New
Credit Agreement (whether incurred pursuant to the definition of Permitted
Indebtedness or pursuant to the provisions of Section 4.07 ) and (ii) any other
Indebtedness constituting Senior Indebtedness that at the date of determination,
has an aggregate principal amount outstanding of at least $25.0 million and that
is specifically designated by the Company, in the instrument creating or
evidencing such Senior Indebtedness or in an Officers' Certificate delivered to
the Trustee, as "Designated Senior Indebtedness."
"DISQUALIFIED CAPITAL STOCK" means any Capital Stock of such Person or
any of its Subsidiaries that, by its terms, by the terms of any agreement
related thereto or by the terms of any security into which it is convertible,
puttable or exchangeable, is, or upon the happening of any event or the passage
of time would be, required to be redeemed or repurchased by such Person or any
to its Subsidiaries, whether or not at the option of the holder thereof, or
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, in whole or in part, on or prior to the final maturity date of the
Notes; provided, however, that any class of Capital Stock of such Person that,
by its terms, authorizes such Person to satisfy in full its obligations with
respect to the payment of dividends or upon maturity, redemption (pursuant to a
sinking fund or otherwise) or repurchase thereof or otherwise by the delivery of
Capital Stock that is not Disqualified Capital Stock, and that is not
convertible, puttable or exchangeable for Disqualified Capital Stock or
Indebtedness, shall not be deemed to be Disqualified Capital Stock so long as
such Person satisfies its obligations with respect thereto solely by the
delivery of Capital Stock that is not Disqualified Capital Stock.
"DOLLARS" and "$" means lawful money of the United States of America.
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"EBITDA" for any period mean without duplication, the sum of the
amounts for such period of (i) Consolidated Net Income plus (ii) in each case to
the extent deducted in determining Consolidated Net Income for such period (and
without duplication), (A) Consolidated Income Tax Expense, (B) Consolidated
Amortization Expense (but only to the extent not included in Consolidated
Interest Expense), (C) Consolidated Depreciation Expense, (D) Consolidated
Interest Expense and (E) all other non-cash items reducing the Consolidated Net
Income (excluding any such non-cash charge that results in an accrual of a
reserve for cash charges in any future period) for such period, in each case
determined on a consolidated basis in accordance with GAAP and minus (iii) the
aggregate amount of all non-cash items, determined on a consolidated basis, to
the extent such items increased Consolidated Net Income for such Period.
"ELIGIBLE JUNIOR SECURITIES" means (a) the common stock of Parent and
(b) any preferred stock of Parent that (i) has a maturity date or mandatory
redemption date not earlier than March 1, 2009, (ii) has no remedies for missed
dividends other than accrual on a cumulative basis and appointment of not more
than two directors to the Board of Directors of Parent, (iii) is not
convertible, puttable or exchangeable into any other security of Parent other
than common stock and (iv) is not, by its terms, by the terms of any agreement
related thereto or by the terms of any security into which it is convertible,
puttable or exchangeable, and upon the happening of any event or the passage of
time would not be, required to be redeemed or repurchased by such Person or any
of its Subsidiaries, whether or not at the option of the holder thereof, or
matures or is mandatorily redeemable, pursuant to a sinking fund obligation or
otherwise, in whole or in part, on or prior to March 1, 2009.
"EQUITY OFFERING" means a primary offering of Eligible Junior
Securities of Parent pursuant to a registration statement filed with the
Commission in accordance with the Securities Act, or pursuant to a private
placement pursuant to an available exemption from registration and, in the case
of any such private placement, a majority of such placement of which is sold to
Persons that are not then and were not at the Issue Date Affiliates of Granaria
Holdings.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXCHANGE DEBENTURES" means the 11 3/4% Exchange Debentures due 2008 of
Parent, if issued by Parent in exchange for the Senior Preferred Stock.
"EXCHANGE OFFER" means the offer that may be made by the Company
pursuant to the Registration Rights Agreement to exchange New Notes for the
Notes.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean a registration
statement relating to an Exchange Offer on an appropriate form and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
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"EXISTING INDEBTEDNESS" means all of the Indebtedness of the Company
and its Subsidiaries that is outstanding on the Issue Date.
"FAIR MARKET VALUE" of any asset or items means the fair market value
of such asset or items as determined in good faith by the Board of Directors and
evidenced by a Board Resolution.
"FOREIGN SUBSIDIARY" means any Subsidiary of the Company that is not
incorporated or organized in the United States or in any State thereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession of the United States, as in effect on the Issue Date.
"GLOBAL NOTE" means a global note, without coupons, representing all or
a portion of the Notes deposited with, or on behalf of, the Depositary
substantially in the form of Exhibit A attached hereto.
"GOVERNMENT SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America for the payment of which guarantee
or obligations the full faith and credit of the United States of America is
pledged.
"GRANARIA HOLDINGS" means Granaria Holdings N.V., a Dutch corporation,
and its successors.
"GUARANTEE" means a guarantee (other than by endorsement of negotiable
instruments for collection in the ordinary course of business), direct or
indirect, in any manner (including, without limitation, letters of credit and
reimbursement agreements in respect thereof), of all or any part of any
Indebtedness.
"GUARANTORS" means each of the Subsidiary Guarantors and Parent, and
"GUARANTOR" means any one of the foregoing.
"HEDGING OBLIGATIONS" of any Person means the obligations of such
Person pursuant to (i) any interest rate swap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to protect such
Person against fluctuations in interest rates, (ii) agreements or arrangements
designed to protect such Person against fluctuations in foreign currency
exchange rates in the conduct of its operations, or (iii) any forward contract,
commodity swap agreement, commodity option agreement or other similar agreement
or arrangement designed to protect such Person against fluctuations in commodity
prices, in each case, entered into in the
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ordinary course of business for bona fide hedging purposes and not for the
purpose of speculation.
"HOLDER" means a Person in whose name a Note is registered on the
Registrar's books.
"IMMATERIAL SUBSIDIARY" means (i) any Subsidiary of the Company which
does not own assets in excess of $50,000, (ii) any Name Holder Subsidiary, and
(iii) Eagle-Picher Inc., a Virgin Islands foreign sales corporation.
"INCUR" means, with respect to any Indebtedness or Obligation, incur,
create, issue, assume, guarantee or otherwise become directly or indirectly
liable, contingently or otherwise, with respect to such Indebtedness or
Obligation; provided that (i) the Indebtedness of a Person existing at the time
such Person became a Restricted Subsidiary shall be deemed to have been incurred
by such Restricted Subsidiary and (ii) neither the accrual of interest nor the
accretion of accreted value shall be deemed to be an incurrence of Indebtedness.
"INDEBTEDNESS" of any Person at any date means, without duplication:
(i) all liabilities, contingent or otherwise, of such Person for borrowed money
(whether or not the recourse of the lender is to the whole of the assets of such
person or only to a portion thereof); (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments; (iii) all
obligations of such Person in respect of letters of credit or other similar
instruments (or reimbursement obligations with respect thereto); (iv) all
obligations of such Person to pay the deferred and unpaid purchase price of
property or services, except trade payables and accrued expenses incurred by
such Person in the ordinary course of business in connection with obtaining
goods, materials or services, which payable is not overdue by more than 60 days
according to the original terms of sale unless such payable is being contested
in good faith; (v) the maximum fixed redemption or repurchase price of all
Disqualified Capital Stock of such Person; (vi) all Capitalized Lease
Obligations of such Person; (vii) all Indebtedness of others secured by a Lien
on any asset of such Person, whether or not such Indebtedness is assumed by such
Person; (viii) all Indebtedness of others guaranteed by such Person to the
extent of such guarantee; provided that Indebtedness of the Company or its
Subsidiaries that is guaranteed by the Company or the Company's Subsidiaries
shall only be counted once in the calculation of the amount of Indebtedness of
the Company and its Subsidiaries on a consolidated basis; (ix) all Attributable
Indebtedness; and (x) to the extent not otherwise included in this definition,
Hedging Obligations of such Person. The amount of Indebtedness of any Person at
any date shall be the outstanding balance at such date of all unconditional
obligations as described above, the maximum liability of such Person for any
such contingent obligations at such date and, in the case of clause (vii), the
lesser of (A) the Fair Market Value of any asset subject to a Lien securing the
Indebtedness of others on the date that the Lien attaches and (B) the amount of
the Indebtedness secured. For purposes of the preceding sentence, the "maximum
fixed redemption or repurchase price" of any Disqualified Capital Stock that
does not have a fixed redemption or repurchase price shall be calculated in
accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased or redeemed on any date on which
Indebtedness shall be required
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to be determined pursuant to this Indenture, and if such price is based upon, or
measured by, the fair market value of such Disqualified Capital Stock (or any
equity security for which it may be exchanged or converted), such fair market
value shall be determined in good faith by the Board of Directors of such
Person, which determination shall be evidenced by a Board Resolution.
"INDENTURE" means this Indenture as amended or supplemented from time
to time.
"INDEPENDENT DIRECTOR" means a director of the Company who has not and
whose Affiliates have not, at any time during the twelve months prior to the
taking of any action hereunder, directly or indirectly, received, or entered
into any understanding or agreement to receive, any compensation, payment or
other benefit, of any type or form, from the Company or any of its Affiliates,
other than customary directors fees for serving on the Board of Directors of the
Company or any Affiliate and reimbursement of out-of-pocket expenses for
attendance at the Company's or Affiliate's board and board committee meetings.
"INDEPENDENT FINANCIAL ADVISOR" means an accounting, appraisal or
investment banking firm of nationally recognized standing that is, in the
reasonable judgment of the Company's Board of Directors, qualified to perform
the task for which it has been engaged and disinterested and independent with
respect to the Company and its Affiliates.
"INTEREST PAYMENT DATE" shall have the meaning set forth in the Notes.
"INVESTMENTS" of any Person means (i) all investments by such Person in
any other Person in the form of loans, advances or capital contributions
(excluding commission, travel and similar advances to officers and employees
made in the ordinary course of business) or similar credit extensions
constituting Indebtedness of such Person, and any guarantee of Indebtedness of
any other Person, (ii) all purchases (or other acquisitions for consideration)
by such Person of Indebtedness, Capital Stock or other securities of any other
Person and (iii) all other items that would be classified as investments
(including without limitation purchases of assets outside the ordinary course of
business) on a balance sheet of such Person prepared in accordance with GAAP.
"ISSUE DATE" means the date the Notes are initially issued.
"LIEN" means, with respect to any asset or property, any mortgage, deed
of trust, lien (statutory or other), pledge, lease, easement, restriction,
covenant, charge, security interest or other encumbrance of any kind or nature
in respect of such asset or property, whether or not filed, recorded or
otherwise perfected under applicable law, including without limitation any
conditional sale or other title retention agreement, and any lease in the nature
thereof, any option or other agreement to sell, and any filing of, or agreement
to give, any financing statement under the Uniform Commercial Code (or
equivalent statutes) of any jurisdiction (other than cautionary filings in
respect of operating leases).
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"MOODY'S" means Moody's Investors Service, Inc., and its successors.
"NAME HOLDER SUBSIDIARY" means any Subsidiary of the Company
incorporated and existing solely for the purpose of reserving the corporate name
of such Subsidiary and which does not conduct any business or hold any assets
other than shares of another Name Holder Subsidiary.
"NET AVAILABLE PROCEEDS" means, with respect to any Asset Sale, the
proceeds thereof in the form of cash or Cash Equivalents including payments in
respect of deferred payment obligations when received in the form of cash or
Cash Equivalents (except to the extent that such obligations are financed or
sold with recourse to the Company or any Restricted Subsidiary), net of (i)
brokerage commissions and other fees and expenses (including fees and expenses
of legal counsel, accountants and investment banks) related to such Asset Sale,
(ii) provisions for all taxes payable as a result of such Asset Sale (after
taking into account any available tax credits or deductions and any tax sharing
arrangements), (iii) amounts required to be paid to any Person (other than the
Company or any Restricted Subsidiary) owning a beneficial interest in the
properties or assets subject to the Asset Sale or having a Lien therein and (iv)
appropriate amounts to be provided by the Company or any Restricted Subsidiary,
as the case may be, as a reserve required in accordance with GAAP against any
liabilities associated with such Asset Sale and retained by the Company or any
Restricted Subsidiary, as the case may be, after such Asset Sale, including,
without limitation, pensions and other postemployment benefit liabilities,
liabilities related to environmental matters and liabilities under any
indemnification obligations associated with such Asset Sale, all as reflected in
an Officers' Certificate delivered to the Trustee; provided, however, that any
amounts remaining after adjustments, revaluations or liquidations of such
reserves shall constitute Net Available Proceeds.
"NEW CREDIT AGREEMENT" means the Credit Agreement dated as of February
24, 1998 by and among ABN AMRO Bank N.V., as agent, PNC Bank, National
Association, as documentation agent, the banks party thereto and the Company,
together with the guarantees delivered by the Guarantors on the Issue Date, any
additional guarantees by the Guarantors and security agreements, as any of the
foregoing may be subsequently amended, restated, refinanced, or replaced from
time to time, and shall include agreements in respect of Hedging Obligations
designed to protect against fluctuations in interest rates and entered into with
respect to loans thereunder.
"NEW NOTES" means any notes of the Company to be offered to Holders in
exchange for Notes pursuant to the Exchange Offer or otherwise pursuant to a
Registration of Notes containing terms identical to the Notes for which they are
exchanged (except as set forth in the form of Note attached hereto).
"NON-RECOURSE PURCHASE MONEY INDEBTEDNESS" means Indebtedness of the
Company or any of its Subsidiaries incurred (a) to finance the purchase of any
assets of the Company or any of its Subsidiaries within 90 days of such
purchase, (b) to the extent the amount of
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Indebtedness thereunder does not exceed 100% of the purchase cost of such
assets, (c) to the extent the purchase cost of such assets is or should be
included in "additions to property, plant and equipment" in accordance with
GAAP, and (d) to the extent that such Indebtedness is non-recourse to the
Company or any of its Subsidiaries or any of their respective assets other than
the assets so purchased.
"NON-U.S. PERSON" means a person that is not a U.S. person, as defined
in Regulation S.
"NOTES" means the Company's 93/8% Senior Subordinated Notes due 2008
issued under this Indenture, and includes the New Notes.
"OBLIGATION" means any principal, interest (including, in the case of
Senior Indebtedness, interest accruing subsequent to the filing of a petition in
bankruptcy or insolvency at the rate specified in the document relating to such
Indebtedness, whether or not such interest is an allowed claim permitted to be
enforced against the obligor under applicable law), penalties, fees,
indemnification, reimbursements, costs, expenses, damages and other liabilities
payable under the documentation governing any Indebtedness.
"OFFER" means a Change of Control Offer or an Net Proceeds Offer, as
the context requires.
"OFFER PERIOD" means a Change of Control Offer Period as an Net
Proceeds Offer Period, as the context requires.
"OFFERING MEMORANDUM" means the Offering Memorandum dated February 20,
1998, in the form used in connection with the original sale of the Notes.
"OFFICER" means any of the following of the Company: the Chairman of
the Board, the Chief Executive Officer, the Chief Financial Officer, the
President, any Vice President, the Treasurer or the Secretary.
"OFFICERS' CERTIFICATE" means a certificate signed by any two Officers.
"OPINION OF COUNSEL" means a written opinion from legal counsel (such
counsel may be an employee of or counsel to the Company or the Trustee) that
complies with the requirements of this Indenture.
"PARENT" means Eagle-Picher Holdings, Inc., a Delaware corporation, and
its successors.
"PARENT PREFERRED STOCK" means collectively the Series A 11 3/4%
Cumulative Redeemable Exchangeable Preferred Stock of Parent and Series B 11
3/4% Cumulative Redeemable Exchangeable Preferred Stock of Parent.
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"PAYMENT RESTRICTION" with respect to a Subsidiary of any Person, means
any encumbrance, restriction of limitation, whether by operation of the terms of
its charter or by reason of any agreement, instrument, judgment, decree, order,
statute, rule or governmental regulation, on the ability of (i) such Subsidiary
to (a) pay dividends or make other distributions on its Capital Stock or make
payments on any obligation, liability or Indebtedness owed to such Person or any
other Subsidiary of such Person, (b) make loans or advances to such Person or
any other Subsidiary or such Person, (c) guarantee any Indebtedness of the
Company or any Restricted Subsidiary or (d) transfer any of its properties or
assets to such Person or any other Subsidiary of such Person (other than
customary restrictions on transfers of property subject to a Lien permitted
under this Indenture) or (ii) such Person or any other Subsidiary of such Person
to receive or retain any such dividends, distributions or payments, loans or
advances, guarantee, or transfer of properties or assets.
"PERMITTED INDEBTEDNESS" means any of the following:
(i) Indebtedness of the Company and any Subsidiary Guarantor under
the New Credit Agreement in an aggregate principal amount at any time
outstanding not to exceed (a) under the Senior Secured Term Loan
Facility, $225 million, less the amount thereof that has been repaid
pursuant to the provision of Section 4.16 and (b) under the Revolving
Loan Facility the greater of (x) $175 million and (y) the sum of 80% of
the book value of the eligible accounts receivable and 50% of inventory
of the Company and its Subsidiaries, calculated on a consolidated basis
and in accordance with GAAP;
(ii) Indebtedness under the Notes, the Note Guarantees and this
Indenture;
(iii) Existing Indebtedness;
(iv) Indebtedness under Hedging Obligations, provided that (1)
such Hedging Obligations are related to payment obligations on
Permitted Indebtedness or Indebtedness otherwise permitted by Section
4.07, and (2) the notional principal amount of such Hedging Obligations
at the time incurred does not exceed the principal amount of such
Indebtedness to which such Hedging Obligations relate;
(v) Indebtedness of the Company to a Subsidiary Guarantor and
Indebtedness of any Subsidiary Guarantor to the Company or any other
Subsidiary Guarantor; provided, however, that upon either (1) the
subsequent issuance (other than directors' qualifying shares), sale,
transfer or other disposition of any Capital Stock or any other event
which results in any such Subsidiary Guarantor ceasing to be a
Subsidiary Guarantor or (2) the transfer or other disposition of any
such Indebtedness (except to the Company or a Subsidiary Guarantor),
the provisions of this clause (v) shall no longer be applicable to such
Indebtedness and such Indebtedness shall be deemed, in each case, to be
incurred and shall be treated as an incurrence for purposes Section
4.07 at the time the Subsidiary
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Guarantor in question ceased to be a Subsidiary Guarantor or the time
such transfer or other disposition occurred;
(vi) Indebtedness in respect of bid, performance or surety bonds
issued for the account of the Company in the ordinary course of
business, including guarantees or obligations of the Company with
respect to letters of credit supporting such bid, performance or surety
obligations (in each case other than for an obligation for money
borrowed);
(vii) Indebtedness in respect of Non-Recourse Purchase Money
Indebtedness incurred by the Company or any Restricted Subsidiary;
(viii) Refinancing Indebtedness; and
(ix) Indebtedness, in addition to Indebtedness incurred pursuant
to the foregoing clauses of this definition, with an aggregate
principal face or stated amount (as applicable) at any time outstanding
for all such Indebtedness incurred pursuant to this clause not in
excess of $35.0 million; provided, however, that (A) Indebtedness under
letters of credit and performance bonds issued for the account of a
Foreign Subsidiary pursuant to this clause to finance trade activities
or otherwise in the ordinary course of business, and not to support
borrowed money or the obtaining of advances or credit, may not exceed
$10.0 million in an aggregate stated or face amount for all such
letters of credit and performance bonds and (B) the aggregate principal
amount at any time outstanding for all other Indebtedness incurred by
all Foreign Subsidiaries pursuant to this clause may not exceed $25.0
million.
"PERMITTED JUNIOR SECURITIES" means any securities of the Company
provided for by a plan of reorganization or readjustment that are subordinated
in right of payment to all Senior Indebtedness that may at the time be
outstanding to substantially the same extent as, or to a greater extent than,
the Notes are subordinated to Senior Indebtedness.
"PERSON" means any individual, corporation, partnership, limited
liability company, joint venture, incorporated or unincorporated association,
joint-stock company, trust, unincorporated organization or government or other
agency or political subdivision thereof or other entity of any kind.
"PLAN OF LIQUIDATION" with respect to any Person, means a plan that
provides for, contemplates or the effectuation of which is preceded or
accompanied by (whether or not substantially contemporaneously, in phases or
otherwise): (i) the sale, lease, conveyance or other disposition of all or
substantially all of the assets of such Person otherwise than as an entirety or
substantially as an entirety; and (ii) the distribution of all or substantially
all of the proceeds of such sale, lease, conveyance or other disposition and all
or substantially all of the remaining assets of such Person to holders of
Capital Stock of such Person.
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"PURCHASE DATE" means the Change of Control Purchase Date or the Net
Proceeds Purchase Date, as the context requires.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"RECORD DATE" has the meaning set forth in the Notes.
"REFINANCING INDEBTEDNESS" means Indebtedness of the Company or a
Restricted Subsidiary issued in exchange for, or the proceeds from the issuance
and sale or disbursement of which are used substantially concurrently to repay,
redeem, refund, refinance, discharge or otherwise retire for value, in whole or
in part (collectively, "repay"), or constituting an amendment, modification or
supplement to or a deferral or renewal of (collectively, an "amendment"), any
Indebtedness of the Company or any Restricted Subsidiary (the "Refinanced
Indebtedness") in a principal amount not in excess of the principal amount of
the Refinanced Indebtedness (or, if such Refinancing Indebtedness refinances
Indebtedness under a revolving credit facility or other agreement providing a
commitment for subsequent borrowings, with a maximum commitment not to exceed
the maximum commitment under such revolving credit facility or other agreement);
provided that: (i) the Refinancing Indebtedness is the obligation of the same
Person as that of the Refinanced Indebtedness, (ii) if the Refinanced
Indebtedness was subordinated to or pari passu with the Note Indebtedness, then
such Refinancing Indebtedness, by its terms, is expressly pari passu with (in
the case of Refinanced Indebtedness that was pari passu with) the Note
Indebtedness, or subordinate in right of payment to (in the case of Refinanced
Indebtedness that was subordinated to) the Note Indebtedness at least to the
same extent as the Refinanced Indebtedness; (iii) the portion, if any, of the
Refinancing Indebtedness that is scheduled to mature on or prior to the maturity
date of the Notes has a Weighted Average Life to Maturity at the time such
Refinancing Indebtedness is incurred that is equal to or greater than the
Weighted Average Life to Maturity of the portion of the Refinanced Indebtedness
being repaid that is scheduled to mature on or prior to the maturity date of the
Notes; and (iv) the Refinancing Indebtedness is secured only to the extent, if
at all, and by the assets (which may include after-acquired assets), that the
Refinanced Indebtedness is secured.
"REGISTRATION" means a registered exchange offer for the Notes by the
Company or other registration of the Notes under the Securities Act pursuant to
and in accordance with the terms of the Registration Rights Agreement.
"REGISTRATION RIGHTS AGREEMENT" means the Registration Rights
Agreement, dated as of the Closing Date, by and among the Company, SBC Warburg
Dillon Read Incorporated and ABN AMRO Incorporated, as such agreement may be
amended, modified or supplemented from time to time.
"REGISTRATION STATEMENT" means the Registration Statement pursuant to
and as defined in the Registration Rights Agreement.
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"REGULATION S" means Regulation S under the Securities Act.
"RELATED BUSINESS" means any business in which the Company and its
Subsidiaries operate on the Issue Date, or that is closely related to or
complements the business of the Company and its Subsidiaries, as such business
exists on the Issue Date.
"RELATED BUSINESS INVESTMENT" means any Investment directly by the
Company or its Subsidiaries in any Related Business.
"RELATED PARTY AGREEMENT" means any management or advisory agreements
or other arrangements with any Affiliate of the Company or with any other direct
or indirect holder of more than 10% of any class of the Company's or Parent's
capital stock (except, in any such case, Parent, the Company or any Restricted
Subsidiary), but excluding in any event arrangements with ABN AMRO Bank N.V. and
its Affiliates or their respective successors (i) under the New Credit Agreement
or in connection therewith, (ii) in connection with the offering of the Notes or
the Series A Senior Preferred Stock or (iii) pursuant to other banking,
financing or underwriting activity entered into in the ordinary course of
business.
"REPRESENTATIVE" means, with respect to any Senior Indebtedness, the
indenture trustee or other trustee, agent or other representative(s), if any, of
holders of such Senior Indebtedness.
"RESTRICTED DEBT PAYMENT" means any purchase, redemption, defeasance
(including without limitation in substance or legal defeasance) or other
acquisition or retirement for value, directly or indirectly, by the Company or a
Restricted Subsidiary, prior to the scheduled maturity or prior to any scheduled
repayment of principal or sinking fund payment, as the case may be, in respect
of Subordinated Indebtedness.
"RESTRICTED INVESTMENT" means any Investment by the Company or any
Restricted Subsidiary (other than investments in Cash Equivalents) in any Person
that is not the Company or a Restricted Subsidiary, including in any
Unrestricted Subsidiary.
"RESTRICTED PAYMENT" means with respect to any Person: (i) the
declaration or payment of any dividend (other than a dividend declared and paid
(x) by a Wholly-Owned Restricted Subsidiary to holders of its Capital Stock, or
(y) by a Subsidiary (other than a Wholly-Owned Restricted Subsidiary) to its
shareholders on a pro rata basis, but only to the extent of the dividends
actually received by the Company or a Restricted Subsidiary) or the making of
any other payment or distribution of cash, securities or other property or
assets in respect of such Person's Capital Stock (except that a dividend payable
solely in Capital Stock (other than Disqualified Capital Stock) of such Person
shall not constitute a Restricted Payment); (ii) any payment on account of the
purchase, redemption, retirement or other acquisition for value of (A) the
Capital Stock of the Company or (B) the Capital Stock of any Restricted
Subsidiary, or any other payment or distribution made in respect thereof, either
directly or indirectly (other than a payment solely in Capital Stock that is not
Disqualified Capital Stock, and excluding any such
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payment to the extent actually received by the Company or a Restricted
Subsidiary); (iii) any Restricted Investment; (iv) any Restricted Debt Payment;
or (v) payments by the Company or its Restricted Subsidiaries in respect of any
Related Party Agreement.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"REVOLVING LOAN FACILITY" means the revolving loan facility provided
under the New Credit Agreement.
"RULE 144A" means Rule 144A under the Securities Act.
"S&P" means Standard & Poor's Ratings Services, a division of the
McGraw-Hill Companies, Inc., and its successors.
"SALE AND LEASEBACK TRANSACTIONS" means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party, providing for the leasing by such
Person of any property or asset of such Person which has been or is being sold
or transferred by such Person to such lender or investor or to any Person to
whom funds have been or are to be advanced by such lender or investor on the
security of such property or asset.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the U.S. Securities Act of 1933, as amended.
"SENIOR INDEBTEDNESS" means all Indebtedness and other Obligations
specified below payable directly or indirectly by the Company or any Guarantor,
as the case may be, whether outstanding on the Issue Date or thereafter created,
incurred or assumed by the Company or such Guarantor: (i) the principal of and
interest on and all other Indebtedness under and Obligations related to the New
Credit Agreement (including, without limitation, all loans, letters of credit
and unpaid drawings with respect thereto and other extensions of credit under
the New Credit Agreement, and all expenses, fees, reimbursements, indemnities
and other amounts owing pursuant to the New Credit Agreement), (ii) amounts
payable in respect of any Hedging Obligations, (iii) in addition to the amounts
described in (i) and (ii), all Indebtedness not prohibited by Section 4.07 that
is not expressly pari passu with, or subordinated to, the Notes or the Note
Guarantees, as the case may be, (iv) all Capital Lease Obligations outstanding
on the Issue Date, and (v) all Refinancing Indebtedness permitted under this
Indenture. Notwithstanding anything to the contrary in the foregoing Senior
Indebtedness will not include (a) any Indebtedness which by the express terms of
the agreement or instrument creating, evidencing or governing the same is junior
or subordinate in right of payment to any item of Senior Indebtedness, (b) any
trade payable arising from the purchase of goods or materials or for services
obtained in the ordinary course of business, (c) Indebtedness incurred (but only
to the
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extent incurred) in violation of this Indenture as in effect at the time of the
respective incurrence, (d) any Indebtedness of the Company that, when incurred,
was without recourse to the Company, (e) any Indebtedness to any employee of the
Company or any of its respective Subsidiaries or (f) any liability for taxes
owned or owing by the Company.
"SENIOR PREFERRED STOCK" means, collectively, the Series A Senior
Preferred Stock and Series B Senior Preferred Stock.
"SENIOR SECURED TERM LOAN FACILITY" means the term loan facility
providing for the senior secured term loans under the New Credit Agreement.
"SENIOR SUBORDINATED INDEBTEDNESS" of the Company means the Notes and
any other Indebtedness of the Company that specifically provides that such
Indebtedness is to rank pari passu with the Notes in right of payment and is not
subordinated by its terms in right of payment to any Indebtedness or other
obligation of the Company which is not Senior Indebtedness. "Senior Subordinated
Indebtedness" of any Guarantor has a correlative meaning.
"SERIES A SENIOR PREFERRED STOCK" means the 11 3/4% Series A Cumulative
Redeemable Exchangeable Preferred Stock of Parent.
"SERIES B SENIOR PREFERRED STOCK" means the 11 3/4% Series B Cumulative
Redeemable Exchangeable Preferred Stock of Parent.
"SHELF REGISTRATION STATEMENT" shall mean a Shelf Registration
Statement of the Company pursuant to the Registration Rights Agreement.
"SIGNIFICANT SUBSIDIARY" means any Subsidiary of the Company that would
be a "Significant Subsidiary" as defined in Article 1, Rule 1-02 of Regulation
S-X, promulgated pursuant to the Securities Act, as such Regulation is in effect
on the Issue Date, except all references to "10 percent" in such definition
shall be changed to "2 percent".
"SPECIAL INTEREST" has the meaning set forth in the Notes.
"SPECIFIED TRANSACTION PAYMENTS" means the following payments made to
or for the benefit of present or future officers and employees of the Company
and its Affiliates, or to Granaria Holdings and its Affiliates, in each case in
connection with the Acquisition and on terms (including without limitation the
amount thereof) substantially as described in the Offering Memorandum, but only
to the extent that the aggregate amount thereof does not exceed $43.2 million
for all periods from and after the Issue Date: (i) payments to finance or
refinance the purchase by such officers and employees (or a trust for their
benefit) of capital stock of Parent or its parent company, the grant or vesting
of any award of such capital stock and the payment by such officers and
employees of income taxes in respect thereof, (ii) "stay put" and other
incentive bonuses, (iii) severance payments and (iv) transaction fees paid to
Granaria Holdings.
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"SUBORDINATED INDEBTEDNESS" means Indebtedness of the Company or any
Restricted Subsidiary that is subordinated in right of payment to the Notes or
the Note Guarantee of such Restricted Subsidiary, respectively.
"SUBSIDIARY" of any Person means (i) any corporation of which at least
a majority of the aggregate voting power of all classes of the Voting Stock is
owned by such Person directly or through one or more other Subsidiaries of such
Person and (ii) any entity other than a corporation in which such Person,
directly or indirectly, owns at least a majority of the Voting Stock of such
entity entitling the holder thereof to vote or otherwise participate in the
selection of the governing body, partners, managers or others that control the
management and policies of such entity. Unless otherwise specified, "Subsidiary"
means a Subsidiary of the Company.
"SUBSIDIARY GUARANTOR" means each domestic Restricted Subsidiary of the
Company (other than an Immaterial Subsidiary) and each other person who is
required to become (or whom the Company otherwise causes to become) a Subsidiary
Guarantor by the terms of this Indenture.
"TAX SHARING AGREEMENT" means any tax sharing agreement or arrangement
entered or to be entered into by Parent, the Company and its Subsidiaries,
providing for payments by or to Parent, the Company and its Subsidiaries that,
in each case, are not in excess of the tax liabilities that would have been
payable by such Person on a stand-alone basis.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the Closing Date (except as otherwise provided in
Section 1.03 hereof).
"TRUSTEE" means The Bank of New York until a successor replaces it in
accordance with the applicable provisions of this Indenture and thereafter means
such successor.
"TRUST OFFICER" when used with respect to the Trustee means the
chairman or vice chairman of the board of directors, the chairman or vice
chairman of the executive committee of the board of directors, the president,
any vice president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller and any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"UNRESTRICTED SUBSIDIARY" means (i) any Subsidiary that at the time of
determination shall be designated an Unrestricted Subsidiary by the Board of
Directors of the Company in the manner provided below and (ii) any Subsidiary of
an Unrestricted Subsidiary. The Board of Directors of the Company may designate
any Restricted Subsidiary to be an Unrestricted Subsidiary, and any such
designation shall be deemed to be a Restricted Investment at the time of and
immediately upon such designation by the Company and its Restricted Subsidiaries
in the
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amount of the Consolidated Net Worth of such designated Subsidiary and its
consolidated Subsidiaries at such time, provided that such designation shall be
permitted only if (A) the Company and its Restricted Subsidiaries would be able
to make the Restricted Investment deemed made pursuant to such designation at
such time, (B) no portion of the Indebtedness or any other obligation
(contingent or otherwise) of such Subsidiary (x) is Guaranteed by the Company or
any Restricted Subsidiary, (y) is recourse to the Company or any Restricted
Subsidiary or (z) subjects any property or asset of the Company or any
Restricted Subsidiary, directly or indirectly, contingently or otherwise, to the
satisfaction thereof and (C) no default or event of default with respect to any
Indebtedness of such Subsidiary would permit any holder of any Indebtedness of
the Company or any Restricted Subsidiary to declare such Indebtedness of the
Company or any restricted Subsidiary due and payable prior to its maturity. The
Board of Directors of the Company may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary, and any such designation shall be deemed to be an
incurrence by the Company and its Subsidiaries of the Indebtedness (if any) of
such Subsidiary so designated for purposes of Section 4.07 as of the date of
such designation, provided that such designation shall be permitted only if
immediately after giving effect to such designation and the incurrence of any
such additional Indebtedness deemed to have been incurred thereby (x) the
Company would meet the Coverage Ratio Incurrence Condition and (y) no Default or
Event of Default shall be continuing. Any such designation by the Board of
Directors described in the two preceding sentences shall be evidenced to the
Trustee by the filing with the Trustee of a certified copy of the Board
Resolution giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing conditions and
setting forth the underlying calculations of such certificate.
"U.S. PERSON" has the meaning ascribed to it in Regulation S.
"VOTING STOCK" with respect to any Person, means securities of any
class of Capital Stock of such Person entitling the holders thereof (whether at
all times or only so long as no senior class of stock or other relevant equity
interest has voting power by reason of any contingency) to vote in the election
of members of the board of directors of such Person.
"WEIGHTED AVERAGE LIFE TO MATURITY", when applied to any Indebtedness
at any date, means the number of years obtained by dividing (i) the sum of the
products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (b) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment by (ii) the then outstanding principal
amount of such Indebtedness.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means a Restricted Subsidiary of
which 100% of the Capital Stock (except for directors' qualifying shares or
certain minority interests owned by other Persons solely due to local law
requirements that there be more than one stockholder,
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but which interest is not in excess of what is required for such purpose) is
owned directly by the Company or through one or more Wholly-Owned Restricted
Subsidiaries.
SECTION 1.02. Other Definitions.
<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"AFFILIATE TRANSACTION"............................................. 4.10
"AGENT MEMBERS"..................................................... 2.07
"ASSET SALE OFFER".................................................. 4.14
"ASSET SALE OFFER AMOUNT"........................................... 4.14
"ASSET SALE OFFER PERIOD"........................................... 4.14
"ASSET SALE PAYMENT"................................................ 4.14
"AGENT MEMBERS"..................................................... 2.07(a)(iii)
"ASSET SALE TRIGGER DATE"........................................... 4.16(c)
"CEDEL BANK"........................................................ 2.01(a)
"CERTIFICATED NOTE"................................................. 2.01(a)
"CHANGE OF CONTROL OFFER"........................................... 4.15(b)(ii)
"CHANGE OF CONTROL OFFER PERIOD".................................... 4.15(c)
"CHANGE OF CONTROL PURCHASE DATE"................................... 4.15(c)
"CHANGE OF CONTROL PURCHASE PRICE".................................. 4.15(a)
"CHANGE OF CONTROL TRIGGER DATE".................................... 4.15(a)
"CINS".............................................................. 2.16
"COMMISSION"........................................................ 4.02
"COVENANT DEFEASANCE"............................................... 8.01(b)(ii)
"CUSIP"............................................................. 2.16
"EVENT OF DEFAULT".................................................. 6.01(a)
"EUROCLEAR"......................................................... 2.01(a)
"EXCESS PROCEEDS"................................................... 4.16(b)(ii)
"GLOBAL NOTE HOLDER"................................................ 2.01(a)
"INSOLVENCY OR LIQUIDATION PROCEEDING".............................. 10.02(a)
"LEGAL DEFEASANCE".................................................. 8.01(b)(i)
"NET PROCEEDS DEFICIENCY"........................................... 4.16(c)(ii)
"NET PROCEEDS OFFER"................................................ 4.16(c)(i)
"NET PROCEEDS OFFER PERIOD"......................................... 4.16(c)(iii)
"NET PROCEEDS PURCHASE DATE"........................................ 4.16(c)(iii)
"NON-PAYMENT DEFAULT"............................................... 10.03(b)
"NOTE GUARANTEE".................................................... 11.01(a)
"NOTE INDEBTEDNESS"................................................. 10.01
"NOTICE OF DEFAULT"................................................. 6.01(a)
"OFFERED PRICE"..................................................... 4.16(c)(ii)
"OFFSHORE CERTIFICATED NOTE"........................................ 2.01(a)
"PAYING AGENT"...................................................... 2.03
</TABLE>
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<TABLE>
<CAPTION>
DEFINED IN
TERM SECTION
<S> <C>
"PAYMENT AMOUNT".................................................... 4.16(c)(i)
"PAYMENT BLOCKAGE NOTICE"........................................... 10.03(b)
"PAYMENT BLOCKAGE PERIOD"........................................... 10.03(b)
"PAYMENT DEFAULT"................................................... 10.03(a)
"REGULATION S GLOBAL NOTE".......................................... 2.01(a)
"REGULATION S NOTES"................................................ 2.01(a)
"REGULATION S PERMANENT GLOBAL NOTE"................................ 2.01(a)
"REGULATION S TEMPORARY GLOBAL NOTE"................................ 2.01(a)
"REPLACEMENT FACILITY".............................................. 4.13(b)
"RESTRICTED GLOBAL NOTE"............................................ 2.01(a)
"REGISTRAR"......................................................... 2.03
"RULE 144A NOTES"................................................... 2.01(a)
"SECURITIES ACT LEGEND"............................................. 2.01(a)
"SUCCESSOR"......................................................... 5.01(a)(ii)
"TRUSTEE EXPENSES".................................................. 6.08(a)(iii)
</TABLE>
SECTION 1.03. Incorporation by Reference of TIA. Whenever this
Indenture refers to a provision of the TIA, the portion of the provision
required to be incorporated herein in order for this Indenture to be qualified
under the TIA is incorporated by reference in, and made a part of, this
Indenture. Any terms incorporated by reference in this Indenture that are
defined by the TIA, defined by the TIA by reference to another statute or
defined by the SEC in a rule under the TIA have the meanings so assigned to them
therein.
SECTION 1.04. Rules of Construction. Unless the context otherwise
requires: (1) a term has the meaning assigned to it in this Indenture; (2) an
accounting term not otherwise defined herein has the meaning assigned to it
under GAAP; (3) "OR" is not exclusive; (4) words in the singular include the
plural, and in the plural include the singular; (5) provisions apply to
successive events and transactions; and (6) any reference to a Section or
Article refers to such Section or Article of this Indenture.
ARTICLE 2
THE NOTES
SECTION 2.01. Form and Dating. (a) The Notes and the certificate of
authentication of the Trustee or an authenticating agent appointed on its behalf
pursuant to Section 2.02 shall be substantially in the form of Exhibit A hereto,
bearing such legends as are required pursuant to this Section 2.01. The Notes
may have notations, legends or endorsements required by law, stock exchange rule
or usage. Each Note shall be dated the date of its authentication. The Notes
shall be in denominations of $1,000 principal amount and integral multiples
thereof.
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The terms and provisions contained in the Notes shall constitute, and
are hereby expressly made, a part of this Indenture and to the extent
applicable, the Company, the Guarantors and the Trustee, by their execution and
delivery of this Indenture, expressly agree to such terms and provisions and to
be bound thereby.
Notes offered and sold to QIBs in reliance on Rule 144A ("RULE 144A
NOTES") shall be issued initially in the form of one or more Global Notes in
definitive, fully registered form, without interest coupons, substantially in
the form of Exhibit A hereto, bearing such legends as are required pursuant to
this Section 2.01 (the "RESTRICTED GLOBAL NOTES"), will be deposited on the
Issue Date with, or on behalf of, the Depositary and registered in the name of
Cede & Co., as nominee of the Depositary (such nominee being referred to herein
as the "GLOBAL NOTE HOLDER"), duly executed by the Company and authenticated by
the Trustee as herein provided. The aggregate principal amount of the Restricted
Global Notes may from time to time be increased or decreased by adjustments made
on the records of the Trustee, as custodian for the Depositary or its nominee,
as hereinafter provided.
Notes sold in offshore transactions in reliance on Regulation S under
the Securities Act ("REGULATION S NOTES") will initially be represented by one
or more temporary Global Notes in definitive, fully registered form without
interest coupons substantially in the form set forth in Exhibit A (each a
"REGULATION S TEMPORARY GLOBAL NOTE") and will be deposited with the Trustee as
custodian for, and registered in the name of Cede & Co., as nominee of the
Depositary for the accounts of Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear System ("EUROCLEAR"), and Cedel
Bank, societe anonyme ("CEDEL BANK"). At any time on or after the 40th day
following the latest of the commencement of the offering of the Notes and the
Issue Date, upon receipt by the Trustee and the Company of a certificate
substantially in the Form of Exhibit B hereto, one or more permanent global
Notes in registered form substantially in the form set forth in Exhibit A (each
a "REGULATION S PERMANENT GLOBAL NOTE" and together with the Regulation S
Temporary Global Notes, the "REGULATION S GLOBAL NOTES") duly executed by the
Company and authenticated by the Trustee as hereinafter provided shall be
deposited with the Trustee, as custodian for the Depositary, in exchange for the
principal amount of the beneficial interest in the Regulation S Temporary Global
Notes to be exchanged, and the Registrar shall reflect on its books and records
the date and a decrease in the principal amount of the Regulation S Temporary
Global Notes in an amount equal to the principal amount of the beneficial
interest in the Regulation S Temporary Global Notes so exchanged. Prior to such
40th day, beneficial interests in a Regulation S Temporary Global Note may be
held only through Euroclear or Cedel Bank. The aggregate principal amount of the
Regulation S Global Notes may from time to time be increased or decreased by
adjustments made on the records of the Trustee, as custodian for the nominee of
the Depositary for the Regulation S Global Notes, for the accounts of Euroclear
and Cedel Bank, as hereinafter provided.
Any person having a beneficial interest in any Restricted Global Note
may, upon request to the Trustee, exchange such beneficial interest for Notes in
definitive form (each a "U.S. CERTIFICATED NOTE"). Any person having a
beneficial interest in any Regulation S Permanent
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Global Note may, upon request to the Trustee, exchange such beneficial interest
for Notes in definitive form (each an "OFFSHORE CERTIFICATED NOTE"). The
Offshore Certificated Notes and the U.S. Certificated Notes are sometimes
collectively referred to as the "CERTIFICATED NOTES." Upon any such issuance,
the Trustee is required to register such Notes in the name of, and cause the
same to be delivered to, such persons or persons (or the nominee of any
thereof). Such Notes will be issued in fully registered form and will be subject
to transfer restrictions. In addition, if (i) the Company notifies the Trustee
in writing that the Depositary is no longer willing or able to act as a
depositary and the Company is unable to locate a qualified successor within 90
days or (ii) the Company, at its option, notifies the Trustee in writing that it
elects to cause the issuance of Certificated Notes, then, upon surrender by the
relevant Global Note Holder of its Global Note, Notes in such form will be
issued to each person that such Global Note Holder and the Depositary identifies
as being the beneficial owner of the related Notes.
Unless and until a Note is exchanged for a New Note in connection with
an effective Registration pursuant to the Registration Rights Agreement, each
Restricted Global Note, each Temporary Regulation S Global Note and each U.S.
Certificated Note shall bear the legend the "SECURITIES ACT LEGEND" set forth
below on the face thereof:
"THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY
ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND THE SECURITY EVIDENCED HEREBY MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN
APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE SECURITY
EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT AND (2) IS HEREBY NOTIFIED
THAT THE SELLER MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF
SECTION 5 OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER OR
ANOTHER EXEMPTION UNDER THE SECURITIES ACT. THE HOLDER OF THE SECURITY
EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER THAT (X) SUCH
SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)(a)
TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT)
IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A
TRANSACTION MEETING THE REQUIREMENTS OF RULE 144 UNDER THE SECURITIES
ACT, (c)
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OUTSIDE THE UNITED STATES TO A PERSON THAT IS NOT A U.S. PERSON (AS
DEFINED IN RULE 902 UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING
THE REQUIREMENTS OF RULE 904 UNDER THE SECURITIES ACT OR (d) IN
ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION REQUIREMENTS
OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH
ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR
ANY OTHER APPLICABLE JURISDICTION AND (Y) THE HOLDER WILL, AND EACH
SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER FROM IT OF THE
SECURITY EVIDENCED HEREBY OF THE RESALE RESTRICTIONS SET FORTH IN (X)
ABOVE."
(b) Each Global Note, whether or not a New Note, shall also bear the
following legend on the face thereof:
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO
THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE
& CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR
TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED
OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE,
BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF
OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL
NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE
RESTRICTIONS SET FORTH IN SECTIONS 2.06, 2.07 AND 2.08 OF THE
INDENTURE.
(c) Each Temporary Regulation S Global Note shall bear the following
legend on the face thereof:
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<PAGE>
THIS NOTE IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE
EXPIRATION OF THE RESTRICTED PERIOD APPLICABLE HERETO,
BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD BY ANY
PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON
WHO PURCHASED SUCH INTEREST IN A TRANSACTION THAT DID
NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"). BENEFICIAL
INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR DEFINITIVE
SECURITIES. TERMS IN THIS LEGEND ARE USED AS USED IN
REGULATION S UNDER THE SECURITIES ACT.
SECTION 2.02. Execution and Authentication; Authentication Agent. Two
Officers of the Company shall sign each Note for the Company by manual or
facsimile signature. If an Officer whose signature is on a Note no longer holds
that office at the time the Note is authenticated, the Note shall nevertheless
be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee, and the Trustee's signature shall be conclusive evidence that
the Note has been authenticated under this Indenture. The form of Trustee's
certificate of authentication to be borne by the Notes shall be substantially as
set forth in Exhibit A. The Trustee may appoint an authenticating agent
acceptable to the Company to authenticate the Notes. Unless limited by the terms
of such appointment, an authenticating agent may authenticate Notes whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or any of its Affiliates. If an
appointment of an authenticating agent is made pursuant to this Section 2.02,
the Notes may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternative certificate of authentication substantially in
the form set forth in Exhibit A.
The Trustee shall, upon receipt of a written order signed by two
Officers of the Company, authenticate Notes for issuance on the Issue Date in
the aggregate principal amount of up to $220,000,000 (notwithstanding anything
to the contrary contained in this Indenture, the Notes or otherwise, the
aggregate principal amount of outstanding Notes may not exceed that amount at
any time, except as provided in Section 2.10).
SECTION 2.03. Registrar and Paying Agent. The Company shall maintain an
office or agency (the "REGISTRAR") where Notes may be presented for registration
of transfer or for exchange (subject to Sections 2.06, 2.07 and 2.08) and an
office or agency (the "PAYING AGENT") where Notes may be presented for payment
and an office or agency where notices to or upon the Company in respect of the
Notes or this Indenture may be served. The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Company may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Company may change the Paying
Agent, Registrar or co-registrar without prior notice to any Holder. The Company
shall notify the Trustee and the Trustee shall
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notify the Holders of the name and address of any Agent not a party to this
Indenture. The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, and such agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent.
The Company initially appoints the Trustee as Registrar (subject to
Section 2.06), Paying Agent and agent for service of notices and demands in
connection with the Notes. The Company or any of its Affiliates may act as
Paying Agent, Registrar or co-registrar. If the Company fails to appoint or
maintain a Registrar and/or Paying Agent, subject to Section 2.06, the Trustee
shall act as such, and shall be entitled to appropriate compensation in
accordance with Section 7.07.
SECTION 2.04. Paying Agent to Hold Money in Trust. The Company shall
require each Paying Agent other than the Trustee to agree in writing that the
Paying Agent will hold in trust for the Holders' benefit or the Trustee all
money the Paying Agent holds for the redemption or purchase of the Notes or for
the payment of principal of, or premium, if any, or interest (including Special
Interest, if any) on the Notes, and will notify the Trustee of any default by
the Company in providing the Paying Agent with sufficient funds to redeem or
purchase Notes or make any payment on the Notes as and to the extent required to
be redeemed, purchased or paid under the terms of this Indenture. While any such
default continues, the Trustee may require the Paying Agent to pay all money it
holds to the Trustee and account for any funds disbursed. The Company at any
time may require the Paying Agent to pay all money it holds to the Trustee. Upon
payment over to the Trustee, the Paying Agent (if other than the Company or any
of its Affiliates) shall have no further liability for the money it delivered to
the Trustee. If the Company or any of its Subsidiaries acts as Paying Agent, it
shall segregate and hold in a separate trust fund for the Holders' benefit all
money it holds as Paying Agent.
SECTION 2.05. Holder Lists. The Trustee shall preserve in as current a
form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders and shall otherwise comply with section 312(a) of
the TIA. If the Trustee is not the Registrar, the Company shall furnish to the
Trustee, at least 7 Business Days before each interest payment date and at such
other times as the Trustee may request in writing, a list in such form and as of
such date as the Trustee may reasonably require that sets forth the names and
addresses of, and the aggregate principal amount of Notes held by, each Holder,
and the Company shall otherwise comply with section 312(a) of the TIA.
SECTION 2.06. Transfer and Exchange. (a) The Company appoints the
Trustee as transfer and exchange agent for the purpose of any transfer or
exchange of the Notes.
(b) Neither the Trustee nor the Registrar shall be required to issue,
register the transfer of or exchange any Note (i) to register the transfer of or
exchange any Note selected for redemption, (ii) to register the transfer of or
exchange any Note for a period of 15 days before the mailing of a notice of
redemption and ending on the date of such mailing, (iii) to register the
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transfer or exchange of a Note between a record date and the next succeeding
interest payment date.
(c) No service charge shall be made for any registration of transfer
or exchange (except as otherwise expressly permitted herein), but the Registrar
may require a Holder to furnish appropriate endorsements and transfer documents
and payment of a sum sufficient to cover any transfer tax or similar
governmental charge payable in connection therewith (other than any such
transfer tax or similar governmental charge payable upon exchanges pursuant to
Section 2.12, 3.06 or 9.05, which the Company shall pay).
(d) Prior to due presentment for registration of transfer of any Note
to the Trustee, the Trustee, any Agent and the Company shall deem and treat the
Person in whose name any Note is registered as the absolute owner of such Note
(whether or not such Note shall be overdue and notwithstanding any notation of
ownership or other writing on such Note made by anyone other than the Company,
the Registrar, or any co-registrar) for the purpose of receiving payment of
principal of, premium, if any, interest (including Special Interest, if any) on
such Note and for all other purposes, and notice to the contrary shall not
affect the Trustee, any Agent or the Company.
(e) A Holder may transfer a Note only by written application to the
Registrar stating the name of the proposed transferee and otherwise complying
with the terms of this Indenture. No such transfer shall be effected until, and
such transferee shall succeed to the rights of a Holder only upon, final
acceptance and registration of the transfer by the Registrar. Prior to the
registration of any transfer by a Holder as provided herein, the Company, the
Trustee, and any agent of the Company shall treat the person in whose name the
Note is registered as the absolute owner thereof for all purposes whether or not
the Note shall be overdue, and neither the Company, the Trustee, nor any such
agent shall be affected by notice to the contrary. Furthermore, any Holder of a
Global Note shall, by acceptance of such Global Note, agree that transfers of
beneficial interests in such Global Note may be effected through a book entry
system maintained by the Holder of such Global Note (or its agent) and that
ownership of a beneficial interest in the Note shall be required to be reflected
in a book entry. When Notes are presented to the Registrar or a co-registrar
with a request to register the transfer or to exchange them for an equal
principal amount of Notes of other authorized denominations (including an
exchange of Notes for New Notes), the Registrar or co-registrar, as relevant,
shall register the transfer or make the exchange as requested if the
requirements for such transactions set forth herein are met; provided that no
exchanges of Notes for New Notes shall occur until a Registration Statement
shall have been declared effective by the SEC and provided further that any
Notes that are exchanged for New Notes shall be cancelled by the Trustee. To
permit registrations of transfers and exchanges, the Company shall execute and
the Trustee shall authenticate Notes at the Registrar's request.
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All Notes issued upon any transfer or exchange of Notes shall be valid
obligations of the Company, evidencing the same debt, and entitled to the same
benefits under this Indenture, as the Notes surrendered upon such transfer or
exchange.
SECTION 2.07. Book-entry Provisions for Global Notes. (a) The
Restricted Global Notes and Regulation S Global Notes initially shall (i) be
registered in the name of the Depositary for such Global Notes or the nominee of
such Depositary, (ii) be delivered to the Trustee as custodian for such
Depositary and (iii) bear legends as set forth in Section 2.01.
Members of, or participants in, the Depositary ("AGENT MEMBERS") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by the Depositary, or the Trustee as its custodian, or under such
Global Note, and the Depositary may be treated by the Company, the Trustee and
any agent of the Company or the Trustee as the absolute owner of such Global
Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein
shall prevent the Company, the Trustee or any agent of the Company or the
Trustee, from giving effect to any written certification, proxy or other
authorization furnished by the Depositary or shall impair, as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Note.
(b) Transfers of a Global Note shall be limited to transfers of such
Global Note in whole, but not in part, to the Depositary, its successors or
their respective nominees. Interests of beneficial owners in a Restricted Global
Note or Regulation S Global Note may be transferred in accordance with the rules
and procedures of the Depositary and the provisions of Section 2.08. In
addition, U.S. Certificated Notes and Offshore Certificated Notes shall be
transferred to all beneficial owners in exchange for their beneficial interests
in the Restricted Global Notes or the Regulation S Global Notes, respectively,
if (i) the Depositary notifies the Company that it is unwilling or unable to
continue as Depositary for the Restricted Global Notes or the Regulation S
Global Notes, as the case may be, and a successor depositary is not appointed by
the Company within 90 days of such notice or (ii) an Event of Default of which
the Trustee has actual notice has occurred and is continuing and the Registrar
has received a request from the Depositary to issue such U.S. Certificated Notes
and Offshore Certificated Notes.
(c) Any beneficial interest in one of the Global Notes that is
transferred to a person who takes delivery in the form of an interest in the
other Global Note will, upon transfer, cease to be an interest in such Global
Note and become an interest in the other Global Note and, accordingly, will
thereafter be subject to all transfer restrictions, if any, and other procedures
applicable to beneficial interests in such other Global Note for as long as it
remains such an interest.
(d) In connection with any transfer of a portion of the beneficial
interests in the Global Notes to beneficial owners pursuant to paragraph (b) of
this Section, the Registrar shall reflect on its books and records the date and
a decrease in the principal amount of the Global Notes in an amount equal to the
principal amount of the beneficial interest in the Global Notes to be
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transferred, and the Company shall execute, and the Trustee shall authenticate
and deliver, one or more Certificated Notes of like tenor and amount.
(e) In connection with the transfer of all of the Restricted Global
Notes or Regulation S Global Notes to beneficial owners pursuant to paragraph
(b) of this Section, the Restricted Global Notes or Regulation S Global Notes,
as the case may be, shall be deemed to be surrendered to the Trustee for
cancellation, and the Company shall execute, and the Trustee shall authenticate
and deliver, to each beneficial owner identified by the Depositary in exchange
for its beneficial interest in the Restricted Global Notes or Regulation S
Global Notes, as the case may be, an equal aggregate principal amount of U.S.
Certificated Notes or Offshore Certificated Notes, as the case may be, of
authorized denominations.
(f) Any U.S. Certificated Notes delivered in exchange for an interest
in any Restricted Global Notes pursuant to paragraph (b) or (d) of this Section
shall, except as otherwise provided by paragraph (e) of Section 2.08, bear the
legend regarding transfer restrictions applicable to the U.S. Certificated Notes
set forth in Section 2.01.
(g) Any Offshore Certificated Note delivered in exchange for an
interest in any Regulation S Global Note pursuant to paragraph (b) of this
Section shall, except as otherwise provided by paragraph (e) of Section 2.08,
bear the legend regarding transfer restrictions applicable to the Offshore
Certificated Note set forth in Section 2.01.
(h) The registered holder of a Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.
SECTION 2.08. Special Transfer Provisions. Unless and until a Note is
exchanged for a New Note in connection with an effective Registration pursuant
to the Registration Rights Agreement, the following provisions shall apply:
(a) TRANSFERS TO QIBS. The following provisions shall apply with
respect to the registration of any proposed transfer of a U.S. Certificated Note
or an interest in a Restricted Global Note to a QIB (excluding Non-U.S.
Persons):
(i) If the Note to be transferred consists of (x) U.S. Certificated
Notes, the Registrar shall register the transfer, if such transfer is
being made by a proposed transferor who has checked the box provided
for on the form of Note stating, or has otherwise advised the Company
and the Registrar in writing, that the sale has been made in compliance
with the provisions of Rule 144A to a transferee who has signed the
certification provided for on the form of Note stating, or has
otherwise advised the Company and the Registrar, that it is purchasing
the Note for its own account or an account with respect to which it
exercises sole investment discretion and that it and any such account
is a QIB within the meaning of Rule 144A, and is aware that the sale to
it is
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being made in reliance on Rule 144A and acknowledges that it has
received such information regarding the Company as it has requested
pursuant to Rule 144A or has determined not to request such information
and that it is aware that the transferor is relying upon its foregoing
representation in order to claim the exemption from registration
provided for by Rule 144A or (y) an interest in the Restricted Global
Note, the transfer of such interest may be effected only through the
book entry system maintained by the Depositary.
(ii) If the proposed transferee is an Agent Member, and the Note to be
transferred consists of U.S. Certificated Notes, upon receipt by the
Registrar of the documents referred to in clause (i) and instructions
given in accordance with the Depositary's and the Registrar's
procedures, the Registrar shall reflect on its books and records the
date and an increase in the principal amount of the Restricted Global
Notes in an amount equal to the principal amount of the U.S.
Certificated Notes to be transferred and the Trustee shall cancel the
U.S. Certificated Notes so transferred.
(b) TRANSFERS OF INTERESTS IN THE REGULATION S TEMPORARY GLOBAL NOTES.
The following provisions shall apply with respect to registration of any
proposed transfer of interests in any Regulation S Temporary Global Note:
(i) The Registrar shall register the transfer of any Note (x) if the
proposed transferee is a Non-U.S. Person and the proposed transferor
has delivered to the Registrar a certificate substantially in the form
of Exhibit C hereto or (y) if the proposed transferee is a QIB and the
proposed transferor has checked the box provided for on the form of
Note stating, or has otherwise advised the Company and the Registrar in
writing, that the sale has been made in compliance with provisions of
Rule 144A to a transferee who has signed the certification provided for
on the form of Note stating, or has otherwise advised the Company and
the Registrar in writing, that it is purchasing the Note for its own
account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a QIB within
the meaning of Rule 144A, and is aware that the sale to it is being
made in reliance on Rule 144A and acknowledges that it has received
such information regarding the Company as it has requested pursuant to
Rule 144A or has determined not to request such information and that it
is aware that the transferor is relying upon its foregoing
representations in order to claim the exemption from registration
provided by Rule 144A.
(ii) If the proposed transferee is an Agent Member, upon receipt by
the Registrar of the documents referred to in clause (i)(y) above and
instructions given in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and an increase in the principal amount of the
Restricted Global Notes, in an amount equal to the principal amount of
the Regulation S Temporary Global Notes to be transferred, and the
Trustee shall decrease the amount of the Regulation S Temporary Global
Note.
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(c) TRANSFERS OF INTERESTS IN THE REGULATION S PERMANENT GLOBAL NOTES
OR OFFSHORE CERTIFICATED NOTES TO U.S. PERSONS. The following provisions shall
apply with respect to any transfer of interests in any Regulation S Permanent
Global Note or Offshore Certificated Notes to U.S. Persons:
(i) prior to the removal of the Securities Act Legend from any
Regulation S Global Note or Offshore Certificated Notes in accordance
with Section 2.01, the Registrar shall refuse to register such
transfer; and
(ii) after such removal, the Registrar shall register the transfer of
any such Note without requiring any additional certification.
(d) TRANSFERS TO NON-U.S. PERSONS AT ANY TIME. The following provisions
shall apply with respect to any transfer of a Note to a Non-U.S. Person:
(i) Prior to 40 days after the date hereof, the Registrar shall
register any proposed transfer of a Note to a Non-U.S. Person upon
receipt of a certificate substantially in the form of Exhibit C hereto
from the proposed transferor.
(ii) On and after 40 days after the date hereof, the Registrar shall
register any proposed transfer to any Non-U.S. Person if the Note to be
transferred is a U.S. Certificated Note or an interest in the
Restricted Global Note, upon receipt of a certificate substantially in
the form of Exhibit C from the proposed transferor.
(iii) (A) If the proposed transferor is an Agent Member holding a
beneficial interest in a Restricted Global Note, upon receipt by the
Registrar of (x) the documents, if any, required by paragraph (ii) and
(y) instructions in accordance with the Depositary's and the
Registrar's procedures, the Registrar shall reflect on its books and
records the date and a decrease in the principal amount of the
Restricted Global Notes in an amount equal to the principal amount of
the beneficial interest in the Restricted Global Notes to be
transferred, and (B) if the proposed transferee is an Agent Member,
upon receipt by the Registrar of instructions given in accordance with
the Depositary's and the Registrar's procedures, the Registrar shall
reflect on its books and records the date and an increase in the
principal amount of the Regulation S Global Notes in an amount equal to
the principal amount of the U.S. Certificated Notes or the Restricted
Global Notes, as the case may be, to be transferred, and the Trustee
shall cancel the Certificated Notes, if any, so transferred or decrease
the amount of the Restricted Global Notes, as the case may be.
(e) Securities Act Legend. Upon the transfer, exchange or replacement
of Notes not bearing the Securities Act Legend, the Registrar shall deliver
Notes that do not bear the Securities Act Legend. Upon the transfer, exchange or
replacement of Notes bearing the Securities Act Legend, the Registrar shall
deliver only Notes that bear the Securities Act Legend
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unless there is delivered to the Registrar an Opinion of Counsel reasonably
satisfactory to the Company and the Trustee to the effect that neither such
legend nor the related restrictions on transfer are required in order to
maintain compliance with the provisions of the Securities Act.
(f) General. By its acceptance of any Note bearing the Securities Act
Legend, each Holder of such a Note acknowledges the restrictions on transfer of
such Note set forth in this Indenture and in the Securities Act Legend and
agrees that it will transfer such Note only as provided in this Indenture. The
Registrar shall not register a transfer of any Note unless such transfer
complies with the restrictions on transfer of such Note set forth in this
Indenture. In connection with any transfer of Notes, each Holder agrees by its
acceptance of the Notes to furnish the Registrar or the Company such
certifications, legal opinions or other information as either of them may
reasonably require to confirm that such transfer is being made pursuant to an
exemption from, or a transaction not subject to, the registration requirements
of the Securities Act; provided that the Registrar shall not be required to
determine (but may rely on a determination made by the Company with respect to)
the sufficiency of any such certifications, legal opinions or other information.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.07 or this Section 2.08.
The Company shall have the right to inspect and make copies of all such letters,
notices or other written communications at any reasonable time upon the giving
of reasonable written notice to the Registrar.
SECTION 2.09. Replacement Notes. Holders shall surrender mutilated
Notes to the Trustee. If any mutilated Note is surrendered to the Trustee, or if
the Company and the Trustee receive evidence to their satisfaction of the
destruction, loss or theft of any Note, the Company shall issue and the Trustee
shall authenticate, a replacement Note if the Trustee's requirements are met,
and each such replacement Note shall be an additional obligation of the Company.
If the Trustee or the Company requires, the Holder must supply an indemnity bond
that is sufficient, in the reasonable judgment of the Trustee and the Company,
to protect the Company, the Trustee, any Agent or any authenticating agent from
any loss that any of them may suffer if a Note is replaced. The Company and the
Trustee may charge for its reasonable expenses in replacing a Note.
SECTION 2.10. Outstanding Notes. The Notes outstanding at any time are
all the Notes the Trustee has authenticated except for those it has cancelled,
those delivered to it for cancellation, and those described in this Section 2.10
as not outstanding. If a Note is replaced pursuant to Section 2.09, it ceases to
be outstanding unless the Trustee receives proof satisfactory to it that a bona
fide purchaser holds the replaced Note. If the entire principal of, premium, if
any, and accrued interest (including Special Interest, if any) on any Note is
considered paid under Section 2.04, it ceases to be outstanding and interest on
it ceases to accrue. Subject to Section 2.11, a Note does not cease to be
outstanding because the Company or any Affiliate of the Company holds such Note.
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SECTION 2.11. Treasury Notes. In determining whether the Holders of the
required principal amount of Notes have concurred in any direction, waiver or
consent, Notes owned by the Company or any Affiliate of the Company shall be
considered as though they are not outstanding; provided, however, that for the
purposes of determining whether the Trustee shall be protected in relying on any
such direction, waiver or consent, only Notes that the Trustee knows are so
owned shall be so disregarded. Notwithstanding the foregoing, Notes that the
Company or any Affiliate of the Company offers to purchase or acquires pursuant
to an exchange offer, tender offer or otherwise shall not be deemed to be owned
by the Company or any Affiliate of the Company until legal title to such Notes
passes to the Company or such Affiliate, as the case may be.
SECTION 2.12. Temporary Notes. Until definitive Notes are ready for
delivery, the Company may prepare and the Trustee on its behalf shall
authenticate temporary Notes. Temporary Notes shall be substantially in the form
of definitive Notes but may have variations that the Company considers
appropriate for temporary Notes. Without unreasonable delay, the Company shall
prepare and the Trustee on its behalf, upon receipt of a written order signed by
two Officers of the Company, shall authenticate definitive Notes in exchange for
temporary Notes. Until such exchange, temporary Notes shall be entitled to the
same rights, benefits and privileges as definitive Notes.
SECTION 2.13. Cancellation. Holders shall surrender Notes for
cancellation to the Trustee. The Company at any time may deliver Notes to the
Trustee for cancellation. The Registrar, any co-registrar, the Paying Agent, the
Company and its Subsidiaries shall forward to the Trustee any Notes surrendered
to them for registration of transfer, exchange, replacement, payment (including
all Notes called for redemption and all Notes accepted for payment pursuant to
an Offer) or cancellation, and the Trustee shall cancel all such Notes and shall
return all cancelled Notes to the Company. The Company may not issue new Notes
to replace any Notes that have been cancelled by the Trustee or that have been
delivered to the Trustee for cancellation. If the Company or any Affiliate of
the Company acquires any Notes (other than by redemption pursuant to Section
3.07 or an Offer pursuant to Section 4.15 or 4.16), such acquisition shall not
operate as a redemption or satisfaction of the Indebtedness represented by such
Notes unless and until such Notes are delivered to the Trustee for cancellation.
SECTION 2.14. Defaulted Interest. If the Company defaults in a payment
of interest on the Notes, it shall pay the defaulted interest in any lawful
manner plus, to the extent lawful, interest payable on the defaulted interest,
to Holders on a subsequent special record date, in each case at the rate
provided in the Notes and Section 4.01. The Company shall, with the Trustee's
consent, fix or cause to be fixed each such special record date and payment
date. At least 15 days before the special record date, the Company (or, at the
request of the Company, the Trustee in the name of, and at the expense of, the
Company) shall mail a notice that states the special record date, the related
payment date and the amount of interest to be paid.
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SECTION 2.15. Record Date. The record date for purposes of determining
the identity of holders of Notes entitled to vote or consent to any action by
vote or consent authorized or permitted under this Indenture shall be determined
as provided for in section 316(c) of the TIA.
SECTION 2.16. CUSIP and CINS Numbers. A "CUSIP" or "CINS" number will
be printed on the Notes and the Trustee shall use CUSIP or CINS numbers, as the
case may be, in notices of redemption, purchase or exchange as a convenience to
Holders, provided that any such notice may state that no representation is made
as to the correctness or accuracy of such numbers printed in the notice or on
the Notes and that reliance may be placed only on the other identification
numbers printed on the Notes. The Company will promptly notify the Trustee of
any change in the CUSIP or CINS number, as the case may be.
ARTICLE 3
REDEMPTIONS AND OFFERS TO PURCHASE
SECTION 3.01. Notices to Trustee. If the Company elects to redeem Notes
pursuant to Section 3.07, it shall furnish to the Trustee, at least 15 but not
more than 30 days before notice of any redemption is to be mailed to Holders (or
such shorter time as may be satisfactory to the Trustee), (x) an Officers'
Certificate stating (i) that the Company has elected to redeem Notes pursuant to
Section 3.07(a) or (b), as the case may be, (ii) the date notice of redemption
is to be mailed to Holders, (iii) the redemption date, (iv) the aggregate
principal amount of Notes to be redeemed, (v) the redemption price for such
Notes and (vi) the amount, if any, of accrued and unpaid interest (including
Special Interest, if any) on such Notes as of the redemption date and (y) an
Opinion of Counsel that the Company is entitled to redeem the Notes pursuant to
Section 3.07. If the Trustee is not the Registrar, the Company shall,
concurrently with delivery of its notice to the Trustee of a redemption, cause
the Registrar to deliver to the Trustee a certificate (upon which the Trustee
may rely) setting forth the name of, and the aggregate principal amount of the
Notes held by, each Holder.
If the Company is required to offer to purchase Notes pursuant to
Section 4.15 or 4.16, it shall furnish to the Trustee, at least 2 Business Days
before notice of the Offer is to be mailed to Holders, an Officers' Certificate
setting forth (i) that the Offer is being made pursuant to Section 4.15 or 4.16,
as the case may be, (ii) the Purchase Date, (iii) the maximum principal amount
of Notes the Company is offering to purchase pursuant to the Offer, (iv) the
purchase price for such Notes and (v) the amount, if any, of accrued and unpaid
interest (including Special Interest, if any) on such Notes as of the Purchase
Date.
The Company will also provide the Trustee with any additional
information that the Trustee reasonably requests in connection with any
redemption or Offer.
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SECTION 3.02. Selection of Notes to Be Redeemed or Purchased. If less
than all outstanding Notes are to be redeemed or if less than all Notes tendered
pursuant to an Offer are to be accepted for payment, the Trustee shall select
the outstanding Notes to be redeemed or accepted for payment on a pro rata
basis, by lot or by any other method that the Trustee deems fair and
appropriate. If the Company elects to mail notice of a redemption to Holders,
the Trustee shall at least 15 days prior to the date notice of redemption is to
be mailed (i) select the Notes to be redeemed from Notes outstanding not
previously called for redemption in the manner specified by the Trustee and (ii)
notify the Company of the names of each Holder of Notes selected for redemption,
the principal amount of Notes held by each such Holder and the principal amount
of such Holder's Notes that are to be redeemed. If less than all Notes tendered
pursuant to an Offer are to be accepted for payment, the Trustee shall select on
or prior to the Purchase Date for such Offer the Notes to be accepted for
payment. The Trustee shall select for redemption or purchase Notes or portions
of Notes in principal amounts at maturity of $1,000 or integral multiples
thereof; except that if all of the Notes of a Holder are selected for redemption
or purchase, the aggregate principal amount of the Notes held by such Holder,
even if not an integral multiple of $1,000, may be redeemed or purchased. Except
as provided in the preceding sentence, provisions of this Indenture that apply
to Notes called for redemption or tendered pursuant to an Offer also apply to
portions of Notes called for redemption or tendered pursuant to an Offer. The
Trustee shall notify the Company promptly of the Notes or portions of Notes to
be called for redemption or selected for purchase.
SECTION 3.03. Notice of Redemption. (a) At least 30 days but not more
than 60 days before any redemption date the Company shall mail by first class
mail a notice of redemption to the Trustee. With respect to any redemption of
Notes, the notice shall identify the Notes or portions thereof to be redeemed,
including CUSIP or CINS numbers, and shall state: (1) the redemption date; (2)
the redemption price for the Notes and the amount, if any, of unpaid and accrued
interest on such Notes as of the date of redemption and the premium, if any, and
Special Interest, if any, on the Notes as of the date of redemption; (3) the
section of this Indenture pursuant to which the Notes called for redemption are
being redeemed; (4) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date, upon surrender of such Note, a new Note or Notes in principal amount equal
to the unredeemed portion will be issued; (5) the name and address of the Paying
Agent; (6) that Notes called for redemption must be surrendered to the Paying
Agent to collect the redemption price for, and any accrued and unpaid interest
(including Special Interest, if any) on such Notes as of the date of redemption;
(7) that, unless the Company defaults in making such redemption payment,
interest on Notes called for redemption ceases to accrete or accrue, as the case
may be, on, and after the redemption date; and (8) that no representation is
made as to the correctness or accuracy of the CUSIP or CINS number (as
applicable) listed in such notice and printed on the Notes.
(b) The Trustee shall (at the Company's expense and in the Company's
name) give the notice of any redemption to Holders; provided, however, that the
Company shall deliver to the Trustee, at least 45 days prior to the date of
redemption and at least 15 days prior to the date that
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notice of the redemption is to be mailed to Holders, an Officers' Certificate
that (i) requests the Trustee to give notice of the redemption to Holders, (ii)
sets forth the information to be provided to Holders in the notice of
redemption, as set forth in the preceding paragraph, and (iii) sets forth the
aggregate principal amount of Notes to be redeemed and the amount, if any, of
accrued and unpaid interest (including Special Interest, if any) thereon as of
the date of redemption. If the Trustee is not the Registrar, the Company shall,
concurrently with any such request, cause the Registrar to deliver to the
Trustee a certificate (upon which the Trustee may rely) setting forth the name
of, the address of, and the aggregate principal amount of Notes held by, each
Holder; provided further that any such Officers' Certificate may be delivered to
the Trustee on a date later than permitted under this Section 3.03(b) if such
later date is acceptable to the Trustee.
SECTION 3.04. Effect of Notice of Redemption. Once notice of redemption
is mailed, Notes called for redemption become due and payable on the redemption
date at the price set forth in the Note.
SECTION 3.05. Deposit of Redemption Price. (a) Prior to 10:00 a.m. on
any redemption date, the Company shall deposit with the Paying Agent money
sufficient to pay the redemption price of, and the amount, if any, of accrued
interest and unpaid interest (including Special Interest, if any) on all Notes
to be redeemed in immediately available funds as of the date of redemption.
After any redemption date, the Paying Agent shall promptly return to the Company
any money that the Company deposited with the Paying Agent in excess of the
amounts necessary to pay the redemption price of, and any accrued interest
(including Special Interest, if any) on all Notes to be redeemed.
(b) If the Company complies with the preceding paragraph, interest on
the Notes to be redeemed will cease to accrete or accrue, as the case may be, on
such Notes on the applicable redemption date, whether or not such Notes are
presented for payment. If a Note is redeemed on an interest payment date, then
any accrued and unpaid interest shall be paid to the Person in whose name such
Note was registered at the close of business on the related interest record
date, in all other circumstances, such interest shall be paid to the Holder of
such Note. If any Note called for redemption shall not be so paid upon surrender
for redemption because of the failure of the Company to comply with the
preceding paragraph, interest will be paid on the unpaid principal, premium, if
any, and unpaid interest (including Special Interest, if any) which has accrued
to the redemption date, from the redemption date until such amounts are paid, at
the rate of interest provided in the Notes and Section 4.01.
SECTION 3.06. Notes Redeemed in Part. Upon surrender of a Note that is
redeemed in part, the Company shall issue and the Trustee shall authenticate for
the Holder at the Company's expense a new Note equal in principal amount to the
unredeemed portion of the Note surrendered.
SECTION 3.07. Redemption Provisions. (a) The Notes will not be
redeemable at the Company's option prior to March 1, 2003 except as described
below, with the proceeds of an
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Equity Offering. Thereafter, the Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor more than
60 days' notice, at the redemption prices (expressed as percentages of principal
amount) set forth below plus accrued and unpaid interest (including Special
Interest, if any) thereon, if any, to the applicable redemption date, if
redeemed during the twelve-month period beginning on March 1 of the years
indicated below:
YEAR PERCENTAGE
-------------------------------------- ----------
2003.................................. 104.688%
2004.................................. 103.125%
2005.................................. 101.563%
2006 and thereafter................... 100.000%
(b) In addition to the Company's right to redeem the Notes as set forth
in subsection (a), above, at any time prior to March 1, 2001, the Company may
(but will not have the obligation to) redeem up to 35% of the aggregate
principal amount of the Notes outstanding on the Closing Date at a redemption
price of 109.375% of the principal amount thereof, in each case plus accrued and
unpaid interest (including Special Interest, if any) thereon, if any, to the
redemption date, with the net cash proceeds of one or more Equity Offerings;
provided that at least $100 million aggregate principal amount of Notes remain
outstanding immediately after the occurrence of such redemption; and provided,
further that such redemption will occur within 60 days of the date of the
closing of any such Equity Offering.
SECTION 3.08. Mandatory Offers. (a) Within 30 days after any Change of
Control Trigger Date or Asset Sale Trigger Date, the Company shall mail to the
Trustee (who shall mail to each Holder at the Company's expense) a notice
stating: (1) that an Offer is being made pursuant to Section 4.15 or 4.16, as
the case may be, and describing the transaction or transactions that constitute
the change of control or Asset Sale, as the case may be, and the length of time
the Offer shall remain open and the maximum aggregate principal amount of Notes
that the Company is offering to purchase pursuant to such Offer; (2) the
purchase price for the Notes (as set forth in Section 4.15 or 4.16, as the case
may be), the amount (if any) of accrued and unpaid interest on such Notes as of
the Purchase Date, and the Purchase Date; (3) that any Note not accepted for
payment will continue to accrue interest; (4) that, unless the Company defaults
in making such payment, any Note accepted for payment pursuant to the Offer will
cease to accrue interest after the relevant Purchase Date; (5) that Holders may
tender all or any portion of the Notes registered in the name of such Holder and
that any portion of a Note tendered must be tendered in a principal amount of
$1,000 or an integral multiple thereof; (6) that Holders electing to tender any
Note or portion thereof will be required to surrender their Note, with the form
therein entitled "Option of Holder to Elect Purchase" completed, or transfer by
book-entry transfer, to the Company, a Depositary, if appointed by the Company,
or a Paying Agent at the address specified in the notice at least three days
prior to the Purchase Date; (7) that Holders will be entitled to withdraw their
election to tender Notes if the Company, the Depositary or the Paying Agent, as
the case may be, receives, not later than the close of business on the last day
of
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the relevant Offer Period, a facsimile transmission or letter setting forth the
name of the Holder, the principal amount of Notes delivered for purchase, and a
statement that such Holder is withdrawing his election to have such Note
purchased; and (8) that Holders whose Notes are accepted for payment in part
will be issued new Notes equal in principal amount to the unpurchased portion of
Notes surrendered, provided that only Notes in a principal amount of $1,000 or
integral multiples thereof will be accepted for payment in part.
(b) On the Purchase Date for any Offer, the Company will (i) to the
extent lawful, (x) in the case of an Offer resulting from a Change of Control,
accept for payment all Notes or portions thereof properly tendered pursuant to
such Offer and (y) in the case of an Offer resulting from one or more Asset
Sales, accept for payment, on a pro rata basis to the extent necessary, the
Payment Amount of Notes or portions thereof pursuant to the Net Proceeds Offer,
or if less than the Payment Amount has been tendered, all Notes tendered, and
will deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for payment by the Company in accordance with the
terms of Sections 3.08 and 4.16, (ii) deposit with the Paying Agent in
immediately available funds the aggregate purchase price of all Notes or
portions thereof accepted for payment and any accrued and unpaid interest
(including Special Interest, if any) on such Notes as of the Purchase Date, and
(iii) deliver, or cause to be delivered, to the Trustee all Notes or portions
thereof so accepted together with an Officers' Certificate setting forth the
name of each Holder that tendered Notes and the principal amount of the Notes,
as the case may be, or portions thereof tendered by each such Holder.
(c) With respect to any Offer, (i) if less than all of the Notes
tendered pursuant to an Offer are to be accepted for payment by the Company for
any reason, the Trustee shall select on or prior to the Purchase Date the Notes
or portions thereof to be accepted for payment pursuant to Section 3.02, and
(ii) if the Company deposits with the Paying Agent on the Purchase Date an
amount sufficient to purchase all Notes accepted for payment, interest shall
cease to accrue on such Notes on the Purchase Date; provided, however, that if
the Company fails to deposit an amount sufficient to purchase all Notes accepted
for payment, the deposited funds shall be used to purchase on a pro rata basis
all Notes accepted for payment and interest shall continue to accrue, as the
case may be, on all Notes not purchased.
(d) Promptly after consummation of an Offer, (i) the Paying Agent shall
mail to each Holder of Notes or portions thereof accepted for payment an amount
equal to the Change of Control Purchase Price or Offered Price, as the case may
be, (ii) with respect to any tendered Note not accepted for payment in whole or
in part, the Trustee shall return such Note to the Holder thereof, and (iii)
with respect to any Note accepted for payment in part, the Company shall issue
and the Trustee shall authenticate and mail to each such Holder a new Note equal
in principal amount to the unpurchased portion of the tendered Note.
(e) The Company will (i) publicly announce the results of the Offer to
Holders on or as soon as practicable after the Purchase Date, and (ii) comply
with Rule 14e-1 under the Exchange
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Act and any other securities laws and regulations to the extent such laws and
regulations are applicable to any Offer.
(f) If any of this Section 3.08, Section 4.15 or Section 4.16 conflict
with duties imposed upon the Company or the Guarantors by virtue of any
applicable United States securities laws or regulations, the Company or such
Guarantor, as the case may be, shall comply with such securities laws or
regulations and will not be deemed to have breached its obligations under this
Indenture.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Notes. Subject to the provisions of Article
10, the Company shall pay the principal of, and premium, if any, and interest
(including Special Interest, if any) on the Notes on the dates and in the manner
provided in the Notes. Holders must surrender their Notes to the Paying Agent to
collect principal payments. The Notes will be payable as to principal, premium,
if any, and interest (including Special Interest, if any) at the office or
agency of the Company maintained for such purpose within the City and State of
New York or, at the option of the Company, by wire transfer of immediately
available funds or, in the case of U.S. Certificated Notes or Offshore
Certificated Notes only, by mailing a check to the registered address of the
Holder.
So long as the Global Note Holder is the registered owner of any Notes,
the Global Note Holder will be considered the sole holder of outstanding Notes
represented by such Global Notes under this Indenture. Payments in respect of
the principal of, premium, if any, and interest (including Special Interest, if
any), if any, on any Notes registered in the name of a Global Note Holder on the
applicable record date will be payable by the Trustee to or at the direction of
such Global Note Holder in its capacity as the registered holder under this
Indenture. None of the Company, the Guarantors or the Trustee will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of Notes by the Depositary, or for maintaining,
supervising or reviewing any records of the Depositary relating to such Notes.
Principal, premium or interest (including Special Interest, if any)
shall be considered paid on the date due if, by 3 p.m. Eastern Standard Time on
the Business Day immediately preceding such date, the Company has deposited with
the Paying Agent money in immediately available funds designated for and
sufficient to pay such principal, premium or interest (including Special
Interest, if any); provided, however, that principal, premium or interest
(including Special Interest, if any) shall not be considered paid within the
meaning of this Section 4.01 if money intended to pay such principal, premium or
interest (including Special Interest, if any) is held by the Paying Agent for
the benefit of holders of Senior Indebtedness of the Company pursuant to the
provisions of Article 10. The Paying Agent shall return to the Company, no later
than five
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days following the date of payment, any money that exceeds the amount then due
and payable on the Notes.
SECTION 4.02. Reports. Whether or not required by the rules and
regulations of the Securities and Exchange Commission (the "COMMISSION"), so
long as any Notes are outstanding, the Company and the Guarantors will file with
the Commission, to the extent such filings are accepted by the Commission, and
will furnish (within 15 days after such filing) to the Trustee and the Holders
of Notes all quarterly and annual reports and other information, documents and
reports that would be required to be filed with the Commission pursuant to
Section 13 of the Exchange Act if the Company and the Guarantors were required
to file under such section. In addition, the Company and the Guarantors will
make such information available to prospective purchasers of the Notes,
securities analysts and broker-dealers who request it in writing. The Company
and the Guarantors have agreed that, for so long as any Notes remain
outstanding, they will furnish to the Holders and beneficial holders of Notes
and to prospective purchasers of Notes designated by the holders and to broker
dealers, upon their request, the information required to be delivered pursuant
to Rule 144A(d)(4) under the Securities Act.
SECTION 4.03. Compliance Certificate. The Company shall deliver to the
Trustee, within 90 days after the end of each fiscal year of the Company, an
Officers' Certificate stating that (i) a review of the activities of the Company
and its Subsidiaries during the preceding fiscal year without regard to any
grace period has been made to determine whether the Company has kept, observed,
performed and fulfilled all of its obligations under this Indenture and the
Notes, (ii) such review was supervised by the Officers of the Company signing
such certificate, and (iii) that to the best knowledge of each Officer signing
such certificate, (a) the Company has kept, observed, performed and fulfilled
each and every covenant contained in this Indenture and is not in default in the
performance or observance of any of the terms, provisions and conditions of this
Indenture (or, if a Default or Event of Default occurred, describing all such
Defaults or Events of Default of which each such Officer may have knowledge and
what action the Company has taken or proposes to take with respect thereto), and
(b) no event has occurred and remains in existence by reason of which payments
on account of the principal of, or premium, if any, or interest (including
Special Interest, if any) on the Notes are prohibited or if such event has
occurred, a description of the event and what action the Company is taking or
proposes to take with respect thereto.
So long as not contrary to the then current recommendations of the
American Institute of Certified Public Accountants, the annual financial
statements delivered pursuant to Section 4.02 shall be accompanied by a written
statement of the Company's independent public accountants (which shall be a firm
of established national reputation) that in making the examination necessary for
certification of such financial statements nothing has come to their attention
that would lead them to believe that the Company has violated any provisions of
Sections 4.01, 4.05, 4.07, 4.08, 4.09, 4.10, 4.13, 4.15, 4.16, 4.17, or Article
5 or, if any such violation has occurred, specifying the nature and period of
existence thereof, it being understood that such accountants
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shall not be liable directly or indirectly to any Person for any failure to
obtain knowledge of any such violation.
The Company will, so long as any of the Notes are outstanding, deliver
to the Trustee, promptly after any Officer of the Company becomes aware of any
Default or Event of Default, an Officers' Certificate specifying such Default or
Event of Default and what action the Company is taking or proposes to take with
respect thereto.
SECTION 4.04. Stay, Extension and Usury Laws. Each of the Company and
the Guarantors covenant (to the extent that they may lawfully do so) that they
will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay, extension or usury law wherever
enacted, now or at any time hereafter in force, that might affect the covenants
or the performance of their obligations under this Indenture and Notes; and each
of the Company and the Guarantors (to the extent they may lawfully do so) hereby
expressly waive all benefit or advantage of any such law, and covenant that they
will not, by resort to any such law, hinder, delay or impede the execution of
any power granted to the Trustee pursuant to this Indenture, but will suffer and
permit the execution of every such power as though no such law has been enacted.
SECTION 4.05. Limitation on Restricted Payments. The Company will not,
and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, make any Restricted Payment (except as permitted below) if at the
time of such Restricted Payment:
(i) a Default or Event of Default shall have occurred and be
continuing or shall occur as a consequence thereof;
(ii) the Company would be unable to meet the Coverage Ratio Incurrence
Condition; or
(iii) the amount of such Restricted Payment, when added to the
aggregate amount of all other Restricted Payments (except as expressly
provided in the second following paragraph) made after the Issue Date,
exceeds the sum of (A) 50% of the Company's Consolidated Net Income
(taken as one accounting period) from the beginning of the first fiscal
quarter commencing after the Issue Date to the end of the Company's
most recently ended fiscal quarter for which financial statements are
available at the time of such Restricted Payment (or, if such aggregate
Consolidated Net Income shall be a deficit, minus 100% of such
aggregate deficit) plus (B) the net cash proceeds from the issuance and
sale (other than to a Subsidiary of the Company) after the Issue Date
of (1) the Company's Capital Stock that is not Disqualified Capital
Stock or (2) debt securities of the Company that have been converted
into the Company's Capital Stock that is not Disqualified Capital Stock
and that is not held by a Subsidiary of the Company, plus (C) to the
extent that any Restricted Investment that was made after the Issue
Date is sold for cash or otherwise liquidated or repaid for cash, the
lesser of (x) the
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cash return of capital with respect to such Restricted Investment (less
the cost of disposition, if any) and (y) the initial amount of such
Restricted Investment plus (D) the amount of Restricted Investment
outstanding in an Unrestricted Subsidiary at the time such Unrestricted
Subsidiary is designated a Restricted Subsidiary of the Company in
accordance with the definition of "Unrestricted Subsidiary".
The foregoing provisions will not prohibit (1) the payment of any
dividend by the Company or any Restricted Subsidiary within 60 days after the
date of declaration thereof, if at said date of declaration such payment would
have complied with the provisions of this Indenture; (2) the redemption,
repurchase, retirement or other acquisition of any Capital Stock of the Company
in exchange for, or out of the proceeds of, the substantially concurrent sale
(other than to a Subsidiary of the Company) of other Capital Stock of the
Company (other than any Disqualified Capital Stock); (3) the defeasance,
redemption, repurchase or other retirement of Subordinated Indebtedness in
exchange for, or out of the proceeds of, the substantially concurrent issue and
sale of Capital Stock of the Company (other than (x) Disqualified Capital Stock,
(y) Capital Stock sold to a Subsidiary of the Company and (z) Capital Stock
purchased with the proceeds of loans from the Company or any of its
Subsidiaries); (4) the making of a Related Business Investment in joint ventures
or Unrestricted Subsidiaries out of the proceeds of the substantially concurrent
issue and sale of Capital Stock of the Company (other than (x) Disqualified
Capital Stock, (y) Capital Stock sold to a Subsidiary of the Company and (z)
Capital Stock purchased with the proceeds of loans from the Company or any of
its Subsidiaries); (5) Specified Transaction Payments; (6) payments of up to
$1.75 million to Granaria Holdings or any of its Affiliates in the aggregate in
any fiscal year pursuant to any Related Party Agreement entered into between
Granaria Holdings or any of its Affiliates and the Company or its Subsidiaries
to provide management and similar services to any such Persons or to Parent; (7)
the payments of dividends or distributions to Parent solely in amounts and at
the times necessary to permit Parent to purchase, redeem, acquire, cancel or
otherwise retire for value Capital Stock of Parent, or permit payments of
dividends or distributions by Parent to its shareholders solely in amounts and
at the times necessary to permit such shareholders to (or permit subsequent
distributions to permit their respective shareholders to) purchase, redeem,
acquire, cancel or otherwise retire for value Capital Stock of such
shareholders, in each case held by officers, directors or employees or former
officers, directors or employees (or their transferees, estates or beneficiaries
under their estates), or a trust established for the benefit of any of the
foregoing of Parent, the Company or its Subsidiaries, upon death, disability,
retirement, severance or termination of employment or service or pursuant to any
agreement under which such Capital Stock or related rights were issued; provided
that the amount of such payments under this clause (7) after the Issue Date does
not exceed in the aggregate $5.0 million; (8) the payment of dividends or
distributions of amounts to Parent in amounts and at such times as are
sufficient to pay the scheduled interest or dividends owed by Parent on the
Parent Preferred Stock or Exchange Debentures so long as (x) Parent is the
direct Parent of the Company owning 100% of the Capital Stock of the Company and
(y) such Parent Preferred Stock or Exchange Debentures contains no scheduled
requirement for the payment of cash interest or dividends, as applicable, until
at least five years from the date of their original issuance, provided that at
the time of such
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Restricted Payment and after giving effect thereto, either (A) Company would be
able to meet the Coverage Ratio Incurrence Condition or (B) the amount of such
Restricted Payment, when added to the aggregate amount of all other Restricted
Payments made after the Issue Date, does not exceed the sum referred to in
clause (iii) of the next preceding paragraph; (9) Restricted Investments the
amount of which, together with the amount of all other Restricted Investments
made pursuant to this clause (9) after the Issue Date, does not exceed $10.0
million, provided that, in the case of clauses (8) and (9), no Default or Event
of Default shall have occurred and be continuing or occur as a consequence of
the actions or payments set forth therein; or (10) during any period in which
Parent files consolidated income tax returns that include the Company, payments
to Parent in amounts not in excess of the amount that the Company would have
paid if it had filed consolidated tax returns on a separate-company basis, in
each case solely in amounts and at the times necessary to permit Parent to pay
its consolidated income taxes.
Each Restricted Payment permitted pursuant to the preceding paragraph
(other than the Restricted Payments referred to in clauses (2) through (5) or
(10) thereof, and, to the extent deducted in determining Consolidated Net Income
in any period, the Restricted Payments referred to in clauses (6) and (7)
thereof) shall be included once in calculating whether the conditions of clause
(iii) of the second preceding paragraph have been met with respect to any
subsequent Restricted Payments. For purposes of determining compliance with this
Section 4.05, in the event that a transaction meets the criteria of more than
one of the types of Restricted Payments described in the clauses of the
immediately preceding paragraph or of the clauses of the definition of
"Restricted Payment," the Company, in its sole discretion, shall classify such
transaction and only be required to include the amount and type of such
transaction in one of such clauses. If an issuance of Capital Stock of the
Company is applied to make a Restricted Payment pursuant to clause (2), (3) or
(4) above, then, in calculating whether the conditions of clause (iii) of the
second preceding paragraph have been met with respect to any subsequent
Restricted Payments, the proceeds of any such issuance shall be included under
such clause (iii) only to the extent such proceeds are not applied as so
described in this sentence.
Not later than the date of making any Restricted Payment, the Company
shall deliver to the Trustee an Officers' Certificate stating that such
Restricted Payment is permitted and setting forth the basis upon which the
calculations required by Section 4.05 were computed, which calculations shall be
based upon the Company's latest available financial statements.
SECTION 4.06. Corporate Existence. Subject to Section 4.16 and Article
5, the Company will do or cause to be done all things necessary to preserve and
keep in full force and effect its corporate existence and the corporate,
partnership or other existence of each of its Subsidiaries in accordance with
the respective organizational documents of each of its Subsidiaries and the
rights (charter and statutory), licenses and franchises of the Company and each
of its Subsidiaries; provided, however, that the Company shall not be required
to preserve any such right, license or franchise, or the corporate, partnership
or other existence of any Subsidiary, if the Board of Directors of the Company
shall determine that the preservation thereof is no longer
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desirable in the conduct of the business of the Company and its Subsidiaries
taken as a whole, and that the loss thereof is not adverse in any material
respect to the Holders.
SECTION 4.07. Limitations on Additional Indebtedness. The Company will
not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, to incur any Indebtedness (including without limitation Acquired
Indebtedness); provided that (i) the Company and its Restricted Subsidiaries may
incur Permitted Indebtedness and (ii) the Company may incur additional
Indebtedness if, after giving effect thereto, the Company's Consolidated
Interest Coverage Ratio on the date thereof would be at least 2.0 to 1,
determined on a pro forma basis as if the incurrence of such additional
Indebtedness, and the application of the net proceeds therefrom, had occurred at
the beginning of the four-quarter period used to calculate the Company's
Consolidated Interest Coverage Ratio.
SECTION 4.08. Limitation on the Issuance of Capital Stock of Restricted
Subsidiaries. The Company will not permit any Restricted Subsidiary, directly or
indirectly, to issue or sell any shares of its Capital Stock (including options,
warrants or other rights to purchase shares of such Capital Stock) except (i) to
the Company or a Wholly-Owned Restricted Subsidiary, (ii) if, immediately after
giving effect to such issuance or sale, such Restricted Subsidiary would no
longer constitute a Restricted Subsidiary or (iii) to the extent such shares
represent directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Wholly-Owned Restricted
Subsidiary. The proceeds of any sale of Capital Stock permitted hereunder and
referred to in clauses (ii) and (iii) above will be treated as Net Available
Proceeds and must be applied in a manner consistent with the provisions of
Section 4.16.
SECTION 4.09. Limitations on Layering Debt. The Company will not, and
will not permit any Subsidiary Guarantor to, incur any Indebtedness that is
subordinate or junior in right of payment to any Senior Indebtedness of the
Company or such Subsidiary Guarantor unless such Indebtedness by its terms is
pari passu with, or subordinated to, the Notes or the Note Guarantee of such
Subsidiary Guarantor, as the case may be.
SECTION 4.10. Limitation on Transactions with Affiliates. The Company
will not, and will not permit any of its Restricted Subsidiaries to, directly or
indirectly, in one transaction or a series of related transactions, sell, lease,
transfer or otherwise dispose of any of its properties or assets to, or purchase
any property or assets from or enter into any contract, agreement,
understanding, loan, advance or guarantee with, or for the benefit of, any
Affiliate (each of the foregoing, an "AFFILIATE TRANSACTION"), unless (i) such
Affiliate Transaction is on terms that are no less favorable to the Company or
the relevant Restricted Subsidiary than those that would have been obtained in a
comparable transaction by the Company or such Restricted Subsidiary with an
unrelated Person and (ii) the Company delivers to the Trustee (a) with respect
to any Affiliate Transaction (or series of related transactions) involving
aggregate payments in excess of $1.0 million, an Officers' Certificate
certifying that such Affiliate Transaction complies with clause (i) above and a
Secretary's Certificate which sets forth and authenticates a resolution that has
been adopted by a vote of a majority of the Independent Directors approving such
Affiliate
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Transaction or, if at the time fewer than three Independent Directors are then
in office, a Secretary's Certificate which sets forth and authenticates a
resolution that has been adopted unanimously by the Company's Board of Directors
and (b) with respect to any Affiliate Transaction (or series of related
transactions) involving aggregate payments of $5.0 million or more, the
certificates described in the preceding clause (a) and an opinion as to the
fairness to the Company or such Subsidiary from a financial point of view issued
by an Independent Financial Advisor; provided, however, that the following shall
not be deemed to be Affiliate Transactions: (i) transactions exclusively between
or among (1) the Company and one or more Restricted Subsidiaries or (2)
Restricted Subsidiaries, provided, in each case, that no Affiliate of the
Company (other than another Restricted Subsidiary) owns Capital Stock of any
such Restricted Subsidiary; (ii) transactions between the Company or any
Restricted Subsidiary and any qualified employee stock ownership plan
established for the benefit of the Company's employees, or the establishment or
maintenance of any such plan; (iii) reasonable director, officer and employee
compensation and other benefit, and indemnification arrangements approved by a
majority of the Independent Directors on the Board of Directors; (iv)
transactions permitted under Section 4.05; (v) the pledge of Capital Stock of
Unrestricted Subsidiaries to support the Indebtedness thereof; (vi) the entering
into of any Tax Sharing Agreement, and any payment pursuant thereto; (vii) the
payment on behalf of Parent of ministerial administrative and operating fees and
expenses in the ordinary course to Persons other than to Affiliates of Parent or
the Company, provided that the aggregate amount thereof in any fiscal year of
the Company does not exceed $750,000; (viii) arrangements with ABN AMRO Bank
N.V. or any of its Affiliates or their respective successors (x) under the New
Credit Agreement or the Notes or in connection therewith, (y) in connection with
the offering of the Notes or the Series A Senior Preferred Stock or (z) pursuant
to other banking, financing or underwriting activity entered into in the
ordinary course of business; (ix) transactions between the Company or any
Restricted Subsidiary and any Affiliate of the Company or such Restricted
Subsidiary that is a joint venture, provided that no direct or indirect holder
of an equity interest in such joint venture (other than the Company or a
Restricted Subsidiary) is an Affiliate of the Company or such Restricted
Subsidiary; and (x) Specified Transaction Payments.
SECTION 4.11. Limitations on Liens. The Company shall not, and shall
not permit any Restricted Subsidiary to, directly or indirectly, incur or permit
to exist any Lien of any nature whatsoever on any property of the Company or any
Restricted Subsidiary (including Capital Stock of a Restricted Subsidiary),
whether owned at the Issue Date or thereafter acquired, which secures
Indebtedness that is not Senior Indebtedness unless contemporaneously therewith
effective provision is made to secure the Notes equally and ratably with (or if
such Lien secures Indebtedness that is subordinated to the Notes, prior to) such
Indebtedness for so long as such Indebtedness is secured by a Lien.
The foregoing restrictions shall not apply to (i) Liens existing on the
Issue Date securing Indebtedness outstanding on the Issue Date; (ii) Liens in
favor of the Company or a Subsidiary Guarantor; (iii) Liens to secure
Indebtedness that is non-recourse to the Company or any of its Subsidiaries or
any of their respective assets other than the assets acquired or improved with
such
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Indebtedness; (iv) Liens securing Acquired Indebtedness permitted to be incurred
under this Indenture, provided that the Liens do not extend to property or
assets not subject to such Lien at the time of acquisition (other than
improvements thereon); (v) Liens on property of a Person existing at the time
such Person is acquired or merged with or into or consolidated with the Company
or any such Restricted Subsidiary (and not created in anticipation or
contemplation thereof); (vi) Liens to secure Refinancing Indebtedness of
Indebtedness secured by Liens referred to in the foregoing clauses (iv) and (v),
provided that in each case such Liens do not extend to any additional property
or assets (other than improvements thereon).
SECTION 4.12. Taxes. The Company shall, and shall cause each of its
Subsidiaries to, pay prior to delinquency all taxes, assessments and
governmental levies the failure of which to pay could reasonably be expected to
result in a material adverse effect on the condition (financial or otherwise),
business or results of operations of the Company and its Subsidiaries taken as a
whole, except for those taxes contested in good faith by appropriate
proceedings.
SECTION 4.13. Limitations on Restrictions on Distributions from
Restricted Subsidiaries. The Company will not, and will not permit any of its
Restricted Subsidiaries to, create or otherwise cause or suffer to exist or
become effective any consensual Payment Restriction with respect to any of its
Restricted Subsidiaries, except for (a) any such Payment Restriction in effect
on the Issue Date under the New Credit Agreement or the Parent Preferred Stock
or any similar Payment Restriction under any similar credit facility, or any
amendment, restatement, renewal, replacement or refinancing of any of the
foregoing, provided that such similar Payment Restrictions are not, taken as a
whole, materially more restrictive than the Payment Restrictions in effect on
the Issue Date under the New Credit Agreement or the Parent Preferred Stock, (b)
any such Payment Restriction in effect on the Issue Date consisting of customary
net worth or leverage tests in effect on the Issue Date under any credit
facility of any Foreign Subsidiary, or any amendment, restatement, renewal,
replacement or refinancing of any of the foregoing (including for purposes of
this clause (b), any increase in the principal amount available thereunder) (a
"REPLACEMENT FACILITY"), provided that such Payment Restrictions in any such
Replacement Facility are not, taken as a whole, materially more restrictive than
the Payment Restrictions in effect on the Issue Date under the facility amended,
restated, renewed, replaced or refinanced, (c) any such Payment Restriction
under any agreement evidencing any Acquired Indebtedness that was permitted to
be incurred pursuant to this Indenture in effect at the time of such incurrence
and not created in contemplation of such event, provided that such Payment
Restriction is not extended to apply to any of the assets of the entities not
previously subject thereto, (d) any such Payment Restriction arising in
connection with Refinancing Indebtedness; provided that any such Payment
Restrictions that arise under such Refinancing Indebtedness are not, taken as a
whole, materially more restrictive than those under the agreement creating or
evidencing the Indebtedness being refunded or refinanced and (e) any such
restriction by reason of customary provisions restricting assignments,
subletting or other transfers contained in leases, licenses and similar
agreements entered into in the ordinary course of business.
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SECTION 4.14. Maintenance of Office or Agencies. The Company will
maintain an office or an agency (which may be an office of any Agent) where
Notes may be surrendered for registration of transfer or exchange or for
presentation for payment and where notices and demands to or upon the Company in
respect of the Notes and this Indenture may be served. The Company will give
prompt written notice to the Trustee of any change in the location of such
office or agency. If at any time the Company shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office, subject to Section 2.06.
The Company may also from time to time designate one or more other
offices or agencies where the Notes may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such other office or
agency.
The Company hereby designates the Corporate Trust Office of the Trustee
as one such office or agency of the Company in accordance with Section 2.03.
SECTION 4.15. Change of Control. (a) Upon the occurrence of a Change of
Control (the "CHANGE OF CONTROL TRIGGER DATE"), each Holder of Notes may require
the Company to repurchase all or any part (equal to $1,000 or an integral
multiple thereof) of such Holder's Notes pursuant to the offer described below
at an offer price in cash equal to 101% of the aggregate principal amount of the
Notes thereof plus accrued and unpaid interest (including Special Interest, if
any), if any, to the date of repurchase (the "CHANGE OF CONTROL PURCHASE
PRICE").
(b) Within 30 days following any Change of Control, the Company will
mail to the Trustee (who shall mail to each Holder at the Company's expense) a
notice (i) describing the transaction or transactions that constitute the Change
of Control, (ii) offering to repurchase, pursuant to the procedures required by
Section 3.08 of this Indenture and described in such notice (a "CHANGE OF
CONTROL OFFER"), on a date specified in such notice (which shall be a business
day not earlier than 30 days or later than 60 days from the date such notice is
mailed) and for the Change of Control Purchase Price, all Notes properly
tendered by such holder pursuant to such offer to purchase for the Change of
Control Purchase Price and (iii) describing the procedures that holders must
follow to accept the Change of Control Offer.
(c) The Change of Control Offer will remain open for a period of at
least 20 Business Days following its commencement (the "CHANGE OF CONTROL OFFER
PERIOD"). No later than five Business Days after the termination of the Change
of Control Offer Period (the "CHANGE OF CONTROL PURCHASE DATE"), the Company
will purchase all Notes tendered in response to the Change of Control Offer.
Payment for any Notes so purchased will be made in the same manner as interest
payments are made.
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(d) Prior to complying with the provisions of this Section 4.15, but in
any event within 30 days following a Change of Control, the Company will either
repay all outstanding Senior Indebtedness or obtain the requisite consents, if
any, under all agreements governing outstanding Senior Indebtedness to permit
the repurchase of Notes required by this covenant. The Company's obligation to
make a Change of Control Offer will be satisfied if a third party makes the
Change of Control Offer in the manner and at the times and otherwise in
compliance with the requirements applicable to a Change of Control Offer made by
the Company and purchases all Notes properly tendered and not withdrawn under
such Change of Control Offer.
(e) The Company will comply with the applicable tender offer rules,
including the requirements of Rule 14e-1 under the Exchange Act and any other
applicable laws and regulations in connection with the purchase of Notes
pursuant to a Change of Control Offer.
SECTION 4.16. Limitations on Asset Sales. (a) The Company will not, and
will not permit any of its Restricted Subsidiaries to, consummate any Asset Sale
unless (i) the Company or such Restricted Subsidiary receives consideration at
the time of such Asset Sale at least equal to the Fair Market Value of the
assets included in such Asset Sale (evidenced by the delivery by the Company to
the Trustee of an Officers' Certificate certifying that such Asset Sale complies
with this clause (i)), (ii) immediately before and immediately giving effect to
such Asset Sale, no Default or Event of Default shall have occurred and be
continuing, and (iii) at least 80% of the consideration received by the Company
or such Restricted Subsidiary therefor is in the form of cash paid at the
closing thereof. The amount (without duplication) of any (x) Indebtedness (other
than Subordinated Indebtedness) of the Company or such Restricted Subsidiary
that is expressly assumed by the transferee in such Asset Sale and with respect
to which the Company or such Restricted Subsidiary, as the case may be, is
unconditionally released by the holder of such Indebtedness, and (y) any Cash
Equivalents, or other notes, securities or items of property received from such
transferee that are promptly (but in any event within 15 days) converted by the
Company or such Restricted Subsidiary to cash (to the extent of the cash
actually so received), shall be deemed to be cash for purposes of clause (ii)
and, in the case of clause (x) above, shall also be deemed to constitute a
repayment of, and a permanent reduction in, the amount of such Indebtedness for
purposes of the following paragraph (b). If at any time any non-cash
consideration received by the Company or any Restricted Subsidiary of the
Company, as the case may be, in connection with any Asset Sale is converted into
or sold or otherwise disposed of for cash (other than interest received with
respect to any such non-cash consideration), then the date of such conversion or
disposition shall be deemed to constitute the date of an Asset Sale hereunder
and the Net Available Proceeds thereof shall be applied in accordance with this
Section 4.16. A transfer of assets by the Company to a Restricted Subsidiary or
by a Restricted Subsidiary to the Company or to a Restricted Subsidiary will not
be deemed to be an Asset Sale and a transfer of assets that constitutes a
Restricted Investment and that is permitted under Section 4.05 will not be
deemed to be an Asset Sale.
(b) If the Company or any Restricted Subsidiary engages in an Asset
Sale, the Company or any Restricted Subsidiary shall, no later than 360 days
after such Asset Sale (i)
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apply all or any of the Net Available Proceeds therefrom to repay amounts
outstanding under the New Credit Agreement or any other Senior Indebtedness;
provided, in each case, that the related loan commitment (if any) of any
Indebtedness constituting revolving credit debt is thereby permanently reduced
by the amount of such Indebtedness so repaid and/or (ii) invest all or any part
of the Net Available Proceeds thereof in the purchase of fixed assets to be used
by the Company and its Restricted Subsidiaries in a Related Business (together
with any short-term assets incidental thereto), or the making of a Related
Business Investment. The amount of such Net Available Proceeds not applied or
invested as provided in this paragraph will constitute "EXCESS PROCEEDS."
(c) When the aggregate amount of Excess Proceeds equals or exceed $5.0
million (such date, the "ASSET SALE TRIGGER DATE"), the Company will be required
to make an offer to purchase, from all Holders of the Notes, an aggregate
principal amount of Notes equal to the amount of such Excess Proceeds as
follows:
(i) The Company will make an offer to purchase (a "NET PROCEEDS
OFFER") from all holders of the Notes, in accordance with the
procedures set forth in Section 3.08, the maximum principal amount
(expressed as a multiple of $1,000) of Notes that may be purchased out
of the amount (the "PAYMENT AMOUNT") of such Excess Proceeds.
(ii) The offer price for the Notes will be payable in cash in an
amount equal to 100% of the principal amount of the Notes tendered
pursuant to a Net Proceeds Offer, plus accrued and unpaid interest and
Special Interest, if any, to the date such Net Proceeds Offer is
consummated (the "OFFERED PRICE"), in accordance with the procedures
set forth in this Indenture. To the extent that the aggregate Offered
Price of Notes tendered pursuant to a Net Proceeds Offer is less than
the Payment Amount relating thereto (such shortfall constituting a "NET
PROCEEDS DEFICIENCY"), the Company may use such Net Proceeds
Deficiency, or a portion thereof, for general corporate purposes,
subject to the limitations in Section 4.05.
(iii) If the aggregate Offered Price of Notes validly tendered and not
withdrawn by holders thereof exceeds the Payment Amount, Notes to be
purchased will be selected on a pro rata basis (with such adjustments
as may be deemed appropriate by the Company so that only Notes in
denominations of $1,000, or integral multiples thereof, will be
purchased). The Net Proceeds Offer shall remain open for a period of at
least 20 Business Days following its commencement (the "NET PROCEEDS
OFFER PERIOD"). No later than five Business Days after the termination
of the Offer Period (the "NET PROCEEDS PURCHASE DATE"), the Company
will purchase the principal amount of Notes required to be purchased
pursuant to this covenant. Payment for any Notes so purchased will be
made in the same manner as interest payments are made.
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(iv) Upon completion of such Net Proceeds Offer in accordance with the
foregoing provisions, the amount of Excess Proceeds with respect to
which such Net Proceeds Offer was made shall be deemed to be zero.
The Company will not permit any Subsidiary to enter into or suffer to
exist any agreement that would place any restriction of any kind (other than
pursuant to law or regulation or the New Credit Agreement) on the ability of the
Company to make a Net Proceeds Offer following any Asset Sale. The Company will
comply with Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder, if applicable, in the event that an Asset Sale occurs
and the Company is required to purchase Notes as described above.
SECTION 4.17. Additional Note Guarantees. If the Company or any of its
Subsidiaries shall acquire or create another Subsidiary (other than (x) any
Foreign Subsidiary or (y) a Subsidiary that has been designated as an
Unrestricted Subsidiary or (z) an Immaterial Subsidiary), then within 10 days
after acquiring or creating such Subsidiary, the Company will cause each such
Subsidiary to execute and deliver to the Trustee a counterpart of this Indenture
as a Subsidiary Guarantor.
ARTICLE 5
SUCCESSORS
SECTION 5.01. Limitations on Mergers and Certain Other Transactions.
(a) The Company will not, in a single transaction or a series of related
transactions, (i) consolidate or merge with or into (other than a merger with a
Wholly-Owned Restricted Subsidiary solely for the purpose of changing the
Company's jurisdiction of incorporation to another State of the United States),
or sell, lease, transfer, convey or otherwise dispose of or assign all or
substantially all of the assets of the Company or the Company and its
Subsidiaries (taken as a whole), or assign any of its obligations under the
Notes and this Indenture, to any Person or (ii) adopt a Plan of Liquidation
unless, in either case: (w) the Person formed by or surviving such consolidation
or merger (if other than the Company) or to which such sale, lease, conveyance
or other disposition or assignment shall be made (or, in the case of a Plan of
Liquidation, any Person to which assets are transferred) (collectively, the
"SUCCESSOR"), is a corporation organized and existing under the laws of any
State of the United States of America or the District of Columbia, and the
Successor assumes by supplemental indenture in a form satisfactory to the
Trustee all of the obligations of the Company under the Notes and this
Indenture; (x) immediately prior to and immediately after giving effect to such
transaction and the assumption of the obligations as set forth in clause (w)
above and the incurrence of any Indebtedness to be incurred in connection
therewith, no Default or Event of Default shall have occurred and be continuing;
and (y) immediately after and giving effect to such transaction and the
assumption of the obligations set forth in clause (w) above and the incurrence
of any Indebtedness to be incurred in connection therewith, and the use of any
net proceeds therefrom on a pro forma basis,
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(1) the Consolidated Net Worth of the Company or the Successor, as the case may
be, would be at least equal to the Consolidated Net Worth of the Company
immediately prior to such transaction and (2) the Company or the Successor, as
the case may be, could meet the Coverage Ratio Incurrence Condition; and (z)
each Subsidiary Guarantor, unless it is the other party to the transactions
described above, shall have by amendment to its guarantee confirmed that its
guarantee of the Notes shall apply to the obligations of the Company or the
Successor under the Notes and this Indenture. For purposes of this covenant, any
Indebtedness of the Successor which was not Indebtedness of the Company
immediately prior to the transaction shall be deemed to have been incurred in
connection with such transaction.
(b) No Subsidiary Guarantor may consolidate with or merge with or into
(whether or not such Subsidiary Guarantor is the surviving Person), another
Person or entity whether or not affiliated with such Subsidiary Guarantor
unless:
(i) the Person formed by or surviving any such consolidation or merger
(if other than such Subsidiary Guarantor) assumes all the obligations
of such Subsidiary Guarantor under the Notes and this Indenture
pursuant to a supplemental indenture in form and substance reasonably
satisfactory to the Trustee under this Indenture,
(ii) immediately after giving effect to such transaction, no Default
or Event of Default exists, and
(iii) immediately after giving effect to such transaction, the
Coverage Ratio Incurrence Condition would be met.
(c) Subject to Section 5.01(b), in the event of a sale or other
disposition of all of the assets of any Subsidiary Guarantor, by way of merger,
consolidation or otherwise, or a sale or other disposition of all of the Capital
Stock of any Subsidiary Guarantor, by way of merger, consolidation or otherwise,
then such Subsidiary Guarantor (in the event of a sale or other disposition of
all of the Capital Stock of such Subsidiary Guarantor) or the corporation
acquiring the property (in the event of a sale or other disposition of all of
the assets of such Subsidiary Guarantor) will be released and relieved of any
obligations under its Note Guarantee; provided that, to the extent applicable,
the Net Proceeds of such sale or other disposition are applied in accordance
with Section 4.16.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default. (a) Each of the following constitutes
an event of default (an "EVENT OF DEFAULT"):
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(i) failure by the Company to pay interest on any of the Notes when it
becomes due and payable and the continuance of any such failure for 30
days;
(ii) failure by the Company to pay the principal or premium, if any,
on any of the Notes when it becomes due and payable, whether at stated
maturity, upon redemption, upon acceleration or otherwise;
(iii) failure by the Company to comply with any of its agreements or
covenants described above under Article 5, or in respect of its
obligations to make a Change of Control Offer or a Net Proceeds Offer
described in Sections 4.15 and 4.16, respectively;
(iv) failure by the Company to comply with any other covenant in this
Indenture and continuance of such failure for 60 days after notice of
such failure has been given to the Company by the Trustee or by the
holders of at least 25% of the aggregate principal amount of the Notes
then outstanding;
(v) failure by either the Company or any of its Restricted
Subsidiaries to make any payment when due after the expiration of any
applicable grace period, in respect of any Indebtedness of the Company
or any of such Restricted Subsidiaries, or the acceleration of the
maturity of such Indebtedness by the holders thereof because of a
default, with an aggregate outstanding principal amount for all such
Indebtedness under this clause (v) of $10.0 million or more (but
excluding in any event any such Indebtedness that is paid when so due
after expiration of any applicable grace period, or upon acceleration
of the maturity thereof, pursuant to any letter of credit);
(vi) one or more final, non-appealable judgments or orders that exceed
$10.0 million in the aggregate for the payment of money have been
entered by a court or courts of competent jurisdiction against the
Company or any Subsidiary of the Company and such judgment or judgments
have not been satisfied, stayed, annulled or rescinded within 60 days
of being entered;
(vii) except as permitted by Section 5.01, any Note Guarantee ceases
to be in full force and effect or any Guarantor repudiates its
obligations under any Note Guarantee;
(viii) if under any Bankruptcy Law, (A) the Company, Parent or any
Significant Subsidiary commences a voluntary case, consents to the
entry of an order for relief against it in an involuntary case,
consents to the appointment of a Custodian of it or for all or
substantially all of its property, or makes a general assignment for
the benefit of its creditors, or (B) a court of competent jurisdiction
enters an order or decree, and such order or decree remains unstated
and in effect for 60 days, that is for relief against the Company,
Parent or any Significant Subsidiary in an involuntary case, appoints a
Custodian of the Company, Parent or any Significant Subsidiary or for
all or substantially
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all of the property of the Company, Parent or any Significant
Subsidiary, or orders the liquidation of the Company, Parent or any
Significant Subsidiary.
(b) Any notice of default delivered to the Company by the Trustee or by
Holders of Notes with a copy to the Trustee must specify the Default, demand
that it be remedied and state that the notice is a "NOTICE OF DEFAULT".
SECTION 6.02. Acceleration. (a) If an Event of Default (other than an
Event of Default under Section 6.01(a)(viii) with respect to the Company) occurs
and is continuing under this Indenture, the Trustee, by written notice to the
Company, or the holders of at least 25% in aggregate principal amount of the
Notes then outstanding by written notice to the Company and the Trustee may
declare all amounts owing under the Notes to be due and payable immediately.
Upon such declaration of acceleration, the aggregate principal of, premium, if
any, and interest on the outstanding Notes shall immediately become due and
payable.
(b) Notwithstanding anything to the contrary in this Indenture, if an
Event of Default arises under Section 6.01(a)(viii) with respect to the Company,
the principal amount of and premium on, if any, and any accrued and unpaid
interest (including Special Interest, if any) on all outstanding Notes shall
ipso facto become and be immediately due and payable without any declaration or
other act on the part of the Trustee or any Holders.
(c) The Holders of a majority in aggregate principal amount of the then
outstanding Notes by notice to the Trustee may rescind any declaration of
acceleration of such Notes and its consequences if the rescission would not
conflict with any judgment or decree and if all existing Defaults and Events of
Default (other than the nonpayment of principal of, or premium, if any, or
interest on, the Notes which shall have become due by such declaration) shall
have been cured or waived.
SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of, or premium, if any, or interest (including Special Interest, if
any) on, the Notes or to enforce the performance of any provision of the Notes
or this Indenture. The Trustee may maintain a proceeding even if it does not
possess any of the Notes or does not produce any of them in the proceeding. A
delay or omission by the Trustee or any Holder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. All remedies are
cumulative to the extent permitted by law.
SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
aggregate principal amount of the then outstanding Notes by notice to the
Trustee may on behalf of all Holders waive any existing Default or Event of
Default and its consequences under this Indenture, except a continuing Default
or Event of Default in the payment of the principal of, premium, if any, or
interest (including Special Interest, if any) on, any Note (which may only be
waived with the consent of each Holder affected). Upon any such waiver, such
Default shall cease to exist, and
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any Event of Default arising therefrom shall be deemed to have been cured for
every purpose of this Indenture; provided that no such waiver shall extend to
any subsequent or other Default or Event of Default or impair any right
consequent thereon.
SECTION 6.05. Control by Majority of Holders. Subject to Section
7.01(e), the Holders of a majority in aggregate principal amount of the then
outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on it by this Indenture. However, the Trustee may refuse to
follow any direction that conflicts with law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of other Holders, or would
involve the Trustee in personal liability. The Trustee may take any other action
deemed proper by the Trustee that is not inconsistent with such direction.
SECTION 6.06. Limitations on Suits by Holders. A Holder may pursue a
remedy with respect to this Indenture or the Notes only if: (1) the Holder gives
to the Trustee written notice of a continuing Event of Default; (2) the Holders
of at least 25% in principal amount of the then outstanding Notes make a written
request to the Trustee to pursue the remedy; (3) such Holder or Holders offer to
the Trustee indemnity satisfactory to the Trustee against any loss, liability or
expense; (4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and (5) during such 60-day
period the Holders of a majority in aggregate principal amount of the then
outstanding Notes do not give the Trustee a direction inconsistent with the
request. A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder. Holders of the
Notes may not enforce this Indenture or the Notes, except as provided herein.
SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding any
other provision of this Indenture, but subject to Article 10, the right of any
Holder to receive payment of principal of, and premium, if any, and interest
(including Special Interest, if any) on, a Note, on or after a respective due
date expressed in the Note, or to bring suit for the enforcement of any such
payment on or after such respective date, shall not be impaired or affected
without the consent of the Holder.
SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(a)(i) or (a)(ii) occurs and is continuing, the Trustee
is authorized to recover judgment in its own name and as trustee of an express
trust against the Company (or any Guarantor or other obligor under the Notes)
for (i) principal, premium, if any, interest, if any, and Special Interest, if
any, remaining unpaid on the Notes, (ii) interest on overdue principal and
premium, if any, and, to the extent lawful, interest, and (iii) such further
amount as shall be sufficient to cover the costs and expenses of collection,
including the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel ("TRUSTEE EXPENSES").
SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may file
such proofs of claim and other papers or documents as may be necessary or
advisable to have the claims of the
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Trustee (including any claim for Trustee Expenses and for amounts due under
Section 7.07) and the Holders allowed in any Insolvency or Liquidation
Proceeding or other judicial proceeding relative to the Company (or any
Subsidiary Guarantor or other obligor upon the Notes), its creditors or its
property and shall be entitled and empowered to collect, receive and distribute
to Holders any money or other property payable or deliverable on any such claims
and each Holder authorizes any Custodian in any such Insolvency or Liquidation
Proceeding or other judicial proceeding to make such payments to the Trustee,
and if the Trustee shall consent to the making of such payments directly to the
Holders any such Custodian is hereby authorized to make such payments directly
to the Holders, and to pay to the Trustee any amount due to it hereunder for
Trustee Expenses, and any other amounts due the Trustee or any predecessor
Trustee under Section 7.07; provided, however, that the Trustee shall not be
authorized to (i) consent to, accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the Notes or
the rights of any Holder or (ii) vote in respect of the claim of any Holder in
any such Insolvency or Liquidation Proceeding or other judicial proceeding. To
the extent that the payment of any such Trustee Expenses, and any other amounts
due the Trustee under Section 7.07 out of the estate in any such proceeding,
shall be denied for any reason, payment of the same shall be secured by a Lien
on, and shall be paid out of, any and all distributions, dividends, money, Notes
and other properties which the Holders may be entitled to receive in such
proceeding, whether in liquidation or under any plan of reorganization or
arrangement or otherwise.
SECTION 6.10. Priorities. If the Trustee collects any money pursuant to
this Article 6, it shall pay out the money in the following order:
First: to the Trustee for all Trustee Expenses and for all amounts
due under Section 7.07;
Second: to the holders of Senior Indebtedness to the extent required
by Article 10;
Third: to Holders for amounts due and unpaid on the Notes for
principal, premium, if any, interest, Special Interest, if
any, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for
principal, premium, if any, interest and Special Interest, if
any, respectively; and
Fourth: to the Company or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders.
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SECTION 6.11. Undertaking for Costs. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section 6.11 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 6.06, or a suit by Holders of
more than 10% in principal amount of the then outstanding Notes.
SECTION 6.12. Willful Default. In the case of an Event of Default
occurring by reason of any willful action (or inaction) taken (or not taken) by
or on behalf of the Company with the intention of avoiding payment of the
premium that the Company would have had to pay if the Company then had elected
to redeem the Notes under the provisions of Article 3 and under the Notes, an
equivalent premium shall also become and be immediately due and payable, to the
extent permitted by law, upon the acceleration of the Notes. If an Event of
Default occurs prior to March 1, 2003 by reason of any willful action (or
inaction) taken (or not taken) by or on behalf of the Company with the intention
of avoiding the prohibition on redemption of the Notes prior to March 1, 2003,
then, upon acceleration of the Notes, an additional premium shall also become
and be immediately due and payable, to the extent permitted by law, in an amount
equal to 10.0%.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee. (a) If an Event of Default occurs (and
has not been cured) the Trustee shall (i) exercise the rights and powers vested
in it by this Indenture, and (ii) use the same degree of care and skill in
exercising such rights and powers as a prudent man would exercise or use under
the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default: (i) the
Trustee's duties shall be determined solely by the express provisions of this
Indenture and the Trustee need perform only those duties that are specifically
set forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and (ii) in
the absence of bad faith on its part, the Trustee may conclusively rely, as to
the truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, the Trustee shall examine the
certificates and opinions to determine whether they conform to this Indenture's
requirements.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own wilful
misconduct, except that: (i) this Section 7.01(c) does not
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limit the effect of Section 7.01(b); (ii) the Trustee shall not be liable for
any error of judgment made in good faith by a Trust Officer, unless it is proved
that the Trustee was negligent in ascertaining the pertinent facts; and (iii)
the Trustee shall not be liable with respect to any action it takes or omits to
take in good faith in accordance with a direction it receives pursuant to
Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee shall be subject to paragraphs (a), (b) and (c) of this Section.
(e) No provision of this Indenture shall require the Trustee to expend
or risk its own funds or incur any liability. The Trustee shall be under no
obligation to exercise any of its rights and powers or to perform any duty under
this Indenture at the request of any Holders unless such Holders shall have
offered to the Trustee security and indemnity satisfactory to it against any
loss, liability or expense.
(f) The Trustee shall not be liable for interest on any money received
by it except as it may agree in writing with the Company. Money held in trust by
the Trustee need not be segregated from other funds except to the extent
required by law.
SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document it believes to be genuine and to have been signed or presented by the
proper Person. The Trustee need not investigate any fact or matter stated in any
such document.
(b) Before the Trustee acts or refrains from acting, it may require an
Officers' Certificate or an Opinion of Counsel, or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in reliance on
such Officers' Certificate or Opinion of Counsel. The Trustee may consult with
counsel and advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken, suffered
or omitted by it under this Indenture in good faith and in reliance on such
advice or opinion.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith that it believes to be authorized or within its rights or
powers.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by an Officer of the Company.
(f) The Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request or direction of
any of the Holders, unless such
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Holders shall have offered to the Trustee reasonable security or indemnity
against the costs, expenses and liabilities that might be incurred by it in
compliance with such request or direction.
SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Notes and
may otherwise deal with the Company or any of its Affiliates with the same
rights it would have if it were not Trustee. The Trustee shall at all times
comply with Section 310(b) of the TIA as in effect from time to time. Each Agent
shall have the same rights as the Trustee under this Section 7.03.
SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Notes; it shall not be accountable for the Company's use
of the proceeds from the Notes, and it shall not be responsible for any
statement or recital in this Indenture or any statement in the Notes or any
other document executed in connection with the sale of the Notes or pursuant to
this Indenture other than its certificate of authentication.
SECTION 7.05. Notice to Holders of Defaults and Events of Default. If a
Default or Event of Default occurs and is continuing and if it is known to the
Trustee, the Trustee shall mail to the Holders a notice of the Default or Event
of Default within 30 days after the occurrence thereof. Except in the case of a
Default or Event of Default in payment of principal or interest or Special
Interest, if any, on any Note (including any failure to redeem Notes called for
redemption or any failure to purchase Notes that are tendered pursuant to an
Offer and that are required to be purchased by the terms of this Indenture), the
Trustee may withhold the notice if and so long as a committee of its Trust
Officers determines in good faith that withholding such notice is in the
Holders' interests.
SECTION 7.06. Reports by Trustee to Holders. Within 60 days after each
May 15 beginning with May 15, 1998, the Trustee shall mail to the Holders a
brief report dated as of such reporting date that complies with section 313(a)
of the TIA (but if no event described in section 313(a) of the TIA has occurred
within the twelve months preceding the reporting date, no report need be
transmitted). The Trustee also shall comply with section 313(b)(2) of the TIA.
The Trustee shall also transmit by mail all reports as required by section
313(c) of the TIA.
Commencing at the time this Indenture is qualified under the TIA, a
copy of each report at the time of its mailing to Holders shall be filed with
the SEC and each stock exchange on which the Notes are listed. The Company shall
notify the Trustee when the Notes are listed on any stock exchange.
SECTION 7.07. Compensation and Indemnity. The Company shall pay to the
Trustee from time to time such compensation for its services hereunder as the
parties shall agree from time to time. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The Company
shall reimburse the Trustee upon request for all reasonable disbursements,
advances and expenses it incurs or makes in addition to the
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compensation for its services. Such expenses shall include the reasonable
compensation, disbursements and expenses of the Trustee's agents and counsel.
The Company shall indemnify the Trustee for, from and against any and
all losses, liabilities or expenses the Trustee Incurs arising out of or in
connection with the acceptance or administration of its duties under this
Indenture (including any expenses Incurred in connection with the performance of
its duties under Section 6.08), except as set forth below. The Trustee shall
notify the Company promptly of any claim for which it may seek indemnity;
provided, however, that failure by the Trustee to provide the Company with any
such notice shall not relieve the Company of any of its obligations under this
Section 7.07 except to the extent that the Company has been prejudiced by such
failure. The Company shall defend the claim and the Trustee shall cooperate in
the defense of any such claim. If, in the opinion of the Trustee's counsel, the
Trustee has an interest adverse to the Company or a potential conflict of
interest exists between the Trustee and the Company, the Trustee may have
separate counsel and the Company shall pay the reasonable fees and expenses of
such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld.
The Company's obligations under this Section 7.07 shall survive the
satisfaction and discharge of this Indenture. The Company need not reimburse any
expense or indemnify against any loss or liability the Trustee Incurs through
the Trustee's negligence or bad faith.
To secure payment of the Company's obligations under this Section 7.07,
the Trustee shall have a Lien prior to the Notes on all money or property the
Trustee holds or collects, except that held in trust to pay principal of, and
premium, if any, interest and Special Interest, if any, on, particular Notes.
Such Lien shall survive the satisfaction and discharge of this Indenture.
When the Trustee Incurs expenses or renders services after an Event of
Default specified in Section 6.01(a)(viii) occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute administrative expenses under any Bankruptcy
Law without any need to demonstrate substantial contribution under Bankruptcy
Law.
SECTION 7.08. Replacement of Trustee. A resignation or removal of the
Trustee and appointment of a successor Trustee shall become effective only upon
the successor Trustee's acceptance of appointment as provided in this Section
7.08.
The Trustee may resign and be discharged from the trust hereby created
by so notifying the Company in writing. The Holders of a majority in aggregate
principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Company in writing. The Company may remove the
Trustee if: (i) the Trustee fails to comply with Section 7.10; (ii) the Trustee
is adjudged a bankrupt or an insolvent or an order for relief is entered with
respect to the Trustee under any Bankruptcy Law; (iii) a Custodian or public
officer takes charge
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of the Trustee or its property or (iv) the Trustee becomes incapable of
performing the services of the Trustee hereunder.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee, provided that within one year after such appointment the Holders of a
majority in aggregate principal amount of the then outstanding Notes may appoint
a successor Trustee to replace any successor Trustee appointed by the Company.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee shall become effective and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
appointment to Holders. The retiring Trustee shall promptly transfer all
property it holds as Trustee to the successor Trustee, subject to its rights
under Section 7.07 and provided that all sums owing to the retiring Trustee
hereunder have been paid. Notwithstanding replacement of the Trustee pursuant to
this Section 7.08, the Company's obligations under Section 7.07 shall continue
for the retiring Trustee's benefit with respect to expenses and liabilities
relating to the retiring Trustee's activities prior to being replaced.
SECTION 7.09. Successor Trustee by Merger, Etc. If the Trustee
consolidates, merges or converts into, or transfers all or substantially all of
its corporate trust business to, another corporation, subject to Section 7.10,
the successor corporation without any further act shall be the successor
Trustee.
SECTION 7.10. Eligibility; Disqualification. The Trustee shall at all
times (i) be a corporation organized and doing business under the laws of the
United States of America, of any state thereof, or the District of Columbia
authorized under such laws to exercise corporate trustee power, (ii) be subject
to supervision or examination by federal or state authority, (iii) have a
combined capital and surplus of at least $50 million as set forth in its most
recent published annual report of condition, and (iv) satisfy the requirements
of sections 310(a)(1), (2) and (5) and 310(b) of the TIA.
SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee is subject to section 311(a) of the TIA, excluding any creditor
relationship listed in section 311(b)
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of the TIA. A Trustee who has resigned or been removed shall be subject to
section 311(a) of the TIA to the extent indicated therein.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. Discharge of Liability on Notes; Defeasance. (a) Subject
to Sections 8.01(c) and 8.06, this Indenture shall cease to be of any further
effect after (i) either the Company has delivered to the Trustee all outstanding
Notes (other than Notes replaced pursuant to Section 2.09) for cancellation or
all outstanding Notes have become due and payable and the Company has
irrevocably deposited with the Trustee or a Paying Agent money and/or Government
Securities in an amount sufficient (without reinvestment thereof) to pay when
due all principal of, premium, if any, and interest and Special Interest, if
any, on, all outstanding Notes (other than Notes replaced pursuant to Section
2.09), and (ii) the Company pays all other sums payable under this Indenture.
(b) Subject to Sections 8.01(c), 8.02, and 8.06, the Company at any
time may terminate (i) all its obligations under this Indenture and the Notes
("LEGAL DEFEASANCE"), or (ii) its obligations under Sections 4.02, 4.03, 4.05,
4.06, 4.07, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.15, 4.16, 4.17 and 5.01
("COVENANT DEFEASANCE"). The Company may exercise Legal Defeasance
notwithstanding its prior exercise of Covenant Defeasance.
If the Company exercises Legal Defeasance, payment of the Notes may not
be accelerated because of an Event of Default. If the Company exercises Covenant
Defeasance, payment of the Notes may not be accelerated because of an Event of
Default specified in 6.01 (a)(iii), (iv), (v), (vi), (vii) or (viii).
Upon satisfaction of the conditions set forth in Section 8.02 and upon
the Company's request (and at the Company's expense), the Trustee shall
acknowledge in writing the discharge of those obligations that the Company has
terminated. Upon discharge of the Company's obligations as a result of the
exercise by the Company of its Covenant Defeasance the obligations of the
Guarantors under the Note Guarantees and under this Indenture shall terminate.
(c) Notwithstanding Sections 8.01(a) and (b), the Company's
obligations under Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.04,
7.07, 7.08, 8.04, 8.05, and 8.06, and the obligations of the Trustee and the
Paying Agent under Section 8.04 shall survive until the Notes have been paid in
full. Thereafter, the Company's obligations under Sections 7.07 and 8.05 and the
obligations of the Company, Trustee and Paying Agent under Section 8.04 shall
survive.
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SECTION 8.02. Conditions to Defeasance. The Company may exercise either
Legal Defeasance or Covenant Defeasance only if:
(i) the Company irrevocably deposits with the Trustee, in trust, for
the benefit of the Holders of the Notes, cash in U.S. dollars,
non-callable Government Securities, or a combination thereof, in such
amounts as will be sufficient, (x) in the opinion of a nationally
recognized firm of independent public accountants, to pay the principal
of, premium, if any, and interest and Special Interest, if any, on the
outstanding Notes on the stated maturity or the date such payments are
due in accordance with the terms of the Notes or on the applicable,
redemption date, as the case may be, and (y) in the opinion of the
Company as stated in an Officers' Certificate, to pay the Trustee
Expenses. In addition, the Company specifies whether the Notes are
being defeased to maturity or to a particular redemption date,
(ii) in the case of Legal Defeasance, the Company shall have delivered
to the Trustee (1) an Opinion of Counsel reasonably acceptable to the
Trustee confirming that (x) the Company has received from, or there has
been published by, the Internal Revenue Service a ruling or (y) since
the date of this Indenture, there has been a change in the applicable
federal income tax law, in either case to the effect that, and based
thereon such Opinion of Counsel will confirm that, the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Legal Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
and at the same times as would have been the case if such Legal
Defeasance had not occurred, (2) an Opinion of Counsel to the effect
that (x) the deposit of the trust funds does not violate the Investment
Company Act of 1940 and (y) after the period ending on the 123rd day
after the date of deposit, the trust funds will not be subject to the
effect of Section 547 of the United States Bankruptcy Code or Section
15 of the New York Debtor and Creditor Law in a case commenced by or
against the Company under either such statute,
(iii) in the case of Covenant Defeasance, the Company shall have
delivered to the Trustee (1) an Opinion of Counsel in the United States
reasonably acceptable to the Trustee confirming that the Holders of the
outstanding Notes will not recognize income, gain or loss for federal
income tax purposes as a result of such Covenant Defeasance and will be
subject to federal income tax on the same amounts, in the same manner
at the same times as would have been the case if such Covenant
Defeasance had not occurred, (2) an Opinion of Counsel to the effect
that (x) the deposit of the trust funds does not violate the Investment
Company Act of 1940 and (y) after the period ending on the 123rd day
after the date of deposit, the trust funds will not be subject to the
effect of Section 547 of the United States Bankruptcy Code or Section
15 of the New York Debtor and Creditor Law in a case commenced by or
against the Company under either such statute,
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(iv) no Default or Event of Default shall have occurred and be
continuing on the date of such deposit (other than a Default or Event
of Default resulting from the borrowing of funds to be applied to such
deposit) or insofar as Events of Default from bankruptcy or insolvency
events are concerned, at any time in the period ending on the 123rd day
after the date of deposit,
(v) such Legal Defeasance or Covenant Defeasance shall not result in a
breach or violation of, or constitute a Default under any material
agreement or instrument (other than this Indenture) to which the
Company or any of its Subsidiaries is a party or by which the Company
or any of its Subsidiaries is bound,
(vi) the Company shall have delivered to the Trustee an Officers'
Certificate stating that the deposit was not made by the Company with
the intent of preferring the Holders of Notes over the other creditors
of the Company with the intent of defeating, hindering, delaying or
defrauding creditors of the Company or others and
(vii) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent relating to the Legal Defeasance or the Covenant Defeasance
have been complied with.
SECTION 8.03. Application of Trust Money. The Trustee or Paying Agent
shall hold in trust money and/or Government Securities deposited with it
pursuant to this Article 8. The Trustee or Paying Agent shall apply the
deposited money and the money from Government Securities in accordance with this
Indenture to the payment of principal of, and premium, if any, interest or
Special Interest, if any, on, the Notes. Money deposited with the Trustee or a
Paying Agent pursuant to this Article 8 shall not be subject to the provisions
of Article 10.
SECTION 8.04. Repayment to Company. After the Notes have been paid in
full, the Trustee and the Paying Agent shall promptly turn over to the Company
any excess money or Notes held by them.
Any money deposited with the Trustee or a Paying Agent pursuant to this
Article 8 for the payment of the principal of, premium, if any, interest or
Special Interest, if any, on, any Note that remains unclaimed for two years
after becoming due and payable shall be paid to the Company on its request; and
the Holder of such Note shall thereafter, as an unsecured general creditor, look
only to the Company for payment thereof, and all liability of the Trustee or
such Paying Agent with respect to such money shall cease; provided, however,
that the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in The
New York Times and The Wall Street Journal (National Edition), notice that such
money remains unclaimed and that, after a date specified therein, which shall
not be less than 30 days from the date of such notification or publication, any
unclaimed balance of such money then remaining will be repaid to the Company.
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SECTION 8.05. Indemnity for Government Securities. The Company shall
pay and shall indemnify the Trustee and any Paying Agent against any tax, fee or
other charge imposed on or assessed against cash and/or Government Securities
deposited with it pursuant to this Article 8 or the principal and interest
received on such cash and/or Government Securities.
SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is unable
to apply any money or Government Securities in accordance with this Article 8 by
reason of any legal proceeding or by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, the Company's Obligations under this Indenture and the Notes
and the Guarantors' Obligations under the Note Guarantees shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 8 until
such time as the Trustee or Paying Agent is permitted to apply all such money or
Government Securities in accordance with this Article 8; provided, however, that
if the Company or any Guarantor has made any payment of principal of, or
premium, if any, interest, or Special Interest, if any, on, any Notes because of
the reinstatement of its Obligations under this Indenture and the Notes or the
Note Guarantees, the Company or such Guarantor, as the case may be, shall be
subrogated to the Holders' rights to receive such payment from the money or
Government Securities held by the Trustee or Paying Agent.
ARTICLE 9
AMENDMENTS
SECTION 9.01. Amendments and Supplements Permitted without Consent of
Holders. (a) Notwithstanding Section 9.02, the Company, the Guarantors and the
Trustee may amend or supplement this Indenture or the Notes without the consent
of any Holder to: (i) cure any ambiguity, defect or inconsistency; (ii) provide
for uncertificated Notes in addition to or in place of Certificated Notes; (iii)
provide for the assumption of the obligations to the Holders of the Company or a
Guarantor, as the case may be, in the event of a merger or consolidation; (iv)
make any change that (1) would provide any additional rights or benefits to
Holders or (2) does not adversely affect the legal rights under this Indenture
of any Holder; or (v) comply with the requirements of the SEC in order to effect
or maintain the qualification of this Indenture under the TIA.
(b) Upon the Company's request, after receipt by the Trustee of a
resolution of the Board of Directors of the Company authorizing the execution of
any amended or supplemental indenture and the documents described in Section
9.06, the Trustee shall join with the Company and the Guarantors in the
execution of any amended or supplemental indenture authorized or permitted by
the terms of this Indenture, but the Trustee shall not be obligated to enter
into an amended or supplemental indenture that adversely affects its own rights,
duties or immunities under this Indenture or otherwise.
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SECTION 9.02. Amendments and Supplements Requiring Consent of Holders.
(a) Except as otherwise provided in Sections 9.01(a), this Indenture and the
Notes may be amended or supplemented with the written consent of the Holders of
at least a majority in aggregate principal amount of the Notes then outstanding
(including consents obtained in connection with a tender offer or exchange offer
for the Notes), and any existing Default or Event of Default or compliance with
any provision of this Indenture or the Notes may be waived (other than any
continuing Default or Event of Default in the payment of the principal of,
premium, if any, or interest on the Notes) with the consent of Holders of at
least a majority in aggregate principal amount of the then outstanding Notes
(including consents obtained in connection with a tender offer or exchange offer
for the Notes); provided that:
(i) no such modification or amendment may, without the consent of the
holders of 75% in aggregate principal amount of Notes then outstanding,
amend or modify the obligations of the Company under Section 4.15 (or
the definitions related thereto) that could adversely affect the rights
of any holder of the Notes; and
(ii) without the consent of each holder affected, the Company and the
Trustee may not: (w) extend the maturity of any Note; (x) affect the
terms of any scheduled payment of interest on or principal of the Notes
(including without limitation any redemption provisions); (y) take any
action that would subordinate the Notes or the Note Guarantees to any
other Indebtedness of the Company or any of Guarantors, respectively
(except as provided in Article 10), or otherwise affect the ranking of
the Notes or the Note Guarantees; or (z) reduce the percentage of
holders necessary to consent to an amendment, supplement or waiver to
this Indenture.
(b) It shall not be necessary for the consent of the Holders under this
Section 9.02 to approve the particular form of any proposed amendment or waiver,
but it shall be sufficient if such consent approves the substance thereof. After
an amendment, supplement or waiver under this Section becomes effective, the
Company shall mail to each Holder affected thereby a notice briefly describing
the amendment, supplement or waiver. Any failure of the Company to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such amended or supplemental indenture or waiver.
SECTION 9.03. Compliance with TIA. Every amendment or supplement to
this Indenture or the Notes shall be set forth in an amended supplemental
indenture that complies with the TIA as then in effect.
SECTION 9.04. Revocation and Effect of Consents. (a) Until an
amendment, supplement or waiver becomes effective, a consent to it by a Holder
of a Note is a continuing consent by the Holder and every subsequent Holder of a
Note or portion of a Note that evidences the same Indebtedness as the consenting
Holder's Note, even if notation of the consent is not made on any Note. However,
any such Holder or subsequent Holder may revoke the consent as to his or her
Note or portion of a Note if the Trustee receives the notice of revocation
before the date on
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which the Trustee receives an Officers' Certificate certifying that the Holders
of the requisite principal amount of Notes have consented to the amendment,
supplement or waiver.
(b) The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the holders of Notes entitled to consent to any
amendment or waiver. If a record date is fixed, then notwithstanding the
provisions of the immediately preceding paragraph, those Persons who were
Holders of Notes at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to consent to such amendment or waiver or
to revoke any consent previously given, whether or not such Persons continue to
be Holders of Notes after such record date. No consent shall be valid or
effective for more than 90 days after such record date unless consents from
Holders of the principal amount of Notes required hereunder for such amendment
or waiver to be effective shall have also been given and not revoked within such
90-day period.
(c) After an amendment or waiver becomes effective, it shall bind every
Holder, unless it is of the type described in clause (ii) of Section 9.02(a), in
which case the amendment or waiver shall only bind each Holder that consented to
it and every subsequent holder of a Note that evidences the same debt as the
consenting Holder's Note.
SECTION 9.05. Notation or Exchange of Notes. The Trustee may place an
appropriate notation about an amendment, supplement or waiver on any Note
thereafter authenticated. The Company in exchange for all Notes may issue and
the Trustee shall authenticate new Notes that reflect the amendment, supplement
or waiver. Failure to make the appropriate notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. Trustee Protected. The Trustee shall sign any amendment
or supplemental indenture authorized pursuant to this Article 9 if the amendment
does not adversely affect the rights, duties, liabilities or immunities of the
Trustee. If it does, the Trustee may, but need not, sign it. In signing such
amendment or supplemental indenture, the Trustee shall be entitled to receive
and, subject to Section 7.01, shall be fully protected in relying upon, an
Officers' Certificate and Opinion of Counsel pursuant to Sections 12.04 and
12.05 as conclusive evidence that such amendment or supplemental indenture is
authorized or permitted by this Indenture, that it is not inconsistent herewith,
and that it will be valid and binding upon the Company and the Guarantors in
accordance with its terms. Neither the Company nor any Guarantor may sign an
amendment or supplemental indenture until the Board of Directors of the Company
approves it.
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ARTICLE 10
SUBORDINATION
SECTION 10.01. Agreement to Subordinate. The Company and each Guarantor
agrees, and each Holder by accepting a Note agrees, that the payment by the
Company of principal of, and premium, if any, and interest (including Special
Interest, if any) on the Notes, and by each Guarantor of such amounts under its
Note Guarantee (collectively, the "NOTE INDEBTEDNESS"), are subordinated to the
prior payment in full in cash when due of the principal of, and premium, if any,
and accrued and unpaid interest on and all other amounts owing in respect of,
all existing and future Senior Indebtedness of the Company and of each
Guarantor, as the case may be.
SECTION 10.02. Liquidation; Dissolution; Bankruptcy. (a) Upon any
payment or distribution to creditors of the Company or any Guarantor of the
assets of the Company or the Guarantors of any kind or character in a total or
partial liquidation or dissolution of the Company or the Guarantors or in a
bankruptcy, reorganization, insolvency, receivership or similar proceeding
relating to the Company or any Guarantor, whether voluntary or involuntary
(including any assignment for the benefit of creditors and proceedings for
marshaling of assets and liabilities of the Company or any Guarantor) (a
"INSOLVENCY OR LIQUIDATION PROCEEDING"), the holders of all Senior Indebtedness
of the Company or any Guarantor then outstanding will be entitled to payment in
full in cash (including interest accruing subsequent to the filing of petition
of bankruptcy or insolvency at the rate specified in the document relating to
the applicable Senior Indebtedness, whether or not such interest is an allowed
claim enforceable against the Company or any Guarantor under applicable law)
before the Holders of Notes are entitled to receive any payment (other than
payments made from a trust previously established pursuant to provisions
described Section 8.02) on or with respect to the Note Indebtedness and until
all Senior Indebtedness receives payment in full in cash, any distribution to
which the Holders of Notes would be entitled will be made to holders of Senior
Indebtedness.
(b) Notwithstanding anything to the contrary in Section 10.02, Holders
of Notes may continue to receive payments from the trust established pursuant to
Article 8.
SECTION 10.03. No Payment on Notes in Certain Circumstances. (a) Upon
the occurrence of any default in the payment of any principal of or interest on
or other amounts due on any Designated Senior Indebtedness of the Company or any
Guarantor (a "PAYMENT DEFAULT"), no payment of any kind or character shall be
made by the Company or a Guarantor (or by any other Person on its or their
behalf) with respect to the Note Indebtedness unless and until (i) such Payment
Default shall have been cured or waived in accordance with the instruments
governing such Indebtedness or shall have ceased to exist, (ii) such Designated
Senior Indebtedness has been discharged or paid in full in cash in accordance
with the instruments governing such Indebtedness or (iii) the benefits of this
sentence have been waived by the holders of such Designated Senior Indebtedness
or their representative, including, if applicable, the Agents, immediately after
which the Company must resume making any and all required payments, including
missed payments, in respect of its obligations under the Notes.
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(b) Upon (i) the occurrence and continuance of an event of default
(other than a Payment Default) relating to Designated Senior Indebtedness, as
such event of default is defined therein or in the instrument or agreement under
which it is outstanding, which event of default, pursuant to the instruments
governing such Designated Senior Indebtedness, entitles the holders (or a
specified portion of the holders) of such Designated Senior Indebtedness or
their designated representative to immediately accelerate without further notice
(except such notice as may be required to effect such acceleration) the maturity
of such Designated Senior Indebtedness (whether or not such acceleration has
actually occurred) (a "NON-PAYMENT DEFAULT") and (ii) the receipt by the Trustee
and the Company or any Guarantor from the trustee or other representative of
holders of such Designated Senior Indebtedness of written notice (a "PAYMENT
BLOCKAGE NOTICE") of such occurrence, no payment is permitted to be made by the
Company or any Guarantor (or by any other Person on its or their behalf) in
respect of the Note Indebtedness for a period (a "PAYMENT BLOCKAGE PERIOD")
commencing on the date of receipt by the Trustee of such notice and ending on
the earliest to occur of the following events (subject to any blockage of
payments that may then be in effect due to a Payment Default on Designated
Senior Indebtedness): (w) such Non-payment Default has been cured or waived or
has ceased to exist; (x) a 179-consecutive-day period commencing on the date
such written notice is received by the Trustee has elapsed; (y) such Payment
Blockage Period has been terminated by written notice to the Trustee from the
Trustee or other representative of holders of such Designated Senior
Indebtedness, whether or not such Non-payment Default has been cured or waived
or has ceased to exist; and (z) such Designated Senior Indebtedness has been
discharged or paid in full in cash, immediately after which, in the case of
clause (w), (x), (y) or (z), the Company or any Guarantor, as the case may be,
must resume making any and all required payments, including missed payments, in
respect of its obligations under the Notes. Notwithstanding the foregoing, (A)
not more than one Payment Blockage Period may be commenced in any period of 365
consecutive days and (B) no default or event of default with respect to the
Designated Senior Indebtedness of the Company or any Guarantor that was the
subject of a Payment Blockage Notice which existed or was continuing on the date
of the giving of any Payment Blockage Notice shall be or serve as the basis for
the giving of a subsequent Payment Blockage Notice whether or not within a
period of 365 consecutive days unless such default or event of default shall
have been cured or waived for a period of at least 90 consecutive days after
such date. Notwithstanding anything in this Indenture to the contrary, there
must be 180 consecutive days in any 365-day period in which no Payment Blockage
Period is in effect.
(c) Notwithstanding the foregoing, Holders of Notes may receive and
retain Permitted Junior Securities and payment from the money or the proceeds
held in any defeasance trust described under Article 8, and no such receipt or
retention will be contractually subordinated in right of payment to any Senior
Indebtedness or subject to the restrictions described in this Article 10.
SECTION 10.04. Acceleration of Notes. If payment of the Notes is
accelerated because of an Event of Default, the Company shall promptly notify
the Credit Facility Agent and each holder of the Senior Indebtedness of the
Company or any Guarantor of the acceleration.
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SECTION 10.05. When Distributions Must Be Paid Over. In the event that
any payment or distribution of assets of the Company or any Guarantor, whether
in cash, property or securities, shall be received by the Trustee or the Holders
of Notes at a time when such payment or distribution is prohibited by this
Article 10, such payment or distribution shall be segregated from other funds or
assets and held in trust for the benefit of the holders of Senior Indebtedness
of the Company or such Guarantor, as the case may be, and shall be paid or
delivered by the Trustee or such Holders, as the case may be, to the holders of
the Senior Indebtedness of the Company or such Guarantor, as the case may be,
remaining unpaid or unprovided for or their representative or representatives,
or to the trustee or trustees under any indenture pursuant to which any
instruments evidencing any of such Senior Indebtedness of the Company or such
Guarantor, as the case may be, may have been issued, ratably according to the
aggregate amounts remaining unpaid on account of the Senior Indebtedness of the
Company or such Guarantor, as the case may be, held or represented by each, for
application to the payment of all Senior Indebtedness of the Company or such
Guarantor, as the case may be, remaining unpaid, to the extent necessary to pay
or to provide for the payment in full in cash of all such Senior Indebtedness
after giving effect to any concurrent payment or distribution to the holders of
such Senior Indebtedness.
With respect to the holders of Senior Indebtedness of the Company or
any Guarantor, the Trustee undertakes to perform only such obligations on its
part as are specifically set forth in this Article 10, and no implied covenants
or obligations with respect to any holders of the Senior Indebtedness of the
Company or any Guarantor shall be read into this Indenture against the Trustee.
The Trustee shall not be deemed to owe any fiduciary duty to the holders of the
Senior Indebtedness of the Company or any Guarantor and shall not be liable to
any holders of such Senior Indebtedness if the Trustee shall pay over or
distribute to, or on behalf of, Holders or the Company or any other Person,
money or assets to which any holders of such Senior Indebtedness are entitled
pursuant to this Article 10, except if such payment is made at a time when a
Trust Officer has knowledge that the terms of this Article 10 prohibit such
payment.
SECTION 10.06. Notice. Neither the Trustee nor the Paying Agent shall
at any time be charged with the knowledge of the existence of any facts that
would prohibit the making of any payment to or by the Trustee or Paying Agent
under this Article 10, unless and until the Trustee or Paying Agent shall have
received written notice thereof from the Company or such Guarantor or one or
more holders of the Senior Indebtedness of the Company or such Guarantor, as the
case may be, or a Representative of any holders of such Senior Indebtedness;
and, prior to the receipt of any such written notice, the Trustee or Paying
Agent shall be entitled to assume conclusively that no such facts exist. The
Trustee shall be entitled to rely on the delivery to it of written notice by a
Person representing itself to be a holder of the Senior Indebtedness of the
Company or such Guarantor (or a Representative thereof) to establish that such
notice has been given.
The Company shall promptly notify the Trustee and the Paying Agent in
writing of any facts it knows that would cause a payment of principal of, or
premium, if any, or interest (including Special Interest, if any) on, the Notes
or any other Obligation in respect of the Notes
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to violate this Article 10, but failure to give such notice shall not affect the
subordination of the Notes to the Senior Indebtedness of the Company or any
Guarantor provided in this Article 10 or the rights of holders of such Senior
Indebtedness under this Article 10.
SECTION 10.07. Subrogation. After all Senior Indebtedness of the
Company or any Guarantor has been paid in full in cash and until the Notes are
paid in full, Holders shall be subrogated (equally and ratably with all other
Indebtedness pari-passu with the Notes) to the rights of holders of such Senior
Indebtedness to receive distributions applicable to such Senior Indebtedness to
the extent that distributions otherwise payable to the Holders have been applied
to the payment of such Senior Indebtedness A distribution made under this
Article 10 to holders of the Senior Indebtedness of the Company or any Guarantor
that otherwise would have been made to Holders is not, as between the Company or
such Guarantor, as the case may be, and Holders, a payment by the Company or
such Guarantor, as the case may be, on its Senior Indebtedness.
SECTION 10.08. Relative Rights. This Article 10 defines the relative
rights of Holders and holders of the Senior Indebtedness of the Company or any
Guarantor. Nothing in this Indenture shall: (1) impair, as between the Company
or a Guarantor, as the case may be, and Holders, the Obligations of the Company
or any Guarantor, which are absolute and unconditional, to pay principal of, and
premium, if any, and interest (including Special Interest, if any) on the Notes
in accordance with their terms; (2) affect the relative rights of Holders and
the creditors of the Company or any Guarantor other than their rights in
relation to holders of the Senior Indebtedness of the Company or any Guarantor;
or (3) prevent the Trustee or any Holder from exercising its available remedies
upon a Default or Event of Default, subject to the rights of holders of the
Senior Indebtedness of the Company or any Guarantor to receive distributions and
payments otherwise payable to Holders.
Nothing contained in this Article 10 or elsewhere in this Indenture or
in any Note is intended to or shall impair, as between the Company, any
Guarantor and the Holders, the Obligations of the Company and the Guarantors,
which are absolute and unconditional, to pay to the Holders the principal of,
and premium, if any, and interest (including Special Interest, if any) on the
Notes as and when the same shall become due and payable in accordance with their
terms, or is intended to or shall affect the relative rights of the Holders and
creditors of the Company and the Guarantors other than the holders of the Senior
Indebtedness of the Company or any Guarantor, nor shall anything herein or
therein prevent the Trustee or any Holder from exercising all remedies otherwise
permitted by applicable law upon Default under this Indenture, subject to the
rights, if any, under this Article 10 of the holders of such Senior
Indebtedness.
The failure to make a payment on account of principal of, or interest
on the Notes by reason of any provision of this Article 10 shall not be
construed as preventing the occurrence of an Event of Default under Section
6.01.
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SECTION 10.09. The Company, Guarantors and Holders May Not Impair
Subordination. (a) No right of any holder of the Senior Indebtedness of the
Company or any Guarantor to enforce the subordination as provided in this
Article 10 shall at any time or in any way be prejudiced or impaired by any act
or failure to act by the Company or any Guarantor or by any noncompliance by the
Company or any Guarantor with the terms, provisions and covenants of this
Indenture or the Notes or any other agreement regardless of any knowledge
thereof with which any such holder may have or be otherwise charged.
(b) Without in any way limiting Section 10.09(a), the holders of any
Senior Indebtedness of the Company or any Guarantor may, at any time and from
time to time to the extent not otherwise prohibited by this Indenture, without
the consent of or notice to any Holders, without incurring any liabilities to
any Holder and without impairing or releasing the subordination and other
benefits provided in this Indenture or the Holders' obligations to the holders
of such Senior Indebtedness, even if any Holder's right of reimbursement or
subrogation or other right or remedy is affected, impaired or extinguished
thereby, do any one or more of the following: (i) amend, renew, exchange,
extend, modify, increase or supplement in any manner such Senior Indebtedness or
any instrument evidencing or guaranteeing or securing such Senior Indebtedness
or any agreement under which such Senior Indebtedness is outstanding (including,
but not limited to, changing the manner, place or terms of payment or changing
or extending the time of payment of, or renewing, exchanging, amending,
increasing or altering, (x) the terms of such Senior Indebtedness, (y) any
security for, or any Guarantee of, such Senior Indebtedness, (z) any liability
of any obligor on such Senior Indebtedness (including any guarantor) or any
liability Incurred in respect of such Senior Indebtedness) (ii) sell, exchange,
release, surrender, realize upon, enforce or otherwise deal with in any manner
and in any order any property pledged, mortgaged or otherwise securing such
Senior Indebtedness or any liability of any obligor thereon, to such holder, or
any liability Incurred in respect thereof; (iii) settle or compromise any such
Senior Indebtedness or any other liability of any obligor of such Senior
Indebtedness to such holder or any security therefor or any liability Incurred
in respect thereof and apply any sums by whomsoever paid and however realized to
any liability (including, without limitation, payment of any of the Senior
Indebtedness) in any manner or order; and (iv) fail to take or to record or
otherwise perfect, for any reason or for no reason, any lien or security
interest securing such Senior Indebtedness by whomsoever granted, exercise or
delay in or refrain from exercising any right or remedy against any obligor or
any guarantor or any other Person, elect any remedy and otherwise deal freely
with any obligor and any security for such Senior Indebtedness or any liability
of any obligor to the holders of such Senior Indebtedness or any liability
Incurred in respect of such Senior Indebtedness.
SECTION 10.10. Distribution or Notice to Representative. Whenever a
distribution is to be made, or a notice given, to holders of Senior Indebtedness
of the Company or any Guarantor, the distribution may be made and the notice
given to their Representative, if any. If any payment or distribution of the
Company's assets is required to be made to holders of any of the Senior
Indebtedness of the Company or any Guarantor pursuant to this Article 10, the
Trustee and the Holders shall be entitled to rely upon any order or decree of
any court of competent jurisdiction,
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or upon any certificate of a Representative of such Senior Indebtedness or a
Custodian, in ascertaining the holders of such Senior Indebtedness entitled to
participate in any such payment or distribution, the amount to be paid or
distributed to holders of such Senior Indebtedness and all other facts pertinent
to such payment or distribution or to this Article 10.
SECTION 10.11. Rights of Trustee and Paying Agent. The Trustee or
Paying Agent may continue to make payments on the Notes unless prior to any
payment date it has received written notice of facts that would cause a payment
of principal of, or premium, if any, or interest (including Special Interest, if
any) on the Notes to violate this Article 10. Only the Company, a Guarantor, a
Representative of Senior Indebtedness, or a holder of Senior Indebtedness that
has no Representative may give such notice.
To the extent permitted by the TIA, the Trustee in its individual or
any other capacity may hold Indebtedness of the Company or any Guarantor
(including Senior Indebtedness) with the same rights it would have if it were
not Trustee. Any Agent may do the same with like rights.
SECTION 10.12. Authorization to Effect Subordination. Each Holder of a
Note by its acceptance thereof authorizes and directs the Trustee on its behalf
to take such action as may be necessary or appropriate to effectuate the
subordination as provided in this Article 10, and appoints the Trustee as such
Holder's attorney-in-fact for any and all such purposes (including, without
limitation, the timely filing of a claim for the unpaid balance of the Note that
such Holder holds in the form required in any Insolvency or Liquidation
Proceeding and causing such claim to be approved).
If a proper claim or proof of debt in the form required in such
proceeding is not filed by or on behalf of all Holders prior to 30 days before
the expiration of the time to file such claims or proofs, then the holders or a
Representative of any Senior Indebtedness of the Company or any Guarantor are
hereby authorized, and shall have the right (without any duty), to file an
appropriate claim for and on behalf of the Holders.
ARTICLE 11
GUARANTEE
SECTION 11.01. Guarantee. (a) Each Guarantor hereby unconditionally,
jointly and severally, guarantees (each a "NOTE GUARANTEE") to each Holder of a
Note authenticated and delivered by the Trustee that: (i) the principal of,
premium, interest (including Special Interest, if any) on the Notes will be
promptly paid in full when due, whether at maturity, by acceleration, redemption
or otherwise, and interest on the overdue principal of and interest (including
Special Interest, if any), and premium, if any, on the Notes, if any, to the
extent lawful, and all other Obligations of the Company to the Holders or the
Trustee under this Indenture and the Notes will
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be promptly paid in full, all in accordance with the terms of this Indenture and
the Notes; and (ii) in case of any extension of time of payment or renewal of
any Notes or any of such other Obligations, that the Notes will be promptly paid
in full when due in accordance with the terms of such extension or renewal,
whether at stated maturity, by acceleration or otherwise.
Each Guarantor hereby further agrees that its Obligations under this
Indenture and the Notes shall, subject to Section 11.05, be unconditional,
regardless of the validity, legality or enforceability of this Indenture or the
Notes, the absence of any action to enforce this Indenture or the Notes, any
waiver or consent by any Holder with respect to any provisions this Indenture or
the Notes, any modification or amendment of, or supplement of, this Indenture or
the Notes, the recovery of any judgment against the Company or any action to
enforce any such judgment, or any other circumstance that might otherwise
constitute a legal or equitable discharge or defense of such Guarantor. Each
Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of insolvency or bankruptcy of the Company, any
right to require a proceeding first against the Company, protest, notice and all
demands whatsoever and covenants that its Note Guarantee will not be discharged
except by complete performance by the Company of such Obligations. If any Holder
or the Trustee is required by any court or otherwise to return to the Company,
such Guarantor or a Custodian of the Company or such Guarantor any amount paid
by the Company or such Guarantor to the Trustee or such Holder, its Note
Guarantee shall, to the extent previously discharged as a result of any such
payment, be immediately reinstated and be in full force and effect. Each
Guarantor hereby acknowledges and agrees that, as between it, on the one hand,
and the Holders and the Trustee, on the other hand, (x) the maturity of the
Company's Obligations under this Indenture and the Notes may be accelerated as
provided in Article 6 for purposes of its Note Guarantee notwithstanding any
stay, injunction or other prohibition preventing such acceleration, and (y) in
the event of any declaration of acceleration of the Company's Obligations under
this Indenture and the Notes as provided in Article 6, such Obligations (whether
or not due and payable) shall forthwith become due and payable by such Guarantor
for the purpose of its Note Guarantee.
(b) Upon making any payment with respect to the Company hereunder, a
Guarantor shall be subrogated to the rights of the payee against the Company
with respect to such payment; provided that no Guarantor shall enforce any
payment by way of subrogation or contribution until all Obligations of the
Company under this Indenture have been paid in full.
SECTION 11.02. Trustee to Include Paying Agent. In case at any time any
Paying Agent other than the Trustee shall have been appointed by the Company,
the term "Trustee" as used in this Article 11 shall (unless the context shall
otherwise require) be construed as extending to and including such Paying Agent
within its meaning as fully and for all intents and purposes as if such Paying
Agent were named in this Article 11 in place of the Trustee.
SECTION 11.03. Subordination of Guarantee. Each Guarantor's Obligations
under its Note Guarantee shall be junior and subordinated in right of payment to
any Senior Indebtedness of such Guarantor in the same manner and to the same
extent as the Notes are subordinated to
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Senior Indebtedness of the Company pursuant to Article 10. Any Payment Blockage
Notice given to the Trustee in respect of the Company's Designated Senior
Indebtedness pursuant to Section 10.03 shall be deemed to be a Payment Blockage
Notice given to the Trustee in respect of such Guarantor's Designated Senior
Indebtedness and any Payment Blockage Notice given to the Trustee in respect of
such Guarantor's Designated Senior Indebtedness pursuant to this Section 11.03
shall be deemed to be a Payment Blockage Notice given to the Trustee in respect
of the Company's Designated Senior Indebtedness.
In the event of a conflict between the provisions of Section 10.03 and
the provisions of Section 10.03 as read to apply to such Guarantor's Note
Guarantee pursuant to this Section 11.03, the provisions of Section 10.03 shall
apply and govern this Indenture.
SECTION 11.04. Senior Subordinated Debt of Guarantor. Each Guarantor
hereby agrees that it will not Incur, Guarantee or otherwise become liable for
any Indebtedness that is subordinated or junior in right of payment to any
Senior Indebtedness of such Guarantor unless such Indebtedness is pari passu
with or is expressly subordinated in right of payment to the Notes.
SECTION 11.05. Limits of Guarantee. (a) Notwithstanding anything to the
contrary in this Article 11, the aggregate amount of the Obligations guaranteed
under this Indenture by each Guarantor shall be limited in amount to the lesser
of (a) the maximum amount that would not render such Guarantor's obligations
subject to avoidance under applicable fraudulent conveyance provisions of the
United States Bankruptcy Code or any comparable provision of any applicable
state law and (b) the maximum amount that would not render the Note Guarantee an
improper corporate distribution by such Guarantor under applicable state law.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls. If any provision of this
Indenture limits, qualifies, or conflicts with the duties imposed by operation
of Section 318(c) of the TIA, the imposed duties shall control.
SECTION 12.02. Notices. Any notice or communication by the Company or
the Trustee to the other is duly given if in writing and delivered in person,
mailed by registered or certified mail, postage prepaid, return receipt
requested or delivered by telecopier or overnight air courier guaranteeing next
day delivery to the other's address:
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If to the Company or the Guarantors:
Eagle-Picher Industries, Inc.
250 East Fifth Street
Cincinnati, Ohio 445202
Telecopier: (513) 721-7010
Attention: President
If to the Trustee:
The Bank of New York
101 Barclay St. Floor 21 West
New York, NY 10286
Telecopier: (212) 815-5915
Attention: Corporate Trust Administration
The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders) shall
be deemed to have been duly given: (i) at the time delivered by hand, if
personally delivered; (ii) the date receipt is acknowledged, if mailed by
registered or certified mail; (iii) when answered back, if telecopied and (iv)
the next Business Day after timely delivery to the courier, if sent by overnight
air courier guaranteeing next day delivery.
Any notice or communication to a Holder shall be mailed by first-class
mail to his or her address shown on the register maintained by the Registrar.
Failure to mail a notice or communication to a Holder or any defect in it shall
not affect its sufficiency with respect to other Holders. If a notice or
communication is mailed in the manner provided above within the time prescribed,
it is duly given, whether or not the addressee receives it. If the Company mails
a notice or communication to Holders, it shall mail a copy to the Trustee and
each Agent at the same time.
SECTION 12.03. Communication by Holders with Other Holders. Holders may
communicate pursuant to section 312(b) of the TIA with other Holders with
respect to their rights under this Indenture or the Notes. The Company, the
Trustee, the Registrar and any other Person shall have the protection of section
312(c) of the TIA.
SECTION 12.04. Certificate and Opinion As to Conditions Precedent. Upon
any request or application by the Company to the Trustee to take any action
under this Indenture, the Company shall furnish to the Trustee: (a) an Officers'
Certificate (which shall include the statements set forth in Section 12.05)
stating that, in the opinion of the signers, all conditions precedent and
covenants, if any, provided for in this Indenture relating to the proposed
action have been complied with; and (b) an Opinion of Counsel (which shall
include the statements set
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forth in Section 12.05) stating that, in the opinion of such counsel, all such
conditions precedent provided for in this Indenture relating to the proposed
action have been complied with.
SECTION 12.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a condition or covenant
provided for in this Indenture (other than a certificate provided pursuant to
section 314(a)(4) of the TIA) shall include: (1) a statement that the Person
making such certificate or opinion has read such covenant or condition; (2) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based; (3) a statement that, in the opinion of such Person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with, and (4) a statement as to whether, in such Person's opinion, such
condition or covenant has been complied with.
SECTION 12.06. Rules by Trustee and Agents. The Trustee may make
reasonable rules for action by or at a meeting of Holders. The Registrar or
Paying Agent may make reasonable rules and set reasonable requirements for its
functions.
SECTION 12.07. Legal Holidays. If a payment date is a not a Business
Day at a place of payment, payment may be made at that place on the next
succeeding day that is a Business Day , and no interest shall accrue for the
intervening period.
SECTION 12.08. No Recourse Against Others. No director, officer,
employee, incorporator or direct or indirect stockholder or Affiliate of the
Company or any Guarantor (other than the Company and any Guarantor), as such,
shall have any liability for any obligation of the Company under this Indenture,
the Notes Guarantees or the Notes or for any claim based on, in respect of, or
by reason of, any such obligation or the creation of any such obligation. Each
Holder by accepting a Note waives and releases such Persons from all such
liability and such waiver and release is part of the consideration for the
Issuance of the Notes.
SECTION 12.09. Counterparts. This Indenture may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
SECTION 12.10. Initial Appointments, Compliance Certificates. The
Company initially appoints the Trustee as Paying Agent, Registrar (subject to
Section 2.03 and 2.06) and authenticating agent. The first compliance
certificate to be delivered by the Company to the Trustee pursuant to Section
4.03 shall be for the fiscal year ending on November 30, 1998.
SECTION 12.11. Governing Law. The internal laws of the State of New
York shall govern this Indenture and the Notes, without regard to the conflict
of laws provisions thereof.
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SECTION 12.12. No Adverse Interpretation of Other Agreements. This
Indenture may not be used to interpret another indenture, loan or debt agreement
of the Company or any of its Subsidiaries, and no other indenture, loan or debt
agreement may be used to interpret this Indenture.
SECTION 12.13. Successors. All agreements of the Company and the
Guarantors in this Indenture and the Notes shall bind any successors of the
Company and such Guarantors, respectively. All agreements of the Trustee in this
Indenture shall bind its successor.
SECTION 12.14. Severability. If any provision in this Indenture or in
the Notes shall be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remaining provisions shall not in any way be affected or
impaired thereby.
SECTION 12.15. Third Party Beneficiaries. Holders of Senior
Indebtedness are third party beneficiaries of this Indenture, and any of them
(or their Representative) shall have the right to enforce the provisions of this
Indenture that benefit such holders.
SECTION 12.16. Table of Contents, Headings, Etc. The Table of Contents
and headings of the Articles and Sections of this Indenture have been inserted
for convenience of reference only, are not to be considered a part of this
Indenture, and shall in no way modify or restrict any of the terms or provisions
of this Indenture.
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IN WITNESS WHEREOF, the parties have caused this Indenture to be duly
executed as of the date and year first written above.
E-P ACQUISITION, INC.
By: /s/ JOEL P. WYLER
----------------------------
Name: Joel P. Wyler
Title: President
DAISY PARTS, INC.
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER DEVELOPMENT
COMPANY, INC.
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: President
EAGLE-PICHER HOLDINGS, INC.
By: /s/ JOEL P. WYLER
----------------------------
Name: Joel P. Wyler
Title: President
EAGLE-PICHER FAR EAST, INC.
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
<PAGE>
<PAGE>
EAGLE-PICHER FLUID SYSTEMS,
INC.
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER MINERALS, INC.
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER TECHNOLOGIES,
LLC
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: Director-Manager
HILLSDALE TOOL &
MANUFACTURING CO.
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
MICHIGAN AUTOMOTIVE
RESEARCH CORPORATION
By: /s/ ANDRIES RUIJSSENAARS
----------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
<PAGE>
<PAGE>
THE BANK OF NEW YORK
as Trustee
By: /s/ MARY JANE MORRISSEY
----------------------------
Name: Mary Jane Morrissey
Title: Vice President
<PAGE>
<PAGE>
EXHIBIT A
(FORM OF FACE OF NOTE)
[Legend if Note is a Transfer Restricted Note]
THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER
THAT (X) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)
(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES
TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN RULE 902 UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (Y) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (X) ABOVE.
A-1
<PAGE>
<PAGE>
[Additional Legend if Note is a Global Note]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 2.06,
2.07 AND 2.08 OF THE INDENTURE.
[Additional Legend if Note is a Regulation S Temporary Global Note]
THIS NOTE IS A TEMPORARY GLOBAL SECURITY. PRIOR TO THE EXPIRATION OF THE
RESTRICTED PERIOD APPLICABLE HERETO, BENEFICIAL INTERESTS HEREIN MAY NOT BE HELD
BY ANY PERSON OTHER THAN (1) A NON-U.S. PERSON OR (2) A U.S. PERSON WHO
PURCHASED SUCH INTEREST IN A TRANSACTION THAT DID NOT REQUIRE REGISTRATION UNDER
THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). BENEFICIAL
INTERESTS HEREIN ARE NOT EXCHANGEABLE FOR DEFINITIVE SECURITIES. TERMS IN THIS
LEGEND ARE USED AS USED IN REGULATION S UNDER THE SECURITIES ACT.
A-2
<PAGE>
<PAGE>
E-P ACQUISITION, INC.
TO BE MERGED INTO
EAGLE-PICHER INDUSTRIES, INC.
9 3/8% SENIOR SUBORDINATED NOTES DUE 2008
No. ____________ $__________
[CUSIP][CINS] NO.
E-P Acquisition, Inc., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to ______________________, or registered
assigns, the principal sum of ___________________ Dollars on March 1, 2008.
Interest Payment Dates: March 1 and September 1, commencing
March 1, 1998
Record Dates: February 15 and August 15
Pursuant to the Indenture, the payment of principal of and premium, if
any, and interest and, if applicable, Special Interest on this Note is
unconditionally guaranteed by Eagle-Picher Holdings, Inc., and its successors
("PARENT") and by the Subsidiary Guarantors (as defined in the Indenture)
(together with Parent, the "GUARANTORS"), and such other Persons as may from
time to time execute and deliver to the Trustee a counterpart of the Indenture
as a Subsidiary Guarantor.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and as more fully specified in the Indenture, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
A-3
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<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
E-P ACQUISITION, INC.
By:
----------------------------
Name:
Title:
By:
----------------------------
Name:
Title:
FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Dated:_______________
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By:
---------------------------------
Authorized Signatory
FORM OF ALTERNATIVE CERTIFICATE OF AUTHENTICATION
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By:
---------------------------------
as Authenticating Agent
By:
---------------------------------
Authorized Signatory
A-4
<PAGE>
<PAGE>
FORM OF REVERSE OF NOTE
1. INTEREST. E-P Acquisition, Inc. (the "Company") promises to pay
interest on the principal amount of this Note at the rate and in the manner
specified below. Cash interest will accrue at 9.375% per annum until maturity
and will be payable semi-annually in arrears in cash on March 1 and September 1
of each year commencing March 1, 1998, or if any such day is not a Business Day
on the next succeeding Business Day (each an "Interest Payment Date"). Interest
on this Note will accrue from the most recent date on which interest has been
paid or, if no interest has been paid, from the original date of issue. To the
extent lawful, the Company shall pay interest on overdue principal, premium, if
any, interest and Special Interest, if any, from time to time on demand at the
rate of 11.375% per annum, compounded semi-annually. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
[In the event that one or more Registration Defaults shall have
occurred and be continuing under the Registration Rights Agreement, then Special
Interest (as defined therein) (in addition to the interest otherwise due hereon)
will accrue on the principal amount of the Notes and the New Notes (in addition
to the stated interest on the Notes and the New Notes) from and including the
date on which the first such Registration Default shall have occurred to but
excluding the date on which all such Registration Defaults have been cured.
Special Interest will accrue at a rate of 0.25% per annum during the 90-day
period immediately following the occurrence of the first such Registration
Default and shall increase by 0.25% per annum at the end of each subsequent
90-day period, but in no event shall such rate exceed 1.5% per annum in the
aggregate as a result of any Registration Default or Defaults. All accrued
Special Interest, if any, will be paid by the Company or the Guarantors, in
arrears, on each Interest Payment Date, commencing September 1, 1998. Upon the
cure of all Registration Defaults, the accrual of Special Interest will
cease.](1)
[There shall also be payable in respect of this Note all Special
Interest that may have accrued on the Note for which this Note was exchanged (as
defined in such Note) pursuant to the Exchange Offer or otherwise pursuant to a
Registration of such Note, such Special Interest to be payable in accordance
with the terms of such Note.](2)
2. METHOD OF PAYMENT. The Company will pay interest on this Note to
the Person who is the registered Holder of this Note at the close of business on
the record date for the next Interest Payment Date, which record date shall be
February 15 and August 15 of each year (each a "Record Date"); notwithstanding
the foregoing, the first record date shall be February 24, 1998. Holders must
surrender Notes to a Paying Agent, as defined below, to
- --------
(1) To be included in Notes but not New Notes.
(2) To be included in New Notes.
A-5
<PAGE>
<PAGE>
collect principal payments on such Notes. Principal of, premium, if any,
interest and Special Interest, if any, on, the Notes will be payable at the
office or agency of the Company maintained for such purpose within the City and
State of New York or, at the option of the Company by wire transfer of
immediately available funds or, in the case of certificated securities only, by
mailing a check to the registered address of the Holder. Until otherwise
designated by the Company, the Company's office or agency will be the office of
the Trustee maintained for such purpose.
3. PAYING AGENT AND REGISTRAR. (a) The Bank of New York (the "Trustee")
will initially act as the Paying Agent and Registrar. The Company may appoint
additional paying agents or co-registrars, and change the Paying Agent, any
additional paying agent, the Registrar or any co-registrar without prior notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(b) Pursuant to the Indenture, the Company has appointed the Trustee
as transfer and exchange agent for the purpose of any transfer or
exchange of the Notes.
(c) Holders shall present Notes to the Trustee, as transfer and
exchange agent.
4. INDENTURE. The Company has issued the Notes under an Indenture,
dated as of February 24, 1998 (the "Indenture"), among the Company, as issuer of
the Notes, the Guarantors party thereto and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code
'SS''SS' 77aaa-77bbbb) as in effect on the date of the original issuance of the
Notes (the "Trust Indenture Act"). The Notes are subject to, and qualified by,
all such terms, certain of which are summarized herein, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of such terms (all
capitalized terms not defined herein shall have the meanings assigned to them in
the Indenture). The Notes are unsecured general obligations of the Company
limited to $220,000,000 in aggregate principal amount.
5. REDEMPTION PROVISIONS. (a) The Notes are not subject to any
mandatory sinking fund redemption prior to maturity.
(b) Except as set forth below in this Section 5, the Notes may not be
redeemed at the option of the Company prior to March 1, 2003. On March
1, 2003 and thereafter, the Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as
percentages of the principal amount of the Notes) set forth below,
together with accrued and unpaid interest if any thereon to the
applicable redemption date, if redeemed during the twelve-month period
beginning on March 1 of the years indicated below:
A-6
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
YEAR PERCENTAGE
------------------------------------------- ----------
<S> <C>
2003....................................... 104.688%
2004....................................... 103.125%
2005....................................... 101.563%
2006 and thereafter........................ 100.000%
</TABLE>
(c) In addition to the Company's right to redeem the Notes as set
forth in Section 5(b), at any time prior to March 1, 2001, the Company
may redeem up to 35% of the aggregate principal amount of the Notes
outstanding on the Issue Date with the net cash proceeds of one or more
Equity Offerings at a redemption price equal to 109.375% of the
principal amount thereof, plus accrued and unpaid interest (including
Special Interest, if any) to the redemption date; provided that (x) at
least $100 million aggregate principal amount of the Notes remains
outstanding immediately after the occurrence of such redemption and (y)
such redemption occurs within 60 days of the date of the closing of any
such Equity Offering.
(d) If less than all of the Notes are to be redeemed at any time,
selection of the Notes to be redeemed will be made by the Trustee from
among the outstanding Notes on a pro rata basis, by lot or by any other
method permitted in the Indenture. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date
to each holder whose Notes are to be redeemed at the registered address
of such holder. On and after the redemption date, interest will cease
to accrue on the Notes or portions thereof called for redemption.
6. MANDATORY OFFERS. (a) Within 30 days after any Change of Control
Trigger Date or Asset Sale Trigger Date, the Company shall mail to the Trustee
(who shall mail to each Holder) a notice stating certain details as set forth in
Section 3.08 of the Indenture in connection with the Offer that the Company is
obligated under the Indenture to make to Holders in such circumstances.
(b) Holders may tender all or, subject to Section 8 below, any
portion of their Notes by completing the attachment hereto entitled
"OPTION OF HOLDER TO ELECT PURCHASE" in an Offer.
(c) Upon a Change of Control, any Holder of Notes will have the right
to cause the Company to purchase the Notes of such Holder, in whole or
in part in integral multiples of aggregate principal amount of $1,000,
at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest (including Special Interest,
if any), if any, to the date of repurchase, as provided in, and subject
to the terms of the Indenture.
A-7
<PAGE>
<PAGE>
(d) Upon there being at least $5,000,000 in Excess Proceeds relating
to one or more Asset Sales, any Holder of Notes will have the right to
cause the Company to purchase the Notes of such Holder, in whole or in
part in integral multiples of aggregate principal amount of $1,000, at
a purchase price in cash equal to 100% of the principal amount thereof
plus accrued and unpaid interest, if any, and Special Interest, if any,
to the date such Net Proceeds Offer is consummated, as provided in, and
subject to the terms of the Indenture.
(e) Promptly after consummation of an Offer, (i) the Paying Agent
shall mail or wire transfer, if permitted under the Indenture, to each
Holder of Notes or portions thereof accepted for payment an amount
equal to Change of Control Price or Offered Price, as the case may be,
(ii) with respect to any tendered Note not accepted for payment in
whole or in part, the Trustee shall return such Note to the Holder
thereof, and (iii) with respect to any Note accepted for payment in
part, the Company shall issue and the Trustee shall authenticate and
mail to each such Holder a new Note equal in principal amount to the
unpurchased portion of the tendered Note.
(f) The Company will (i) announce the results of the Offer to Holders
on or as soon as practicable after the Purchase Date, and (ii) comply
with Rule 14e-1 under the Securities Exchange Act of 1934, as amended,
and any other securities laws and regulations to the extent applicable
to any Offer.
7. NOTES TO BE REDEEMED OR PURCHASED. The Notes may be redeemed or
purchased in part, but only in multiples of $1,000 principal amount unless all
Notes held by a Holder are to be redeemed or purchased. On or after any date on
which Notes are redeemed or purchased, interest ceases to accrete or accrue, as
the case may be, on the Notes or portions thereof called for redemption or
accepted for purchase on such date.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form, without coupons, in denominations of $1,000 principal amount of maturity
and integral multiples thereof. The transfer of Notes may be registered and
Notes may be exchanged as provided in the Indenture. Holders seeking to transfer
or exchange their Notes may be required, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not exchange
or register the transfer of any Note or portion of a Note selected for
redemption or tendered pursuant to an Offer. Neither the Trustee or the
Registrar shall be required to issue, register the transfer of or exchange any
Note (i) to register the transfer of or exchange any Note selected for
redemption, (ii) to register the transfer of or exchange any Note for a period
of 15 days before the mailing of a notice of redemption ending on the date of
such mailing, (iii) to register the transfer or exchange of a Note between a
record date and the next succeeding interest payment date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of the Note for all purposes.
A-8
<PAGE>
<PAGE>
10. AMENDMENTS AND WAIVERS. (a) Subject to certain exceptions, the
Indenture and the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes), and any existing Default or Event of Default
or compliance with any provision of the Indenture or the Notes may be waived
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for the Notes); provided that: (i) no such
modification or amendment may, without the consent of the holders of 75% in
aggregate principal amount of such series of Notes then outstanding, amend or
modify the obligations of the Company under Section 4.15 of the Indenture (or
the definitions related thereto) that could adversely affect the rights of any
holder of the Notes; and (ii) without the consent of each holder affected, the
Company and the Trustee may not: (w) extend the maturity of any Note; (x) affect
the terms of any scheduled payment of interest on or principal of the Notes
(including without limitation any redemption provisions); (y) take any action
that would subordinate the Notes or the Note Guarantees to any other
Indebtedness of the Company or any of Guarantors, respectively (except as
provided in Article 10), or otherwise affect the ranking of the Notes or the
Note Guarantees; or (z) reduce the percentage of holders necessary to consent to
an amendment, supplement or waiver to this Indenture.
(b) Notwithstanding section 10(a) above, the Company, the Guarantors
and the Trustee may amend or supplement the Indenture or the Notes,
without the consent of any Holder, to: cure any ambiguity, defect or
inconsistency; provide for uncertificated Notes in addition to or in
place of certificated Notes; provide for the assumption of the
obligations to the Holders of the Company, or the Guarantors, as the
case may be, in the event of any merger or reorganization involving the
Company, or a Guarantor, as the case may be, that is permitted under
Article 5 of the Indenture; make any change that would provide any
additional rights or benefits to Holders or does not adversely affect
the legal rights under the Indenture of any Holder; comply with the
requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
11. DEFAULTS AND REMEDIES. Events of Default include: (i) failure by
the Company to pay interest on any of the Notes when it becomes due and payable
and the continuance of any such failure for 30 days; (ii) failure by the Company
to pay the principal or premium, if any, on any of the Notes when it becomes due
and payable, whether at stated maturity, upon redemption, upon acceleration or
otherwise; (iii) failure by the Company to comply with any of its agreements or
covenants described under Article 5 of the Indenture, or in respect of its
obligations to make a Change of Control Offer or a Net Proceeds Offer described
in Section 4.15 and 4.16 of the Indenture, respectively; (iv) failure by the
Company to comply with any other covenant in the Indenture and continuance of
such failure for 60 days after notice of such failure has been given to the
Company by the Trustee or by the holders of
A-9
<PAGE>
<PAGE>
at least 25% of the aggregate principal amount of the Notes then outstanding;
(v) failure by either the Company or any of its Restricted Subsidiaries to make
any payment when due after the expiration of any applicable grace period, in
respect of any Indebtedness of the Company or any of such Restricted
Subsidiaries, or the acceleration of the maturity of such Indebtedness by the
holders thereof because of a default, with an aggregate outstanding principal
amount for all such Indebtedness under this clause (v) of $10.0 million or more
(but excluding in any event any such Indebtedness that is paid when so due after
expiration of any applicable grace period, or upon acceleration of the maturity
thereof, pursuant to any letter of credit); (vi) one or more final,
non-appealable judgments or orders that exceed $10.0 million in the aggregate
for the payment of money have been entered by a court or courts of competent
jurisdiction against the Company or any Subsidiary of the Company and such
judgment or judgments have not been satisfied, stayed, annulled or rescinded
within 60 days of being entered; (vii) certain events of bankruptcy, insolvency
or reorganization involving the Parent, the Company or any Significant
Subsidiary; and (viii) except as permitted by the Indenture, any Note Guarantee
ceases to be in full force and effect or any Guarantor repudiates its
obligations under any Note Guarantee.
If an Event of Default (other than an Event of Default specified in
clause (vii) above with respect to the Company), shall have occurred and be
continuing under the Indenture, the Trustee, by written notice to the Company,
or the holders of at least 25% in aggregate principal amount of the Notes then
outstanding by written notice to the Company and the Trustee may declare all
amounts owing under the Notes to be due and payable immediately. Upon such
declaration of acceleration, the aggregate principal of, premium, if any, and
interest on the outstanding Notes shall immediately become due and payable. If
an Event of Default results from bankruptcy, insolvency or reorganization with
respect to the Company, all outstanding Notes shall become due and payable
without any further action or notice. In certain cases, the holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
an existing Default or Event of Default and its consequences, except a default
in the payment of principal of, premium, if any, and interest on the Notes.
In the case of an Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes under the provisions
of Article 3 of the Indenture and under the Notes, an equivalent premium shall
also become and be immediately due and payable, to the extent permitted by law,
upon the acceleration of the Notes. If an Event of Default occurs prior to March
1, 2003 by reason of any willful action (or inaction) taken (or not taken) by or
on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to March 1, 2003, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable, to the extent permitted by law, in an amount equal to 10.0%.
A-10
<PAGE>
<PAGE>
The holders may not enforce the provisions of the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
holders of a majority in principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power; provided however, that
such direction does not conflict with the terms of the Indenture. The Trustee
may withhold from the holders notice of any continuing Default or Event of
Default (except any Default or Event of Default in payment of principal of,
premium, if any, or interest on the Notes) if the Trustee determines that
withholding such notice is in the holders' interest.
12. GUARANTEE. Each Guarantor unconditionally, jointly and severally,
guarantees (each a "NOTE GUARANTEE") to each Holder of a Note authenticated and
delivered by the Trustee that: (i) the principal of, premium, interest
(including Special Interest, if any) on the Notes will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or otherwise, and
interest on the overdue principal of and interest and (including, Special
Interest, if any), and premium, if any, on the Notes, if any, to the extent
lawful, and all other Obligations of the Company to the Holders or the Trustee
under this Indenture and the Notes will be promptly paid in full, all in
accordance with the terms of this Indenture and the Notes; and; (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
Obligations, that the Notes will be promptly paid in full when due in accordance
with the terms of such extension or renewal, whether at stated maturity, by
acceleration or otherwise; provided that notwithstanding anything to the
contrary herein or in Article 11 of the Indenture, the aggregate amount of the
Obligations guaranteed under the Indenture by any Guarantor shall be limited in
amount to the lesser of (x) the maximum amount that would not render such
Guarantor's obligations subject to avoidance under applicable fraudulent
conveyance provisions of the United States Bankruptcy Code or any comparable
provision of any applicable state law and (y) the maximum amount that would not
render the Note Guarantee of such Guarantor an improper corporate distribution
by such Guarantor under applicable state law.
13. ADDITIONAL NOTE GUARANTEES. If the Company or any of its
Subsidiaries shall acquire or create another Subsidiary (other than (x) any
Foreign Subsidiary or (y) a Subsidiary that has been designated as an
Unrestricted Subsidiary or (z) an Immaterial Subsidiary), then within 10 days
after acquiring or creating such Subsidiary, the Company will cause each such
Subsidiary to execute and deliver to the Trustee a counterpart of this Indenture
as a Subsidiary Guarantor.
14. SUBORDINATION. (a) All Obligations owed under and in respect of
the Notes are subordinated in right of payment, to the extent and in the manner
provided in Article 10 of the Indenture, to the prior payment in full in cash of
all Obligations owed under and in respect of all Senior Indebtedness of the
Company and the Guarantors, and the subordination of the Notes is for the
benefit of all holders of all Senior Indebtedness, whether outstanding on the
Closing Date or Incurred thereafter. The Company agrees, and each Holder by
accepting a Note agrees, to the subordination.
A-11
<PAGE>
<PAGE>
(b) Each Guarantor's Obligations under its Notes Guarantee shall be
junior and subordinated in right of payment to any Senior Indebtedness
of the Guarantor in the manner set forth in more detail in Section
11.03 of the Indenture.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may otherwise
deal with the Company or any of its Affiliates with the same rights it would
have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or direct or indirect stockholder of the Company or any Guarantor
(other than the Company and any Subsidiary Guarantor), as such, shall have any
liability for any obligation of the Company or such Subsidiary Guarantor under
the Indenture or the Notes or for any claim based on, in respect of, or by
reason of, any such obligation or the creation of any such obligation. Each
Holder by accepting a Note waives and releases such Persons from all such
liability, and such waiver and release is part of the consideration for the
issuance of the Notes.
17. MERGERS AND CERTAIN OTHER TRANSACTIONS. The Company will not, in a
single transaction or a series of related transactions, (i) consolidate or merge
with or into (other than a merger with a Wholly-Owned Restricted Subsidiary
solely for the purpose of changing the Company's jurisdiction of incorporation
to another State of the United States), or sell, lease, transfer, convey or
otherwise dispose of or assign all or substantially all of the assets of the
Company or the Company and its Subsidiaries (taken as a whole), or assign any of
its obligations under the Notes and the Indenture, to any Person or (ii) adopt a
Plan of Liquidation unless, in either case: (a) the Person formed by or
surviving such consolidation or merger (if other than the Company) or to which
such sale, lease, conveyance or other disposition or assignment shall be made
(or, in the case of a Plan of Liquidation, any Person to which assets are
transferred) (collectively, the "SUCCESSOR"), is a corporation organized and
existing under the laws of any State of the United States of America or the
District of Columbia, and the Successor assumes by supplemental indenture in a
form satisfactory to the Trustee all of the obligations of the Company under the
Notes and the Indenture; (b) immediately prior to and immediately after giving
effect to such transaction and the assumption of the obligations as set forth in
clause (a) above and the incurrence of any Indebtedness to be incurred in
connection therewith, no Default or Event of Default shall have occurred and be
continuing; and (c) immediately after and giving effect to such transaction and
the assumption of the obligations set forth in clause (a) above and the
incurrrence of any Indebtedness to be incurred in connection therewith, and the
use of any net proceeds therefrom on a pro forma basis, (1) the Consolidated Net
Worth of the Company or the Successor, as the case may be, would be at least
equal to the Consolidated Net Worth of the Company immediately prior to such
transaction and (2) the Company or the Successor, as the case may be, could meet
the Coverage Ratio Incurrence Condition; and (d) each Subsidiary Guarantor,
unless it is the other party to the transactions described above, shall have by
amendment to its guarantee confirmed that its guarantee of the Notes shall apply
to the obligations of the
A-12
<PAGE>
<PAGE>
Company or the Successor under the Notes and the Indenture. For purposes of this
paragraph, any Indebtedness of the Successor which was not Indebtedness of the
Company immediately prior to the transaction shall be deemed to have been
incurred in connection with such transaction.
18. GOVERNING LAW. This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
the conflict of laws provisions thereof.
19. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
20. CUSIP/CINS NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Company has caused
CUSIP and CINS numbers, as applicable, to be printed on the Notes and has
directed the Trustee to use CUSIP and CINS numbers, as applicable, in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers printed on the Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to: Eagle-Picher Industries,
Inc., 250 East Fifth Street, Cincinnati, Ohio, Attention: Secretary.
A-13
<PAGE>
<PAGE>
SCHEDULE OF EXCHANGES OF CERTIFICATED NOTES(3)
The following exchanges of a part of this Global Note for Certificated
Notes have been made:
<TABLE>
<CAPTION>
Principal Amount of this
Amount of decrease in Amount of increase in Global Note following Signature of authorized
Principal Amount of this Principal Amount of this such decrease (or officer of Trustee or
Date of Exchange Global Note Global Note increase) Notes Custodian
- ------------------- ------------------------- ------------------------ ---------------------------- -----------------------
<S> <C> <C> <C> <C>
</TABLE>
- --------
(3) This schedule should only be added if the Note is issued in global form.
A-14
<PAGE>
<PAGE>
[FORM OF TRANSFER NOTICE]
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.: ______________________________________
Please print or typewrite name and address including zip code of assignee:
- ------------------------------------------------------------
- ------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
- ---------------------------
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
[THE FOLLOWING PROVISION TO BE INCLUDED ON ALL NOTES OTHER THAN EXCHANGE NOTES,
REGULATION S PERMANENT GLOBAL NOTES AND OFFSHORE CERTIFICATED NOTES:]
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of an effective Registration or (ii)
the end of the period referred to in Rule 144(k) under the Securities Act, the
undersigned confirms, without utilizing any general solicitation or general
advertising, that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If neither of the foregoing boxes is checked, the Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer or registration set
forth herein and in Section 2.08 of the Indenture shall have been satisfied.
Date: _______________ Signature: ________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
A-15
<PAGE>
<PAGE>
TO BE COMPLETED BY PURCHASER IF (a), ABOVE, IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ___________ Signature: _________________________________
NOTICE: To be executed by an executive
officer of the transferee
Signature Guarantee: _______________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"), in
accordance with the Securities Exchange Act of 1934, as amended.)
A-16
<PAGE>
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Note purchased by the Company pursuant to
Section 4.15 of the Indenture, check the box: [ ]
If you elect to have this Note purchased by the Company pursuant to
Section 4.16 of the Indenture, check the box: [ ]
If you elect to have only part of the principal amount of this Note
purchased by the Company pursuant to Section 4.15 or 4.16 of the Indenture,
state the portion of such amount (multiples of $1,000 principal amount only):
$_________________________.
Dated: Your signature:
- ---------------------- -----------------------------------
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee:__________________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"), in
accordance with the Securities Exchange Act of 1934, as amended.)
A-17
<PAGE>
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EXHIBIT B
Form of Certificate of Beneficial Ownership
[Complete Form I or Form II as Applicable]
[Form I]
The Bank of New York
101 Barclay St., Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: E-P Acquisition, Inc. (the "Company") 9 3/8% Senior Subordinated
Notes due 2008 (the "Notes") Issued under the Indenture (the
"Indenture") dated as of February 24, 1998 relating to the Notes
Dear Sirs:
We are the beneficial owners of U.S.$________ principal amount of Notes
issued under the Indenture and represented by Temporary Global Notes (as defined
in the Indenture).
We hereby certify as follows:
[CHECK A OR B AS APPLICABLE.]
[ ]A. We are a non-U.S. person (within the meaning of Regulation S
under the Securities Act of 1933, as amended).
[ ]B. We are a U.S. person (within the meaning of Regulation S
under the Securities Act of 1933, as amended) who purchased the
Notes in a transaction that did not require registration under
the Securities Act of 1933, as amended.
Accordingly, you are hereby requested to exchange our beneficial
interest in the Regulation S Temporary Global Notes for an equivalent beneficial
interest in a Regulation S Permanent Global Notes.
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You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[NAME OF BENEFICIAL OWNER]
By:
-------------------------------
Name:
Title:
Address:
Date:________________
[Form II]
The Bank of New York
101 Barclay St., Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: E-P Acquisition, Inc. (the "Company") 9 3/8% Senior Subordinated
Notes due 2008 (the "Notes") Issued under the Indenture (the
"Indenture") dated as of February 24, 1998 relating to the Notes
This is to certify that based solely on certifications we have received
in writing, by tested telex or by electronic transmission from member
organizations ("Member Organizations") appearing in our records as persons being
entitled to a portion of the principal amount of Notes represented by Regulation
S Temporary Global Notes issued under the above-referenced Indenture, that as of
the date hereof, $____ principal amount of Notes represented by the Regulation S
Temporary Global Notes being submitted herewith for exchange is beneficially
owned by persons who are either (i) non-U.S. persons (within the meaning of
Regulation S under the Securities Act of 1933, as amended) or (ii) U.S. persons
who purchased the Notes in a transaction that did not require registration under
the Securities Act of 1933, as amended. We further certify that (i) we are not
submitting herewith for exchange any portion of such Regulation S Temporary
Global Notes excepted in such Member Organization certifications and (ii) as of
the date hereof we have not received any notification from any Member
Organization to the effect that the statements made by such Member Organization
with respect to any portion of
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such Regulation S Temporary Global Notes submitted herewith for exchange are no
longer true and cannot be relied upon as of the date hereof. Accordingly, you
are hereby requested to exchange such beneficial interest in the Regulation S
Temporary Global Notes for an equivalent beneficial interest in a Regulation S
Permanent Global Notes.
You and the Company are entitled to rely upon this Certificate and are
irrevocably authorized to produce this Certificate or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Yours faithfully,
[MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, Brussels
office, as operator of the Euroclear System]
OR
[CEDEL BANK, societe anonyme]
By:
-----------------------------------------
Name:
Title:
Date:________________
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EXHIBIT C
Form of Certificate to be Delivered
in Connection with Transfers
Pursuant to Regulation S
---------, ----
The Bank of New York
101 Barclay St., Floor 21 West
New York, NY 10286
Attention: Corporate Trust Administration
Re: E-P Acquisition, Inc. (the "Company")
9 3/8% Senior Subordinated Notes due 2008 (the "Notes")
Dear Sirs:
In connection with our proposed sale of U.S.$________ aggregate
principal amount of the Notes, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the Securities Act of
1933, as amended, and, accordingly, we represent that:
(1) the offer of the Notes was not made to a person in the United
States;
(2) at the time the buy order was originated, the transferee was
outside the United States or we and any person acting on our behalf reasonably
believed that the transferee was outside the United States;
(3) no directed selling efforts have been made by us in the United
States in contravention of the requirements of Rule 903(b) or Rule 904(b) of
Regulation S, as applicable; and
(4) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act of 1933.
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You and the Company are entitled to rely upon this letter and are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceedings or official inquiry with
respect to the matters covered hereby. Terms used in this certificate have the
meanings set forth in Regulation S.
Very truly yours,
[Name of Transferor]
By:
---------------------------------
Authorized Signatory
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THE SECURITY (OR ITS PREDECESSOR) EVIDENCED HEREBY WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER SECTION 5 OF THE U.S. SECURITIES ACT
OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND THE SECURITY EVIDENCED HEREBY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THE
SECURITY EVIDENCED HEREBY (1) BY ITS ACQUISITION HEREOF REPRESENTS THAT (A) IT
IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER THE
SECURITIES ACT) OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THE SECURITY
EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT AND (2) IS HEREBY NOTIFIED THAT THE SELLER MAY BE
RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES ACT
PROVIDED BY RULE 144A THEREUNDER OR ANOTHER EXEMPTION UNDER THE SECURITIES ACT.
THE HOLDER OF THE SECURITY EVIDENCED HEREBY AGREES FOR THE BENEFIT OF THE ISSUER
THAT (X) SUCH SECURITY MAY BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (i)
(a) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL
BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES ACT) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, (b) IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144 UNDER THE SECURITIES ACT, (c) OUTSIDE THE UNITED STATES
TO A PERSON THAT IS NOT A U.S. PERSON (AS DEFINED IN RULE 902 UNDER THE
SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 904 UNDER THE
SECURITIES ACT OR (d) IN ACCORDANCE WITH ANOTHER EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED UPON AN OPINION OF COUNSEL IF THE
COMPANY SO REQUESTS), (ii) TO THE COMPANY OR (iii) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT AND, IN EACH CASE, IN ACCORDANCE WITH ANY APPLICABLE
SECURITIES LAWS OF ANY STATE OF THE UNITED STATES OR ANY OTHER APPLICABLE
JURISDICTION AND (Y) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER FROM IT OF THE SECURITY EVIDENCED HEREBY OF THE RESALE
RESTRICTIONS SET FORTH IN (X) ABOVE.
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UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE
TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
TRANSFERS OF THIS GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN
PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S
NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL NOTE SHALL BE LIMITED TO
TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 2.06,
2.07 AND 2.08 OF THE INDENTURE.
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E-P ACQUISITION, INC.
TO BE MERGED INTO
EAGLE-PICHER INDUSTRIES, INC.
9 3/8% SENIOR SUBORDINATED NOTES DUE 2008
No. 1 $200,000,000
CUSIP NO. 269803AC6
E-P Acquisition, Inc., a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to), for
value received, hereby promises to pay to CEDE & CO., or registered
assigns, the principal sum of Two Hundred Million Dollars on March 1, 2008.
Interest Payment Dates: March 1 and September 1, commencing
March 1, 1998
Record Dates: February 15 and August 15
Pursuant to the Indenture, the payment of principal of and premium, if
any, and interest and, if applicable, Special Interest on this Note is
unconditionally guaranteed by Eagle-Picher Holdings, Inc., and its successors
("PARENT") and by the Subsidiary Guarantors (as defined in the Indenture)
(together with Parent, the "GUARANTORS"), and such other Persons as may from
time to time execute and deliver to the Trustee a counterpart of the Indenture
as a Subsidiary Guarantor.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and as more fully specified in the Indenture, which
further provisions shall for all purposes have the same effect as if set forth
at this place.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
E-P ACQUISITION, INC.
By: /s/ Joel P. Wyler
----------------------------
Name:
Title:
By: /s/ Peter J. Ph. Kortenhorst
----------------------------
Name:
Title:
Dated: 2/24/98
This is one of the Notes referred to in the within-mentioned Indenture.
THE BANK OF NEW YORK
as Trustee
By: /s/ Mary Jane Morrissey
---------------------------------
Authorized Signatory
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REVERSE OF NOTE
1. INTEREST. E-P Acquisition, Inc. (the "Company") promises to pay
interest on the principal amount of this Note at the rate and in the manner
specified below. Cash interest will accrue at 9.375% per annum until maturity
and will be payable semi-annually in arrears in cash on March 1 and September 1
of each year commencing March 1, 1998, or if any such day is not a Business Day
on the next succeeding Business Day (each an "Interest Payment Date"). Interest
on this Note will accrue from the most recent date on which interest has been
paid or, if no interest has been paid, from the original date of issue. To the
extent lawful, the Company shall pay interest on overdue principal, premium, if
any, interest and Special Interest, if any, from time to time on demand at the
rate of 11.375% per annum, compounded semi-annually. Interest will be computed
on the basis of a 360-day year of twelve 30-day months.
In the event that one or more Registration Defaults shall have occurred
and be continuing under the Registration Rights Agreement, then Special Interest
(as defined therein) (in addition to the interest otherwise due hereon) will
accrue on the principal amount of the Notes and the New Notes (in addition to
the stated interest on the Notes and the New Notes) from and including the date
on which the first such Registration Default shall have occurred to but
excluding the date on which all such Registration Defaults have been cured.
Special Interest will accrue at a rate of 0.25% per annum during the 90-day
period immediately following the occurrence of the first such Registration
Default and shall increase by 0.25% per annum at the end of each subsequent
90-day period, but in no event shall such rate exceed 1.5% per annum in the
aggregate as a result of any Registration Default or Defaults. All accrued
Special Interest, if any, will be paid by the Company or the Guarantors, in
arrears, on each Interest Payment Date, commencing September 1, 1998. Upon the
cure of all Registration Defaults, the accrual of Special Interest will cease.
2. METHOD OF PAYMENT. The Company will pay interest on this Note to the
Person who is the registered Holder of this Note at the close of business on the
record date for the next Interest Payment Date, which record date shall be
February 15 and August 15 of each year (each a "Record Date"); notwithstanding
the foregoing, the first record date shall be February 24, 1998. Holders must
surrender Notes to a Paying Agent, as defined below, to collect principal
payments on such Notes. Principal of, premium, if any, interest and Special
Interest, if any, on, the Notes will be payable at the office or agency of the
Company maintained for such purpose within the City and State of New York or, at
the option of the Company by wire transfer of immediately available
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funds or, in the case of certificated securities only, by mailing a check to the
registered address of the Holder. Until otherwise designated by the Company, the
Company's office or agency will be the office of the Trustee maintained for such
purpose.
3. PAYING AGENT AND REGISTRAR. (a) The Bank of New York (the "Trustee")
will initially act as the Paying Agent and Registrar. The Company may appoint
additional paying agents or co-registrars, and change the Paying Agent, any
additional paying agent, the Registrar or any co-registrar without prior notice
to any Holder. The Company or any of its Subsidiaries may act in any such
capacity.
(b) Pursuant to the Indenture, the Company has appointed the Trustee
as transfer and exchange agent for the purpose of any transfer or
exchange of the Notes.
(c) Holders shall present Notes to the Trustee, as transfer and
exchange agent.
4. INDENTURE. The Company has issued the Notes under an Indenture,
dated as of February 24, 1998 (the "Indenture"), among the Company, as issuer of
the Notes, the Guarantors party thereto and the Trustee. The terms of the Notes
include those stated in the Indenture and those made part of the Indenture by
reference to the Trust Indenture Act of 1939 (15 U.S. Code
'SS''SS' 77aaa-77bbbb) as in effect on the date of the original issuance of the
Notes (the "Trust Indenture Act"). The Notes are subject to, and qualified by,
all such terms, certain of which are summarized herein, and Holders are referred
to the Indenture and the Trust Indenture Act for a statement of such terms (all
capitalized terms not defined herein shall have the meanings assigned to them in
the Indenture). The Notes are unsecured general obligations of the Company
limited to $220,000,000 in aggregate principal amount.
5. REDEMPTION PROVISIONS. (a) The Notes are not subject to any
mandatory sinking fund redemption prior to maturity.
(b) Except as set forth below in this Section 5, the Notes may not be
redeemed at the option of the Company prior to March 1, 2003. On March
1, 2003 and thereafter, the Notes will be subject to redemption at the
option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed as
percentages of the principal amount of the Notes) set forth below,
together with accrued and unpaid interest if any thereon to the
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applicable redemption date, if redeemed during the twelve-month period
beginning on March 1 of the years indicated below:
YEAR PERCENTAGE
------------------------------------------- ----------
2003....................................... 104.688%
2004....................................... 103.125%
2005....................................... 101.563%
2006 and thereafter........................ 100.000%
(c) In addition to the Company's right to redeem the Notes as set
forth in Section 5(b), at any time prior to March 1, 2001, the Company
may redeem up to 35% of the aggregate principal amount of the Notes
outstanding on the Issue Date with the net cash proceeds of one or more
Equity Offerings at a redemption price equal to 109.375% of the
principal amount thereof, plus accrued and unpaid interest (including
Special Interest, if any) to the redemption date; provided that (x) at
least $100 million aggregate principal amount of the Notes remains
outstanding immediately after the occurrence of such redemption and (y)
such redemption occurs within 60 days of the date of the closing of any
such Equity Offering.
(d) If less than all of the Notes are to be redeemed at any time,
selection of the Notes to be redeemed will be made by the Trustee from
among the outstanding Notes on a pro rata basis, by lot or by any other
method permitted in the Indenture. Notice of redemption will be mailed
at least 30 days but not more than 60 days before the redemption date
to each holder whose Notes are to be redeemed at the registered address
of such holder. On and after the redemption date, interest will cease
to accrue on the Notes or portions thereof called for redemption.
6. MANDATORY OFFERS. (a) Within 30 days after any Change of Control
Trigger Date or Asset Sale Trigger Date, the Company shall mail to the Trustee
(who shall mail to each Holder) a notice stating certain details as set forth in
Section 3.08 of the Indenture in connection with the Offer that the Company is
obligated under the Indenture to make to Holders in such circumstances.
(b) Holders may tender all or, subject to Section 8 below, any
portion of their Notes by completing the attachment hereto entitled
"OPTION OF HOLDER TO ELECT PURCHASE" in an Offer.
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(c) Upon a Change of Control, any Holder of Notes will have the right
to cause the Company to purchase the Notes of such Holder, in whole or
in part in integral multiples of aggregate principal amount of $1,000,
at a purchase price in cash equal to 101% of the principal amount
thereof plus accrued and unpaid interest (including Special Interest,
if any), if any, to the date of repurchase, as provided in, and subject
to the terms of the Indenture.
(d) Upon there being at least $5,000,000 in Excess Proceeds relating
to one or more Asset Sales, any Holder of Notes will have the right to
cause the Company to purchase the Notes of such Holder, in whole or in
part in integral multiples of aggregate principal amount of $1,000, at
a purchase price in cash equal to 100% of the principal amount thereof
plus accrued and unpaid interest, if any, and Special Interest, if any,
to the date such Net Proceeds Offer is consummated, as provided in, and
subject to the terms of the Indenture.
(e) Promptly after consummation of an Offer, (i) the Paying Agent
shall mail or wire transfer, if permitted under the Indenture, to each
Holder of Notes or portions thereof accepted for payment an amount
equal to Change of Control Price or Offered Price, as the case may be,
(ii) with respect to any tendered Note not accepted for payment in
whole or in part, the Trustee shall return such Note to the Holder
thereof, and (iii) with respect to any Note accepted for payment in
part, the Company shall issue and the Trustee shall authenticate and
mail to each such Holder a new Note equal in principal amount to the
unpurchased portion of the tendered Note.
(f) The Company will (i) announce the results of the Offer to Holders
on or as soon as practicable after the Purchase Date, and (ii) comply
with Rule 14e-1 under the Securities Exchange Act of 1934, as amended,
and any other securities laws and regulations to the extent applicable
to any Offer.
7. NOTES TO BE REDEEMED OR PURCHASED. The Notes may be redeemed or
purchased in part, but only in multiples of $1,000 principal amount unless all
Notes held by a Holder are to be redeemed or purchased. On or after any date on
which Notes are redeemed or purchased, interest ceases to accrete or accrue, as
the case may be, on the Notes or portions thereof called for redemption or
accepted for purchase on such date.
8. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form, without coupons, in denominations of $1,000 principal amount of
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maturity and integral multiples thereof. The transfer of Notes may be registered
and Notes may be exchanged as provided in the Indenture. Holders seeking to
transfer or exchange their Notes may be required, among other things, to furnish
appropriate endorsements and transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not exchange
or register the transfer of any Note or portion of a Note selected for
redemption or tendered pursuant to an Offer. Neither the Trustee or the
Registrar shall be required to issue, register the transfer of or exchange any
Note (i) to register the transfer of or exchange any Note selected for
redemption, (ii) to register the transfer of or exchange any Note for a period
of 15 days before the mailing of a notice of redemption ending on the date of
such mailing, (iii) to register the transfer or exchange of a Note between a
record date and the next succeeding interest payment date.
9. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of the Note for all purposes.
10. AMENDMENTS AND WAIVERS. (a) Subject to certain exceptions, the
Indenture and the Notes may be amended or supplemented with the written consent
of the Holders of at least a majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes), and any existing Default or Event of Default
or compliance with any provision of the Indenture or the Notes may be waived
with the consent of the Holders of at least a majority in principal amount of
the then outstanding Notes (including consents obtained in connection with a
tender offer or exchange offer for the Notes); provided that: (i) no such
modification or amendment may, without the consent of the holders of 75% in
aggregate principal amount of such series of Notes then outstanding, amend or
modify the obligations of the Company under Section 4.15 of the Indenture (or
the definitions related thereto) that could adversely affect the rights of any
holder of the Notes; and (ii) without the consent of each holder affected, the
Company and the Trustee may not: (w) extend the maturity of any Note; (x) affect
the terms of any scheduled payment of interest on or principal of the Notes
(including without limitation any redemption provisions); (y) take any action
that would subordinate the Notes or the Note Guarantees to any other
Indebtedness of the Company or any of Guarantors, respectively (except as
provided in Article 10), or otherwise affect the ranking of the Notes or the
Note Guarantees; or (z) reduce the percentage of holders necessary to consent to
an amendment, supplement or waiver to this Indenture.
(b) Notwithstanding section 10(a) above, the Company, the Guarantors
and the Trustee may amend or supplement the Indenture or
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the Notes, without the consent of any Holder, to: cure any ambiguity,
defect or inconsistency; provide for uncertificated Notes in addition
to or in place of certificated Notes; provide for the assumption of the
obligations to the Holders of the Company, or the Guarantors, as the
case may be, in the event of any merger or reorganization involving the
Company, or a Guarantor, as the case may be, that is permitted under
Article 5 of the Indenture; make any change that would provide any
additional rights or benefits to Holders or does not adversely affect
the legal rights under the Indenture of any Holder; comply with the
requirements of the SEC in order to effect or maintain the
qualification of the Indenture under the Trust Indenture Act.
11. DEFAULTS AND REMEDIES. Events of Default include: (i) failure by
the Company to pay interest on any of the Notes when it becomes due and payable
and the continuance of any such failure for 30 days; (ii) failure by the Company
to pay the principal or premium, if any, on any of the Notes when it becomes due
and payable, whether at stated maturity, upon redemption, upon acceleration or
otherwise; (iii) failure by the Company to comply with any of its agreements or
covenants described under Article 5 of the Indenture, or in respect of its
obligations to make a Change of Control Offer or a Net Proceeds Offer described
in Section 4.15 and 4.16 of the Indenture, respectively; (iv) failure by the
Company to comply with any other covenant in the Indenture and continuance of
such failure for 60 days after notice of such failure has been given to the
Company by the Trustee or by the holders of at least 25% of the aggregate
principal amount of the Notes then outstanding; (v) failure by either the
Company or any of its Restricted Subsidiaries to make any payment when due after
the expiration of any applicable grace period, in respect of any Indebtedness of
the Company or any of such Restricted Subsidiaries, or the acceleration of the
maturity of such Indebtedness by the holders thereof because of a default, with
an aggregate outstanding principal amount for all such Indebtedness under this
clause (v) of $10.0 million or more (but excluding in any event any such
Indebtedness that is paid when so due after expiration of any applicable grace
period, or upon acceleration of the maturity thereof, pursuant to any letter of
credit); (vi) one or more final, non-appealable judgments or orders that exceed
$10.0 million in the aggregate for the payment of money have been entered by a
court or courts of competent jurisdiction against the Company or any Subsidiary
of the Company and such judgment or judgments have not been satisfied, stayed,
annulled or rescinded within 60 days of being entered; (vii) certain events of
bankruptcy, insolvency or reorganization involving the Parent, the Company or
any Significant Subsidiary; and (viii) except as permitted by the Indenture, any
Note Guarantee ceases to be in full force and effect or any Guarantor repudiates
its obligations under any Note Guarantee.
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If an Event of Default (other than an Event of Default specified in
clause (vii) above with respect to the Company), shall have occurred and be
continuing under the Indenture, the Trustee, by written notice to the Company,
or the holders of at least 25% in aggregate principal amount of the Notes then
outstanding by written notice to the Company and the Trustee may declare all
amounts owing under the Notes to be due and payable immediately. Upon such
declaration of acceleration, the aggregate principal of, premium, if any, and
interest on the outstanding Notes shall immediately become due and payable. If
an Event of Default results from bankruptcy, insolvency or reorganization with
respect to the Company, all outstanding Notes shall become due and payable
without any further action or notice. In certain cases, the holders of a
majority in aggregate principal amount of the Notes then outstanding may waive
an existing Default or Event of Default and its consequences, except a default
in the payment of principal of, premium, if any, and interest on the Notes.
In the case of an Event of Default occurring by reason of any willful
action (or inaction) taken (or not taken) by or on behalf of the Company with
the intention of avoiding payment of the premium that the Company would have had
to pay if the Company then had elected to redeem the Notes under the provisions
of Article 3 of the Indenture and under the Notes, an equivalent premium shall
also become and be immediately due and payable, to the extent permitted by law,
upon the acceleration of the Notes. If an Event of Default occurs prior to March
1, 2003 by reason of any willful action (or inaction) taken (or not taken) by or
on behalf of the Company with the intention of avoiding the prohibition on
redemption of the Notes prior to March 1, 2003, then, upon acceleration of the
Notes, an additional premium shall also become and be immediately due and
payable, to the extent permitted by law, in an amount equal to 10.0%.
The holders may not enforce the provisions of the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
holders of a majority in principal amount of the Notes then outstanding may
direct the Trustee in its exercise of any trust or power; provided however, that
such direction does not conflict with the terms of the Indenture. The Trustee
may withhold from the holders notice of any continuing Default or Event of
Default (except any Default or Event of Default in payment of principal of,
premium, if any, or interest on the Notes) if the Trustee determines that
withholding such notice is in the holders' interest.
12. GUARANTEE. Each Guarantor unconditionally, jointly and severally,
guarantees (each a "NOTE GUARANTEE") to each Holder of a Note authenticated and
delivered by the Trustee that: (i) the principal of, premium, interest
(including Special Interest, if any) on the Notes will be promptly paid in full
when due, whether at maturity, by acceleration, redemption or otherwise, and
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interest on the overdue principal of and interest and (including, Special
Interest, if any), and premium, if any, on the Notes, if any, to the extent
lawful, and all other Obligations of the Company to the Holders or the Trustee
under this Indenture and the Notes will be promptly paid in full, all in
accordance with the terms of this Indenture and the Notes; and; (ii) in case of
any extension of time of payment or renewal of any Notes or any of such other
Obligations, that the Notes will be promptly paid in full when due in accordance
with the terms of such extension or renewal, whether at stated maturity, by
acceleration or otherwise; provided that notwithstanding anything to the
contrary herein or in Article 11 of the Indenture, the aggregate amount of the
Obligations guaranteed under the Indenture by any Guarantor shall be limited in
amount to the lesser of (x) the maximum amount that would not render such
Guarantor's obligations subject to avoidance under applicable fraudulent
conveyance provisions of the United States Bankruptcy Code or any comparable
provision of any applicable state law and (y) the maximum amount that would not
render the Note Guarantee of such Guarantor an improper corporate distribution
by such Guarantor under applicable state law.
13. ADDITIONAL NOTE GUARANTEES. If the Company or any of its
Subsidiaries shall acquire or create another Subsidiary (other than (x) any
Foreign Subsidiary or (y) a Subsidiary that has been designated as an
Unrestricted Subsidiary or (z) an Immaterial Subsidiary), then within 10 days
after acquiring or creating such Subsidiary, the Company will cause each such
Subsidiary to execute and deliver to the Trustee a counterpart of this Indenture
as a Subsidiary Guarantor.
14. SUBORDINATION. (a) All Obligations owed under and in respect of
the Notes are subordinated in right of payment, to the extent and in the manner
provided in Article 10 of the Indenture, to the prior payment in full in cash of
all Obligations owed under and in respect of all Senior Indebtedness of the
Company and the Guarantors, and the subordination of the Notes is for the
benefit of all holders of all Senior Indebtedness, whether outstanding on the
Closing Date or Incurred thereafter. The Company agrees, and each Holder by
accepting a Note agrees, to the subordination.
(b) Each Guarantor's Obligations under its Notes Guarantee shall be
junior and subordinated in right of payment to any Senior Indebtedness
of the Guarantor in the manner set forth in more detail in Section
11.03 of the Indenture.
15. TRUSTEE DEALINGS WITH COMPANY. The Trustee in its individual or
any other capacity may become the owner or pledgee of Notes and may
12
<PAGE>
<PAGE>
otherwise deal with the Company or any of its Affiliates with the same rights it
would have if it were not Trustee.
16. NO RECOURSE AGAINST OTHERS. No director, officer, employee,
incorporator or direct or indirect stockholder of the Company or any Guarantor
(other than the Company and any Subsidiary Guarantor), as such, shall have any
liability for any obligation of the Company or such Subsidiary Guarantor under
the Indenture or the Notes or for any claim based on, in respect of, or by
reason of, any such obligation or the creation of any such obligation. Each
Holder by accepting a Note waives and releases such Persons from all such
liability, and such waiver and release is part of the consideration for the
issuance of the Notes.
17. MERGERS AND CERTAIN OTHER TRANSACTIONS. The Company will not, in a
single transaction or a series of related transactions, (i) consolidate or merge
with or into (other than a merger with a Wholly-Owned Restricted Subsidiary
solely for the purpose of changing the Company's jurisdiction of incorporation
to another State of the United States), or sell, lease, transfer, convey or
otherwise dispose of or assign all or substantially all of the assets of the
Company or the Company and its Subsidiaries (taken as a whole), or assign any of
its obligations under the Notes and the Indenture, to any Person or (ii) adopt a
Plan of Liquidation unless, in either case: (a) the Person formed by or
surviving such consolidation or merger (if other than the Company) or to which
such sale, lease, conveyance or other disposition or assignment shall be made
(or, in the case of a Plan of Liquidation, any Person to which assets are
transferred) (collectively, the "SUCCESSOR"), is a corporation organized and
existing under the laws of any State of the United States of America or the
District of Columbia, and the Successor assumes by supplemental indenture in a
form satisfactory to the Trustee all of the obligations of the Company under the
Notes and the Indenture; (b) immediately prior to and immediately after giving
effect to such transaction and the assumption of the obligations as set forth in
clause (a) above and the incurrence of any Indebtedness to be incurred in
connection therewith, no Default or Event of Default shall have occurred and be
continuing; and (c) immediately after and giving effect to such transaction and
the assumption of the obligations set forth in clause (a) above and the
incurrrence of any Indebtedness to be incurred in connection therewith, and the
use of any net proceeds therefrom on a pro forma basis, (1) the Consolidated Net
Worth of the Company or the Successor, as the case may be, would be at least
equal to the Consolidated Net Worth of the Company immediately prior to such
transaction and (2) the Company or the Successor, as the case may be, could meet
the Coverage Ratio Incurrence Condition; and (d) each Subsidiary Guarantor,
unless it is the other party to the transactions described above, shall have by
amendment to its guarantee confirmed that its guarantee of the Notes
13
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<PAGE>
shall apply to the obligations of the Company or the Successor under the Notes
and the Indenture. For purposes of this paragraph, any Indebtedness of the
Successor which was not Indebtedness of the Company immediately prior to the
transaction shall be deemed to have been incurred in connection with such
transaction.
18. GOVERNING LAW. This Note shall be governed by and construed in
accordance with the internal laws of the State of New York, without regard to
the conflict of laws provisions thereof.
19. AUTHENTICATION. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.
20. CUSIP/CINS NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Note Identification Procedures, the Company has caused
CUSIP and CINS numbers, as applicable, to be printed on the Notes and has
directed the Trustee to use CUSIP and CINS numbers, as applicable, in notices of
redemption as a convenience to Holders. No representation is made as to the
accuracy of such numbers either as printed on the Notes or as contained in any
notice of redemption and reliance may be placed only on the other identification
numbers printed on the Notes.
The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to: Eagle-Picher Industries,
Inc., 250 East Fifth Street, Cincinnati, Ohio, Attention: Secretary.
14
<PAGE>
<PAGE>
SCHEDULE OF EXCHANGES OF CERTIFICATED NOTES
The following exchanges of a part of this Global Note for Certificated
Notes have been made:
<TABLE>
<CAPTION>
Principal Amount of this
Amount of decrease in Amount of increase in Global Note following Signature of authorized
Principal Amount of this Principal Amount of this such decrease (or officer of Trustee or
Date of Exchange Global Note Global Note increase) Notes Custodian
- ------------------- ------------------------- ------------------------ ---------------------------- -----------------------
<S> <C> <C> <C> <C>
</TABLE>
15
<PAGE>
<PAGE>
TRANSFER NOTICE
FOR VALUE RECEIVED the undersigned registered Holder hereby sell(s),
assign(s) and transfer(s) unto
Insert Taxpayer Identification No.: ______________________________________
Please print or typewrite name and address including zip code of assignee:
- ------------------------------------------------------------
- ------------------------------------------------------------
the within Note and all rights thereunder, hereby irrevocably constituting and
appointing
- ---------------------------
attorney to transfer said Note on the books of the Company with full power of
substitution in the premises.
In connection with any transfer of this Note occurring prior to the
date which is the earlier of (i) the date of an effective Registration or (ii)
the end of the period referred to in Rule 144(k) under the Securities Act, the
undersigned confirms, without utilizing any general solicitation or general
advertising, that:
[CHECK ONE]
[ ] (a) this Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder.
OR
[ ] (b) this Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If neither of the foregoing boxes is checked, the Registrar shall not be
obligated to register this Note in the name of any Person other than the Holder
hereof unless and until the conditions to any such transfer or registration set
forth herein and in Section 2.08 of the Indenture shall have been satisfied.
Date: _______________ Signature: ________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon the face of the within-mentioned
instrument in every particular, without
alteration or any change whatsoever.
16
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<PAGE>
TO BE COMPLETED BY PURCHASER IF (a), ABOVE, IS CHECKED:
The undersigned represents and warrants that it is purchasing this Note
for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by Rule 144A.
Dated: ___________ Signature: _________________________________
NOTICE: To be executed by an executive
officer of the transferee
Signature Guarantee: _______________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"), in
accordance with the Securities Exchange Act of 1934, as amended.)
17
<PAGE>
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you elect to have this Note purchased by the Company pursuant to
Section 4.15 of the Indenture, check the box: [ ]
If you elect to have this Note purchased by the Company pursuant to
Section 4.16 of the Indenture, check the box: [ ]
If you elect to have only part of the principal amount of this Note
purchased by the Company pursuant to Section 4.15 or 4.16 of the Indenture,
state the portion of such amount (multiples of $1,000 principal amount only):
$_________________________.
Dated: Your signature:
- ---------------------- -----------------------------------
(Sign exactly as name appears on the
other side of this Note)
Signature Guarantee:__________________________________________
(Signature must be guaranteed by a financial institution that is a
member of the Securities Transfer Agent Medallion Program ("STAMP"), in
accordance with the Securities Exchange Act of 1934, as amended.)
18
<PAGE>
<PAGE>
CROSS-REFERENCE TABLE
Reconciliation and tie between Trust Indenture Act of 1939, as amended, and
Indenture, dated as of February 24, 1998, among E-P Acquisition, Inc., the
Guarantors named therein and The Bank of New York, as Trustee.
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
----------- -------
<S> <C>
'SS'310 (a)(1).................... 7.10
(a)(2).................... 7.10
(a)(5).................... 7.10
(b)....................... 7.08; 7.10
'SS'311 (a)....................... 7.11
(b)....................... 7.11
'SS'312 (a)....................... 2.05
(b)....................... 12.03
(c)....................... 12.03
'SS'313 (a)....................... 7.06
(b)(2).................... 7.06
(c)....................... 7.06; 12.02
(d)....................... 7.06
'SS'314 (a)....................... 4.02; 4.03; 12.02
(a)(4).................... 12.05
(c)(1).................... 12.04
(c)(2).................... 12.04
(e)....................... 12.05
'SS'315 (a)....................... 7.01
(b)....................... 7.05; 12.02
(c)....................... 7.01
(d)....................... 7.01
(e)....................... 6.11
'SS'316 (a)(last sentence)........ 2.11
(a)(1)(A)................. 6.05
(a)(1)(B)................. 6.04
(b)....................... 6.07
(c)....................... 2.15
'SS'317 (a)(1).................... 6.03; 6.08
(a)(2).................... 6.09
(b)....................... 2.04
'SS'318 (a)....................... 12.01
</TABLE>
<PAGE>
<PAGE>
FIRST SUPPLEMENTAL INDENTURE
FIRST SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of
February 24, 1998 among Eagle-Picher Industries, Inc., an Ohio corporation,
("Eagle-Picher"), as survivor to the merger between E-P Acquisition, Inc. ("E-P
Acquisition") and Eagle-Picher, and The Bank of New York, a New York banking
corporation, as Trustee (the "Trustee").
WITNESSETH:
WHEREAS, E-P Acquisition, the Guarantors named therein and the Trustee
executed and delivered an Indenture relating to the 9 3/8% Senior Subordinated
Notes due 2008 (the "Notes") of E-P Acquisition, dated as of February 24, 1998;
WHEREAS, Section 9.01 of the Indenture provides that the Indenture may
be amended without the consent of the holders of the Notes in order to provide
for the assumption of the obligations to the holders of the Notes in the event
of merger or consolidation;
WHEREAS, in accordance with and as contemplated by Article 5 of the
Indenture, E-P Acquisition has been merged with Eagle-Picher, on the Issue
Date, and the parties to the Indenture have agreed that Eagle-Picher, as
survivor of such merger, be the "Issuer" under the Indenture.
WHEREAS, all things necessary to make this Supplemental Indenture a
valid supplement to the Indenture according to its terms and the terms of the
Indenture have been done;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Certain Terms Defined in the Indenture. All capitalized terms
used herein without definition herein shall have the meanings ascribed thereto
in the Indenture.
SECTION 2. Assumption of Obligations Under the Indenture. Eagle-Picher
assumes all the obligations of E-P Acquisition under the Notes and the
Indenture.
<PAGE>
<PAGE>
SECTION 3. Governing Law. The laws of the State of New York shall govern
this Supplemental Indenture.
SECTION 4. Counterparts. This Supplemental Indenture may be signed in
any number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.
SECTION 5. Ratification. Except as expressly amended hereby, each
provision of the Indenture shall remain in full force and effect and, as
amended hereby, the Indenture is in all respects agreed to, ratified and
confirmed by each of Eagle-Picher and the Trustee.
2
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: President
DAISY PARTS, INC.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER DEVELOPMENT
COMPANY, INC.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: President
EAGLE-PICHER HOLDINGS, INC.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: President
3
<PAGE>
<PAGE>
EAGLE-PICHER FAR EAST, INC.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER FLUID SYSTEMS, INC.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER MINERALS, INC.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER TECHNOLOGIES,
LLC
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: Director-Manager
HILLSDALE TOOL &
MANUFACTURING CO.
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: Authorized Person
4
<PAGE>
<PAGE>
MICHIGAN AUTOMOTIVE
RESEARCH CORPORATION
By: /s/ ANDRIES RUIJSSENAARS
______________________________________
Name: Andries Ruijssenaars
Title: Authorized Person
THE BANK OF NEW YORK
as Trustee
By: /s/ MARY JANE MORRISSEY
______________________________________
Name: Mary Jane Morrissey
Title: Vice President
5
<PAGE>
<PAGE>
MERGER AGREEMENT
dated as of
December 23, 1997
among
EAGLE-PICHER INDUSTRIES, INC. PERSONAL
INJURY SETTLEMENT TRUST,
EAGLE-PICHER INDUSTRIES, INC.,
E-P HOLDINGS, INC.
and
E-P ACQUISITION, INC.
<PAGE>
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
ARTICLE I - THE MERGER
1.1 The Merger................................................................ 1
1.2 Effective Time............................................................ 1
1.3 Closing Date.............................................................. 2
1.4 Effects of the Merger..................................................... 2
1.5 Certificate of Incorporation and By-Laws.................................. 2
1.6 Directors and Officers of the Surviving Corporation....................... 2
1.7 Conversion of Capital Stock............................................... 2
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE COMPANY
2.1 The Trust................................................................. 3
2.2 The Company............................................................... 3
2.3 Subsidiaries and Joint Venture Interests.................................. 3
2.4 Capitalization; Outstanding Debt.......................................... 4
2.5 Authority; No Conflict; Approvals......................................... 5
2.6 Ownership of Shares; Title................................................ 6
2.7 Financial Statements...................................................... 6
2.8 No Changes................................................................ 6
2.9 Real and Personal Property................................................ 6
2.10 Contracts................................................................. 7
2.11 Intellectual Property..................................................... 9
2.12 Litigation, Claims and Proceedings........................................ 10
2.13 Environmental Conditions.................................................. 10
2.14 Compliance with Law; Permits.............................................. 11
2.15 Taxes..................................................................... 12
2.16 Labor and Employee Benefits............................................... 12
2.17 Insurance................................................................. 14
2.18 Finder's Fee.............................................................. 14
2.19 Exclusivity of Representations............................................ 14
2.20 Transactions with Affiliates.............................................. 15
</TABLE>
(i)
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<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
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<S> <C> <C>
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND ACQUISITION
3.1 Due Organization.......................................................... 15
3.2 Authority................................................................. 15
3.3 No Conflict............................................................... 15
3.4 Approvals................................................................. 15
3.5 Litigation................................................................ 16
3.6. Finder's Fee.............................................................. 16
3.7 Financing................................................................. 16
ARTICLE 4 - COVENANTS
4.1 Conduct of Business....................................................... 16
4.2 Access to Records and Properties.......................................... 18
4.3 Approvals................................................................. 19
4.4 Public Announcements...................................................... 20
4.5 Confidentiality........................................................... 20
4.6 Reports; Access to Books and Records...................................... 20
4.7 Tax Matters............................................................... 21
4.8 Repurchase of Shares Payment; Payment of Outstanding
Indebtedness.............................................................. 24
4.9 Director and Officer Liability............................................ 24
4.10 Notices of Certain Events................................................. 25
4.11 Further Assurances........................................................ 25
4.12 Financial Statements...................................................... 25
4.13 Negotiations.............................................................. 26
4.14 No Phase II Reviews....................................................... 27
4.15 ISRA...................................................................... 27
ARTICLE 5 - CONDITIONS TO OBLIGATIONS OF HOLDINGS AND ACQUISITION
5.1 Absence of Injunction..................................................... 27
5.2 Hart-Scott-Rodino......................................................... 27
</TABLE>
(ii)
<PAGE>
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
5.3 No Breach................................................................. 27
5.4 Bankruptcy Court Approval................................................. 27
5.5 Merger Approvals.......................................................... 27
5.6 Government Approvals...................................................... 28
5.7 Financing................................................................. 28
5.8 Material Adverse Change................................................... 28
5.9 Existing Indebtedness..................................................... 28
5.10 Environmental Conditions.................................................. 28
5.11 Legal Opinions............................................................ 28
5.12 Consents.................................................................. 28
5.13 Other Documents........................................................... 28
ARTICLE 6 - CONDITIONS TO OBLIGATIONS OF THE TRUST
6.1 Absence of Injunction..................................................... 28
6.2 Hart-Scott-Rodino......................................................... 29
6.3 No Breach................................................................. 29
6.4 Bankruptcy Court Approval................................................. 29
6.5 Merger Approvals.......................................................... 29
6.6 Government Approvals...................................................... 29
6.7 Legal Opinion............................................................. 29
6.8 Holdings Financing........................................................ 29
6.9. Other Documents........................................................... 29
ARTICLE 7 - CLOSING
7.1 The Trust Deliveries...................................................... 29
7.2 Holdings Deliveries....................................................... 30
7.3 Payment of Debentures..................................................... 30
ARTICLE 8 - INDEMNIFICATION
8.1 Indemnification by the Trust.............................................. 30
8.2 Indemnification by Acquisition and Holdings............................... 32
8.3 Survival.................................................................. 32
</TABLE>
(iii)
<PAGE>
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
8.4 Limitations on Indemnity.................................................. 33
8.5 Indemnification Procedure................................................. 33
8.6 Exclusive Remedy.......................................................... 34
ARTICLE 9 - TERMINATION; SURVIVAL
9.1 Termination............................................................... 35
9.2 Effect of Termination..................................................... 36
ARTICLE 10 - MISCELLANEOUS
10.1 Expenses.................................................................. 36
10.2 Entire Agreement.......................................................... 36
10.3 Waivers................................................................... 36
10.4 Binding Effect; Assignability............................................. 36
10.5 Notices................................................................... 37
10.6 Counterparts.............................................................. 38
10.7 Attachments, Exhibits and Schedules....................................... 38
10.8 Governing Law............................................................. 38
10.9 No Presumption............................................................ 38
10.10 Headings.................................................................. 39
10.11 Amendment................................................................. 39
10.12 Third Party Rights........................................................ 39
10.13 Severability.............................................................. 39
10.14 Consent to Jurisdiction................................................... 39
10.15 Nonrecourse Provisions.................................................... 39
10.16 Terms Generally........................................................... 40
</TABLE>
(iv)
<PAGE>
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
<S> <C>
ATTACHMENTS
Attachment A Definitions
EXHIBITS
Exhibit A Form of Opinion of Hughes Hubbard & Reed LLP, counsel to the Company
and the Trust
SCHEDULES
Schedule 2.3(a) Subsidiaries
Schedule 2.3(b) Joint Venture Entities and Interests
Schedule 2.5 No Conflicts
Schedule 2.7 Financial Statements
Schedule 2.8 Material Changes
Schedule 2.9 Real Property
Schedule 2.10(a) Contracts
Schedule 2.10(b) Contract Defaults
Schedule 2.10(c) Material Government Contracts
Schedule 2.11 Intellectual Property Rights and Claims
Schedule 2.12 Litigation, Claims and Proceedings
Schedule 2.13 Environmental Matters
Schedule 2.14 Permits
Schedule 2.16(a) Employment & Collective Bargaining Agreements and Labor Disputes
Schedule 2.16(b) US Benefit Plans
Schedule 2.16(f) Retiree Medical and Life Insurance Plans
Schedule 2.16(h) Foreign Benefit Plans
Schedule 2.17 Liability and Casualty Insurance Policies
Schedule 2.18 Finder's Fee
Schedule 2.20 Transactions with Affiliates
Schedule 3.7 Financing Letters
Schedule 4.1 Permitted Changes
Schedule 5.10 Real Property Investigated for Environmental Conditions
Schedule 5.12 Consents
</TABLE>
(v)
<PAGE>
<PAGE>
MERGER AGREEMENT
MERGER AGREEMENT (together with the Attachments, Exhibits and Schedules
hereto, and as amended from time to time in accordance with the terms hereof,
this "Agreement") made as of December 23, 1997 among Eagle-Picher Industries,
Inc. Personal Injury Settlement Trust, an Ohio trust (the "Trust"), Eagle-Picher
Industries, Inc., an Ohio corporation (the "Company"), E-P Holdings, Inc., a
Delaware corporation ("Holdings"), and E-P Acquisition, Inc., a Delaware
corporation and a wholly-owned subsidiary of Holdings ("Acquisition").
WHEREAS, the Trust is the sole stockholder of the Company:
WHEREAS, the Board of Directors of each of Holdings, Acquisition, and the
Company and the sole stockholders of Acquisition and the Company have approved
the merger (the "Merger") of Acquisition with and into the Company, upon the
terms and conditions of this Agreement. As a result of the Merger, each issued
and outstanding share of common stock, without par value (the "Common Stock"),
of the Company, will be converted into the right to receive the consideration
provided in this Agreement and the separate corporate existence of Acquisition
shall cease; and
WHEREAS, the defined terms used in this Agreement, which are capitalized,
shall have the meanings set forth in Attachment A.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained in this Agreement, the Trust, the Company,
Acquisition and Holdings agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the Ohio General Corporation Law ("OGCL")
and the Delaware General Corporation Law ("DGCL"), at the Effective Time (as
defined below), Acquisition shall be merged with and into the Company. Following
the Merger, the separate corporate existence of Acquisition shall cease and the
Company shall continue as the surviving corporation (the "Surviving
Corporation") and shall succeed to and assume all the rights and obligations of
the Company in accordance with the OGCL and the DGCL.
1.2 Effective Time. At the Closing, upon the satisfaction of all conditions
set forth in Articles 5 and 6 and the taking of all actions referred to in
Sections 7.1 and 7.2 (other than 7.1(b) and 7.2(i)), the Trust, Holdings and
Acquisition shall cause a copy of the certificate of merger (executed in
accordance with the relevant provisions of the OGCL and the DGCL) or other
appropriate documents to be filed in the office of the Ohio Secretary of State
and the office of the Delaware Secretary of State (the "Certificate of Merger"),
and the parties shall make all other
<PAGE>
<PAGE>
2
filings or recordings required under the OGCL and the DGCL. The Merger shall
become effective at such time as the Certificate of Merger is duly filed with
the Ohio Secretary of State or at such time as is agreed upon by the parties and
specified in the Certificate of Merger. Such time is referred to in this
Agreement as the "Effective Time."
1.3 Closing Date. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. Eastern Time at the offices of Hughes Hubbard & Reed LLP,
One Battery Park Plaza, New York, New York on the fifth Business Day after all
conditions to the obligations of Holdings and Acquisition, on the one hand, and
the Trust, on the other hand, under Articles 5 and 6 of this Agreement shall
have been satisfied or waived (other than the conditions referred to in Sections
5.3, 5.8 and 6.3), or at such other place and on such other date as the parties
may mutually agree in writing (such date on which the Closing occurs hereinafter
is referred to as the "Closing Date").
1.4 Effects of the Merger. The Merger shall have the effects set forth in
the OGCL and the DGCL.
1.5 Certificate of Incorporation and By-Laws. The Articles of Incorporation
of the Company as in effect immediately prior to the Effective Time shall be the
Articles of Incorporation of the Surviving Corporation until amended. The
Regulations of the Company as in effect immediately prior to the Effective Time
shall be the Regulations of the Surviving Corporation until amended.
1.6 Directors and Officers of the Surviving Corporation. The directors and
officers of Acquisition at the Effective Time shall be the directors and
officers, respectively, of the Surviving Corporation, until the earlier of their
resignation or removal or until their successors are duly elected and qualified.
1.7 Conversion of Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of the holder of any shares of Common
Stock or any shares of common stock, par value $.01 per share (the "Acquisition
Common Stock"), of Acquisition:
(a) Acquisition Common Stock. Each issued and outstanding share of
Acquisition Common Stock shall be converted into and become one fully paid
and nonassessable share of common stock of the Surviving Corporation.
(b) Cancellation of Treasury Stock and Company-Owned Stock. Each share
of Common Stock that is held by the Company as treasury stock or owned by
the Company or any Company Subsidiary, in each case immediately prior to
the Effective Time, shall be canceled and retired and shall cease to exist
and no consideration shall be delivered in exchange therefor.
(c) Exchange of Shares. All of the issued and outstanding shares (the
"Shares") of Common Stock (all of which are and, immediately prior to the
Effective Time, will be owned by the Trust) shall be converted into and
become the right to receive an amount in cash equal to (A) $410,000,000
plus the Interest Amount less (B) the Transaction Expense
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3
Amount (the "Merger Consideration"). Upon receipt by the Trust of the
Merger Consideration, the Trust shall deliver to Holdings the certificates
formerly representing the Shares and shall have no further rights with
respect thereto. From and after the Effective Time, the stock transfer
books of the Company shall be closed and there shall be no further
registration of transfers of the shares of Common Stock.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE TRUST AND THE COMPANY
The Trust and the Company represent and warrant to Acquisition and Holdings
that, (x) as of the date of this Agreement and as of the Closing with respect to
the Closing Representations and (y) as of December 1, 1997 with respect to the
December 1 Representations (except as to requirements for matters to be
disclosed on Schedules which requirements shall be as of the date of this
Agreement):
2.1 The Trust. The Trust has been duly formed and is validly existing as a
trust under the Laws of the State of Ohio pursuant to the Eagle-Picher
Industries, Inc. Personal Injury Settlement Trust Agreement dated November 29,
1996 (the "Trust Agreement") among the Company and certain of its Affiliates, as
settlors, and James J. McMonagle, Ruth McMullin and Daniel M. Phillips (together
with W. Thomas Stephens, the "Trustees") pursuant to the Third Amended
Consolidated Plan of Reorganization of the Company and its affiliated debtors,
as confirmed by the order of the United States District Court and the United
States Bankruptcy Court for the Southern District of Ohio dated November 18,
1996 (the "Plan"). The Trust Agreement remains in full force and effect. The
Trust has delivered to Holdings true and complete copies of the Trust Agreement.
The Trust complies in all respects with the requirements of a trust set forth in
Section 524(g)(2)(B)(i) of the Bankruptcy Reform Act of 1978, as amended. The
Trust has the power and authority to enter into this Agreement and consummate
the transactions contemplated hereby.
2.2 The Company. The Company is an Ohio corporation, duly incorporated and
validly existing as a corporation in good standing under the Laws of the State
of Ohio and has the corporate power to own, operate or lease the properties and
assets owned, operated or leased by it and to carry on its business as now being
conducted. The Company is duly qualified to do business and is in good standing
as a foreign corporation in each jurisdiction where qualification as a foreign
corporation is required, except where the failure to be so qualified would not
reasonably be expected to have a Material Adverse Effect. The Trust has
delivered to Holdings prior to the date of this Agreement true and complete
copies of the Articles of Incorporation and Regulations of the Company. There
are no voting trusts, stockholders agreements, proxies or other similar
agreements in effect with respect to the voting or transfer of the Shares.
2.3 Subsidiaries and Joint Venture Interests.
(a) Set forth in Schedule 2.3(a) is a true and complete list of all Company
Subsidiaries stating, with respect to each, its jurisdiction of incorporation,
type of entity and equity ownership. Each of the Company Subsidiaries is duly
incorporated, validly existing and
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4
(with respect to Domestic Subsidiaries) in good standing under the laws of the
jurisdiction of its incorporation and has the corporate power to own, operate or
lease the properties and assets owned, operated or leased by it and to carry on
its business as now being conducted. Each of the Company Subsidiaries which is a
Domestic Subsidiary is duly qualified to do business (with regard to
jurisdictions within the United States) and is in good standing in each
jurisdiction where qualification as a foreign corporation is required, except
where the failure to be so qualified would not reasonably be expected to have a
Material Adverse Effect. All of the outstanding shares of capital stock of the
Company Subsidiaries have been validly authorized and issued, are fully paid and
nonassessable and have not been issued in violation of any preemptive rights or
of any federal or state securities law and are owned by the Company of record
and beneficially free and clear of any Lien other than Permitted Liens. The
Trust has heretofore made available to Holdings true and correct copies of the
certificates or articles of incorporation and bylaws or other organizational
documents of the Company Subsidiaries. There are no voting trusts, stockholders
agreements, proxies or other similar agreements in effect with respect to the
voting or transfer of the capital stock or other equity interests of the Company
Subsidiaries.
(b) Set forth in Schedule 2.3(b) is a true and complete description of (i)
the nature of interests (the "Joint Venture Interests") held by the Company and
Company Subsidiaries in certain joint venture entities (the "Joint Venture
Entities"), (ii) the holders of the Joint Venture Interests and (iii) the
percentage of Joint Venture Interests held by the Company or Company
Subsidiaries.
(c) As of the date of this Agreement, except as set forth in Schedule
2.3(a) and Schedule 2.3(b), the Company does not have, directly or indirectly,
any material ownership, equity, profit or voting interest in any corporation,
partnership, joint venture, association, trust or any other unincorporated
organization or entity and has no agreement or commitment to purchase any such
interest.
2.4 Capitalization; Outstanding Debt.
(a) The authorized stock of the Company consists of twenty million
(20,000,000) shares of Common Stock, of which ten million (10,000,000) shares
are issued and outstanding as of the date hereof, and no shares are held in the
treasury of the Company. At the Effective Time, 9,340,000 shares of Common Stock
will be issued and outstanding. The Trust owns all of the issued and outstanding
shares of Common Stock. The Shares have been validly authorized and issued, are
fully paid and nonassessable and have not been issued in violation of any
preemptive rights or of any federal or state securities law. Other than as
contemplated hereby, there is no security, option, warrant, right, call,
subscription, agreement, commitment or understanding of any nature whatsoever,
fixed or contingent, that directly or indirectly: (i) calls for the issuance,
sale, pledge or other disposition of any shares of the Company or any Company
Subsidiary or any securities convertible into, or exchangeable or exercisable
for, or other rights to acquire, any shares of the Company or any Company
Subsidiary, (ii) affects to the voting or control of such stock, securities or
rights or (iii) obligates the Company or any Company Subsidiary to grant, offer
or enter into any of the foregoing.
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5
(b) The sum of the outstanding principal amounts under the IRBs, other
long-term indebtedness (including current portions) and any revolving credit or
line of credit (collectively, "Company Debt") at November 30, 1997 was no
greater than $23,400,000.
2.5 Authority; No Conflict; Approvals.
(a) The execution, delivery and, subject to Section 2.5(c)(ii), the
consummation of the transactions contemplated by this Agreement has been duly
and validly authorized by all necessary action on the part of the Trust. This
Agreement has been duly and validly executed and delivered by the Trust,
constitutes a valid and binding obligation of the Trust and is enforceable
against the Trust in accordance with its terms except to the extent that (i)
such enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or other similar Laws relating to creditors' rights generally and is
subject to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law) and (ii)
specific performance may not be available in certain jurisdictions outside the
US (the foregoing clauses (i) and (ii), collectively, the "Enforceability
Exceptions").
(b) Except as set forth in Schedule 2.5 and assuming compliance with the
matters referred to in Section 2.5(c), the execution and delivery by the Trust
of this Agreement and the consummation of the transactions contemplated by this
Agreement do not and will not (A) contravene, conflict with or result in the
breach of any term or provision of (i) the Trust Agreement, or (ii) the charter,
articles or certificate of incorporation or any other organizational document or
bylaws of the Company or any Company Subsidiary, (B) (i) constitute a default
under (or an event which, with notice or lapse of time or both, would constitute
a default), or give rise to a right of termination, cancellation or acceleration
under, or to a loss of any benefit to which the Trust, the Company or any
Company Subsidiary is entitled under, any material agreement, contract or other
instrument binding upon the Company or any Company Subsidiary or any material
license, franchise, permit or other similar authorization held by the Company or
any Company Subsidiary or (ii) result in the creation or imposition of any Lien
on any material asset of the Company or any Company Subsidiary, or (C)
contravene, conflict with or constitute a violation by the Trust, the Company or
any Company Subsidiary of any Law applicable to such entity.
(c) No Approval is necessary for the execution, delivery and performance of
this Agreement by the Trust or to make this Agreement an enforceable obligation
of the Trust or to permit the Trust to consummate the transactions contemplated
hereunder without violating any Laws, except (i) compliance with applicable
requirements under the H-S-R Act and the expiration or termination of all
applicable waiting periods thereunder, (ii) the approval of the amendment of the
Amended and Restated Articles of Incorporation of the Company contemplated by
Section 6.4 by the United States Bankruptcy Court for the Southern District of
Ohio, Western Division (the "Bankruptcy Court"), (iii) in connection with
compliance with any applicable non-US competition laws or national merger
regulations ("Merger Approvals"), (iv) in connection with compliance with any
applicable non-US laws on exchange control or foreign investments, (v) in
connection with any necessary Approvals of the US Government, including, without
limitation, the Office of Defense Trade Controls and the Company's Cognizant
Security
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6
Agencies ("Government Approvals"), (vi) any Approvals that may be required to be
made as a result of (x) the specific regulatory status of Holdings or any of its
Affiliates or (y) any other facts that relate to the business or activities in
which Holdings or any of its Affiliates is engaged, and (vii) any Pension
Benefit Guaranty Corporation ("PBGC") "Notice of Reportable Event" required
under Section 4043(c) of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
2.6 Ownership of Shares; Title. The Trust is the sole record and beneficial
owner of the Shares. The Trust has good title to the Shares, free and clear of
Liens.
2.7 Financial Statements. Attached hereto as Schedule 2.7 are the unaudited
consolidated balance sheet of the Company and the Company Subsidiaries as of
August 31, 1997 (the "Balance Sheet") and the audited balance sheet of the
Company and the Company Subsidiaries as of November 30, 1996 and the unaudited
and audited consolidated statements of income and cash flows of the Company and
Company Subsidiaries for the nine (9) month and the twelve (12) month periods
then ended, respectively, (collectively, the "Financial Statements"). Except as
set forth on Schedule 2.7 and as noted therein, the Financial Statements have
been prepared in accordance with GAAP and present fairly, in all material
respects, the consolidated financial position of the Company and the Company
Subsidiaries as of August 31, 1997 and November 30, 1996 and the consolidated
results of operations and cash flows of the Company and its consolidated Company
Subsidiaries for the nine (9) month and the twelve (12) month periods then
ended, respectively, subject in the case of the unaudited financial statements
to normal year-end adjustments. Except as reflected, reserved against or
otherwise disclosed in the Balance Sheet or as set forth on Schedule 2.7, during
the period from November 30, 1996 to the date hereof, neither the Company nor
any Company Subsidiary has incurred any liabilities (absolute, accrued,
contingent or otherwise) required by GAAP to be reflected on a consolidated
balance sheet of the Company or set forth in the notes thereto, except for
liabilities incurred in the ordinary course of business and consistent with past
practice.
2.8 No Changes. Except as disclosed on Schedule 2.8 or for Permitted
Changes, during the period from August 31, 1997 to December 1, 1997, the
businesses of the Company and the Company Subsidiaries taken as a whole have
been conducted in all material respects in the ordinary course of business and
consistent with past practice and there has been no change in the business,
financial condition or results of operations of the Company and Company
Subsidiaries that would reasonably be expected to have a Material Adverse
Effect. Except as set forth on Schedule 2.8, during the period from August 31,
1997 to the date hereof, neither the Company nor any of the Company's
Subsidiaries has taken any of the actions specified in Section 4.1(d)-(o)
hereto.
2.9 Real and Personal Property.
(a) Schedule 2.9 lists all real property owned or leased by the Company or
Company Subsidiaries (together with any structures or improvements thereon and
all easements and other rights with respect thereto, the "Real Property").
Schedule 2.9 sets forth the address by which each parcel of Real Property is
commonly known, identifies which Real Property is owned
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7
("Owned Real Property") and which is leased ("Leased Real Property"), and
identifies the respective Company or Company Subsidiary and the applicable
division that owns or leases such Real Property. Except as disclosed on such
Schedule, neither the Company nor any Company Subsidiary owns or leases any
interest or estate in any Real Property. Except as set forth on Schedule 2.9,
all Real Property conforms with all applicable building, zoning and other land
use laws, ordinances, rules and regulations, with such exceptions as would not
reasonably be expected to have a Material Adverse Effect. Each lease of Real
Property (together with all amendments, supplements, and any other writing which
affects the terms thereof, a "Real Property Lease") is in full force and effect
and is enforceable against the landlord which is a party thereto in accordance
with its terms, except as enforceability may be limited by the Enforceability
Exceptions and with such exceptions that would not reasonably be expected to
have a Material Adverse Effect, and neither any Company nor, to the knowledge of
the Trust, any other party to any Real Property Lease, is in breach of or
default under any Real Property Lease, with such exceptions as would not
reasonably be expected to have a Material Adverse Effect. As identified on
Schedule 2.9, the Company or such Company Subsidiary is the sole owner and
holder of, and has good and valid fee title to, each Owned Real Property, and is
the sole owner and holder of the lessee's interest and estate under each Real
Property Lease and has a good and valid leasehold estate in each Leased Real
Property, in each case with such exceptions as would not reasonably be expected
to have a Material Adverse Effect. Except as set forth in Schedule 2.9, the
Company and Company Subsidiaries have good and valid title to all of their owned
Real Property, free and clear of all Liens (other than Permitted Liens). The
Trust has delivered to Holdings a true and complete copy of each Real Property
Lease described on Schedule 2.9. Except as disclosed on Schedule 2.9, no Consent
is required from any landlord under any Real Property Lease for the transactions
contemplated by this Agreement. All tangible personal property material to the
operations of the Company and Company Subsidiaries is in good working condition,
reasonable wear and tear and loss due to normal operations excepted.
(b) None of the Trust, the Company or any Company Subsidiary has received
any written notice of any, and to the Trust's Knowledge there is no existing,
pending or contemplated condemnation, eminent domain or similar proceeding with
respect to any material Real Property or any portion thereof. With such
exceptions as would not reasonably be expected to have a Material Adverse
Effect, no part of any Real Property is subject to any building or use
restrictions that would restrict or prevent the present use and operation of
such Real Property, and each Real Property is properly and duly zoned for its
current use, and such current use is in all respects a conforming use or is a
permitted nonconforming use. No Governmental Authority having jurisdiction over
any Real Property has issued or, to the Knowledge of the Trust, has threatened
to issue any notice or order that materially and adversely affects the current
use or operation of any material Real Property.
2.10 Contracts.
(a) Schedule 2.10(a) lists as of the date of this Agreement the following:
(i) each Contract which meets any of the following criteria, except
purchase orders made in the ordinary course of business (each such
Contract, each Contract with a
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8
supplier described in clause (ii) and each Material Government Contract, a
"Material Contract"):
(A) involves the sale by the Company or a Company Subsidiary of
goods in excess of $1,000,000 annually following the Closing and is
not terminable by the Company or Company Subsidiary without material
penalty on less than sixty-one (61) days notice (other than purchase
orders relating to the sale of goods and/or services of the Company or
a Company Subsidiary in the ordinary course of business);
(B) contains commitments of suretyship, guaranty or
indemnification in excess of $1,000,000 annually by the Company or
Company Subsidiary following the Closing, or is a Material Government
Contract;
(C) relating to indebtedness for money borrowed or capital leases
by or from the Company or a Company Subsidiary from or to any person
(other than credit terms offered to customers in connection with the
sale of goods and/or services of the Company or a Company Subsidiary
in the ordinary course of business) in excess of $1,000,000 annually
following the Closing;
(D) relating to any joint venture, partnership, limited liability
company, or other similar agreement or arrangement which has involved
or is expected to involve (i) a capital contribution by the Company or
any Company Subsidiary or (ii) a sharing of annual revenues with other
Persons, in each case, in excess of $500,000 or more;
(E) relating to the employment or compensation of any director,
officer or shareholder of the Company or any Company Subsidiary;
(F) relating to the acquisition or disposition of any business
(whether by merger, sale of stock, sale of assets or otherwise)
material to the Company and the Company Subsidiaries in the aggregate,
which contract has been executed since November 30, 1996;
(G) that limits the freedom of the Company or any Company
Subsidiary to compete in any material respect in any line of business
or with any Person or in any area or which would so limit the freedom
of the Company or any Company Subsidiary after the Closing Date;
(H) involving payments of in excess of $1,000,000 or involving
employment arrangements and, in each case, containing a change of
control provision; or
(I) not made in the ordinary course of business and involving
payments of in excess of $1,000,000 annually; and
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9
(ii) each supplier with whom the Company or a Company Subsidiary has a
written arrangement (or group of related written arrangements) for the
purchase of raw materials, commodities, supplies, products or other
personal property or for the receipt of services, in each case from whom
more than $1,000,000 in the aggregate was purchased by the Company during
the twelve months ending August 31, 1997.
(b) Except as otherwise indicated in Schedule 2.10(b), as of the date of
this Agreement: (i) neither the Trust nor, to the Trust's Knowledge, any other
party to any of the Material Contracts (A) is in default thereunder, where such
default would reasonably be expected to have a Material Adverse Effect, or (B)
has since January 1, 1996 given notice of default to any other party thereunder,
except where such default would not reasonably be expected to have a Material
Adverse Effect; (ii) to the Knowledge of the Trust, no condition exists which,
with notice or lapse of time or both, would constitute a default by the Company
under any Material Contract; and (iii) no Consent is required under any Material
Contract in order to consummate the transactions contemplated hereby.
(c) Except as set forth on Schedule 2.10(c) with respect to each Government
Contract with a backlog value in excess of $1,000,000 ("Material Government
Contract"), (i) the Company and the Company Subsidiaries have complied, in all
material respects, with all terms and conditions thereof and all provisions of
Law applicable thereto; (ii) neither the Company nor any Company Subsidiary has
received any written notice from the US Government that such entity has breached
or violated any material term thereof or material provision of Law applicable
thereto where there is a substantial probability that the matter will be
resolved in a manner adverse to the Company or any Company Subsidiary; (iii) no
termination for convenience, termination for default or cure notice is currently
in effect with respect thereto; and (iv) to the Trust's Knowledge, no cost
incurred by the Company or any Company Subsidiary with respect thereto, has been
the subject of investigation or has been disallowed by the US Government where
there is a substantial likelihood of a determination of such matter in a manner
adverse to the Company or any Company Subsidiary.
2.11 Intellectual Property. Except as set forth on Schedule 2.11, the
Company and the Company Subsidiaries either own or by license or otherwise have
the right to use all trade secrets, patents, copyrights, trademarks, trade names
and other protectible intellectual property rights which are used by the Company
and the Company Subsidiaries in connection with the conduct of their business
("Intellectual Property"), with such exceptions as would not reasonably be
expected to have a Material Adverse Effect. Schedule 2.11 sets forth a list of
all such Intellectual Property registered or patented on the date of this
Agreement in the name of the Company or any Company Subsidiary with the United
States Patent and Trademark Office or comparable offices in foreign
jurisdictions. Except as set forth on Schedule 2.11, to the Knowledge of the
Trust, the Company and the Company Subsidiaries have conducted and are
conducting their businesses in a manner which has not and does not violate any
intellectual property right of another Person which violation would reasonably
be expected to have a Material Adverse Effect. Except as set forth on Schedule
2.11, between January 1, 1996 and the date hereof, there has been no
Intellectual Property Claim received by the Company and the
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10
Company Subsidiaries, which Intellectual Property Claim would reasonably be
expected to have a Material Adverse Effect.
2.12 Litigation, Claims and Proceedings. Except as set forth on Schedule
2.12, there is no suit, action, arbitration, administrative or other proceeding,
or governmental investigation pending or, to the Trust's Knowledge, threatened
against the Company or the Company Subsidiaries which would reasonably be
expected to have a Material Adverse Effect. All of the matters disclosed on
Schedule 2.12 are covered by the insurance policies set forth on Schedule 2.17
except as otherwise indicated. With respect to such matters, (i) the Company has
timely provided all notices it is required to give to its insurance carriers to
preserve coverage of such claims under such policies, (ii) the Company has not
received written notice that any of the insurance carriers identified in such
insurance policies have denied coverage in respect of any such claims (not
including any deductibles not covered pursuant to the terms of such policies)
and (iii) to the Trust's Knowledge, such insurance policies provide adequate
coverage in respect of such claims subject to the terms and conditions of such
insurance policies, except to the extent the Company self-insures the risks to
which such claims relate. Except as set forth in Schedule 2.12, neither the
Company nor any Company Subsidiary has received notice that it is subject to any
material injunction, writ, judgment, order or decree from a Governmental
Authority. Except as set forth in Schedule 2.12, neither the Company nor any
Company Subsidiary has received written notice of any claim or threatened claim
against the Company or any Company Subsidiary for product liability, nor, to the
Knowledge of the Trust, has the Company or any Company Subsidiary received oral
notice of any claim or threatened claim against the Company or any Company
Subsidiary for product liability, in each case, which claim would reasonably be
expected to have a Material Adverse Effect.
2.13 Environmental Conditions.
(a) Except as set forth on Schedule 2.13:
(i) to the Trust's Knowledge, the Company and the Company Subsidiaries
are in compliance with all Environmental Requirements, with such exceptions
as would not reasonably be expected to have a Material Adverse Effect;
(ii) the Company and the Company Subsidiaries have not received any
written notice prior to the date of this Agreement from a governmental,
administrative or judicial agency or authority or third party regarding any
liability of the Company or the Company Subsidiaries under Environmental
Requirements that would reasonably be expected to have a Material Adverse
Effect;
(iii) the Company and the Company Subsidiaries are not subject to any
judicial or administrative proceeding alleging any violation of or
liability under any Environmental Requirements;
(iv) the Company and the Company Subsidiaries have not filed with any
Governmental Authority any notice under or relating to any Environmental
Requirements indicating or reporting any past or present spillage, disposal
or release into the
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11
environment of any Hazardous Material that, individually, would reasonably be
expected to require an expenditure of in excess of $50,000;
(v) there are no events or conditions with respect to any facilities
or properties currently or previously owned, leased or occupied by the
Company or any Company Subsidiary that require the Company or any Company
Subsidiary under any Environmental Requirement to expend in excess of
$50,000 per site in the aggregate with respect to any such sites in
environmental remediation costs (including, without limitation, for
investigator costs, cleanup costs, governmental response costs, natural
resources damages, property damages, fines or penalties); and
(vi) No claim has been asserted, or to the Trust's Knowledge,
threatened to be asserted against the Company or any Company Subsidiary for
liabilities under CERCLA relating to the disposal of Hazardous Materials
since January 7, 1991. Neither the Company nor any Company Subsidiary has
expressly assumed by contract or operation of law any liability or
obligation of a third party (including, without limitation, any former
owner, lienholder or former or present tenant or other user of any of the
facilities or properties) arising out of, or relating to, any violation of
or liability under any Environmental Requirement. To the Trust's Knowledge,
since January 7, 1991, no third party has Released or disposed of any
Hazardous Materials on, in, under, above or about any of the facilities or
properties owned, leased or occupied by the Company or a Company Subsidiary
on or after January 7, 1991, except for such Releases as would not
reasonably be expected to have a Material Adverse Effect.
(b) All payments and distributions on account of claims relating to
Liquidated Sites (as defined in the Environmental Settlement Agreement) have
been paid in full to the Environmental Claimants and all pre-petition claims of
the Environmental Claimants relating to Liquidated Sites have been discharged.
(c) The Trust has provided Holdings with a copy of certain environmental
profiles for the facilities and property currently owned, leased or occupied by
the Company and the Company Subsidiaries (collectively, "Environmental
Reports").
(d) Except as disclosed on Schedule 2.13, neither the Company nor any
Company Subsidiary is involved in any pending suit, nor has any notice been
received of any claims, relating to personal injuries from exposure to Hazardous
Materials resulting from the operation of any facilities or properties currently
or previously owned, leased or occupied by the Company or a Company Subsidiary
and there have been no such claims in the preceding five years, other than any
of the foregoing that would not be reasonably likely to have a Material Adverse
Effect.
2.14 Compliance with Law; Permits. The Company and the Company
Subsidiaries, with regard to their assets and businesses, are operating their
businesses in compliance in all material respects, and are not in default under
or in violation of any statutes, laws, ordinances or regulations of any
Governmental Authority (collectively, "Laws") applicable to any of their assets
or to the conduct of their businesses. Except as set forth in Schedule 2.14, the
Company and the Company Subsidiaries have all Permits which are necessary to own
and operate their
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12
assets and to conduct their businesses as they are presently being conducted and
are in compliance in all material respects with all such material Permits, and
the Company and the Company Subsidiaries have made all filings and registrations
with all Governmental Authorities which are necessary to own and operate their
assets and to conduct their businesses as they are presently being conducted
with all such Permits, except where the absence of any of the foregoing or the
noncompliance therewith would not reasonably be expected to have a Material
Adverse Effect.
2.15 Taxes.
(a) Each of the Company and the Company Subsidiaries has filed all material
Tax Returns and reports required to be filed by it, or requests for extensions
to file such Tax Returns or reports have been timely filed and granted and have
not expired, and all Tax Returns and reports are complete and accurate in all
respects. The Company and each of the Company Subsidiaries has paid (or the
Company has paid on their behalf) all Taxes due and payable by the Company and
each of the Company Subsidiaries for all taxable periods and portions thereof
through the date hereof. The Balance Sheet reflects an adequate reserve for all
Taxes payable by the Company and the Company Subsidiaries for all taxable
periods and portions thereof accrued through the date of such Balance Sheet, and
no deficiencies for any Taxes have been proposed, asserted or assessed against
the Company or any Company Subsidiary that are not adequately reserved for. No
requests for waivers of the time to assess any taxes against the Company or any
Company Subsidiary have been granted or are pending, except for requests with
respect to such taxes that have been adequately reserved for in the Balance
Sheet.
(b) Neither the Company nor any of the Company Subsidiaries has been a
United States real property holding company within the meaning of Section
897(c)(2) of the Code during the period specified in Section 897(c)(1)(A)(ii) of
the Code. Neither the Company nor any of the Company Subsidiaries is a party to
a tax sharing or tax indemnity agreement with any third party or any other
agreement of a similar nature that remains in effect. Each of the Company and
the Company Subsidiaries has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder or other third party.
(c) The Trust is a "qualified settlement fund" within the meaning of
Treasury Regulation Section 1.468B-1 for United States federal income tax
purposes. As of December 1, 1997, (i) the amount of the Company's alternative
minimum tax ("AMT") net operating loss carryforward is not less than $123
million. Payment of principal on the Debentures will entitle the Company to a
deduction for United States federal income tax purposes in the year payment is
made equal to the amount of such payment.
2.16 Labor and Employee Benefits.
(a) Except as set forth in Schedule 2.16(a) hereto, neither the Company nor
any Company Subsidiary is a party to (i) any material written employment
agreement or (ii) any collective bargaining agreement with any union or other
labor organization. Copies of any such agreements have been provided or made
available to Holdings. Except as set forth in Schedule
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13
2.16(a), neither the Company nor any Domestic Subsidiary has, at any time during
the preceding three years, had a strike, work stoppage, work slowdown or other
labor dispute, nor, to the Trust's Knowledge, is any such action or labor
dispute threatened that, in any such case, would reasonably be expected to have
a Material Adverse Effect. Except as set forth in Schedule 2.12 or 2.16(a), or
as would not reasonably be expected to have a Material Adverse Effect, there is
no unfair labor practice complaint or other proceeding against the Company or
any Domestic Subsidiary pending before the National Labor Relations Board or any
other Governmental Authority and, to the Trust's Knowledge, there are no charges
relating to the business and operations of the Company or any Domestic
Subsidiary before the Equal Employment Opportunity Commission or any other
agency responsible for the prevention of unlawful employment practices,
including, without limitation, discrimination based on age, sex or race.
(b) Schedule 2.16(b) hereto contains a true and correct list of (i) each
"employee benefit plan" within the meaning of Section 3(3) of ERISA, and (ii)
each other stock option, stock purchase, stock award, stock appreciation,
deferred compensation, pension, retirement, savings, profit sharing, incentive,
bonus, health, life insurance, cafeteria, flexible spending, dependent care,
vacation pay, holiday pay, disability, sick pay, severance, employee loan or
educational assistance plan, arrangement or policy, other than any such plan,
arrangement or policy which is required by applicable law ("Benefit Plan"),
which is sponsored or maintained by the Company or a Domestic Subsidiary or to
which the Company, a Domestic Subsidiary or any of their Affiliates contributes
or is required to contribute, on behalf of current or former employees of the
Company or a Domestic Subsidiary ("US Benefit Plans").
(c) With respect to any US Benefit Plan, other than a "multiemployer plan,"
within the meaning of Section 4001(a)(3) of ERISA ("Multiemployer Plan"), the
Trust or the Company has delivered or made available to Holdings complete and
correct copies of the plan document, any trust agreement, any summary plan
description, the most recent IRS determination letter, the most recent annual
report on IRS Form 5500, and the most recent actuarial report.
(d) With respect to each US Benefit Plan other than a Multiemployer Plan:
(i) each such plan is and has been operated and administered, in all material
respects, in accordance with its terms and all applicable laws; (ii) each such
plan intended to be tax-qualified under Section 401(a) of the Code has received
a favorable determination letter from the IRS as to its tax-qualified status
under the Code and, to the Trust's Knowledge nothing has occurred since the date
of such favorable determination letter which would adversely affect the
qualified status of such plan; (iii) there are no actions, suits, or claims
(other than routine claims for benefits in the ordinary course) with respect to
any such plan pending or, to the Trust's Knowledge threatened which would
reasonably be expected to give rise to a material liability to any such plan,
the Company or any Company Subsidiary, and the Trust and the Company have no
knowledge of any facts which could give rise to any such actions, suits or
claims (other than routine claims for benefits in the ordinary course of
business); and (iv) to the Trust's Knowledge, no such plan is currently under
governmental investigation or audit and, to the Trust's Knowledge no such
investigation or audit is contemplated or under consideration.
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14
(e) With respect to each US Benefit Plan which is a Multiemployer Plan, to
the Trust's Knowledge: (i) no termination (within the meaning of Section
4041A(a) of ERISA) has occurred; and (ii) such plan is not insolvent or in
reorganization within the meaning of Sections 4245 and 4241 of ERISA,
respectively. Neither the Company nor any Company Subsidiary has incurred
liability under Title IV of ERISA as a result of any termination of, or
withdrawal from, a plan by the Company, a Domestic Subsidiary or any of their
Affiliates.
(f) Except as set forth in Schedule 2.16(f), no US Benefit Plan provides
medical or life insurance benefits to retirees of the Company or a Domestic
Subsidiary.
(g) All contributions to US Benefit Plans that will have been required to
have been made by the Company or a Company Subsidiary will have been made or
accrued as of the Closing.
(h) Schedule 2.16(h) hereto contains a true and correct list of each
material Benefit Plan, which is sponsored by or maintained by the Company, a
Foreign Subsidiary or any of their Affiliates, or to which the Company, a
Foreign Subsidiary or any of their Affiliates contributes or is required to
contribute, on behalf of current or former employees of a Foreign Subsidiary
other than any such plan, arrangement or policy which is required by applicable
law ("Foreign Benefit Plan"). Each Foreign Benefit Plan is and has been operated
and administered, in all material respects, in accordance with its terms and all
applicable laws. All contributions to Foreign Benefit Plans that will have been
required to have been made by the Company or a Company Subsidiary prior to the
Closing will have been made or accrued as of the Closing.
2.17 Insurance. Schedule 2.17 lists all material liability and casualty
insurance policies with coverage limits in excess of $1,000,000 in force as of
the date of this Agreement for the benefit of the Company or the Company
Subsidiaries with respect to their businesses or their assets. All such policies
are in full force and effect and shall not be affected by the Merger. All
premiums due thereon have been paid by the Company or the Company Subsidiaries
and the Company and the Company Subsidiaries have complied in all material
respects with the provisions of such policies and have not received any written
notice from any of their insurance brokers or carriers that such broker or
carrier will not be willing or able to renew their existing coverage. There are
no material pending claims against such policies by the Company or any Company
Subsidiary.
2.18 Finder's Fee. Except as set forth on Schedule 2.18, which amounts will
be borne solely by the Trust, the Trust and the Company have done nothing to
cause Holdings to incur any liability to any party for any brokerage or finder's
fee or agent's commission, or the like, in connection with this Agreement or any
transaction provided for herein.
2.19 EXCLUSIVITY OF REPRESENTATIONS. THE REPRESENTATIONS AND WARRANTIES
MADE BY THE TRUST IN THIS AGREEMENT, IN THE DISCLOSURE SCHEDULES OR IN ANY
CERTIFICATES OR OTHER DOCUMENTS DELIVERED BY THE TRUST PURSUANT TO SECTIONS 4.12
AND 7.1 OF THIS AGREEMENT ARE IN LIEU OF AND ARE EXCLUSIVE OF ALL OTHER
REPRESENTATIONS AND WARRANTIES, INCLUDING ANY IMPLIED WARRANTIES. THE TRUST
HEREBY
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15
DISCLAIMS ANY SUCH OTHER OR IMPLIED REPRESENTATIONS OR WARRANTIES,
NOTWITHSTANDING THE DELIVERY OR DISCLOSURE TO HOLDINGS OR ITS OFFICERS,
DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES OF ANY DOCUMENTATION OR OTHER
INFORMATION (INCLUDING, WITHOUT LIMITATION, ANY FINANCIAL PROJECTIONS OR OTHER
SUPPLEMENTAL DATA).
2.20 Transactions with Affiliates. Schedule 2.20 sets forth each Contract
by and between the Trust and its Affiliates (other than the Company and the
Company Subsidiaries), on one hand, and the Company and any Company Subsidiary,
on the other hand.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF HOLDINGS AND ACQUISITION
Holdings and Acquisition represent and warrant to the Trust as follows:
3.1 Due Organization. Each of Acquisition and Holdings is a corporation
duly organized and validly existing and in good standing under the Laws of the
State of Delaware and each has all requisite corporate power and authority to
enter into and perform its obligations under this Agreement.
3.2 Authority. The execution, delivery and performance of this Agreement
have been duly and validly authorized by all necessary corporate action on the
part of Acquisition and Holdings. This Agreement has been duly and validly
executed and delivered by Acquisition and Holdings, constitutes a valid and
binding obligation of Acquisition and Holdings and is enforceable against
Acquisition and Holdings in accordance with its terms, except to the extent of
the Enforceability Exceptions.
3.3 No Conflict. The consummation of the transactions contemplated by this
Agreement will not result in (a) the breach of any term or provision of (i) the
charter, articles or certificate of incorporation or any other organizational
document or by-laws of Acquisition or Holdings, or (ii) any contract or
agreement of Acquisition or Holdings or (b) the violation by Acquisition or
Holdings of any Law applicable to Acquisition or Holdings, except, in the cases
of clauses (a)(ii) and (b) above, for such breaches or violations, if any, which
would not reasonably be expected to preclude Acquisition or Holdings in any
material respect from consummating the transactions contemplated by this
Agreement or delay such consummation.
3.4 Approvals. No Approval is necessary for the execution, delivery and
performance of this Agreement by Acquisition or Holdings or for the consummation
of the transactions contemplated hereunder without violating any Law, except for
(i) compliance with applicable requirements under the H-S-R Act and the
expiration or termination of all applicable waiting periods thereunder, (ii)
approval of the amendment of the Amended and Restated Articles of Incorporation
of the Company contemplated by Section 6.4 by the Bankruptcy Court, (iii)
compliance with the Merger Approvals, (iv) compliance with any applicable non-US
laws on exchange control or foreign investments and (v) with any necessary
Government Approvals.
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16
3.5 Litigation. There is no suit, action, arbitration, administrative or
other proceeding, or governmental investigation pending or, to Holdings'
knowledge, threatened against Holdings which would materially and adversely
affect or delay Holdings' ability to perform its obligations hereunder.
3.6. Finder's Fee. Holdings has done nothing to cause the Trust to incur
any liability to any party for any brokerage or finder's fee or agent's
commission, or the like, in connection with this Agreement or any transaction
provided for herein.
3.7 Financing. Attached as Schedule 3.7 is (i) a Commitment Letter from ABN
AMRO Bank NV and (ii) a highly confident letter from SBC Warburg Dillon Read
Inc. (collectively, the "Financing Letters"), in each case for the benefit of
Holdings, which contemplate the financing described therein subject in each case
to definitive documentation and the satisfaction of the conditions contained
therein. As of the date of this Agreement, the Financing Letters have not been
amended and are in full force and effect, and Holdings has no reason to believe
such financing will not be available. The financing outlined in the Financing
Letters, together with the additional $100 million equity investment from
Holdings, or its Affiliates, will be sufficient to pay the Merger Consideration,
the Debt Repayment Amount and the Transaction Expense Amount, and to consummate
the other transactions contemplated by this Agreement to be consummated by
Holdings. None of the Financing Letters require Phase II Environmental Site
Assessments as a condition to providing the financing contemplated hereby.
Holdings has been advised by ABN AMRO Bank NV and SBC Warburg Dillon Read, Inc.
that they will make their environmental assessment solely on Phase I
Environmental Site Assessments and reviews of internal Company environmental
profiles.
ARTICLE 4
COVENANTS
4.1 Conduct of Business. During the period from the date hereof until the
Closing, except for any change contemplated by this Agreement or consented to in
writing by Holdings or described on Schedule 4.1 (collectively, "Permitted
Changes"), the Trust shall cause the Company and the Company Subsidiaries to:
(a) conduct their businesses and utilize their assets in all material
respects in the ordinary course of business and consistent with past
practice;
(b) refrain from transferring, pledging, mortgaging, encumbering or
otherwise granting any rights in any assets, except in the ordinary course
of their businesses or pursuant to Contracts in effect as of the date
hereof;
(c) use their reasonable efforts consistent with past practices to
maintain the businesses intact, to retain their employees, and to preserve
the good relations of their suppliers, customers and others with whom they
have businesses relations (it being agreed that nothing herein shall
prohibit the Company or the Company Subsidiaries from
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17
terminating the employment of any employee if the Company or a Company
Subsidiary deems it appropriate under the circumstances to do so);
(d) refrain from (i) making or granting any general wage or salary
increase or making any material increase in the payments of benefits under
any bonus, insurance, pension or other employee benefit plan or program, in
each case other than in the ordinary course of their businesses (including,
without limitation, customary year-end wage and salary increases), pursuant
to existing agreements or commitments or benefit plans or as required by
Law, (ii) granting any increase in the compensation payable or to become
payable by the Company or any of the Company Subsidiaries to any of its
executive officers or key employees, or (iii) entering into any employment
or severance agreement with or, except in accordance with the existing
agreements, granting any severance or termination pay to any officer,
director or employee of the Company or any Company Subsidiaries;
(e) refrain from changing the certificates of incorporation and
by-laws (or equivalent organizational documents) of the Company and the
Company Subsidiaries, except that the Amended and Restated Articles of
Incorporation of the Company shall be amended as contemplated by Section
6.4 of this Agreement;
(f) refrain from splitting, combining or reclassifying any of their
equity securities, declaring, setting aside or paying any dividends, or
making any distributions, in respect of their equity securities, or
purchasing, redeeming or otherwise acquiring any such equity securities;
(g) refrain from issuing or selling any additional shares of the
capital stock of, or other equity interests in, the Company or securities
convertible into or exchangeable for such shares or equity interests, or
issue or grant any options, warrants or other rights of any kind to acquire
additional shares of such capital stock, such other equity interests, or
such securities;
(h) refrain from making any loans, advances, or capital contributions
to, or investments in, any other person or entity (other than the Company
or a Company Subsidiary) other than in the ordinary course of business and
consistent with past practice;
(i) refrain from transferring, leasing, licensing, selling,
mortgaging, pledging, disposing of, or encumbering any material assets
other than in the ordinary course of business and consistent with past
practice, or incurring or modifying any material indebtedness or other
liability, other than in the ordinary course of business and consistent
with past practice;
(j) except in the ordinary course of business and consistent with past
practice, refrain from entering into any Contract involving consideration
in excess of $250,000 individually or $1,000,000 in the aggregate or which
is otherwise material to the Company and the Company Subsidiaries taken as
a whole, and refrain from modifying, amending or
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18
terminating any of its Material Contracts or waiving, releasing or
assigning any material rights or claims;
(k) refrain from permitting any material insurance policy naming it as
a beneficiary or a loss payable payee to be canceled or terminated without
notice to Holdings, except in the ordinary course of business and
consistent with past practice;
(l) refrain from incurring, assuming or guaranteeing any indebtedness
for borrowed money or purchase money indebtedness;
(m) refrain from changing any of the accounting principles used by it
unless required by GAAP;
(n) refrain from paying, discharging or satisfying any claims,
liabilities or obligations, other than the payment, discharge or
satisfaction of any such claims, liabilities or obligations, (x) in the
ordinary course of business and consistent with past practice, of claims,
liabilities or obligations reflected or reserved against in, or
contemplated by, the Audited Financial Statements (or the notes thereto) or
(y) incurred in the ordinary course of business and consistent with past
practice; and
(o) refrain from entering into any Contract to do any of the
foregoing, or from authorizing, recommending proposing or announcing an
intention to do any of the foregoing.
Notwithstanding any other provision hereof, (A) the Company may purchase from
the Trust 660,000 Shares for an aggregate purchase price of Twenty Nine Million
Dollars ($29,000,000), (B) the Company Subsidiaries may distribute or dividend
cash and intercompany accounts and notes receivable to the Company or other
Company Subsidiaries and (C) the Company and the Company Subsidiaries may repay
intercompany borrowings.
4.2 Access to Records and Properties. From the date hereof until the
Closing Date, the Trust shall cause the Company and the Company Subsidiaries to:
(a) provide Holdings and its officers and other representatives and
employees with such access to the facilities and Real Property of their
respective businesses and their principal personnel and such books and
records pertaining to their businesses, as Holdings may reasonably request
in order to effectuate the transactions contemplated hereby, without charge
by the Trust to Holdings (but otherwise at Holdings' expense), provided
that Holdings agree that such access will be requested and exercised during
normal business hours and without causing unreasonable interference with
the operations of the businesses;
(b) promptly furnish to Holdings or their representatives, upon
reasonable request, such additional financial and operating data and other
information relating to the businesses;
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19
(c) make available to Holdings, and its representatives upon
reasonable request, for inspection and review all documents, or copies
thereof, listed in the Schedules hereto, and all files, records and papers
pertaining to any proceedings and matters listed in the Schedules hereto;
and
(d) provided Holdings has entered into a Site Access and Investigation
Agreement on customary terms reasonably satisfactory to the Company, permit
Holdings or its agents access to each facility and property owned, leased
or occupied by the Company or a Company Subsidiary solely (with respect to
environmental due diligence) for the purpose of conducting a Phase I
Environmental Site Assessment of such facility and real property, and for
general business site visits for financing parties, and which contains
appropriate confidentiality provisions.
4.3 Approvals.
(a) From the date hereof until the Closing Date, the Trust and Holdings
shall (and shall cause their respective Affiliates to) use all reasonable
efforts to obtain or make, as the case may be, as soon as possible, all
Approvals as may be required to be obtained or made, as the case may be, by it
(and/or any of its Affiliates) in order to enable it (and/or any of its
Affiliates) to perform its obligations under this Agreement, including,
obtaining all necessary Government Approvals.
(b) As promptly as practicable, after the date of this Agreement, the Trust
and Holdings shall each make their initial filing (and shall thereafter timely
make any required filings (including responses to requests for additional
information)) with the FTC and the DOJ pursuant to the H-S-R Act and any other
Governmental Authority whose acquiescence or consent is necessary in order for
the transactions contemplated by this Agreement to be consummated as promptly as
practicable. The parties shall use reasonable efforts to demonstrate that such
transactions should not be opposed by the FTC, the DOJ, or such other
Governmental Authority, and Holdings and the Trust shall jointly use all
reasonable efforts to eliminate and/or satisfy as promptly as practicable any
objection that any such Governmental Authority may have to the transactions
contemplated hereby. Without limiting the generality of the foregoing, Holdings
and the Trust shall jointly:
(i) use all reasonable efforts to prevent the entry in a judicial or
administrative proceeding brought under any antitrust law by any
Governmental Authority or any other party of any permanent or preliminary
injunction or other order that would make consummation of the Merger in
accordance with the terms of this Agreement unlawful or would prevent or
delay it;
(ii) take promptly, in the event that such an injunction or order has
been issued in such a proceeding, any and all reasonable steps, including,
without limitation, appeal thereof, the posting of a bond necessary to
vacate, modify or suspend such injunction or order so as to permit the
consummation of such transaction as nearly as possible on the schedule
contemplated by this Agreement; and
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20
(iii) take promptly all other reasonable action and do all other
things necessary and proper to avoid or eliminate each and every impediment
under any antitrust law which may be asserted by any Governmental Authority
or any other party, US or foreign, to the consummation of the Merger in
accordance with the terms of this Agreement.
4.4 Public Announcements. On and after the date hereof and through the
Closing Date, the Trust and Holdings shall consult with each other before
issuing any press releases or otherwise making any public statements with
respect to this Agreement and the transactions contemplated hereby. Neither the
Trust nor Holdings shall issue any press release or make any public statement
prior to obtaining the other party's approval, which approval shall not be
unreasonably withheld, except that no such approval shall be necessary to the
extent disclosure may be required by Law (including, without limitation, any
required disclosures to employee representatives) or any listing agreement of
either party hereto; provided, however, that if disclosure shall be required
pursuant to applicable Law or a listing agreement, the parties shall seek to
make such disclosure in a form mutually acceptable to them. The Trust
acknowledges that Holdings and its financing parties will be required to make
certain disclosures in connection with completing the financing described in
Section 3.7.
4.5 Confidentiality.
(a) Except as provided in Section 4.5(b), the terms of the letter agreement
dated as of September 4, 1997 (the "Confidentiality Agreement") between the
Trust and Holdings are hereby incorporated herein by reference and shall
continue in full force and effect until the Closing, at which time the
Confidentiality Agreement and the obligations of Holdings under this Section 4.5
shall terminate. If this Agreement is for any reason terminated prior to the
Closing, the Confidentiality Agreement shall nonetheless continue in full force
and effect.
(b) Except as required by applicable Law, the Trust agrees to keep
confidential all material non-public information with respect to the Company and
the Company Subsidiaries and all material non-public information obtained by it
with respect to Holdings in connection with this Agreement and the negotiations
preceding this Agreement. Notwithstanding the foregoing, the Trust shall not be
required to keep confidential or return any information which (i) is known by it
through other lawful sources not, to the Knowledge of the Trust, subject to a
confidentiality agreement with the disclosing party, (ii) is or becomes publicly
known through no breach of a confidentiality obligation owed by the Trust or its
agents or (iii) is developed by the Trust independently of any disclosure by
Holdings.
4.6 Reports; Access to Books and Records. After the Closing, Holdings shall
permit the Trust to have reasonable access to and the right to make copies of
such of the Company's or the Company Subsidiaries' or their Affiliates' books,
records and files for any reasonable purpose of the Trust, such as for use in
litigation, financial reporting, tax return preparation, or tax compliance
matters. In addition, Holdings shall make available to the Trust, upon the
Trust's reasonable request, personnel of the Company or the Company Subsidiaries
or their Affiliates who are familiar with any such matter requested. Holdings
agrees to preserve and keep all of the books, records and files of the Company's
and the Company Subsidiaries' businesses and assets
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21
in accordance with their existing document retention policies, except that books
and records maintained for financial and tax purposes shall be preserved and
kept for a period of not less than five (5) years after the Closing Date.
4.7 Tax Matters.
(a) Holdings shall make an election (the "Election") pursuant to Section
338(g) of the Code and shall report the transaction consistent with such
Election. The Trust agrees that it shall pay and indemnify Holdings, the Company
and the Company Subsidiaries for any Federal income taxes (including interest
and penalties thereon) resulting from the Election (net of the present value of
any incremental future tax benefits to Holdings, the Company or any of the
Company Subsidiaries resulting therefrom, as determined using an assumed
discount rate equal to the "Federal mid-term rate" (as defined in Section
1274(d) of the Code) in effect on the date hereof) ; provided, however, that
with respect to Federal income taxes imposed under Section 55 of the Code, the
Trust shall pay and indemnify Holdings, the Company and the Company Subsidiaries
only to the extent such Federal income taxes (including interest and penalties
thereon) directly result from a breach of the representation and warranty made
by the Trust under Section 2.15(c). For purposes of this subparagraph (a),
Federal income taxes resulting from the Election shall mean taxable gain
associated with the deemed asset sale calculated in accordance with Section 338
of the Code and the regulations promulgated thereunder less (i) the sum of (A)
net operating losses, (B) foreign tax credits, (C) general business credits, (D)
AMT credit carryforwards, (E) AMT net operating losses and (F) alternative
minimum foreign tax credit carryforwards, each of the Company as of November 30,
1997 and (ii) the full amount of the deduction to the Company resulting from
payment of the Debentures. Except as provided in this Section 4.7(a), the Trust
shall not have any liability for Taxes of the Company or the Company
Subsidiaries attributable to the Election.
(b) All Tax Returns with respect to the Company and the Company
Subsidiaries not required to be filed on or before the date hereof (i) shall, to
the extent required to be filed on or before the Closing Date (taking into
account any valid extensions), be caused by the Trust to be filed by the Company
and the Company Subsidiaries when due in accordance with all applicable laws and
(ii) shall, as of the time of filing, correctly reflect in all material respects
the facts regarding the income, business, assets, operations, activities and
status of the Company and each of the Company Subsidiaries and any other
information required to be shown therein.
(c) All transfer, documentary, sales, use, stamp, registration, value added
and other such Taxes and fees (including any penalties and interest) incurred
solely as a result of the Merger hereunder (including any real property transfer
tax and any similar Tax, but excluding any Taxes referred to in the last
sentence of Section 4.7(a)) shall be paid by the Trust when due but only to the
extent the amount of such Taxes does not exceed the amount of Taxes that would
have been incurred if the Seller had sold the Common Stock to Holdings, and the
Trust will file all necessary Tax Returns and other documentation with respect
to all such Taxes and fees.
(d) From the date hereof until the Closing, without the prior written
consent of Holdings, neither the Company nor any of the Company Subsidiaries
shall make or change any
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22
Tax election, change any annual Tax accounting period, adopt or change any
method of Tax accounting, file any amended Tax Return, enter into any closing
agreement, settle any Tax claim or assessment, surrender any right to claim a
Tax refund, consent to any extension or waiver of the limitations period
applicable to any Tax claim or assessment or take or omit to take any other
action, if any such other action or omission would have the effect of materially
increasing the Tax liability of the Company or any of the Company Subsidiaries.
(e) (i) Notwithstanding any other provision of this Agreement (including,
without limitation, Section 8.1), in the event that the Closing occurs, the
Trust shall be liable for and indemnify Holdings, the Company and the Company
Subsidiaries for Taxes of the Company and the Company Subsidiaries for any
taxable year or period that ends on or before November 30, 1997 and, with
respect to any taxable year or period beginning before and ending after November
30, 1997, the portion of such taxable year ending on and including November 30,
1997 but only to the extent such Taxes exceed the aggregate amount accrued (to
the extent such accruals are consistent with past practice) for Taxes on the
Audited Balance Sheet.
(ii) In the event that the Closing occurs, Holdings, the Company and
the Company Subsidiaries shall be liable for and indemnify the Trust for
the Taxes of the Company and the Company Subsidiaries for any taxable year
or period that begins after November 30, 1997 and, with respect to any
taxable year or period beginning before and ending after November 30, 1997,
the portion of the taxable year beginning on the day after November 30,
1997.
(iii) For purposes of subparagraphs (e)(i) and (e)(ii), whenever it is
necessary to determine the liability for Taxes of the Company and the
Company Subsidiaries for a portion of a taxable year or period that begins
before and ends after November 30, 1997, the determination of such Taxes
for the portion of the year or period ending on, and the portion of the
year or period beginning after November 30, 1997 shall be determined by
assuming that the Company and the Company Subsidiaries had a taxable year
or period which ended at the close of November 30, 1997, except that
exemptions, allowances or deductions that are calculated on an annual
basis, such as the deduction for depreciation, shall be apportioned based
on the number of days in the year elapsed to and including November 30,
1997.
(iv) Any payment by the Trust or Holdings under this Section 4.7 will
be treated for Tax purposes as, in the case of a payment by the Trust, a
contribution to the capital of the Company and, in the case of a payment by
Holdings, as a distribution by the Company to the Trust, in either case,
immediately prior to the Effective Time.
(f) After the date hereof, each of the Trust and Holdings shall:
(i) assist in all reasonable respects (and cause their respective
Affiliates to assist) the other party in preparing any Tax Returns or
reports which such other party is responsible for preparing and filing in
accordance with this Section 4.7;
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23
(ii) cooperate in all reasonable respects in preparing for any audits
of, or disputes with Governmental Authorities regarding, any Tax Returns of
the Company and each of the Company Subsidiaries;
(iii) make available to the other and to any Governmental Authority as
reasonably requested all information, records, and documents relating to
Taxes of the Company and each of the Company Subsidiaries;
(iv) provide timely notice to the other in writing of any pending or
threatened Tax audits or assessments of the Company or any of the Company
Subsidiaries for taxable period for which the other may have a liability
under this Section 4.7; and
(v) furnish the other with copies of all correspondence received from
any Government Authority in connection with any Tax audit or information
request with respect to any taxable period of the Company and each of the
Company Subsidiaries.
(g) Holdings shall notify the Trust in writing upon receipt by Holdings,
the Company or any of the Company Subsidiaries of notice of any pending or
threatened federal, state, local or foreign Tax audits or assessments which may
materially affect the Tax liabilities of the Company for which the Trust would
be required to indemnify Holdings, the Company or any of the Company
Subsidiaries. The Trust shall notify Holdings in writing upon receipt by the
Trust of written notice of any pending or threatened federal, state, local or
foreign Tax audits or assessments which may materially affect the Tax
liabilities of the Trust, the Company or any of the Company Subsidiaries for
which Holdings would be required to indemnify the Trust.
(h) All Taxes that are not due and payable on or prior to November 30, 1997
but which relate to a tax period ending on or prior to November 30, 1997 will be
paid by the Trust when due, but only to the extent such taxes exceed the amount
accrued (to the extent such accruals are consistent with past practice) on the
balance sheet for the year in which such Taxes arose. Notwithstanding any other
provision of this Agreement (including, without limitation, Section 8.1), the
Company and the Company Subsidiaries shall be liable for the Taxes described in
this subsection (h).
(i) To the extent that an indemnification obligation pursuant to Section
4.7 duplicates or is inconsistent with an indemnification obligation pursuant to
Article 8, the provisions of Section 4.7 shall govern.
(j) Except as provided in Section 4.7(k), Holdings shall have the right to
control the conduct of any audit or administrative or court proceeding relating
to a taxable year or period of the Company or any of the Company Subsidiaries
ending on or prior to November 30, 1997. Holdings shall keep the Trust informed
on a current basis of the progress of any such audit or proceeding (including,
without limitation, providing upon request copies of correspondence received
from the IRS and giving the Trust full access to all relevant information and to
the advisors handling such audit or proceeding), and shall permit the Trust to
participate at its own expense in the preparation of any briefs, memoranda or
other similar materials to be submitted in connection with such audit or
proceeding. Holdings shall ensure that due consideration is given
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24
to any points raised by the Trust with respect to such an audit or proceeding.
Holdings shall not agree to compromise or settle any audit or proceeding without
the prior written consent of the Trust, which consent shall not be unreasonably
withheld.
(k) The Trust shall have the right to control the conduct of an audit
concerning the valuation of the Common Stock held by the Trust and any
administrative or court proceeding relating to such audit. The Trust shall keep
Holdings informed on a current basis of the progress of such audit or proceeding
(including, without limitation, providing upon request copies of correspondence
received from the IRS and giving Holdings full access to all relevant
information and to the advisors handling any such audit or proceeding), and
shall permit Holdings to participate at its own expense in the preparation of
any briefs, memoranda or other similar materials to be submitted in connection
with any such audit or proceeding. The Trust shall ensure that due consideration
is given to any points raised by Holdings with respect to any such audit or
proceeding. The Trust shall not agree to compromise or settle any audit or
proceeding without the prior written consent of Holdings, which consent shall
not be unreasonably withheld.
4.8 Repurchase of Shares Payment; Payment of Outstanding Indebtedness.
Immediately prior to the Effective Time, the Trust shall cause the Company to:
(a) repurchase 660,000 Shares from the Trust for an aggregate purchase
price of Twenty-Nine Million Dollars ($29,000,000); and
(b) pay, by wire transfer of immediately available funds, to PNC, Ohio,
National Association, as agent ("PNC Bank"), an amount in cash equal to the
principal amount of all indebtedness of the Company and the Company Subsidiaries
owed to the bank syndicate for which PNC Bank acts as agent as of the Closing
Date, all accrued and unpaid interest thereon through the Closing Date and all
other obligations of the Company and the Company Subsidiaries payable to PNC
Bank.
The "Debt Repayment Amount" shall mean an amount equal to the sum of (i) the
amount of the payments made or to be made pursuant to Sections 4.8(b) and 7.3,
and (ii) the principal amount of the IRBs and any other long-term indebtedness
(including current portions) or revolving credit or similar balance outstanding
on the Closing Date.
4.9 Director and Officer Liability.
(a) For six years after the Closing Date, Holdings and the Company shall
indemnify and hold harmless each person who is, or has been at any time prior to
the date hereof or who becomes prior to the Closing an officer or director of
the Company (the "Management Persons"), in respect of acts or omissions
occurring prior to the Closing (including but not limited to the transactions
contemplated by this Agreement); provided that such indemnification shall be
subject to any limitation imposed from time to time under applicable law. For
six years after the Closing Date, Holdings shall cause the Company to provide,
if available, officers' and directors' liability insurance in respect of acts or
omissions occurring prior to the Closing, including but not limited to the
transactions contemplated by this Agreement, covering each such Person currently
covered by the Company's officers' and directors' liability insurance policy, or
who becomes
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25
covered by such policy prior to the Closing, on terms with respect to coverage
and amount no less favorable than those of such policy in effect on the date
hereof; provided that in satisfying its obligation under this Section 4.9, the
Company shall not be obligated to pay premiums in excess of two-hundred percent
(200%) of the amount per annum the Company paid the fiscal year ended November
30, 1997; but provided further that Holdings shall nevertheless be obligated to
cause the Company to provide such coverage as may be obtained for such amount.
(b) Any determination to be made as to whether any Management Person has
met any standard of conduct imposed by law shall be made by legal counsel
reasonably acceptable to such Management Person and Holdings, retained at the
Company's expense. This Section 4.9 is intended to benefit the Management
Persons, their heirs, executors and personal representatives and shall be
binding on successors and assigns of Holdings.
4.10 Notices of Certain Events. The Trust shall promptly notify Holdings of
(i) any notice or other communication from any Person alleging that the consent
of such Person is or may be required in connection with the transactions
contemplated by this Agreement; (ii) any notice or other communication from any
Governmental Authority in connection with the transactions contemplated by this
Agreement; (iii) any actions, suits, claims, investigations or proceedings
commenced or, to the Trust's Knowledge threatened, against the Trust, the
Company or any Company Subsidiary that, if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to Section
2.12; (iv) the occurrence, or the failure to occur, of any event which would be
likely to cause any representation or warranty contained in this Agreement to be
untrue or inaccurate in any material respect (except for any representation and
warranty qualified as to materiality, which need only be untrue or inaccurate as
a result of such event occurring or failing to occur); and (v) any failure by
the Trust to comply with or satisfy any material covenant, condition or
agreement to be complied with or satisfied by it hereunder prior to the Closing
Date. For the purposes of this Section 4.10 only, the December 1 Representations
shall be read to speak as of the Closing Date.
4.11 Further Assurances. Each party shall use all commercially reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations, to consummate and make effective the transactions contemplated by
this Agreement as expeditiously as practicable within the control of any of
them.
4.12 Financial Statements. At least 20 business days prior to the Closing,
the Trust shall deliver to Holdings (i) the audited consolidated balance sheet
of the Company and the Company Subsidiaries as of November 30, 1997 and the
related audited consolidated statement of income and cash flows of the Company
and Company Subsidiaries for the fiscal year then ended (including any notes
thereto) certified by Deloitte & Touche and accompanied by their reports thereon
(collectively, the "Audited Financial Statements"), and (ii) a certificate of
the Trust stating that the Audited Financial Statements are prepared in
accordance with GAAP and present fairly, in all material respects, the
consolidated financial position of the Company and the Company's Subsidiaries as
of November 30, 1997 and the consolidated results of operations and
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26
cash flows of the Company and the consolidated Company Subsidiaries for the
fiscal year ended November 30, 1997.
4.13 Negotiations. From the date hereof until the termination of this
Agreement in accordance with its terms, the Trust agrees that neither the Trust,
the Company nor any of their respective Trustees, directors, officers,
employees, investment banking firms, advisors or other agents, nor any Person
acting on their behalf (the "Trust Group"), will initiate, solicit or encourage
or take any action intended to facilitate the making of any inquiries or
proposals by, or engage in any discussions or negotiations with, or furnish any
information to or enter into any agreement with, any Person concerning the sale
of an equity interest in the Company or a sale of substantially all of the
assets of the Company or the merger, consolidation, or other business
combination involving the Company, and will promptly notify Holdings orally and
in writing of the substance of any inquiry or proposal concerning any such
transaction that may be received by the Trust or any other member of the Trust
Group; provided, however, that notwithstanding any other provision of this
Agreement, the Trust may (i) engage in discussions or negotiations with a third
party who (without any solicitation, initiation, encouragement, discussion or
negotiation, directly or indirectly, by or with the Trust after December 19,
1997) seeks to initiate such discussions or negotiations and may furnish such
third party information concerning the Company if, and only to the extent that,
(A)(x) the third party has first made an Acquisition Proposal that is
financially superior (taking into account all relevant factors) to the
transactions contemplated by this Agreement and has demonstrated that the funds
necessary for the Acquisition Proposal are reasonably likely to be available (as
determined in good faith in each case by the Trust after consultation with its
financial advisors) and (y) the Trustees shall conclude in good faith after
consulting with their financial and legal advisors that such action is in the
best interests of the Trust and its beneficiaries and (B) prior to furnishing
such information to or entering into discussions or negotiations with such
Person, the Trust (x) provides prompt notice to Holdings to the effect that it
is furnishing information to or entering into discussions or negotiations with
such Person and (y) receives from such Person an executed confidentiality
agreement in reasonably customary form and (ii) provided the Trust terminates
this Agreement pursuant to Section 9.1(d), accept an Acquisition Proposal from a
third party. The Trust shall notify Holdings orally and in writing of any such
inquiries, offers or proposals (including, without limitation, the terms and
conditions of any such proposal and the identity of the Person making it),
within 24 hours of the receipt thereof, shall keep Holdings informed of the
status and details of any such inquiry, offer or proposal (including any
material change to the offer or proposal), and shall give Holdings five days'
advance notice of any agreement to be entered into with, or any information to
be supplied to, any Person making such inquiry, offer or proposal. The Trust
shall, and shall cause the Company, the Company Subsidiaries and Affiliates and
their respective officers, directors, employees, investment bankers, attorneys,
accountants and other agents to immediately cease and cause to be terminated all
discussions and negotiations that have taken place prior to the date of this
Agreement, if any, with any parties conducted heretofore with respect to any
Acquisition Proposal. As used herein, "Acquisition Proposal" shall mean a bona
fide proposal or offer (other than by Holdings) for a merger or other business
combination involving the Company, or any bona fide proposal or offer to acquire
in any manner all or substantially all of the assets or equity of the Company.
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27
4.14 No Phase II Reviews. Holdings and Acquisition agree that neither
Holdings, Acquisition nor any of their affiliates, agents, or financing parties
shall have any right to engage in any Phase II Environmental Site Assessments
prior to Closing, at any facility or property owned, leased or occupied by the
Company or a Company Subsidiary.
4.15 ISRA. Prior to the Closing, the Trust shall prepare, and deliver to
the New Jersey Department of Environmental Protection, all written submissions
required by the New Jersey Industrial Site Recovery Act ("ISRA"), with respect
to the facilities owned or operated by the Company or any Company Subsidiaries,
including the facilities located at 10 Industrial Road in Carlstadt, New Jersey.
ARTICLE 5
CONDITIONS TO OBLIGATIONS OF HOLDINGS AND ACQUISITION
The obligations of Holdings and Acquisition to be performed by Holdings and
Acquisition at the Closing are subject to the satisfaction at or prior to the
Closing of each of the following conditions, unless waived by Holdings in its
sole discretion:
5.1 Absence of Injunction. No Governmental Order shall have been issued and
be in effect that prohibits or enjoins in any material respect the consummation
of the transactions contemplated by this Agreement.
5.2 Hart-Scott-Rodino. The waiting period (and any extensions thereof)
under the H-S-R Act applicable to the Merger shall have expired or otherwise
been terminated.
5.3 No Breach. Each representation and warranty of the Trust contained in
this Agreement (a) that is qualified by a reference to Material Adverse Effect
shall be true and correct and (b) that is not qualified by a reference to
Material Adverse Effect, shall be true and correct with such exceptions as would
not reasonably be expected to have a Material Adverse Effect, in each case under
clauses (a) and (b), as of (x) the Closing in the case of the Closing
Representations and (y) as of December 1, 1997 in the case of the December 1
Representations, except to the extent a different date is specified therein, in
which case such representation and warranty shall be true and correct, or true
and correct with such exceptions as would not reasonably be expected to have a
Material Adverse Effect, as the case may be, as of such date. Each covenant and
agreement of the Trust contained in this Agreement required to be performed or
complied with at or prior to the Closing will have been duly performed and
complied with in all material respects as of the Closing.
5.4 Bankruptcy Court Approval. The Bankruptcy Court shall have approved an
amendment of the Amended and Restated Articles of Incorporation of the Company
that deletes Article Sixth thereof.
5.5 Merger Approvals. All Merger Approvals required to consummate the
transactions as contemplated hereby shall have been obtained.
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28
5.6 Government Approvals. All Governmental Approvals required to consummate
the transactions contemplated hereby shall have been obtained.
5.7 Financing. Holdings shall have received or otherwise have available
financing outlined in the Financing Letters, on terms and conditions no less
favorable to Holdings than the terms and conditions set forth in the Financing
Letters.
5.8 Material Adverse Change. Since August 31, 1997, there shall not have
occurred any event, change or effect having, or which would be reasonably likely
to have, individually or in the aggregate, a material adverse change on the
business, assets, financial condition or results of operations of the Company
and the Company Subsidiaries, taken as a whole.
5.9 Existing Indebtedness. The holder of any outstanding indebtedness for
borrowed money referred to in Section 4.8(b) shall have released and discharged
the same and its lien securing the same against payment pursuant to Section 4.8
of this Agreement of the outstanding balance of such indebtedness and any
related obligation, and Holdings shall have received reasonably satisfactory
evidence of the foregoing.
5.10 Environmental Conditions. The Phase I Environmental Site Assessments
that Holdings has commissioned and received with respect to those of the
properties identified on Schedule 5.10 do not identify any Updated Environmental
Conditions except for Updated Environmental Conditions that are not material and
adverse to the Company and the Company Subsidiaries taken as a whole. "Updated
Environmental Conditions" shall mean environmental conditions that are
significantly different from those disclosed pursuant to Table 2.13(a)(v) of
Schedule 2.13.
5.11 Legal Opinions. Holdings shall have received an opinion, dated as of
the Closing Date and addressed to it, of Hughes Hubbard & Reed LLP, counsel to
the Company and the Trust, substantially in the form attached hereto as Exhibit
A.
5.12 Consents. All Consents identified in Schedule 5.12 shall have been
obtained.
5.13 Other Documents. The Trust shall have delivered or caused to be
delivered to Holdings all other documents reasonably requested by Holdings.
ARTICLE 6
CONDITIONS TO OBLIGATIONS OF THE TRUST
The obligations of the Trust to be performed by the Trust at the Closing
are subject to the satisfaction at or prior to the Closing of each of the
following conditions, unless waived by the Trust in its sole discretion:
6.1 Absence of Injunction. No Governmental Order shall have been issued and
be in effect that prohibits or enjoins in any material respect the consummation
of the transactions contemplated by this Agreement.
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29
6.2 Hart-Scott-Rodino. The waiting period (and any extensions thereof)
under the H-S-R Act applicable to the Merger shall have expired or otherwise
been terminated.
6.3 No Breach. Each representation and warranty of Acquisition and Holdings
contained in this Agreement shall be true and correct as of the Closing, except
to the extent a different date is specified therein, in which case such
representation and warranty shall be true and correct as of such date. Each
covenant and agreement of Acquisition and Holdings contained in this Agreement
required to be performed or complied with at or prior to the Closing will have
been duly performed and complied with in all material respects as of the
Closing.
6.4 Bankruptcy Court Approval. The Bankruptcy Court shall have approved an
amendment of the Amended and Restated Articles of Incorporation of the Company
that deletes Article Sixth thereof.
6.5 Merger Approvals. All Merger Approvals required to consummate the
transactions contemplated hereby shall have been obtained.
6.6 Government Approvals. All Government Approvals required to consummate
the transactions contemplated hereby shall have been obtained.
6.7 Legal Opinion. The Trust shall have received an opinion, dated as of
the Closing Date and addressed to it, of Howard, Darby & Levin, counsel to
Holdings and Acquisition, in form and substance reasonably satisfactory to the
Trust.
6.8 Holdings Financing. Holdings and Acquisition shall have received or
otherwise have available funds in an amount sufficient to satisfy all of its
obligations hereunder. Holdings shall have demonstrated to the reasonable
satisfaction of the Trust that Holdings will comply with the terms of Section
7.3.
6.9. Other Documents. Holdings shall have delivered or caused to be
delivered to the Trust all other documents reasonably requested by the Trust.
ARTICLE 7
CLOSING
7.1 The Trust Deliveries. Subject to the conditions set forth in this
Agreement, at the Closing, the Trust shall deliver to Holdings:
(a) certificates representing all of the Shares accompanied by stock
powers duly executed in blank with all necessary stock transfer and other
documentary stamps attached;
(b) a receipt for the Merger Consideration;
(c) a certificate, dated the Closing Date and duly executed by a
Trustee and a senior executive officer of the Company, to the effect that
the conditions set forth in Section 5.3 have been satisfied;
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30
(d) a Secretary's certificate certifying the (i) resolutions
adopted by the Trust evidencing the authorizations described in Section
2.5, (ii) constituent documents of the Trust, and (iii) incumbency of the
Trustees executing this Agreement and the other documents required
hereunder; and
(e) a FIRPTA affidavit from the Trust, and any other Person required
under the Code to deliver the same in connection with the transactions
contemplated by this Agreement under and in accordance with Section 897 and
Section 1445 of the Code.
7.2 Holdings Deliveries. At the Closing, (i) Holdings shall make the wire
transfer of funds in the amount of the Merger Consideration and (ii) shall
execute where applicable and deliver to the Trust:
(a) a certificate, dated the Closing Date and duly executed by a
senior executive officer of Acquisition and Holdings, to the effect that
the conditions set forth in Section 6.3 have been satisfied; and
(b) a Secretary's certificate certifying the (x) resolutions adopted
by Acquisition and Holdings evidencing the authorizations described in
Section 3.2, (y) the constituent documents of Acquisition and Holdings, and
(z) incumbency of officers of Acquisition and Holdings executing this
Agreement and the other documents required hereunder.
7.3 Payment of Debentures. At the Closing, simultaneously with the
Effective Time, Holdings shall cause the Company to pay, by wire transfer of
immediately available funds, to the Trust, an amount in cash equal to Two
Hundred Fifty Million Dollars ($250,000,000), representing the principal amount
of all indebtedness of the Company owed to the Trust as of the Closing Date
under the Company's 10% Senior Unsecured Sinking Fund Debentures Due November
29, 2006 (the "Debentures"), plus all accrued and unpaid interest thereon
through the Closing Date and all other obligations of the Company and the
Company Subsidiaries payable to the Trust thereon.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Trust. Subject to Section 8.4, if the Closing
occurs, the Trust shall, jointly and severally, defend and indemnify and hold
harmless Acquisition and Holdings and its directors, officers, employees,
Affiliates, agents, successors by operation of law and permitted assigns
("Holdings Indemnified Parties") from and against and in respect of any and all
Losses which any of them may incur as a result of any one or more of the
following:
(a) any breach by the Trust of any covenant or agreement of the Trust
in this Agreement; or
(b) any breach of or inaccuracy in any representation or warranty made
by the Trust in this Agreement or any certificate or document delivered by
the Closing Date
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31
pursuant to or in connection with this Agreement (or any facts or
circumstances constituting such breach) (it being agreed and acknowledged
by the parties that for purposes of Acquisition's and Holdings' rights to
indemnification pursuant to this Section 8.1, the representations and
warranties contained herein shall be made without qualification by any
references therein to materiality generally or whether any breach or
inaccuracy would have, or be reasonably expected to have, a Material
Adverse Effect); provided, however, that notwithstanding any other
provision contained herein, the Trust shall have no liability for any
breach of or inaccuracy in any December 1 Representation which arises out
of or is based upon any event, change or effect which occurs after December
1, 1997; or
(c) (i) any investigation, assessment, sampling, monitoring,
treatment, remediation, removal or cleanup ("Remedial Activities") after
the Closing relating to any release of Hazardous Materials into the
environment of, on or about the Real Property prior to the Closing to the
extent such Remedial Activities are required under any Environmental Laws
(including any authoritative interpretation thereof by any Governmental
Authority) or are necessary to prevent any imminent danger to health or
human safety; or (ii) any claims, suits, demands or notices of liability or
potential liability arising at any time under Environmental Laws (including
any authoritative interpretation thereof by any Governmental Authority)
relating to the business or operation of the Company or the Company
Subsidiaries prior to the Closing, provided, however, that (x) with respect
to environmental matters disclosed on Table 2.13(a)(v) of Schedule 2.13,
Holdings Indemnified Parties shall be entitled to indemnification pursuant
to this Section 8.1 for such matters only to the extent that the Losses
with respect to such matters or properties exceed the amount of the
liability with respect to such matters or properties set forth on Table
2.13(a)(v) of Schedule 2.13; and (y) that Holdings Indemnified Parties
shall not be entitled to indemnification pursuant to this Section 8.1 with
respect to any property that is identified on Schedule 5.10; provided,
however, that, if and to the extent any Phase I Environmental Site
Assessment commissioned and received by Holdings prior to the Closing with
respect to such property identifies adverse Updated Environmental
Conditions, the Holdings Indemnified Parties shall be entitled to
indemnification with respect to such Updated Environmental Conditions
pursuant to this Section 8.1, subject to the limitations set forth in
Section 8.4, subject to the following:
(x) notwithstanding Section 8.1(c) the Holdings Indemnified
Parties shall not be entitled to any indemnification for Losses
arising out of any Phase II Environmental Site Assessment other than
any such action taken (x) in connection with a settlement, resolution
of any pending or threatened administrative enforcement action or as
otherwise required to comply with any Environmental Law, or action
rendered necessary by an imminent danger to health or human safety; or
(y) as part of any monitoring or remediation consistent with the past
practices; and
(y) with respect to any remediation on any Real Property in
respect of which indemnity is provided under Section 8.1(c), Holdings
shall use remedial alternatives which shall be among the most
cost-effective alternatives permitted
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32
under applicable Environmental Laws that does not cause or result in a
material interference with operations on the Real Property and may
include, without limitation, the use of risk assessments, deed
restrictions, institutional controls and industrial remediation
standards. Holdings shall promptly provide copies to the Trust of any
notices, correspondence, drafts and final reports relating to any
covered matter; or
(d) any matter on Schedule 2.11 or 2.12 that is designated as covered
by this Section 8.1(d); provided, however, that the Trust's obligations
under this Section 8.1(d) shall be limited to 50% of any Losses resulting
from any such matter; or
(e) any matter on Schedule 2.12 that is designated as covered by this
Section 8.1(e).
8.2 Indemnification by Acquisition and Holdings. Subject to Section 8.4, if
the Closing occurs, Holdings shall, jointly and severally, defend, indemnify and
hold harmless the Trust and its Trustees, officers, employees, Affiliates,
successors and permitted assigns ("Trust Indemnified Parties") from and against
and in respect of any and all Losses which any of them may incur as a result of
any one or more of the following:
(a) any breach by Acquisition or Holdings of any covenant or agreement
of Acquisition or Holdings in this Agreement; or
(b) any breach of or inaccuracy in any representation or warranty on
the part of Acquisition or Holdings in this Agreement or any certificate or
document delivered at the Closing in connection with this Agreement (or any
facts or circumstances constituting such breach) (it being agreed and
acknowledged by the parties that for purposes of the Trust's right to
indemnification pursuant to this Section 8.2, the representations and
warranties contained herein shall not be deemed qualified by any references
herein to materiality generally).
8.3 Survival. The parties agree that, regardless of any investigation made
at any time by the parties, the representations and warranties made by the
Trust, the Company, Acquisition and Holdings in this Agreement or in any
Schedule (and any related indemnity obligations) shall survive the Closing but
shall terminate and be of no further force and effect on, and no claims of any
kind with respect thereto may be made by the Trust, the Company, Holdings or
Acquisition after, March 31, 1999; provided, however, that representations and
warranties set forth in Section 2.4, paragraph (a) of Section 2.5, Section 2.6
and Section 2.18 will survive the Closing Date and remain in full force and
effect indefinitely, and, provided, further, that the representations and
warranties set forth in Section 2.15 and the agreements contained in Section 4.7
shall survive until six months after the expiration of the applicable statute of
limitations and provided, further, that the representatives and warranties in
Section 2.13 shall survive until the third anniversary of the Closing. The
indemnification obligations set forth in Section 8.1(c) shall survive until the
third anniversary of the Closing at which time they shall terminate and be of no
further force or effect. In addition, if written notice of a claim has been
given prior to the expiration of the applicable representations and warranties
or indemnification obligations under Section 8.1(c) by
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33
either Acquisition or Holdings or the Trust, as applicable, then the relevant
representations and warranties (and related indemnity obligations) or
indemnification obligations under Section 8.1(c) shall survive as to such claim,
until such claim has been finally resolved. The covenants and agreements
contained in this Agreement shall survive the closing.
8.4 Limitations on Indemnity.
(a) The following limitations shall apply in respect of the indemnification
obligations pursuant to Sections 8.1 and 8.2:
(i) no claim for indemnification may be made by a Holdings Indemnified
Party pursuant to Section 8.1 or by a Trust Indemnified Party pursuant to
Section 8.2 unless notice of such claim (describing the basic facts or
events, the existence or occurrence of which constitute or have resulted in
the alleged breach of a representation or warranty made in this Agreement
or which otherwise form the basis of the claim) has been given to the party
from whom indemnification is sought (the "Indemnifying Party") during the
relevant survival period set forth in Section 8.3;
(ii) The Trust shall have no liability pursuant to Section 8.1 until
the cumulative aggregate amount of all Losses which are otherwise
recoverable thereunder by Holdings Indemnified Parties exceed Ten Million
Dollars ($10,000,000) (the "Deductible"), and then only for the amount (the
"Excess Amount") by which such Losses exceed the Deductible up to a maximum
Excess Amount of, and the cumulative aggregate amount of Losses for which
the Trust shall be liable pursuant to Section 8.1 shall in no event exceed,
Fifty Million Dollars ($50,000,000); provided, however, that this Section
8.4(a)(ii) shall not apply to any recovery for claims based upon a breach
of Section 2.4, paragraph (a) of Section 2.5, and Sections 2.6 and 2.18;
and
(iii) The cumulative aggregate indemnity obligation of Holdings under
Section 8.2 shall in no event exceed Fifty Million Dollars ($50,000,000).
This Section 8.4 shall not apply to Tax matters, which shall be governed by
Section 4.7. The parties hereto acknowledge and agree that there shall not be
any duplication of indemnification with respect to any matter, notwithstanding
the fact that such matter may give rise to a right or rights of reimbursement or
indemnification under one or more Sections of this Article 8 or Section 4.7 of
this Agreement.
8.5 Indemnification Procedure.
(a) Any party making a claim for indemnification hereunder (an
"Indemnitee") shall notify the indemnifying party (an "Indemnitor") of the claim
in writing promptly (a "Notice of Claim"), provided that the failure to so
notify an Indemnitor shall not relieve the Indemnitor of its obligations
hereunder except to the extent such failure shall have actually prejudiced the
Indemnitor.
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34
(b) With respect to any third party action, lawsuit, proceeding,
investigation or other claim which is the subject of a Notice of Claim (a "Third
Party Claim"), if (i) such claim does not seek an order, injunction or other
equitable relief against the Indemnitee which, if successful, would materially
interfere with the business or operations of the Indemnitee and (ii) the
Indemnitor admits in writing that this indemnity fully covers the Indemnitee
against such Third Party Claim, an Indemnitor shall be entitled to assume and
control (with counsel of its choice reasonably acceptable to the Indemnitee) the
defense of such Third Party Claim at the Indemnitor's expense and at its option
by sending written notice of its election to do so within fifteen (15) days
after receiving the Notice of Claim from the Indemnitee as aforesaid; provided,
however, that:
(i) The Indemnitee shall be entitled to participate in the defense of
such Third Party Claim and to employ counsel of its choice for such purpose
(the fees and expenses of such separate counsel shall be borne by
Indemnitee); and to assert against any third party (other than the
Indemnitor) any and all crossclaims and counterclaims the Indemnitee may
have, subject to the Indemnitor's consent, which consent shall not be
unreasonably withheld;
(ii) If the Indemnitor elects to assume the defense of any such Third
Party Claim, the Indemnitor shall be entitled to compromise or settle such
Third Party Claim in its sole discretion so long as either (x) such is
solely a monetary settlement which provides an unconditional release of the
Indemnitee with respect to such claim or (y) the Indemnitor shall obtain
the prior written consent of the Indemnitee (which shall not be
unreasonably withheld); and
(iii) If the Indemnitor shall not have assumed the defense of such
Third Party Claim within the fifteen (15) day period set forth above, the
Indemnitee may assume the defense of such Third Party Claim with counsel
selected by it and may make any compromise or settlement thereof or
otherwise protect against the same and be entitled to all amounts paid as a
result of Third Party Claim or any compromise or settlement thereof. The
Indemnitee shall give the Indemnitor notice of the name of counsel selected
by it prior to the time of assuming the defense and the Indemnitor shall
have five (5) Business Days in which to object to such counsel. In the
event of such objection, the Indemnitor shall have the obligation to defend
on the terms specified in Section 8.5(b)(ii).
(c) The Indemnitee shall at all times cooperate, at no expense, in all
reasonable ways with, make its relevant files and records available for
inspection and copying by, and make its employees available or otherwise render
reasonable assistance to, the Indemnitor.
(d) Upon payment of any amount pursuant to any claim for indemnification
hereunder, the Indemnitor shall be subrogated, to the extent of such payment, to
all of the Indemnitee's rights of recovery against any third party with respect
to the matters to which such claims relates.
8.6 Exclusive Remedy. If the Closing occurs, the sole and exclusive
remedies of Acquisition and Holdings for (a) any breach of any representation or
warranty made by the Trust
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35
or the Company, (b) any breach, nonfulfillment or nonperformance of any covenant
or agreement to be performed, complied with or fulfilled by the Trust under this
Agreement or (c) any Losses referred to in Section 8.1 hereof shall be the
remedies therefor expressly provided in this Article 8 and the Trust shall have
no other obligations with respect thereto; provided, however, that this Section
8.6 shall not apply to matters governed by Section 4.7. If the Closing occurs,
the sole and exclusive remedies of the Trust for (a) any breach of any
representation or warranty made by Acquisition and Holdings, (b) any breach,
non-fulfillment or non-performance of any covenant or agreement to be performed,
complied with or fulfilled by Acquisition and Holdings under this Agreement or
(c) any Losses referred to in Section 8.2 hereof shall be the remedies therefor
expressly provided in this Article 8 and Acquisition and Holdings shall have no
other obligations with respect thereto; provided, however that this Section 8.6
shall not apply to matters governed by Section 4.7.
ARTICLE 9
TERMINATION
9.1 Termination. Notwithstanding anything to the contrary set forth herein,
this Agreement may be terminated and the transactions contemplated hereby
abandoned at any time prior to the Closing:
(a) by mutual consent of Holdings and the Trust;
(b) by either Holdings or the Trust, if the Closing shall not have
been consummated on or before June 30, 1998 (the "Deadline"); provided,
however, that the right to terminate this Agreement pursuant to this
Section 9.1(b) shall be suspended as to any party whose failure to fulfill
any material obligation under this Agreement shall have been the cause of,
or shall have resulted in, the failure of the Closing to occur prior to the
Deadline until the fifth Business Day after such failure has been cured;
(c) by either Holdings or the Trust in the event of the issuance of a
final, nonappealable Governmental Order restraining or prohibiting the
consummation of the transactions contemplated hereby; or
(d) by the Trust, upon five days' prior notice to Holdings, if the
Trust has complied with the provisions of the proviso in the first sentence
of Section 4.13; provided, however, that prior to any such termination, the
Trust shall, and shall cause its respective financial and legal advisors
to, negotiate with Holdings to make such adjustments in the terms and
conditions of this Agreement as would enable Holdings to proceed with the
transactions contemplated hereby; provided further, however, that no
termination shall be effective pursuant to this clause (d) unless
concurrently with such termination a termination fee equal to the sum of
(i) Seventeen Million Five Hundred Thousand Dollars ($17,500,000) and (ii)
Holdings' (and its Affiliates') out-of-pocket expenses relating to the
transaction (including, without limitation, professional and other fees and
disbursements and commitment and other financing fees) up to a maximum of
Two Million Five Hundred Thousand Dollars ($2,500,000), is paid in cash by
the Trust to Holdings.
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36
9.2 Effect of Termination. If this Agreement is terminated pursuant to
Section 9.1, this Agreement shall be of no further force and effect, and none of
the parties hereto nor their respective Affiliates, directors, shareholders,
officers, employees, agents, consultants, attorneys-in-fact or other
representatives shall have any liability in respect of such termination, except
that (a) the agreements in Section 10.1 and 10.16 shall survive the termination
hereof and (b) nothing herein shall relieve either party from liability for any
breach hereof or failure to perform hereunder. Notwithstanding the foregoing, if
this Agreement shall be terminated by either party pursuant to Section 9.1(b) as
a result of the other party's failure to fulfill any material obligation of this
Agreement, then the non-terminating party shall pay the other party an amount
equal to the terminating party's reasonable fees and expenses incurred by such
party in connection with the transactions contemplated by this Agreement,
including, but not limited to, fees of counsel, filing fees, agency fees,
commitment fees, accountant fees, appraisal fees and all out-of-pocket expenses
related thereto.
ARTICLE 10
MISCELLANEOUS
10.1 Expenses. Except as otherwise expressly provided herein, whether or
not the transactions contemplated hereby are consummated, all costs, expenses
and disbursements incurred by the Trust and Holdings in connection with this
Agreement and the transactions contemplated hereby shall be borne by them,
respectively.
10.2 Entire Agreement. This Agreement constitutes the entire agreement of
the parties with respect to the subject matter hereof and supersede all previous
agreements, understandings or discussions with respect to the subject matter
hereof, except for the Confidentiality Agreement. Except as set forth in the
preceding sentence, any and all prior arrangements, representations, promises,
understandings and conditions in connection with said subject matter and any
representations, promises or conditions not expressly incorporated herein or
expressly made a part hereof shall not be binding upon any party hereto.
10.3 Waivers. Any waiver of rights hereunder must be set forth in writing
signed by the party against whom the waiver is to be effective. A waiver of any
breach or failure to enforce any of the terms or conditions of this Agreement
shall not in any way affect, limit or waive any party's rights at any time to
enforce strict compliance thereafter with every term or condition of this
Agreement for any other breach or failure to comply with the terms and
conditions of this Agreement.
10.4 Binding Effect; Assignability. This Agreement shall be binding upon,
inure to the benefit of, and be enforceable by the parties and their respective
successors and permitted assigns. This Agreement shall not be assignable by any
party without the express written consent of the other parties; provided,
however, that Holdings may assign its rights and obligations under this
Agreement to any Affiliate of Holdings and any of its financing parties without
the express written consent of the Trust provided that Holdings shall not be
relieved of any of its obligations hereunder.
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37
10.5 Notices. All notices or other communications required or permitted to
be given hereunder shall be (as elected by the party giving such notice) (a)
personally delivered against receipt to the party to whom it is to be given with
copies to all others listed, (b) transmitted by telecopy, (c) transmitted by
postage prepaid certified mail, return receipt requested, or (d) delivered from
a point in the United States by a recognized overnight courier service as
follows:
(i) If to the Trust:
Eagle-Picher Industries, Inc.
Personal Injury Settlement Trust
One East Fourth Street
Suite 1219
Cincinnati, Ohio 45202
Telecopy: (513) 721-3404
with a copy to:
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
Attention: Ed Kaufmann
Telecopy: (212) 422-4726
(ii) If to the Company:
Eagle-Picher Industries, Inc.
580 Walnut Street
Floor 13
Cincinnati, Ohio 45202
Telecopy: (513) 721-2341
with a copy to:
Hughes Hubbard & Reed LLP
One Battery Park Plaza
New York, New York 10004
Attention: Ed Kaufmann
Telecopy: (212) 422-4726
(iii) If to Holdings or Acquisition:
Granaria Holdings B.V.
Lange Voorhout 16
P.O. Box 233
2501 CE The Hague
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38
The Netherlands
Attention: Joel P. Wyler
Chairman
Telecopy: 011 31 70 312 1150
with a copy to:
Howard, Darby & Levin
1330 Avenue of the Americas
New York, NY 10019
Attention: Scott F. Smith
Telecopy: (212) 841-1010
All notices and other communications shall be deemed to have been duly given on
(x) the date of receipt if delivered personally or by telecopy (with issuance by
the transmitting machine of confirmation of successful transmission), (y) the
day of delivery as indicated on the return receipt if delivered by mail, or (z)
one (1) Business Day after the date of delivery in the US to the overnight
courier if sent by overnight courier. Any party hereto may change its address
for purposes hereof by notice to the other parties.
10.6 Counterparts. This Agreement may be executed simultaneously in two (2)
or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute and be the same instrument.
10.7 Attachments, Exhibits and Schedules. All Attachments, Exhibits and
Schedules attached hereto are incorporated herein and expressly made a part of
this Agreement as though completely set forth herein. All references to this
Agreement herein or in any of the Attachments, Exhibits or Schedules shall be
deemed to refer to this entire Agreement, including all Attachments, Exhibits
and Schedules. Neither the specification of any dollar amount in the
representations and warranties set forth in Article 2 or elsewhere herein nor
the indemnification provisions of Article 8 nor the inclusion of any Schedule
shall be deemed to constitute an admission by the Trust, or otherwise imply,
that any such amounts or the items so included are material for purposes of this
Agreement or are required to be listed on the relevant schedule.
10.8 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE INTERPRETED,
CONSTRUED, AND GOVERNED BY AND IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK, DISREGARDING ANY CONFLICT OF LAWS PROVISIONS WHICH MIGHT OTHERWISE REQUIRE
THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION.
10.9 No Presumption. Holdings, Acquisition, the Trust and the Company
have participated jointly in the negotiation and drafting of this Agreement. In
the event any ambiguity or question of intent or interpretation arises, this
Agreement shall be construed as if drafted jointly by Holdings and the Trust,
and no presumption or burden of proof shall arise favoring or disfavoring any
party by virtue of the authorship of any of the provisions of this Agreement.
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39
10.10 Headings. The headings and subheadings of this Agreement are inserted
for convenience of reference only and shall not affect the interpretation of
this Agreement.
10.11 Amendment. This Agreement may be amended only in a writing signed by
all parties hereto.
10.12 Third Party Rights. Except as otherwise provided (a) in Section 4.9
with respect to the rights of Management Persons, (b) in Article 8 with respect
to the indemnification obligations for the benefit of Holdings Indemnified
Parties and the Trust Indemnified Parties (other than Holdings and the Trust)
and (c) in Section 10.16 with respect to the rights of Trust Persons, the
provisions of this Agreement are for the sole benefit of Holdings, Acquisition,
the Company and the Trust and shall not inure to the benefit of any other Person
(other than permitted assigns of the parties hereto) either as a third party
beneficiary or otherwise, including, without limitation, with respect to rights
of subrogation in favor of title insurance companies.
10.13 Severability. If and to the extent that any court of competent
jurisdiction holds any provisions (or any part thereof) of this Agreement to be
invalid or unenforceable, such holding shall in no way affect the validity of
the remainder of this Agreement.
10.14 Consent to Jurisdiction. Holdings, Acquisition, the Trust and the
Company hereby submit to the non-exclusive jurisdiction of the courts of general
jurisdiction of the State of New York and the federal courts of the US, located
in the City of New York, solely in respect of the interpretation and enforcement
of the provisions of this Agreement and any other agreement, instrument or other
document entered into in connection herewith and hereby waive, and agree not to
assert, as a defense in any action, suit or proceeding for the interpretation or
enforcement of this Agreement or any such other agreement, instrument or other
document, that it is not subject thereto or that such action, suit or proceeding
may not be brought or is not maintainable in such courts or that this Agreement
or any such other agreement, instrument or other document may not be enforced in
or by such courts or that its property is exempt or immune from execution, that
the suit, action or proceeding is brought in an inconvenient forum, or that the
venue of the suit, action or proceeding is improper. Service of process with
respect thereto may be made upon Holdings or the Trust by mailing a copy thereof
by registered or certified mail, postage prepaid, to such party at its address
as provided in Section 10.5 hereof with copies to the indicated parties,
provided that service of process may be accomplished in any other manner
permitted by applicable Law.
10.15 Nonrecourse Provisions.
(a) Holdings agrees that, notwithstanding to the contrary in this Agreement
(including, without limitation, Article 8) or any agreement, instrument or
certificate of the Trust delivered pursuant to this Agreement (each a
"Transaction Document") or under any applicable rule of law or equity, (i) the
sole recourse of Holdings under the Transaction Documents or otherwise with
respect to the matters contemplated hereby or thereby shall be limited to the
Trust and its assets and (ii) the Trust's obligations and liabilities under all
Transaction Documents and otherwise in connection with the transactions
contemplated therein shall be Nonrecourse to the
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40
Trustees and the beneficiaries, employees, advisors and agents of the Trust
(collectively, "Trust Persons").
(b) "Nonrecourse" shall mean that the obligations and liabilities are
limited in recourse solely to the Trust and the assets of the Trust (which shall
not include any receivables due from or other rights against Trust Persons), and
no Trust Person shall be directly or indirectly personally liable in any respect
for any obligation or liability of the Trust under any Transaction Document or
any transaction contemplated herein or therein.
(c) Holdings hereby covenants for itself and its successors and assigns
that it and its successors and assigns will not make any claim, or bring,
commence, prosecute or maintain any action, either at law or equity, in any
federal, state or local court of the United States or in any foreign court,
against any Trust Person in respect of (i) the payment of any amount or the
performance of any obligation under any Transaction Document, (ii) the
satisfaction of any liability arising in connection with any such payment or
obligation or otherwise, including without limitation, liability arising in law
for tort (including, without limitation, for active and passive negligence,
negligent misrepresentation and fraud), equity (including, without limitation,
for indemnification and contribution) or contract (including, without
limitation, monetary damages for the breach of representation or warranty or
performance of any of the covenants or obligations contained in any Transaction
Document or with the transactions contemplated herein or therein) or (iii)
otherwise in respect of the transactions contemplated hereby provided that this
Section 10.15(c) shall not limit Holdings from naming a Trust Person in any
action against the Trust, solely for the purposes of enforcing the Trust's
obligations under the Agreement or satisfying any liability referred to in
clauses (i) and (ii) of this Section 10.15(c).
10.16 Terms Generally. (a) Words in the singular shall be held to include
the plural and vice versa and words of one gender shall be held to include the
other gender as the context requires, (b) the terms "hereof," "herein," and
"herewith" and words of similar import shall, unless otherwise stated, be
construed to refer to this Agreement as a whole (including all of the
Attachments and Schedules hereto) and not to any particular provision of this
Agreement, (c) Article, Section, paragraph, clause, Attachment and Schedule
references are to the Articles, Sections, paragraphs, clauses, Attachments and
Schedules to this Agreement unless otherwise specified, (d) the word "including"
and words of similar import when used in this Agreement shall mean "including,
without limitation," unless otherwise specified, (e) the word "or" shall not be
exclusive, and (f) references to a Person are also references to its permitted
successors and assigns.
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41
IN WITNESS WHEREOF, the duly authorized officers or representatives of the
parties hereto have duly executed this Agreement on the date first written
above.
E-P HOLDINGS, INC. EAGLE-PICHER INDUSTRIES, INC. PERSONAL
INJURY SETTLEMENT TRUST
By: /s/ Joel P. Wyler By: /s/ Ruth R. McMullin
----------------------------- ---------------------------------
Name: Joel P. Wyler Name: Ruth R. McMullin
Title: Chairman and President Title: Chairperson
E-P ACQUISITION, INC. EAGLE-PICHER INDUSTRIES, INC.
By: /s/ Joel P. Wyler By: /s/ Thomas E. Petry
----------------------------- ----------------------------------
Name: Joel P. Wyler Name: Thomas E. Petry
Title: Chairman and President Title: Chairman and CEO
<PAGE>
<PAGE>
ATTACHMENT A
Definitions
For purposes of this Agreement:
"Acquisition" shall have the meaning specified in the Preamble.
"Acquisition Common Stock" shall have the meaning specified in Section 1.7.
"Acquisition Proposal" shall have the meaning specified in Section 4.13.
"Affiliate" shall mean, as to any specified Person, any other Person,
which, directly or indirectly, controls, is controlled by or is under common
control with, such specified Person. For purposes of this definition, "control"
means the possession of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall have the meaning specified in the Preamble.
"AMT" shall have the meaning specified in Section 2.15(c).
"Approval" shall mean any Consent of, or notice to or filing, registration
or qualification with, any Governmental Authority.
"Audited Balance Sheet" shall mean the audited consolidated balance sheet
of the Company and the Company Subsidiaries as of November 30, 1997.
"Audited Financial Statements" shall have the meaning set forth in Section
4.12(i).
"Balance Sheet" shall have the meaning specified in Section 2.7.
"Bankruptcy Court" shall have the meaning specified in Section 2.5(c)(ii).
"Benefit Plan" shall have the meaning specified in Section 2.16(b).
"Business Day" shall mean a day other than a Saturday, Sunday or other day
on which banks in New York, New York are required to or may be closed.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended (42 U.S.C. 'SS''SS' 9601, et seq.).
"Certificate of Merger" shall have the meaning specified in Section 1.2.
"Closing" shall have the meaning specified in Section 1.3.
"Closing Date" shall have the meaning specified in Section 1.3.
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2
"Closing Representations" shall mean the representations and warranties
contained in Section 2.1 through 2.6, Sections 2.15(b) and (c) and Section 2.18.
"Code" shall mean the US Internal Revenue Code of 1986, as amended, and the
rules and regulations thereunder.
"Common Stock" shall have the meaning specified in the second recital of
this Agreement.
"Company" shall have the meaning specified in the Preamble.
"Company Debt" shall have the meaning specified in Section 2.4(b).
"Company Property" shall have the meaning specified in Section 8.1(e).
"Company Subsidiary" shall mean a Subsidiary of the Company.
"Confidentiality Agreement" shall have the meaning specified in Section
4.5(a).
"Consent" shall mean any action, approval, waiver, consent, authorization,
notification or permit.
"Contract" shall mean a written or oral contract or agreement, plan, lease,
arrangement or commitment to which the Company or a Company Subsidiary is a
party.
"Deadline" shall have the meaning specified in Section 9.1(b).
"Debentures" shall have the meaning specified in Section 7.3.
"Debt Repayment Amount" shall have the meaning specified in Section 4.8.
"December 1 Representations" shall mean the representations and warranties
contained in Section 2.7 through 2.17 (except Sections 2.15(b) and (c)) and in
Section 2.20.
"Deductible" shall have the meaning specified in Section 8.4(a)(ii).
"DGCL" shall mean the Delaware General Corporation Law.
"DOJ" shall mean the US Department of Justice.
"Domestic Subsidiary" shall mean a Company Subsidiary incorporated in the
United States.
"Effective Time" shall have the meaning specified in Section 1.2.
"Election" shall have the meaning specified in Section 4.7(a).
"Enforceability Exceptions" shall have the meaning specified in Section
2.5(a).
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3
"Environmental Claimants" shall mean the US Environmental Protection
Agency, the US Department of the Interior and the states of Arizona, Oklahoma
and Michigan.
"Environmental Laws" shall mean Laws in effect as of the close of business
on November 30, 1997 relating to the protection of the environment from
pollution or regulating or relating to the emission, discharge, disposal,
treatment, transportation, storage, release or threatened release of Hazardous
Materials into the environment, including ambient air, surface water, ground
water, land surface or subsurface strata.
"Environmental Reports" shall have the meaning specified in Section
2.13(c).
"Environmental Requirements" shall mean any Environmental Laws and all
Permits issued under Environmental Laws.
"Environmental Settlement Agreement" shall mean a certain Settlement
Agreement by and among the Company, certain Company Subsidiaries and the
Environmental Claimants, approved by an order issued on or about June 6, 1996 by
the United States Bankruptcy Court for the Southern District of Ohio, Western
Division.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.
"Evaluation Material" shall have the meaning set forth in the
Confidentiality Agreement.
"Excess Amount" shall have the meaning specified in Section 8.4(a)(ii).
"Financial Statements" shall have the meaning specified in Section 2.7.
"Financing Letters" shall have the meaning specified in Section 3.7.
"FIRPTA" shall mean the Foreign Investment in Real Property Act of 1980.
"Foreign Benefit Plan" shall have the meaning specified in Section 2.16(h).
"Foreign Subsidiary" shall mean any Company Subsidiary not qualified to do
business in the United States.
"FTC" shall mean the Federal Trade Commission.
"GAAP" shall mean United States generally accepted accounting principles as
in effect at the relevant time, or during the relevant period, specified herein,
applied on a consistent basis over the period indicated.
"Government Approval" shall have the meaning specified in Section
2.5(c)(v).
"Government Contract" shall mean any written prime contract, subcontract,
grant or cooperative agreement between the Company or any Company Subsidiary and
(i) the US
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4
Government, (ii) any prime contractor of the US Government or (iii) any
subcontractor with respect to any contract described in clauses (i) or (ii)
above.
"Governmental Authority" shall mean any United States Federal, State or
local, or any foreign, (i) government, governmental, regulatory or
administrative authority, agency or commission or (ii) court, tribunal, or
judicial body.
"Governmental Order" shall mean any order, writ, stay, judgment,
injunction, decree, stipulation, determination or award entered by or with any
Governmental Authority.
"Hazardous Material" shall mean (i) any substance designated pursuant to
Section 311(b)(2)(A) of the Clean Water Act, as amended (33 U.S.C.
'SS''SS' 1251, et seq.), (ii) any "hazardous substance" designated pursuant to
CERCLA, (iii) any waste having the characteristics identified under or listed
pursuant to the Resource Conservation Recovery Act of 1976, as amended
(42 U.S.C. 'SS''SS' 6901, et seq.), (iv) any pollutant listed under Section
307(a) of the Clean Water Act, as amended (33 U.S.C. 'SS''SS' 1251, et seq.),
(v) any hazardous air pollutant listed under Section 112 of the Clean Air Act,
as amended (42 U.S.C. 'SS''SS' 7401, et seq.), (vi) any petroleum, crude oil or
any fraction or by-product thereof which is not otherwise specifically listed or
designated under paragraphs (i) to (v) above, (vii) any other substance,
pollutant, waste or petroleum fraction which is designated as hazardous under
the above statutes or under any Environmental Law, (viii) any other substance
which is regulated by or forms the basis of liability under any Environmental
Law, including, without limitation, friable asbestos and polychlorinated
biphenyls ("PCBs") and (ix) any material or substance which is defined as a
"hazardous waste," "hazardous substance," "hazardous material," "restricted
hazardous waste," "industrial waste," "solid waste," "contaminant,"
"pollutant," "toxic waste" or "toxic substance" under any provision of
Environmental Law.
"Holdings" shall have the meaning specified in the Preamble.
"Holdings Indemnified Parties" shall have the meaning specified in Section
8.1.
"H-S-R Act" shall mean the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.
"Indemnifying Party" shall have the meaning specified in Section 8.4(a)(i).
"Indemnitee" shall have the meaning specified in Section 8.5(a).
"Indemnitor" shall have the meaning specified in Section 8.5(a).
"Intellectual Property" shall have the meaning specified in Section 2.11.
"Intellectual Property Claim" shall mean any written claim (i) challenging
the scope, validity or enforceability of any of the Intellectual Property, (ii)
that any of the products designed, manufactured or sold by the Company or any
Company Subsidiary infringes upon the intellectual property rights of any third
party or (iii) made by the Company or the Company Subsidiaries that any
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5
activity of a third party infringes upon any of the Intellectual Property of
the Company or the Company Subsidiaries.
"Interest Amount" shall mean an amount equal to the amount of interest on
$410,000,000 for the period beginning on (and including) December 1, 1997 to
(but excluding) the Closing Date, at a rate per annum of 8% (calculated on the
basis of the actual number of days elapsed over a year of 365 days).
"IRB" shall mean Industrial Revenue Bond.
"IRS" shall mean the US Internal Revenue Service.
"ISRA" shall have the meaning specified in Section 4.15.
"Joint Venture Entities" shall have the meaning specified in Section
2.3(b).
"Joint Venture Interests" shall have the meaning specified in Section
2.3(b).
"Knowledge of the Trust," "the Trust's Knowledge" or variants thereof shall
mean the actual knowledge, as of the date of this Agreement, of the Trustees and
the chief executive officer, the chief operating officer, the senior vice
president-finance, controller, the general counsel, chief information officer,
senior human resources officer and the head of the Hillsdale Tool Division, the
Wolverine Gasket Division, the Technologies Division, the Construction Equipment
Division and the Minerals Division, in each case without specific investigation.
"Laws" shall have the meaning specified in Section 2.14.
"Leased Real Property" shall have the meaning specified in Section 2.9(a).
"Lien" shall mean any mortgage, pledge, security interest or similar
encumbrance of property, whether voluntarily incurred or arising by operation of
law or otherwise.
"Liquidated Sites" shall have the meaning specified in the Environmental
Settlement Agreement.
"Losses" shall mean claims, liabilities, obligations, losses, damages,
costs, and out of pocket expenses (including without limitation, reasonable
legal, accounting and similar expenses); provided, however, that (i) Losses
shall be calculated on a net after tax basis assuming that the person incurring
the Loss has an effective tax rate of 40% and taking into account any Tax
benefits realized by such Person from the Losses (net of insurance recovery);
(ii) Losses shall not include consequential damages other than Losses payable to
a third party that consist of consequential damages suffered by such third
party; (iii) Losses shall not include punitive damages, except to the extent
such Losses represent the amount necessary to satisfy a specific award of
punitive damages to a third party; and (iv) Losses shall be reduced by the
amount of any insurance recovery or other payment from a non-affiliated third
party received by the person incurring the Loss in connection with the Loss,
subject to the offsetting effect of Taxes.
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6
"Management Persons" shall have the meaning specified in Section 4.9(a).
"Material Adverse Effect" shall mean a material adverse effect,
individually or in the aggregate, on the business, financial condition or
results of operations of the Company and the Company Subsidiaries considered as
a single enterprise.
"Material Contract" shall have the meaning specified in Section 2.10(a)(i).
"Material Government Contract" shall have the meaning specified in Section
2.10(c).
"Merger" shall have the meaning specified in the second recital of this
Agreement.
"Merger Approvals" shall have the meaning specified in Section 2.5(c)(iii).
"Merger Consideration" shall have the meaning specified in Section 1.7(c).
"Multiemployer Plan" shall have the meaning specified in Section 2.16(c).
"Notice of Claim" shall have the meaning specified in Section 8.5(a).
"Nonrecourse" shall have the meaning specified in Section 10.15(b).
"OGCL" shall mean the Ohio General Corporation Law.
"Owned Real Property" shall have the meaning specified in Section 2.9(a).
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"PCBs" shall mean polychlorinated biphenyls.
"Permit" shall mean any permit, certificate, license or authorization
issued by any Governmental Authority.
"Permitted Changes" shall have the meaning specified in Section 4.1.
"Permitted Liens" shall mean (i) Liens for current property taxes and
assessments or other government charges or levies not yet due or the validity of
which is being contested in good faith by appropriate proceedings, (ii) Liens of
mechanics, materialmen, laborers, warehousemen, carriers and other similar
common law or statutory Liens in each case, arising in the ordinary course of
business and not in excess of $500,000, (iii) Liens and encumbrances existing on
the date hereof which are set forth on Schedule 2.9, (iv) zoning, and other land
use and environmental regulations by governmental agencies, (v) any other Liens
or encumbrances which do not materially detract from the value or materially
interfere with the present use of the relevant asset or property, (vi) Liens
reflecting capitalized leases from the Person financing a purchase of equipment
so long as the Lien is limited to the specific equipment so acquired, and (vii)
with respect to Real Property and Real Property Leases, leases, subleases and
occupancy agreements to Persons occupying less than 25,000 square feet pursuant
<PAGE>
<PAGE>
7
to arrangements on market terms when made that can be terminated on ninety (90)
or fewer days notice or that expire within one (1) year of the Closing Date.
"Person" shall mean any individual, corporation, partnership (general,
limited or limited liability), limited liability company, joint venture,
association, trust, or other entity or organization.
"Phase I Environmental Site Assessment" shall have the meaning used and
understood by and among environmental consultants and shall exclude any boring,
sampling, installation of wells, analysis of soil and groundwater, and all other
intrusive work.
"Phase II Environmental Site Assessment" shall mean an environmental site
assessment that includes any boring, sampling, installation of wells, analysis
of soil and groundwater, or other intrusive work.
"Plan" shall have the meaning specified in Section 2.1.
"PNC Bank" shall have the meaning specified in Section 4.8(b).
"Real Property" shall have the meaning specified in Section 2.9(a).
"Real Property Lease" shall have the meaning specified in Section 2.9(a).
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, or disposing into
the environment.
"Remedial Activities" shall have the meaning set forth in Section 8.1(c).
"Securities Act" shall mean the Securities Act of 1933, as amended.
"Seller Group" shall have the meaning specified in Section 4.13.
"Shares" shall have the meaning set forth in Section 1.7(c).
"Subsidiary" shall mean, with respect to any Person, any entity of which
securities or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
are directly or indirectly owned by such Person.
"Surviving Corporation" shall have the meaning specified in Section 1.1.
"Tax" or "Taxes" shall mean all taxes, assessments or other governmental
charges (including, without limitation, excise taxes, sales taxes, taxes
withheld from employees' salaries and other withholding taxes and obligations
and all deposits required to be made with respect thereto), levies, assessments,
deficiencies, imports, duties, licenses and registration fees and charges of any
nature whatsoever, including any interest and penalties thereon or additions
thereto, imposed by any government or taxing authority which are levied upon the
property, assets, income or franchises of Company or the Company Subsidiaries by
virtue of the operations of their businesses.
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8
"Tax Return" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to Taxes, including any
schedule or attachment thereto, and including any amendment thereof.
"Third Party Claim" shall have the meaning specified in Section 8.5(b).
"Transaction Document" shall have the meaning specified in Section
10.15(a).
"Transaction Expense Amount" shall mean the aggregate amount of fees and
expenses of all accounting, financial and legal advisors to the Company and the
Trust incurred in connection with the transactions contemplated by this
Agreement to the extent such fees and expenses are paid by the Company.
"Trust" shall have the meaning specified in the preamble.
"Trust Agreement" shall have the meaning specified in Section 2.1.
"Trust Indemnified Parties" shall have the meaning specified in Section
8.2.
"Trust Persons" shall have the meaning specified in Section 10.15(a).
"Trustees" shall have the meaning specified in Section 2.1.
"Updated Environmental Conditions" shall have the meaning specified in
Section 5.10.
"US" shall mean the United States of America.
"US Benefit Plans" shall have the meaning specified in Section 2.16(b).
"US Government" shall mean the United States Government and any agencies,
instrumentalities and departments thereof.
<PAGE>
<PAGE>
AMENDMENT NO. 1 TO
MERGER AGREEMENT
dated as of
February 23, 1998
among
EAGLE-PICHER INDUSTRIES, INC. PERSONAL
INJURY SETTLEMENT TRUST,
EAGLE-PICHER INDUSTRIES, INC.,
EAGLE-PICHER HOLDINGS, INC.
and
E-P ACQUISITION, INC.
<PAGE>
<PAGE>
AMENDMENT NO. 1 TO MERGER AGREEMENT
AMENDMENT NO. 1 TO MERGER AGREEMENT (this "Amendment"), dated as of
February 23, 1998, among Eagle-Picher Industries, Inc. Personal Injury
Settlement Trust, an Ohio trust (the "Trust"), Eagle-Picher Industries, Inc., an
Ohio corporation (the "Company"), Eagle-Picher Holdings, Inc., a Delaware
corporation ("Holdings"), and E-P Acquisition, Inc., a Delaware corporation and
a wholly-owned subsidiary of Holdings ("Acquisition"), amending the Merger
Agreement, made as of December 23, 1997, among the Trust, the Company, Holdings
and Acquisition (the "Merger Agreement").
The parties to the Merger Agreement desire to amend the Merger Agreement on
the terms set forth herein. Accordingly, this Amendment shall be deemed to be
part of the Merger Agreement and all references in the Merger Agreement to "this
Agreement" (or similar terminology) shall be deemed to refer to the Merger
Agreement after giving effect to the amendments set forth in this Amendment. All
capitalized terms used herein, unless otherwise defined herein, are used as
defined in the Merger Agreement.
In consideration of the mutual covenants and agreements contained in the
Merger Agreement and in this Amendment, and notwithstanding anything in the
Merger Agreement to the contrary, the parties hereto agree as follows:
1. Amendment to Section 1.7(c) of the Merger Agreement. Section 1.7(c) of
the Merger Agreement is hereby amended by adding the language "from Acquisition
(and Holdings shall cause Acquisition to pay to the Trust)" after the language
"shall be converted into and become the right to receive" in the third line of
Section 1.7(c).
2. Amendment to Article 4 of the Merger Agreement. Article 4 of the Merger
Agreement is hereby amended by adding the following Sections 4.16, 4.17, 4.18
and 4.19:
4.16 Assignment to the Trust of Certain Claims Against Third Parties.
Except as set forth in Section 4.18, the Company and the Company
Subsidiaries hereby (i) assign to the Trust all rights, claims, and causes
of action of the Company and Company Subsidiaries against any third party
arising out of (x) any payment made by the Company or Company Subsidiaries
prior to the Closing Date to any claimant alleging bodily injury from
exposure to asbestos-containing products and (y) any defense costs incurred
by the Company or Company Subsidiaries prior to the Closing Date in the
defense of claims alleging bodily injury from exposure to
asbestos-containing products, (ii) agree to execute and deliver to the
Trust such documents as shall, in the reasonable opinion of the Trust, be
necessary to further evidence the assignment referred to in clause (i) of
this Section 4.16, and (iii) shall transfer to the Trust upon its request
originals or complete and correct copies of all files, records and other
documents relating to the matters referred to in clause (i) of this Section
4.16.
4.17 Claims by the Trust of Rights Under Certain Insurance Policies.
(a) Except as set forth in Section 4.18, the Company and the Company
<PAGE>
<PAGE>
3
Subsidiaries acknowledge that the Trust is an insured party under all general
liability, umbrella, and excess liability policies issued to the Company, a
Company Subsidiary or any current or former Affiliate of the Company prior to
December 23, 1997 to the extent such policies cover claims alleging bodily
injury arising out of exposure to lead-containing products (the "Lead
Policies").
(b) Except as set forth in Section 4.18, Holdings, the Company, the
Company Subsidiaries and their respective Affiliates (i) shall refrain from
opposing, contesting or impeding, in any manner whatsoever, any claim the
Trust may make for coverage under the Lead Policies for claims alleging
bodily injury as a result of exposure to lead-containing products and (ii)
shall provide reasonable cooperation to the Trust in pursuing any such
claims under the Lead Policies, provided that the Company shall not be
required to incur any unreasonable expense in providing such cooperation.
4.18 Certain Insurance Claims.
(a) Section 4.16 shall not apply to (i) any claims against Liberty
Mutual Insurance Company, or any of its Affiliates, of any rights, claims,
payments or causes of action in connection with the matter of Eagle-Picher
Industries, Inc. v. Eagle-Picher Industries, Inc. Personal Injury
Settlement Trust, Number 97-1032, pending before the United States
Bankruptcy Court for the Southern District of Ohio, Western Division,
relating to Eagle-Picher Industries, Inc., Debtors (Consolidated Case
Number 1-91-00100) (the "Liberty Mutual Settlement"), (ii) any claims
against General Accident Insurance Company of America or American
Employers' Insurance Company, of any rights, claims, payments or causes of
action in connection with the matter of Eagle-Picher Industries, Inc. v.
General Accident Insurance Company of America, et al., Number C-1-96-1082,
pending before the United States District Court for the Southern District
of Ohio, Western Division (the "Insurance Coverage Litigation") or (iii)
any other pending claims against insurance companies under policies issued
to Eagle-Picher Industries, Inc. or any affiliated company other than for
claims alleging bodily injury arising out of exposure to asbestos-related
and lead-related products.
(b) The Trust and its Affiliates shall refrain from opposing,
contesting or impeding, in any manner whatsoever, any claim Holdings, the
Company, the Company Subsidiaries and their respective subsidiaries may
make for coverage under the claims identified in Section 4.18(a) (including
the Liberty Mutual Settlement and the Insurance Coverage Litigation).
4.19 Payments to Trust. Holdings and the Trust shall enter into
arrangements, reasonably satisfactory to the Trust, which shall result in
the Trust receiving the payments contemplated by Sections 7.2(i) and 7.3
simultaneously with the Effective Time.
3. Amendment to Section 8.1 of the Merger Agreement. Section 8.1 of the
Merger Agreement is hereby amended by (i) inserting "or" at the end of Section
8.1(e) and (ii) adding the following Section 8.1(f):
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<PAGE>
4
(f) the matter of the Unofficial Committee of Co-Defendants v.
Eagle-Picher Industries, Inc., et al., Case Nos. 96-4309 and 97-149,
pending before the United States Court of Appeals for the Sixth Circuit,
relating to In re Eagle-Picher Industries, Inc., Debtor.
4. Amendment to Section 8.3 of the Merger Agreement. Section 8.3 of the
Merger Agreement is hereby amended by deleting "Section 8.1(c)" in the fifteenth
and eighteenth lines of Section 8.3 and replacing such language with "Section
8.1".
5. Amendment to Section 8.4 of the Merger Agreement. Section 8.4 of the
Merger Agreement is hereby amended by:
(a) (i) deleting "Section 8.1" in the first line of Section 8.4(a)(ii) and
replacing such language with "Sections 8.1(a), (b), (c), (d), or (e)", (ii)
deleting "Section 8.1" in the sixth line of Section 8.4(a)(ii) and replacing
such language with "Sections 8.1(a), (b), (c), (d) and (e)", and (iii) deleting
"and" at the end of Section 8.4(a)(ii);
(b) adding the following Section 8.4(a)(iii):
(iii) The cumulative aggregate amount of all Losses for which the
Trust shall be liable pursuant to Section 8.1(f) shall in no event exceed
an amount equal to (x) the sum of the Merger Consideration plus Two Hundred
Fifty Million Dollars ($250,000,000) less (y) the cumulative aggregate
amount of all Losses for which the Trust shall be liable pursuant to
Sections 8.1 (a), (b), (c), (d) and (e); and
(c) replacing "(iii)" at the beginning of Section 8.4(a)(iii) with "(iv)".
6. Amendment to Article 10 of the Merger Agreement . Article 10 of the
Merger Agreement is hereby amended by adding the following Section 10.17:
10.17 Specific Performance. The parties recognize that any breach of
any covenant or agreement contained in this Agreement may give rise to
irreparable harm for which money damages would not be an adequate remedy
and accordingly agree that, in addition to other remedies, any
non-breaching party will be entitled to enforce the covenants and
agreements of a breaching party contained herein by a decree of specific
performance without the necessity of proving the inadequacy as a remedy of
money damages.
7. Ratification. Except as amended hereby, the Merger Agreement continues
and shall remain in full force and effect in all respects. In the event of any
conflict or inconsistency between the terms of this Amendment and the Merger
Agreement, the terms of this Amendment shall govern.
8. Miscellaneous. This Amendment may be executed simultaneously in two (2)
or more counterparts, each of which shall be deemed to be an original, but all
of which together shall together constitute and be the same instrument. This
Amendment shall in all respects be interpreted, construed and governed by and in
accordance with the laws of the State of New
<PAGE>
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5
York, disregarding any conflict of laws provisions which might otherwise require
the application of the law of another jurisdiction.
<PAGE>
<PAGE>
6
IN WITNESS WHEREOF, the duly authorized officers or representatives of the
parties hereto have duly executed this Amendment on the date first written
above.
<TABLE>
<S> <C>
EAGLE-PICHER HOLDINGS, INC. EAGLE-PICHER INDUSTRIES, INC.
PERSONAL INJURY SETTLEMENT TRUST
By: /s/ JOEL P. WYLER By: /s/ RUTH R. McMULLIN
---------------------------- ---------------------------
Name: Joel P. Wyler Name: Ruth R. McMullin
Title: Chairman and President Title: Chairperson of the Trustees
E-P ACQUISITION, INC. EAGLE-PICHER INDUSTRIES, INC.
By: /s/ JOEL P. WYLER By: /s/ ANDRIES RUIJSSENAARS
----------------------------- ----------------------------
Name: Joel P. Wyler Name: Andries Ruijssenaars
Title: Chairman and President Title: President and Chief Operating Officer
</TABLE>
<PAGE>
<PAGE>
E-P ACQUISITION, INC.
to be merged into Eagle-Picher Industries, Inc.
$220,000,000 9 3/8% Senior Subordinated Notes due 2008
NOTES PURCHASE AGREEMENT
February 19, 1998
New York, New York
SBC Warburg Dillon Read Inc.
535 Madison Avenue
New York, New York 10022
ABN AMRO Incorporated
1325 Avenue of the Americas
New York, New York 10019
Ladies and Gentlemen:
E-P Acquisition, Inc., a Delaware corporation (the "ISSUER"), to be
merged on or prior to the Closing Date (as defined herein) into Eagle-Picher
Industries, Inc., an Ohio corporation (the "COMPANY"), and Eagle-Picher
Holdings, Inc. ("PARENT") jointly and severally agree with you as follows:
1. ISSUANCE OF NOTES. The Issuer proposes to issue and sell to SBC
Warburg Dillon Read Inc. and ABN AMRO Incorporated (together, the "INITIAL
PURCHASERS") an aggregate of $220,000,000 principal amount of 9 3/8% Senior
Subordinated Notes due 2008 (the "ORIGINAL NOTES"). The Original Notes will be
issued pursuant to an indenture (the "NOTES INDENTURE"), to be dated the Closing
Date (as defined below), by and among the Issuer, the Guarantors and The Bank of
New York, as trustee (the "TRUSTEE"). The Issuer's obligations under the
Original Notes will be succeeded to, upon the merger, by the Company and will be
unconditionally guaranteed (the "GUARANTEES") on an unsecured senior
subordinated basis by Parent and the Subsidiary Guarantors (collectively, the
"Guarantors"). All references herein to the Original Notes include the related
Guarantees, unless the context otherwise requires. Capitalized terms used but
not otherwise defined herein shall have the meanings given to such terms in the
Notes Indenture or the Offering Memorandum (as defined below).
<PAGE>
<PAGE>
The Original Notes will be offered and sold to the Initial Purchasers
pursuant to an exemption from the registration requirements under the Securities
Act of 1933, as amended (the "ACT"). The Issuer has prepared a preliminary
offering memorandum dated February 4, 1998 (the "PRELIMINARY OFFERING
MEMORANDUM") and a final offering memorandum dated February 20, 1998 (the
"OFFERING MEMORANDUM") relating to the Issuer, the Company, the Guarantors and
the Original Notes.
The Initial Purchasers have advised the Issuer that the Initial
Purchasers intend, as soon as they deem practicable after this Notes Purchase
Agreement has been executed and delivered, to resell (the "EXEMPT RESALES") the
Original Notes purchased by the Initial Purchasers under this Notes Purchase
Agreement (this "AGREEMENT") in private sales exempt from registration under the
Act on the terms set forth in the Offering Memorandum, as amended or
supplemented, solely to (i) persons whom the Initial Purchasers reasonably
believe to be "qualified institutional buyers," as defined in Rule 144A under
the Act ("QIBS"), and (ii) other eligible purchasers pursuant to offers and
sales that occur outside the United States within the meaning of Regulation S
under the Act; the persons specified in clauses (i) and (ii) are sometimes
collectively referred to herein as the "ELIGIBLE PURCHASERS."
Holders (including subsequent transferees) of the Original Notes will
have the registration rights set forth in the registration rights agreement (the
"REGISTRATION RIGHTS AGREEMENT") to be dated the Closing Date in form and
substance satisfactory to the Initial Purchasers and conforming to the
description thereof in the Offering Memorandum, for so long as such Original
Notes constitute "TRANSFER RESTRICTED SECURITIES" (as defined in the
Registration Rights Agreement). Pursuant to the Registration Rights Agreement,
the Issuer will agree to (i) file with the Securities and Exchange Commission
(the "COMMISSION") under the circumstances set forth in the Registration Rights
Agreement, (a) a registration statement under the Act (the "EXCHANGE OFFER
REGISTRATION STATEMENT") relating to a new issue of debt securities (the "NEW
NOTES" and, together with the Original Notes, the "NOTES," which term includes
the Guarantees related thereto) to be offered in exchange for the Original Notes
(the "EXCHANGE OFFER") and issued under the Notes Indenture or an indenture
substantially identical to the Notes Indenture and/or (b) under certain
circumstances set forth in the Registration Rights Agreement, a shelf
registration statement pursuant to Rule 415 under the Act (the "SHELF
REGISTRATION STATEMENT" and, together with the Exchange Offer Registration
Statement, the "REGISTRATION STATEMENTS") relating to the resale by certain
holders of the Original Notes, and (ii) to cause such Registration Statements to
be declared effective. This Agreement, the Notes, the
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<PAGE>
Notes Indenture and the Registration Rights Agreement are hereinafter sometimes
referred to collectively as the "OPERATIVE DOCUMENTS."
Upon original issuance of the Original Notes and until such time as the
same is no longer required under the applicable requirements of the Act, the
Original Notes shall bear the legend relating thereto set forth under "Transfer
Restrictions" in the Offering Memorandum.
Concurrently with the offering of Notes hereby, Parent is offering (the
"PREFERRED STOCK OFFERING") approximately $80.0 million of gross proceeds of 11
3/4% Cumulative Redeemable Exchangeable Preferred Stock (the "PREFERRED STOCK").
In connection with the Acquisition (as defined below) and the offering of the
Original Notes hereby, the Issuer, the Company and the Guarantors will enter
into a Credit Agreement (the "CREDIT AGREEMENT") with ABN AMRO Bank N.V., as
Agent, and the other agents and lenders party thereto. The net proceeds from the
sale of the Original Notes and from the Preferred Stock Offering and borrowings
under the New Credit Agreement will be used as described under "The Acquisition
and Use of Proceeds" in the Offering Memorandum, including, but not exclusively,
(i) to pay the Merger Consideration in connection with the merger of the Issuer
into the Company (the "ACQUISITION") pursuant to a Merger Agreement (the "MERGER
AGREEMENT") dated as of December 23, 1997 by and among the Issuer, Parent, the
Company and the Eagle-Picher Industries, Inc. Personal Injury Settlement Trust
(the "TRUST") and (ii) to repay the total amount outstanding under the 10%
Debentures and (iii) to redeem 660,000 shares of Common Stock from the Trust.
2. AGREEMENTS TO SELL AND PURCHASE. On the basis of the
representations, warranties and covenants contained in this Agreement, and
subject to the terms and conditions contained in this Agreement, the Issuer
agrees to issue and sell to the Initial Purchasers, and the Initial Purchasers
agree to purchase from the Issuer, severally and not jointly, the aggregate
principal amount of Original Notes set forth opposite its name in Schedule I
hereto. The purchase price for the Original Notes shall be 99.836% of their
principal amount. The Guarantors shall unconditionally guarantee on an unsecured
senior subordinated basis the Issuer's obligations under the Notes.
3. DELIVERY AND PAYMENT. Delivery of, and payment of the purchase
price for, the Original Notes shall be made at 10:00 a.m., New York City time,
on February 24, 1998 (such date and time, the "CLOSING DATE") at the offices of
Howard, Darby & Levin, 1330 Avenue of the Americas, New York, New York 10019.
The Closing Date and the location of delivery of and the form of payment for the
Original Notes may be varied by mutual agreement between the Initial Purchasers
and the Issuer.
3
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<PAGE>
One or more of the Original Notes in global form registered in such
names as the Initial Purchasers may request upon at least one business day's
notice prior to the Closing Date, having an aggregate principal amount
corresponding to the aggregate principal amount of the Original Notes, shall be
delivered by the Issuer to the Initial Purchasers (or as the Initial Purchasers
direct), against payment by the Initial Purchasers of the purchase price
therefor by means of transfer of immediately available funds to such account or
accounts as the Issuer shall specify prior to the Closing Date, or by such means
as the parties hereto shall agree prior to the Closing Date. The Original Notes
in global form shall be made available to the Initial Purchasers for inspection
not later than 1:00 p.m. on the business day immediately preceding the Closing
Date.
4. AGREEMENTS OF THE ISSUER. The Issuer covenants and agrees
with the Initial Purchasers as follows:
(a) To furnish the Initial Purchasers and those persons identified by
the Initial Purchasers, without charge, with as many copies of the
Preliminary Offering Memorandum and the Offering Memorandum, and any
amendments or supplements thereto, as the Initial Purchasers may
reasonably request. The Issuer consents to the use of the Preliminary
Offering Memorandum and the Offering Memorandum, and any amendments and
supplements thereto required pursuant to this Agreement, by the Initial
Purchasers in connection with Exempt Resales that are in compliance
with this Agreement.
(b) Not to amend or supplement the Offering Memorandum prior to the
Closing Date unless the Initial Purchasers shall previously have been
advised of, and shall not have objected to, such amendment or
supplement within a reasonable time, but in any event not longer than
two business days after being furnished with a copy of such amendment
or supplement. The Issuer shall promptly prepare, upon the Initial
Purchasers' reasonable request, any amendment or supplement to the
Offering Memorandum that may be necessary or advisable in connection
with Exempt Resales.
(c) If, during the time that an Offering Memorandum is required to be
delivered in connection with any Exempt Resales or market-making
transactions after the date of this Agreement and prior to the
consummation of the Exchange Offer, any event shall occur that, in the
judgment of the Issuer or in the judgment of counsel to the Initial
Purchasers, makes any statement of a material fact in the Offering
Memorandum as then amended or supplemented untrue or that requires the
4
<PAGE>
<PAGE>
making of any additions to or changes in the Offering Memorandum in
order to make the statements in the Offering Memorandum as then amended
or supplemented, in the light of the circumstances under which they are
made, not misleading, or if it is necessary to amend or supplement the
Offering Memorandum to comply with all applicable laws, the Issuer
shall promptly notify the Initial Purchasers of such event and prepare
an appropriate amendment or supplement to the Offering Memorandum so
that (i) the statements in the Offering Memorandum as amended or
supplemented will, in the light of the circumstances at the time that
the Offering Memorandum is delivered to prospective Eligible
Purchasers, not be misleading and (ii) the Offering Memorandum will
comply with applicable law.
(d) To cooperate with the Initial Purchasers and counsel to the
Initial Purchasers in connection with the qualification or registration
of the Original Notes under the securities or Blue Sky laws of such
jurisdictions as the Initial Purchasers may request and to continue
such qualification in effect so long as required for the Exempt
Resales. Notwithstanding the foregoing, neither the Issuer nor the
Company nor the Guarantors shall be required to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified or to
file a general consent to service of process in any such jurisdiction
or subject itself to taxation in excess of a nominal dollar amount in
any such jurisdiction where it is not then so subject.
(e) To advise the Initial Purchasers promptly and, if requested by the
Initial Purchasers, to confirm such advice in writing, of the issuance
by any state securities commission of any stop order suspending the
qualification or exemption from qualification of any of the Original
Notes for offering or sale in any jurisdiction, or the initiation of
any proceeding for such purpose by any state securities commission or
other regulatory authority. The Issuer shall use its reasonable best
efforts to prevent the issuance of any stop order or order suspending
the qualification or exemption of any of the Original Notes under any
state securities or Blue Sky laws, and if at any time any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption of any of the Original
Notes under any state securities or Blue Sky laws, the Issuer shall use
its reasonable best efforts to obtain the withdrawal or lifting of such
order at the earliest possible time.
(f) Whether or not the transactions contemplated by this Agreement are
consummated or this Agreement becomes effective or is terminated, to
pay all costs, expenses, fees, disbursements (including fees, expenses
and disbursements of counsel to the Issuer, the Guarantors and
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<PAGE>
the Company, but not of counsel to the Initial Purchasers (except
pursuant to clause (iv) herein) or expenses of the Initial Purchases if
the transactions contemplated hereby are consummated) and stamp,
documentary or similar taxes incident to and in connection with: (i)
the preparation, printing and distribution of the Preliminary Offering
Memorandum and the Offering Memorandum (including, without limitation,
financial statements) and all amendments and supplements thereto, (ii)
the preparation and delivery of the Operative Documents and all other
agreements, memoranda, correspondence and documents prepared and
delivered in connection with this Agreement and with the Exempt
Resales, (iii) the issuance, transfer and delivery by the Issuer and
the Guarantors of the Original Notes and the Guarantees, respectively,
to the Initial Purchasers, (iv) the qualification or registration of
the Notes for offer and sale under the securities or Blue Sky laws of
the several states of the United States or provinces of Canada
(including, without limitation, the cost of printing and mailing a
preliminary and final Blue Sky memorandum and the fees and
disbursements of counsel to the Initial Purchasers relating thereto),
(v) the furnishing of such copies of the Preliminary Offering
Memorandum and the Offering Memorandum, and all amendments and
supplements thereto, as may be reasonably requested for use in
connection with Exempt Resales, (vi) the preparation of certificates
for the Notes, (vii) the application for quotation of the Notes in the
National Association of Securities Dealers, Inc. ("NASD") Automated
Quotation System - PORTAL ("PORTAL"), including, but not limited to,
all listing fees and expenses, (viii) the approval of the Notes by The
Depository Trust Company ("DTC") for "book-entry" transfer, (ix) the
rating of the Notes by rating agencies, (x) the fees and expenses of
the Trustee and its counsel and (xi) the performance by the Issuer, the
Company and the Guarantors of their other obligations under the
Operative Documents, including, but not limited to, the fees,
disbursements and expenses of the Issuer's counsel and accountants.
(g) To use the proceeds from the sale of the Original Notes in the
manner described in the Offering Memorandum under the caption "The
Acquisition and Use of Proceeds."
(h) To do and perform all things required to be done and performed
under this Agreement by it prior to or after the Closing Date and to
satisfy all conditions precedent on its part to the delivery of the
Original Notes.
(i) Not to, and not to permit any Subsidiary of the Company to,
sell, offer for sale or solicit offers to buy or otherwise negotiate
in respect
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<PAGE>
of any security (as defined in the Act) that would be integrated with
the sale of the Original Notes in a manner that would require the
registration under the Act of the sale of the Original Notes to the
Initial Purchasers or any Eligible Purchasers.
(j) During the period of two years after the Closing Date or, if
earlier, until such time as the Original Notes are no longer restricted
securities (as defined in Rule 144 under the Act), not to, not to
permit any Subsidiary to, and to use its reasonable best efforts to
cause its other affiliates (as defined in Rule 144 under the Act) not
to, resell any of the Original Notes that have been reacquired by any
of them.
(k) Not to engage, not to allow any Subsidiary to engage, and to use
its reasonable best efforts to cause its other affiliates and any
person acting on its behalf (other than in any case any Initial
Purchaser, as to whom the Issuer and Parent make no covenant) not to
engage, in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Act) in connection with
any offer or sale of the Original Notes in the United States.
(l) Not to engage, not to allow any Subsidiary to engage, and to use
its reasonable best efforts to cause its other affiliates and any
person acting on its behalf (other than in any case any Initial
Purchaser, as to whom the Issuer and Parent make no covenant) not to
engage in any directed selling effort with respect to the Original
Notes, and agrees to comply with the offering restrictions requirement
of Regulation S under the Act. Terms used in this paragraph have the
meanings given to them by Regulation S.
(m) In connection with the offering, until 90 days after the Closing
Date, not to, not to permit any Subsidiary to, and to use its
reasonable best efforts to cause its other affiliates not to, either
alone or with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial interest
any Original Notes; and neither it nor any of its affiliates will make
bids or purchases for the purpose of creating actual, or apparent,
active trading in, or of raising the price of, the Original Notes.
(n) During the period of two years after the Closing Date or, if
earlier, until such time as the Original Notes are no longer restricted
securities (as defined in Rule 144 under the Act), not to be or become
a closed-end investment company required to be registered, but not
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registered, under the Investment Company Act of 1940, as amended (the
"INVESTMENT COMPANY ACT").
(o) From and after the Closing Date, for so long as any of the Notes
remain outstanding and are "restricted securities" within the meaning
of Rule 144(a)(3) under the Act and during any period in which the
Issuer is not subject to Section 13 or 15(d) of the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), to make available upon
request the information required by Rule 144(d)(4) under the Act to (i)
any Holder or beneficial owner or Notes in connection with any sale of
such Notes and (ii) any prospective purchase of such Notes from any
such Holder or beneficial owner designated by the Holder or beneficial
owner. The Issuer will pay the expenses of printing and distributing
such documents.
(p) To comply with all its agreements set forth in the Registration
Rights Agreement and all agreements set forth in the representations
letter of the Issuer to DTC relating to the approval of the Notes by
DTC for "book-entry" transfer and to obtain approval of the Notes by
DTC for "book-entry" transfer.
(q) To use its reasonable best efforts to effect the inclusion of
the Original Notes in PORTAL.
(r) Prior to the Closing Date, to furnish to the Initial Purchasers,
as soon as they have been prepared by the Company and its Subsidiaries,
a copy of any regularly prepared final internal financial statements of
the Company and its Subsidiaries for any period subsequent to the
period covered by the financial statements appearing in the Offering
Memorandum and prior to the Closing Date.
(s) Not to distribute prior to the Closing Date any offering material
in connection with the offer and sale of the Original Notes other than
the Preliminary Offering Memorandum and the Offering Memorandum.
(t) To cause each Original Note to bear the legend set forth in the
form of Original Note set forth in the Notes Indenture until such
legend shall no longer be necessary or advisable because the Notes are
no longer subject to the restrictions on transfer described therein.
5. REPRESENTATIONS AND WARRANTIES. (a) Each of the Issuer
and Parent represents and warrants to the Initial Purchasers that:
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(i) Each of the Preliminary Offering Memorandum and the Offering
Memorandum has been prepared in connection with the Exempt Resales.
Neither the Preliminary Offering Memorandum nor the Offering
Memorandum, nor any supplement or amendment thereto, contains any
untrue statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading;
provided, however, that the Issuer and Parent make no representation
or warranty with respect to information contained in or omitted from
the Preliminary Offering Memorandum or the Offering Memorandum, as
supplemented or amended, in reliance upon and in conformity with the
information set forth in Section 9 hereto and furnished to the Issuer
and Parent in writing by or on behalf of the Initial Purchasers
expressly for inclusion in the Preliminary Offering Memorandum or the
Offering Memorandum or any supplement or amendment thereto. No order
preventing the use of either the Preliminary Offering Memorandum or
the Offering Memorandum, or any order asserting that any of the
transactions contemplated by this Agreement are subject to the
registration requirements of the Act, has been issued or to the
knowledge of Issuer or Parent threatened.
(ii) There are no securities of either the Company or the Guarantors
that are listed on a national securities exchange registered under
Section 6 of the Exchange Act or that are quoted in a United States
automated interdealer quotation system.
(iii) As of the date of this Agreement, the Trust beneficially owns
100% of the outstanding common stock equity ownership of the Company
and, as of the Closing Date, the Company shall have an authorized
capitalization as set forth under the heading entitled "Company Pro
Forma" in the section of the Offering Memorandum entitled
"Capitalization". Attached as Schedule A is a true and complete list
of all Subsidiaries, their jurisdictions of incorporation, type of
entity and equity ownership. All of the issued and outstanding shares
of capital stock of each Subsidiary have been duly authorized and
validly issued, are fully paid and nonassessable. All shares of
capital stock of the Subsidiaries that are owned of record directly by
the Company or indirectly by a wholly-owned Subsidiary of the Company
are owned free and clear of any lien, security interest, pledge,
charge, encumbrance, equity or claim; none of the outstanding shares
of capital stock of each such Subsidiary was issued in violation of,
or subject to, any preemptive or similar rights or the charter or
by-laws of the Issuer, the Company or such Subsidiary or any agreement
to which the Issuer, the Company or such Subsidiary is a party.
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Upon the closing of the Acquisition, there will not be any outstanding
rights, warrants or options to acquire, or instruments convertible
into or exchangeable for, any shares of capital stock or other equity
interest of the Company's Subsidiaries, which shares of capital stock
or other equity interests are held by the Company.
(iv) The Issuer, the Company, Parent and each Subsidiary has been
duly incorporated, is validly existing as a corporation in good
standing (or its equivalent in the case of non-U.S. Subsidiaries)
under the laws of its respective jurisdiction of incorporation and has
all requisite corporate power and authority, and all necessary
authorizations, approvals, orders, licenses, certificates and permits
of and from regulatory or governmental officials, bodies and
tribunals, except where the failure to obtain such authorizations,
approvals, orders, licenses, certificates and permits would not
reasonably be expected to have a Material Adverse Effect, to (A) carry
on its business as it is currently being conducted and as described in
the Offering Memorandum and (B) own, lease, license and operate its
respective properties in accordance with its business as currently
conducted. The Company and each Restricted Subsidiary is duly
qualified and in good standing as a foreign corporation authorized to
do business in each jurisdiction in which the nature of its business
or its ownership or leasing of property requires such qualification,
except where the failure to be so qualified would not, either
individually or in the aggregate, be reasonably expected to have a
Material Adverse Effect. A "MATERIAL ADVERSE EFFECT" means any
material adverse effect on the business, condition (financial or
other), properties, results of operations or prospects of the Company
and its Subsidiaries, taken as a whole.
(v) Each of the Issuer, the Company and each Guarantor has all
requisite corporate power and authority to execute, deliver and
perform all of its obligations under the Operative Documents to which
it is a party and to consummate the transactions contemplated by the
Operative Documents to be consummated on its part and, without
limitation, the Issuer has all requisite corporate power and authority
to issue, sell and deliver the Notes and each Guarantor has all
requisite corporate power and authority to execute, deliver and
perform all its obligations under its Guarantee.
(vi) This Agreement has been duly and validly authorized, executed
and delivered by the Issuer and Parent.
(vii) The Notes Indenture, including the Guarantees set forth
therein, has been, or upon the Closing Date will be, duly and validly
authorized by the Issuer and each Guarantor and, when duly executed
and
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delivered by the Issuer, each Guarantor and the Trustee (assuming the
due authorization, execution and delivery thereof by the Trustee),
will be a legal, valid and binding obligation of each of the Issuer
and each Guarantor, enforceable against each of them in accordance
with its terms, except as enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be
brought. The Notes Indenture, when executed and delivered, will
conform in all material respects to the description thereof in the
Preliminary Offering Memorandum and the Offering Memorandum.
(viii) The Original Notes have been, or upon the Closing Date will
be, duly and validly authorized for issuance and sale to the Initial
Purchasers by the Issuer and, when issued, authenticated and delivered
by the Issuer against payment by the Initial Purchasers in accordance
with the terms of this Agreement and the Notes Indenture, the Original
Notes will be legal, valid and binding obligations of the Issuer,
entitled to the benefits of the Notes Indenture and enforceable
against the Issuer in accordance with their terms, except as
enforcement thereof may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
affecting the enforcement of creditors' rights generally and by
general principles of equity and the discretion of the court before
which any proceedings therefor may be brought. The Original Notes,
when issued, authenticated and delivered, will conform in all material
respects to the description thereof in the Preliminary Offering
Memorandum and the Offering Memorandum.
(ix) The New Notes have been, or upon the Closing Date will be, duly
and validly authorized for issuance by the Issuer and, when issued,
authenticated and delivered by the Issuer in accordance with the terms
of the Registration Rights Agreement, the Exchange Offer and the Notes
Indenture, the New Notes will be legal, valid and binding obligations
of the Issuer, entitled to the benefits of the Notes Indenture and
enforceable against the Issuer in accordance with their terms, except
that enforceability of the New Notes may be limited by bankruptcy,
insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditors' rights generally
and by general principles of equity and the discretion of the court
before which any proceedings therefor may be brought. The New Notes,
when issued, authenticated and delivered, will conform in all material
respects to the
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description thereof in the Preliminary Offering Memorandum and the
Offering Memorandum.
(x) The Registration Rights Agreement has been, or upon the Closing
Date will be, duly and validly authorized, executed and delivered by
the Issuer and, when duly executed and delivered by the Issuer and the
Initial Purchasers, will constitute a legal, valid and binding
obligation of the Issuer, enforceable against it in accordance with
its terms, except that (A) enforceability of the Registration Rights
Agreement may be limited by bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles
of equity and the discretion of the court before which any proceedings
therefor may be brought and (B) any rights to indemnity or
contribution thereunder may be limited by federal and state securities
laws and public policy considerations. The Registration Rights
Agreement will conform in all material respects to the description
thereof in the Preliminary Offering Memorandum and the Offering
Memorandum.
(xi) All taxes, fees and other governmental charges that are due and
payable on or prior to the Closing Date in connection with the
execution, delivery and performance of the Operative Documents, the
Credit Agreement and the Merger Agreement and the execution, delivery
and sale of the Original Notes shall have been paid by or on behalf of
the Issuer at or prior to the Closing Date.
(xii) None of the Issuer, the Company, Parent or any Subsidiary is
(A) in violation of its charter, constitutive documents or bylaws or
(B) in default (or, with notice or lapse of time or both, would be in
default) in the performance or observance of any obligation,
agreement, covenant or condition contained in any bond, debenture,
note, indenture, mortgage, deed of trust, loan or credit agreement,
lease, license, franchise agreement, authorization, permit,
certificate or other agreement or instrument to which any of them is a
party or by which any of them is bound or to which any of their assets
or properties is subject (collectively, "AGREEMENTS AND INSTRUMENTS"),
or (C) in violation of any law, statute, rule, regulation, judgment,
order or decree of any domestic or foreign court with jurisdiction
over any of them or any of their assets or properties or other
governmental or regulatory authority, agency or other body, that, in
the case of clauses (B) and (C) herein, would reasonably be expected
to have a Material Adverse Effect. There exists no condition that,
with notice, the passage of time or otherwise, would constitute a
default by the Issuer, the Company, Parent or any Subsidiary under any
such document or
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instrument or result in the imposition of any penalty or the
acceleration of any indebtedness, other than penalties, defaults or
conditions that would not have a Material Adverse Effect.
(xiii) The Credit Agreement has been, or upon the Closing Date will
be, authorized, executed and delivered by the Issuer, the Guarantors,
ABN AMRO Bank N.V., as Agent, and the other agents and lenders party
thereto will constitute the legal, valid and binding obligations of
the Issuer and the Guarantors, enforceable against the Issuer and the
Guarantors, in accordance with their terms, except that enforceability
of the Credit Agreement may be limited by bankruptcy, insolvency,
reorganization, fraudulent conveyance, moratorium or similar laws
affecting the enforceability of creditors' rights generally and by
general principles of equity and the discretion of the court before
which any proceedings therefor may be brought. The Credit Agreement
conforms in all material respects to the description thereof in the
Preliminary Offering Memorandum and the Offering Memorandum.
(xiv) The Merger Agreement has been duly and validly authorized,
executed and delivered by the Issuer and Parent, and constitutes a
legal, valid and binding obligation of the Issuer and Parent
enforceable against the Issuer and Parent in accordance with its terms
except that enforceability of the Merger Agreement may be limited by
bankruptcy, insolvency, reorganization, fraudulent conveyance,
moratorium or similar laws affecting the enforceability of creditors'
rights generally and by general principles of equity and the
discretion of the court before which any proceedings therefor may be
brought.
(xv) None of (A) the execution and delivery by the Issuer and Parent
of this Agreement and the Registration Rights Agreement, (B) the
execution, delivery and performance by the Issuer or each of the
Guarantors of (x) the other Operative Documents, (y) the Credit
Agreement or (z) the Merger Agreement to the extent each is a party or
(C) the consummation of the offer and sale of the Original Notes, the
Preferred Stock Offering or the Acquisition does or will violate,
conflict with or constitute a breach of any of the terms or provisions
of, or a default under (or an event that with notice or the lapse of
time, or both, would constitute a default), or require consent under,
or result in the creation or imposition of a lien (other than, as of
the Closing Date, the liens imposed under the Credit Agreement),
charge or encumbrance on any property or assets of the Issuer, the
Company, Parent or any Subsidiary or an acceleration of any
indebtedness of the Issuer, the Company, Parent or any Subsidiary
pursuant to, (i) the charter, constitutive documents or bylaws of
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the Issuer, the Company, Parent or any Subsidiary, (ii) assuming the
consummation of the Acquisition and the transactions contemplated
thereby, any Agreement or Instrument, (iii) any law, statute, rule or
regulation applicable to the Issuer, the Company, Parent or any
Subsidiary or their respective assets or properties or (iv) any
judgment, order or decree of any domestic or foreign court or
governmental agency or authority having jurisdiction over the Issuer,
the Company, Parent or any Subsidiary or their respective assets or
properties. Assuming the accuracy of the representations and
warranties of the Initial Purchasers in Section 5(b) of this
Agreement, no consent, approval, authorization or order of, or filing,
registration, qualification, license or permit of or with, any court
or governmental agency, body or administrative agency, domestic or
foreign, is required to be obtained or made by the Issuer, the Company
or any Guarantor for (1) the execution and delivery by the Issuer or
Parent of this Agreement or the Registration Rights Agreement, (2) the
execution, delivery and performance by the Issuer and each Guarantor
of (x) the other Operative Documents, (y) the Credit Agreement or (z)
the Merger Agreement to the extent each is a party or (3) the
consummation of the Acquisition or any of the transactions
contemplated thereby, except (x) such as have been or will be obtained
or made on or prior to the Closing Date, (y) registration of the
Exchange Offer or resale of the Notes under the Act pursuant to the
Registration Rights Agreement or (z) such as may be required by the
NASD. No consents or waivers from any other person or entity are
required for the execution, delivery and performance of this Agreement
or any of the other Operative Documents, the execution, delivery and
performance of the Merger Agreement or the Credit Agreement or the
consummation of the Preferred Stock Offering or the Acquisition or any
of the transactions contemplated thereby, other than such consents and
waivers as have been obtained or will be obtained prior to the Closing
Date.
(xvi) The Issuer has delivered or made available to the Initial
Purchasers true and correct executed copies of the Merger Agreement
and the Credit Agreement and there have been no amendments,
alterations or modifications thereto or waivers of any of the
provisions thereof. The representations and warranties of the Issuer
and each Guarantor set forth in the Merger Agreement and the Credit
Agreement will be true and correct in all material respects as of the
Closing Date (except to the extent that any such representation or
warranty was expressly made as of any other date, in which case such
representation and warranty was true and correct as of such date).
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(xvii) Except as set forth in the Offering Memorandum, there is (A)
no action, suit or proceeding before or by any court, arbitrator or
governmental agency, body or official, domestic or foreign, now
pending or, to the knowledge of the Issuer or Parent, threatened or
contemplated, to which the Issuer, the Company, Parent or any
Subsidiary is or may be a party or to which the business, assets or
property of such person is or may be subject, (B) no statute, rule,
regulation or order that has been enacted, adopted or issued or, to
the knowledge of the Issuer or Parent, that has been proposed by any
governmental body or agency, domestic or foreign, (C) no injunction,
restraining order or order of any nature by a federal or state court
or foreign court of competent jurisdiction to which the Issuer, the
Company, Parent or any Subsidiary is or may be subject that (x) in the
case of clause (A) above, if determined adversely to the Issuer, the
Company, Parent or any Subsidiary, would reasonably be expected,
either individually or in the aggregate, (1) to have a Material
Adverse Effect or (2) to interfere with or adversely affect the
issuance of the Notes or the Guarantees in any jurisdiction or
adversely affect the consummation of the transactions contemplated by
any of the Operative Documents, the Merger Agreement or the Credit
Agreement and (y) in the case of clauses (B) and (C) above, would
reasonably be expected, either individually or in the aggregate, (1)
to have a Material Adverse Effect or (2) to interfere with or
adversely affect the issuance of the Notes or the Guarantees in any
jurisdiction or adversely affect the consummation of the transactions
contemplated by any of the Operative Documents, the Merger Agreement
or the Credit Agreement. Every request of any securities authority or
agency of any jurisdiction for additional information with respect to
the Notes that has been received by the Issuer, Parent or their
counsel prior to the date hereof has been, or will prior to the
Closing Date be, complied with in all material respects.
(xviii) Except as would not reasonably be expected to have a Material
Adverse Effect, (a) no labor disturbance by the employees of the
Company or any Subsidiary exists or, to the actual knowledge of the
Issuer or Parent, is imminent; (b) the Issuer, the Company, Parent and
each Subsidiary are in compliance in all respects with, as applicable,
all presently applicable provisions of the Employee Retirement Income
Security Act of 1974, as amended, including the regulations and
published interpretations thereunder ("ERISA"); (c) no "reportable
event" (as defined in ERISA) has occurred with respect to any "pension
plan" (as defined in ERISA) for which the Issuer, the Guarantors, the
Company or any Subsidiary would have any liability; (d) none of the
Issuer, the Company, Parent or any Subsidiary has incurred or expects
to incur liability under (A) Title IV of ERISA with respect to
termination of, or
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withdrawal from, any "pension plan" or (B) Section 412 or 4971 of the
Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and (e) each
"pension plan" that is maintained or contributed to by the Company or
its Subsidiaries that is intended to be qualified under Section 401(a)
of the Code is so qualified and nothing has occurred, whether by
action or by failure to act, that would cause the loss of such
qualification.
(xix) Except as set forth in the Offering Memorandum, each of the
Company and each Subsidiary (A) is in compliance with, or not subject
to costs or liabilities under, all local, state, provincial, federal
and foreign laws, regulations, rules of common law, orders and
decrees, as in effect as of the date hereof, and any present judgments
and injunctions issued or promulgated thereunder relating to pollution
or protection of public and employee health and safety, the
environment or hazardous or toxic substances or wastes, pollutants or
contaminants applicable to it or its business or operations or
ownership or use of its property ("ENVIRONMENTAL LAWS"), other than
noncompliance or such costs or liabilities that would not reasonably
be expected to have a Material Adverse Effect, and (B) possesses all
permits, licenses or other approvals required under applicable
Environmental Laws, except where the failure to possess any such
permit, license or other approval would not reasonably be expected to
have a Material Adverse Effect. All currently pending and, to the
knowledge of the Issuer or Parent, threatened proceedings, notices of
violation, demands, notices of potential responsibility or liability,
suits and existing environmental conditions by any governmental
authority which the Company or its Subsidiaries could reasonably
expect to result in a Material Adverse Effect are fully and accurately
described in all material respects in the Offering Memorandum.
(xx) Each of the Company and each Subsidiary has (A) good and
marketable title to all of the properties and assets described in the
Offering Memorandum as owned by it and good and marketable title to
the leasehold estates in the real and personal property described in
the Offering Memorandum as leased by them, free and clear of all Liens
(as defined in the Notes Indenture), except for Liens described in the
Offering Memorandum and Liens permitted under the Notes Indenture, and
such Liens as would not reasonably be expected to have a Material
Adverse Effect on the rights of the holders of the Notes, (B) all
licenses, certificates, permits, authorizations, approvals, franchises
and other rights from, and has made all declarations and filings with,
all federal, state, local and foreign authorities, all self-regulatory
authorities and all courts and other tribunals (each, an
"AUTHORIZATION") necessary to engage in the
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business conducted by it in the manner described in the Offering
Memorandum, except where failure to hold such Authorizations would not
be reasonably expected to have a Material Adverse Effect, and (C) no
reason to believe that any governmental body or agency, domestic or
foreign, is considering limiting, suspending or revoking any such
Authorization, except where such limitation, suspension or revocation
would not reasonably be expected to have a Material Adverse Effect.
All such Authorizations are valid and in full force and effect and the
Company and each Subsidiary is in compliance in all material respects
with the terms and conditions of all such Authorizations and with the
rules and regulations of the regulatory authorities having
jurisdiction with respect to such Authorizations, except for any
invalidity, failure to be in full force and effect or noncompliance
with any Authorization that would not reasonably be expected to have a
Material Adverse Effect.
(xxi) The Company and each Subsidiary owns, possesses or has the
right to employ all patents, patent rights, licenses, inventions,
copyrights, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems
or procedures), trademarks, service marks and trade names
(collectively, the "INTELLECTUAL PROPERTY") necessary to conduct the
businesses operated by it as described in the Offering Memorandum,
except where the failure to own, possess or have the right to employ
such Intellectual Property would not reasonably be expected to have a
Material Adverse Effect. None of the Company or any Subsidiary has
received any notice of infringement of or conflict with (and neither
knows of any such infringement or a conflict with) asserted rights of
others with respect to any of the foregoing that, if such assertion of
infringement or conflict were sustained, would reasonably be expected
to have a Material Adverse Effect. The use of the Intellectual
Property in connection with the business and operations of the Company
and its Subsidiaries does not infringe on the rights of any person,
except for such infringement as would not reasonably be expected to
have a Material Adverse Effect.
(xxii) All tax returns required to be filed by the Company and each
Subsidiary have been filed in all jurisdictions where such returns are
required to be filed; and all taxes, including withholding taxes,
penalties and interest, assessments, fees and other charges due or
claimed to be due from such entities or that are due and payable have
been paid, other than those being contested in good faith and for
which reserves have been provided in accordance with generally
accepted accounting principles or those currently payable without
penalty or interest and except where the failure to make such required
filings or payment would not reasonably be
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expected to have a Material Adverse Effect. To the knowledge of the
Issuer and Parent, there are no material proposed additional tax
assessments against any of the Company and its Subsidiaries or their
assets or property.
(xxiii) None of the Issuer, the Company, Parent or any Subsidiary is
an "investment company" or a company "controlled" by an "investment
company" incorporated in the United States within the meaning of the
Investment Company Act.
(xxiv) Except as set forth in the Registration Rights Agreement or as
described in the Offering Memorandum, there are no holders of
securities of the Issuer, the Company, Parent or any Subsidiary who
have the right to request or demand that the the Issuer, the Company,
Parent or any of the Company's Subsidiaries register under the Act or
analogous foreign laws and regulations any of such securities held by
any such holders.
(xxv) Each of the Company and its Subsidiaries maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that: (A) transactions are executed in accordance with
management's general or specific authorizations; (B) transactions are
recorded as necessary to permit preparation of its financial
statements in conformity with United States generally accepted
accounting principles and to maintain accountability for assets; (C)
access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability
for its assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences.
(xxvi) Each of the Company and its Subsidiaries maintains insurance
covering its properties, assets, operations, personnel and businesses,
and such insurance is of such type and in such amounts in accordance
with customary industry practice to protect the Company and its
Subsidiaries and their businesses. None of the Company or any
Subsidiary has received notice from any insurer or agent of such
insurer that any material capital improvements or other material
expenditures will have to be made in order to continue any insurance
maintained by any of them other than capital improvements and other
expenditures that have been budgeted by the Company or its
Subsidiaries, as the case may be.
(xxvii) None of the Issuer, the Company, any Restricted Subsidiary or
their Affiliates (as defined in Rule 501(b) of Regulation D under the
Act) has (A) taken, directly or indirectly, any action designed to, or
that
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might reasonably be expected to, cause or result in stabilization or
manipulation of the price of any security of the Issuer to facilitate
the sale or resale of the Original Notes or (B) since the date of the
Preliminary Offering Memorandum (x) sold, bid for, purchased or paid
any person any compensation for soliciting purchases of the Original
Notes in a manner that would require registration of the Original
Notes under the Act or (y) paid or agreed to pay to any person any
compensation for soliciting another to purchase any other securities
of the Issuer, the Company or any Restricted Subsidiary in a manner
that would require registration of the Original Notes under the Act.
(xxviii) None of the Issuer, the Company, any Restricted Subsidiary
or any of their Affiliates (as defined in Regulation D under the Act)
has, directly or through any agent, sold, offered for sale, contracted
to sell, pledged, solicited offers to buy or otherwise disposed of or
negotiated in respect of, any security (as defined in the Act) that is
currently or will be integrated with the sale of the Original Notes in
a manner that would require the registration of the Original Notes
under the Act.
(xxix) None of the Issuer, the Company, any Restricted Subsidiary or
any of their Affiliates, or any person acting on its or their behalf
(other than any Initial Purchasers, as to whom the Issuer and Parent
make no representation), is engaged in any directed selling effort
with respect to the Original Notes, and each of them has complied with
the offering restrictions requirement of Regulation S under the Act.
Terms used in this paragraph have the meaning given to them by
Regulation S.
(xxx) No registration under the Act of the Original Notes or
qualification of the Notes Indenture under the Trust Indenture Act of
1939, as amended (the "TRUST INDENTURE ACT"), is required for the sale
of the Original Notes to the Initial Purchasers as contemplated by
this Agreement or for the Exempt Resales, assuming in each case that
(A) the purchasers who buy the Original Notes in the Exempt Resales
are Eligible Purchasers and (B) the accuracy of and compliance with
the Initial Purchasers' representations, warranties and covenants
contained in Section 5(b) of this Agreement. No form of general
solicitation or general advertising (prohibited by the Act in
connection with offers or sales such as the Exempt Resales) was used
by the Issuer, the Company, any Restricted Subsidiary or any of their
representatives (other than any Initial Purchaser, as to whom the
Issuer and Parent make no representation) in connection with the offer
and sale of any of the Original Notes or in connection with Exempt
Resales, including, but not limited to, articles, notices or other
communications published in any newspaper, magazine or similar medium
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or broadcast over television or radio, or any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising. None of the Issuer, the Company, any Restricted
Subsidiary or any of their affiliates has entered into, and none of
the Issuer, the Company, any Restricted Subsidiary or their affiliates
will enter into any contractual arrangement with respect to the
distribution of the Original Notes except for this Agreement.
(xxxi) The execution and delivery of this Agreement, the other
Operative Documents, and the sale of the Notes to be purchased by the
QIBs will not involve any prohibited transaction within the meaning of
Section 406(a) of ERISA or Section 4975(c)(1)(A)-(D) of the Code. The
representation made by the Issuer and Parent in the preceding sentence
is made in reliance upon and subject to the accuracy of, and
compliance with, the representations and covenants made or deemed made
by the Initial Purchasers in Section 5(b) and by the persons who
purchase the Notes as set forth in the Offering Memorandum under the
caption "Transfer Restrictions."
(xxxii) Each of the Preliminary Offering Memorandum and the Offering
Memorandum, as of its respective date, and each amendment or
supplement thereto, as of its date, contains the information specified
in, and meets the requirements of, Rule 144A(d)(4) under the Act.
(xxxiii) As of November 30, 1997, neither, the Company, nor any
Subsidiary had any material liabilities or obligations, direct or
contingent, that were not set forth in the Company's consolidated
balance sheet as of November 30, 1997 or in the notes thereto set
forth in the Offering Memorandum. Since November 30, 1997, except as
set forth or contemplated in the Offering Memorandum, (a) none of the
Issuer, the Company, Parent or any Subsidiary has (1) incurred any
liabilities or obligations, direct or contingent, that would
reasonably be expected to have a Material Adverse Effect, or (2)
entered into any material transaction not in the ordinary course of
business, (b) there has not been any event or development in respect
of the business or condition (financial or other) of the Company and
its Subsidiaries that, either individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect and (c) there
has been no dividend or distribution of any kind declared, paid or
made by the Company or any Subsidiary on any class of their capital
stock.
(xxxiv) None of the Issuer, the Company, Parent or any Subsidiary (or
any agent thereof acting on their behalf) has taken, and none of them
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will take, any action that might cause this Agreement or the issuance
or sale of the Notes to violate Regulation G (12 C.F.R. Part 207),
Regulation T (12 C.F.R. Part 220), Regulation U (12 C.F.R. Part 221)
or Regulation X (12 C.F.R. Part 224) of the Board of Governors of the
Federal Reserve System or analogous foreign laws and regulations, in
each case as in effect, or as the same may hereafter be in effect, on
the Closing Date.
(xxxv) Each firm of accountants that has certified or shall certify
the financial statements included or to be included as part of the
Offering Memorandum is an independent accountant within the meaning of
the Act. The historical financial statements and the notes thereto
included in the Preliminary Offering Memorandum and the Offering
Memorandum comply as to form in all material respects with the
requirements applicable to registration statements on Form S-1 under
the Act and present fairly in all material respects the consolidated
financial position and results of operations of Parent, the Company
and its Subsidiaries at the respective dates and for the respective
periods indicated. Such financial statements have been prepared in
accordance with United States generally accepted accounting principles
applied on a consistent basis throughout the periods presented (except
as disclosed in the Offering Memorandum). The pro forma financial
statements included in the Preliminary Offering Memorandum and the
Offering Memorandum have been prepared on a basis consistent with such
historical statements, except for the pro forma adjustments specified
therein, and give effect to assumptions made on a reasonable basis and
present fairly in all material respects the historical and proposed
transactions contemplated by the Preliminary Offering Memorandum and
the Offering Memorandum, this Agreement and the other Operative
Documents. The other financial and statistical information and data
included in the Preliminary Offering Memorandum and the Offering
Memorandum, historical and pro forma, are accurately presented in all
material respects and prepared on a basis consistent with the
financial statements and the books and records of Parent, the Company
and its Subsidiaries.
(xxxvi) None of the Issuer, the Company, Parent or any Subsidiary (A)
is "insolvent" as that term is defined in Section 101(32) of the
United States Bankruptcy Code (the "Bankruptcy Code") (11 U.S.C. '
101(32)), Section 2 of the Uniform Fraudulent Transfer Act ("UFTA") or
Section 2 of the Uniform Fraudulent Conveyance Act ("UFCA"), (B) has
"unreasonably small capital" as that term is used in Section
548(a)(2)(ii) of the Bankruptcy Code or Section 5 of the UFCA, (C) is
engaged or about to engage in a business or transaction for which its
remaining property is
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"unreasonably small" in relation to the business or transaction as
that term is used in Section 4 of the UFTA or (D) is unable to pay its
debts as they mature or become due, within the meaning of Section
548(a)(2)(B)(iii) of the Bankruptcy Code, Section 4 of the UFTA and
Section 6 of the UFCA. The Issuer, Parent, the Company and each
Subsidiary now own assets having a value both at "fair valuation" and
at "present fair saleable value" greater than the amount required to
pay its "debts" as such terms are used in Section 2 of the UFTA and
Section 2 of the UFCA. None of the Issuer, the Company, Parent or any
Subsidiary of the Company will be rendered insolvent by the execution
and delivery of any of the Operative Documents or the Credit Agreement
or by the transactions contemplated hereunder or thereunder.
(xxxvii) Except as described in the Offering Memorandum, the
Consolidated Plan of Reorganization of the Eagle-Picher Group, the
Order of the Bankruptcy Court and the Ohio District Court and the
Injunction (together, the "Bankruptcy Plans and Orders") are in full
force and effect, and none of them has been stayed, voided, vacated or
reversed or modified in any material respect; the Eagle-Picher Group,
the Issuer and Parent have not taken any actions or omitted to take
actions in violation of the Bankruptcy Plans and Orders.
(xxxviii) Except as described in the section entitled "Certain
Relationships and Related Transactions" in the Offering Memorandum,
there are no contracts, agreements or understandings between the
Issuer, the Company, Parent or any Subsidiary and any other person
other than the Initial Purchasers that would give rise to a valid
claim against the Issuer, the Company, Parent, any Subsidiary or the
Initial Purchasers for a brokerage commission, finder's fee or like
payment in connection with the issuance, purchase and sale of the
Notes.
(xxxix) The Company has the authorized, issued and outstanding
capitalization set forth in the Preliminary Offering Memorandum and
the Offering Memorandum under the caption "Capitalization"; all of the
outstanding capital stock of the Company has been duly authorized and
validly issued, is or will be on the Closing Date fully paid and
nonassessable and was not issued in violation of any preemptive or
similar rights.
(xl) The statistical and market-related data and forward-looking
statements (within the meaning of Section 27A of the Act and Section
21E of the Exchange Act) included in the Preliminary Offering
Memorandum and the Offering Memorandum are based on or derived from
sources that
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the Issuer and Parent believe to be reliable and accurate in all
material respects and represent their good faith estimates that are
made on the basis of data derived from such sources, and the Company
and its Subsidiaries have informed the Issuer and Parent that they
believe such sources to be reliable and accurate in all material
respects and have notified the Issuer and Parent as to their good
faith estimates made on the basis of data derived from such sources.
(xli) Each certificate signed by any officer of the Issuer or Parent
and delivered to the Initial Purchasers or counsel for the Initial
Purchasers pursuant to, or in connection with, this Agreement shall be
deemed to be a representation and warranty by the Issuer or Parent to
the Initial Purchasers as to the matters covered by such certificate.
(xlii) All of the representations and warranties made by the Issuer
and Parent in each of the Operative Documents will be true and correct
as of the Closing Date in all material respects, in each case after
giving effect to the Merger and the transactions contemplated thereby.
The Issuer and Parent acknowledge that the Initial Purchasers
and, for purposes of the opinions to be delivered to the Initial
Purchasers pursuant to Section 8 of this Agreement, counsel to the
Issuer and counsel to the Initial Purchasers will rely upon the
accuracy and truth of the foregoing representations and the Issuer and
Parent hereby consent to such reliance.
(b) Each Initial Purchaser represents, warrants and covenants (as to
itself only) to the Issuer that:
(i) It is a QIB with such knowledge and experience in financial and
business matters as are necessary in order to evaluate the merits and
risks of an investment in the Notes.
(ii) (A) It has not and will not solicit offers for, or offer or sell,
the Original Notes by any form of general solicitation or general
advertising (as those terms are used in Regulation D under the Act) or
in any manner involving a public offering within the meaning of Section
4(2) of the Act and (B) it has and will solicit offers for the Original
Notes only from, and will offer and sell the Original Notes only to (1)
persons whom the Initial Purchaser reasonably believes to be QIBs or,
if any such person is buying for one or more institutional accounts for
which such person is acting as fiduciary or agent, only when such
person has represented to the Initial Purchaser that each such account
is a QIB to whom notice has been
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given that such sale or delivery is being made in reliance on Rule
144A, and, in each case, in reliance on the exemption from the
registration requirements of the Act pursuant to Rule 144A, or (2)
persons other than U.S. persons outside the United States in reliance
on the exemption from the registration requirements of the Act provided
by Regulation S.
(iii) With respect to offers and sales outside the United States,
(A) such Initial Purchaser will comply with all
applicable laws and regulations in each jurisdiction in which
it acquires, offers, sells or delivers Notes or has in its
possession or distributes either any Preliminary Offering
Memorandum or Offering Memorandum or any such other material,
in all cases at its own expense;
(B) the Original Notes have not been and will not be
registered under the Act and may not be offered or sold within
the United States or to, or for the account or benefit of,
U.S. persons except in accordance with Regulation S under the
Act or pursuant to an exemption from the registration
requirements of the Act;
(C) such Initial Purchaser has offered the Original Notes
and will offer and sell the Original Notes (1) as part of its
distribution at any time and (2) otherwise until 40 days after
the later of the commencement of the offering of the Original
Notes and the Closing Date, only in accordance with Rule 903
of Regulation S or another exemption from the registration
requirements of the Act. Accordingly, neither such Initial
Purchaser nor any persons acting on its or their behalf have
engaged or will engage in any directed selling efforts (within
the meaning of Regulation S) with respect to the Original
Notes, and any such persons have complied and will comply with
the offering restrictions requirements of Regulation S;
Terms used in this Section 5(b)(iii) have the
meanings given to them by Regulation S.
(iv) The source of funds being used by it to acquire the Original
Notes does not include the assets of any "employee benefit plan"
(within the meaning of Section 3 of ERISA) or any "plan" (within the
meaning of Section 4975 of the Code).
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Each of the Initial Purchasers understands that the Issuer
and, for purposes of the opinions to be delivered to them pursuant to
Sections 8(g) and 8(h) hereof, counsel to the Issuer and counsel to the
Initial Purchasers will rely upon the accuracy and truth of the
foregoing representations, and each of the Initial Purchasers hereby
consents to such reliance.
6. INDEMNIFICATION.
(a) Each of the Issuer and Parent, on a joint and several basis,
agrees to indemnify and hold harmless each Initial Purchaser, each
person, if any, who controls an Initial Purchaser within the meaning of
Section 15 of the Act or Section 20(a) of the Exchange Act, the agents,
employees, officers and directors of the Initial Purchasers and the
agents, employees, officers and directors of any such controlling
person from and against any and all losses, liabilities, claims,
damages and expenses whatsoever (including, but not limited, to
reasonable attorneys' fees and any and all reasonable expenses
whatsoever incurred in investigating, preparing or defending against
any litigation, commenced or threatened, or any claim whatsoever, and
any and all reasonable amounts paid in settlement of any claim or
litigation) (collectively, "LOSSES") to which they or any of them may
become subject under the Act, the Exchange Act or otherwise insofar as
such Losses (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of a material
fact contained in the Preliminary Offering Memorandum or the Offering
Memorandum, or in any supplement thereto or amendment thereof, or arise
out of or are based upon the omission or alleged omission to state
therein a material fact necessary to make the statements therein, in
the light of the circumstances under which they were made, not
misleading; provided, however, that the Issuer and Parent will not be
liable in any such case to the extent, but only to the extent, that any
such Loss arises out of or is based upon any such untrue statement or
alleged untrue statement or omission or alleged omission made therein
in reliance upon and in conformity with written information relating to
the Initial Purchasers furnished to the Issuer or Parent by or on
behalf of the Initial Purchasers expressly for use therein; and,
provided further, however, that the indemnity agreement contained in
this subsection (a) with respect to any Preliminary Offering Memorandum
shall not inure to the benefit of the Initial Purchasers or their
agents, employees, officers and directors for any Loss if the Offering
Memorandum corrected any such alleged untrue statement or omission and
if such Initial Purchasers failed to send or give a copy of the
Offering Memorandum at or prior to the written confirmation of a sale
of the Notes to the person alleging such Loss. This indemnity agreement
will be in addition to any liability that each of the Issuer and
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Parent may otherwise have, including, but not limited to, liability
under this Agreement.
(b) The Initial Purchasers agree, severally and not jointly, to
indemnify and hold harmless the Issuer and Parent, each person, if any,
who controls the Issuer and Parent within the meaning of Section 15 of
the Act or Section 20(a) of the Exchange Act, and each of its agents,
employees, officers and directors and the agents, employees, officers
and directors of any such controlling person from and against any
Losses to which they or either of them may become subject under the
Act, the Exchange Act or otherwise insofar as such Losses (or actions
in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the
Preliminary Offering Memorandum or the Offering Memorandum, or in any
amendment thereof or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, in each case
to the extent, but only to the extent, that any such Loss arises out of
or is based upon any untrue statement or alleged untrue statement or
omission or alleged omission made therein in reliance upon and in
conformity with information relating to the Initial Purchasers
furnished in writing to the Issuer and Parent by the Initial Purchasers
expressly for use therein. The Issuer, Parent and the Initial
Purchasers acknowledge that the information set forth in Section 9 is
the only information furnished in writing by the Initial Purchasers to
the Issuer and Parent expressly for use in the Preliminary Offering
Memorandum or the Offering Memorandum.
(c) Promptly after receipt by an indemnified party under subsection
6(a) or 6(b) above of notice of the commencement of any action, suit or
proceeding (collectively, an "ACTION"), such indemnified party shall,
if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify each party against whom
indemnification is to be sought in writing of the commencement of such
action (but the failure so to notify an indemnifying party shall not
relieve such indemnifying party from any liability that it may have
under this Section 6 except to the extent that it has been prejudiced
in any material respect by such failure or from any liability which it
may otherwise have). In case any such action is brought against any
indemnified party, and it notifies an indemnifying party of the
commencement of such action, the indemnifying party will be entitled to
participate in such action, and to the extent it may elect by written
notice delivered to the indemnified party promptly after receiving the
aforesaid notice from such indemnified party,
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to assume the defense of such action with counsel satisfactory to such
indemnified party. Notwithstanding the foregoing, the indemnified party
or parties shall have the right to employ its or their own counsel in
any such action, but the fees and expenses of such counsel shall be at
the expense of such indemnified party or parties unless (i) the
employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such action,
(ii) the indemnifying parties shall not have employed counsel to take
charge of the defense of such action within a reasonable time after
notice of commencement of the action, or (iii) the named parties to
such action (including any impleaded parties) include such indemnified
party and the indemnifying parties (or such indemnifying parties have
assumed the defense of such action), and such indemnified party or
parties shall have reasonably concluded that there may be defenses
available to it or them that are different from or additional to those
available to one or all of the indemnifying parties (in which case the
indemnifying parties shall not have the right to direct the defense of
such action on behalf of the indemnified party or parties), in any of
which events such reasonable fees and expenses of counsel shall be
borne by the indemnifying parties. In no event shall the indemnifying
party be liable for the fees and expenses of more than one counsel
(together with appropriate local counsel) at any time for all
indemnified parties in connection with any one action or separate but
substantially similar or related actions arising in the same
jurisdiction out of the same general allegations or circumstances.
Anything in this subsection to the contrary notwithstanding, an
indemnifying party shall not be liable for any settlement of any claim
or action effected without its written consent; provided, however, that
such consent was not unreasonably withheld.
7. CONTRIBUTION. In order to provide for contribution in
circumstances in which the indemnification provided for in Section 6 of this
Agreement is for any reason held to be unavailable from the indemnifying party,
or is insufficient to hold harmless a party indemnified under Section 6 of this
Agreement, the Issuer, Parent and the Initial Purchasers shall contribute to the
amount paid or payable by such indemnified party as a result of such aggregate
Losses of the nature contemplated by such indemnification provision (but after
deducting in the case of Losses suffered by the indemnifying party, any
contribution received by the indemnifying party from persons other than the
indemnified party who may also be liable for contribution, including persons who
control the indemnified party within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act) to which the Issuer, Parent and the Initial
Purchasers may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Issuer and Parent, on the one hand, and the
Initial Purchasers, on the other hand, from the offering of the Original Notes
or, if such
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allocation is not permitted by applicable law or indemnification is not
available as a result of the indemnifying party not having received notice as
provided in paragraph (c) of this Section 8 and having been prejudiced in any
material respect by the absence of such notice, in such proportion as is
appropriate to reflect not only the relative benefits referred to above but also
the relative fault of the Issuer and Parent, on the one hand, and the Initial
Purchasers, on the other hand, in connection with the statements or omissions
that resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits received by the Issuer and Parent, on the
one hand, and the Initial Purchasers, on the other hand, shall be deemed to be
in the same proportion as (x) the total proceeds from the offering of Original
Notes (net of discounts and commissions but before deducting expenses) received
by the Issuer and Parent, and (y) the total discounts and commissions received
by the Initial Purchasers as set forth in the table on the cover page of the
Offering Memorandum. The relative fault of the Issuer and Parent, on the one
hand, and the Initial Purchasers, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer, Parent or the Initial Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission.
The Issuer, Parent and the Initial Purchasers agree that it would not
be just and equitable if contribution pursuant to this Section 7 were determined
by pro rata allocation or by any other method of allocation that does not take
into account the equitable considerations referred to above. Notwithstanding the
provisions of this Section 7, (i) in no case shall the Initial Purchasers be
required to contribute any amount in excess of the amount by which the total
discount and commissions applicable to the Original Notes pursuant to this
Agreement exceeds the amount of any damages that the Initial Purchasers have
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person, if
any, who controls the Initial Purchasers within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act shall have the same rights to
contribution as the Initial Purchasers, and each person, if any, who controls
the Issuer and Parent within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act shall have the same rights to contribution as the
Issuer and Parent, subject in each case to clauses (i) and (ii) of this Section
7. Any party entitled to contribution will, promptly after receipt of notice of
commencement of any action against such party in respect of which a claim for
contribution may be made against another party or parties under this Section 7,
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notify such party or parties from whom contribution may be sought, but the
omission to so notify such party or parties shall not relieve the party or
parties from whom contribution may be sought from any obligation it or they may
have under this Section 7 or otherwise, except to the extent that it has been
prejudiced in any material respect by such failure; provided, however, that no
additional notice shall be required with respect to any action for which notice
has been given under Section 6 for purposes of indemnification. Anything in this
section to the contrary notwithstanding, no party shall be liable for
contribution with respect to any action or claim settled without its written
consent, provided, however, that such written consent was not unreasonably
withheld.
8. CONDITIONS OF INITIAL PURCHASERS' OBLIGATIONS. The obligations of
the Initial Purchasers to purchase and pay for the Original Notes, as provided
for in this Agreement, shall be subject to satisfaction of the following
conditions prior to or concurrently with such purchase:
(a) All of the representations and warranties of the Issuer and Parent
contained in this Agreement shall be true and correct, or true and
correct in all material respects where such representations and
warranties are not qualified by materiality or Material Adverse Effect,
on the date of this Agreement and, in each case after giving effect to
the Merger and the transactions contemplated thereby, on the Closing
Date, except that if a representation and warranty is made as of a
specific date, and such date is expressly referred to therein, such
representation and warranty shall be true and correct (or true and
correct in all material respects, as applicable) as of such date. The
Issuer and Parent shall have performed or complied with all of the
agreements contained in this Agreement and required to be performed or
complied with by them at or prior to the Closing Date.
(b) The Offering Memorandum shall have been printed and copies
distributed to the Initial Purchasers not later than 5:00 p.m., New
York City time, on the day following the date of this Agreement or at
such later date and time as the Initial Purchasers may agree. No stop
order suspending the qualification or exemption from qualification of
the Original Notes in any jurisdiction shall have been issued and no
proceeding for that purpose shall have been commenced or shall be
pending or threatened.
(c) No action shall have been taken and no statute, rule, regulation
or order shall have been enacted, adopted or issued by any governmental
agency that would, as of the Closing Date, prevent the issuance of the
Original Notes or consummation of the Exchange Offer; except as
disclosed in the Offering Memorandum, no action, suit or
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proceeding shall have been commenced and be pending against or
affecting or, to the best knowledge of the Issuer and Parent,
threatened against the Issuer, the Company, Parent and/or any
Subsidiary before any court or arbitrator or any governmental body,
agency or official that, if adversely determined, would reasonably be
expected to have a Material Adverse Effect; and no stop order
preventing the use of the Offering Memorandum, or any amendment or
supplement thereto, or any order asserting that any of the transactions
contemplated by this Agreement are subject to the registration
requirements of the Act shall have been issued.
(d) As of November 30, 1997, neither, the Company, nor any Subsidiary
had any material liabilities or obligations, direct or contingent, that
were not set forth in the Company's consolidated balance sheet as of
November 30, 1997 or in the notes thereto set forth in the Offering
Memorandum. Since November 30, 1997, except as set forth or
contemplated in the Offering Memorandum, (a) none of the Issuer, the
Company, Parent or any Subsidiary has (1) incurred any liabilities or
obligations, direct or contingent, that would reasonably be expected to
have a Material Adverse Effect, or (2) entered into any material
transaction not in the ordinary course of business, (b) there has not
been any event or development in respect of the business or condition
(financial or other) of the Company and its Subsidiaries that, either
individually or in the aggregate, would reasonably be expected to have
a Material Adverse Effect and (c) there has been no dividend or
distribution of any kind declared, paid or made by the Company or any
Subsidiary on any class of their capital stock.
(e) The Initial Purchasers shall have received certificates, dated the
Closing Date, signed by two authorized officers of each of the Issuer
and Parent confirming, as of the Closing Date, the matters set forth in
paragraphs (a), (b), (c) and (d) of this Section 8.
(f) The Initial Purchasers shall have received on the Closing Date an
opinion dated the Closing Date, addressed to the Initial Purchasers, of
Howard, Darby & Levin, counsel to the Issuer, the Guarantors and the
Company, in form and substance reasonably satisfactory to the Initial
Purchasers and counsel to the Initial Purchasers.
(g) The Initial Purchasers shall have received on the Closing Date an
opinion (satisfactory in form and substance to the Initial Purchasers)
dated the Closing Date of Davis Polk & Wardwell, special counsel to the
Initial Purchasers, covering such matters as are customarily covered in
such opinions.
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In addition, such counsel shall state that they have
participated in discussions with your representatives, representatives
of the Issuer and the Guarantors and their counsel and independent
public accountants concerning the preparation of the Offering
Memorandum. Such counsel shall state that, although they are not
passing upon and do not assume any responsibility for the accuracy,
completeness or fairness of any of the statements in the Offering
Memorandum, on the basis of the foregoing (relying as to materiality to
a large extent upon officers or other representatives of the Issuer and
the Company and upon your representations), no facts have come to their
attention that lead such counsel to believe that the Offering
Memorandum (other than the financial statements and other financial and
statistical data contained therein as to which such counsel need
express no belief), on the date of such Offering Memorandum and as of
the date of the time of purchase, contained or contains an untrue
statement of a material fact or omitted or omits to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
(h) Prior to the execution of this Agreement, the Initial Purchasers
shall have received a "comfort letter" from each of KPMG Peat Marwick
LLP and Deloitte & Touche LLP, independent public accountants for the
Company, dated as of the date of this Agreement, addressed to the
Initial Purchasers and in form and substance satisfactory to the
Initial Purchasers and counsel to the Initial Purchasers. In addition,
as of the Closing Date, the Initial Purchasers shall have received a
"bring-down comfort letter" from Deloitte & Touche LLP in form and
substance satisfactory to the Initial Purchasers and counsel to the
Initial Purchasers covering the same items and matters as covered in
their "comfort letter" but as of a date that is not more than three
days prior to the date thereof and any changes and additions to the
Preliminary Offering Memorandum that were made producing the Offering
Memorandum.
(i) The Issuer and each of the Guarantors shall have entered into the
Notes Indenture and the Initial Purchasers shall have received copies,
conformed as executed, thereof.
(j) The Issuer shall have entered into the Registration Rights
Agreement and the Initial Purchasers shall have received counterparts,
conformed as executed, thereof.
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(k) The Issuer and each of the Guarantors shall have entered into the
Credit Agreement, and the Initial Purchasers shall have received
counterparts, conformed as executed, thereof.
(l) The Initial Purchasers shall have received on the Closing Date a
certificate from the Company dated the Closing Date as to the solvency
of the Company and its Subsidiaries, addressed to the Initial
Purchasers and to the lenders in connection with the Issuer and
Guarantors entering into the Credit Agreement.
(m) Simultaneously with the purchase by the Initial Purchasers of the
Original Notes under this Agreement, the Initial Purchasers shall have
consummated the Preferred Stock Offering.
(n) Prior to or simultaneously with the closing of the transactions
contemplated by this Agreement, the Acquisition shall have been
consummated or will be consummated and the Issuer shall have been
merged into, or on the Closing Date will be merged into, the Company.
(o) The Initial Purchasers shall have been furnished with copies of
such documents as they may reasonably request and all closing documents
from the closings of the transactions contemplated hereby.
(p) Davis Polk & Wardwell, counsel to the Initial Purchasers, shall
have been furnished with such documents as they may reasonably request
to enable them to review or pass upon the matters referred to in this
Section 8 and in order to evidence the accuracy, completeness or
satisfaction in all material respects of any of the representations,
warranties or conditions contained in this Agreement.
(q) The Original Notes shall be eligible for trading in the PORTAL
market upon issuance.
(r) The Notes shall have initially been assigned ratings of "B-" and
"B3" by Standard & Poor's Rating Services and Moody's Investors
Service, Inc., respectively, and no such rating shall have been
downgraded or placed on any "watch list" for possible downgrading as of
or prior to the Closing Date.
(s) All agreements set forth in the representation letter of the
Issuer to DTC relating to the approval of the Notes by DTC for
"book-entry" transfer shall have been complied with.
32
<PAGE>
<PAGE>
If any of the conditions specified in this Section 8 shall not have
been fulfilled when and as required by this Agreement to be fulfilled, this
Agreement may be terminated by the Initial Purchasers on notice to the Issuer at
any time at or prior to the Closing Date, and such termination shall be without
liability of any party to any other party. Notwithstanding any such termination,
the provisions of Sections 4(f), 6, 7, 10, 11(d) and 14 shall remain in effect.
The Issuer's obligation under this Agreement to sell the Original Notes
to the Initial Purchasers on the Closing Date is subject to the Initial
Purchasers purchasing and paying for all of the Original Notes and the accuracy
of, and compliance with, the representations and warranties and agreements in
Section 5(b).
9. INITIAL PURCHASERS' INFORMATION. The Issuer, Parent and the
Initial Purchasers severally acknowledge that the statements with respect to the
offer and sale of the Original Notes set forth in (i) the last paragraph of the
cover page, (ii) the first paragraph of page 3 and (iii) in the second, fourth,
and fifth paragraph under the caption "Plan of Distribution", all in the
Offering Memorandum constitute the only information furnished in writing by the
Initial Purchasers expressly for use in the Preliminary Offering Memorandum or
the Offering Memorandum.
10. SURVIVAL OF REPRESENTATIONS AND AGREEMENTS. All representations
and warranties, covenants and agreements contained in this Agreement, including
the agreements contained in Sections 4(f) and 11(d), the indemnity agreements
contained in Section 6 and the contribution agreements contained in Section 7
shall remain operative and in full force and effect regardless of any
investigation made by or on behalf of the Initial Purchasers or any controlling
person thereof or by or on behalf of the Issuer, Parent or any controlling
person of any thereof, and shall survive delivery of and payment for the
Original Notes to and by the Initial Purchasers. The agreements contained in
Sections 4(f), 6, 7, 11(d) and 14 shall survive the termination of this
Agreement, including pursuant to Section 11.
11. EFFECTIVE DATE OF AGREEMENT; TERMINATION. (a) This
Agreement shall become effective upon execution and delivery of a counterpart
hereof by each of the parties hereto.
(b) The Initial Purchasers shall have the right to terminate this
Agreement at any time prior to the Closing Date by notice to the Issuer
from the Initial Purchasers, without liability (other than with respect
to Sections 6 and 7) on the Initial Purchasers' part to the Issuer if,
on or prior to such date, (i) the Issuer and Parent shall have failed,
refused or been
33
<PAGE>
<PAGE>
unable to perform in any material respect any agreement on its part to
be performed under this Agreement when and as required, (ii) any other
condition to the obligations of the Initial Purchasers under this
Agreement to be fulfilled by the Issuer or any of the Guarantors
pursuant to Section 8 is not fulfilled when and as required in any
material respect, (iii) trading in securities generally on the New York
Stock Exchange or the American Stock Exchange shall have been suspended
or materially limited, or minimum prices shall have been established on
such exchange by the Commission, or by such exchange or other
regulatory body or governmental authority having jurisdiction, (iv) a
general banking moratorium shall have been declared by federal, New
York or Ohio authorities or (v) there is an outbreak or escalation of
armed hostilities involving the United States on or after the date of
this Agreement, or if there has been a declaration by the United States
of a national emergency or war or other national or international
calamity or crisis (economic, political, financial or otherwise) which
affects the U.S. and international markets, making it, in the Initial
Purchasers' judgment, impracticable to proceed with the offering or
delivery of the Original Notes on the terms and in the manner
contemplated in the Offering Memorandum.
(c) Any notice of termination pursuant to this Section 11 shall be
given at the address specified in Section 12 below by telephone, telex,
telephonic facsimile or telegraph, confirmed in writing by letter.
(d) If this Agreement shall be terminated pursuant to clause (i) or
(ii) of Section 11(b), or if the sale of the Notes provided for in this
Agreement is not consummated because the Issuer or Parent to satisfy
any condition to the obligations of the Initial Purchasers set forth in
this Agreement to be satisfied on their part or because of any refusal,
inability or failure on the part of either of the Issuer or Parent to
perform any agreement in this Agreement or comply with any provision of
this Agreement, the Issuer will, subject to demand by the Initial
Purchasers, reimburse the Initial Purchasers for all of their
reasonable out-of-pocket expenses (including the fees and expenses of
the Initial Purchasers' counsel) incurred in connection with this
Agreement.
12. NOTICE. All communications with respect to or under this
Agreement, except as may be otherwise specifically provided in this Agreement,
shall be in writing and, if sent to the Initial Purchasers, shall be mailed,
delivered, or telexed, telegraphed or telecopied and confirmed in writing to SBC
Warburg Dillon Read Inc., 535 Madison Avenue, New York, New York 10022
(telephone: (212) 906-7000), Attention: Syndicate Department, telecopy number:
203-719-1075; and if sent to the Issuer or Parent, shall be mailed, delivered or
telexed,
34
<PAGE>
<PAGE>
telegraphed or telecopied and confirmed in writing to Eagle-Picher Industries,
Inc., 250 East Fifth Street, Cincinnati, Ohio 45202 (telephone: (513) 721-7010,
Telecopy (513) 721-2341, Attention: President).
All such notices and communications shall be deemed to have been duly
given: when delivered by hand, if personally delivered; five business days after
being deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt acknowledged by telecopier machine, if telecopied; and one
business day after being timely delivered to a next-day air courier.
13. PARTIES. This Agreement shall inure solely to the benefit of, and
shall be binding upon, the Initial Purchasers, the Issuer and Parent and the
controlling persons and agents referred to in Sections 6 and 7, and their
respective successors and assigns, and no other person shall have or be
construed to have any legal or equitable right, remedy or claim under or in
respect of or by virtue of this Agreement or any provision herein contained. The
term "successors and assigns" shall not include a purchaser, in its capacity as
such, of Notes from the Initial Purchasers.
14. CONSTRUCTION. This Agreement shall be construed in accordance with
the internal laws of the State of New York (without giving effect to any
provisions thereof relating to conflicts of law) and each of the parties hereto
consent to the jurisdiction of the courts of the State of New York. Each of the
parties hereto agrees to submit to the jurisdiction of the courts of the State
of New York and the U.S. federal courts sitting in the City of New York for the
purposes of any suit, action or proceeding arising out of or relating to this
Agreement. Nothing herein shall affect the right to serve process in any other
manner permitted by law or shall limit the right of the Initial Purchasers to
bring proceedings against the Company in the courts of any other jurisdiction.
15. CAPTIONS. The captions included in this Agreement are included
solely for convenience of reference and are not to be considered a part of this
Agreement.
16. COUNTERPARTS. This Agreement may be executed in various
counterparts that together shall constitute one and the same instrument.
35
<PAGE>
<PAGE>
If the foregoing Notes Purchase Agreement correctly sets forth the
understanding among the Issuer, Parent and the Initial Purchasers, please so
indicate in the space provided below for the purpose, whereupon this letter and
your acceptance shall constitute a binding agreement among the Issuer, Parent
and the Initial Purchasers.
E-P ACQUISITION, INC.
By: /s/ Joel P. Wyler
-------------------------------
Name: Joel P. Wyler
Title: Chairman and President
EAGLE-PICHER HOLDINGS, INC.
By: /s/ Joel P. Wyler
-------------------------------
Name: Joel P. Wyler
Title: Chairman and President
Confirmed and accepted as of
the date first above written:
SBC WARBURG DILLON READ INC.
By: /s/ John G. Brim
---------------------------------------
Name: John G. Brim
Title: Managing Director
ABN AMRO INCORPORATED
By: /s/ Linda A. Dawson
---------------------------------------
Name: Linda A. Dawson
Title: Managing Director
<PAGE>
<PAGE>
SCHEDULE I
<TABLE>
<CAPTION>
Principal Amount of
Initial Purchaser Original Notes
- ------------------ ------------------------
<S> <C>
SBC Warburg Dillon Read Inc..................................... $200,903,282
ABN AMRO Incorporated........................................... 19,096,718
-------------
Total $220,000,000
=============
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A
SUBSIDIARIES
Jurisdiction
Name Type of Entity Of Incorporation Equity Ownership and Direct Owner
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
1. DOMESTIC OPERATING SUBSIDIARIES
Daisy Parts, Inc. corporation Michigan Eagle-Picher Industries, Inc. - 100%
Eagle-Picher Development Company, Inc. corporation Dealware Eagle-Picher Industries, Inc. - 100%
Eagle-Picher Far East, Inc. corporation Dealware Eagle-Picher Industries, Inc. - 100%
Eagle-Picher Fluid Systems, Inc. corporation Michigan Eagle-Picher Industries, Inc. - 100%
Eagle-Picher Minerals, Inc. corporation Nevada Eagle-Picher Industries, Inc. - 100%
Hillsdale Tool & Manufacturing Co. corporation Michigan Eagle-Picher Industries, Inc. - 100%
Michigan Automotive Research Corporation corporation Michigan Eagle-Picher Development Company, Inc. - 100%
2. FOREIGN SUBSIDIARIES
Eagle-Picher Automotive GmbH Gesellschaft mit Germany Eagle-Picher Industries, Europe B.V. - 100%
Beschraeckter
Haftung (company
with limited
liability)
Eagle-Picher Espana, S.A. Sociedad Anonima Spain Eagle-Picher Industries, Europe B.V. - 100%
(joint stock
company)
Eagle-Picher Fluid Systems, Ltd. private limited England & Wales Eagle-Picher UK Limited - 100%
company
Eagle-Picher Hillsdale Limited private limited England & Wales Eagle-Picher UK Limited - 100%
company
Eagle-Picher Industries Europe B.V. Besloten Netherlands Eagle-Picher Industries Inc - 100%
Venwootschap
(private company
with limited
liability)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Jurisdiction
Name Type Of Entity Of Incorporation Equity Ownership and Direct Owner
- ------------------------------- -------------------- ---------------- ----------------------------------
<S> <C> <C> <C>
Eagle-Pitcher Technologies GmbH Gesellschaft mit Germany Eagle-Picher Wolverine GmbH - 100%
beschraenkter Haftung
(company with limited
liability)
Eagle-Picher Industries of Canada corporation Ontario, Canada Eagle-Picher Industries, Inc. - 100%
Limited
Eagle-Picher Minerals International Societe a Responsabilite France Eagle-Picher Minerals, Inc. - 100%
S.A.R.L. Limite (limited liability
company)
Eagle-Picher UK Limited private limited company England & Wales Eagle-Picher Industries Europe B.V. - 100%
Eagle-Picher Wolverine GmbH private limited company Germany Eagle-Picher Industries Europe B.V.
- 99.95% (DM 3,798,000); A Ruijssenaars
in trust for Eagle-Picher Industries, Inc.
- .05% (DM 2,000)
Eagle-Picher, Inc. foreign sales corporation Virgin Islands Eagle-Picher Industries, Inc. - 100%
EPTEC, S.A. de C.V. Sociedad Anonima de Mexico Eagle-Picher Industries, Inc. (28,582,138
Capital Variable shares) & Hillsdale Tool & Manufacturing
(corporation with Co. (1 share)
variable capital)
Equipos de Acuna, S.A. de C.V. Sociedad Anonima de Mexico Eagle-Picher Industries, Inc. (999 shares
Capital Variable of Series A, 19,794,801 shares of Series
(corporation with B, 1,508,248 shares of Series C; James A.
variable capital) Ralston - 1 share of Series A
United Minerals GmbH & Co. KG Kommandit Gesellschaft Germany Eagle-Picher Minerals International
(limited partnership) S.A.R.L. - 100%
United Minerals Verwaltungs-und Gesellschaft mit Germany Eagle-Picher Minerals International
Beteiligungs GmbH beschraenkter Haftung S.A.R.L - 100%
(company with limited
liability)
3. IMMATERIAL SUBSIDIARIES
Fabricon Corporation corporation Michigan Eagle-Picher Industries, Inc. - 100%
Fabricon Products Corporation of corporation Pennsylvania Fabricon Corporation - 100%
Pennsylvania
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
Jurisdiction
Name Type Of Entity Of Incorporation Equity Ownership and Direct Owner
- ---------------------------------- -------------------- ---------------- ----------------------------------
<S> <C> <C> <C>
Ross Aluminum Foundries, Inc. corporation Ohio Eagle-Picher Industries, Inc. - 100%
Wolverine Gasket and Manufacturing corporation Michigan Eagle-Picher Industries, Inc. - 100%
Company
Cincinnati Industrial Machinery corporation Ohio Eagle-Picher Industries, Inc. - 100%
Sales Company
</TABLE>
<PAGE>
<PAGE>
ASSUMPTION AGREEMENT
FOR THE NOTES PURCHASE AGREEMENT
AGREEMENT dated as of February 24, 1998 of Eagle-Picher Industries,
Inc., an Ohio corporation (the "COMPANY"), and the Subsidiary Guarantors listed
on the signature pages hereof (the "SUBSIDIARY GUARANTORS").
WHEREAS, E-P Acquisition, Inc. (the "ISSUER"), Eagle-Picher Holdings,
Inc., a Delaware corporation ("PARENT"), and SBC Warburg Dillon Read Inc. and
ABN AMRO Incorporated (together, the "INITIAL PURCHASERS") have entered into
the Notes Purchase Agreement dated as of the date hereof (the "NOTES PURCHASE
AGREEMENT"); and
WHEREAS, pursuant to the Merger Agreement dated as of December 23, 1997
(the "MERGER AGREEMENT") among the Eagle-Picher Industries, Inc. Personal
Injury Settlement Trust, the Company, Assignor and Parent, Assignor has merged
into the Company with the Company as the surviving corporation;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the Company and the Subsidiary Guarantors hereto
agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein have the respective meanings set forth in the Notes Purchase Agreement.
SECTION 2. Assignment. The Company and the Subsidiary Guarantors hereby
assume all of the obligations of the Issuer under the Notes Purchase Agreement.
Upon the execution and delivery hereof by the the Company and the Subsidiary
Guarantors, the Company shall, as of the date hereof, succeed to the rights and
be obligated to perform the obligations of the "Issuer," and the Subsidiary
Guarantors shall, as of the date hereof, be obligated to perform the
obligations of Guarantors along with "Parent" under the Notes Purchase
Agreement.
SECTION 3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Company and the Subsidiary Guarantors have
caused this Agreement to be executed and delivered as of the date first above
written.
EAGLE-PICHER INDUSTRIES, INC.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: President
DAISY PARTS, INC.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER DEVELOPMENT
COMPANY, INC.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: President
EAGLE-PICHER FAR EAST, INC.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
<PAGE>
<PAGE>
EAGLE-PICHER FLUID SYSTEMS, INC.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER MINERALS, INC.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
EAGLE-PICHER TECHNOLOGIES, LLC
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: Director-Manager
HILLSDALE TOOL &
MANUFACTURING CO.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
MICHIGAN AUTOMOTIVE RESEARCH
CORPORATION
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: Authorized Person
<PAGE>
<PAGE>
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT") is made and
entered into as of February 24, 1998 by and among E-P ACQUISITION, INC., a
Delaware corporation (the "COMPANY"), and SBC WARBURG DILLON READ INC. and ABN
AMRO INCORPORATED (the "INITIAL PURCHASERS"). The execution and delivery of this
Agreement is a condition to the obligations of the Initial Purchasers to
purchase $220,000,000 aggregate principal amount of the Company's 93/8% Senior
Subordinated Notes due 2008 (the "NOTES") under the Notes Purchase Agreement,
dated February 19, 1998 (the "PURCHASE AGREEMENT"), by and among the Company,
Parent and the Initial Purchasers. The Notes will be guaranteed on an unsecured
senior subordinated basis by the Guarantors and will be issued pursuant to the
Notes Indenture (as defined herein).
The Company and the Initial Purchasers hereby agree as follows:
SECTION 1. Definitions. As used in this Agreement, the following
capitalized terms shall have the following meanings:
"ACT" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated by the Commission pursuant thereto.
"ACTION" has the meaning set forth in Section 8(c) of this Agreement.
"BROKER-DEALER" means any broker or dealer registered under the
Exchange Act.
"COMMISSION" means the Securities and Exchange Commission.
"CONSUMMATION" of an Offer means the occurrence of (i) the filing and
effectiveness under the Act of the Exchange Offer Registration Statement
relating to the New Notes to be issued in the Exchange Offer, (ii) the
maintenance of such Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period
required pursuant to Section 3(b) of this Agreement and (iii) the delivery by
the Company to the Registrar under the Notes Indenture of New Notes in the same
aggregate principal amount as the aggregate principal amount of Old Notes
tendered by the Holders thereof pursuant to the Exchange Offer and not
withdrawn. "CONSUMMATE," when used as a verb, has a correlative meaning.
"EFFECTIVENESS TARGET DATE" has the meaning set forth in Section 5 of
this Agreement.
<PAGE>
<PAGE>
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated by the Commission pursuant thereto.
"EXCHANGE OFFER" means the registration under the Act by the Company of
the New Notes pursuant to a Registration Statement pursuant to which the Company
offers the Holders of outstanding Transfer Restricted Securities the opportunity
to exchange such outstanding Old Notes that are Transfer Restricted Securities
held by such Holders for New Notes in an aggregate principal amount equal to the
aggregate principal amount of the Old Notes that are Transfer Restricted
Securities tendered in such exchange offer by such Holders.
"EXCHANGE OFFER REGISTRATION STATEMENT" means the Registration
Statement relating to the Exchange Offer, including the related Prospectus.
"GUARANTORS" means Parent and the Subsidiary Guarantors (as defined in
the Purchase Agreement).
"HOLDERS" has the meaning set forth in Section 2(b) of this Agreement.
"INDEMNIFIED PERSON" has meaning set forth in Section 8(a) of this
Agreement.
"INITIAL PURCHASERS" means SBC Warburg Dillon Read Inc. and ABN
AMRO Incorporated.
"INTEREST PAYMENT DATE" has the meaning set forth in the Notes
Indenture and the Notes.
"ISSUE DATE" means the date that the Notes are purchased by the Initial
Purchasers pursuant to the Purchase Agreement.
"LOSSES" has the meaning set forth in Section 8(a) of this Agreement.
"NASD" means the National Association of Securities Dealers, Inc.
"NEW NOTES" means the Company's 9 3/8% Senior Subordinated Notes due
2008 to be issued pursuant to the Notes Indenture or an indenture substantially
identical to the Notes Indenture (i) in connection with the Exchange Offer or
(ii) upon the request of any Holder of Old Notes covered by the Shelf
Registration Statement, in exchange for such Old Notes and evidencing the same
debt as the Old Notes, including the guarantees by the Guarantors.
"NOTES" means the Old Notes and the New Notes.
2
<PAGE>
<PAGE>
"NOTES INDENTURE" means the Notes Indenture, dated as of February 24,
1998, by and among the Company and The Bank of New York, as trustee (the
"TRUSTEE"), pursuant to which the Notes are to be issued, as such Notes
Indenture is amended or supplemented from time to time in accordance with its
terms.
"OLD NOTES" means the Company's 9 3/8% Senior Subordinated Notes due
2008 to be issued pursuant to the Notes Indenture on the Issue Date, including
the Guarantees by the Guarantors.
"PARENT" means Eagle-Picher Holdings, Inc., a Delaware corporation, and
its successors.
"PARTICIPATING BROKER-DEALER" has the meaning set forth in Section 6(a)
of this Agreement.
"PERSON" means an individual, corporation, partnership, joint venture,
incorporated or unincorporated association, joint-stock company, trust,
unincorporated organization or a government or other agency or political
subdivision thereof or other entity of any kind.
"PROSPECTUS" means the prospectus included in a Registration Statement
at the time such Registration Statement is declared effective, as amended or
supplemented by any prospectus supplement and by all other amendments and
supplements thereto, including post-effective amendments, and all material
incorporated by reference or deemed to be incorporated by reference, if any, in
such Prospectus.
"REGISTRATION DEFAULT" has the meaning set forth in Section 5 of this
Agreement.
"REGISTRATION STATEMENT" means any registration statement of the
Company relating to (a) an offering of New Notes pursuant to an Exchange Offer
or (b) the registration for resale of Transfer Restricted Securities pursuant to
the Shelf Registration Statement that is filed pursuant to the provisions of
this Agreement, in each case, including the Prospectus included therein, all
amendments and supplements thereto (including pre- and post-effective
amendments) and all exhibits and material incorporated by reference or deemed to
be incorporated by reference, if any, therein.
"SHELF FILING DEADLINE" has the meaning set forth in Section 4(a) of
this Agreement.
3
<PAGE>
<PAGE>
"SHELF REGISTRATION STATEMENT" has the meaning set forth in
Section 4(a) of this Agreement.
"SUBSIDIARY" means, with respect to any Person, any other Person of
which a majority of the equity ownership or the voting securities is at the time
owned, directly or indirectly, by such Person or by one or more other
subsidiaries of such Person or a combination thereof.
"TIA" means the Trust Indenture Act of 1939, as amended, and the rules
and regulations promulgated pursuant thereto, all as in effect on the date of
the Notes Indenture.
"TRANSFER RESTRICTED SECURITIES" means each Note until the earliest to
occur of (i) the date on which each such Old Note has been exchanged by a person
other than a Broker-Dealer for a New Note in the Exchange Offer, (ii) following
the exchange by a Broker-Dealer in the Exchange Offer of an Old Note for a New
Note, the date on which such New Note is sold to a purchaser who receives from
such Broker-Dealer on or prior to the date of such sale a copy of the Prospectus
contained in the Exchange Offer Registration Statement, (iii) the date on which
such Note has been effectively registered under the Act and disposed of in
accordance with the Shelf Registration Statement or (iv) the date on which such
Note could be resold pursuant to Rule 144 under the Act.
"UNDERWRITTEN REGISTRATION" or "UNDERWRITTEN OFFERING" means a
registration in which securities of the Company are sold to an underwriter for
reoffering to the public pursuant to an effective Registration Statement.
SECTION 2. Securities Subject to this Agreement. (a) Transfer
Restricted Securities. The securities entitled to the benefits of this
Agreement are the Transfer Restricted Securities.
(b) Holders of Transfer Restricted Securities. A Person is deemed
to be a holder of Transfer Restricted Securities (each, a "HOLDER") whenever
such Person beneficially owns Transfer Restricted Securities.
SECTION 3. Registered Exchange Offer. (a) Unless the Exchange Offer
shall not be permitted by applicable federal law or Commission policy, the
Company shall (i) cause to be filed with the Commission on or prior to 45 days
after the Issue Date, an Exchange Offer Registration Statement under the Act
relating to the New Notes and the Exchange Offer and (ii) use its best efforts
to cause such Exchange Offer Registration Statement to be declared effective by
the Commission on or prior to 90 days after the Issue Date. In connection with
the foregoing, the Company shall (A) file all pre-effective amendments to such
4
<PAGE>
<PAGE>
Exchange Offer Registration Statement as may be necessary to cause such Exchange
Offer Registration Statement to become effective, (B) if applicable, file a
post-effective amendment to such Exchange Offer Registration Statement pursuant
to Rule 430A under the Act, (C) cause all necessary filings in connection with
the registration and qualification of the New Notes to be made under the Blue
Sky laws of such jurisdictions as are necessary to permit Consummation of the
Exchange Offer; provided, however, that the Company shall not be obligated to
qualify as a foreign corporation in any jurisdiction in which it is not so
qualified or to take any action which would subject it to general service of
process or taxation in any jurisdiction where it is not so subject and (D) upon
the effectiveness of such Registration Statement, commence the Exchange Offer
and use its best efforts to issue on or prior to 45 days after the date on which
such Exchange Offer Registration Statement is declared effective by the
Commission, New Notes in exchange for all Old Notes tendered prior thereto in
the Exchange Offer. The Exchange Offer shall be on the appropriate form
permitting registration of the New Notes to be offered in exchange for the Old
Notes that are Transfer Restricted Securities and permitting resales of New
Notes held by Broker-Dealers as contemplated by Section 3(c) below. If, after
such Exchange Offer Registration Statement initially is declared effective by
the Commission, the Exchange Offer or the issuance of New Notes under the
Exchange Offer or the resale of New Notes received by Broker-Dealers in the
Exchange Offer as contemplated by Section 3(c) below is interfered with by any
stop order, injunction or other order or requirement of the Commission or any
other governmental agency or court, such Exchange Offer Registration Statement
shall be deemed not to have become effective for purposes of this Agreement
during the period that such stop order, injunction or other similar order or
requirement shall remain in effect.
(b) The Company shall cause the Exchange Offer Registration Statement
to be effective continuously and shall keep the Exchange Offer open for a period
of not less than the minimum period required under applicable federal and state
securities laws to Consummate the Exchange Offer; provided, however, that in no
event shall such period be less than 20 business days. The Company shall cause
the Exchange Offer to comply with all applicable federal and state securities
laws. The Company shall only offer to exchange New Notes for Old Notes in the
Exchange Offer. The Company shall use its best efforts to cause the Exchange
Offer to be Consummated on the earliest practicable date after the Exchange
Offer Registration Statement has become effective, but not less than 20 business
days after such effective date and in no event later than 45 days after such
effective date.
(c) The Company shall indicate in a "Plan of Distribution" section
contained in the Prospectus included in the Exchange Offer Registration
5
<PAGE>
<PAGE>
Statement that any Broker-Dealer that holds Old Notes that are Transfer
Restricted Securities and that were acquired for its own account as a result of
market-making activities or other trading activities (other than Transfer
Restricted Securities acquired directly from the Company or any affiliate of the
Company), may exchange such Old Notes pursuant to the Exchange Offer; provided,
however, that such Broker-Dealer may be deemed to be an "underwriter" within the
meaning of the Act and must, therefore, deliver a prospectus meeting the
requirements of the Act in connection with any resales of the New Notes received
by such Broker-Dealer in the Exchange Offer. Such "Plan of Distribution" section
shall allow the use of such Prospectus by all Persons subject to the prospectus
delivery requirements of the Act, including Participating Broker-Dealers, and
shall also contain all other information with respect to such resales by
Broker-Dealers that the Commission may require to permit such resales pursuant
thereto, but such "Plan of Distribution" shall not name any such Broker-Dealer
or disclose the amount of Notes held by any such Broker-Dealer except to the
extent required by the Commission as a result of a change in policy after the
date of this Agreement.
The Company shall use its best efforts to keep the Exchange Offer
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Section 6(c) below to the extent necessary to
ensure that it is available for resales of Notes acquired by Broker-Dealers for
their own accounts as a result of market-making activities or other trading
activities, and to ensure that it conforms with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a period of 180 days from the date on which the
Exchange Offer Registration Statement is declared effective. The Company shall
provide sufficient copies of the latest version of such Prospectus to
Broker-Dealers promptly upon request at any time during such 180-day period in
order to facilitate such resales.
SECTION 4. Shelf Registration. (a) Shelf Registration. If (i) the
Company is not required to file an Exchange Offer Registration Statement or to
Consummate the Exchange Offer because the Exchange Offer is not permitted by
applicable law or Commission policy or (ii) any Holder of Transfer Restricted
Securities shall notify the Company within 20 days after the commencement of the
Exchange Offer that such Holder (A) is prohibited by applicable law or
Commission policy from participating in the Exchange Offer, or (B) may not
resell the New Notes acquired by it in the Exchange Offer to the public without
delivering a prospectus, and the Prospectus contained in the Exchange Offer
Registration Statement is not appropriate or available for such resales by such
Holder or (C) is a Broker-Dealer and holds Old Notes (including the Initial
Purchasers that hold Old Notes as part of an unsold allotment from the original
offering of the Notes) acquired directly from the Company or one of its
affiliates,
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then the Company shall (x) cause to be filed a shelf registration statement
pursuant to Rule 415 under the Act, which may be an amendment to the Exchange
Offer Registration Statement (in either event, the "SHELF REGISTRATION
STATEMENT"), on or prior to the earliest to occur of (1) the 45th day after the
date on which the Company determines that it is not required to file the
Exchange Offer Registration Statement or (2) the 45th day after the date on
which the Company receives notice from a Holder of Transfer Restricted
Securities as contemplated by clause (ii) above (such earliest date being the
"SHELF FILING DEADLINE"), which Shelf Registration Statement shall provide for
resales of all Transfer Restricted Securities the Holders of which shall have
provided the information required pursuant to Section 4(c) of this Agreement,
and (y) use its best efforts to cause such Shelf Registration Statement to be
declared effective by the Commission on or before the 45th day after the Shelf
Filing Deadline. The Company shall use its best efforts to keep such Shelf
Registration Statement continuously effective, supplemented and amended as
required by the provisions of Sections 6(b) and 6(c) of this Agreement to the
extent necessary to ensure that it is available for resales of Notes by the
Holders of Transfer Restricted Securities entitled to the benefit of this
Section 4(a) and to ensure that it conforms to the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as
announced from time to time, for a continuous period of two years following the
date on which such Shelf Registration becomes effective under the Act or such
shorter period that will terminate when all the Notes covered by the Shelf
Registration Statement have been sold pursuant to such Shelf Registration
Statement.
(b) Postponement or Suspension of Shelf Registration Statement under
Certain Circumstances. If, notwithstanding its best efforts to cause an Exchange
Offer Registration Statement to be declared effective and to consummate the
Exchange Offer pursuant to Section 3(a) of this Agreement, the Company is
required to file a Shelf Registration Statement pursuant to Section 4(a) hereof,
the Company may postpone or suspend the filing or effectiveness of such Shelf
Registration Statement (or any amendment or supplements thereto) (i) if such
action is required by applicable law or (ii) for up to an aggregate of 30 days
during any consecutive 365-day period, if such action is approved by the Board
of Directors of the Company and is taken by the Company in good faith and for
valid business reasons (not including the avoidance of the Company's obligations
hereunder), including the premature disclosure of material nonpublic information
which, if disclosed at such time, would be materially harmful to the interests
of the Company and its shareholders, so long as the Company promptly thereafter
complies with the requirements of Section 4(a) hereof. This Section 4(b) shall
not affect the Company's obligations to pay Special Interest pursuant to Section
5 of this Agreement.
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(c) Provision by Holders of Certain Information in Connection with the
Shelf Registration Statement. No Holder of Transfer Restricted Securities may
include any of its Transfer Restricted Securities in any Shelf Registration
Statement pursuant to this Agreement unless and until such Holder furnishes to
the Company in writing, within 15 days after receipt of a request therefor, such
information as the Company may reasonably request for use in connection with any
Shelf Registration Statement or Prospectus or preliminary prospectus included in
such Shelf Registration Statement. Each Holder as to which any Shelf
Registration Statement is being effected agrees to furnish promptly to the
Company all information required to be disclosed to make the information
previously furnished to the Company by such Holder not materially misleading.
SECTION 5. Special Interest. If (i) the Exchange Offer Registration
Statement or the Shelf Registration Statement is not filed with the Commission
on or prior to the date specified for such filing in Section 3(a) or Section
4(a), respectively, of this Agreement, (ii) the Exchange Offer Registration
Statement or the Shelf Registration Statement has not been declared effective by
the Commission on or prior to the date specified for such effectiveness in
Section 3(a) or Section 4(a), respectively, of this Agreement (the
"EFFECTIVENESS TARGET DATE"), (iii) the Exchange Offer has not been Consummated
within 45 days after the Effectiveness Target Date with respect to the Exchange
Offer Registration Statement or (iv) any Registration Statement required by this
Agreement is filed and declared effective but shall thereafter cease to be
effective or usable in connection with resales of Transfer Restricted Securities
during the periods required by this Agreement (each such event referred to in
clauses (i) through (iv), a "REGISTRATION DEFAULT"), the Company hereby agrees
to pay to each Holder of Transfer Restricted Securities additional interest
("SPECIAL INTEREST") on the principal amount of the Notes (in addition to the
stated interest on the Notes) from and including the date on which any such
Registration Defaults have occurred to but excluding the date on which all such
Registration Defaults have been cured. Special Interest will accrue at a rate of
0.25% per annum during the 90-day period immediately following the occurrence of
any Registration Default and shall increase by 0.25% per annum at the end of
each subsequent 90-day period, but in no event shall such rate exceed 1.5% per
annum. The Company shall have no obligation to pay additional Special Interest
in respect of any subsequent Registration Default so long as the Company
continues to accrue Special Interest with respect to an earlier Registration
Default. All accrued Special Interest shall be paid by the Company on each
Interest Payment Date in accordance with the provisions applicable to the
payment of interest set forth in the Notes Indenture. Following the cure of all
Registration Defaults relating to any particular Transfer Restricted Securities,
the accrual of Special Interest with respect to such Transfer Restricted
Securities will cease.
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All obligations of the Company set forth in the preceding paragraph
that are outstanding with respect to any Transfer Restricted Security at the
time such security ceases to be a Transfer Restricted Security shall survive
until such time as all such obligations with respect to such Transfer Restricted
Security shall have been satisfied in full.
SECTION 6. Registration Procedures. (a) Exchange Offer Registration
Statement. In connection with the Exchange Offer, the Company shall comply with
all of the provisions of Section 6(c) below, shall use its best efforts to
effect such exchange to permit the sale of Transfer Restricted Securities being
sold in accordance with the intended method or methods of distribution thereof,
and shall comply with all of the following provisions:
(i) If, in the reasonable opinion of counsel to the Company, there is
a question as to whether the Exchange Offer is permitted by applicable
federal law or Commission policy, the Company hereby agrees to seek a
no-action letter or other favorable decision from the Commission
allowing the Company to Consummate an Exchange Offer for such Old
Notes. The Company hereby agrees to pursue the issuance of such a
no-action letter or favorable decision to the Commission staff level.
In connection with the foregoing, the Company hereby agrees to take all
such other reasonable actions as are requested by the Commission or
otherwise required in connection with the issuance of such no-action
letter or decision, including without limitation (A) participating in
telephonic conferences with the Commission staff, (B) delivering to the
Commission staff an analysis prepared by counsel to the Company setting
forth the legal bases, if any, upon which such counsel has concluded
that such an Exchange Offer should be permitted and (C) diligently
pursuing a resolution (which need not be favorable) by the Commission
staff of such submission. The Initial Purchasers shall be given prior
notice of any action taken by the Company under this clause (i).
(ii) As a condition to its participation in the Exchange Offer
pursuant to the terms of this Agreement, each Holder of Transfer
Restricted Securities shall furnish, upon the request of the Company,
prior to the Consummation of the Exchange Offer, a written
representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement)
to the effect that (A) it is not an affiliate of the Company within the
meaning of the Act, (B) it is not engaged in, and does not intend to
engage in, and has no arrangement or understanding with any Person to
participate in, a distribution of the New Notes to be issued in the
Exchange Offer and (C) it is acquiring the New Notes in its ordinary
course of business. Holders
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of Transfer Restricted Securities shall use their best efforts to
cooperate in the Company's preparations for the Exchange Offer.
(iii) The Company and the Initial Purchasers acknowledge that the
staff of the Commission has taken the position that any Broker-Dealer
that owns New Notes that were received by such Broker-Dealer for its
own account in the Exchange Offer (a "PARTICIPATING BROKER-DEALER") may
be deemed to be an "underwriter" within the meaning of the Act and must
deliver a prospectus meeting the requirements of the Act in connection
with any resale of such New Notes. Further, the Company and the Initial
Purchasers acknowledge that the Initial Purchasers may not exchange in
the Exchange Offer Old Notes representing unsold allotments resulting
from the original offering of the Old Notes.
The Company and the Initial Purchasers also acknowledge that it is the
Commission staff's current position that if the Prospectus contained in the
Exchange Offer Registration Statement includes a plan of distribution containing
a statement to the above effect and the means by which Participating
Broker-Dealers may resell the New Notes, without naming the Participating
Broker-Dealers or specifying the amount of New Notes owned by them, such
Prospectus may be delivered by Participating Broker-Dealers to satisfy their
prospectus delivery obligations under the Act in connection with resales of New
Notes for their own accounts (other than a resale of an unsold allotment
resulting from the original offering of the Notes), so long as the Prospectus
otherwise meets the requirements of the Act.
(b) Shelf Registration Statement. In the event that a Shelf
Registration Statement is required by this Agreement, the Company shall comply
with all the provisions of Section 6(c) of this Agreement and shall use its best
efforts to effect such registration to permit the sale of the Transfer
Restricted Securities being sold in accordance with the intended method or
methods of distribution of such Transfer Restricted Securities and, in
connection therewith, the Company shall, as expeditiously as possible, prepare
and file with the Commission a Shelf Registration Statement relating to the
registration on any appropriate form under the Act, which form shall be
available for the sale of the Transfer Restricted Securities in accordance with
the intended method or methods of distribution of such Transfer Restricted
Securities within the time periods and otherwise in accordance with the
provisions of this Agreement.
(c) General Provisions. In connection with any Registration Statement
and any Prospectus required by this Agreement to permit the sale or resale of
Transfer Restricted Securities (including, without limitation, any Registration
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Statement and the related Prospectus, to the extent that the same are required
to be available to permit resales of Notes by Broker-Dealers), the Company
shall:
(i) use its best efforts to keep such Registration Statement
continuously effective for the applicable time period required
hereunder and provide all requisite financial statements (including, if
required by the Act or any regulation thereunder, financial statements
of the Guarantors) for the period specified in Section 3 or 4 of this
Agreement, as applicable; upon the occurrence of any event that would
cause any such Registration Statement or the Prospectus contained
therein (A) to contain a material misstatement or omission or (B) not
to be effective and usable for resale of Transfer Restricted Securities
during the period required by this Agreement, the Company shall
promptly notify the Holders to suspend use of the Prospectus, and the
Holders shall suspend use of the Prospectus and the Holders shall not
communicate non-public information to any third party in violation of
the securities laws until the Company has made an appropriate amendment
to such Registration Statement (or caused the Prospectus to be
supplemented by a Prospectus Supplement), in the case of clause (A),
correcting any such misstatement or omission, and, in the case of
either clause (A) or (B), the Company shall use its best efforts to
cause such amendment to be declared effective and such Registration
Statement and the related Prospectus to become usable for their
intended purpose(s) as soon as practicable thereafter;
(ii) prepare and file with the Commission such pre-effective and
post-effective amendments to such Registration Statement as may be
necessary to keep the Registration Statement effective for the
applicable period set forth in Section 3 or 4 of this Agreement, or
such shorter period as will terminate when all Transfer Restricted
Securities covered by such Registration Statement have been sold; cause
the Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule 424
under the Act during the applicable time period required hereunder and
to comply fully with the applicable provisions of Rules 424 and 430A
under the Act in a timely manner; and comply with the provisions of the
Act and the Exchange Act applicable to the Company with respect to the
disposition of all Transfer Restricted Securities covered by such
Registration Statement during such period in accordance with the
intended method or methods of distribution by the sellers of such
securities set forth in such Registration Statement as so amended or in
such Prospectus as so supplemented;
(iii) advise the underwriter(s), if any, the Initial Purchasers, and,
in the case of a Shelf Registration Statement, each of the selling
Holders
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promptly and, if requested by such Persons, confirm such advice in
writing, (A) when the Prospectus or any prospectus supplement or
post-effective amendment has been filed and, with respect to any
Registration Statement or any post-effective amendment thereto, when
the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements
to the Prospectus or for additional information relating to such
Registration Statement or Prospectus, (C) of the issuance by the
Commission of any stop order suspending the effectiveness of the
Registration Statement under the Act or of the suspension by any state
securities commission of the qualification of the Transfer Restricted
Securities for offering or sale in any jurisdiction, or the initiation
of any proceeding for any of the preceding purposes, (D) of the
existence of any fact or the happening of any event that makes any
statement of a material fact made in the Registration Statement, the
Prospectus, any amendment or supplement to such Registration Statement
or Prospectus, as the case may be, or any document incorporated by
reference in such Registration Statement or Prospectus untrue, or that
requires the making of any additions to or changes in the Registration
Statement or the Prospectus in order to make the statements in such
Registration Statement or Prospectus not misleading and that, in the
case of the Prospectus, it will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading. If at any
time the Commission shall issue any stop order suspending the
effectiveness of the Registration Statement, or any state securities
commission or other regulatory authority shall issue an order
suspending the qualification or exemption from qualification of the
Transfer Restricted Securities under state securities or Blue Sky laws,
the Company shall use its best efforts to obtain the withdrawal or
lifting of such order at the earliest possible time;
(iv) furnish to each of the underwriter(s), if any, the Initial
Purchasers and, in the case of a Shelf Registration Statement, each of
the selling Holders, before filing with the Commission, copies of any
Registration Statement or any Prospectus included in such Registration
Statement or Prospectus or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents
incorporated by reference after the initial filing of such Registration
Statement), which documents will be subject to the review and comment
of such underwriter(s), if any, the Initial Purchasers, and such
Holders for a period of at least five business days, and the Company
will not file any such Registration Statement or Prospectus or any
amendment or
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supplement to any such Registration Statement or Prospectus, as the
case may be (including all such documents incorporated by reference),
to which any underwriter, Initial Purchaser or selling Holder shall
reasonably object within five business days after the receipt of such
Registration Statement or Prospectus;
(v) in connection with any Shelf Registration Statement and, in the
case of Participating Broker-Dealers, any Exchange Offer Registration
Statement, promptly prior to the filing of any document that is to be
incorporated by reference into a Registration Statement or Prospectus,
(A) provide copies of such document to the selling Holders (including
Participating Broker-Dealers, if any) and to the underwriter(s), if
any, (B) make the Company's representatives reasonably available for
discussion of such document and other customary due diligence matters;
provided that such discussion and due diligence shall be coordinated on
behalf of the selling Holders by one counsel designated by and on
behalf of such selling Holders and (C) include such information in such
document prior to the filing of such document as such selling Holders
or underwriter(s), if any, may reasonably request;
(vi) make available at reasonable times for inspection by the selling
Holders, any underwriter participating in any disposition pursuant to
such Registration Statement and any attorney or accountant retained by
such selling Holders or any of the underwriter(s), if any, at the
offices where normally kept, during reasonable business hours, all
relevant financial and other records, pertinent corporate documents and
properties of the Company and the Guarantors and cause the Company's
and the Guarantors' officers, directors and employees to supply all
information reasonably requested by any such Holder, underwriter,
attorney or accountant in connection with such Registration Statement
subsequent to the filing thereof and prior to its effectiveness;
provided, however, that any information that is designated in writing
by the Company, in good faith, as confidential at the time of delivery
of such information shall be kept confidential by such selling Holders,
underwriters, attorney or accountant, unless such disclosure is made in
connection with a court proceeding or required by law, or such
information becomes available to the public generally or through a
third party without an accompanying, obligation of confidentiality.
Each selling Holder, underwriter, attorney or accountant requesting
disclosure will agree that it will, upon learning that disclosure of
such information is sought in connection with a court proceeding, give
notice to the Company and allow it at its own expense to undertake
appropriate action to prevent disclosure of the information deemed
confidential;
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(vii) if requested by any selling Holders or the underwriter(s), if
any, promptly include in any Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment, if necessary,
such information as such selling Holders and underwriter(s), if any,
may reasonably request to have included therein, including, without
limitation, information relating to the "Plan of Distribution" of the
Transfer Restricted Securities, information with respect to the
principal amount of Transfer Restricted Securities being sold to such
underwriter(s), the purchase price being paid for Transfer Restricted
Securities and any other terms of the offering of the Transfer
Restricted Securities to be sold in such offering; and make all
required filings of such Prospectus supplement or post-effective
amendment as soon as practicable after the Company is notified of the
matters to be included in such Prospectus supplement or post-effective
amendment; provided, however, that the Company shall not be required to
take any action pursuant to this Section 6(c)(vii) that would, in the
opinion of counsel for the Company, violate applicable law;
(viii) furnish to each underwriter, if any, the Initial Purchasers and
selling Holders, without charge, at least one conformed copy of the
Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference
therein and all exhibits (including exhibits incorporated therein by
reference that are expressly requested by such persons);
(ix) deliver to each selling Holder, each of the underwriter(s), if
any, and the Initial Purchasers, without charge, as many copies of the
Prospectus (including each preliminary prospectus) and any amendment or
supplement thereto as such Persons may reasonably request; the Company
hereby consents to the use of the Prospectus and any amendment or
supplement to the Prospectus by each of the selling Holders and each of
the underwriter(s), if any, in connection with the offering and the
sale of the Transfer Restricted Securities in accordance with the terms
thereof and with U.S. federal securities laws and Blue Sky laws covered
by the Prospectus or any amendment or supplement thereto;
(x) enter into such agreements (including an underwriting agreement in
form, scope and substance as is customary in underwritten offerings of
securities of this type) and take all such other reasonable actions in
connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any Registration
Statement contemplated by this Agreement, all as may be reasonably
requested by any Holder of Transfer Restricted Securities or
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the underwriter(s), if any, in connection with any sale or resale of
Transfer Restricted Securities pursuant to any Registration Statement
contemplated by this Agreement; and whether or not an underwriting
agreement is entered into and whether or not the registration is an
Underwritten Registration, the Company shall
(A) make such representations and warranties to the
Holders of such Transfer Restricted Securities and the
underwriters, if any, with respect to the business of the
Company and its Subsidiaries (including with respect to
businesses or assets acquired or to be acquired by any of
them), and the Shelf Registration Statement, Prospectus and
documents, if any, incorporated or deemed to be incorporated
by reference therein, in each case, in form, substance and
scope as are customarily made by issuers to underwriters in
underwritten offerings, and confirm the same if and when
customarily requested;
(B) use its reasonable best efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel and
opinions (in form, scope and substance) shall be reasonably
satisfactory to the underwriters, if any, and special counsel
to the Holders of the Transfer Restricted Securities being
sold), addressed to each selling Holder of Transfer Restricted
Securities and each of the underwriters, if any, covering the
matters customarily covered in opinions requested in
underwritten offerings and such other matters as may be
reasonably requested by such underwriters, if any, and special
counsel to Holders of Transfer Restricted Securities;
(C) use its reasonable best efforts to obtain customary
"cold comfort" letters and updates thereof from the
independent certified public accountants of the Company (and,
if necessary, any other independent certified public
accountants of any subsidiary of the Company or of any
business acquired by the Company or any such subsidiary for
which financial statements and financial data is, or is
required to be, included in the Registration Statement),
addressed to each selling Holder of Transfer Restricted
Securities and each of the underwriters, if any, such letters
to be in customary form and covering matters of the type
customarily covered in "cold comfort" letters in connection
with underwritten offerings;
(D) if an underwriting agreement is entered into, the
same shall contain indemnification provisions and procedures
no less
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favorable to the selling Holders and the underwriters, if any,
than those set forth in Section 8 hereof (or such other
provisions and procedures acceptable to Holders of a majority
in aggregate principal amount of Transfer Restricted
Securities covered by such Shelf Registration Statement and
the underwriters, if any); and
(E) deliver such documents and certificates as may be
reasonably requested by the Holders of a majority in aggregate
principal amount of the Transfer Restricted Securities being
sold and the underwriters, if any, to evidence the continued
validity of the representations and warranties made pursuant
to clause (A) above and to evidence compliance with any
customary conditions contained in the underwriting agreement
or other agreement entered into by the Company.
If at any time the representations and warranties of the Company
contemplated in clause (x)(A) above cease to be true and correct, the Company
shall so advise the Initial Purchasers and the underwriter(s), if any, and each
selling Holder promptly and, if requested by any of them, shall confirm such
advice in writing;
(xi) prior to any public offering of Transfer Restricted Securities,
cooperate with the selling Holders, the underwriter(s), if any, and
their respective counsel in connection with the registration and
qualification (or exemption from such registration or qualification) of
the Transfer Restricted Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the selling
Holders and underwriter(s), if any, may reasonably request and do any
and all other reasonable acts or things necessary or advisable to
enable the disposition in such jurisdictions of the Transfer Restricted
Securities covered by the Registration Statement; provided, however,
that the Company shall not be required to register or qualify as a
foreign corporation where it is not now so qualified or to take any
action that would subject it to the service of process or to taxation,
other than as to matters and transactions relating to the Registration
Statement, in any jurisdiction where it is not now so subject;
(xii) if a Shelf Registration is filed pursuant to Section 4,
cooperate with the selling Holders of Registrable Securities and the
managing Underwriters, if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold, which certificates shall not bear any restrictive legends and
shall be in a form eligible for deposit with The Depository Trust
Company; and enable such Transfer Restricted Securities to be in such
denominations and
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registered in such names as the managing Underwriters, if any, or
Holders may reasonably request;
(xiii) in connection with any sale or transfer of Transfer Restricted
Securities that will result in such securities no longer being Transfer
Restricted Securities, cooperate with the selling Holders and the
underwriter(s), if any, to facilitate the timely preparation and
delivery of certificates representing Transfer Restricted Securities to
be sold and not bearing any restrictive legends; and enable such
Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders or the underwriter(s), if any,
may request at least two business days prior to any sale of Transfer
Restricted Securities made by such underwriter(s);
(xiv) use its best efforts to cause the Transfer Restricted Securities
covered by the Registration Statement to be registered with or approved
by such other governmental agencies or authorities as may be necessary
to enable the seller or sellers of such Transfer Restricted Securities
or the underwriter(s), if any, to Consummate the disposition of such
Transfer Restricted Securities, subject to the proviso contained in
clause (xi) above;
(xv) if any fact or event contemplated by Section 6(c)(iii)(D) of this
Agreement shall exist or have occurred, prepare a supplement or
post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated in such Registration Statement
or Prospectus by reference or file any other required document so that,
as thereafter delivered to the purchasers of Transfer Restricted
Securities, the Registration Statement will not contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading and the
Prospectus will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements contained therein, in the light of the
circumstances under which they were made, not misleading;
(xvi) provide a CUSIP or CINS number for all Transfer Restricted
Securities not later than the effective date of the Registration
Statement and provide the Trustee under the Notes Indenture with
certificates for the Transfer Restricted Securities that are in a form
eligible for deposit with The Depository Trust Company;
(xvii) cooperate and assist in any filings required to be made with
the NASD and in the performance of any due diligence investigation by
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any "qualified independent underwriter" that is required to be
retained in accordance with the rules and regulations of the NASD;
(xviii) otherwise use its best efforts to comply with all applicable
rules and regulations of the Commission in regards to any Registration
Statement, and make generally available to its securityholders, as soon
as practicable, a consolidated earnings statement of the Company and
its subsidiaries meeting the requirements of Rule 158 (which need not
be audited) for the twelve-month period (A) commencing at the end of
any fiscal quarter in which Transfer Restricted Securities are sold to
underwriters in a firm commitment or reasonable best efforts
Underwritten Offering or (B) if not sold to underwriters in such an
offering, beginning with the first month of the Company's first fiscal
quarter commencing after the effective date of the Registration
Statement; and
(xix) cause the Notes Indenture or such other indenture for the New
Notes to be qualified under the TIA not later than the effective date
of the first Registration Statement required by this Agreement, and, if
applicable, in connection therewith, cooperate with the Trustee and the
Holders to effect such changes to the Notes Indenture, if any, as may
be required for such Notes Indenture to be so qualified in accordance
with the terms of the TIA; and execute, and use its best efforts to
cause the Trustee to execute, all customary documents that may be
required to effect such changes and all other forms and documents
required to be filed with the Commission to enable such Notes Indenture
to be so qualified in a timely manner.
In the case of a Shelf Registration Statement, the Company may require
each Holder to furnish to the Company such information as the Company may
reasonably request, and the Company may exclude from such registration the New
Notes of any Holder who fails to furnish such information within a reasonable
period of time after receiving such request. Each Holder as to which any Shelf
Registration is being effected shall furnish promptly to the Company, upon its
request, all information required to be disclosed in order to make the
information previously furnished to the Company by such Holder not materially
misleading. Each Holder agrees by acquisition of a Transfer Restricted Security
that, upon receipt of any notice from the Company of the existence of any fact
of the kind described in Section 6(c)(iii)(D) of this Agreement, such Holder
will forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the applicable Registration Statement until such Holder's receipt of
the copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) of this Agreement, or until it is advised in writing (the "ADVICE") by
the Company that the use of the Prospectus may be resumed, and has received
copies of any
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additional or supplemental filings that are incorporated by reference in the
Prospectus. If so directed by the Company, each Holder will deliver to the
Company (at the Company's expense) all copies, other than permanent file copies
then in such Holder's possession, of the Prospectus covering such Transfer
Restricted Securities that was current at the time of receipt of such notice. In
the event that the Company shall give any such notice, the time period regarding
the effectiveness of such Registration Statement set forth in Section 3 or 4 of
this Agreement, as applicable, shall be extended by the number of days during
the period from and including the date of the giving of such notice pursuant to
Section 6(c)(iii)(D) of this Agreement to and including the date when each
selling Holder covered by such Registration Statement shall have received the
copies of the supplemented or amended Prospectus contemplated by Section
6(c)(xv) of this Agreement or, if no such supplemented or amended Prospectus is
required, when it shall have received the Advice.
SECTION 7. Registration Expenses. (a) All fees and expenses incident to
the Company's performance of or compliance with this Agreement will be borne by
the Company regardless of whether a Registration Statement becomes effective,
including, without limitation: (i) all registration and filing fees and expenses
(including required filings made by any Initial Purchaser or Holder with the
NASD (and, if applicable, the reasonable fees and expenses of any "qualified
independent underwriter" and its counsel that may be required by the rules and
regulations of the NASD)); (ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws; (iii) all expenses of printing
(including printing certificates for the New Notes to be issued in the Exchange
Offer and printing of Prospectuses); (iv) all fees and disbursements of counsel
for the Company and, subject to Section 7(b) below, all reasonable fees and
disbursements of counsel for the Holders of Transfer Restricted Securities; (v)
all fees and disbursements of independent certified public accountants of the
Company (including the expenses of any comfort letters required by or incident
to such performance); and (vi) all fees and expenses of the Trustee and any
exchange agent and the fees and disbursements of its counsel.
The Company will, in any event, bear its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
Notwithstanding the foregoing or anything in this Agreement to the
contrary, each Holder of Transfer Restricted Securities shall pay all
underwriting discounts and commissions of any underwriters with respect to any
Notes sold by or on behalf of it.
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(b) In connection with any Registration Statement required by this
Agreement (including, without limitation, the Exchange Offer Registration
Statement and the Shelf Registration Statement), the Company will reimburse the
Initial Purchasers and the Holders of Transfer Restricted Securities being
tendered in the Exchange Offer and/or resold pursuant to the "Plan of
Distribution" contained in the Exchange Offer Registration Statement or
registered pursuant to the Shelf Registration Statement, as applicable, for the
reasonable fees and disbursements of not more than one counsel, who shall be
Davis Polk & Wardwell or such other counsel as may be chosen by the Holders of a
majority in principal amount of the Transfer Restricted Securities for whose
benefit such Registration Statement is being prepared.
SECTION 8. Indemnification. (a) The Company agrees to indemnify and
hold harmless (i) the Initial Purchasers (in their capacity as such), each
Holder of Transfer Restricted Securities and each Participating Broker-Dealer,
(ii) each person, if any, who controls any of the foregoing within the meaning
of Section 15 of the Act or Section 20(a) of the Exchange Act (any of the
persons referred to in this clause (ii) being hereinafter referred to as a
"controlling person") and (iii) the respective agents, employees, officers and
directors of the Initial Purchasers (in their capacity as such) and the agents,
employees, officers and directors of any Holder or any controlling person (any
person referred to in clause (i), (ii) or (iii) may hereinafter be referred to
as an "INDEMNIFIED PERSON") from and against any and all losses, liabilities,
claims, damages and expenses whatsoever (including, but not limited to,
reasonable attorneys' fees and any and all reasonable expenses whatsoever
incurred in investigating, preparing or defending against any litigation,
commenced or threatened, or any claim whatsoever, and any and all reasonable
amounts paid in settlement of any claim or litigation) (collectively, "LOSSES")
to which they or any of them may become subject under the Act, the Exchange Act
or otherwise, insofar as such Losses (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement, preliminary prospectus or
Prospectus, or in any supplement thereto or amendment thereof, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company will not be liable in any such case to the
extent, but only to the extent, that any such Loss arises out of or is based
upon any such untrue statement or alleged untrue statement or omission or
alleged omission made therein in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any Indemnified Person
relating to such Indemnified Person expressly for use therein; and, provided
further, however, that the indemnity agreement contained in this subsection (a)
with respect to any preliminary prospectus shall not inure to the benefit of the
20
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Indemnified Persons or their agents, employees, officers and directors for any
Loss if the Prospectus corrected any such alleged untrue statement or omission
and if such Indemnified Persons failed to send or give a copy of the Prospectus
at or prior to the written confirmation of a sale of the Notes to the person
alleging such Loss. This indemnity agreement will be in addition to any
liability that the Company may otherwise have, including, but not limited to,
liability under this Agreement.
(b) In connection with any Registration Statement pursuant to which a
Holder of Transfer Restricted Securities offers or sells Transfer Restricted
Securities, such Holder agrees, severally and not jointly, to indemnify and hold
harmless the Company, its respective agents, employees, officers and directors
and any person controlling the Company within the meaning of Section 15 of the
Act or Section 20(a) of the Exchange Act, and the agents, employees, officers
and directors of such controlling person to the same extent as the foregoing
indemnity from the Company to each Indemnified Person but only with respect to,
and to the extent that, information relating to such Holder furnished in writing
by or on behalf of such Holder expressly for use in such Registration Statement.
(c) Promptly after receipt by an indemnified party under this Section
8 of notice of the commencement of any action, suit or proceeding (collectively,
an "ACTION"), such indemnified party shall, if a claim in respect thereof is to
be made against the indemnifying party under such subsection, notify each party
against whom indemnification is to be sought in writing of the commencement of
such Action (but the failure so to notify an indemnifying party shall not
relieve such indemnifying party from any liability that it may have under this
Section 8 except to the extent that it has been prejudiced in any material
respect by such failure or from any liability which it may otherwise have). In
case any such Action is brought against any indemnified party, and it notifies
an indemnifying party of the commencement of such Action, the indemnifying party
will be entitled to participate in such Action, and to the extent it may elect
by written notice delivered to the indemnified party promptly after receiving
the aforesaid notice from such indemnified party, to assume the defense of such
Action with counsel satisfactory to such indemnified party. Notwithstanding the
foregoing, the indemnified party or parties shall have the right to employ its
or their own counsel in any such Action, but the fees and expenses of such
counsel shall be at the expense of such indemnified party or parties unless (i)
the employment of such counsel shall have been authorized in writing by the
indemnifying parties in connection with the defense of such Action, (ii) the
indemnifying parties shall not have employed counsel to take charge of the
defense of such Action within a reasonable time after notice of commencement of
the Action, or (iii) the named parties to such Action (including any impleaded
parties) include such indemnified party and the indemnifying parties (or such
indemnifying parties shall have
21
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assumed the defense of such action), and such indemnified party or parties shall
have reasonably concluded that there may be defenses available to it or them
that are different from or additional to those available to one or all of the
indemnifying parties (in which case the indemnifying parties shall not have the
right to direct the defense of such Action on behalf of the indemnified party or
parties), in any of which events such fees and expenses of counsel shall be
borne by the indemnifying parties. In no event shall the indemnifying party be
liable for the fees and expenses of more than one counsel (together with
appropriate local counsel) at any time for all indemnified parties in connection
with any one Action or separate but substantially similar or related Actions
arising out of the same general allegations or circumstances. Anything in this
subsection to the contrary notwithstanding, an indemnifying party shall not be
liable for any settlement of any claim or Action effected without its written
consent; provided, however, that such consent was not unreasonably withheld.
(d) In order to provide for contribution in circumstances in which the
indemnification provided for in paragraphs (a) and (b) of this Section 8 is for
any reason held to be unavailable from the indemnifying party, or is
insufficient to hold harmless a party indemnified under this Section 8, the
Company and the Indemnified Persons shall contribute to the aggregate Losses of
the nature contemplated by such indemnification provision (but after deducting
in the case of Losses suffered by the indemnifying party, any contribution
received by the indemnifying party from persons other than the Indemnified
Person who may also be liable for contribution, including persons who control
the Indemnified Person within the meaning of Section 15 of the Act or Section
20(a) of the Exchange Act) to which the Company and the Indemnified Persons may
be subject, in such proportion as is appropriate to reflect the relative
benefits received by the Company, on the one hand, and the Indemnified Persons,
on the other hand, from the offering of the Notes or, if such allocation is not
permitted by applicable law or indemnification is not available as a result of
the indemnifying party not having received notice as provided in paragraph (c)
of this Section 8 and having been prejudiced in any material respect by the
absence of such notice, in such proportion as is appropriate to reflect not only
the relative benefits referred to above but also the relative fault of the
Company, on the one hand, and the Indemnified Persons, on the other hand, in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations. The relative benefits
received by the Company shall be deemed to be in the same proportion as the
total proceeds from the offering of Old Notes (net of discounts but before
deducting expenses) received by the Company as set forth in the table on the
cover page of the Prospectus. The relative fault of the Company, on the one
hand, and the Indemnified Persons, on the other hand, shall be determined by
reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a
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material fact relates to information supplied by the Company or the Indemnified
Persons and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission or alleged
statement or omission.
(e) The Company and the Initial Purchasers agree that it would not be
just and equitable if contribution pursuant to paragraph (d) of this Section 8
were determined by pro rata allocation or by any other method of allocation that
does not take into account the equitable considerations referred to above.
Notwithstanding the provisions of paragraph (d) of this Section 8, (i) in no
case shall an Indemnified Persons be required to contribute any amount in excess
of the amount by which the total received by such Indemnified Person with
respect to its sale of its Transfer Restricted Securities or New Notes, as the
case may be, exceeds the amount of any damages that such Indemnified Person has
otherwise been required to pay by reason of any untrue or alleged untrue
statement or omission or alleged omission and (ii) no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of paragraphs (d) and (e) of this
Section 8, each person, if any, who controls an Indemnified Person within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act shall have
the same rights to contribution as such Indemnified Person, and each person, if
any, who controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act shall have the same rights to contribution as
the Company, subject in each case to clauses (i) and (ii) of this Section 8(e).
Any party entitled to contribution will, promptly after receipt of notice of
commencement of any Action against such party in respect of which a claim for
contribution may be made against another party or parties under paragraph 8(d)
or (e) of this Section 8, notify such party or parties from whom contribution
may be sought, but the omission to so notify such party or parties shall not
relieve the party or parties from whom contribution may be sought from any
obligation it or they may have under paragraph (d) or (e) of this Section 8 or
otherwise; except to the extent that it has been prejudiced in any material
respect by such failure; provided, however, that no additional notice shall be
required with respect to any action for which notice has been given under
Section 6 for purposes of indemnification. Anything in this section to the
contrary notwithstanding, no party shall be liable for contribution with respect
to any Action or claim settled without its written consent; provided, however,
that such written consent shall not be unreasonably withheld.
SECTION 9. Rule 144A. The Company agrees with each Holder, for so long
as any Transfer Restricted Securities remain outstanding, to make available to
any Holder or beneficial owner of Transfer Restricted Securities and any
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prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner and to Broker-Dealers, upon their request, the
information required by Rule 144A(d)(4) under the Act in order to permit resales
of such Transfer Restricted Securities pursuant to Rule 144A.
SECTION 10. Participation in Underwritten Registrations. No Holder may
participate in any Underwritten Registration under this Agreement unless such
Holder (a) agrees to sell such Holder's Transfer Restricted Securities on the
basis provided in customary underwriting arrangements approved by the Persons
entitled under this Agreement to approve such arrangements and (b) completes and
executes all reasonable questionnaires, powers of attorneys, indemnities,
underwriting agreements, lock-up letters and other documents required under the
terms of such underwriting arrangements.
SECTION 11. Selection of Underwriters. The Holders of Transfer
Restricted Securities covered by the Shelf Registration Statement who desire to
do so may sell such Transfer Restricted Securities in an Underwritten Offering.
In any such Underwritten Offering, the investment banker or investment bankers
and manager or managers that will administer the offering will be selected by
the Holders of a majority in aggregate principal amount of the Transfer
Restricted Securities included in such offering; provided that such investment
bankers and managers must be reasonably satisfactory to the Company.
SECTION 12. Miscellaneous. (a) Remedies. Each Holder, in addition to
being entitled to exercise all rights provided in this Agreement, in the Notes
Indenture, the Purchase Agreement or granted by law, including recovery of
liquidated or other damages, will be entitled to specific performance of its
rights under this Agreement. The Company agrees that monetary damages would not
be adequate compensation for any loss incurred by reason of a breach by them of
the provisions of this Agreement and hereby agree to waive the defense in any
Action for specific performance that a remedy at law would be adequate.
(b) No Inconsistent Agreements. The Company will not on or after the
date of this Agreement enter into any agreement with respect to its securities
that is inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions of this Agreement. The Company has not
previously entered into any agreement granting any registration rights with
respect to its respective securities to any Person, except as disclosed in the
Offering Memorandum dated February 20, 1998 relating to the Old Notes and in the
Offering Memorandum dated February 20, 1998 relating to the offering of
preferred stock by Parent. The rights granted to the Holders under this
Agreement do not in any way conflict with and are not inconsistent with the
rights granted to
24
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the holders of the Company's securities under any agreement in effect on the
date of this Agreement.
(c) Adjustments Affecting the Notes. Without the written consent of
the Holders of a majority in aggregate principal amount of outstanding Transfer
Restricted Securities, the Company will not take any action, or permit any
change to occur, with respect to the Notes that would materially and adversely
affect the ability of the Holders to Consummate any Exchange Offer.
(d) Amendments and Waivers. The provisions of this Agreement may not
be amended, modified or supplemented, and waivers or consents to or departures
from the provisions of this Agreement may not be given unless (i) in the case of
Section 5 hereof and this Section 12(d)(i), the Company has obtained the written
consent of each affected Holder of outstanding Transfer Restricted Securities
and (ii) in the case of all other provisions hereof, the Company has obtained
the written consent of Holders of a majority of the outstanding principal amount
of Transfer Restricted Securities. Notwithstanding the foregoing, a waiver or
consent to departure from the provisions of this Agreement that relates
exclusively to the rights of Holders whose securities are being sold or tendered
pursuant to the Exchange Offer and that does not affect directly or indirectly
the rights of other Holders whose securities are not being sold or tendered
pursuant to such Exchange Offer may be given by the Holders of a majority of the
outstanding principal amount of Transfer Restricted Securities subject to such
Exchange Offer.
(e) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivering, first-class
mail (registered or certified, return receipt requested), telex, telecopier or
air courier guaranteeing overnight delivery:
(i) if to a Holder, at the address set forth on the records of the
Registrar under the Notes Indenture, with a copy to the Registrar under
the Notes Indenture; and
(ii) if to the Company, at:
E-P Acquisition, Inc.
c/o Eagle-Picher Industries, Inc.
The Chiquita Center
250 East Fifth Street
Cincinnati, Ohio 45202
Facsimile: (513) 721-2341
Attention: President
25
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with a copy to:
Howard, Darby & Levin
1330 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 841-1010
Attention: Scott F. Smith. Esq.
All such notices and communications shall be deemed to have been duly
given: (i) at the time delivered by hand, if personally delivered; (ii) five
business days after being deposited in the mail, postage prepaid, if mailed;
(iii) when answered back, if telexed; (iv) when receipt acknowledged by
telecopier machine, if telecopied; and (v) on the next business day, if timely
delivered to an air courier guaranteeing overnight delivery.
Copies of all such notices, demands or other communications shall be
concurrently delivered by the Person giving the same to the Trustee at the
address specified in the Notes Indenture.
(f) Successors and Assigns. This Agreement shall inure to the benefit
of and be binding upon the successors and permitted assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of Transfer Restricted Securities.
(g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties to this Agreement in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of this
Agreement.
(i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE
CONFLICT OF LAWS RULES THEREOF.
(j) Severability. In the event that any one or more of the provisions
contained in this Agreement, or the application of any such provision in any
circumstance, is held invalid, illegal or unenforceable, the validity, legality
and enforceability of any such provision in every other respect and of the
remaining provisions contained in this Agreement shall not be affected or
impaired thereby.
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(k) Entire Agreement. This Agreement together with the other Operative
Documents (as defined in the Purchase Agreement) is intended by the parties as a
final expression of their agreement and intended to be a complete and exclusive
statement of the agreement and understanding of the parties to this Agreement in
respect of the subject matter contained in this Agreement. There are no
restrictions, promises, warranties or undertakings, other than those set forth
or referred to in this Agreement with respect to the registration rights granted
by the Company with respect to the Transfer Restricted Securities. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
E-P ACQUISITION, INC.
By: /s/ JOEL P. WYLER
---------------------------------
Name: Joel P. Wyler
Title: Chairman and President
Accepted and agreed as of
the date first above written:
SBC WARBURG DILLON READ INC.
By: /s/ JOHN G. BRIM
-------------------------------
Name: John G. Brim
Title: Managing Director
ABN AMRO INCORPORATED
By: /s/ LINDA A. DAWSON
-------------------------------
Name: Linda A. Dawson
Title: Managing Director
<PAGE>
<PAGE>
ASSUMPTION AGREEMENT
FOR THE REGISTRATION RIGHTS AGREEMENT
AGREEMENT dated as of February 24, 1998 of Eagle-Picher Industries,
Inc., an Ohio corporation (the "COMPANY").
WHEREAS, the E-P Acquisition, Inc. (the "ISSUER") and SBC Warburg Dillon
Read Inc. and ABN AMRO Incorporated (together, the "INITIAL PURCHASERS") have
entered into the Registration Rights Agreement dated as of the date hereof
(the "REGISTRATION RIGHTS AGREEMENT"); and
WHEREAS, pursuant to the Merger Agreement dated as of December 23, 1997
(the "MERGER AGREEMENT") among the Eagle-Picher Industries, Inc. Personal Injury
Settlement Trust, the Assignee, Assignor and Eagle-Picher Holdings, Inc.,
Assignor has merged into the Assignee with the Assignee as the surviving
corporation;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the Company hereto agrees as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein have the respective meanings set forth in the Registration Rights
Agreement.
SECTION 2. Assumption. The Assignee hereby assumes all of the
obligations of the Assignor under the Registration Rights Agreement. Upon the
execution and delivery hereof by the Assignee, the Assignee shall, as of the
date hereof, succeed to the rights and be obligated to perform the obligations
of the "Issuer" under the Registration Rights Agreement.
SECTION 3. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
<PAGE>
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and delivered as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By: /s/ ANDRIES RUIJSSENAARS
-------------------------------
Name: Andries Ruijssenaars
Title: President
2
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================================================================================
CREDIT AGREEMENT
Among
E-P ACQUISITION, INC.
(to be merged with and into
EAGLE-PICHER INDUSTRIES, INC.)
VARIOUS LENDERS
FROM TIME TO TIME PARTY HERETO
ABN AMRO BANK N.V.,
as Agent
PNC BANK, NATIONAL ASSOCIATION,
as Documentation Agent
And
DLJ CAPITAL FUNDING, INC.,
as Syndication Agent
--------------------------
Dated as of February 19, 1998
--------------------------
================================================================================
<PAGE>
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION HEADING PAGE
<S> <C>
Parties...........................................................................................1
SECTION 1. AMOUNT AND TERMS OF CREDIT..........................................................1
Section 1.01. The Commitments.................................................................1
Section 1.01.01. Term Loans and Revolving Credit........................................1
Section 1.01.02. Swingline Loans........................................................3
Section 1.01.03. Mandatory Borrowing....................................................3
Section 1.02. Minimum Borrowing Amount, Etc...................................................4
Section 1.03. Notice of Borrowing.............................................................4
Section 1.04. Disbursement of Funds...........................................................5
Section 1.05. Notes...........................................................................6
Section 1.06. Conversions.....................................................................7
Section 1.07. Pro Rata Borrowings.............................................................8
Section 1.08. Interest........................................................................8
Section 1.09. Interest Periods................................................................9
Section 1.10. Increased Costs, Illegality, Etc...............................................10
Section 1.11. Compensation...................................................................12
Section 1.12. Change of Lending Office.......................................................13
Section 1.13. Replacement of Lenders.........................................................13
SECTION 2. LETTERS OF CREDIT..................................................................14
Section 2.01. Letters of Credit..............................................................14
Section 2.02. Minimum Stated Amount..........................................................16
Section 2.03. Letter of Credit Requests......................................................16
Section 2.04. Letter of Credit Participations................................................16
Section 2.05. Agreement to Repay Letter of Credit Drawings...................................18
Section 2.06. Increased Costs................................................................19
SECTION 3. FEES; COMMITMENTS..................................................................20
Section 3.01. Fees...........................................................................20
Section 3.02. Voluntary Reduction of Commitments.............................................21
Section 3.03. Mandatory Adjustments of Commitments, Etc......................................21
SECTION 4. PREPAYMENTS; PAYMENTS..............................................................22
</TABLE>
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Section 4.01. Voluntary Prepayments..........................................................22
Section 4.02. Mandatory Prepayments and Repayments...........................................23
Section 4.02.01. Mandatory Prepayments and Repayments..................................23
Section 4.02.02. Application...........................................................26
Section 4.02.03. Waiver of Certain Mandatory Repayments by
B Lenders and C Lenders...............................................27
Section 4.03. Method and Place of Payment....................................................28
Section 4.04. Net Payments...................................................................28
Section 4.05. Application After Event of Default.............................................30
SECTION 5. CONDITIONS PRECEDENT...............................................................31
Section 5.01. Conditions to Closing Date and Credit Events on the
Closing Date...................................................................31
Section 5.02. Conditions to Each Credit Event................................................37
Section 5.03. Determinations under Section 5.01..............................................38
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.........................................38
Section 6.01. Corporate Status...............................................................39
Section 6.02. Corporate Power and Authority..................................................39
Section 6.03. No Violation...................................................................39
Section 6.04. Governmental Approvals.........................................................39
Section 6.05. Financial Statements; Financial Condition; Undisclosed
Liabilities, etc...............................................................40
Section 6.06. Litigation.....................................................................41
Section 6.07. True and Complete Disclosure...................................................41
Section 6.08. Use of Proceeds; Margin Regulations............................................42
Section 6.09. Tax Returns and Payments.......................................................42
Section 6.10. Compliance with ERISA..........................................................43
Section 6.11. Subsidiaries...................................................................43
Section 6.12. Compliance with Statutes, etc..................................................43
Section 6.13. Environmental Matters..........................................................44
Section 6.14. Investment Company Act.........................................................44
Section 6.15. Public Utility Holding Company Act.............................................44
Section 6.16. Patents, Licenses, Franchises and Formulas.....................................45
Section 6.17. Properties.....................................................................45
Section 6.18. Labor Relations................................................................45
Section 6.19. Indebtedness...................................................................45
Section 6.20. Security Interests.............................................................45
Section 6.21. Representations and Warranties in Other Documents..............................46
</TABLE>
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<S> <C>
Section 6.22. Transaction....................................................................46
Section 6.23. Capitalization.................................................................46
Section 6.24. Senior Subordinated Notes......................................................47
SECTION 7. AFFIRMATIVE COVENANTS..............................................................47
Section 7.01. Information Covenants..........................................................47
Section 7.02. Books, Records and Inspections.................................................50
Section 7.03. Maintenance of Property, Insurance, Environmental
Matters, etc...................................................................51
Section 7.04. Corporate Franchises...........................................................51
Section 7.05. Compliance with Statutes, etc..................................................52
Section 7.06. ERISA..........................................................................52
Section 7.07. Performance of Obligations.....................................................53
Section 7.08. Payment of Taxes...............................................................53
Section 7.09. Collateral, Additional Security; Further Assurances............................53
Section 7.10. Interest Rate Protection.......................................................57
Section 7.11. Foreign Subsidiaries Security..................................................57
SECTION 8. NEGATIVE COVENANTS.................................................................58
Section 8.01. Liens..........................................................................58
Section 8.02. Consolidation, Merger, Sale of Assets, etc.....................................60
Section 8.03. Dividends and Payment under Related Party Agreement............................61
Section 8.04. Indebtedness...................................................................61
Section 8.05. Advances, Investments and Loans................................................62
Section 8.06. Transactions with Affiliates...................................................63
Section 8.07. Capital Expenditures...........................................................64
Section 8.08. Interest Coverage Ratio........................................................65
Section 8.09. Leverage Ratio.................................................................65
Section 8.10. Fixed Charge Coverage Ratio....................................................66
Section 8.11. Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other Agreements;
Issuances of Capital Stock; etc................................................66
Section 8.12. Limitation on Restrictions on Subsidiary Dividends and
Other Distributions............................................................67
Section 8.13. Limitation on Issuances of Capital Stock by Subsidiaries.......................67
Section 8.14. Limitation on the Creation of Subsidiaries.....................................67
Section 8.15. Maintenance of Corporate Separateness; etc.....................................
Section 8.16. Business.......................................................................68
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SECTION 9. EVENTS OF DEFAULT..................................................................68
Section 9.01. Payments.......................................................................68
Section 9.02. Representations, etc...........................................................68
Section 9.03. Covenants......................................................................68
Section 9.04. Default under Other Agreements.................................................69
Section 9.05. Bankruptcy, etc................................................................69
Section 9.06. ERISA..........................................................................69
Section 9.07. Security Documents.............................................................70
Section 9.08. Guaranties.....................................................................70
Section 9.09. Judgments......................................................................70
Section 9.10. Change in Control..............................................................70
Section 9.11. Matters Regarding the Permanent Injunction.....................................70
SECTION 10. DEFINITIONS AND ACCOUNTING TERMS...................................................71
Section 10.01. Defined Terms..................................................................71
Section 10.02. Principles of Construction.....................................................99
SECTION 11. THE AGENT..........................................................................99
Section 11.01. Appointment....................................................................99
Section 11.02. Nature of Duties..............................................................100
Section 11.03. Lack of Reliance on the Agent.................................................100
Section 11.04. Certain Rights of the Agent...................................................100
Section 11.05. Reliance......................................................................101
Section 11.06. Indemnification...............................................................101
Section 11.07. The Agents in Their Individual Capacity.......................................101
Section 11.08. Holders.......................................................................101
Section 11.09. Resignation or Removal of the Agent...........................................102
Section 11.10. Release of Collateral.........................................................102
SECTION 12. MISCELLANEOUS.....................................................................102
Section 12.01. Payment of Expenses, Etc......................................................102
Section 12.02. Right of Setoff...............................................................104
Section 12.03. Notices.......................................................................104
Section 12.04. Benefit of Agreement, Etc.....................................................105
Section 12.05. No Waiver; Remedies Cumulative................................................107
Section 12.06. Payments Pro Rata.............................................................107
Section 12.07. Calculations; Computations....................................................108
</TABLE>
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Section 12.08. Governing Law; Submission to Jurisdiction; Venture;
Waiver of Jury Trial..........................................................108
Section 12.09. Counterparts..................................................................110
Section 12.10. Effectiveness.................................................................110
Section 12.11. Headings Descriptive..........................................................110
Section 12.12. Amendment or Waiver; etc......................................................110
Section 12.13. Survival......................................................................112
Section 12.14. Domicile of Loans.............................................................112
Section 12.15. Confidentiality...............................................................112
Section 12.16. Register......................................................................113
Section 12.17. Judgment Currency.............................................................113
Section 12.18. Integration...................................................................114
Signature Page..................................................................................115
</TABLE>
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Annex I Commitment
Annex II Pricing Grid
Annex III Credit Party Address
Exhibit A Notice of Borrowing
Exhibit B-1 A Term Note
Exhibit B-2 B Term Note
Exhibit B-3 C Term Note
Exhibit B-4 Revolving Note
Exhibit B-5 Swingline Note
Exhibit C Notice of Conversion/Continuation
Exhibit D Letter of Credit Request
Exhibit E Section 4.04(b)(ii) Certificate
Exhibit F Opinion
Exhibit G Certificate
Exhibit H Holdings Guaranty
Exhibit I Subsidiary Guaranty
Exhibit J Holdings Pledge Agreement
Exhibit K Borrower and Subsidiary Pledge Agreement
Exhibit L Security Agreement
Exhibit M Subordination Agreement
Exhibit N Assignment and Assumption Agreement
Exhibit O Surveyor's Certificate
Schedule 2.01 Existing Letters of Credit
Schedule 6.03 Consents Not Obtained
Schedule 6.05 Material Changes
Schedule 6.06 Litigation
Schedule 6.09 Taxes
Schedule 6.10 ERISA
Schedule 6.11 Subsidiary
Schedule 6.13 Environmental Matters
Schedule 6.17 Properties
Schedule 6.19 Existing Indebtedness
Schedule 6.23 Capitalization
Schedule 8.01 Existing Liens
Schedule 8.05 Joint Venture
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CREDIT AGREEMENT, dated as of February 19, 1998, among E-P
ACQUISITION, INC., a Delaware corporation (as further defined herein, the
"Borrower"), the lenders from time to time party hereto (each a "Lender" and,
collectively, the "Lenders"), ABN AMRO BANK N.V., as Agent (in such capacity,
the "Agent"), PNC BANK, NATIONAL ASSOCIATION, as Documentation Agent (in such
capacity, the "Documentation Agent") and DLJ CAPITAL FUNDING, INC., as
Syndication Agent (in such capacity, the "Syndication Agent"). All capitalized
terms used herein shall have the meanings provided in Section 10.
WITNESSETH:
WHEREAS, the Borrower has requested the Lenders to provide certain term
loan facilities and a revolving credit facility (including a sublimit for
letters of credit and a sublimit for swingline loans); and
WHEREAS, the credit facilities shall be used (i) to effectuate the
merger of the Borrower with and into Eagle-Picher Industries, Inc., an Ohio
corporation ("EPII"), including the repayment of certain existing debt of EPII,
(ii) to pay the transaction costs of such merger and (iii) for general corporate
purposes, all as hereinafter more fully set forth; and
WHEREAS, the Lenders are willing to provide such credit upon the terms
and conditions hereinafter set forth;
NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
thereby, covenant and agree as follows:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
Section 1.01. The Commitments.
Section 1.01.01. Term Loans and Revolving Credit. Subject to and upon the
terms and conditions herein set forth, each Lender severally agrees to make a
loan or loans to the Borrower which loans shall be drawn, to the extent such
Lender has a commitment under such Facility, under the A Term Loan Facility, the
B Term Loan Facility, the C Term Loan Facility and the Revolving Credit
Facility, as set forth below:
(a) Each loan under the A Term Loan Facility (each an "A Term
Loan" and, collectively, the "A Term Loans") (i) shall be made pursuant
to a drawing on the Closing Date, (ii) shall be denominated in U.S.
Dollars, (iii) except as hereinafter provided, shall be made as Base
Rate Loans or Eurodollar Rate Loans and may, at the option of the
Borrower, be maintained as and/or converted into Base Rate Loans or
Eurodollar Rate Loans, provided that all A Term Loans made by all
Lenders pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist
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entirely of A Term Loans of the same Type and (iv) shall not exceed for
any Lender at the time of incurrence thereof that aggregate principal
amount which equals the A Term Loan Commitment, if any, of such Lender
at such time. Once repaid, A Term Loans may not be reborrowed. The
aggregate amount of the A Term Loans shall not exceed $100,000,000.
(b) Each loan under the B Term Loan Facility (each a "B Term
Loan" and, collectively, the "B Term Loans") (i) shall be made pursuant
to a drawing on the Closing Date, (ii) shall be denominated in U.S.
Dollars, (iii) except as hereinafter provided, shall be made as Base
Rate Loans or Eurodollar Rate Loans and may, at the option of the
Borrower, be maintained as and/or converted into Base Rate Loans or
Eurodollar Rate Loans, provided that all B Term Loans made by all
Lenders pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist entirely of B Term Loans of the
same Type and (iv) shall not exceed for any Lender at the time of
incurrence thereof that aggregate principal amount which equals the B
Term Loan Commitment, if any, of such Lender at such time. Once repaid,
B Term Loans may not be reborrowed. The aggregate amount of the B Term
Loans shall not exceed $50,000,000.
(c) Each loan under the C Term Loan Facility (each a "C Term
Loan" and, collectively, the "C Term Loans") (i) shall be made pursuant
to a drawing on the Closing Date, (ii) shall be denominated in U.S.
Dollars, (iii) except as hereinafter provided, shall be made as Base
Rate Loans or Eurodollar Rate Loans and may, at the option of the
Borrower, be maintained as and/or converted into Base Rate Loans or
Eurodollar Rate Loans, provided that all C Term Loans made by all
Lenders pursuant to the same Borrowing shall, unless otherwise
specifically provided herein, consist entirely of C Term Loans of the
same Type and (iv) shall not exceed for any Lender at the time of
incurrence thereof that aggregate principal amount which equals the C
Term Loan Commitment, if any, of such Lender at such time. Once repaid,
C Term Loans may not be reborrowed. The aggregate amount of the C Term
Loans shall not exceed $75,000,000.
(d) Each loan under the Revolving Credit Facility (each a
"Revolving Loan" and, collectively, the "Revolving Loans") (i) shall be
made at any time and from time to time on or after the Closing Date and
prior to the Revolving Loan Maturity Date, (ii) shall be denominated in
U.S. Dollars, (iii) except as hereinafter provided, may, at the option
of the Borrower, be incurred and maintained as and/or converted into
Base Rate Loans or Eurodollar Rate Loans, provided that all Revolving
Loans made as part of the same Borrowing shall, unless otherwise
specifically provided herein, consist of Revolving Loans of the same
Type, (iv) may be repaid and reborrowed in accordance with the
provisions hereof and (v) shall not exceed for any Revolving Lender at
any time outstanding that aggregate principal amount which equals such
Revolving Lender's Revolving Percentage, if any, of the Total Unutilized
Revolving Credit Commitment at such time. The Total Revolving Credit
Commitment on the Closing Date shall be $160,000,000.
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Section 1.01.02. Swingline Loans. Subject to and upon the terms and
conditions set forth herein, the Swingline Lender agrees to make, at any time
and from time to time on or after the Closing Date and prior to the Swingline
Expiry Date, a loan or loans (each, a "Swingline Loan" and, collectively, the
"Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made and
maintained as Base Rate Loans, (ii) shall be denominated in U.S. Dollars, (iii)
may be repaid and reborrowed in accordance with the provisions hereof, (iv)
shall not exceed in aggregate principal amount at any time outstanding that
aggregate principal amount which, when added to the sum of (I) the aggregate
principal amount of all Revolving Loans then outstanding and (II) the aggregate
amount of all Letter of Credit Outstandings (exclusive of Unpaid Drawings
relating to Letters of Credit which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of such
Swingline Loans) at such time, equals the Total Revolving Credit Commitment at
such time and (v) shall not exceed the Maximum Swingline Amount. The Swingline
Lender will not make a Swingline Loan after it has received written notice from
the Required Lenders stating that a Default or an Event of Default exists and
specifically requesting that the Swingline Lender not make any Swingline Loans,
provided that the Swingline Lender may continue making Swingline Loans at such
time thereafter as the respective Default or Event of Default has been cured or
waived in accordance with the requirements of this Agreement or the Required
Lenders have withdrawn the written notice described above in this sentence. In
addition, the Swingline Lender shall not be obligated to make any Swingline Loan
at a time when a Lender Default exists unless the Swingline Lender shall have
entered into arrangements satisfactory to it and the Borrower to eliminate the
Swingline Lender's risk with respect to the Defaulting Lender's participation in
such Swingline Loan, including by cash collateralizing such Defaulting Lender's
Revolving Percentage of the outstanding Swingline Loans.
Section 1.01.03. Mandatory Borrowing. On any Business Day, the Swingline
Lender may, in its sole discretion, give notice to the Revolving Lenders that
its outstanding Swingline Loans shall be funded with a Borrowing of Revolving
Loans (provided that such notice shall be deemed to have been automatically
given upon the occurrence of a Default or an Event of Default under Section 9.05
or upon the exercise of any of the remedies provided in the last paragraph of
Section 9), in which case a Borrowing of Revolving Loans constituting Base Rate
Loans (each such Borrowing, a "Mandatory Borrowing") shall be made on the
immediately succeeding Business Day by all Revolving Lenders (without giving
effect to any reductions thereto pursuant to the last paragraph of Section 9)
pro rata based on each Revolving Lender's Revolving Percentage (determined
before giving effect to any termination of the Commitments pursuant to the last
paragraph of Section 9), and the proceeds thereof shall be applied directly to
the Swingline Lender to repay the Swingline Lender for such outstanding
Swingline Loans. Each Revolving Lender hereby irrevocably agrees to make Base
Rate Loans upon one Business Day's notice pursuant to each Mandatory Borrowing
in the amount and in the manner specified in the preceding sentence and on the
date specified in writing by the Swingline Lender notwithstanding (i) the
amount of the Mandatory Borrowing may not comply with the Minimum Borrowing
Amount otherwise required hereunder, (ii) any condition specified in Section 5
may not then be satisfied, (iii) the existence of any Default or Event of
Default, (iv) the date of such Mandatory Borrowing and (v) the amount of the
Total Revolving Credit Commitment at such time. In
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the event that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to the
Borrower), then each Revolving Lender (other than the Swingline Lender) hereby
agrees that it shall forthwith purchase (as of the date the Mandatory Borrowing
would otherwise have occurred, but adjusted for any payments received from the
Borrower on or after such date and prior to such purchase from the Swingline
Lender) (without recourse or warranty) such participations in the outstanding
Swingline Loans as shall be necessary to cause the Revolving Lenders to share in
such Swingline Loans ratably based upon their respective Revolving Percentages
(determined before giving effect to any termination of the Commitments pursuant
to the last paragraph of Section 9), provided that (x) all interest payable on
the Swingline Loans shall be for the account of the Swingline Lender until the
date the respective participation is required to be purchased and, to the extent
attributable to the purchased participation, shall be payable to the participant
from and after such date and (y) at the time any purchase of participations
pursuant to this sentence is actually made, the purchasing Lender shall be
required to pay the Swingline Lender interest on the principal amount of
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans for each day thereafter.
Section 1.02. Minimum Borrowing Amount, Etc. The aggregate principal amount
of each Borrowing under a Facility shall not be less than the Minimum Borrowing
Amount for such Facility, provided that Mandatory Borrowings shall be made in
the amounts required by Section 1.01.03. More than one Borrowing may occur on
the same date, but at no time shall there be an outstanding more than fifteen
Borrowings of Eurodollar Rate Loans.
Section 1.03. Notice of Borrowing. (a) Whenever the Borrower desires to
incur Loans under any Facility (excluding Revolving Loans incurred pursuant to a
Mandatory Borrowing and Swingline Loans), it shall give the Agent at its Notice
Office at least (x) three Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of each Eurodollar Rate Loan to be made
hereunder and (y) one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of each Base Rate Loan to be made hereunder,
provided that any such notice shall be deemed to have been given on a certain
day only if actually received by the Agent before 11:00 A.M. (New York time) on
such day. Each such notice (each a "Notice of Borrowing"), except as otherwise
expressly provided in Section 1.10, shall be irrevocable, and, in the case of
each written notice and each confirmation of telephonic notice, shall be in the
form of Exhibit A, appropriately completed, to specify (i) the Facility pursuant
to which such Borrowing is to be made, (ii) the date of such Borrowing (which
shall be a Business Day), (iii) the aggregate principal amount of the Loans to
be made pursuant to such Borrowing, (iv) whether the Loans to be made pursuant
to such Borrowing are to be initially maintained as Base Rate Loans or, to the
extent permitted hereunder, Eurodollar Rate Loans and (v) in the case of
Eurodollar Rate Loans, the initial Interest Period to be applicable thereto.
The Agent shall promptly give each Lender notice of (i) such proposed Borrowing,
(ii) such
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Lender's proportionate share thereof, if any, and (iii) the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b) (i) Whenever the Borrower desires to incur Swingline Loans
hereunder, it shall give the Swingline Lender no later than 11:00 A.M. (New York
time) on the day such Swingline Loan is to be made, written notice or telephonic
notice promptly confirmed in writing of each Swingline Loan to be made
hereunder. Each such notice shall be irrevocable and specify in each case (i)
the date of Borrowing (which shall be a Business Day) and (ii) the aggregate
principal amount of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01.03, with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in
Section 1.01.03.
(c) Without, in any way, limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or the Swingline Lender (in the case of a Borrowing of Swingline Loans) or
the Letter of Credit Issuer (in the case of the issuance of Letters of Credit),
as the case may be, may act without liability upon the basis of such telephonic
notice, believed by the Agent, the Swingline Lender or the Letter of Credit
Issuer, as the case may be, in good faith to be from an Authorized Officer of
the Borrower (or from any other officer of the Borrower designated in writing
from time to time by an Authorized Officer of the Borrower as a person entitled
to give telephonic notices hereunder), prior to receipt of written confirmation.
In each such case, the Borrower hereby waives the right to dispute the Agent's,
the Swingline Lender's or the Letter of Credit Issuer's record of the terms of
any such telephonic notice to the extent such record is made without gross
negligence or willful misconduct of the Agent, the Swingline Lender or the
Letter of Credit Issuer, as the case may be.
Section 1.04. Disbursement of Funds. No later than 1:00 P.M. (New York
time) on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than 2:00 P.M. (New York time) on the date specified
in Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than
12:00 Noon (New York time) on the date specified in Section 1.01.03), each
Lender with a Commitment under the respective Facility will make available
through such Lender's applicable lending office its pro rata portion, if any, of
each Borrowing requested to be made on such date to the Agent (or, in the case
of Swingline Loans, the Swingline Lender shall make available the full amount
thereof), in U.S. Dollars and in immediately available funds at the Agent's
Payment Office. The Agent will make available to the Borrower at the Agent's
Payment Office the aggregate of the amounts so made available prior to 1:00 P.M.
(New York time) on such day, to the extent of funds actually received by the
Agent prior to 12:00 Noon (New York time). Unless the Agent shall have been
notified by any Lender prior to the date of any Borrowing that such Lender does
not intend to make available to the Agent such Lender's portion of any Borrowing
to be made on such date, the Agent may assume that such Lender has made such
amount available to the Agent on such date of Borrowing and the Agent may, in
reliance upon such assumption, make available to the Borrower a corresponding
amount. If such corresponding
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amount is not in fact made available to the Agent by such Lender, the Agent
shall be entitled to recover such corresponding amount on demand from such
Lender. If such Lender does not pay such corresponding amount forthwith upon
the Agent's demand therefor, the Agent shall promptly notify the Borrower and
the Borrower shall immediately pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover on demand from such Lender or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Agent to the Borrower until the date such corresponding amount is recovered by
the Agent, at a rate per annum equal to (i) if recovered from such Lender, the
overnight Federal Funds Rate and (ii) if recovered from the Borrower, the rate
of interest applicable to the respective Borrowing as determined in accordance
with the appropriate clause of Section 1.08. Nothing in this Section 1.04 shall
be deemed to relieve any Lender from its obligation to fulfill its Commitment
hereunder or to prejudice any rights which the Borrower may have against any
Lender as a result of any default by such Lender hereunder.
Section 1.05. Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, all Loans made by each Lender to the Borrower shall be
evidenced (i) if A Term Loans, by a promissory note duly executed and delivered
to such Lender by the Borrower in the form of Exhibit B-1 with blanks
appropriately completed in conformity herewith (each, an "A-Term Note" and,
collectively, the "A-Term Notes"), (ii) if B Term Loans, by a promissory note
duly executed and delivered to such Lender by the Borrower in the form of
Exhibit B-2 with blanks appropriately completed in conformity herewith (each, a
"B-Term Note" and collectively, the "B-Term Notes"), (iii) if C Term Loans, by a
promissory note duly executed and delivered to such Lender by the Borrower in
the form of Exhibit B-3 with blanks appropriately completed in conformity
herewith (each, a "C-Term Note" and, collectively, the "C-Term Notes"), (iv) if
Revolving Loans, by a promissory note duly executed and delivered to such Lender
by the Borrower in the form of Exhibit B-4 with blanks appropriately completed
in conformity herewith (each, a "Revolving Note" and, collectively, the
"Revolving Notes") and (v) if Swingline Loans, by a promissory note duly
executed and delivered to the Swingline Lender by the Borrower in the form of
Exhibit B-5 with blanks appropriately completed in conformity herewith (the
"Swingline Note").
(b) The A-Term Note issued to each Lender shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the Closing Date, (iii) be in a stated principal amount equal to the A Term Loan
Commitment of such Lender and be payable in the principal amount of the
outstanding A Term Loans evidenced thereby, (iv) mature on the A Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Rate Loans, as the
case may be, evidenced thereby and (vi) be entitled to the benefits of this
Agreement and the other Credit Documents.
(c) The B-Term Note issued to each Lender shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the Closing Date, (iii) be in a stated principal amount equal to the B Term Loan
Commitment of such Lender and be payable in the principal amount of the
outstanding B Term Loans evidenced thereby, (iv) mature on the B Term Loan
Maturity Date, (v) bear interest as provided in the
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appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Rate Loans, as the case may be, evidenced thereby and (vi) be
entitled to the benefits of this Agreement and the other Credit Documents.
(d) The C-Term Note issued to each Lender shall (i) be executed by the
Borrower, (ii) be payable to such Lender or its registered assigns and be dated
the Closing Date, (iii) be in a stated principal amount equal to the C Term Loan
Commitment of such Lender and be payable in the principal amount of the
outstanding C Term Loans evidenced thereby, (iv) mature on the C Term Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Rate Loans, as the
case may be, evidenced thereby and (vi) be entitled to the benefits of this
Agreement and the other Credit Documents.
(e) The Revolving Note issued to each Lender shall (i) be executed by
the Borrower, (ii) be payable to such Lender or its registered assigns and be
dated the Closing Date, (iii) be in a stated principal amount equal to the
Revolving Credit Commitment of such Lender and be payable in the principal
amount of the outstanding Revolving Loans evidenced thereby, (iv) mature on the
Revolving Loan Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar Rate
Loans, as the case may be, evidenced thereby and (vi) be entitled to the
benefits of this Agreement and the other Credit Documents.
(f) The Swingline Note issued to the Swingline Lender shall (i) be
executed by the Borrower, (ii) be payable to the Swingline Lender or its
registered assigns and be dated the Closing Date, (iii) be in a stated principal
amount equal to the Maximum Swingline Amount and be payable in the principal
amount of the outstanding Swingline Loans evidenced thereby, (iv) mature on the
Swingline Expiry Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans evidenced thereby, and (vi) be
entitled to the benefits of this Agreement and the other Credit Documents.
(g) Each Lender will note on its internal records the amount of each
Loan made by it and each payment and conversion in respect thereof and will
prior to any transfer of any of its Notes endorse on the reverse side thereof
the outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
Section 1.06. Conversions. The Borrower shall have the option to convert on
any Business Day occurring after the Closing Date all or a portion equal to at
least the applicable Minimum Borrowing Amount, of the outstanding principal
amount of the Loans (other than Swingline Loans) made to the Borrower pursuant
to one or more Borrowings of one or more Types of Loans under a single Facility
into a Borrowing or Borrowings of another Type of Loans under such Facility,
provided that (i) except as otherwise provided in Section 1.10(b), Eurodollar
Rate Loans may be converted into Base Rate Loans only on the last day of an
Interest Period applicable thereto and no such partial conversion of Eurodollar
Rate Loans shall reduce the outstanding principal amount of Eurodollar Rate
Loans made pursuant to any single Borrowing to less than the Minimum Borrowing
Amount applicable
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thereto, (ii) Base Rate Loans may only be converted into Eurodollar Rate Loans
if no Default or Event of Default is in existence on the date of the conversion
and (iii) no conversion pursuant to this Section 1.06 shall result in a greater
number of Borrowings than is permitted under Section 1.02. Swingline Loans may
not be converted pursuant to this Section 1.06. Each such conversion shall be
effected by the Borrower giving the Agent at its Notice Office prior to 11:00
A.M. (New York time) at least three Business Days' (two Business Days' in the
case of conversions into Base Rate Loans) prior written notice in the form of
Exhibit C (or telephone notice promptly confirmed in writing) (each a "Notice
of Conversion") specifying the Loans to be so converted, the Borrowing(s)
pursuant to which such Loans were made, the date of such conversion (which
shall be a Business Day) and, if to be converted into Eurodollar Rate Loans,
the Interest Period to be initially applicable thereto. Each Notice of
Conversion, except as otherwise expressly provided in Section 1.10, shall be
irrevocable. The Agent shall give each Lender prompt notice of any such proposed
conversion affecting any of its Loans.
Section 1.07. Pro Rata Borrowings. All Borrowings of Loans (other than
Swingline Loans) under this Agreement with respect to a Facility shall be
incurred from the Lenders pro rata on the basis of their then respective
Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make Loans hereunder and that
each Lender shall be obligated to make the Loans to be made by it hereunder
regardless of the failure of any other Lender to fulfill its commitments.
Section 1.08. Interest. (a) The Borrower agrees to pay interest in respect
of the unpaid principal amount of each Base Rate Loan made to the Borrower from
the date the proceeds thereof are made available to the Borrower until the
earlier of (i) the maturity (whether by acceleration or otherwise) of such Base
Rate Loan and (ii) the conversion of such Base Rate Loan into a Eurodollar Rate
Loan pursuant to Section 1.06 at a rate per annum which shall be equal to the
sum of the Applicable Base Rate Margin plus the Base Rate in effect from time to
time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Rate Loan made to the Borrower from the date
the proceeds thereof are made available to the Borrower until the earlier of (i)
the maturity (whether by acceleration or otherwise) of such Eurodollar Rate Loan
and (ii) the conversion of such Eurodollar Rate Loan into a Base Rate Loan
pursuant to Section 1.06 at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Applicable Eurodollar Rate
Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
(including, to the extent legally permitted, overdue interest) shall bear
interest at a rate per annum equal to (i) in the case of overdue principal of
any Loan, the rate which is 2% in excess of the rate then borne by such Loan
and, after the expiration of the Interest Period, if any, for such Loan, 2% plus
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the Applicable Base Rate Margin plus the Base Rate from time to time in effect
and (ii) in the case of overdue interest or any other overdue amount, the rate
equal to 2% plus the Applicable Base Rate Margin plus the Base Rate from time to
time in effect. Interest which accrues under this Section 1.08(c) shall be
payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on the last Business Day of
each February, May, August and November, (ii) in respect of each Eurodollar Rate
Loan, (x) on the last day of each Interest Period applicable thereto and, in the
case of an Interest Period in excess of three months, on each date occurring at
three month intervals after the first day of such Interest Period and (y) the
date of any conversion into a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10(b), as applicable (on the amount converted), and (iii) in respect of each
Loan, on any repayment or prepayment (on the amount repaid or prepaid), at
maturity (whether by acceleration or otherwise) and, after such maturity, on
demand.
(e) On each Interest Determination Date, the Agent shall determine the
interest rate for the Eurodollar Rate Loans for the Interest Period to be
applicable to such Eurodollar Rate Loans and shall promptly notify the Borrower
and the Lenders thereof. Each such determination shall, absent manifest error,
be final and conclusive and binding on all parties hereto.
Section 1.09. Interest Periods. At the time the Borrower gives any Notice
of Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Rate Loan (in the case of the initial Interest Period
applicable thereto) or by giving the Agent written irrevocable notice (or
telephonic notice promptly confirmed in writing) thereof by 11:00 A.M. (New York
time), on the third Business Day prior to the expiration of an Interest Period
applicable to such Eurodollar Rate Loan (in the case of subsequent Interest
Periods), it shall have the right to elect the interest period (each an
"Interest Period") applicable to a Borrowing of such Eurodollar Rate Loans,
which Interest Period shall, at the option of the Borrower, be a one, two, three
or six-month or, if available (as determined by the Agent), twelve-month period
provided that:
(i) all Eurodollar Rate Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Borrowing of Eurodollar
Rate Loans shall commence on the date of such Borrowing (including the
date of any conversion from a Borrowing of Base Rate Loans) and each
Interest Period occurring thereafter in respect of such Borrowing shall
commence on the day on which the next preceding Interest Period expires;
(iii) if any Interest Period begins on a day for which there is
not numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
would otherwise expire on a day which
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is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(v) no Interest Period may be selected at any time when a Default
or an Event of Default is then in existence;
(vi) no Interest Period for a Borrowing under a Facility may be
selected if it would extend beyond the respective Maturity Date for such
Facility; and
(vii) no Interest Period with respect to any Borrowing of Term
Loans shall extend beyond any date upon which a scheduled repayment of
such Term Loans is required to be made under Section 4.02.01(b)(i), (ii)
or (iii), as the case may be, if, after giving effect to the selection
of such Interest Period, the aggregate principal amount of such Term
Loans maintained as Eurodollar Loans with Interest Periods ending after
such date of mandatory repayment would exceed the aggregate principal
amount of such Term Loans permitted to be outstanding after such
mandatory prepayment.
If upon the expiration of any Interest Period, the Borrower has failed
to select (or is not permitted to select) a new Interest Period to be applicable
to such Borrowing as provided above, the Borrower shall be deemed to have
selected to convert such Borrowing into a Borrowing of Base Rate Loans effective
as of the expiration date of such current Interest Period.
Section 1.10. Increased Costs, Illegality, Etc. (a) In the event that any
Lender shall have determined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Eurodollar Rate Loan because of (x) any change since the date of
this Agreement in any applicable law or governmental rule, regulation,
guideline, order or request (whether or not having the force of law) or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline,
order or request such as, for example, but not limited to, (A) a change
in official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate or (B) a change in the basis of taxation of payments
to any Lender of the principal of or interest on such Eurodollar Rate
Loan or any other amounts payable hereunder (except for changes in
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the rate of tax on, or determined by reference to, the net income or
profits of such Lender pursuant to the laws of the jurisdiction in which
such Lender is organized or the jurisdiction in which such Lender's
principal office or applicable lending office is located or any
subdivision thereof or therein) and/or (y) any other circumstances
affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market; or
(iii) at any time that the making or continuance of any Eurodollar
Rate Loan has become (x) unlawful by compliance by such Lender with any
law, governmental rule, regulation, guideline or order, (y) impossible
by compliance by such Lender with any governmental request (whether or
not having the force of law) or (z) has become impracticable as a result
of a contingency occurring after the date of this Agreement which
materially and adversely affects the interbank Eurodollar market;
then, and in any such event, such Lender (or the Agent, in the case of clause
(i) above) shall promptly give notice (by telephone confirmed in writing) to the
Borrower and, except in the case of clause (i) above, to the Agent of such
determination (which notice the Agent shall promptly transmit to each of the
other Lenders). Thereafter (x) in the case of clause (i) above, Eurodollar Rate
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Lenders that the circumstances giving rise to such notice by
the Agent no longer exist, and any Notice of Borrowing or Notice of Conversion
given by the Borrower with respect to such affected Eurodollar Rate Loans which
have not yet been incurred (including by way of conversion) shall be deemed
rescinded by the Borrower, (y) in the case of clause (ii) above, the Borrower
shall pay to such Lender, within 15 days of receipt of the notice referred to
below, such additional amounts (in the form of an increased rate of, or a
different method of calculating, interest or otherwise as such Lender in its
sole discretion shall determine) as shall be required to compensate such Lender
for such increased costs or reductions in amounts received or receivable
hereunder (a written notice as to the additional amounts owed to such Lender,
setting forth in reasonable detail the basis for the calculation thereof,
submitted to the Borrower by such Lender shall, absent manifest error, be final
and conclusive and binding upon all parties hereto) and (z) in the case of the
clause (iii) above, the Borrower shall take one of the actions specified in
Section 1.10(b) as promptly as possible and, in any event, within the time
period required by law.
(b) At any time that any Eurodollar Rate Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Rate Loan affected pursuant to Section 1.10(a)(iii)
shall) either (x) if the affected Eurodollar Rate Loan is then being made
initially or pursuant to a conversion, cancel the respective Borrowing by giving
the Agent irrevocable telephonic notice (confirmed in writing) thereof on the
same date that the Borrower was notified by the affected Lender or the Agent
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Rate
Loan is then outstanding, upon at least three Business Days' written notice to
the Agent, require the affected Lender to convert such Eurodollar Rate Loan
into a Base Rate Loan (which conversion, in the case of the circumstances
described in Section 1.10(a)(iii), shall occur no later than the last day of the
Interest Period then applicable to such Eurodollar Rate Loan (or
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such earlier date as shall be required by applicable law)), provided that, if
more than one Lender is similarly affected at any time, then all similarly
affected Lenders must be treated the same pursuant to this Section 1.10(b).
(c) If any Lender shall have determined that after the date hereof, the
adoption or effectiveness of any applicable law, rule or regulation regarding
capital adequacy, 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 such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy issued after the date hereof (whether or
not having the force of law) of any such authority, central bank or comparable
agency, has or would have the effect of reducing the rate of return on such
Lender's or such other corporation's capital or assets as a consequence of such
Lender's Commitments or obligations hereunder to a level below that which such
Lender or such other corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender's or
such other corporation's policies with respect to capital adequacy), then from
time to time, upon written demand by such Lender (with a copy to the Agent),
accompanied by the notice referred to in the last sentence of this clause (c),
the Borrower shall pay to such Lender such additional amount or amounts as will
compensate such Lender or such other corporation for such reduction. Each
Lender, upon determining in good faith that any additional amounts will be
payable pursuant to this Section 1.10(c), will give prompt written notice
thereof to the Borrower, which notice shall set forth the basis of the
calculation of such additional amounts, although the failure to give any such
notice shall not release or diminish the Borrower's obligations to pay
additional amounts pursuant to this Section 1.10(c) upon the subsequent receipt
of such notice.
Section 1.11. Compensation. The Borrower shall compensate each Lender,
upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Rate Loans but excluding any loss
of anticipated profits) which such Lender may sustain: (i) if for any reason
(other than a default by such Lender or the Agent) a Borrowing of, or conversion
from or into, Eurodollar Rate Loans does not occur on a date specified therefor
in a Notice of Borrowing or Notice of Conversion (whether or not withdrawn by
the Borrower or deemed withdrawn pursuant to Section 1.10); (ii) if any
repayment (including any repayment made pursuant to Section 4.01 or 4.02 or as a
result of an acceleration of the Loans pursuant to Section 9) or conversion of
any of its Eurodollar Rate Loans occurs on a date which is not the last day of
an Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Rate Loans is not made on any date specified in a notice of
prepayment given by the Borrower; or (iv) as a consequence of (x) any other
default by the Borrower to repay its Loans when required by the terms of this
Agreement or the Notes held by such Lender or (y) any election made pursuant to
Section 1.10(b). Calculation of all amounts payable to a Lender under this
Section 1.11 shall be made as though that Lender had actually funded its
relevant Eurodollar Rate Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of
that Loan, having a maturity
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comparable to the relevant Interest Period and through the transfer of such
Eurodollar deposit from an offshore office of that Lender to a domestic office
of that Lender in the United States of America; provided, however, that each
Lender may fund each of its Eurodollar Rate Loans in any manner it sees fit and
the foregoing assumption shall be utilized only for the calculation of amounts
payable under this Section 1.11. It is further understood and agreed that if any
repayment of Eurodollar Rate Loans pursuant to Section 4.01 or 4.02 or any
conversion of Eurodollar Rate Loans pursuant to Section 1.06 in either case
occurs on a date which is not the last day of any Interest Period applicable
thereto, such repayment or conversion shall be accompanied by any amounts owing
to any Lender pursuant to this Section 1.11.
Section 1.12. Change of Lending Office. Each Lender agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such
Lender, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Lender) to designate another lending
office for any Loans or Letters of Credit affected by such event, provided
that such designation is made on such terms that, in the sole judgment of such
Lender, such Lender and its lending office suffer no economic, legal, regulatory
or other disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing in this Section 1.12
shall affect or postpone any of the obligations of the Borrower or the right
of any Lender provided in Sections 1.10, 2.06 and 4.04.
Section 1.13. Replacement of Lenders. (a)(i) If any Lender becomes a
Defaulting Lender, (ii) upon the occurrence of any event giving rise to the
operation of Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06
or Section 4.04 with respect to any Lender which results in such Lender
charging to the Borrower increased costs in excess of those being generally
charged to the Borrower by the other Lenders or (iii) as and to the extent
provided in Section 12.12(b), the Borrower shall have the right and in the case
of clause (a)(i) above, the Agent shall have the right, in accordance with the
requirements of Section 12.04(b), if, in the case of a replacement by the
Borrower, no Default or Event of Default will exist after giving effect to such
replacement, to replace such Lender (the "Replaced Lender") with one or more
other Eligible Transferee or Transferees (collectively, the "Replacement
Lender") acceptable to the Agent and the Letter of Credit Issuers (such
acceptability to be communicated to the Borrower within 15 days), provided that
(i) at the time of any replacement pursuant to this Section 1.13, the
Replacement Lender shall enter into one or more Assignment and Assumption
Agreements pursuant to Section 12.04(b) (and with all fees payable pursuant to
said Section 12.04(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the Commitments and all outstanding
Loans of, and the participations in Letters of Credit and Swingline Loans by,
the Replaced Lender and, in connection therewith, shall pay to (x) the Replaced
Lender in respect thereof an amount equal to the sum of (A) an amount equal to
the principal of, and all accrued interest on, all outstanding Loans of the
Replaced Lender and an amount equal to all Unpaid Drawings that have been funded
by (and not reimbursed to) such Replaced Lender, together with all then unpaid
interest with respect thereto at such time, and (B) an amount equal to all
accrued, but theretofore unpaid, Fees owing to the Replaced Lender
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pursuant to Section 3.01, (y) the Letter of Credit Issuer an amount equal to
such Replaced Lender's Revolving Percentage of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender and (z) the Swingline Lender an
amount equal to such Replaced Lender's Revolving Percentage of any Mandatory
Borrowing to the extent such amount was not theretofore funded by such Replaced
Lender, and (ii) all obligations of the Borrower owing to the Replaced Lender
(other than those specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently being, paid) shall be
paid in full by the Borrower to such Replaced Lender concurrently with such
replacement.
(b) Upon the execution of the respective Assignment and Assumption
Agreements, the payment of the amounts referred to in clauses (i) and (ii) of
proviso of Section 1.13(a), recordation of the assignment on the Register by the
Agent pursuant to Section 12.16 and the delivery to the Replacement Lender of
the appropriate Note or Notes executed by the Borrower, the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to
constitute a Lender hereunder, except with respect to indemnification provisions
under this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06,
4.04, 12.01 and 12.06), which shall survive as to such Replaced Lender.
SECTION 2. LETTERS OF CREDIT.
Section 2.01. Letters of Credit. (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that the Letter of Credit
Issuer issue, at any time and from time to time on and after the Closing Date
and prior to the fifth Business Day (or the 30th day in the case of trade
Letters of Credit) preceding the Revolving Loan Maturity Date, for the account
of the Borrower and in support of (i) trade obligations of the Borrower or any
of its Subsidiaries that arise in the ordinary course of business and are in
respect of general corporate purposes of the Borrower or any of its
Subsidiaries, as the case may be, and/or (ii) on a standby basis, L/C
Supportable Indebtedness of the Borrower or any of its Subsidiaries to any other
Person, irrevocable letters of credit in such form as may be approved by the
Letter of Credit Issuer, and subject to and upon the terms and conditions herein
set forth, the Letter of Credit Issuer in each case agrees to issue from time to
time Letters of Credit (each such letter of credit issued or deemed issued
pursuant to this paragraph (a), a "Letter of Credit" and, collectively, the
"Letters of Credit"). For purposes of this Agreement and the other Credit
Documents, each of the Existing Letters of Credit shall be deemed a Letter of
Credit issued under this Agreement (in which each Revolving Lender shall be
deemed to have purchased a participation on the Closing Date as provided in
Section 2.04(a)). To the extent the terms and conditions of any agreement or
document relating to the reimbursement of drawings under any Existing Letter of
Credit are inconsistent with the terms and conditions of this Agreement, the
terms and conditions of this Agreement shall control with respect to such
Existing Letter of Credit. Notwithstanding the foregoing the Letter of Credit
Issuer shall be under no obligation to issue any Letter of Credit if at the time
of such issuance:
(i) any order, judgment or decree of any governmental authority
or arbitrator shall purport by its terms to enjoin or restrain the
Letter of Credit Issuer
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from issuing such Letter of Credit or any requirement of law applicable
to the Letter of Credit Issuer or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over the Letter of Credit Issuer shall prohibit, or request
that the Letter of Credit Issuer refrain from, the issuance of letters
of credit generally or such Letter of Credit in particular or shall
impose upon the Letter of Credit Issuer with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which the
Letter of Credit Issuer is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to the Letter of Credit Issuer as of the
date hereof and which the Letter of Credit Issuer in good faith deems
material to it; or
(ii) the Letter of Credit Issuer shall have received notice from
the Required Lenders prior to the issuance of such Letter of Credit of
the type described in the penultimate sentence of Section 2.03(b).
In addition, the Letter of Credit Issuer shall not be obligated to issue any
Letter of Credit at a time when a Lender Default exists unless the Letter of
Credit Issuer shall have entered into arrangements satisfactory to it and the
Borrower to eliminate the Letter of Credit Issuer's risk with respect to the
participation in Letters of Credit of the Defaulting Lender, including by cash
collateralizing such Lender's Revolving Percentage of the Letter of Credit
Outstandings. If the Letter of Credit Issuer shall not be able to issue a Letter
of Credit because of the circumstances described in clause (i) above, then, the
Borrower may, with the consent of the Agent and such Revolving Lender, designate
any Revolving Lender as a substitute letter of credit issuer for such Letter of
Credit.
(b) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time would
exceed either (x) $60,000,000 or (y) when added to the sum of the aggregate
principal amount of all Swingline Loans and Revolving Loans then outstanding,
an amount equal to the Total Revolving Credit Commitment at such time; (ii)(x)
each standby Letter of Credit shall have an expiry date occurring not later than
one year after such Letter of Credit's date of issuance (except for the Existing
Letters of Credit, which shall each have an expiry date as set forth in Schedule
2.01 and any Letter of Credit replacing each Existing Letter of Credit
identified on Schedule 2.01 as a letter of credit required to have an expiry
date later than one year after the issuance), provided that any such Letter of
Credit (other than Existing Letters of Credit) may be automatically extendable
for periods of up to one year so long as such Letter of Credit provides that
the Letter of Credit Issuer retains an option, satisfactory to the Letter of
Credit Issuer, to terminate such Letter of Credit within a specified period of
time prior to each scheduled extension date and (y) each trade Letter of Credit
shall have an expiry date occurring not later than one year after such Letter of
Credit's date of issuance; (iii)(x) no standby Letter of Credit shall have an
expiry date occurring later than the fifth Business Day next preceding the
Revolving Loan Maturity Date and (y) no trade Letter of Credit shall have an
expiry date occurring later
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than 30 days prior to the Revolving Loan Maturity Date; and (iv) each Letter of
Credit shall be denominated in U.S. Dollars.
Section 2.02. Minimum Stated Amount. The initial Stated Amount of each
Letter of Credit shall not be less than $25,000 or such lesser amount as
is acceptable to the Letter of Credit Issuer.
Section 2.03. Letter of Credit Requests. (a) Whenever the Borrower desires
that a Letter of Credit be issued for its account, it shall give the Agent
and the Letter of Credit Issuer at least five Business Days' (or such shorter
period as is acceptable to the Letter of Credit Issuer) written notice
thereof. Each notice shall be in the form of Exhibit D (each a "Letter
of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(b). Unless the Letter of Credit Issuer has received notice from the
Required Lenders before it issues a Letter of Credit that a Default or an Event
of Default then exists or that the issuance of such Letter of Credit would
violate Section 2.01(b), then the Letter of Credit Issuer shall issue the
requested Letter of Credit for the account of the Borrower in accordance with
the Letter of Credit Issuer's usual and customary practices. Upon its issuance
of any Letter of Credit or any amendment thereto, the Letter of Credit Issuer
shall promptly notify the Agent and each Lender of such issuance or amendment,
which notice shall be accompanied by a copy of the Letter of Credit actually
issued or the amendment actually made.
Section 2.04. Letter of Credit Participations. (a) Immediately upon the
issuance by the Letter of Credit Issuer of any Letter of Credit, the Letter
of Credit Issuer shall be deemed to have sold and transferred to each
other Revolving Lender (each such Lender, in its capacity under this
Section 2.04, a "Participant"), and each such Participant shall be deemed
irrevocably and unconditionally to have purchased and received from the Letter
of Credit Issuer, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Revolving Percentage
in such Letter of Credit, each drawing made thereunder and the obligations
of the Borrower under this Agreement with respect thereto, and any security
therefor or guaranty pertaining thereto. Upon any change in the Revolving Credit
Commitment of the Revolving Lenders pursuant to Section 1.13 or 12.04, it is
hereby agreed that, with respect to all outstanding Letters of Credit and
Unpaid Drawings, there shall be an automatic adjustment to the participations
pursuant to this Section 2.04 to reflect the new Revolving Percentages of
the assignor and assignee Lender or of all Lenders, as the case may be.
(b) In determining whether to pay under any Letter of Credit, the Letter
of Credit Issuer shall have no obligation relative to the respective
Participants other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they appear
to substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Letter of Credit Issuer
under or in connection with any Letter of Credit if taken or omitted in the
absence of gross
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negligence or willful misconduct, shall not create for the Letter of Credit
Issuer any resulting liability to the Borrower or any Lender.
(c) In the event that the Letter of Credit Issuer makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Letter of Credit Issuer pursuant to Section 2.05(a), the
Letter of Credit Issuer shall promptly notify the Agent, which shall promptly
notify each Participant of such failure, and each Participant shall promptly and
unconditionally pay to the Agent for the account of the Letter of Credit Issuer
the amount of such Participant's Revolving Percentage of such unreimbursed
payment in U.S. Dollars and in same day funds. If the Agent so notifies, prior
to 12:00 Noon (New York time) on any Business Day, any Participant required to
fund a payment under a Letter of Credit, such Participant shall make available
to the Agent for the account of the Letter of Credit Issuer in U.S. Dollars such
Participant's Revolving Percentage of the amount of such payment on such
Business Day in same day funds. If and to the extent such Participant shall not
have so made its Revolving Percentage of the amount of such payment available to
the Agent for the account of the Letter of Credit Issuer, such Participant
agrees to pay to the Agent for the account of the Letter of Credit Issuer,
forthwith on demand such amount, together with interest thereon, for each day
from such date until the date such amount is paid to the Agent for the account
of the Letter of Credit Issuer at the overnight Federal Funds Rate. The failure
of any Participant to make available to the Agent for the account of the Letter
of Credit Issuer its Revolving Percentage of any payment under any Letter of
Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Agent for the account of the Letter of Credit Issuer its
Revolving Percentage of any payment under any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Agent for the account
of the Letter of Credit Issuer such other Participant's Revolving Percentage of
any such payment.
(d) Whenever the Letter of Credit Issuer receives a payment of a
reimbursement obligation as to which the Agent has received for the account of
the Letter of Credit Issuer any payments from the Participants pursuant to
clause (c) above, the Letter of Credit Issuer shall pay to the Agent for the
account of each Participant which has paid its Revolving Percentage thereof, in
U.S. Dollars and in same day funds, an amount equal to such Participant's
Revolving Percentage (based upon the proportionate aggregate amount originally
funded by such Participant to the aggregate amount funded by all Participants)
of the principal amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to the Agent
for the account of the Letter of Credit Issuer with respect to Letters of Credit
shall be unconditional and irrevocable and not subject to counterclaim, set-off
or other defense or any other qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
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(i) any lack of validity or enforceability of this Agreement or
any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower or any of its Subsidiaries may have at any time
against a beneficiary named in a Letter of Credit, any transferee of any
Letter of Credit (or any Person for whom any such transferee may be
acting), the Agent, the Agent for the account of the Letter of Credit
Issuer, any Participant, any Lender or any other Person, whether in
connection with this Agreement, any Letter of Credit, any other Credit
Document, the transactions contemplated herein or therein or any
unrelated transactions (including any underlying transaction between the
Borrower or any of its Subsidiaries on the one hand and the beneficiary
named in any such Letter of Credit on the other hand);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default unless the
Letter of Credit Issuer shall have issued any such Letter of Credit in
disregard of a notice received from the Required Lenders of the type
described in the penultimate sentence of Section 2.03(b).
Section 2.05. Agreement to Repay Letter of Credit Drawings. (a) The
Borrower hereby agrees to reimburse the Letter of Credit Issuer, by making
payment to the Agent in immediately available funds at the Payment Office of the
Agent, for any payment or disbursement made by the Letter of Credit Issuer under
any Letter of Credit (each such amount, so paid until reimbursed, an "Unpaid
Drawing"), immediately after, and in any event on the date of such payment or
disbursement, with interest on the amount so paid or disbursed by the Letter of
Credit Issuer, to the extent not reimbursed prior to 12:00 Noon (New York time)
on the date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date the Letter of Credit Issuer was reimbursed
by the Borrower therefor at a rate per annum which shall be the Applicable Base
Rate Margin plus the Base Rate as in effect from time to time for Revolving
Loans; provided, however, to the extent such amounts are not reimbursed prior to
12:00 Noon (New York time) on the third Business Day following such payment or
disbursement, interest shall thereafter accrue on the amounts so paid or
disbursed by the Letter of Credit Issuer (and until reimbursed by the Borrower)
at a rate per annum which shall be the Applicable Base Rate Margin plus the Base
Rate as in effect from time to time for Revolving Loans plus 2% and with such
interest to be payable on demand. The Letter of Credit Issuer shall give the
Borrower prompt notice of each Drawing under any Letter of Credit, provided that
the failure to give any such notice shall in no way affect, impair or diminish
the Borrower's obligations hereunder.
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<PAGE>
(b) The obligations of the Borrower under this Section 2.05 to reimburse
the Letter of Credit Issuer with respect to drawings on Letters of Credit (each,
a "Drawing") (including, in each case, interest thereon) shall be absolute and
unconditional under any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower or any of its Subsidiaries
may have or have had against any Lender (including in its capacity as issuer of
the Letter of Credit or as Participant), or any non-application or
misapplication by the beneficiary of the proceeds of such Drawing, the Letter of
Credit Issuer's only obligation to the Borrower being to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered and that they appear to substantially comply on their face with
the requirements of such Letter of Credit. Any action taken or omitted to be
taken by the Letter of Credit Issuer under or in connection with any Letter of
Credit if taken or omitted in the absence of gross negligence or willful
misconduct, shall not create for the Letter of Credit Issuer any resulting
liability to the Borrower or any of its Subsidiaries.
Section 2.06. Increased Costs. If at any time after the date
hereof, the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law), 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 the Letter of
Credit Issuer or any Participant with any request or directive by any such
authority (whether or not having the force of law), or any change in generally
acceptable accounting principles, shall either (i) impose, modify or make
applicable any reserve, deposit, capital adequacy or similar requirement against
letters of credit issued by the Letter of Credit Issuer or participated in by
any Participant, or (ii) impose on the Letter of Credit Issuer or any
Participant any other conditions relating, directly or indirectly, to this
Agreement or any Letter of Credit; and the result of any of the foregoing is to
increase the cost to the Letter of Credit Issuer or any Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by the Letter of Credit Issuer or any Participant
hereunder or reduce the rate of return on its capital with respect to Letters of
Credit (except for changes in the rate of tax on, or determined by reference to,
the net income or profits of the Letter of Credit Issuer or such Participant,
pursuant to the laws of the jurisdiction in which the Letter of Credit Issuer or
such Participant is organized or the jurisdiction in which the Letter of Credit
Issuer's or such Participant's principal office or applicable lending office is
located or any subdivision thereof or therein), then, within 15 days after
demand to the Borrower by the Letter of Credit Issuer or such Participant (a
copy of which demand shall be sent by the Letter of Credit Issuer or such
Participant to the Agent), the Borrower shall pay to the Letter of Credit Issuer
or such Participant such additional amount or amounts as will compensate the
Letter of Credit Issuer or such Participant for such increased cost or reduction
in the amount receivable or reduction on the rate of return on its capital. The
Letter of Credit Issuer or any Participant, upon determining that any additional
amounts will be payable pursuant to this Section 2.06, will give prompt written
notice thereof to the Borrower, which notice shall include a certificate
submitted to the Borrower by the Letter of Credit Issuer or such Participant (a
copy of which certificate shall be sent by the Letter of Credit Issuer or such
Participant to the Agent), setting forth in reasonable detail the basis for the
calculation of
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<PAGE>
such additional amount or amounts necessary to compensate the Letter of Credit
Issuer or such Participant. The certificate required to be delivered pursuant to
this Section 2.06 shall, if delivered in good faith and absent manifest error,
be final and conclusive and binding on the Borrower.
SECTION 3. FEES; COMMITMENTS
Section 3.01. Fees. (a) The Borrower agrees to pay to the Agent for
distribution to each Revolving Lender a commitment fee (the "Commitment Fee")
for the period from the Closing Date to and including the Revolving Loan
Maturity Date (or such earlier date as the Total Revolving Credit Commitment
shall have been terminated) computed at a rate for each day equal to the
Applicable Commitment Fee Rate for such day on the daily average Unutilized
Revolving Credit Commitment of such Lender. Accrued Commitment Fees shall be due
and payable quarterly in arrears on the last Business Day of each February, May,
August and November of each year, and on the Revolving Loan Maturity Date (or
upon such earlier date as the Total Revolving Credit Commitment is terminated).
Notwithstanding anything to the contrary contained in the immediately preceding
sentence, (i) the Commitment Fee shall be 1/2 of 1% per annum at any time when
an Event of Default shall exist and (ii) the Commitment Fee shall be 1/2 of 1%
per annum prior to the date which is six months after the Closing Date.
(b) The Borrower agrees to pay to the Agent for pro rata distribution to
each Revolving Lender (based upon such Lender's Revolving Percentage) a fee in
respect of each Letter of Credit issued hereunder (the "Letter of Credit Fee")
for the period from and including the date of issuance of such Letter of Credit
to and including the termination of such Letter of Credit, computed at a rate
per annum equal to the Applicable Eurodollar Rate Margin for Revolving Loans as
in effect from time to time on the daily Stated Amount of such Letter of Credit.
Accrued Letter of Credit Fees shall be due and payable quarterly in arrears on
the last Business Day of each February, May, August and November and upon the
first day on or after the termination of the Total Revolving Credit Commitment
upon which no Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Agent for the account of the
Letter of Credit Issuer a fee in respect of each Letter of Credit (the "Facing
Fee"), for the period from and including the date of issuance of such Letter of
Credit to and including the termination of such Letter of Credit, computed at a
rate per annum equal to 1/8 of 1% per annum on the daily Stated Amount of such
Letter of Credit, provided, that in any event the minimum amount of the Facing
Fee payable in any 12 month period for each Letter of Credit shall be $500; it
being agreed that, on the date of issuance of any Letter of Credit and on each
anniversary thereof prior to the termination of such Letter of Credit, if $500
will exceed the amount of Facing Fees that will accrue with respect to such
Letter of Credit for the immediately succeeding 12 month period, the full $500
shall be payable on the date of issuance of such Letter of Credit and on each
such anniversary thereof prior to the termination of such Letter of Credit.
Except as otherwise provided in the proviso to the immediately preceding
sentence, accrued Facing Fees shall be due and payable quarterly in arrears on
the last Business Day of each February, May, August and November and upon the
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<PAGE>
first day on or after the termination of the Total Revolving Credit Commitment
upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to the Letter of Credit Issuer, upon each
drawing under, issuance of, or amendment to, any Letter of Credit, such amount
as shall at the time of such event be the administrative charge which the Letter
of Credit Issuer is customarily charging in connection with such occurrence with
respect to letters of credit.
(e) The Borrower agrees to pay to the Agent, for its own account, such
other fees as shall have been agreed to by the Borrower and the Agent in that
certain fee letter between them dated December 21, 1997, as amended.
Section 3.02. Voluntary Reduction of Commitments. (a) Upon at least five
Business Days' prior written notice to the Agent at its Notice Office (which
notice the Agent shall promptly transmit to each of the Lenders), the Borrower
shall have the right, at any time or from time to time, without premium or
penalty, to terminate the Total Unutilized Revolving Credit Commitment in whole
or in part, in integral multiples of $1,000,000 in the case of partial
reductions to the Total Unutilized Revolving Credit Commitment, provided that
each such reduction shall apply proportionately to permanently reduce the
Revolving Credit Commitment of each Revolving Lender.
(b) As and to the extent provided in Section 12.12(b), the Borrower may,
upon five Business Days' prior written notice to the Agent at its Notice Office
(which notice the Agent shall promptly transmit to each of the Lenders), require
such Lender to assign its entire Revolving Credit Commitment and all Loans, Fees
and other amounts owing to such Lender to another Lender or Lenders (which would
agree to provide the consent refused by the assignor Lender) pursuant to
subsection 12.04(b), if such other Lender or Lenders consent to such assignment,
(at which time Annex I shall be deemed modified to reflect such changed
amounts), and at such time, such Lender shall no longer constitute a "Lender"
for purposes of this Agreement, except with respect to indemnifications under
this Agreement (including, without limitation, Sections 1.10, 1.11, 2.06, 4.04,
12.01 and 12.06), which shall survive as to such Lender.
Section 3.03. Mandatory Adjustments of Commitments, Etc. (a) The Total
Commitment shall terminate in its entirety on February 27, 1998 unless the
Closing Date has occurred on or before such date.
(b) Each of the Total A Term Loan Commitment, the Total B Term Loan
Commitment and the Total C Term Loan Commitment shall terminate in its entirety
on the Closing Date, after giving effect to the making of the respective Term
Loans on such date.
(c) The Total Revolving Credit Commitment (and the Revolving Credit
Commitment of each Revolving Lender) shall terminate in their entirety on the
earlier of (i) the date on which a Change of Control occurs and (ii) the
Revolving Loan Maturity Date.
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(d) From and after payment in full of the Term Loans, on each date upon
which a mandatory repayment of Term Loans pursuant to Section 4.02.01.(c), (d),
(e), (f) or (g) would otherwise be required, the Total Revolving Credit
Commitment shall be permanently reduced by the amount, if any, required to be
applied pursuant to said Sections.
(e) Each reduction of the Total Revolving Credit Commitment pursuant to
this Section 3.03 shall apply proportionately to the Revolving Credit Commitment
of each Lender.
SECTION 4. PREPAYMENTS; PAYMENTS
Section 4.01. Voluntary Prepayments. The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Agent prior to 12:00 Noon (New York time) at its Notice Office
(x) at least one Business Day's prior irrevocable written notice (or telephonic
notice promptly confirmed in writing) of the Borrower's intent to prepay Base
Rate Loans (or same day notice in the case of Swingline Loans provided such
notice is given prior to 11:00 A.M. (New York time)) and (y) at least three
Business Days' prior irrevocable written notice (or telephonic notice promptly
confirmed in writing) of the Borrower's intent to prepay Eurodollar Rate Loans,
whether A Term Loans, B Term Loans, C Term Loans, Revolving Loans or Swingline
Loans shall be prepaid, the amount of such prepayment and the Types of Loans to
be prepaid and, in the case of Eurodollar Rate Loans, the specific Borrowing or
Borrowings pursuant to which such Eurodollar Rate Loans were made, which notice
the Agent shall promptly transmit to each of the Lenders; (ii) each prepayment
shall be in an aggregate principal amount of at least $500,000 (or $50,000 in
the case of Swingline Loans) and in increments of $100,000 (or $25,000 in the
case of Swingline Loans) in excess thereof, provided that if any partial
prepayment of Eurodollar Rate Loans made pursuant to any Borrowing shall reduce
the outstanding Eurodollar Rate Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount, then such Borrowing may not be
continued as a Borrowing of Eurodollar Rate Loans and any selection of an
Interest Period with respect thereto given by the Borrower shall have no force
or effect; (iii) each prepayment in respect of any Loans made pursuant to a
specific Borrowing shall be applied pro rata among such Loans, provided that at
the Borrower's election in connection with any prepayment of Revolving Loans
pursuant to this Section 4.01, such prepayment shall not be applied to any
Revolving Loans of a Defaulting Lender at any time when the aggregate amount of
Revolving Loans of any Non-Defaulting Lender exceeds such Non-Defaulting
Lender's Revolving Percentage of all Revolving Loans then outstanding; (iv) each
prepayment of Term Loans pursuant to this Section 4.01 must consist of a
prepayment of A Term Loans (in an amount equal to the A TL Percentage of such
prepayment), B Term Loans (in an amount equal to the B TL Percentage of such
prepayment) and C Term Loans (in an amount equal to the C TL Percentage of such
prepayment); (v) each prepayment of A Term Loans pursuant to this Section 4.01
shall reduce the then remaining Scheduled A Repayments on a pro rata basis
(based upon the then remaining principal amount of each such Scheduled A
Repayment); (vi) each prepayment of B Term Loans pursuant to this Section 4.01
shall reduce the then remaining Scheduled B Repayments on a pro rata basis
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(based upon the then remaining principal amount of each such Scheduled B
Repayment); and (vii) each prepayment of C Term Loans pursuant to this Section
4.01 shall reduce the then remaining Scheduled C Repayments on
a pro rata basis (based upon the then remaining principal amount of each such
Scheduled C Repayment).
Section 4.02. Mandatory Prepayments and Repayments.
Section 4.02.01. Mandatory Prepayments and Repayments. (a) If on any date the
sum of (I) the aggregate outstanding principal amount of Revolving Loans and
Swingline Loans and (II) the aggregate amount of Letter of Credit Outstandings
exceeds the Total Revolving Credit Commitment as then in effect, the Borrower
shall repay on such date that principal amount of Swingline Loans, and if no
Swingline Loans are or remain outstanding, Revolving Loans, in an amount equal
to such excess. If, after giving effect to the prepayment of all outstanding
Swingline Loans and Revolving Loans, the aggregate amount of the Letter of
Credit Outstandings exceeds the Total Revolving Credit Commitment as then in
effect, the Borrower shall pay to the Agent at the Payment Office on such date
an amount of cash or Cash Equivalents equal to the amount of such excess (up to
a maximum amount equal to the Letter of Credit Outstandings at such time), such
cash or Cash Equivalents to be held as security for the obligations of the
Borrower hereunder in a cash collateral account established by the Agent.
(b) (i) The Borrower shall be required to repay the principal amount of
A Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02.02(b), a "Scheduled A Repayment"):
<TABLE>
<CAPTION>
SCHEDULED A REPAYMENT DATE AMOUNT
<S> <C>
the last Business Day in August, 1998 $2,500,000.00
the last Business Day in November, 1998 2,500,000.00
the last Business Day in February, 1999 2,500,000.00
the last Business Day in May, 1999 2,500,000.00
the last Business Day in August, 1999 2,500,000.00
the last Business Day in November, 1999 2,500,000.00
the last Business Day in February, 2000 3,750,000.00
the last Business Day in May, 2000 3,750,000.00
the last Business Day in August, 2000 3,750,000.00
the last Business Day in November, 2000 3,750,000.00
the last Business Day in February, 2001 5,000,000.00
the last Business Day in May, 2001 5,000,000.00
the last Business Day in August, 2001 5,000,000.00
the last Business Day in November, 2001 5,000,000.00
</TABLE>
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<TABLE>
<S> <C>
the last Business Day in February, 2002 6,250,000.00
the last Business Day in May, 2002 6,250,000.00
the last Business Day in August, 2002 6,250,000.00
the last Business Day in November, 2002 6,250,000.00
the last Business Day in February, 2003 6,250,000.00
the last Business Day in May, 2003 6,250,000.00
the last Business Day in August, 2003 6,250,000.00
A Term Loan Maturity Date (the last Business Day in November, 2003) 6,250,000.00
</TABLE>
(ii) The Borrower shall be required to repay the principal amount of B
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02.02(b), a "Scheduled B Repayment"):
<TABLE>
<CAPTION>
SCHEDULED B REPAYMENT DATE AMOUNT
<S> <C>
the last Business Day in November, 1998 $100,000.00
the last Business Day in November, 1999 150,000.00
the last Business Day in November, 2000 150,000.00
the last Business Day in November, 2001 150,000.00
the last Business Day in November, 2002 150,000.00
the last Business Day in November, 2003 150,000.00
the last Business Day in November, 2004 150,000.00
B Term Loan Maturity Date (the last Business Day in August, 2005) 49,000,000.00
</TABLE>
(iii) The Borrower shall be required to repay the principal amount of C
Term Loans on each date set forth below in the amount set forth opposite such
date below (each such repayment, as the same may be reduced as provided in
Sections 4.01 and 4.02.02(b), a "Scheduled C Repayment"):
<TABLE>
<CAPTION>
SCHEDULED C REPAYMENT DATE AMOUNT
<S> <C>
the last Business Day in November, 1998 $100,000.00
the last Business Day in November, 1999 150,000.00
the last Business Day in November, 2000 150,000.00
the last Business Day in November, 2001 150,000.00
</TABLE>
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<TABLE>
<S> <C>
the last Business Day in November, 2002 150,000.00
the last Business Day in November, 2003 150,000.00
the last Business Day in November, 2004 150,000.00
the last Business Day in November, 2005 150,000.00
C Term Loan Maturity Date (the last Business Day 73,850,000.00
in August, 2006)
</TABLE>
(c) On the Business Day after the date of receipt thereof by the
Borrower and/or any of its Subsidiaries of Cash Proceeds from any Asset Sale, an
amount equal to 100% of the Net Cash Proceeds from such Asset Sale shall be
applied as a mandatory repayment of principal of the Term Loans (with the A TL
Percentage of such amount to be applied as a repayment of the A Term Loans, the
B TL Percentage of such amount to be applied as a repayment of the B Term Loans
and the C TL Percentage of such amount to be applied as a repayment of the C
Term Loans, in each case subject to modification of such application as set
forth in Section 4.02.03), provided that with respect to no more than
$25,000,000 in the aggregate of such Net Cash Proceeds in any fiscal year of the
Borrower, such Net Cash Proceeds shall not be required to be so applied on such
date to the extent that no Default or Event of Default then exists and the
Borrower delivers a certificate to the Agent on or prior to such date stating
that such Net Cash Proceeds shall be used to purchase assets used or to be used
in the businesses referred to in Section 8.16, within 270 days following the
date of such Asset Sale (which certificate shall set forth the estimates of the
proceeds to be so expended), and provided further, that if all or any portion of
such Net Cash Proceeds not so applied to the repayment of Term Loans are not so
used within such 270 day period, such remaining portion shall be applied on the
last day of such period as a mandatory repayment of principal of outstanding
Term Loans as provided above in this Section 4.02.01(c).
(d) On the Business Day after the date of the receipt thereof by the
Borrower and/or any of its Subsidiaries, an amount equal to 100% of the cash
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) of the incurrence of Indebtedness by the Borrower
and/or any of its Subsidiaries (other than Indebtedness permitted to be incurred
by Section 8.04 as such section is in effect on the date hereof) shall be
applied as a mandatory repayment of principal of the Term Loans (with the A TL
Percentage of such amount to be applied as a repayment of the A Term Loans, the
B TL Percentage of such amount to be applied as a repayment of the B Term Loans
and the C TL Percentage of such amount to be applied as a repayment of the C
Term Loans, in each case subject to modification of such application as set
forth in Section 4.02.03).
(e) On the Business Day after the date of the receipt thereof by the
Borrower and/or any of its Subsidiaries, an amount equal to 50% of the cash
proceeds (net of underwriting discounts and commissions and other reasonable
costs associated therewith) of the issuance or sale of equity securities by the
Borrower and/or any of its Subsidiaries shall be applied as a mandatory
repayment of principal of the Term Loans (with the A TL Percentage of such
amount to be applied as a repayment of the A Term Loans, the
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B TL Percentage of such amount to be applied as a repayment of the B Term Loans
and the C TL Percentage of such amount to be applied as a repayment of the
C Term Loans, in each case subject to modification of such application as set
forth in Section 4.02.03).
(f) On each Excess Cash Payment Date, an amount equal to 60% of Excess
Cash Flow of the Borrower and its Subsidiaries for the most recent Excess Cash
Flow Period ending prior to such Excess Cash Payment Date shall be applied as a
mandatory repayment of principal of the Term Loans (with the A TL Percentage of
such amount to be applied as a repayment of the A Term Loans, the B TL
Percentage of such amount to be applied as a repayment of the B Term Loans and
the C TL Percentage of such amount to be applied as a repayment of the C Term
Loans, in each case subject to modification of such application as set forth in
Section 4.02.03).
(g) Within 10 days following each date on which the Borrower or any of
its Subsidiaries receives any proceeds from any Recovery Event, an amount equal
to 100% of the proceeds of such Recovery Event (net of reasonable costs and
taxes incurred in connection with such Recovery Event) shall be applied as a
mandatory repayment of principal of the Term Loans (with the A TL Percentage of
such amount to be applied as a repayment of the A Term Loans, the B TL
Percentage of such amount to be applied as a repayment of the B Term Loans and
the C TL Percentage of such amount to be applied as a repayment of the C Term
Loans, in each case subject to modification of such application as set forth in
Section 4.02.03), provided that so long as no Default or Event of Default then
exists and the requirements of the Security Documents have been satisfied, such
proceeds shall not be required to be so applied on such date to the extent that
the Borrower has delivered a certificate to the Agent on or prior to such date
stating that such proceeds shall be used to replace or restore any properties
or assets in respect of which such proceeds were paid within 360 days following
the date of the receipt of such proceeds (which certificate shall set forth the
estimates of the proceeds to be so expended), and provided further, that if all
or any portion of such proceeds not required to be applied to the repayment of
Term Loans pursuant to the preceding proviso are not so used within 360 days
after the date of the receipt of such proceeds, such remaining portion shall be
applied on the last day of such period as a mandatory repayment of principal of
the Term Loans as provided above in this Section 4.02.01(g).
(h) Notwithstanding anything to the contrary contained elsewhere in this
Agreement, (i) all then outstanding Swingline Loans shall be repaid in full on
the Swingline Expiry Date and (ii) all other then outstanding Loans of the
respective Facility shall be repaid in full on the Maturity Date for such
Facility.
Section 4.02.02. Application. (a) Any amount required to be applied to A Term
Loans, B Term Loans or C Term Loans, as the case may be, shall apply to the
repayment of the outstanding principal amount of A Term Loans, B Term Loans and
C Term Loans, respectively, of the respective Facility.
(b) All repayments of A Term Loans, B Term Loans and C Term Loans
pursuant to Section 4.02.01(c), (d), (e), (f) or (g) shall be applied to reduce
the then remaining
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<PAGE>
Scheduled Repayments of the respective Facility pro rata
based on the sum of the then remaining Scheduled Repayments of the respective
Facility.
(c) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and
the specific Borrowing(s) under the affected Facility pursuant to which such
Borrowing(s) was/were made; provided that (i) Eurodollar Rate Loans made
pursuant to a specific Facility may be designated for repayment pursuant to this
Section 4.02 only on the last day of an Interest Period applicable thereto
unless all Eurodollar Rate Loans made pursuant to such Facility with Interest
Periods ending on such date of required prepayment and all Base Rate Loans made
pursuant to such Facility have been paid in full; (ii) if early repayment of
Eurodollar Rate Loans made pursuant to a single Borrowing shall reduce the
outstanding Loans made pursuant to such Borrowing to an amount less than the
Minimum Borrowing Amount, such Borrowing shall be immediately converted into
Base Rate Loans; and (iii) each repayment of any Loans made pursuant to a
Borrowing shall be applied pro rata among such Loans; provided that no repayment
pursuant to Section 4.02.01(a) shall be applied to any Revolving Loans of a
Defaulting Lender at any time when the aggregate amount of the Revolving Loans
of any Non-Defaulting Lender exceeds such Non-Defaulting Lender's Revolving
Percentage of Revolving Loans then outstanding. In the absence of a designation
by the Borrower as described in the preceding sentence, the Agent shall, subject
to the above, make such designation in its sole discretion.
Section 4.02.03. Waiver of Certain Mandatory Repayments by B Lenders and C
Lenders. Notwithstanding anything to the contrary contained in this Section 4.02
or elsewhere in this Agreement (including, without limitation, in Section
12.12), Lenders with outstanding B Term Loans (the "B Lenders") or outstanding C
Term Loans (the "C Lenders") may waive a mandatory repayment of such Loans
pursuant to Section 4.02.01(c), (d), (e), (f) and/or (g) (each such repayment, a
"Waivable Mandatory Repayment") upon the terms and provisions set forth in this
Section 4.02.03. The Borrower shall give to the Agent written irrevocable notice
of its intention to make a Waivable Mandatory Repayment at least five Business
Days prior to such repayment, which notice the Agent shall promptly forward to
all B Lenders and C Lenders (indicating in such notice the amount of such
repayment to be applied to each such Lender's outstanding Term Loans under such
Facilities). Any B Lender and C Lender may waive all or any part of any such
Waivable Mandatory Repayment. In the event any such B Lender or C Lender desires
to waive such Lender's right to receive any such Waivable Mandatory Repayment in
whole or in part, such Lender shall so advise the Agent no later than the close
of business two Business Days after the date of such notice from the Agent,
which notice shall also include the amount such Lender desires to receive in
respect of such repayment. If any Lender does not reply to the Agent within the
two Business Days, it will be deemed not to have waived any part of such
repayment. If any Lender does not specify an amount it wishes to receive, it
will be deemed to have accepted 100% of the total payment. In the event that any
such Lender waives all or part of such right to receive any such Waivable
Mandatory Repayment, the Agent shall apply 100% of the amount so waived by such
Lender to the A Term Loans in accordance with Section 4.02.02. From and after
payment in full of the A Term Loans and, if any B Lender or C Lender waives all
or any part of a Waivable Mandatory
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Repayment, 100% of the principal amount of the Waivable Mandatory Repayment so
waived shall be applied to (i) permanently reduce the Total Revolving Credit
Commitment until the Total Revolving Credit Commitment is reduced to
$100,000,000 (the Borrower shall repay all the Revolving Loans in excess of such
Commitment as so reduced) and (ii) thereafter, repay the outstanding Revolving
Loans, if any, without reducing the Total Revolving Credit Commitment.
Section 4.03. Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Agent for the account of the Lender or Lenders entitled thereto no later
than 12:00 Noon (New York time) on the date when due and shall be made in U.S.
Dollars in immediately available funds at the Agent's Payment Office. Any
payments under this Agreement which are made later than 12:00 Noon (New York
time) shall be deemed to have been made on the next succeeding Business Day.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
Section 4.04. Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without presentment, demand, protest or notice of
any kind, all of which are hereby waived by the Borrower and without setoff,
counterclaim or other defense or deduction of any nature. Except as provided in
Section 4.04(b), all such payments will be made free and clear of, and without
deduction or withholding for, any present or future taxes, levies, imposts,
duties, fees, assessments or other charges of whatever nature now or hereafter
imposed by any jurisdiction or by any political subdivision or taxing authority
thereof or therein with respect to such payments (but excluding, in the case of
each Lender and the Agent, except as provided in the second succeeding sentence,
any tax imposed on or measured by the net income or profits pursuant to the laws
of the jurisdiction in which such Lender or the Agent (as the case may be) is
organized or any subdivision thereof or therein and, in the case of each Lender,
any tax imposed on or measured by the net income or profits pursuant to the laws
of the jurisdiction in which the principal office or applicable lending office
of such Lender is located or any subdivision thereof or therein) and all
interest, penalties or similar liabilities with respect thereto (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as "Taxes"). If any Taxes are so levied or
imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts due
under this Agreement or under any Note, after withholding or deduction for or on
account of any Taxes, will not be less than the amount provided for herein or in
such Note. If any amounts are payable in respect of Taxes pursuant to the
preceding sentence, the Borrower agrees to reimburse each Lender, upon the
written request of such Lender, for taxes imposed on or measured by the net
income or profits of such Lender pursuant to the laws of the jurisdiction in
which such Lender is organized or the jurisdiction in which the principal office
or applicable lending office of such Lender is located or under the laws of any
political subdivision or taxing authority of any such jurisdiction in which such
Lender is organized or the jurisdiction in which such Lender is organized or the
jurisdiction in which the principal office or applicable
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lending office of such Lender is located and for any withholding of taxes as
such Lender shall determine are payable by, or withheld from, such Lender in
respect of such amounts so paid to or on behalf of such Lender pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Lender pursuant to this sentence. The Borrower will furnish to the Agent within
30 days after the date the payment of any Taxes is due pursuant to applicable
law certified copies of tax receipts evidencing such payment by the Borrower.
The Borrower agrees to indemnify and hold harmless each Lender, and reimburse
such Lender upon its written request, for the amount of any Taxes so levied or
imposed and paid by such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Closing Date, or in the case of a Lender that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.13 or 12.04 (unless the respective Lender was already a Lender
hereunder immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Lender, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Lender's entitlement to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note, or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit E (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Lender's entitlement to a complete exemption from United States withholding
tax with respect to payments of interest to be made under this Agreement and
under any Note. In addition, each Lender agrees that from time to time after the
Closing Date, when a lapse in time or change in circumstances renders the
previous certification obsolete or inaccurate in any material respect, it will
deliver to the Borrower and the Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001, or Form W-8 and a
Section 4.04(b)(ii) Certificate, as the case may be, and such other forms as may
be required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Agent of its inability to deliver any such Form or
Certificate, in which case such Lender shall not be required to deliver any such
Form or Certificate. Notwithstanding anything to the contrary contained in
Section 4.04(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 4.04(a) to gross-up
payments to be made to a Lender in respect of income or similar
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taxes imposed by the United States if (I) such Lender has not provided to the
Borrower the Internal Revenue Service Forms or other certificates and documents
required to be provided to the Borrower pursuant to this Section 4.04(b) or (II)
in the case of a payment, other than interest, to a Lender described in clause
(ii) above, to the extent that such Forms do not establish a complete exemption
from withholding of such taxes. Notwithstanding anything to the contrary
contained in the preceding sentence or elsewhere in this Section 4.04 and
except as set forth in Section 12.04(b), the Borrower agrees to pay additional
amounts and to indemnify each Lender in the manner set forth in Section 4.04(a)
(without regard to the identity of the jurisdiction requiring the deduction or
withholding) in respect of any amounts deducted or withheld by it as described
in the immediately preceding sentence as a result of any changes after the
Closing Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of income or similar Taxes.
Section 4.05. Application After Event of Default. Notwithstanding any other
provisions of this Credit Agreement, after the occurrence and during the
continuance of an Event of Default, all amounts collected or received by the
Agent or any Lender on account of amounts outstanding under any of the Credit
Documents or in respect of the Collateral shall be paid over or delivered as
follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Agent in connection with enforcing the rights of the Lenders under
the Credit Documents and any protective advances made by the Agent with
respect to the Collateral under or pursuant to the terms of the Credit
Documents;
SECOND, to the payment of all reasonable costs and expenses
(including without limitation reasonable attorneys' fees and allocated
cost of in-house attorneys), of each of the Lenders in connection with
enforcing its rights under the Credit Documents;
THIRD, to the payment of all accrued fees and interest payable to
the Lenders, the Agent or the Letter of Credit Issuer hereunder;
FOURTH, to the payment of the outstanding principal amount of the
Loans and Unpaid Drawings under Letters of Credit, to the payment or
cash collateralization of the outstanding Letter of Credit Outstandings
and to any amounts owing under Interest Rate Protection Agreements with
any Lenders or any Affiliate thereof, pro rata as set forth below;
FIFTH, to all other obligations which shall have become due and
payable under the Credit Documents and not repaid pursuant to clauses
"FIRST" through "FOURTH" above; and
SIXTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
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In carrying out the foregoing, (a) amounts received shall be applied in the
numerical order provided until exhausted prior to application to the next
succeeding category; (b) each of the Lenders shall receive an amount equal to
its pro rata share (based on the proportion that the then outstanding Loans,
Letter of Credit Outstandings and obligations under Interest Rate Protection
Agreements held by such Lender bears to the aggregate then outstanding Loans,
Letter of Credit Outstandings and obligations under Interest Rate Protection
Agreements) of amounts available to be applied pursuant to clauses "SECOND,"
"THIRD," "FOURTH," and "FIFTH" above; and (c) to the extent that any amounts
available for distribution pursuant to clause "FOURTH" above are attributable to
the issued but undrawn amount of outstanding Letters of Credit, such amounts
shall be held by the Agent in a cash collateral account and applied (x) first,
to reimburse the Letter of Credit Issuer from time to time for any drawings
under such Letters of Credit and (y) then, following the expiration of all
Letters of Credit, to all other obligations of the types described in clauses
"FIRST" and "FIFTH" above in the manner provided in this Section 4.05.
SECTION 5. CONDITIONS PRECEDENT.
Section 5.01. Conditions to Closing Date and Credit Events on the Closing
Date. The obligation of each Lender to make each Loan to the Borrower hereunder,
the obligation of the Letter of Credit Issuer to issue each Letter of Credit
hereunder and of the Existing Letters of Credit becoming Letters of Credit
hereunder, in each case on the Closing Date, is subject, at the time of each
such Credit Event, to the satisfaction of the following conditions:
(a) Execution of Agreement; Notes. On or prior to the Closing Date, (i)
this Agreement shall have been executed and delivered to the Agent and (ii)
there shall have been delivered to the Agent for the account of each Lender the
appropriate A-Term Note, B-Term Note, C-Term Note and Revolving Note, if any,
and to ABN AMRO, the Swingline Note, in each case executed by the Borrower and
in the amount, maturity and as otherwise provided herein.
(b) Officer's Certificate. On the Closing Date, the Agent shall have
received a certificate dated such date signed by an appropriate officer of the
Borrower stating that all of the applicable conditions set forth in Sections
5.01(e), (f), (g) and 5.02(a) exist as of such date.
(c) Opinions of Counsel. On the Closing Date, the Agent shall have
received opinions, addressed to the Agent and each of the Lenders and dated the
Closing Date, from (i) Howard, Darby & Levin, counsel to the Credit Parties,
which opinion shall cover the matters contained in Exhibit F and (ii) subject to
Section 7.09(i), local and other counsel to the Credit Parties and/or the Agent
reasonably satisfactory to the Agent, which opinions shall cover such matters
incident to the transactions contemplated herein and in the other Credit
Documents as the Agent may request and shall be in form and substance reasonably
satisfactory to the Agent. In addition, on the Closing Date, the Agent shall
have received copies of the opinions delivered pursuant to the Merger Agreement,
which shall be in form and substance reasonably satisfactory to the Agent.
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(d) Corporate Proceedings. (i) On the Closing Date, the Agent shall have
received from each Credit Party a certificate, dated the Closing Date, signed by
the chairman, a vice chairman, the president or any vice-president of such
Credit Party, and attested to by the secretary or any assistant secretary of
such Credit Party, in the form of Exhibit G with appropriate insertions or in
another form approved by the Agent and executed and attested by such officers
acceptable to the Agent, together with copies of the certificate of
incorporation and by-laws of such Credit Party and the resolutions of such
Credit Party referred to in such certificate and all of the foregoing (including
each such certificate of incorporation and by-laws) shall be reasonably
satisfactory to the Agent.
(ii) On the Closing Date, all corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the Merger Agreement and the other Documents to be
consummated on and as of the Closing Date shall be satisfactory in form and
substance to the Agent and the Required Lenders, and the Agent shall have
received all information and copies of all certificates, documents and papers,
including good standing certificates, bring-down certificates and any other
records of corporate proceedings and governmental approvals, if any, which the
Agent reasonably may have requested in connection therewith, such documents and
papers, where appropriate, to be certified by proper corporate or governmental
authorities.
(e) Adverse Changes Etc. Since November 30, 1997, nothing shall have
occurred that has had or could be expected to have a material adverse effect on
the rights or remedies of the Agent or the Lenders, or on the ability of the
Borrower to perform its respective obligations to the Agent, Letter of Credit
Issuer and the Lenders or which has, or could be expected to have, a Material
Adverse Effect. Since November 30, 1997, nothing shall have occurred that has
had or could be expected to have a material adverse effect on the business,
properties, assets, liabilities or financial condition of Holdings and its
Subsidiaries taken as a whole, except as set forth in Schedule 6.05.
(f) Litigation. On the Closing Date, there shall be no actions, suits
proceedings or investigations pending or threatened (i) with respect to this
Agreement or any other Document or (ii) which the Agent or the Agent and the
Required Lenders shall determine could reasonably be expected to (x) have a
Material Adverse Effect or (y) have a material adverse effect on the
Transaction, the rights or remedies of the Lenders or the Agent hereunder or
under any other Credit Document or on the ability of any Credit Party to perform
its respective obligations to the Lenders or the Agent hereunder or under any
other Credit Document or prospects of the Borrower or of the Borrower and its
Subsidiaries taken as a whole.
(g) Approvals. On or prior to the Closing Date, all necessary
governmental (domestic and foreign) and third party approvals in connection with
the Transaction, the transactions contemplated by the Documents and otherwise
referred to herein or therein shall have been obtained and remain in effect, and
all applicable waiting periods shall have expired without any action being taken
by any competent authority which restrains, prevents or imposes materially
adverse conditions upon the consummation of the Transaction, the transactions
contemplated by the Documents and otherwise referred to herein or therein.
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Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction or the making of Loans or
the issuance of the Letters of Credit.
(h) Security Documents. (i) On the Closing Date, Holdings shall have
duly authorized, executed and delivered the Holdings Guaranty in the form of
Exhibit H (as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Holdings Guaranty") and each of the
Borrower's Domestic Subsidiaries (except Immaterial Subsidiaries), shall have
duly authorized, executed and delivered the Subsidiary Guaranty in the form of
Exhibit I (as modified, amended or supplemented from time to time in accordance
with the terms thereof and hereof, the "Subsidiary Guaranty").
(ii) On the Closing Date, Holdings shall have duly authorized, executed
and delivered the Holdings Pledge Agreement in the form of Exhibit J (as
modified, amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Holdings Pledge Agreement") and shall have delivered to
the Collateral Agent for the benefit of Secured Creditors, as pledgee
thereunder, all of the Pledged Securities referred to therein, accompanied by
executed and undated stock powers, and the Holdings Pledge Agreement shall be in
full force and effect. On the Closing Date, the Borrower, Eagle-Picher
Development Company, Inc. and Eagle-Picher Minerals, Inc. shall have duly
authorized, executed and delivered the Borrower and Subsidiary Pledge Agreement
in the form of Exhibit K (as modified, amended or supplemented from time to time
in accordance with the terms thereof and hereof, the "Borrower and Subsidiary
Pledge Agreement") and shall have delivered to the Collateral Agent for the
benefit of Secured Creditors, as pledgee thereunder, all of the Pledged
Securities referred to therein, accompanied by executed and undated stock
powers, and the Borrower and Subsidiary Pledge Agreement shall be in full force
and effect.
(iii) On the Closing Date, the Borrower and each of its Domestic
Subsidiaries (except Immaterial Subsidiaries), shall have duly authorized,
executed and delivered the Security Agreement in the form of Exhibit L (as
modified, amended or supplemented from time to time in accordance with the terms
thereof and hereof, the "Security Agreement") covering all of the Security
Agreement Collateral, together with:
(A) executed copies of Financing Statements (Form UCC-1) or
appropriate local equivalent in appropriate form for filing under the
UCC or appropriate local equivalent of each jurisdiction as may be
necessary to perfect the security interests purported to be created by
the Security Agreement;
(B) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, each of a recent date listing all
effective financing statements that name the Borrower or any of its
Domestic Subsidiaries as debtor and that are filed in the jurisdictions
referred to in clause (A) above or as otherwise identified by the Agent,
together with copies of such financing statements that name the Borrower
or any of its Domestic Subsidiaries as debtor (none of which shall cover
the Collateral
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except (x) those with respect to which appropriate termination
statements executed by the secured lender thereunder have been delivered
to the Agent and (y) to the extent evidencing Permitted Liens);
(C) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable, to perfect the security interests in the Security Agreement
Collateral purported to be created by the Security Agreement; and
(D) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect the
security interests in the Security Agreement Collateral purported to be
created by the Security Agreement have been taken;
and the Security Agreement and such Financing Statements shall be in full force
and effect.
(i) Mortgages; Title Insurance; Surveys. (A) On the Closing Date, the
Collateral Agent shall have received fully executed counterparts of deeds of
trust, mortgages and similar documents in each case in form and substance
reasonably satisfactory to the Agent (as amended, modified or supplemented from
time to time in accordance with the terms thereof and hereof, each a "Mortgage"
and, collectively, the "Mortgages") with respect to each of the Mortgaged
Properties, subject to Section 7.09(j), and arrangements reasonably satisfactory
to the Agent shall be in place to provide that counterparts of such Mortgages
shall be recorded on or promptly after the Closing Date in all places to the
extent necessary or desirable, in the judgment of the Collateral Agent,
effectively to create a valid and enforceable first priority mortgage Lien,
subject to Permitted Liens, (but subject to Section 7.09(k)) on each such
Mortgaged Property in favor of the Collateral Agent (or such other trustee as
may be required or desired under local law) for the benefit of the Secured
Creditors.
(B) On the Closing Date, the Collateral Agent shall have received
mortgagee title insurance policies, which may be in the form of marked-up
countersigned commitments (the "Mortgage Policies"), with respect to each of the
Mortgaged Properties, subject to Section 7.09(i) issued by title insurers
satisfactory to the Agent (the "Title Insurers") in amounts equal to fair market
value thereof or otherwise reasonably satisfactory to the Agent and assuring the
Collateral Agent that the Mortgages referred to in paragraph (A) above are valid
and enforceable first priority mortgage Liens on the respective Mortgaged
Properties, free and clear of all defects and encumbrances except Permitted
Liens. Such Mortgage Policies shall be in form and substance satisfactory to the
Agent and (i) shall include (to the extent available in the respective
jurisdiction of each such Mortgaged Property) an endorsement for future advances
under this Agreement, the Notes and the Mortgages, and endorsements for such
other matters that the Agent in its discretion may request, (ii) shall not
include an exception for mechanics' liens, and (iii) shall provide for
affirmative insurance and such reinsurance (including direct access agreements)
as the Agent in its discretion may reasonably request.
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(j) Existing Indebtedness Agreements; Shareholders' Agreements;
Management Agreements; and Leases. On or prior to the Closing Date, there shall
have been delivered to the Agent copies, certified as true and correct by an
appropriate officer of the Borrower, of:
(i) all agreements evidencing or relating to the Existing
Indebtedness that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Existing
Indebtedness Agreements");
(ii) all agreements entered into by the Borrower or any of its
Subsidiaries governing the terms and relative rights of its capital
stock, and any agreements entered into by shareholders relating to any
such entity with respect to their capital stock, in each case that are
to remain in effect after giving effect to the consummation of the
Transaction (collectively, the "Shareholders' Agreements");
(iii) any material agreements (or the forms thereof) with members
of, or with respect to, the management of the Borrower or any of its
Subsidiaries that are to remain in effect after giving effect to the
consummation of the Transaction (collectively, the "Management
Agreements");
(iv) Senior Subordinated Note Documents and documents relating to
the Holdings Preferred Stock and the Exchange Debentures; and
(v) all agreements relating to the material leases of the Borrower
and its Subsidiaries (collectively, the "Lease Agreements");
all of which Existing Indebtedness Agreements, Shareholders' Agreements,
Management Agreements, Senior Subordinated Note Documents and Lease Agreements
shall be in form and substance satisfactory to the Agent and shall be in full
force and effect on the Closing Date.
(k) Solvency Certificate; Evidence of Insurance. On the Closing Date,
the Agent shall have received:
(i) a solvency certificate from the Borrower, addressed to the
Agent and each of the Lenders and dated the Closing Date and certifying,
that, after giving effect to the Transaction and the incurrence of all
financings contemplated herein, the Borrower (on a stand alone basis)
and the Borrower and its Subsidiaries (taken as a whole) are not
insolvent and will not be rendered insolvent by the indebtedness
incurred in connection herewith, will not be left with unreasonably
small capital with which to engage in their respective businesses and
will not have incurred debts beyond their ability to pay such debts as
they mature and become due; and
(ii) evidence of insurance complying with the requirements of
Section 7.03 for the business and properties of the Borrower and its
Subsidiaries, in scope, form and substance reasonably satisfactory to
the Agent and naming the Collateral Agent as an additional insured
and/or loss payee, and stating that such insurance shall not be
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cancelled or revised without at least 30 days' (or 10 days' in the case
of non-payment of premium) prior written notice by the insurer to the
Collateral Agent.
(l) Pro Forma Balance Sheet and Sources and Uses of Proceeds. On or
prior to the Closing Date, there shall have been delivered to the Agent, (i) an
unaudited pro forma consolidated balance sheet of the Borrower and its
Subsidiaries as of the Closing Date after giving effect to the Transaction and
prepared in accordance with GAAP, together with a related statement of
operations and (ii) a certificate of sources and uses of proceeds to be used to
consummate the Transaction which pro forma balance sheets and statement of
operations and certificates shall be reasonably satisfactory in form and
substance to the Agent and the Required Lenders.
(m) Projections. On or prior to the Closing Date, the Lenders shall have
received the financial projections (the "Projections"), which include the
projected results of the Borrower and its Subsidiaries for the five fiscal years
ending after the Closing Date.
(n) Existing Indebtedness. On the Closing Date and after giving effect
to the Transaction to be consummated on the Closing Date and the Loans incurred,
and the Letters of Credit issued, on the Closing Date, neither the Borrower nor
any of its Subsidiaries shall have any preferred stock or Indebtedness
outstanding except for the Obligations, the Senior Subordinated Notes and the
Existing Indebtedness of the Borrower. On and as of the Closing Date, all of the
Existing Indebtedness of the Borrower shall remain outstanding after giving
effect to the Transaction to be consummated on the Closing Date and the other
transactions contemplated hereby without any default or event of default
existing thereunder or arising as a result of the Transaction and the other
transactions contemplated hereby, and there shall not be any amendments or
modifications to the Existing Indebtedness Agreements other than as requested or
approved by the Agent or the Required Lenders. On and as of the Closing Date,
the Agent and the Required Lenders shall be satisfied with the amount of and the
terms and conditions of all Existing Indebtedness.
(o) Consummation of the Transaction. (i) On the Closing Date, the Merger
shall have been consummated in accordance with the Merger Documents and all
applicable laws, and each of the conditions precedent to the consummation of the
Merger (including, without limitation, the accuracy in all material respects of
the representations and warranties contained in the Merger Agreement) shall have
been satisfied and no material provision of the Merger Documents shall have been
waived, amended, supplemented or otherwise modified, except in each case with
the consent of the Agent and the Required Lenders, to the satisfaction of the
Agent and the Required Lenders. The aggregate consideration to be received by
the shareholder of the Borrower in connection with the Merger shall consist of
cash in the amount of $410,000,000 (plus interest thereon less transaction
expenses) as provided in the Merger Agreement.
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(ii) On or prior to the Closing Date, the Borrower shall have received
(in the case of clauses (B) and (C) below, by contribution from Holdings) gross
cash proceeds of not less than:
(A) $219,639,200 from the issuance and sale of Senior
Subordinated Notes;
(B) $80,000,000 from the issuance and sale of Holdings Preferred
Stock; and
(C) $100,000,000 from the issuance and sale of Holdings Common
Stock,
in each case on the terms and conditions satisfactory to the Agent.
(iii) On or prior to the Closing Date, there shall have been delivered to
the Agent true and correct copies of all Documents entered into on or prior to
such date in connection with the Transaction, and all of the terms and
conditions of such Documents, as well as the structure of the Transaction and
the ownership interests in the Borrower prior to and after giving effect to the
Transaction, shall be in form and substance reasonably satisfactory to the Agent
and the Required Lenders.
(iv) On the Closing Date, the Agent shall have received evidence in form,
scope and substance reasonably satisfactory to it that the matters set forth in
Section 5.01(o)(i) and (ii) have been satisfied on such date.
(p) Payment of Fees. On the Closing Date, all costs, fees and expenses,
and all other compensation contemplated by this Agreement, due to the Agent or
the Lenders (including, without limitation, certain fees as agreed to between
the Agent and the Borrower in that certain fee letter between them dated
December 21, 1997, as amended and legal fees and expenses) shall have been paid
to the extent due and the Agent is hereby authorized to deduct and pay such
amounts from the disbursement of proceeds on the Closing Date.
(q) Indebtedness. All Indebtedness of the Credit Parties and their
Subsidiaries (other than Existing Indebtedness) shall be repaid in full and all
commitments and loans relating thereto shall have been terminated and
extinguished.
Section 5.02. Conditions to Each Credit Event. The occurrence of the
Closing Date and the obligation of each Lender to make Loans (including Loans
made on the Closing Date, but excluding Mandatory Borrowings made thereafter,
which shall be made as provided in Section 1.01.03), and the obligation of the
Letter of Credit Issuer to issue (or cause to be deemed issued hereunder) any
Letter of Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
(a) No Default; Representations and Warranties. At the time of each
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents in
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effect at such time shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on and
as of the date of such Credit Event, unless stated to relate to a specific
earlier date, in which case such representations and warranties shall be true
and correct in all material respects as of such earlier date.
(b) Notice of Borrowing; Letter of Credit Request. The Agent shall have
received a Notice of Borrowing satisfying the requirements of Section 1.03 with
respect to each incurrence of Loans; and the Agent and the Letter of Credit
Issuer shall have received a Letter of Credit Request satisfying the
requirements of Section 2.03 with respect to each issuance of a Letter of
Credit.
The occurrence of the Closing Date and the acceptance of the benefits of
each Credit Event shall constitute a representation and warranty by each Credit
Party to the Agent and each of the Lenders that all of the applicable conditions
specified above shall have been satisfied or waived as of the date of such
Credit Event. All of the Notes, certificates, legal opinions and other documents
and papers referred to in this Section 5 unless otherwise specified, shall be
delivered to the Agent at its Notice Office for the account of each of the
Lenders and, except for the Notes, in sufficient counterparts for each of the
Lenders and shall be reasonably satisfactory in form and substance to the Agent
and the Required Lenders.
Section 5.03. Determinations under Section 5.01. For purposes of
determining compliance with the conditions specified in Section 5.01, each
Lender shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lenders unless an officer
of the Agent responsible for the transactions contemplated by this Agreement
shall have received notice from such Lender prior to the date that the Borrower,
by notice to the Lenders, designates as the proposed Closing Date, specifying
its objection thereto. The Agent shall promptly notify the Lenders of the
occurrence of the Closing Date.
SECTION 6. REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
In order to induce the Lenders to enter into this Agreement and to make
the Loans, and issue or deemed issued hereunder (and participate in) the Letters
of Credit as provided herein, the Borrower makes the following representations,
warranties and agreements, in each case after giving effect to the consummation
of the Transaction on the Closing Date, all of which shall survive the execution
and delivery of this Agreement and the Notes and the making of the Loans and
issuance of the Letters of Credit, with the occurrence of the Closing Date and
the occurrence of each Credit Event on or after the Closing Date being deemed to
constitute a representation and warranty that the matters specified in this
Section 6 are true and correct in all material respects on and as of the Closing
Date and on the date of each such Credit Event (it being understood and agreed
that any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).
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Section 6.01. Corporate Status. Each of the Credit Parties and its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
power and authority to own its property and assets and to transact the business
in which it is engaged and presently proposes to engage and (iii) is duly
qualified as a foreign corporation and in good standing in each jurisdiction
where the ownership, leasing or operation of property or the conduct of its
business requires such qualification except where the failure to be so qualified
could not reasonably be expected to have a material adverse effect on the
business, properties, assets, liabilities or financial condition of each of the
Credit Parties or of the Credit Parties and their Subsidiaries taken as a whole.
Section 6.02. Corporate Power and Authority. Each of the Credit Parties has
the corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Credit Documents to which it is a party and has taken
all necessary corporate action to authorize the execution, delivery and
performance by it of each of such Credit Documents. Each of the Credit Parties
has duly executed and delivered each of the Credit Documents to which it is a
party, and each of such Credit Documents constitutes its legal, valid and
binding obligation enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
Section 6.03. No Violation. Neither the execution, delivery or performance
by each of the Credit Parties of the Credit Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, nor the consummation
of the transactions contemplated herein or therein (i) will contravene any
material provision of any law, statute, rule or regulation or any order, writ,
injunction or decree of any court or governmental instrumentality (including,
without limitation, the Confirmation Order and the Plan of Reorganization), (ii)
will conflict or be inconsistent with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of the Credit Parties or any of their Subsidiaries pursuant
to the terms of any indenture, mortgage, deed of trust, credit agreement, loan
agreement or any other material agreement, contract or instrument to which any
of the Credit Parties or any of their Subsidiaries is a party or by which it or
any of its property or assets are bound or to which it may be subject (except
that, as of the Closing Date, the Borrower has not obtained certain consents
required in connection with the Merger, as set forth in Schedule 6.03) or (iii)
will violate any provision of the certificate of incorporation or by-laws (or
the equivalent charter documents) of the Credit Parties or any of their
Subsidiaries.
Section 6.04. Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(except as have been obtained or made on or prior to the Closing Date and which
remain in full force and effect), or exemption by, any governmental or public
body or authority, or any subdivision thereof,
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is required to authorize, or is required in connection with, (i) the execution,
delivery and performance of any Credit Document, (ii) the legality, validity,
binding effect or enforceability of any Credit Document or (iii) the
consummation of the Transaction.
Section 6.05. Financial Statements; Financial Conditions; Undisclosed
Liabilities, etc.
(a) The audited consolidated statements of financial condition of EPII
and its Subsidiaries at November 30, 1997, and the related consolidated
statements of income and retained earnings and cash flows of EPII and its
Subsidiaries for the fiscal year ended on such date, and heretofore
furnished to the Lenders present fairly in all material respects the
consolidated financial condition of EPII and its Subsidiaries at the date of
such statements of financial condition and the consolidated results of the
operations of EPII and its Subsidiaries at the date of such statements of
financial condition and the consolidated results of the operations of EPII and
its Subsidiaries for such fiscal year. All such financial statements have been
prepared in accordance with GAAP consistently applied (except as set forth in
the notes to such financial statements). Except as set forth in Schedule 6.05,
since November 30, 1997, there has been no material adverse change in the
business, property, assets, liabilities or financial condition of EPII or of
EPII and its Subsidiaries taken as a whole.
(b) Except as fully reflected in the financial statements delivered
pursuant to Section 6.05(a) and as specifically noted on Schedule 6.19 and the
Indebtedness incurred under this Agreement, there are as of the Closing Date no
material liabilities or obligations (excluding current obligations incurred in
the ordinary course of business) with respect to the Borrower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due), and the Borrower or any of its Subsidiaries
does not know of any basis for the assertion against the Borrower or any of its
Subsidiaries of any such liability or obligation which, either individually or
in aggregate, are or would be reasonably likely to be material to the Borrower
or to the Borrower and its Subsidiaries taken as a whole.
(c) On and as of the Closing Date, the Projections previously delivered
to the Agent and the Lenders are based on good faith estimates and assumptions
made by the management of the Borrower and its Subsidiaries and on the Closing
Date, such management believes that the Projections are reasonable and
attainable, it being recognized by the Lenders, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections probably will differ from the
projected results and that the differences may be material.
(d) On and as of the Closing Date, on a pro forma basis after giving
effect to the Transaction consummated on or prior to the Closing Date and to all
Indebtedness (including the Loans and the Letters of Credit) being incurred,
assumed or guaranteed in connection therewith, (a) the sum of the assets, at a
fair valuation, of the Borrower (on a stand-alone basis) and the Borrower and
its Subsidiaries (taken as a whole) will exceed the debts of the Borrower (on a
stand-alone basis) or the Borrower and its Subsidiaries (taken as a whole), as
applicable; (b) the Borrower (on a stand-alone basis) and the Borrower and its
Subsidiaries (taken as a whole) have not incurred and do not intend to, or
believe that they will, incur debts beyond their ability to pay such debts as
such debts mature; and (c) the Borrower (on
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a stand-alone basis) and the Borrower and its Subsidiaries (taken as a whole)
will have sufficient capital and assets with which to conduct their businesses.
For purposes of this Section 6.05(d) "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured; or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured.
(e) The pro forma consolidated balance sheet of the Borrower and its
Subsidiaries as of the Closing Date and the related pro forma consolidated
statements of income for the fiscal three-month period ended on or about the
Closing Date (all of which financial statements have been certified by the chief
financial officer of the Borrower), copies of which have heretofore been
furnished to each Lender, reflect the pro forma financial position of the
Borrower and its Subsidiaries after giving effect to the Transaction, as if such
transaction had occurred on December 1, 1997 for such balance sheet and as of
December 1, 1997 for such income statements. Such financial statements are based
on available information and on assumptions that the Borrower believes are
reasonable.
Section 6.06. Litigation. Except as set forth in Schedule 6.06, there are
no actions, suits or proceedings pending or, to the best knowledge of the Credit
Parties and their Subsidiaries, threatened (i) with respect to any Credit
Document, (ii) with respect to any material Indebtedness of the Credit Parties
or any of their Subsidiaries, (iii) that could reasonably be expected to
materially and adversely affect the business, property, assets, liabilities or
financial condition of any of the Credit Parties or of the Credit Parties and
their Subsidiaries taken as a whole or (iv) that could reasonably be expected to
have a material adverse effect on the rights or remedies of the Agents or the
Lenders or on the ability of any Credit Party to perform its respective
obligations to the Agents or the Lenders hereunder and under the other Credit
Documents to which it is, or will be, a party. Additionally, to the best
knowledge of the Credit Parties and their Subsidiaries, there does not exist any
judgment, order or injunction prohibiting, or imposing material adverse
conditions upon, the occurrence of any Credit Event.
Section 6.07. True and Complete Disclosure. All factual information (taken
as a whole) contemporaneously furnished by or on behalf of the Credit Parties or
any of their Subsidiaries in writing to the Agent or any Lender (including,
without limitation, all information contained in the Confidential Information
Memorandum and in the Preliminary Offering Memorandum dated February 4, 1998
relating to the Senior Subordinated Notes and the Holdings Preferred Stock (to
the extent such information relates to the Credit Parties and their
Subsidiaries) and the Credit Documents but excluding the Projections and any
other forecasts and projections of financial information and results submitted
to the Agent or any Lender) for purposes of or in connection with this
Agreement, or any transaction contemplated herein is, and all other such factual
information (taken as a whole) hereafter furnished by or on behalf of any such
Persons in writing to the Agent or any Lender will be, true and accurate in all
material respects on the date as of which such information is dated or
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certified and not incomplete by omitting to state any factnecessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided.
Section 6.08. Use of Proceeds; Margin Regulations.
(a) All proceeds of Loans shall be used by the Borrower (i) to repay all
Indebtedness of EPII and its Subsidiaries (except Existing Indebtedness) as
required by Section 5.01(q), (ii) to effectuate the Merger (including the
purchase of the common stock of EPII), (iii) to pay the transaction costs of the
Merger and (iv) for working capital and general corporate purposes (excluding
acquisitions) of the Borrower and its Subsidiaries.
(b) No part of the proceeds of any Loan will be used by the Borrower or
any Subsidiary thereof to purchase or carry any Margin Stock or to extend credit
to others for the purpose of purchasing or carrying any Margin Stock. Neither
the making of any Loan nor the use of the proceeds thereof will violate or be
inconsistent with the provisions of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
Section 6.09. Tax Returns and Payments. Each of the Borrower and each of
its Subsidiaries has timely filed or caused to be timely filed, on the due dates
thereof or pursuant to applicable extensions thereof, with the appropriate
taxing authority, all Federal, state and other material returns, statements,
forms and reports for taxes (the "Returns") required to be filed by, or with
respect to the income, properties or operations of, the Borrower and/or any of
its Subsidiaries. The Returns accurately reflect all liability for taxes of the
Borrower and its Subsidiaries for the periods covered thereby. Each of the
Borrower and each of its Subsidiaries has paid all taxes payable by them other
than taxes which are not delinquent, and other than those contested in good
faith and for which adequate reserves have been established in accordance with
GAAP. Except as disclosed in the financial statements referred to in Section
6.05(a) or Schedule 6.05, there is no material action, suit, proceeding,
investigation, audit, or claim now pending or, to the best knowledge of the
Borrower and its Subsidiaries, threatened by any authority rewarding any taxes
relating to the Borrower or any of its Subsidiaries. United States Federal
income tax returns of EPII and its Subsidiaries have been examined and closed
through the fiscal year ended November 30, 1993.
As of the Closing Date neither the Borrower nor any of its Subsidiaries
has entered into an agreement or waiver or been requested to enter into an
agreement or waiver extending any statute of limitations relating to the payment
or collection of material taxes of the Borrower or any of its Subsidiaries, or
is aware of any circumstances that would cause the taxable years or other
taxable periods of the Borrower or any of its Subsidiaries not to be subject to
the normally applicable statute of limitations. Neither the Borrower nor any of
its Subsidiaries has provided, with respect to themselves or property held by
them, any consent under Section 341 of the Code. To the best knowledge of the
Borrower and its Subsidiaries, neither the Borrower nor any of its Subsidiaries
has incurred, or will incur, any material tax liability in connection with the
Transaction and the other transactions contemplated hereby.
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Section 6.10. Compliance with ERISA. Each Plan is in substantial compliance
with ERISA and the Code; except as set forth on Schedule 6.10, no Reportable
Event has occurred with respect to a Plan as a result of which the Borrower or
any Subsidiary or any ERISA Affiliate has incurred or will under existing
circumstances incur material liability under ERISA; no Plan is insolvent or in
reorganization; no Plan has an Unfunded Current Liability giving rise to a lien
under ERISA or the Code, and no Plan has an accumulated or waived funding
deficiency, has permitted decrease in its funding standard account or has
applied for a waiver of the minimum funding standard or an extension of any
amortization period within the meaning of Section 412 of the Code; all
contributions required to be made with respect to a Plan have been timely made;
neither the Borrower nor any Subsidiary of the Borrower nor any ERISA Affiliate
has incurred any material liability to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code or expects to incur
any material liability (including any indirect, contingent or secondary
liability) under any of the foregoing Sections with respect to any Plan; no
proceedings have been instituted to terminate, or to appoint a trustee to
administer, any Plan other than pursuant to Section 4041(b) of ERISA; no
condition exists which presents a material risk to the Borrower or any
Subsidiary of the Borrower or any ERISA Affiliate of incurring a material
liability to or on account of a Plan pursuant to the foregoing provisions of
ERISA and the Code; using actuarial assumptions and computation methods
consistent with subpart 1 of subtitle E of Title IV of ERISA, the aggregate
liabilities of the Borrower and its Subsidiaries and its ERISA Affiliates to all
Plans which are multiemployer plans (as defined in Section 4001(a)(3) of ERISA)
in the event of a complete withdrawal therefrom, as of the close of the most
recent fiscal year of each such Plan ended prior to the date of the most recent
Credit Event, would not result in a Material Adverse Effect, no lien imposed
under the Code or ERISA on the assets of the Borrower or any Subsidiary of the
Borrower or any ERISA Affiliate exists or under existing circumstances, will
arise on account of any Plan; and except as set forth on Schedule 6.10, each of
the Borrower and its Subsidiaries may cease contributions to or terminate any
employee benefit plan maintained by them which provides benefits to retired
employees or other former employees without incurring any material liability;
and except as set forth on Schedule 6.10, the Borrower and its Subsidiaries do
not maintain or contribute to any material Retiree Welfare Plan or Foreign
Pension Plan.
Section 6.11. Subsidiaries. Schedule 6.11 correctly sets forth, as of the
Closing Date, each Subsidiary of the Borrower and the percentage ownership
(direct and indirect) of the Borrower in each class of capital stock of each of
its Subsidiaries and also identifies the direct owner thereof.
Section 6.12. Compliance with Statutes, etc. Except as set forth in
Schedule 6.13, the Borrower and each of its Subsidiaries is, to its best
knowledge, in compliance with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of their businesses and the
ownership of their property, except such noncompliances as could not reasonably
be expected to have, either individually or in the aggregate, a Material Adverse
Effect.
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Section 6.13. Environmental Matters. Except as set forth in Schedule 6.13
and except to the extent that the aggregate effect of all failures and
noncompliances of the types described below in this Section 6.13 could not
reasonably be expected to have a Material Adverse Effect:
(a) Each of the Borrower and each of its Subsidiaries is in
compliance with all applicable Environmental Laws and the requirements
of any permits issued under such Environmental Laws. There are no
pending or, to the best knowledge of the Borrower and its Subsidiaries
after due inquiry, threatened Environmental Claims, including any such
claims (regardless of materiality) for liabilities under CERCLA relating
to the disposal of Hazardous Materials since January 7, 1991, against
the Borrower or any of its Subsidiaries or any Real Property owned or
operated by the Borrower or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences on any Real Property owned or
operated by the Borrower or any of its Subsidiaries that, to the best
knowledge of the Borrower and its Subsidiaries after due inquiry, could
reasonably be expected (i) to form the basis of an Environmental Claim
against the Borrower or any of its Subsidiaries or any such Real
Property, or (ii) to cause any such Real Property to be subject to any
restrictions on the ownership, occupancy, use or transferability of such
Real Property by the Borrower or any of its Subsidiaries under any
applicable Environmental Law.
(b) Hazardous Materials have not been generated, used, treated or
stored on, or transported to or from, any Real Property owned or
operated by the Borrower or any of its Subsidiaries where such
generation, use, treatment or storage has violated, is in violation of,
or to the best knowledge of the Borrower and its Subsidiaries after due
inquiry may be in violation of any Environmental Law. Hazardous
Materials have not been Released on or from any Real Property owned or
operated by the Borrower or any of its Subsidiaries where such Release,
individually, may reasonably be expected to require in excess of $50,000
in response costs under any applicable Environmental Law.
(c) The Real Property owned or operated by the Borrower or any of
its Subsidiaries does not contain: (i) underground storage tanks, (ii)
any landfills or dumps, (iii) hazardous waste treatment, storage, or
disposal facilities as defined pursuant to RCRA or any comparable state
law, or (iv) a site on or nominated for the National Priority List
promulgated pursuant to CERCLA or any analogous state remedial priority
list promulgated or published pursuant to any comparable state law.
Section 6.14. Investment Company Act. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended.
Section 6.15. Public Utility Holding Company Act. Neither the Borrower nor
any of its Subsidiaries is 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
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company" within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
Section 6.16. Patents, Licenses, Franchises and Formulas. Each of the
Borrower and each of its Subsidiaries owns all the patents, trademarks, permits,
service marks, trade names, copyrights, franchises and formulas, or rights with
respect to the foregoing, or each has obtained licenses of all other rights of
whatever nature necessary for the present conduct of its businesses, in each
case without any known conflict with the rights of others which, or the failure
to obtain which, as the case may be, could reasonably be expected to result in a
Material Adverse Effect.
Section 6.17. Properties. All Real Property owned by the Borrower or any of
its Subsidiaries and all material Leaseholds leased by the Borrower or any of
its Subsidiaries, in each case as of the Closing Date and after giving effect to
the Transaction, and the nature of the interest therein, is correctly set forth
in Schedule 6.17. Each of the Borrower and each of its Subsidiaries has good and
marketable title to, or a validly subsisting leasehold interest in, all material
properties owned or leased by it, including all Real Property reflected in
Schedule 6.17, free and clear of all Liens, other than Permitted Liens.
Section 6.18. Labor Relations. To the best knowledge of the Borrower and
its Subsidiaries, neither the Borrower nor any of its Subsidiaries is engaged in
any unfair labor practice that could reasonably be expected to have a Material
Adverse Effect. There is (i) no unfair labor practice complaint pending against
the Borrower or any of its Subsidiaries or, to the best knowledge of the
Borrower and its Subsidiaries, threatened against any of them, before the
National Labor Relations Board, and no material grievance or arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower and its Subsidiaries, threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against the Borrower
or any of its Subsidiaries or, to the best knowledge of the Borrower and its
Subsidiaries, threatened against the Borrower or any of its Subsidiaries and
(iii) to the best knowledge of the Borrower and its Subsidiaries, no union
representation proceeding is pending with respect to the employees of the
Borrower or any of its Subsidiaries and no union organizing activities are
taking place, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a Material Adverse Effect.
Section 6.19. Indebtedness. Schedule 6.19 sets forth a true and complete
list of all Indebtedness of the Borrower and its Subsidiaries as of the Closing
Date and which is to remain outstanding after giving effect to the Transaction
and the incurrence of the Loans on such date (excluding the Loans and the
Letters of Credit, all such non-excluded Indebtedness, the "Existing
Indebtedness"), in each case showing the aggregate principal amount thereof and
the name of the respective borrower and any other entity which directly or
indirectly guaranteed such Indebtedness.
Section 6.20. Security Interests. On and after the Closing Date, each of
the Security Documents (to the extent so provided therein) creates (or after the
execution and delivery
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thereof will create), as security for the Obligations, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, superior to and prior to the rights of all third Persons, and subject
to no other Liens (except that the Security Agreement Collateral, the Mortgaged
Properties and the Collateral covered by the Additional Security Documents may
be subject to Permitted Liens relating thereto), in favor of the Collateral
Agent for the benefit of Secured Creditors. No filings or recordings are
required in order to perfect the security interests created under any Security
Document except for filings or recordings required in connection with any such
Security Document which shall have been made on or prior to the Closing Date as
contemplated by Section 5.01(h)(iii) or on or prior to the execution and
delivery thereof as contemplated by Sections 7.09, 7.11 and 8.14 or which shall
be made on or promptly after the Closing Date as contemplated by Section
5.01(i).
Section 6.21. Representations and Warranties in Other Documents. All
representations and warranties of the Credit Parties set forth in the other
Documents were true and correct in all material respects as of the time such
representations and warranties were made and shall be true and correct in all
material respects as of the Closing Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date, and, the
Borrower has no knowledge that any of the representations and warranties of the
other parties set forth in the other Documents, were untrue or incorrect in any
material respect as of the time such representations and warranties were made
and as of the Closing Date as if such representations and warranties were made
on and as of such date, unless stated to relate to a specific earlier date, in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date.
Section 6.22. Transaction. At the time of consummation thereof, the
Transaction shall have been consummated in accordance with the terms of the
respective Documents and all applicable laws, in effect at such time. All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Transaction. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the Transaction, or the occurrence of any Credit Event or the
performance by any Credit Party of its obligations under the Documents and all
applicable laws.
Section 6.23. Capitalization. On the Closing Date and after giving effect
to the Transaction, the authorized and issued capital stock of the Borrower and
its Subsidiaries shall be as set forth on Schedule 6.23. All outstanding shares
of capital stock of the Borrower have been duly and validly issued, and are
fully paid and nonassessable. The Borrower and its Subsidiaries do not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock, except as set forth on Schedule 6.23.
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Section 6.24. Senior Subordinated Notes. The applicable subordination
provisions contained in the Senior Subordinated Note Documents are enforceable
against the Borrower, each Guarantor and the holders thereof, and all
Obligations and Guaranteed Obligations are within the definition of "Senior
Indebtedness" included in such subordination provisions. This Agreement is the
"New Credit Agreement" under the Senior Subordinated Note Indenture.
SECTION 7. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Closing Date and
until the Total Commitment and all Letters of Credit have terminated, and the
Loans, any Unpaid Drawings and the Notes, together with interest, Fees and all
other obligations incurred hereunder and thereunder, are paid in full:
Section 7.01. Information Covenants. The Borrower will furnish to the Agent
with sufficient copies for each Lender (upon receipt thereof, the Agent shall
distribute to each Lender):
(a) Monthly Reports. Within 45 days after the end of each fiscal
month of the Borrower, the consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such fiscal month and the related
consolidated statements of income and retained earnings and of cash
flows for such fiscal month and for the elapsed portion of the fiscal
year ended with the last day of such fiscal month, in each case setting
forth comparative figures for the corresponding fiscal month in the
prior fiscal year and comparable budgeted figures for such fiscal month,
all of which shall be certified by the chief financial officer or other
Authorized Officer of the Borrower, subject to normal year-end audit
adjustments and the absence of footnotes.
(b) Quarterly Financial Statements. (i) Within 45 days after the
close of each quarterly accounting period in each fiscal year of the
Borrower, the consolidated balance sheet of the Borrower and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and of
cash flows for such quarterly accounting period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period, in each case setting forth comparative figures for
the related periods in the prior fiscal year, all of which shall be in
reasonable detail and certified by the chief financial officer or other
Authorized Officer of the Borrower that they fairly present in all
material respects the financial condition of the Borrower and its
Subsidiaries as of the dates indicated and the results of their
operations and changes in their cash flows for the periods indicated,
subject to normal year-end audit adjustments and the absence of
footnotes.
(ii) Within 45 days after the close of each quarterly accounting
period in each fiscal year of the Borrower, a certificate setting forth
the calculations necessary to support compliance with Sections 8.07,
8.08, 8.09 and 8.10 for such quarterly accounting period and for the
elapsed portion of the fiscal year ended with the last day
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of such quarterly accounting period; all of which shall be in reasonable
detail and certified by the chief financial officer or other Authorized
Officer of the Borrower.
(c) Annual Financial Statements. (i) Within 90 days after the
close of each fiscal year of the Borrower, the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings and of cash flows for such fiscal year, in each case setting
forth comparative figures for the preceding fiscal year and comparable
budgeted figures for such fiscal year and certified by independent
certified public accountants of recognized national standing acceptable
to the Agent, in each case to the effect that such statements fairly
present the financial condition of the Borrower and its Subsidiaries as
of the dates indicated and the results of their operations and changes
in cash flows, together with a certificate of such accounting firm
stating that in the course of its regular audit of the business of the
Borrower and its Subsidiaries, which audit was conducted in accordance
with generally accepted auditing standards, no Default or Event of
Default which has occurred and is continuing has come to their attention
or, if such a Default or an Event of Default has come to their attention
a statement as to the nature thereof. The certificate of the accountant
shall be free from qualifications.
(ii) Within 90 days after the close of each fiscal year of the
Borrower, a Certificate setting forth the calculations necessary to
support compliance with Sections 8.07, 8.08, 8.09 and 8.10 for such
fiscal year; all of which shall be in reasonable detail and certified by
the chief financial officer or other Authorized Officer of the Borrower
that they fairly present the information contained therein for the
periods indicated.
(d) Budgets. As promptly as same are approved by the Board of
Directors of the Borrower, but in any event within 45 days after the
first day of each fiscal year of the Borrower, a budget in form
satisfactory to the Agent (including, without limitation, a breakdown of
the projected results of each line of business of the Borrower and its
Subsidiaries, and budgeted statements of income, and sources and uses of
cash and balance sheets for the Borrower and its Subsidiaries taken as a
whole) of the Borrower and its Subsidiaries in reasonable detail for
each of the four fiscal quarters of such fiscal year and for the
immediately succeeding fiscal year taken as a whole, in each case as
customarily prepared by management for its internal use setting forth,
with appropriate discussion, the principal assumptions upon which such
budgets are based. Together with each delivery of financial statements
pursuant to Section 7.01(a), (b) and (c), a comparison of the current
year to date financial results (other than in respect of the balance
sheets included therein) against the budgets required to be submitted
pursuant to this clause (d) shall be presented.
(e) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 7.01(a), (b) and (c), (i) a
certificate of the chief financial officer of the Borrower to the effect
that, no Default or Event of Default has occurred and is continuing or,
if any Default or Event of Default does exist,
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specifying the nature and extent thereof, and (ii) a narrative
discussion and analysis of the financial condition and results of
operations of the Borrower and its Subsidiaries for the period covered
by such financial statements. In addition, at the time of the delivery
of the financial statements provided for in Section 7.01(c)(i), a
certificate of the chief financial officer or other Authorized Officer
of the Borrower setting forth (i) the amount of, and calculations
required to establish the amount of, Excess Cash Flow for the Excess
Cash Flow Period ending on the last day of the respective fiscal year
and (ii) the calculations required to establish whether the Borrower was
in compliance with Section 4.02.01(f) for the respective fiscal year.
(f) Notice of Default or Litigation. Promptly, and in any event
within five Business Days (or three Business Days with respect to an
event described in clause (i) below) after any officer of the Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or an Event of Default, which notice
shall specify the nature thereof, the period of existence thereof and
what action the Borrower proposes to take with respect thereto, (ii) the
commencement of, or threat of, or any significant development in, any
litigation or governmental proceeding pending against the Borrower or
any of its Subsidiaries (x) in which the amount involved is $5,000,000
or more, (y) which is likely to have a Material Adverse Effect, or a
material adverse effect on the ability of any Credit Party to perform
its respective obligations hereunder or under any other Credit Document
or (z) with respect to any Credit Document, and (iii) the commencement
of, or any significant development of (x) any action affecting the
Confirmation Order, the Plan of Reorganization or the Permanent
Injunction to the extent that such action materially and adversely
affects the Transaction or (y) any material claim by the Borrower
against the PI Trust under the Merger Agreement.
(g) Management Letters. Promptly after the Borrower's receipt
thereof, a copy of each report or any "management letter" submitted to
the Borrower or any of its Subsidiaries by its certified public
accountants and the management's responses thereto.
(h) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and other material information,
certificates and reports, if any, which the Borrower or any of its
Subsidiaries (x) has filed with the Securities and Exchange Commission
or any governmental agencies substituted therefor (the "SEC") or any
comparable agency outside of the United States or (y) has delivered to
holders of, or to any agent or trustee with respect to, Indebtedness of
the Borrower or any of its Subsidiaries in their capacity as such a
holder, agent or trustee to the extent that the aggregate principal
amount of such Indebtedness exceeds (or upon the utilization of any
unused commitments may exceed) $5,000,000.
(i) Environmental Matters. Promptly upon, and in any event within
ten Business Days after any officer of the Borrower obtains knowledge
thereof, notice of one or more of the following environmental matters
which individually, or in the aggregate, may reasonably be expected to
have a Material Adverse Effect:
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(i) any notice of Environmental Claim against the
Borrower or any of its Subsidiaries or any Real Property owned or
operated by the Borrower or any of its Subsidiaries;
(ii) any condition or occurrence on or arising from any
Real Property owned or operated by the Borrower or any of its
Subsidiaries that (a) results in noncompliance by the Borrower or
any of its Subsidiaries with any applicable Environmental Law or
(b) could reasonably be expected to form the basis of an
Environmental Claim against the Borrower or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property
owned or operated by the Borrower or any of its Subsidiaries that
could reasonably be expected to cause such Real Property to be
subject to any restrictions on the ownership, occupancy, use or
transferability by the Borrower or any of its Subsidiaries of
such Real Property under any Environmental Law; and
(iv) any removal or remedial actions to be taken in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by the Borrower
or any of its Subsidiaries as required by any Environmental Law
or any governmental or other administrative agency.
All such notices shall describe in reasonable detail the nature of the
claim, investigation, condition, occurrence or removal or remedial
action and the Borrowers' or such Subsidiary's response thereto. In
addition, the Borrower agrees to provide the Lenders with copies of all
material written communications by the Borrower or any of its
Subsidiaries with any Person, government or governmental agency relating
to any of the matters set forth in clauses (i)-(iv) above, and such
detailed reports relating to any of the matters set forth in clauses
(i)-(iv) above as may reasonably be requested by the Agent or the
Required Lenders.
(j) promptly after entering into any tax sharing or tax
allocation agreements by the Borrower or any of its Subsidiaries, copies
of such agreements.
(k) Other Information. From time to time, such other information
or documents (financial or otherwise) of any Credit Party as any Lender
may reasonably request.
Section 7.02. Books, Records and Inspections. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with GAAP and all
requirements of applicable law shall be made of all dealings and transactions in
relation to its business and activities. The Borrower will, and will cause each
of its Subsidiaries to, permit officers and designated representatives and
agents of the Agent or any Lender, to visit and inspect any of the properties of
the Borrower or such Subsidiary, and to examine the books of account of the
Borrower or such Subsidiary and discuss the affairs, finances and accounts of
the Borrower or such Subsidiary
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with, and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals, during reasonable
business hours and to such reasonable extent as the Agent or any
Lender may request provided, that all such visits and inspections shall be
coordinated through the Agent with consultation with the Borrower.
Section 7.03. Maintenance of Property, Insurance, Environmental Matters,
etc. (a) The Borrower will, and will cause each of its Subsidiaries to, (i)
ensure that its material properties and equipment used in its business are kept
in good repair, working order and condition, normal wear and tear and damage by
casualty excepted, and, subject to Section 8.07, that from time to time there
are made in such properties and equipment all needful and proper repairs,
renewals, replacements, extensions, additions, betterments and improvements
thereto, to the extent and in the manner useful or customary for companies in
similar businesses and (ii) maintain in full force and effect with financially
sound and reputable insurance companies insurance which provides substantially
the same (or greater) coverage and against at least such risks as is in
accordance with industry practice, and shall furnish to the Agent upon written
request full information as to the insurance so carried. The Borrower shall, and
shall cause each of its Subsidiaries to, in any event maintain insurance on the
Collateral to the extent required by the Security Documents. The Borrower shall
assert its rights against the PI Trust as to these matters purported to be
indemnified by the PI Trust under the terms of the Merger Agreement.
(b) Without limiting the generality of this Section 7.03, the Borrower
and its Subsidiaries: (i) shall maintain all Real Property in compliance in all
material respects with any applicable Environmental Laws; (ii) shall obtain and
maintain in full force and effect all governmental approvals required for its
operations at or on its properties by any applicable Environmental Laws; (iii)
shall cure as soon as reasonably practicable any violation of applicable
Environmental Laws with respect to any of its properties which individually or
in the aggregate may reasonably be expected to have a Material Adverse Effect;
(iv) shall not, and shall not permit any other Person to, own or operate on any
of its properties any landfill or dump or hazardous waste treatment, storage or
disposal facility as defined pursuant to the RCRA, or any comparable state law
except for those facilities or landfills owned as of the Closing Date as set
forth in Schedule 6.13; and (v) shall not use, generate, treat, store, release
or dispose of Hazardous Materials at or on any of the Real Property except in
the ordinary course of its business and in compliance with all Environmental
Laws. With respect to any Release of Hazardous Materials, the Borrower and its
Subsidiaries shall conduct any necessary or required investigation, study,
sampling and testing, and undertake any cleanup, removal, remedial or other
response action necessary to remove, cleanup or abate any material quantity of
Hazardous Materials released at or on any of its properties as required by any
applicable Environmental Law.
Section 7.04. Corporate Franchises. The Borrower will, and will cause each
of its Subsidiaries to, do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its material rights,
franchises, authority to do business, licenses and patents; provided, however,
that nothing in this Section 7.04 shall prevent (i) sales of assets by the
Borrower or any of its Subsidiaries in accordance with Section 8.02, (ii) the
dissolution or liquidation of any Subsidiary of the Borrower or the merger or
consolidation
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between or among the Subsidiaries of the Borrower, in each case in accordance
with Section 8.02 or (iii) the withdrawal by the Borrower or any of its
Subsidiaries of its qualification to do business as a foreign corporation in
any jurisdiction where such withdrawal could not reasonably be expected to have
a Material Adverse Effect.
Section 7.05. Compliance with Statutes, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property (including, without limitation, all
Environmental Laws applicable to the ownership or use of Real Property now or
hereafter owned or operated by the Borrower or any of its Subsidiaries),
non-compliance of which could have a Material Adverse Effect or could result in
a Lien upon any of the Borrower's or any of its Subsidiaries' property.
Section 7.06. ERISA. As soon as possible and, in any event, within 10 days
after the Borrower or any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Borrower will deliver to each of the Lenders a certificate of the chief
financial officer of the Borrower setting forth details as to such occurrence
and the action, if any, that the Borrower, such Subsidiary or such ERISA
Affiliate is required or proposes to take, together with any notices required or
proposed to be given to or filed with or by the Borrower, the Subsidiary, the
ERISA Affiliate, the PBGC, a Plan participant or the Plan administrator with
respect thereto: that a Reportable Event has occurred; that an accumulated
funding deficiency has been incurred or an application may be or has been made
to the Secretary of the Treasury for a waiver or modification of the minimum
funding standard (including any required installment payments) or an extension
of any amortization period under Section 412 of the Code with respect to a Plan;
that a contribution required to be made to a Plan, Multiemployer Plan or Foreign
Pension Plan has not been timely made; that a Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA other than a termination pursuant to Section 4041(b) of ERISA; that a Plan
has an Unfunded Current Liability giving rise to a lien under ERISA or the Code;
that proceedings may be or have been instituted to terminate or appoint a
trustee to administer a Plan; that a proceeding has been instituted pursuant to
Section 515 of ERISA to collect a delinquent contribution to a Plan; that the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate will or may
incur any material liability (including any indirect, contingent or secondary
liability) to or on account of the termination of or withdrawal from a Plan or
Multiemployer Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975 or 4980 of
the Code or Section 409, 502(i) or 502(l) or ERISA; or that the Borrower or any
Subsidiary of the Borrower has incurred any material liability pursuant to any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) that
provides benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA or applicable state or foreign law or as
disclosed on Schedule 6.10). At the request of any Lender, the Borrower will
deliver to such Lender a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to any
certificates or notices delivered to the Lenders pursuant to the first sentence
hereof, copies of annual reports and any notices received by the
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Borrower or any Subsidiary of the Borrower or any ERISA Affiliate with respect
to any Plan or Foreign Pension Plan shall be delivered to the Lenders no later
than 10 days after the date such report has been filed with the Internal Revenue
Service or received by the Borrower or the Subsidiary or the ERISA Affiliate.
Section 7.07. Performance of Obligations. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its material obligations under the
terms of each mortgage, indenture, security agreement and other material
agreements by which it is bound.
Section 7.08. Payment of Taxes. The Borrower will, and will cause each of
its Subsidiaries to, pay and discharge, all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which any penalties attach
thereto, and all lawful claims for sums that have become due and payable;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to pay or discharge any such tax, assessment, charge, levy or claim
that is being contested in good faith and by proper proceedings and as to which
appropriate reserves are being maintained, unless and until any Lien (other than
Permitted Liens described in Section 8.01(i)) resulting therefrom attaches to
its property.
Section 7.09. Collateral, Additional Security; Further Assurance.
(a) The Borrower agrees that all Obligations and any other obligations
and liabilities of the Borrower to the Agents, the Lenders and the Letter of
Credit Issuer shall be secured by (A) valid, perfected and enforceable liens in
all right, title and interest of Holdings, of the Borrower and of each Domestic
Subsidiary (except Immaterial Subsidiaries) of the Borrower in all capital stock
of the Borrower and each Domestic Subsidiary (except Immaterial Subsidiaries) of
the Borrower and, subject to Section 7.11, in 65% of Voting Equity and 100% of
Non-Voting Equity of each First Tier Foreign Subsidiary (except Immaterial
Subsidiaries) of the Borrower, whether now owned or hereafter acquired, and all
proceeds thereof and (B) valid, perfected (subject to the proviso appearing at
the end of this sentence) and enforceable liens in all right, title and interest
of the Borrower and of each Domestic Subsidiary (except Immaterial Subsidiaries)
of the Borrower in all cash and cash equivalents, accounts, chattel paper,
general intangibles, instruments, investment property, documents, inventory,
equipment and real property (subject to Section 7.09(j) below) of every kind and
description, whether now owned or hereafter acquired, (including, without
limitation, the Real Property located in Kalkaska, Michigan and Manchester,
Tennessee that is described in Schedule 6.17 upon release of the security
documents now encumbering such Real Property or acquisition of the fee interest
therein by the Borrower or any Affiliate thereof), and all proceeds thereof,
including, without limitation, all rights under any leases of goods (except for
real property located outside of the United States); provided, however, that
until a Default or an Event of Default has occurred and is continuing and
thereafter until otherwise required by the Required Lenders or the Agent, (i)
liens on cash or deposit accounts maintained with Persons other than the Lenders
need not be perfected, (ii) liens need not be perfected on note receivables
having a fair market value of less than $5,000,000 in the aggregate, (iii)
liens on investment property (other than the capital stock of the Borrower and
each Domestic Subsidiary (except Immaterial Subsidiaries) of the Borrower) which
cannot be perfected by the filing of a financing statement need not be
perfected, (iv) liens on
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vehicles which are subject to a certificate of title law need not be noted on
the certificate of title, (v) liens on inventory and equipment located at job
sites outside of the United States of America in the ordinary course of business
need not be perfected and (vi) liens on government contracts need not be
perfected. The liens in the Collateral shall be granted by the Borrower and
Domestic Subsidiaries (except Immaterial Subsidiaries) to the Agent for the
ratable account of the Lenders and shall be valid and perfected first liens
subject, however, to the proviso appearing at the end of the immediately
preceding sentence, Section 7.09(k) below and the Permitted Liens.
Notwithstanding anything to the contrary contained herein, in no event will any
of the Collateral described above be deemed to include (i) any interests in any
leases or licenses to use real or personal property under which the Borrower or
any Domestic Subsidiary of the Borrower is lessee or licensee and a Person other
than the Borrower or an Affiliate of the Borrower is lessor or licensor to the
extent the granting of a security interest or lien therein is prohibited by the
agreement(s) pursuant to which such property is leased and such prohibition has
not been or is not waived or the consent of the applicable party has not been or
is not obtained, or (ii) any interest in any joint venture or in any contract,
contract right, or other similar general intangible if the granting of a lien
therein is prohibited by the terms of the written agreement creating such joint
venture or creating or evidencing such contract, contract right, or similar
general intangible; provided further, that (x) notwithstanding anything set
forth in clause (ii) above to the contrary, to the extent not prohibited by law,
the Agent has and shall at all times have a security interest in all rights to
payments of money due or to become due under any joint venture, contract,
contract right, or similar general intangible and all other proceeds thereof and
(y) if and when the prohibition which prevents the granting of a security
interest in any such property is removed, terminated or otherwise becomes
unenforceable as a matter of law, the Agent will be deemed to have, and at all
times to have had, a security interest in such property, and the Collateral will
be deemed to include, and at all times to have included, such property.
(b) The Borrower will, and will cause each of its Domestic Subsidiaries
(and subject to Section 7.11, each of its Foreign Subsidiaries) (except
Immaterial Subsidiaries) to, grant to the Collateral Agent for the benefit of
Secured Creditors security interests and mortgages in such assets and properties
of the Borrower and its Subsidiaries (to the extent described in Section
7.09(a)) as are not covered by the original Security Documents, and as may be
requested from time to time by the Agent or the Required Lenders subject to
applicable law. All such security interests and mortgages shall be granted
pursuant to documentation satisfactory in form and substance to the Agent and
substantially in the same form as the original Security Documents (collectively,
the "Additional Security Documents") and shall constitute valid and enforceable
perfected security interests and mortgages superior to and prior to the rights
of all third Persons and subject to no other Liens except for Permitted Liens.
The Additional Security Documents or instruments related thereto shall have been
duly recorded or filed in such manner and in such places as are required by law
to establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
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(c) The Borrower shall cause to be delivered to the Collateral Agent
surveys in form and substance reasonably satisfactory to the Collateral Agent of
each Mortgaged Property, dated a recent date reasonably acceptable to the
Collateral Agent, accompanied by a certificate in the form of Exhibit O or
otherwise certified in a manner reasonably satisfactory to the Collateral Agent
by a licensed professional surveyor reasonably satisfactory to the Collateral
Agent. Each of the licensed surveyors selected in good faith by Bock & Clark
shall be deemed acceptable to the Collateral Agent.
(d) The Borrower shall cause to be delivered to the Collateral Agent
endorsements to the Mortgage Policies which shall (i) delete any exceptions for
matters that would be disclosed by a survey of the property, (ii) provide
coverage over any exceptions raised by the Title Insurers as a result of review
of the surveys of the property in form and substance acceptable to Agent, and
(iii) include such affirmative coverages and specific endorsements as are not
available as of the Closing Date because of the unavailability of surveys or as
Agent shall otherwise request, including, without limitation, comprehensive
endorsements, 3.1 zoning endorsements (modified to include parking and loading
docks), access endorsements and location endorsements, to the extent available
under applicable laws and regulations.
(e) The Borrower shall cause to be delivered to the Agent such estoppel
letters, landlord waiver letters, no-disturbance letters and similar assurances
as may have been requested (and not waived) by the Agent with respect to
Mortgaged Properties that are Leaseholds, which letters shall be in form and
substance reasonably satisfactory to the Agent.
(f) The Borrower will, and will cause each of its Subsidiaries to, at
the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require. Furthermore, the Borrower shall cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonably requested by the Agent to assure themselves that
this Section 7.09 has been complied with.
(g) If the Agent or the Required Lenders determine that they are
required by law or regulation to have appraisals prepared in respect of the Real
Property of the Borrower and its Subsidiaries constituting Collateral, the
Borrower shall pay, at the Agent's request, any costs and expenses incurred or
to be incurred by the Agent in obtaining appraisals which satisfy the applicable
requirements of the Real Estate Appraisal Reform Amendments of the Financial
Institution Reform, Recovery and Enforcement Act of 1989 and which shall be in
form and substance satisfactory to the Agent.
(h) The Borrower agrees that all Obligations and any other obligations
and liabilities of the Borrower hereunder and under the other Credit Documents
shall at all times be jointly and severally guaranteed by each Guarantor
pursuant to the Holdings Guaranty or
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the Subsidiary Guaranty, as the case may be. In the event any Domestic
Subsidiary (except Immaterial Subsidiary) of the Borrower is hereafter formed or
acquired, the Borrower shall cause such Domestic Subsidiary to execute an
assumption and supplement to the Subsidiary Guaranty pursuant to which such
Domestic Subsidiary joins in and becomes obligated as a guarantor thereunder,
which assumption and supplement shall be in form and substance satisfactory to
the Agent, and the Borrower shall also cause such Domestic Subsidiary to
execute an assumption and supplement to the Security Agreement granting the
Agent for the benefit of the Lenders a security interest in and lien on the
assets of such Domestic Subsidiary as collateral security for the Obligations
and any other obligations and liabilities of the Borrower under the Credit
Documents, together with such other instruments, documents, certificates and
opinions reasonably required by the Agent in connection therewith. In addition
the Borrower shall, or shall cause its Subsidiary (which owns capital stock of
such Domestic Subsidiary) to, execute an assumption and supplemental pledge
agreement to pledge all capital stock of such Domestic Subsidiary owned by the
Borrower or such Subsidiary, as the case may be.
(i) If on the Closing Date the Borrower does not deliver one or more
opinions of local counsel with respect to real property matters or Mortgage
Policies as contemplated by Sections 5.01(c) and 5.01(i)(B) for reasons other
than those within Borrower's reasonable control, which reasons within Borrower's
reasonable control shall include, but not be limited to, the Borrower's failure
to deliver title affidavits or indemnities or corporate documents (such as, but
not limited to, good standing certificates and certified resolutions), or
Borrower's failure to pay premiums or fees or to make deposits required by a
Title Insurer (but not including, solely for the purpose of this sentence,
deposits on account of Liens other than Permitted Liens which may be released
after the Closing Date in accordance with Section 7.09(k)), then the delivery of
the same shall not be a condition precedent under Section 5.01 but a covenant of
the Borrower as hereinafter set forth. Borrower agrees and acknowledges that
closing of the transactions contemplated hereby without receipt of such items
as are described above prior thereto does not constitute a waiver of the
Borrower's obligation to deliver such items as set forth above.
(j) If on the Closing Date any of the Mortgages to be delivered in
connection with Mortgaged Properties in which the Borrower or a Credit Party
holds a Leasehold as set forth in Schedule 6.17 has not been executed and
delivered in recordable form, then the execution and delivery of same shall not
be a condition precedent under Section 5.01 but a covenant of the Borrower as
hereinafter set forth. Borrower agrees and acknowledges that closing of the
transactions contemplated hereby without execution and delivery of such
Mortgages prior thereto does not constitute a waiver of the Borrower's
obligation to execute and deliver such Mortgages.
(k) If on the Closing Date any of the Mortgaged Properties is subject to
a Lien which is not a Permitted Lien, but such Lien or Liens do not have a
material adverse effect, singly or in the aggregate, on the business,
properties, assets, liabilities or financial condition of the Borrower or the
Credit Party granting the lien on such Mortgaged Property, then the release of
same shall not be a condition precedent under Section 5.01 but a covenant of the
Borrower as hereinafter set forth. Borrower agrees and acknowledges that closing
of the
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transactions contemplated hereby without release of such Liens as are
described above prior thereto does not constitute a waiver of the Borrower's
obligation to release such Liens.
(l) The Borrower agrees to use all reasonable efforts in order that each
action required above by this Section 7.09 shall be completed within 90 days
after such action is either requested to be taken by the Agent or the Required
Lenders or required to be taken by the Borrower and its Subsidiaries pursuant to
the terms of this Section 7.09 and agrees that each such action shall in all
events be completed within 150 days of such request or requirement.
Section 7.10. Interest Rate Protection. On or prior to the Closing Date at
least 50% of the sum of outstanding Term Loans of the Borrower shall be subject
to Interest Rate Protection Agreements, satisfactory to the Agent, with a term
of at least 3 years from the Closing Date, or shall be subject to a fixed or
maximum interest rate (with a term of at least 3 years from the Closing Date)
acceptable to the Agent.
Section 7.11. Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower reasonably acceptable to the Agent does not within 30 days after a
request from the Agent or the Required Lenders deliver evidence, in form and
substance mutually satisfactory to the Agent and the Borrower, with respect to
any Foreign Subsidiary of the Borrower which has not already had all of its
stock pledged pursuant to the Pledge Agreement that (i) a pledge (x) of 65% or
more of the total combined voting power of all classes of capital stock of such
Foreign Subsidiary entitled to vote, and (y) of any promissory note issued by
such Foreign Subsidiary to the Borrower or any of its Domestic Subsidiaries,
(ii) the entering into by such Foreign Subsidiary of a security agreement in
substantially the form of the Security Agreement and (iii) the entering into by
such Foreign Subsidiary of a guaranty in substantially the form of the
Subsidiary Guaranty, in any such case would cause the undistributed earnings of
such Foreign Subsidiary as determined for Federal income tax purposes to be
treated as a deemed dividend to such Foreign Subsidiary's United States parent
for Federal income tax purposes, then in the case of a failure to deliver the
evidence described in clause (i) above, that portion of such Foreign
Subsidiary's outstanding capital stock or any promissory notes so issued by such
Foreign Subsidiary, in each case not theretofore pledged pursuant to the Pledge
Agreement shall be pledged to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Pledge Agreement (or another pledge agreement
in substantially similar form, if needed), and in the case of a failure to
deliver the evidence described in clause (ii) above, such Foreign Subsidiary
shall execute and deliver the Security Agreement (or another security agreement
in substantially similar form, if needed), granting the Secured Creditors a
security interest in all of such Foreign subsidiary's assets and securing the
Obligations of the Borrower under the Credit Documents and under any Interest
Rate Protection Agreement and, in the event the Subsidiary Guaranty shall have
been executed by such Foreign Subsidiary, the obligations of such Foreign
Subsidiary thereunder, and in the case of a failure to deliver the evidence
described in clause (iii) above, such Foreign Subsidiary shall execute and
deliver the Subsidiary Guaranty (or another guaranty in substantially similar
form, if needed), guaranteeing the Obligations
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of the Borrower under the Credit Documents and under any Interest Rate
Protection Agreement, in each case to the extent that the entering into such
Security Agreement or Subsidiary Guaranty is permitted by the laws of the
respective foreign jurisdiction and is not restricted by any contract or
agreement to which such Foreign Subsidiary is a party (to the extent such
restriction is not insistent with this Agreement) and with all documents
delivered pursuant to this Section 7.11 to be in form and substance reasonably
satisfactory to the Agent. Notwithstanding the foregoing, the Borrower shall
cause (i) any Voting Equity and Non-Voting Equity of any Foreign Subsidiary to
be pledged to the Collateral Agent for the benefit of Secured Creditors, (ii)
any Foreign Subsidiary to execute the Subsidiary Guaranty and (iii) any Foreign
Subsidiary to execute the Security Agreement, in each case to the extent such
action does not create any undesirable liability, tax or compliance issues under
the laws of the United States or the jurisdiction of organization of such
Foreign Subsidiary is not restricted by any contract or agreement to which such
Foreign Subsidiary is a party (to the extent such restriction is not
inconsistent with this Agreement) (including, without limitation, actual
dividends being paid by any Foreign Subsidiary to the Borrower).
SECTION 8. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Closing Date and
until the Total Commitment and all Letters of Credit have terminated, and the
Loans, any Unpaid Drawings and the Notes, together with interest, Fees and all
other obligations incurred hereunder and thereunder, are paid in full:
Section 8.01. Liens. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets, or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 8.01
shall not prevent the creation, incurrence, assumption or existence of the
following (the Liens described below, the "Permitted Liens"):
(i) inchoate Liens for taxes, governmental assessments, charges
or levies in the nature of taxes not yet due and payable, or Liens for
taxes, governmental assessments, charges or levies and in the nature of
taxes being contested in good faith and by appropriate proceedings which
proceedings have the effect of preventing the forfeiture or sale of the
property and for which adequate reserves (in the good faith judgment of
the management of the Borrower) have been established in accordance with
GAAP;
(ii) Liens in respect of property or assets of the Borrower or
any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's, repairmen's and
mechanic's Liens and other similar
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Liens arising in the ordinary course of business, and (x) which do not
in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the
business of the Borrower and its Subsidiaries or (y) which are being
contested in good faith by appropriate proceedings, which proceedings
have the effect of preventing the forfeiture or sale of the property or
assets subject to any such Lien;
(iii) Liens in existence on the Closing Date which are listed,
and the property subject thereto described, in Schedule 8.01 including
securing any refinancing of the Indebtedness secured, provided that the
aggregate principal amount of the Indebtedness, if any, secured by such
Lien does not increase from that amount outstanding on the Closing Date
and Lien does not extend to any other property;
(iv) Permitted Encumbrances;
(v) Liens incurred or deposits made (x) in the ordinary course of
business in connection with workers' compensation, unemployment
insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds,
bids, government contracts, performance and return-of-money bonds and
other similar obligations incurred in the ordinary course of business
(exclusive of obligations in respect of the payment for borrowed money);
and (y) to secure the performance of leases of Real Property, to the
extent incurred or made in the ordinary course of business;
(vi) Liens created by or pursuant to this Agreement and the
Security Documents;
(vii) Liens arising under Capitalized Leases to the extent
permitted by this Agreement, provided that (x) such Liens only serve
to secure the payment of Indebtedness arising under such Capitalized
Leases, (y) the Lien encumbering the asset giving rise to the
Capitalized Lease does not encumber any other asset of the Borrower or
any of its Subsidiaries and (z) the aggregate principal amount of
Indebtedness secured by Liens under this clause (vii) does not exceed
$25,000,000 at any time outstanding;
(viii) statutory and common law landlord's liens under leases to
which the Borrower or any of its Subsidiaries is a party;
(ix) easements, rights-of-way, restrictions, minor defects or
irregularities in title and other similar charges or encumbrances
arising after the Closing Date and not interfering in any material
respect with the ordinary conduct of the business of the Borrower or any
of its Subsidiaries; and
(x) Non-Recourse Purchase Money Security Interests, securing
Indebtedness permitted by Section 8.04(viii).
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Section 8.02. Consolidation, Merger, Sale of Assets, etc. The Borrower will
not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
(i) the Transaction may be consummated;
(ii) the Borrower and its Subsidiaries may sell and lease
inventory, materials and equipment in the ordinary course of business;
(iii) the Borrower and its Subsidiaries may sell or otherwise
dispose of any assets which, in the reasonable judgment of such Person,
have become uneconomic, obsolete or worn out;
(iv) the Borrower and its Subsidiaries may sell assets, provided
that (I) the aggregate sale proceeds from all assets subject to such
sales pursuant to this clause (iv) (other than in the ordinary course of
business, the Net Cash Proceeds of which are not required to be applied
to the making of mandatory prepayments pursuant to Section 4.02.01(c))
shall not exceed $25,000,000 in any fiscal year of the Borrowers and
(II) the Net Cash Proceeds from sales described in (I) above are either
applied to repay Term Loans as provided in Section 4.02.01(c) or
reinvested in replacement assets to the extent permitted by Section
4.02.01(c);
(v) the Borrower and its Subsidiaries may sell or exchange any
item of equipment, so long as the purpose of each such sale or exchange
is to acquire (and results within 90 days before or after such sale or
exchange in the acquisition of) replacement items of equipment which are
functional equivalent of the item of equipment so sold or exchanged;
(vi) any Subsidiary of the Borrower may be merged or consolidated
with or into the Borrower (provided that the Borrower shall be the
continuing or surviving corporation) or with or into any one or more
Wholly-Owned Subsidiary of the Borrower (provided that the Wholly-Owned
Subsidiary or Subsidiaries shall be the continuing or surviving
corporation) or the Borrower may merge with and into a Wholly-Owned
Domestic Subsidiary of Holdings which was created solely for the purpose
of changing the Borrower's jurisdiction of incorporation to another
State of the United States; and
(vii) any Wholly-Owned Subsidiary of the Borrower may sell,
lease, transfer or otherwise dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to the Borrower or any other
Wholly-Owned Domestic Subsidiary of the Borrower.
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provided, however, that during the existence of any Default or Event of Default,
any sale, transfer, lease, or other disposition of any such property will be
subject to the terms of the relevant Security Documents relating to the
permitted disposition thereof. So long as no Default or Event of Default has
occurred and is continuing or would arise as a result thereof, upon the written
request of the Borrower, the Agent shall release its Lien on any property sold
pursuant to the foregoing provisions.
Section 8.03. Dividends and Payment under Related Party Agreement. The
Borrower will not authorize, declare, pay or make, or permit any of its
Subsidiaries to authorize, declare, pay or make (a) any Dividends, except that
any Subsidiary of the Borrower may pay Dividends to the Borrower or any
Wholly-Owned Subsidiary of the Borrower and (b) any payment under any Related
Party Agreement to the extent such payment is prohibited by the Senior
Subordinated Note Documents, the Holdings Preferred Stock or the Exchange
Debenture Documents. The foregoing does not prohibit (i) the Borrower's payments
of up to $1,750,000 to Granaria Holdings or any of its Affiliates in the
aggregate in any fiscal year of the Borrower pursuant to any Related Party
Agreement entered into between Granaria Holdings or any of its Affiliates and
the Borrower or its Subsidiaries to provide management and similar services to
such Persons; (ii) during any period in which Holdings files consolidated income
tax returns that include the Borrower, the Borrower's payments to Holdings in
amounts not in excess of the amount that the Borrower would have paid if it had
filed consolidated tax returns on a separate-company basis, solely in amounts
and at the times necessary to permit Holdings to pay its consolidated income
taxes; and (iii) commencing September 1, 2003, and semi-annually thereafter on
each March 1 and September 1, the Borrower's payments of Dividends to Holdings
in an amount equal to, and for the express purpose of paying, (x) the regularly
scheduled cash dividend payments required to be paid by Holdings under the
Holdings Preferred Stock as in effect on the Closing Date or (y) any regularly
scheduled cash interest payments required to be paid by Holdings under the
Exchange Debentures as in effect on the Closing Date.
Section 8.04. Indebtedness. The Borrower will not, and will not permit any
of its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except;
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents and Existing Indebtedness;
(ii) surety and appeal bonds, performance and return-of-money
bonds and other similar obligations incurred in the ordinary course of
business (exclusive of obligations in respect of the payment for
borrowed money) and accrued expenses incurred in the ordinary course of
business;
(iii) Indebtedness arising under Capitalized Leases to the extent
permitted pursuant to Section 8.01(vii);
(iv) Indebtedness under Interest Rate Protection Agreements
relating to Indebtedness otherwise permitted under this Section 8.04;
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(v) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Section 8.05(iii);
(vi) Indebtedness of the Borrower and the Subsidiary Guarantors
incurred under one or more Senior Subordinated Note Indentures and
Senior Subordinated Notes and the other Senior Subordinated Note
Documents delivered in connection therewith so long as (A) all of the
terms and conditions (and the documentation) in connection therewith
(including, without limitation, the issuer, amortization, maturities,
interest rates, limitations on cash interest payable, covenants,
defaults, remedies, sinking fund provisions, subordination provisions
and other terms) taken as a whole, are not materially less favorable to
the Borrower, and the subordination provisions thereof are not less
favorable to the Lenders, than those set forth in the Senior
Subordinated Note Indenture as in effect on the Closing Date and (B) the
aggregate principal amount of outstanding Senior Subordinated Notes
under the Senior Subordinated Note Indenture shall not exceed
$220,000,000, minus the aggregate principal amount of all repayments
thereof at any time;
(vii) Indebtedness of Foreign Subsidiaries in the aggregate
amount at any time outstanding not exceeding $25,000,000; and
(viii) Indebtedness secured by Non-Recourse Purchase Money
Security Interests which has not been designated Senior Indebtedness
under the Senior Subordinated Note Documents provided that the aggregate
principal amount of such Indebtedness does not exceed $25,000,000 at any
time outstanding.
Section 8.05. Advances, Investments and Loans. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or enter into any partnerships or joint
ventures, or purchase or own a futures contract or otherwise become liable for
the purchase or sale of currency or other commodities at a future date in the
nature of a futures contract, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
receivables owing to them, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary
trade terms;
(ii) the Borrower and its Subsidiaries may acquire and hold cash
and Cash Equivalents;
(iii) the Borrower may make intercompany loans and advances to
its Wholly-Owned Subsidiaries, and any Subsidiary of the Borrower may
make intercompany loans and advances to the Borrower, to the
Subsidiaries of such Subsidiary or to any Wholly-Owned Subsidiary of the
Borrower (collectively, "Intercompany Loans") (I) for working capital
purposes in the ordinary course of business, or (II) to consolidate cash
management activities of the Borrower and its Subsidiaries in the
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ordinary course of business, provided that each party to the
Intercompany Loans shall execute the Subordination Agreement in the form
of Exhibit M;
(iv) the Borrower and its Subsidiaries may enter into Interest
Rate Protection Agreements with respect to Indebtedness otherwise
permitted to be incurred by the Borrower or its Subsidiaries, as the
case may be, by this Agreement;
(v) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(vi) loans and advances by the Borrower and its Subsidiaries to
employees of the Borrower and its Subsidiaries for moving and travel
expenses and other similar expenses, in each case incurred in the
ordinary course of business, in an aggregate outstanding principal
amount not to exceed $1,000,000 at any time (determined without regard
to any write-downs or write-offs of such loans and advances), shall be
permitted;
(vii) the Borrower may own existing investment in joint venture
interests as described in Schedule 8.05; and
(viii) loans by the Borrower to Fabricon Products, Inc. in an
aggregate amount not exceeding $500,000 at any one time outstanding.
Section 8.06. Transactions with Affiliates. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any of its Subsidiaries, other than on terms
and conditions substantially as favorable to the Borrower or such Subsidiary as
would be obtainable by the Borrower or such Subsidiary at the time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that (i) loans and advances may be incurred and made to the extent
permitted by Sections 8.04 and 8.05; (ii) the Borrower and its Subsidiaries may
effect intercompany transactions and transfers of goods and services in the
ordinary course of business and in conformity with the business practices in
effect on the Closing Date and as otherwise permitted pursuant to Section 8.02;
(iii) the Borrower may pay, on behalf of Holdings, ministerial administrative
and operating fees and expenses in the ordinary course to Persons other than to
Affiliates of Holdings or the Borrower, provided that the aggregate amount
thereof in any fiscal year of the Borrower does not exceed $750,000, (iv) the
Borrower may make Specified Transaction Payments, (v) the Borrower may pay up
to $1,750,000 to Granaria Holding or any of its Affiliates in the aggregate in
any fiscal year of the Borrower pursuant to any Related Party Agreement entered
into between Granaria Holdings or any of its Affiliates and the Borrower or its
subsidiaries to provide management and similar service to such Persons and (vi)
commencing September 1, 2003, the Borrower may pay dividends to Holdings in an
amount equal to (x) any regularly scheduled cash dividend payments
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required to be paid by Holdings under the Holdings Preferred Stock as in effect
on the Closing Date or (y) any regularly scheduled cash interest payments
required to be paid by the Holdings under the Exchange Debentures as in effect
on the Closing Date.
Section 8.07. Capital Expenditures. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make or become obligated to make any Capital
Expenditures, except that during any fiscal year the Borrower and its
Subsidiaries may make and become obligated to make Capital Expenditures so long
as the aggregate amount of such Capital Expenditures does not exceed in any
fiscal year $40,000,000.
(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any fiscal year is greater than the amount of
such Capital Expenditures made by the Borrower and its Subsidiaries during such
fiscal year, such excess (the "Rollover Amount") may be carried forward and
utilized to make Capital Expenditures (in addition to the amount permitted in
clause (a) above) in the succeeding two fiscal years so long as no Default or
Event of Default has occurred and is continuing or would result therefrom.
(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries may
make Capital Expenditures (which Capital Expenditures will not be included in
any determination under the foregoing clause (a)) with any proceeds received by
the Borrower or any of its Subsidiaries from any Recovery Event so long as such
Capital Expenditures are to replace or restore any properties or assets in
respect of which such proceeds were paid within 360 days following the date of
the receipt of such proceeds to the extent such proceeds are not required to be
applied to repay Term Loans pursuant to Section 4.02.01(g).
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Section 8.08. Interest Coverage Ratio. The Borrower will not permit the
Interest Coverage Ratio for any Test Period ending on a date set forth below to
be less than the ratio set forth opposite such date:
DATE RATIO
February 28, 1998 1.85:1.00
May 31, 1998 1.85:1.00
August 31, 1998 1.85:1.00
November 30, 1998 1.85:1.00
February 28, 1999 1.85:1.00
May 31, 1999 1.85:1.00
August 31, 1999 1.85:1.00
November 30, 1999 1.85:1.00
February 29, 2000 2.25:1.00
May 31, 2000 2.25:1.00
August 31, 2000 2.25:1.00
November 30, 2000 2.25:1.00
February 28, 2001 2.50:1.00
May 31, 2001 2.50:1.00
August 31, 2001 2.50:1.00
November 30, 2001 2.50:1.00
thereafter 3.00:1.00
Section 8.09. Leverage Ratio. The Borrower will not permit the Leverage
Ratio on the last day of any fiscal quarter ending on or about any date set
forth below to be more than the ratio set forth opposite such date:
PERIOD RATIO
February 28, 1998 5.60:1.00
May 31, 1998 5.60:1.00
August 31, 1998 5.60:1.00
November 30, 1998 5.60:1.00
February 28, 1999 5.60:1.00
May 31, 1999 5.60:1.00
August 31, 1999 5.60:1.00
November 30, 1999 5.60:1.00
February 29, 2000 4.50:1.00
May 31, 2000 4.50:1.00
August 31, 2000 4.50:1.00
November 30, 2000 4.50:1.00
February 28, 2001 3.50:1.00
May 31, 2001 3.50:1.00
August 31, 2001 3.50:1.00
November 30, 2001 3.50:1.00
thereafter 3.50:1.00
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Section 8.10. Fixed Charge Coverage Ratio. The Borrower will not permit the
Fixed Charge Coverage Ratio for any Test Period ending on a date set forth below
to be less than the ratio set forth opposite such date:
DATE RATIO
February 28, 1998 1.50:1.00
May 31, 1998 1.50:1.00
August 31, 1998 1.50:1.00
November 30, 1998 1.50:1.00
February 28, 1999 1.50:1.00
May 31, 1999 1.50:1.00
August 31, 1999 1.50:1.00
November 30, 1999 1.50:1.00
February 29, 2000 1.75:1.00
May 31, 2000 1.75:1.00
August 31, 2000 1.75:1.00
November 30, 2000 1.75:1.00
February 28, 2001 1.75:1.00
May 31, 2001 1.75:1.00
August 31, 2001 1.75:1.00
November 30, 2001 1.75:1.00
thereafter 1.75:1.00
Section 8.11. Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; Issuances of Capital Stock; etc. The Borrower will not, and
will not permit any of its Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or purchase or
defeasance or acquisition for value of (including, without limitation,
by way of depositing with the trustee with respect thereto or any other
Person money or securities before due for the purpose of paying when
due) any Indebtedness (except for Indebtedness under the Credit
Documents) including, without limitation, Senior Subordinated Notes or
Exchange Debentures; provided that any Foreign Subsidiary may prepay any
Indebtedness of such Foreign Subsidiary;
(ii) make (or give any notice in respect of) any prepayment or
redemption or acquisition for value or purchase or defeasance as a
result of any asset sale, change of control or similar event (including,
without limitation, by way of depositing with the trustee with respect
thereto or any other Person money or securities or other property before
due for the purpose of paying when due) with respect to any Senior
Subordinated Note or Exchange Debenture;
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(iii) amend or modify, or permit the amendment or modification of,
any provision of any Senior Subordinated Note Document which is in any
way adverse to the interests of Lenders; and
(iv) amend, modify or change in any way adverse to the interests
of the Lenders, any Tax Allocation Agreement, any Management Agreement,
any Merger Document, the Confirmation Order, the Plan of Reorganization,
the Trust Agreement relating to the PI Trust, its certificate of
incorporation (including, without limitation, by the filing or
modification of any certificate of designation) or by-laws, or any
agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement
with respect to its capital stock which in any way could be adverse to
the interests of the Lenders.
Section 8.12.Limitation on Restrictions on Subsidiary Dividends and Other
Distributions. The Borrower will not, and it will not permit any of its
Subsidiaries (except for Foreign Subsidiaries with respect to clause (a) below)
to, directly or indirectly, create or otherwise cause or suffer to exist or
become effective any encumbrance or restriction on the ability of any such
Subsidiary to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits, owned by the
Borrower or any Subsidiary of the Borrower or pay or repay any Indebtedness
owed to the Borrower or any Subsidiary of the Borrower, (b) make loans or
advances to the Borrower or any Subsidiary of the Borrower, (c) transfer any of
its properties or assets to the Borrower or any Subsidiary of the Borrower or
(d) encumber or pledge any of its assets, except for Permitted Liens.
Section 8.13. Limitation on Issuances of Capital Stock by Subsidiaries. The
Borrower will not permit any of its Subsidiaries to issue any capital stock
(including by way of sales of treasury stock) or any options or warrants to
purchase, or securities convertible into, capital stock, except for transfers
and replacements of then outstanding shares of capital stock.
Section 8.14. Limitation on the Creation of Subsidiaries. Notwithstanding
anything to the contrary contained in this Agreement, the Borrower will not, and
will not permit any of its Subsidiaries to, establish, create or acquire after
the Closing Date any Subsidiary; provided that the Borrower and its Wholly-Owned
Subsidiaries shall be permitted to establish or create Wholly-Owned Subsidiaries
so long as (i) at least 30 days' prior written notice thereof is given to the
Agent, (ii) the capital stock or any other equity interest in such new
Subsidiary is pledged (or a security interest is granted therein) pursuant to,
and to the extent required by, the Borrower and Subsidiary Pledge Agreement or
the Security Agreement, as the case may be, and the certificates representing
such stock, together with stock powers duly executed in blank, or such equity
interest are delivered to the Collateral Agent, (iii) such new Subsidiary (other
than a Foreign Subsidiary except to the extent otherwise required pursuant to
Section 7.11) executes a counterpart of the Subsidiary Guaranty, the Borrower
and Subsidiary Pledge Agreement (if it has any Subsidiaries) and the Security
Agreement, and (iv) to the extent requested by the Agent, the Collateral Agent
or the Required Lenders, takes all actions required pursuant to Section 7.09. In
addition, the Borrower shall cause each new Wholly-Owned Subsidiary to execute
and deliver, or
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cause to be executed and delivered, all other relevant documentation of the
type described in Section 5 as such new Subsidiary would have had to deliver if
such new Subsidiary were a Credit Party on the Closing Date.
Section 8.15. Maintenance of Corporate Separateness; etc.
The Borrower will not, and will not permit any of its Subsidiaries to, (a)
fail to satisfy customary corporate formalities, including, without limitation,
(i) the holding of regular board of directors' and shareholders' meetings, (ii)
the maintenance of separate corporate offices and records and (iii) the
maintenance of separate bank accounts in its own name; (b) fail to act solely in
its own corporate name and through its authorized officers and agents; (c)
except in connection with the Borrower's cash management system, commingle any
money or other assets of the Borrower or any of its Subsidiaries with any money
or other assets of each other; or (d) take any action, or conduct its affairs in
a manner, which could reasonably be expected to result in the separate corporate
existence of the Borrower and each of its Subsidiaries being ignored, or the
assets and liabilities of the Borrower or any of its Subsidiaries being
substantively consolidated with those of each other in a bankruptcy,
reorganization or other insolvency proceeding.
Section 8.16. Business. The Borrower will not, and will not permit any of
its Subsidiaries to, engage (directly or indirectly) in any business other than
the business in which it is engaged on the Closing Date, reasonable extensions
and expansions thereof and such business as may be incidental or related to such
extension and expansions.
SECTION 9. EVENTS OF DEFAULT.
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
Section 9.01. Payments. The Borrower shall (i) default in the payment when
due of any payment of principal of the Loans or Notes or (ii) default, and such
default shall continue unremedied for at least two Business Days, of any payment
of interest on the Loans or Notes, of any Unpaid Drawing or any Fees or any
other amounts owing by it hereunder or any other Credit Document; or
Section 9.02. Representations, etc. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any statement or certificate delivered pursuant hereto or thereto shall prove to
be untrue in any material respect, or any other factual information (taken as a
whole) furnished on behalf of the Borrower or any of its Subsidiaries in writing
to any Lender shall prove to be untrue in any material respect on the date as of
which made or deemed made; or
Section 9.03. Covenants. The Borrower shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Sections 7 or 8 or (ii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in Sections 9.01
and 9.02 and clause (i) of this Section 9.03)
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contained in this Agreement and such default shall continue unremedied for a
period of 30 days after written notice to the Borrower by the Agent or the
Required Lenders; or
Section 9.04. Default under Other Agreements. (i) Holdings, the Borrower or
any of its Subsidiaries shall (x) default in any payment of any Indebtedness of
$5,000,000 or more (other than the Obligations) beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created or (y) default in the observance or performance of any agreement or
condition relating to any Indebtedness of $5,000,000 or more (other than the
Obligations) or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur or condition exist, the effect
of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such
holder or holders) to cause (determined without regard to whether any notice is
required), any such Indebtedness to become due prior to its stated maturity or
(ii) any Indebtedness of $5,000,000 or more (other than Obligations) of
Holdings, the Borrower or any of its Subsidiaries shall be declared to be due
and payable, or required to be prepaid or purchased pursuant to put provisions,
prior to the stated maturity thereof; or
Section 9.05. Bankruptcy, etc. Holdings, the Borrower or any of its
Subsidiaries shall commence a voluntary case concerning itself under Title 11 of
the United States Code entitled "Bankruptcy," as now or hereafter in effect, or
any successor thereto or any similar laws under any foreign jurisdiction (the
"Bankruptcy Code"); or an involuntary case is commenced against Holdings, the
Borrower or any of its Subsidiaries, and the petition is not controverted within
10 days, or is not dismissed within 60 days, after commencement of the case; or
a custodian (as defined in the Bankruptcy Code) is appointed for, or takes
charge of, all or substantially all of the property of Holdings, the Borrower or
any of its Subsidiaries, or Holdings, the Borrower or any of its Subsidiaries
commences any other proceeding under any reorganization, bankruptcy,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to Holdings, the Borrower or any of its Subsidiaries, or there
is commenced against Holdings, the Borrower or any of its Subsidiaries any such
proceeding which remains undismissed for a period of 60 days, or Holdings, the
Borrower or any of its Subsidiaries is adjudicated insolvent or bankrupt; or any
order of relief or other order approving any such case or proceeding is entered;
or Holdings, the Borrower or any of its Subsidiaries suffers any appointment of
any custodian or the like for it or any substantial part of its property to
continue undischarged or unstayed for a period of 60 days; or Holdings, the
Borrower or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings, the Borrower or any
of its Subsidiaries for the purpose of effecting any of the foregoing; or
Section 9.06. ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof or a waiver of such standard
or extension of any amortization period is sought or granted under Section 412
of the Code, any Plan shall have had or will have a trustee appointed to
administer such Plan, any Plan is, shall have been or will be terminated or be
the subject of termination proceedings under ERISA, any Plan shall have an
Unfunded Current Liability giving rise to a lien under ERISA
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or the Code, a contribution required to be made to a Plan or a Foreign Pension
Plan has not been timely made, the Borrower or any Subsidiary of the Borrower or
any ERISA Affiliate has incurred or will incur a liability to or on account of
a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201,
4204 or 4212 of ERISA or Section 401(a)(29), 4971, 4975 or 4980 of the Code, or
the Borrower or any Subsidiary of the Borrower has incurred or will incur
liabilities pursuant to one or more employee welfare benefit plans (as defined
in Section 3(1) of ERISA) that provide benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA or as disclosed
on Schedule 6.10); (b) there shall result from any such event or events the
imposition of a lien, the granting of a security interest, or a liability; and
(c) which lien, security interest or liability, in the opinion of the Required
Lenders, could reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the Borrower or of the Borrower and its Subsidiaries
taken as a whole; or
Section 9.07. Security Documents. (a) Except in the event of the Collateral
Agent's failure to file continuation statements, any Security Document shall
cease to be in full force and effect in any material respect, or shall cease to
give the Collateral Agent the Liens, rights, powers and privileges purported to
be created thereby in favor of the Collateral Agent for the benefit of Secured
Creditors (including, without limitation, a perfected security interest
(purported to be created thereby) in, and Lien on, all of the Collateral) in any
material respect, or (b) any Credit Party shall default in the due performance
or observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any such Security Document and such default shall continue
unremedied for a period of 30 days; or
Section 9.08. Guaranties. The Guaranties or any provision thereof shall
cease to be in full force and effect in any material respect, or any Guarantor
or any Person acting by or on behalf of such Guarantor shall deny, disaffirm or
repudiate such Guarantor's obligations under any Guaranty or any Guarantor shall
default in the due performance or observance of any term, covenant or agreement
on its part to be performed or observed pursuant to any Guaranty or any "Event
of Default" with respect to the Holdings Guaranty shall occur; or
Section 9.09. Judgments. One or more final, non-appealable judgments or
decrees shall be entered against Holdings, the Borrower or any of its
Subsidiaries involving in the aggregate for Holdings, the Borrower and its
Subsidiaries a liability (not paid or fully covered by insurance) of $5,000,000
or more, and all such judgments or decrees shall not have been satisfied,
stayed, annulled or rescinded within 60 days from the entry thereof; or
Section 9.10. Change in Control. A Change of Control shall occur; or
Section 9.11. Matters Regarding the Permanent Injunction. The Permanent
Injunction shall be stayed, voided, vacated or reversed or modified in any
material respect which results in the Borrower becoming subject to asbestos or
lead related claims that were otherwise enjoined as to the Borrower:
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then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent shall upon the written request of the
Required Lenders, by written notice to the Borrower, take any or all of the
following actions, without prejudice to the rights of the Agent, any Lender or
the holder of any Note to enforce its claims against any Guarantor or the
Borrower (provided, that, if an Event of Default specified in Section 9.05 shall
occur with respect to Holdings, the Borrower or a Subsidiary Guarantor, the
result which would occur upon the giving of written notice by the Agent to the
Borrower as specified in clauses (i), (ii) and (vi) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon the Commitment of each Lender shall forthwith
terminate immediately and any Commitment Fee shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of and
any accrued interest in respect of all Loans and the Notes and all Obligations
owing hereunder (including Unpaid Drawings) to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by the Borrower; (iii)
enforce, as Collateral Agent (or direct the Collateral Agent to enforce), any or
all of the Liens and security interests created pursuant to the Security
Documents; (iv) terminate any Letter of Credit which may be terminated in
accordance with its terms; (v) direct the Borrower to pay (and the Borrower
agrees that upon receipt of such notice, or upon the occurrence of an Event of
Default specified in Section 9.05, it will pay) to the Agent at its Payment
Office such additional amounts of cash, to be held as security for the
Borrower's reimbursement obligations for Drawings that may subsequently occur
under outstanding Letters of Credit hereunder, equal to the aggregate Stated
Amount of all Letters of Credit issued and then outstanding; and (vi) apply any
cash collateral as provided in Section 4.02.01(a).
SECTION 10. DEFINITIONS AND ACCOUNTING TERMS.
Section 10.01. Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such meanings to be equally applicable
to both the singular and plural forms of the terms defined):
"ABN AMRO" shall mean ABN AMRO Bank N.V. in its individual capacity.
"A Term Loan" shall have the meaning provided in Section 1.01.01(a).
"A Term Loan Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Annex I directly below the
column entitled "A Term Loan Commitment," as the same may be terminated or
reduced pursuant to Section 3.03 and/or Section 9.
"A Term Loan Facility" shall mean the Facility evidenced by the Total A
Term Loan Commitment.
"A Term Loan Maturity Date" shall mean the last Business Day in
November, 2003.
"A-Term Note" shall have the meaning provided in Section 1.05(a).
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"A TL Percentage" shall mean, at any time, (i) prior to the disbursement
of the A Term Loans, a fraction (expressed as a percentage) the numerator of
which is the amount of the Total A Term Loan Commitment at such time and the
denominator of which is the amount of the Total Term Loan Commitment at such
time and (ii) after the disbursement of the A Term Loan, a fraction (expressed
as a percentage) the numerator of which is equal to the sum of the aggregate
principal amount of all A Term Loans outstanding at such time and the
denominator of which is equal to the sum of the aggregate principal amount of
all Term Loans outstanding at such time.
"Additional Security Documents" shall have the meaning provided in
Section 7.09(b).
"Affiliate" shall mean, with respect to any Person, any other Person (i)
directly or indirectly controlling (including, but not limited to, all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person or (ii) that directly or indirectly owns more than 5%
of the voting securities of such Person. A Person shall be deemed to control a
corporation if such Person possesses, directly or indirectly, the power to
direct or cause the direction of the management and policies of, such
corporation, whether through the ownership of voting securities, by contract or
otherwise. Notwithstanding the foregoing, none of the Lenders or any of their
respective affiliates shall be deemed to be Affiliates of the Holdings, the
Borrower or any of their Subsidiaries.
"Agent" shall mean ABN AMRO Bank N.V., in its capacity as Agent for the
Lenders hereunder, and shall include any successor to the Agent appointed
pursuant to Section 11.09.
"Agents" shall mean the Agent, the Documentation Agent, the Syndication
Agent and the Collateral Agent.
"Agreement" shall mean this Credit Agreement, as modified, supplemented,
amended, restated, extended, renewed or replaced from time to time.
"Applicable Base Rate Margin" shall mean initially (i) in the case of A
Term Loans, Revolving Loans and Swingline Loans, 1.25%, (ii) in the case of B
Term Loans, 1.625% and (iii) in the case of C Term Loans, 1.875%; provided that
from and after the day that is six months after the Closing Date, the Applicable
Base Rate Margin will be determined pursuant to the Pricing Grid.
"Applicable Commitment Fee Rate" shall mean initially 0.50% and from and
after the day that is six months after the Closing Date, the Applicable
Commitment Fee Rate will be determined pursuant to the Pricing Grid.
"Applicable Eurodollar Rate Margin" shall mean initially (i) in the case
of A Term Loans and Revolving Loans, 2.25%, (ii) in the case of B Term Loans,
2.625% and (iii) in the case of C Term Loans, 2.875%; provided that from and
after the day that is six months after the Closing Date, the Applicable
Eurodollar Rate Margin will be determined pursuant to the Pricing Grid.
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"Approved Lender" shall have the meaning provided in the definition of
"Cash Equivalents."
"Asset Sale" shall mean any sale, transfer or other disposition by the
Borrower or any of its Subsidiaries to any Person other than the Borrower or any
Wholly-Owned Subsidiary of the Borrower of any asset (including, without
limitation, any capital stock or other securities of another Person, but
excluding the sale by such Person of its own capital stock) of the Borrower or
any such Subsidiary other than (i) sales, transfers or other dispositions of
inventory made in the ordinary course of business and (ii) sales of assets
pursuant to Sections 8.02(ii), (iii), (v) and (vii).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit N (appropriately
completed).
"Authorized Officer" shall mean any officer of the Borrower designated
as such in writing to the Agent by the Borrower, in each case to the extent
reasonably acceptable to the Agent.
"B Lenders" shall have the meaning provided in Section 4.02.03.
"B Term Loan" shall have the meaning provided in Section 1.01.01(b).
"B Term Loan Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Annex I directly below the
column entitled "B Term Loan Commitment," as the same may be terminated pursuant
to Section 3.03 and/or Section 9.
"B Term Loan Facility" shall mean the Facility evidenced by the Total B
Term Loan Commitment.
"B Term Loan Maturity Date" shall mean the last Business Day in August,
2005.
"B-Term Note" shall have the meaning provided in Section 1.05(a).
"B TL Percentage" shall mean, at any time, (i) prior to the disbursement
of the B Term Loans, a fraction (expressed as a percentage) the numerator of
which is the amount of the Total B Term Loan Commitment at such time and the
denominator of which is the amount of the Total Term Loan Commitment at such
time and (ii) after the disbursement of the B Term Loan, a fraction (expressed
as a percentage) the numerator of which is equal to the aggregate principal
amount of all B Term Loans outstanding at such time and the denominator of which
is equal to the sum of the aggregate principal amount of all Term Loans
outstanding at such time.
"Bankruptcy Code" shall have the meaning provided in Section 9.05.
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"Base Rate" at any time shall mean the higher of (x) the rate which is
1/2 of 1% in excess of the Federal Funds Rate and (y) the Prime Rate as in
effect at such time.
"Base Rate Loans" shall mean (i) any Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto and (ii)
all Swingline Loans.
"Borrower" shall mean E-P Acquisition, Inc., a Delaware corporation, and
its successor Eagle-Picher Industries, Inc., an Ohio corporation, as survivor of
the Merger.
"Borrower Stock Release Date" shall mean the date of receipt by the
Agent of a written request by the Borrower to release the pledge of all of the
Borrower's capital stock pledged pursuant to the Holdings Pledge Agreement
following the date on which the Leverage Ratio is less than 3.0 to 1.0.
"Borrowing" shall mean (i) the incurrence by the Borrower of one Type of
Loan pursuant to a single Facility from all of the Lenders having Commitments
with respect to such Facility on a pro rata basis on a given date (or resulting
from a conversion or conversions on such date) having in the case of Eurodollar
Rate Loans the same Interest Period, provided that Base Rate Loans incurred
pursuant to Section 1.10(b) shall be considered part of the related Borrowing of
Eurodollar Rate Loans and (ii) the borrowing by the Borrower of Swingline Loans
from ABN AMRO on a given date.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York City or City of Chicago a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Rate Loans, any day
which is a Business Day described in clause (i) above and which is also a day
for trading by and between banks in U.S. Dollar deposits in the London interbank
Eurodollar market.
"CERCLA" shall mean Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"C Lenders" shall have the meaning provided in Section 4.02.03.
"C Term Loan" shall have the meaning provided in Section 1.01.01(c).
"C Term Loan Commitment" shall mean, with respect to each Lender, the
amount set forth opposite such Lender's name in Annex I directly below the
column entitled "C Term Loan Commitment," as the same may be terminated pursuant
to Section 3.03 and/or Section 9.
"C Term Loan Facility" shall mean the Facility evidenced by the Total C
Term Loan Commitment.
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"C Term Loan Maturity Date" shall mean the last Business Day in August,
2006.
"C-Term Note" shall have the meaning provided in Section 1.05(a).
"C TL Percentage" shall mean, at any time, (i) prior to the disbursement
of the C Term Loans, a fraction (expressed as a percentage) the numerator of
which is the amount of the Total C Term Loan Commitment at such time and the
denominator of which is the amount of the Total Term Loan Commitment at such
time and (ii) after the disbursement of the C Term Loan, a fraction (expressed
as a percentage) the numerator of which is equal to the aggregate principal
amount of all C Term Loans outstanding at such time and the denominator of which
is equal to the sum of the aggregate principal amount of all Term Loans
outstanding at such time.
"Capital Expenditures" shall mean any expenditure for fixed or capital
assets (including, without limitation, expenditures for maintenance and repairs
which are capitalized in accordance with GAAP and Capitalized Lease
Obligations).
"Capital Lease," as applied to any Person, shall mean any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"Capitalized Lease Obligations" shall mean all obligations under Capital
Leases of the Borrower or any of its Subsidiaries in each case taken at the
amount thereof accounted for as liabilities in accordance with GAAP.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) from the date of acquisition having
maturities of not more than one year, (ii) U.S. Dollar denominated time deposits
and certificates of deposit of (x) any Lender or (y) any bank, or holding
company of such bank, whose short-term commercial paper rating or that of its
parent company from S&P is at least A-1 or the equivalent thereof or from
Moody's is at least P-1 or the equivalent thereof (any such bank or Lender, an
"Approved Lender"), in each case with maturities of not more than one year from
the date of acquisition, (iii) commercial paper issued by any Approved Lender or
by the parent company of any Approved Lender and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term commercial
paper rating of at least A-1 or the equivalent thereof by S&P or at least P-1 or
the equivalent thereof by Moody's, or guaranteed by any industrial company with
a long term unsecured debt rating of at least A or A2, or the equivalent of each
thereof, from S&P or Moody's, as the case may be, and in each case maturing
within one year after the date of acquisition, (iv) marketable direct
obligations issued by any state of the United States of America or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings obtainable from either S&P or
Moody's, (v) investments in money market funds substantially all the assets of
which are comprised of securities of the types described in
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clauses (i) through (iv) above and (vi) time deposits and certificates of
deposit of any commercial bank of recognized standing having capital and surplus
in excess of the local currency equivalent of $100,000,000 incorporated in a
country where the Borrower has one or more locally operating Subsidiaries, and
that is, as of the date hereof, providing banking services to the Borrower or
any of its Subsidiaries.
"Cash Proceeds" shall mean, with respect to any Asset Sale, the
aggregate cash payments (including any cash received by way of deferred payment,
but only as and when so received) received by the Borrower and/or any of its
Subsidiaries from such Asset Sale.
"Change of Control" shall mean (x) (i) any "Person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act), excluding
Holdings and any employee benefit or stock ownership plan of the Borrower, is or
shall become the "beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5
under the Exchange Act), directly or indirectly, of 10% or more on a fully
diluted basis of the voting and economic interests of the Borrower or shall have
the right to elect a majority of the directors of the Borrower or (ii) the Board
of Directors of the Borrower shall cease to consist of a majority of Continuing
Directors and (y) the occurrence of any Change of Control (as defined in the
Senior Subordinated Note Documents) or any Change of Control as defined in the
Certificate of Designation for the Holdings Preferred Stock or in the Exchange
Debenture Documents.
"Closing Date" shall mean the day (which shall be a Business Day)
specified by the Borrower on which all of the conditions specified in Section 5
as conditions precedent to the Closing Date are fulfilled or waived pursuant to
this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provisions of the Code amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all properties, rights, interests and privileges
from time to time subject to the Liens and security interests granted to the
Collateral Agent for the benefit of the Secured Creditors by the Security
Documents.
"Collateral Agent" shall mean the Agent (or any replacement thereof with
the consent of the Required Lenders) acting as collateral agent for the Secured
Creditors.
"Commitment" shall mean, with respect to each Lender, such Lender's A
Term Loan Commitment, B Term Loan Commitment, C Term Loan Commitment and/or
Revolving Credit Commitment.
"Commitment Fee" shall have the meaning provided in Section 3.01(a)
"Confidential Information Memorandum" shall mean the Confidential
Information Memorandum dated January 1998 relating to the Facilities.
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"Confirmation Order" shall mean the order of the United States District
court for the Southern District of Ohio, Western Division, confirming the Plan
of Reorganization.
"Consolidated Current Assets" shall mean, at any time, the current
assets (other than cash, Cash Equivalents and deferred income taxes to the
extent included in current assets) of the Borrower and its Subsidiaries at such
time determined on a consolidated basis.
"Consolidated Current Liabilities" shall mean, at any time, the current
liabilities of the Borrower and its Subsidiaries determined on a consolidated
basis, but excluding deferred income taxes and the current portion of and
accrued but unpaid interest on any Indebtedness under this Agreement and any
other long-term Indebtedness which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, all Indebtedness of the
Borrower and its Subsidiaries determined on a consolidated basis which would be
reflected on a consolidated balance sheet at such time in accordance with GAAP.
"Consolidated EBIT" shall mean, for any period, Consolidated Net Income
of the Borrower and its Subsidiaries, before total interest expense (whether
cash or non-cash) and provisions for taxes based on income, and determined (i)
without giving effect to any extraordinary gains or losses but with giving
effect to gains or losses from sales of assets sold in the ordinary course of
business, (ii) without giving effect to any impact from the LIFO method of
inventory accounting, (iii) without giving effect to any noncash charge (other
than depreciation or amortization) deducted in determining Consolidated Net
Income for such period, including non-cash charges related to the issuance by
the Borrower or any of its Subsidiaries of stock, warrants or options to
management (or any exercise of any such warrants or options), (iv) without
giving effect to any compensation expense incurred in connection with the Merger
and (v) without giving effect to nonrecurring charges, noncash charges or
documented cash charges, in each case deducted in determining Consolidated Net
Income for such period and related to the Transaction (including for example,
one-time expenses associated with the integration of corporate systems,
temporary service fees and training, moving, relocation and other costs in
connection with the Merger), in each case, to the extent such amounts have not
been added back in determining Consolidated Net Income.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all depreciation expense and
amortization expense that were deducted in determining Consolidated EBIT for
such period.
"Consolidated Fixed Charges" shall mean, for any period, the sum of (i)
the aggregate amount of payments scheduled to be made by the Borrower and its
Subsidiaries during such period in respect of principal on all Indebtedness
(whether at maturity, as a result of mandatory sinking fund redemption,
mandatory prepayment, acceleration or otherwise), on a consolidated basis, plus
(ii) Consolidated Interest Expense for such period, plus (iii) taxes to the
extent paid or payable in cash during such period plus (iv) any dividends paid
by the Borrower pursuant to Section 8.03(iii) during such period.
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"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including amounts properly attributable to interest with
respect to capital leases in accordance with GAAP and amortization of debt
discount and debt issuance costs) of the Borrower and its Subsidiaries on a
consolidated basis for such period with respect to all outstanding Indebtedness
of the Borrower and its Subsidiaries, including, without limitation, all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers' acceptance financing and net costs or benefits under
Interest Rate Protection Agreements, but excluding, however, amortization of
original issue discount, any payments made to obtain any Interest Rate
Protection Agreement, deferred financing costs and any interest expense on
deferred compensation arrangements and any other non-cash interest to the extent
included in total interest expense.
"Consolidated Net Income" shall mean, for any period, the consolidated
net income (or loss) of the Borrower and its Subsidiaries for such period;
provided that, (i) to the extent deducted in determining consolidated net income
for such period and not otherwise added back, the amount of expenses in respect
of Specified Transaction Payments attributable to such period shall be added
back in determining Consolidated Net Income for such period, and (ii) to the
extent not otherwise deducted in determining such consolidated net income for
any period, all payments made to Holdings pursuant to the Tax Sharing Agreement
or otherwise in respect of taxes for such period shall be deducted from the
consolidated net income of the Borrower and (iii) any non-cash loss during the
Borrower's fiscal year ending on November 30, 1998 reflecting the decrease in
deferred tax assets resulting from the Merger and transactions consummated in
connection therewith shall be excluded in determining consolidated net income.
"Contingent Obligation" shall mean, without duplication, as to any
Person, any obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations ("primary obligations") of
any other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, any obligation of such Person,
whether or not contingent, (i) to purchase any such primary obligation or any
property constituting direct or indirect security therefor, (ii) to advance or
supply funds (x) for the purchase or payment of any such primary obligation or
(y) to maintain working capital or equity capital of the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation or (iv) otherwise to assure or hold
harmless the holder of such primary obligation against loss in respect thereof;
provided, however, that the term Contingent Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Contingent Obligation shall be deemed to be an
amount equal to the stated or determinable amount of the primary obligation in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder) as determined by such
Person in good faith.
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"Continuing Directors" shall mean the directors of the Borrower on the
Closing Date after giving effect to the Transaction and each other director, if
such director's nomination for election to the Board of Directors of the
Borrower is recommended by a majority of the then Continuing Directors.
"Credit Documents" shall mean this Agreement, and once executed and
delivered pursuant to the terms of this Agreement, each Note, each Letter of
Credit Request, each Notice of Borrowing, each Notice of Conversion, each Letter
of Credit, the Guaranties and each Security Document.
"Credit Event" shall mean (i) the occurrence of the Closing Date and
(ii) the making of any Loan (other than a Loan made pursuant to a Mandatory
Borrowing) or the issuance of any Letter of Credit or the deemed issuance of any
Existing Letter of Credit under this Agreement.
"Credit Party" shall mean, the Borrower and each Guarantor.
"Creditors" shall mean and include the Agent, each Lender and each Other
Creditor.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" shall mean any Lender with respect to which a Lender
Default is in effect.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid any dividend or returned any capital to its stockholders or
authorized or made any other distribution, payment or delivery of property
(other than common stock of the Borrower) or cash to its stockholders as such,
or redeemed, retired, purchased, or otherwise acquired, directly or indirectly,
for consideration, any shares of any class of its capital stock outstanding on
or after the Closing Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock of such Person outstanding on or after the Closing Date (or any options or
warrants issued by such Person with respect to its capital stock). Without
limiting the foregoing, "Dividends" with respect to any Person shall also
include all payments made or required to be made by such Person with respect to
any stock appreciation rights plans, equity incentive or achievement plans or
any similar plans or the setting aside of any funds for the foregoing purposes.
"Documentation Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Documents" shall mean the Credit Documents, the Merger Documents and
the Senior Subordinated Note Documents.
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"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States (expressed in dollars).
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
incorporated or organized in the United States or any State or territory
thereof.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Early Mandatory Redemption Event" shall mean any Early Mandatory
Redemption Event as defined in the Certificate of Designation of Holdings with
respect to Holdings Preferred Stock.
"Effective Date" shall have the meaning provided in Section 12.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act).
"Environmental Claims" shall mean any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigations or proceedings relating in any way
to any violation (or alleged violation) by the Borrower or any of its
Subsidiaries under any Environmental Law (hereafter "Claims") or any permit
issued under any such law, including, without limitation, (a) any and all Claims
by governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health (other than product liability claims),
safety or the environment.
"Environmental Law" shall mean any federal, state or local statute, law,
rule, regulation, ordinance, code, policy or rule of common law now or hereafter
in effect and in each case as amended, and any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent,
decree or judgment, relating to the environment, public health and safety,
employee health and safety, or Hazardous Materials.
"EPAI" shall mean E-P Acquisition, Inc., a Delaware corporation.
"EPII" shall have the meaning provided in the second "Whereas" clause of
this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
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"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower or any of its Subsidiaries would be
deemed to be a "single employer" (i) within the meaning of Section 414(b), (c),
(m) and (o) of the Code or (ii) as a result of the Borrower or any of its
Subsidiaries being or having been a general partner of such person.
"Eurodollar Rate" shall mean for an Interest Period for a Borrowing of
Eurodollar Loans, (I)(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
necessary, to the nearest 1/100% of 1%) at which deposits in U.S. Dollars in
immediately available funds are offered to the Agent at 11:00 a.m. (London,
England time) two (2) Business Days before the beginning of such Interest Period
by three (3) or more major banks in the interbank eurodollar market selected by
the Agent for delivery on the first day of and for a period equal to such
Interest Period and in an amount equal or comparable to the principal amount of
the Eurodollar Rate Loan schedule to be made by the Agent as part of such
Borrowing, divided (and rounded upwards to the nearest 1/100 of 1%) by (II) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category of
liabilities under Regulation D).
"Eurodollar Rate Loan" shall mean any Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"Event of Default" shall have the meaning provided in Section 9.
"Excess Cash Flow" shall mean, for any period cash flows from operating
activities, as defined by GAAP, minus an amount equal to the sum of (i) all
Capital Expenditures (other than Capital Expenditures made pursuant to Section
8.07(c) made during such period that are not financed by Indebtedness (including
Capitalized Lease Obligations but excluding Loans hereunder), (ii) the aggregate
principal (and interest to the extent not deducted in the calculation of cash
flows) amount of permanent principal payments of Indebtedness for borrowed money
of the Borrower and its Subsidiaries (other than repayments of Loans, provided
that repayments of Loans shall be deducted in determining Excess Cash Flow if
such repayments were (x) required as a result of a Scheduled A Repayment, a
Scheduled B Repayment or a Scheduled C Repayment under Section 4.02.01(b) or (y)
made as a voluntary prepayment with internally generated funds (but in the case
of a voluntary prepayment of Revolving Loans, only to the extent accompanied by
a voluntary reduction to the Total Revolving Credit Commitment)), and (iii) the
amount of unusual or non-recurring charges that decreased Working Capital during
such period.
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"Excess Cash Flow Period" shall mean each fiscal year of the Borrower
commencing with the fiscal year ending November 30, 1998.
"Excess Cash Payment Date" shall mean the date occurring 90 days after
the last day of a fiscal year of the Borrower (beginning with its fiscal year
ending November 30, 1998).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"Exchange Debentures" shall mean the 11 3/4% Exchange Debentures due
2008 of Holdings.
"Exchange Debenture Documents" shall mean and include each of the
Exchange Debenture Indenture and the Exchange Debentures, as the same may be
entered into, modified, supplemented or amended from time to time pursuant to
the terms hereof and thereof.
"Exchange Debenture Indenture" shall mean the Indenture between Holdings
and a banking corporation chosen by Holdings to act as trustee thereunder in
substantially the form described in the Offering Memorandum dated February 20,
1998 with respect thereto and as approved by Holdings and on file with the
office of the Secretary of Holdings on the Closing Date, as the same may be
entered into, modified, supplemented or amended from time to time in
accordance with the terms hereof and thereof.
"Existing Indebtedness" shall have the meaning provided in Section 6.19.
"Existing Indebtedness Agreements" shall have the meaning provided in
Section 5.01(j)(i).
"Existing Letters of Credit" shall mean each letter of credit set forth
in Schedule 2.01.
"Facility" shall mean any of the credit facilities established under
this Agreement, i.e., the A Term Loan Facility, the B Term Loan Facility, the C
Term Loan Facility or the Revolving Credit Facility.
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate (equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
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"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"First Tier Foreign Subsidiary" shall mean, at any date of
determination, each Foreign Subsidiary in which any one or more of the Borrower
and its Domestic Subsidiaries owns directly more than 50%, in the aggregate, of
the voting stock of such Subsidiary.
"Fixed Charge Coverage Ratio" shall mean, at any time, the ratio of
Consolidated EBITDA for the Test Period last ended to Consolidated Fixed Charges
for the Test Period last ended.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Borrower or any one or
more of its Subsidiaries primarily for the benefit of employees of the Borrower
or such Subsidiaries residing outside the United States of America, which plan,
fund or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower other
than a Domestic Subsidiary.
"GAAP" shall mean generally accepted accounting principles and practices
in the United States of America as promulgated by Financial Accounting Standards
Board and as in effect from time to time and consistently applied; it being
understood and agreed that determinations in accordance with GAAP for purposes
of Section 8, including defined terms as used therein, are subject (to the
extent provided therein) to Section 12.07(a).
"Granaria Holdings" means Granaria Holdings N.V., a Dutch corporation,
and its successors.
"Guaranteed Creditors" shall mean and include each of the Agent, the
Collateral Agent, the Lenders and each party (other than any Credit Party) party
to an Interest Rate Protection Agreement to the extent that such party
constitutes a Secured Creditor under the Security Documents.
"Guaranteed Obligations" shall mean (i) the principal and interest on
each Note issued by the Borrower to each Lender, and Loans made, under this
Agreement and all reimbursement obligations and Unpaid Drawings with respect to
Letters of Credit, together with all the other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities,
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fees and interest thereon) of the Borrower to such Lender, the Agents now
existing or hereafter incurred under, arising out of or in connection with this
Agreement or any other Credit Document and the due performance of and compliance
with, by any Credit Party, all the terms, conditions and agreements contained in
each of the Credit Documents to which it is a party, (ii) all obligations
(including obligations which, but for the automatic stay under Section 362(a) of
the Bankruptcy Code, would become due) and liabilities of the Borrower owing
under any Interest Rate Protection Agreement entered into by the Borrower with
any Lender or any affiliate thereof (even if such Lender subsequently ceases to
be a Lender under this Agreement for any reason) so long as such Lender or
affiliate participates in such Interest Rate Protection Agreement, and their
subsequent assigns, if any, whether now in existence or hereafter arising, and
the due performance of and compliance with all terms, conditions and agreements
contained therein and (iii) any other obligations or liabilities of any Credit
Party under the Credit Documents guaranteed under the Guaranties.
"Guarantor" shall mean each of Holdings and the Subsidiary Guarantors.
"Guaranty" shall mean each of the Holdings Guaranty and the Subsidiary
Guaranty (collectively, the "Guaranties").
"Hazardous Materials" shall mean (a) any petrochemical or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; and (b) any chemicals, materials or substances defined as or included
in the definition of "hazardous substances," "hazardous wastes," "hazardous
materials," "restricted hazardous materials," "extremely hazardous wastes,"
"restrictive hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar meaning and regulatory
effect under any applicable Environmental Law.
"Holdings" shall mean Eagle-Picher Holdings, Inc., a Delaware
corporation.
"Holdings Common Stock" shall mean common stock of Holdings.
"Holdings Guaranty" shall have the meaning provided in Section
5.01(h)(i).
"Holdings Pledge Agreement" shall have the meaning provided in Section
5.01(h)(ii).
"Holdings Preferred Stock" shall mean 11 3/4% Cumulative Redeemable
Exchangeable Preferred Stock of Holdings.
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"Immaterial Subsidiary" shall mean (i) any Subsidiary of the Borrower
which does not own assets in excess of $50,000, (ii) any Name Holder Subsidiary
(iii) Eagle-Picher, Inc., a Virgin Island foreign sales corporation; provided,
however, that Immaterial Subsidiaries shall not include any Subsidiary of the
Borrower which is a guarantor of Indebtedness with respect to the Senior
Subordinated Notes.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, but excluding current trade accounts payable incurred in the ordinary
course of business, (ii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person, (iv) the aggregate amount required
to be capitalized under leases under which such Person is the lessee, (v) all
obligations of such Person to pay a specified purchase price for goods or
services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person and (vii) all
obligations under any Interest Rate Protection Agreement.
"Intercompany Loan" shall have the meaning provided in Section 8.05.
"Interest Coverage Ratio" for any period shall mean the ratio of
Consolidated EBITDA to Consolidated Interest Expense for such period.
"Interest Determination Date" shall mean, with respect to any Eurodollar
Rate Loan, the second Business Day prior to the commencement of any Interest
Period relating to such Eurodollar Rate Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement, interest rate futures agreement or other similar agreement or
arrangement.
"Judgment Currency" shall have the meaning provided in Section 12.17(a).
"Judgment Currency Conversion Date" shall have the meaning provided in
Section 12.17(a).
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"L/C Supportable Indebtedness" shall mean (i) obligations of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business
with respect to insurance obligations and workers' compensation, surety bonds
and other similar statutory obligations and (ii) such other obligations of the
Borrower or any of its Subsidiaries as are reasonably acceptable to the Agent
and the Letter of Credit Issuer and otherwise permitted to exist pursuant to the
terms of this Agreement.
"Lease Agreements" shall have the meaning provided in Section
5.01(j)(v).
"Leasehold" of any Person shall mean all of the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Lender" shall mean each financial institution listed in Annex I, as
well as any Person which becomes a "Lender" hereunder pursuant to Section 12.04.
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) or (ii) a Lender having notified in writing the Borrower
and/or the Agent that it does not intend to comply with its obligations under
Section 1.01.01 or 1.01.03 or Section 2.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(b).
"Letter of Credit Issuer" shall mean (i) with respect to any Existing
Letters of Credit, a bank identified as a letter of credit issuer for such
Existing Letter of Credit in Schedule 2.01; (ii) with respect to the Letters of
Credit issued on or after the Closing Date, ABN AMRO or any Revolving Lender
designated as such pursuant to the last paragraph of Section 2.01(a).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
aggregate amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated Debt
at such time to Consolidated EBITDA for the Test Period last ended.
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"LIBOR Index Rate" shall mean, for any Interest Period, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100% of 1%) for deposits
in U.S. Dollars for a period equal to such Interest Period, which appears on the
Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day two (2)
Business Days before the commencement of such Interest Period.
"Lien" shall mean any mortgage, pledge, hypothecation, security
interest, encumbrance, lien (statutory or other), or security agreement of any
kind or nature whatsoever (including, without limitation, any agreement to give
any of the foregoing any conditional sale or other title retention agreement any
financing or similar statement or notice filed under the UCC or any similar
recording or notice and any lease having substantially the same effect as any of
the foregoing and any assignment or deposit arrangement in the nature of a
security device).
"Loan" shall mean each and every Loan made by any Lender hereunder,
including A Term Loans, B Term Loans, C Term Loans, Revolving Loans or Swingline
Loans.
"Majority Lenders" of any Facility shall mean those Non-Defaulting
Lenders which would constitute the Required Lenders under, and as defined in,
this Agreement if all outstanding Obligations of the other Facilities under this
Agreement were repaid in full and all Commitments with respect thereto were
terminated.
"Management Agreements" shall have the meaning provided in Section
5.01(j)(iii).
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01.03.
"Mandatory Redemption Event" shall mean "Mandatory Redemption Event" as
defined in Holdings' certificate of designation with respect to the Holdings
Preferred Stock.
"Margin Adjustment Period" shall mean on a date (a) with respect to the
first such period, the period which shall commence 6 months from the Closing
Date and which shall end on the earlier of (i) the date of actual delivery of
the next financial statements pursuant to Section 7.01(b)(i) or (c)(i), as the
case may be, and (ii) the latest date on which the next financial statements are
required to be delivered pursuant to Section 7.01(b)(i) or (c)(i), as the case
may be and (b) thereafter, with respect to each succeeding period, each period
which shall commence on a date on which the financial statements are delivered
pursuant to Section 7.01(b)(i) or (c)(i), as the case may be, and which shall
end on the earlier of (i) the date of actual delivery of the next financial
statements pursuant to Section 7.01(b)(i) or (c)(i), as the case may be, and
(ii) the latest date on which the next financial statements are required to be
delivered pursuant to Section 7.01(b)(i) or (c)(i), as the case may be.
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"Margin Stock" shall have the meaning provided in Regulation U.
"Material Adverse Effect" shall mean a material adverse effect on the
business, properties, assets, liabilities or financial condition of the Borrower
or of the Borrower and its Subsidiaries taken as a whole.
"Maturity Date" with respect to any Facility shall mean either the A
Term Loan Maturity Date, the B Term Loan Maturity Date, the C Term Loan Maturity
Date or the Revolving Loan Maturity Date, as the case may be.
"Maximum Swingline Amount" shall mean $10,000,000.
"Merger" shall mean the merger of EPAI with and into EPII pursuant to
the Merger Agreement.
"Merger Agreement" shall mean the Merger Agreement dated as of December
23, 1997 among the PI Trust, EPII, the Holdings and EPAI.
"Merger Documents" shall mean the Merger Agreement and all other
agreements and documents relating to the Merger.
"Minimum Borrowing Amount" shall mean (i) for Term Loans, $5,000,000;
(ii) for Revolving Loans, $2,500,000; and (iii) for Swingline Loans, $100,000
and in each case integral multiples thereof.
"Moody's" shall mean Moody's Investors Service, Inc.
"Mortgage" shall have the meaning provided in Section 5.01(i)(A).
"Mortgage Policies" shall have the meaning provided in Section
5.01(i)(B).
"Mortgaged Properties" shall mean and include the Real Properties owned
or leased by the Borrower and its Domestic Subsidiaries to the extent designated
as such on Schedule 6.17.
"Multiemployer Plan" shall mean any multiemployer plan (within the
meaning of section 4001(a)(3) of ERISA) to which the Borrower or any of its
Subsidiaries has any liability or contributes (or has at any time within the
past five years contributed to or had any liability to contribute).
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"Name Holder Subsidiary" shall mean any Subsidiary of the Borrower or
any of its Subsidiaries incorporated and existing solely for the purpose of
reserving the corporate name of such Subsidiary and which does not conduct any
business or hold any assets; provided that such Subsidiary may own another Name
Holder Subsidiary.
"Net Cash Proceeds" shall mean, with respect to any Asset Sale, the Cash
Proceeds resulting therefrom net of (a) reasonable cash expenses of sale
(including brokerage fees, if any, transfer taxes and payment of principal,
premium and interest of Indebtedness other than the Loans required to be repaid
as a result of such Asset Sale) and (b) incremental income taxes paid or payable
as a result thereof.
"1996 Credit Agreement" shall mean $60,000,000 Revolving Credit Facility
Credit Agreement (dated as of November 29, 1996) by and among EPII, certain of
its subsidiaries, the bank's party thereto and PNC Bank, Ohio, National
Association, as agent, as amended.
"Non-Defaulting Lender" shall mean each Lender other than a Defaulting
Lender.
"Non-Recourse Purchase Money Indebtedness" shall mean Indebtedness of
the Borrower or any of its Subsidiaries incurred (a) to finance the purchase of
any assets of the Borrower or any of its Subsidiaries within 90 days of such
purchase, (b) to the extent the amount of Indebtedness thereunder does not
exceed 100% of the purchase cost of such assets, (c) to the extent the purchase
cost of such assets is or should be included in "additions to property, plant
and equipment" in accordance with GAAP, and (d) to the extent that such
Indebtedness is non-recourse to the Borrower or any of its Subsidiaries or any
of their respective assets other than the assets so purchased.
"Non-Recourse Purchase Money Security Interest" shall mean a Lien on
assets of the Borrower or any of its subsidiaries to secure Non-Recourse
Purchase Money Indebtedness with which such assets were purchased.
"Non-Voting Equity" shall mean issued and outstanding shares of each
class of capital stock or other ownership interest not entitled to vote (within
the meaning of Tres. Reg., Section 1.956-2(c)(2).
"Note" shall mean each A Term Note, each B Term Note, each C Term Note,
each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section
1.03(a).
"Notice of Conversion" shall have the meaning provided in Section 1.06.
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"Notice Office" shall mean the office of the Agent located at 1325
Avenue of the Americas, New York, New York 10019, Attention: Agency Services,
or such other office as the Agent may hereafter designate in writing as such to
the other parties hereto.
"Obligation Currency" shall have the meaning provided in Section
12.17(a).
"Obligations" shall mean all amounts, direct or indirect, contingent or
absolute, of every type or description, and at any time existing, owing to the
Agent or any Lender pursuant to the terms of this Agreement or any other Credit
Document.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at
1325 Avenue of the Americas, New York, New York 10019, or such other office as
the Agent may hereafter designate in writing as such to the other parties
hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA or any successor thereto.
"Permanent Injunction" shall mean the order included in the Confirmation
Order permanently staying, restraining and enjoining any entity from taking any
actions with respect to asbestos or lead personal injury claims against EPII and
certain of its Subsidiaries designated as "Debtors" in such order.
"Permitted Encumbrances" shall mean (i) those liens, encumbrances and
other matters affecting title to any Mortgaged Property listed in the Mortgage
Policies in respect thereof as of the Closing Date and found reasonably
acceptable by the Collateral Agent, (ii) as to any particular Mortgaged Property
at any time, such additional easements, encroachments, covenants, rights of way,
minor defects, irregularities or encumbrances on title which do not, in the
reasonable opinion of the Collateral Agent, materially impair such Mortgaged
Property for the purpose for which it is held by the mortgagor thereof, or the
lien held by the Collateral Agent for the benefit of Secured Creditors, (iii)
applicable laws, ordinances, regulations, including without limitation, zoning
and other municipal ordinances which are not violated in any material respect by
the existing improvements and the present use made by the mortgagor thereof of
the Premises (as defined in the respective Mortgage), (iv) general real estate
taxes and assessments not yet delinquent, and (v) such other items as the Agent
may consent to.
"Permitted Holdings Transactions" means (i) the execution, delivery and
performance by Holdings of its obligations under, (x) any guarantees by Holdings
of Obligations of the Borrower and/or its Subsidiaries with respect to this
Agreement and/or the Notes and obligations of the
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Borrowers under Interest Rate Protection Agreements and the pledge of capital
stock of the Borrower as collateral for its obligations under any such
guarantee, and the guarantee by Holdings of any other Indebtedness of the
Borrower and/or its Subsidiaries which such Indebtedness is permitted to be
incurred under this Agreement, (y) the Tax Sharing Agreement (ii) the
establishment of a wholly-owned Subsidiary (other than a Subsidiary of the
Company) for use as a vehicle for the consummation of an acquisition where all
or a substantial part of the consideration thereof is common stock of Holdings,
provided that (A) any such Subsidiary shall become a direct or indirect
Wholly-Owned Subsidiary of the Borrower within 60 days after the consummation of
such acquisition and (B) immediately after giving effect to such acquisition, no
Mandatory Redemption Event, Default or Event of Default shall have occurred,
(iii) any investment in the Borrower, (iv) payments with respect to the Holdings
Preferred Stock and the Exchange Debenture and any Restricted Payment that is
permitted in accordance with the "Limitations on Restricted Payments" covenant,
and (v) the performance of ministerial activities and payment of taxes and
administrative fees necessary for the Borrower and its Subsidiaries.
"Permitted Liens" shall have the meaning provided in Section 8.01.
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company association, trust or other enterprise or
any government or political subdivision or any agency, department or
instrumentality thereof.
"PI Trust" shall mean the personal injury trust established pursuant to
the Plan of Reorganization.
"Plan" shall mean any multiemployer or single-employer plan (as each
such term is defined in Section 4001 of ERISA) subject to Title IV of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute to) the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate, and each such plan for the five-year period immediately following the
latest date on which the Borrower or a Subsidiary of the Borrower or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Plan of Reorganization" shall mean the plan or reorganization relating
to EPII issued by the United States Bankruptcy Court, Southern District of Ohio,
Western Division.
"Pledge Agreement" shall have the meaning provided in Section
5.01(h)(ii).
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in
the Pledge Agreement.
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"Pledged Securities" shall mean all the Pledged Securities as defined in
the Pledge Agreement.
"Pricing Grid" shall mean the pricing grid attached hereto as Annex II.
"Prime Rate" shall mean the rate which ABN AMRO announces from time to
time as its prime lending rate for U.S. Dollar loans, the Prime Rate to change
when and as such prime lending rate changes. The Prime Rate is a reference rate
and does not necessarily represent the lowest or best rate actually charged to
any customer. ABN AMRO may make commercial loans or other loans at rates of
interest at, above or below the Prime Rate.
"Projections" shall have the meaning provided in Section 5.01(m).
"RCRA" shall mean Resource Conservation and Recovery Act, as amended.
"Real Property" of any Person shall mean all of the right, title and
interest of such Person in and to land, improvements and fixtures, including
leaseholds.
"Recovery Event" shall mean the receipt by the Borrower or any of its
Subsidiaries of any insurance or condemnation proceeds payable (i) by reason of
theft, physical destruction or damage or any other similar event with respect to
any properties or assets of the Borrower or any of its Subsidiaries, (ii) by
reason of any condemnation, taking, seizing or similar event with respect to any
properties or assets of the Borrower or any of its Subsidiaries and (iii) under
any policy of insurance required to be maintained under Section 7.03.
"Register" shall have the meaning provided in Section 12.16.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or any portion thereof.
"Regulation T" shall mean Regulation T of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or any portion thereof.
"Regulation U" shall mean Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or a portion thereof.
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"Regulation X" shall mean Regulation X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor to all
or any portion thereof.
"Related Fund" shall mean, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Related Party Agreement" shall mean any management or advisory
agreements or other arrangements with any Affiliate of the Borrower or with any
other direct or indirect holder of more than 10% of any class of the Borrower's
or Holdings, capital stock (except, in any such case, Holdings, the Borrower or
any Subsidiary).
"Release" shall mean any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping, disposing or
migration into the environment.
"Replaced Lender" shall have the meaning provided in Section 1.13(a).
"Replacement Lender" shall have the meaning provided in Section 1.13(a).
"Reportable Event" shall mean an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Required Lenders" shall mean collectively Non-Defaulting Lenders the
sum of whose outstanding Term Loans, Term Loan Commitments, Revolving Credit
Commitments (or, if after the Total Revolving Credit Commitment has been
terminated, outstanding Revolving Loans and Revolving Percentages of outstanding
Swingline Loans and Letter of Credit Outstandings) constitute greater than 50%
of the sum of (i) the total outstanding Term Loans of Non-Defaulting Lenders, or
the Total Term Loan Commitment then in effect and (ii) the Total Revolving
Credit Commitment less the aggregate Revolving Credit Commitments of Defaulting
Lenders (or, if after the Total Revolving Credit Commitment has been terminated,
the total outstanding Revolving Loans of Non-Defaulting Lenders and the
aggregate Revolving Percentages of all Non-Defaulting Lenders of the total
outstanding Swingline Loans and Letter of Credit Outstandings at such time).
"Retiree Welfare Plan" shall mean any employee welfare benefit plan
(within the meaning of section 3(1) of ERISA) which provides benefits to retired
or other former employees of the Borrower or any of its Subsidiaries (other than
continuation of group health plan coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended, or pursuant to applicable state or
foreign law).
"Returns" shall have the meaning provided in Section 6.09.
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"Revolving Credit Commitment" shall mean, with respect to each Lender,
the amount set forth opposite such Lender's name in Annex I directly below the
column entitled "Revolving Credit Commitment," as the same may be reduced from
time to time pursuant to Section 3.02, Section 3.03 and/or Section 9.
"Revolving Credit Facility" shall mean the Facility evidenced by the
Total Revolving Credit Commitment.
"Revolving Lender" shall mean at any time each Lender with a Revolving
Credit Commitment or with outstanding Revolving Loans.
"Revolving Loan" shall have the meaning provided in Section 1.01.01(d).
"Revolving Loan Maturity Date" shall mean the last Business Day in
February, 2004.
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"Revolving Percentage" shall mean at any time for each Revolving Lender,
with respect to Revolving Loans, Swingline Loans and Letters of Credit, the
percentage obtained by dividing such Revolving Lender's Revolving Credit
Commitment by the Total Revolving Credit Commitment, provided that if the Total
Revolving Credit Commitment has been terminated, the Revolving Percentage of
each Revolving Lender shall be determined by dividing such Revolving Lender's
Revolving Credit Commitment immediately prior to such termination by the Total
Revolving Credit Commitment immediately prior to such termination.
"Rollover Amount" shall have the meaning provided in Section 8.07(b).
"Scheduled A Repayment" shall have the meaning provided in Section
4.02.01(b)(i).
"Scheduled B Repayment" shall have the meaning provided in Section
4.02.01(b)(ii).
"Scheduled C Repayment" shall have the meaning provided in Section
4.02.01(b)(iii).
"Scheduled Repayment" shall mean any Scheduled A Repayment, any
Scheduled B Repayment or any Scheduled C Repayment.
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
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"Secured Creditors" shall have the meaning provided in the Security
Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended and
the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section
5.01(h)(iii).
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Documents" shall mean and include the Security Agreement, each
Pledge Agreement, each Mortgage, and each Additional Security Document, if any.
"Senior Subordinated Note Documents" shall mean and include each of the
Senior Subordinated Note Indenture and the Senior Subordinated Notes, as the
same may be entered into, modified, supplemented or amended from time to time
pursuant to the terms hereof and thereof.
"Senior Subordinated Note Indenture" shall mean the Indenture dated as
of February 24, 1998 among the Borrower, the guarantors named therein and The
Bank of New York, as trustee, and any other Indentures that may be entered into
by and between the Borrower and the trustee for the holders of the Senior
Subordinated Notes or the purchaser of the Senior Subordinated Notes, as
applicable, in the form referred to in, or having the terms permitted by,
Section 8.04(vi), as the same may be entered into, modified, supplemented or
amended from time to time in accordance with the terms hereof and thereof.
"Senior Subordinated Notes" shall mean the 9 3/8% Senior Subordinated
Notes due 2008 of the Borrower and any other senior subordinated notes of the
Borrower that may be issued pursuant to a Senior Subordinated Note Indenture and
as the same may be modified, supplemented or amended from time to time pursuant
to the terms hereof and thereof.
"Shareholder's Agreements" shall have the meaning provided in Section
5.01(j)(ii).
"Specified Transaction Payments" means the following payments made to or
for the benefit of present or future officers and employees of the Borrower and
its Affiliates, or to Granaria Holdings and its Affiliates, in each case in
connection with the Transaction and on terms (including without limitation the
amount thereof) substantially as described in the Offering Memorandum, but only
to the extent that the aggregate amount thereof does not exceed $43.2 million
for all periods from and after the Closing Date: (i) payments to finance or
refinance the purchase by such officers and employees (or a trust for their
benefit) of capital stock of Holdings
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or its parent company, the grant or vesting of any award of such capital stock
and the payment by such officers and employees of income taxes in respect
thereof, (ii) stay put and other incentive bonuses, (iii) severance payments and
(iv) transaction fees paid to Granaria Holdings.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
McGraw Hill, Inc.
"Stated Amount" of each Letter of Credit shall mean at any time the
maximum amount available to be drawn thereunder at such time, determined without
regard to whether any conditions to drawing could then be met.
"Subsidiary" shall mean, as to any Person, (i) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower (other
than a Foreign Subsidiary except to the extent otherwise provided in Section
7.11) (except Immaterial Subsidiaries) that is or becomes a party to the
Subsidiary Guaranty.
"Subsidiary Guaranty" shall have the meaning provided in Section
5.01(h)(i)
"Swingline Expiry Date" shall mean the date which is two Business Days
prior to the Revolving Loan Maturity Date.
"Swingline Lender" shall mean ABN AMRO Bank N.V., in its capacity as a
Swingline Lender, or any Lender acting in replacement thereof with the consent
of the Borrower.
"Swingline Loan" shall have the meaning provided in Section 1.01.02.
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Syndication Agent" shall have the meaning provided in the first
paragraph of this Agreement.
"Tax Sharing Agreement" means any tax sharing agreement or arrangement
entered or to be entered into by Holdings, the Borrower and its Subsidiaries,
providing for payments by or to
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Holdings, the Borrower and its Subsidiaries that, in each case, are not in
excess of the tax liabilities that would have been payable by such Person on a
stand-alone basis.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Telerate Page 3750" shall mean the display designated as Page 3750 on
the Telerate Service (or such other page as may replace Page 3750 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 deposits).
"Term Loan" shall mean each A Term Loan, each B Term Loan and each C
Term Loan.
"Term Loan Commitment" shall mean, with respect to each Lender at any
time, the sum of the A Term Loan Commitment, the B Term Loan Commitment and the
C Term Loan Commitment of such Lender at such time.
"Test Period" shall mean the four consecutive fiscal quarters of the
Borrower then last ended, in each case taken as one accounting period.
"Title Insurers" shall have the meaning provided in Section 5.01(i)(B).
"Total A Term Loan Commitment" shall mean the sum of the A Term Loan
Commitments of each of the Lenders.
"Total B Term Loan Commitment" shall mean the sum of the B Term Loan
Commitments of each of the Lenders.
"Total C Term Loan Commitment" shall mean the sum of the C Term Loan
Commitment of each of the Lenders.
"Total Commitment" shall mean the sum of the Total Term Loan Commitment
and the Total Revolving Credit Commitment
"Total Revolving Credit Commitment" shall mean the sum of the Revolving
Credit Commitments of each of the Lenders.
"Total Term Loan Commitment" shall mean the sum of the Total A Term Loan
Commitment, the Total B Term Loan Commitment and the Total C Term Loan
Commitment.
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"Total Unutilized Revolving Credit Commitment" shall mean, at any time,
(i) the Total Revolving Credit Commitment at such time less (ii) the sum of the
aggregate principal amount of all Revolving Loans and Swingline Loans
outstanding at such time plus the Letter of Credit Outstandings at such time.
"Transaction" shall mean, collectively, (i) the Merger, (ii) the
incurrence of Loans and the issuance or deemed issuance of Letters of Credit on
the Closing Date, (iii) the issuance and sale of the Senior Subordinated Notes,
(iv) the refinancing on the Closing Date of substantially all Indebtedness of
the Borrower and its Subsidiaries (other than the Senior Subordinated Notes and
the Existing Indebtedness) and (v) the payment of fees and expenses in
connection with the foregoing.
"Type" shall mean any type of Loan determined with respect to the
interest option applicable thereto, i.e., a Base Rate Loan or a Eurodollar Rate
Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year exceeds the fair market value
of the assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 35, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of such Plan.
"United States" and "U.S." shall each mean the United States of America.
"Unpaid Drawings" shall have the meaning provided in Section 2.05(a).
"U.S. Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States of America.
"Unutilized Revolving Credit Commitment" of any Lender at any time shall
mean the Revolving Credit Commitment of such Lender at such time less the sum of
(i) the aggregate principal amount of Revolving Loans made by such Lender and
then outstanding and (ii) such Lender's Percentage of the Letter of Credit
Outstandings at such time.
"Voting Equity" shall mean the issued and outstanding shares of each
class of capital stock or other ownership interests entitled to vote (within the
meaning of Treas. Reg. Section 1.956-2(c)(2).
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"Waivable Mandatory Repayment" shall have the meaning provided in
Section 4.02.03.
"Wholly-Owned Domestic Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Domestic Subsidiary.
"Wholly-Owned Foreign Subsidiary" shall mean, as to any Person, any
Wholly-Owned Subsidiary of such Person which is a Foreign Subsidiary.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying shares
and/or other nominal amounts of shares required to be held other than by such
Person under applicable law) is at the time owned by such Person and/or one or
more Wholly-Owned Subsidiaries of such Person and (ii) any partnership,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
"Working Capital" shall mean the excess of Consolidated Current Assets
minus Consolidated Current Liabilities.
"Written" (whether lower or upper case) or "in writing" shall mean any
form of written communication or a communication by means of telex, facsimile
device, telegraph or cable.
Section 10.02. Principles of Construction. (a) All references to sections,
schedules and exhibits are to sections, schedules and exhibits in or to this
Agreement unless otherwise specified.
(b) All accounting terms not specifically defined herein shall be
construed in accordance with generally accepted accounting principles in the
United Sates in conformity with those used in the preparation of the financial
statements referred to in Section 6.05(a).
SECTION 11. THE AGENT.
Section 11.01. Appointment. The Lenders hereby designate ABN AMRO as Agent
to act as specified herein and in the other Credit Documents. Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Agent to take such action on
its behalf under the provisions of this Agreement, the other Credit Documents
and any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Agent by the terms hereof and
thereof and such other powers as are reasonably incidental thereto. The Agent
may perform any of its duties hereunder by or through its respective officers,
directors, agents, employees or affiliates.
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Section 11.02. Nature of Duties. Notwithstanding any provision to the
contrary elsewhere in this Agreement or in any other Credit Document, the Agent
shall not have any duties or responsibilities except those expressly set forth
in this Agreement and the other Credit Documents. Neither the Agent nor any of
its respective officers, directors, agents, employees or affiliates shall be
liable for any action taken or omitted by it or them hereunder or under any
other Credit Document or in connection herewith or therewith, unless caused by
its or their gross negligence or willful misconduct. The duties of the Agent
shall be mechanical and administrative in nature; the Agent shall not have by
reason of this Agreement or any other Credit Documents a fiduciary relationship
in respect of any Lender or the holder of any Note; and nothing in this
Agreement or any other Credit Document, expressed or implied, is intended to or
shall be so construed as to impose upon the Agent any obligations in respect of
this Agreement or any other Credit Document except as expressly set forth herein
or therein.
Section 11.03. Lack of Reliance on the Agent. Independently and without
reliance upon the Agent, each Lender and the holder of each Note, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of the Credit
Parties in connection with the making and the continuance of the Loans and the
taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of the Credit Parties and, except as expressly
provided in this Agreement, the Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Agent shall not be responsible to any Lender or the holder
of any Note for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of this
Agreement or any other Credit Document or the financial condition of the
Borrower and its Subsidiaries or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document, or the financial
condition of the Borrower and its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
Section 11.04. Certain Rights of the Agent. If the Agent shall request
instructions from the Required Lenders with respect to any act or action
(including failure to act) in connection with the Agreement or any Credit
Document, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from the
Required Lenders; and the Agent shall not incur liability to any Person by
reason of so refraining. Without limiting the foregoing, no Lender or the holder
of any Note shall have any right of action whatsoever against the Agent as a
result of the Agent acting or refraining from acting hereunder or under any
other Credit Document in accordance with the instructions of the Required
Lenders.
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Section 11.05. Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Agent believed to be the proper Person, and, without respect
to all legal matters pertaining to this Agreement and any other Credit Document
and its duties hereunder and thereunder, upon advice of counsel selected by the
Agent.
Section 11.06. Indemnification. In the event the Agents or Letter of Credit
Issuer, as applicable, is not reimbursed and indemnified by the Borrower, the
Lenders will reimburse and indemnify (but only to the extent required to be
reimbursed or indemnified by the Borrower) the Agents, or Letter of Credit
Issuer, as applicable, in proportion to their respective "percentages" as used
in determining the Required Lenders, for and against any and all liabilities,
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by the Agents or Letter of Credit Issuer, as
applicable, in performing their respective duties as Agents or Letter of Credit
Issuer, as applicable, hereunder or under any other Credit Document, in any way
relating to or arising out of this Agreement or any other Credit Document;
provided that no Lender shall be liable to the Agents or Letter of Credit
Issuer, as applicable, for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agents, or Letter of Credit Issuer, as applicable, gross
negligence or willful misconduct or any fees owing under Section 3.01(e).
Section 11.07. The Agents in Their Individual Capacity. With respect to its
obligation to make Loans and issue Letters of Credit under this Agreement, the
Agents shall have the rights and powers specified herein for a "Lender" and may
exercise the same rights and powers as though it were not performing the duties
specified herein; and the term "Lenders," "Required Lenders," "holders of Notes"
or any similar terms shall, unless the context clearly otherwise indicates,
include the Agents in their individual capacity. The Agents and its affiliates
may accept deposits from, lend money to, and generally engaged in any kind of
banking, trust, debt, equity or other business with any Credit Party or any
Subsidiary or Affiliate of any Credit Party as if they were not performing the
duties specified herein, and may accept fees and other consideration from the
Borrower for services in connection with this Agreement and otherwise without
having to account for the same to the Lenders.
Section 11.08. Holders. The Agent shall deem and treat the payee of any
Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent
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holder, transferee, assignee or endorsee, as the case may be, of such Note or of
any Note or Notes issued in exchange therefor.
Section 11.09. Resignation or Removal of the Agent. (a) The Agent may
resign from the performance of all its functions and duties hereunder and/or
under the other Credit Documents at any time by giving 15 Business Days' prior
written notice to the Borrower and the Lenders, and the Agent may be removed at
any time by written notice of removal from the Required Lenders to the Agent and
the Borrower. Such resignation or removal shall take effect upon the appointment
of a successor Agent pursuant to clauses (b) and (c) below or as otherwise
provided below.
(b) Upon any such notice of resignation or removal, the Required Lenders
shall appoint a successor Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower.
(c) If a successor Agent shall not have been so appointed within such 15
Business Day period, the Agent, with the consent of the Borrower, shall (or the
Borrower, with the consent of the Required Lenders, may) then appoint a
commercial bank or trust company with capital and surplus of not less than
$500,000,000 as successor Agent who shall serve as Agent hereunder or thereunder
until such time, if any, as the Required Lenders appoint a successor Agent as
provided above.
(d) If no successor Agent has been appointed pursuant to clause (b) or
(c) above by the 20th Business Day after the date such notice of resignation was
given by the Agent or the date of removal by the Required Lenders, the Agent's
resignation or removal shall become effective and the Lenders shall thereafter
perform all the duties of the Agent hereunder and/or under any other Credit
Document until such time, if any, as the Required Lenders appoint a successor
Agent as provided above.
Section 11.10. Release of Collateral. As promptly as practicable after the
Borrower Stock Release Date, the Agent shall, and shall instruct the Collateral
Agent to, take all necessary actions to release the Liens on the Borrower's
capital stock created by the Pledge Agreement executed by Holdings.
SECTION 12. MISCELLANEOUS.
Section 12.01. Payment of Expenses, Etc. The Borrower shall: (i) whether or
not the transactions contemplated herein are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agent (including, without limitation,
the reasonable fees and disbursements of Chapman and Cutler and (to the extent
retained in connection with the due diligence investigation
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of and collateral arrangements relating to Real Property of the Borrower and its
Subsidiaries) local counsel, subject to the cap as agreed by the Borrower and
the Agent in a certain letter agreement) in connection with the negotiation,
preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto, of the Agent in
connection with its syndication efforts with respect to this Agreement and of
the Agent and, following an Event of Default, each of the Lenders in connection
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel for the Agent and,
following an Event of Default, for each of the Lenders); (ii) pay and hold each
of the Lenders harmless from and against any and all present and future stamp,
excise and other similar taxes with respect to the foregoing matters and save
each of the Lenders harmless from and against any and all liabilities with
respect to or resulting from any delay or omission (other than to the extent
attributable to such Lender) to pay such taxes; and (iii) indemnify the Agent
and each Lender, and each of their respective officers, directors, trustees
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys' and consultants'
fees and disbursements) incurred by, imposed on or assessed against any of them
as a result of, or arising out of, or in any way related to, or by reason of,
(a) any investigation, litigation or other proceeding (whether or not the Agent
or any Lender is a party thereto) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein or in any other Credit Document or the
exercise of any of their rights or remedies provided herein or in the other
Credit Documents, or (b) the actual or alleged presence of Hazardous Materials
in the air, surface water or groundwater or on the surface or subsurface of any
Real Property owned or at any time operated by any Credit Party or any of its
Subsidiaries, the generation, storage, transportation, handling or disposal of
Hazardous Materials at any location, whether or not owned or operated by any
Credit Party or any of its Subsidiaries, the non-compliance of any Real Property
with foreign, federal, state and local laws, regulations, and ordinances
(including applicable permits thereunder) applicable to any Real Property, or
any Environmental Claim asserted against any Credit Party, any of its
Subsidiaries or any Real Property owned or at any time operated by any Credit
Party or any of its Subsidiaries, including, in each case, without limitation,
the reasonable fees and disbursements of counsel and other consultants incurred
in connection with any such investigation, litigation or other proceeding (but
excluding any losses, liabilities, claims, damages or expenses to the extent
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Agent or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the
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Borrower shall make the maximum contribution to the payment and satisfaction of
each of the indemnified liabilities which is permissible under applicable law.
Section 12.02. Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or any of its Subsidiaries
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and apply any and all deposits (matured or unmatured and
whatever currencies denominated) and any other Indebtedness at any time held or
owing by such Lender (including, without limitation, by branches and agencies of
such Lender wherever located) to or for the credit or the account of any Credit
Party or any of its Subsidiaries against and on account of the Obligations and
liabilities of any Credit Party or any of its Subsidiaries to such Lender under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Lender pursuant to
Section 12.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Lender shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured. Notwithstanding anything to the contrary contained in this Section
12.02, no Lender shall exercise any such right of set-off without the prior
consent of the Agent or the Required Lenders so long as the Obligations shall be
secured by any Real Property located in the State of California, it being
understood and agreed, however, that this sentence is for the sole benefit of
the Lenders and may be amended, modified or waived in any respect by the
Required Lenders without the requirement of prior notice to or consent by any
Credit Party and does not constitute a waiver of any rights against any Credit
Party or against any Collateral.
Section 12.03. Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Borrower, at
the Borrower's address or telecopier number specified opposite its signature
below (with a copy to, in the case of a notice of Event of Default, Michael
Hopkins, Esq., Howard Darby & Levin, 1330 Avenue of the Americas, New York, New
York 10019); if to any other Credit Party, at such Credit Party's address or
telecopier number specified opposite in Annex III; if to any Lender, at its
address specified or telecopier number opposite its signature below; and if to
the Agent, at its Notice Office; or, as to any Borrower or the Agent, at such
other address or telecopier number as shall be designated by such party in a
written notice to the other parties hereto and, as to each Lender, at such other
address or telecopier number as shall be designated by such Lender in a written
notice to the Borrower and the Agent. Each such notice or other communication
shall be effective (i) if given by telecopier, when such telecopy is transmitted
to the telecopier number specified in this Section and a confirmation of such
telecopy
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has been received by the sender, (ii) if given by mail, five (5) days after such
communication is deposited in the mail, certified or registered with return
receipt requested, addressed as aforesaid or (iii) if given by any other means,
when delivered at the addresses specified in this Section, except that notices
and communications to the Agent shall not be effective until received by the
Agent.
Section 12.04. Benefit of Agreement, Etc. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, the Borrower
may not assign or transfer any of its rights, obligations or interest hereunder
or under any other Credit Document without the prior written consent of the
Lenders. Any Lender may at any time transfer, assign or grant participations in
its rights hereunder, provided such Lender shall remain a "Lender" for all
purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Section 12.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Lender" hereunder and, provided, further, that no Lender shall transfer or
grant any participation under which the participant shall have rights to approve
any amendment to or waiver of this Agreement or any other Credit Document except
to the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Revolving Loan Maturity Date) in which such participant
is participating, or reduce the rate or extend the time of payment of interest
or Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its Revolving
Credit Commitment (and related outstanding Obligations hereunder) and/or its
outstanding Term Loans to its parent company and/or any affiliate of such Lender
which is at least 50% owned by such Lender or its
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parent company or to one or more Lenders or to a Related Fund or (y) assign all,
or if less than all, a portion equal to at least $5,000,000 (or at least
$1,000,000 in the case of any assignment by ABN AMRO prior to March __, 1998) in
the aggregate for the assigning Lender or assigning Lenders, of such Revolving
Credit Commitments and/or its outstanding Term Loans (and related outstanding
Obligations) hereunder to one or more Eligible Transferees, each of which
assignees shall become a party to this Agreement as a Lender by execution of an
Assignment and Assumption Agreement, provided that (i) at such time Annex I
shall be deemed modified to reflect the Commitments (and/or outstanding Term
Loans, as the case may be) of such new Lender and of the existing Lenders, (ii)
upon surrender of the old Notes, new Notes will be issued, at the Borrower's
expense, to such new Lender and to the assigning Lender to the extent it is
retaining any Commitments or Loans, such new Notes to be in conformity with the
requirements of Section 1.05 (with appropriate modifications) to the extent
needed to reflect the revised Commitments (and/or outstanding Term Loans, as the
case may be), (iii) the consent of the Agent, Letter of Credit Issuers and, so
long as no Event of Default has occurred and is continuing, the consent of the
Borrower, shall be required in connection with any such assignment pursuant to
clause (y) above (which consents shall not be unreasonably withheld) and (iv)
the Agent shall receive at the time of each such assignment, from the assigning
or assignee Lender, the payment of a non-refundable assignment fee of $3,500
and, provided, further, that such transfer or assignment will not be effective
until recorded by the Agent on the Register pursuant to Section 12.16. To the
extent of any assignment pursuant to this Section 12.04(b), the assigning Lender
shall be relieved of its obligations hereunder with respect to its assigned
Commitments and/or Loans but shall continue to be entitled to the benefit of all
indemnities hereunder with respect to matters arising out of the prior
involvement of such assignor as a Lender hereunder. At the time of each
assignment pursuant to this Section 12.04(b) to a Person which is not already a
Lender hereunder and which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrower and the Agent the
appropriate Internal Revenue Service Forms (and, if applicable a Section
4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent that an
assignment of all or any portion of a Lender's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 12.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10,
1.11 or 2.06 from those being charged by the respective assigning Lender prior
to such assignment, then the Borrower shall not be obligated to pay such
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank, and any Lender
that is a fund that invests in bank loans may, without the consent of the Agent
or Borrower, pledge all or any portion of its interest, rights
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and obligations to any trustee or any other representative of holders of
obligations owed or securities issued by such investment fund as security for
such obligations or securities.
Section 12.05. No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Lender or any holder of any Note in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between any Credit Party and the Agents or any Lender or any
Letter of Credit Issuer or the holder of any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Agents or any Lender or any Letter of
Credit Issuer or the holder of any Note would otherwise have. No notice to or
demand on any Credit Party in any case shall entitle any Credit Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agents or any Lender or any Letter of
Credit Issuer or the holder of any Note to any other to further action in any
circumstances without notice or demand.
Section 12.06. Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Agent agrees that promptly after its receipt of each payment from
or on behalf of any Credit Party in respect of any Obligations hereunder, it
shall distribute such payment to the Lenders or the Letter of Credit Issuers, as
the case may be, (other than any Lender that has consented in writing to waive
its pro rata share of any such payment) pro rata based upon their respective
shares, if any, of the Obligations with respect to which such payment was
received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Fees or Letter of Credit Fees, of a
sum which with respect to the related sum or sums received by other Lenders is
in a greater proportion than the total of such Obligation then owed and due to
such Lender bears to the total of such Obligation then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Credit Party to
such Lenders in such amount as shall result in a proportional participation by
all the Lenders in such amount; provided that if all or any portion of such
excess amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
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Section 12.07. Calculations; Computations. (a) The financial statements to
be furnished to the Lenders pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Lenders); provided that, except as otherwise specifically
provided herein, all computations determining compliance with Sections 8.07
through 8.10, shall utilize accounting principles and policies in conformity
with those used to prepare the historical financial statements delivered to the
Lenders pursuant to Section 6.05(a).
(b) Except as otherwise provided herein, all computations of interests,
Commitment Fees and other Fees hereunder shall be made on the basis of a year of
360 days (or 365 or 366 days, as the case may be, in case of Base Rate Loans
based on the Prime Rate) for the actual number of days (including the first day
but excluding the last day) occurring in the period for which such interest,
Commitment Fees or other Fees are payable.
(c) For purposes of determining compliance with the dollar amounts set
forth in Section 8 and determining the Applicable Margin (to the extent based on
the Leverage Ratio), the dollar equivalent of any Indebtedness or other
obligation incurred in a currency other than Dollars shall be the dollar
equivalent thereof as in effect on the last Business Day of the then most
recently ended fiscal quarter of the Borrower and such dollar equivalent shall
remain in effect until same is recalculated as of the last Business Day of the
immediately succeeding fiscal quarter, and with such dollar equivalent to mean,
at any time of determination thereof, the amount of Dollars which could be
purchased with the amount of currency involved in such computation at the spot
exchange rate therefor as published in the New York edition of The Wall Street
Journal on the date one Business Day subsequent to the date of any determination
of such dollar equivalent, provided that if the New York edition of The Wall
Street Journal is not published on such date, reference shall be made to such
rate as set forth in most recently published New York edition of The Wall Street
Journal, and provided further, that if any time the New York edition of The Wall
Street Journal ceases to publish such exchange rates, the Dollar Equivalent
shall be the amount of Dollars which could be purchased with the amount of
currency involved in such computation at the spot rate therefor as quoted by the
Agent at approximately 11:00 a.m. (London time) on the date two Business Days
prior to the date of any determination thereof for purchase on such date.
Notwithstanding the foregoing, for purposes of determining compliance with
Section 8.04 (vii), the Borrower shall be deemed in compliance with such Section
as long as at the time of incurrence of any Indebtedness by Foreign Subsidiaries
in a currency other than Dollars, the Dollar equivalent (calculated as provided
above) of the sum of (i) such Indebtedness plus (ii) then outstanding
Indebtedness of Foreign Subsidiaries shall not exceed the Dollar amount set
forth in such Section.
Section 12.08. Governing Law; Submission to Jurisdiction; Venture; Waiver
of Jury Trial. (a) This Agreement and the other Credit Documents and the rights
and obligations of the parties hereunder and thereunder shall be construed in
accordance with and be governed by the law of the
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State of New York. Any legal action or proceeding with respect to this Agreement
or any other Credit Document may be brought in the courts of the State of New
York or the United States for the Southern District of New York, and, by
execution and delivery of this Agreement, each Credit Party hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Credit Party
hereby further irrevocably waives any claim that any such courts lack
jurisdiction over such Credit Party, and agrees not to plead or claim, in any
legal action or proceeding with respect to this Agreement or any other Credit
Document brought in any of the aforesaid courts, that any such court lacks
jurisdiction over such Credit Party. Each Subsidiary hereby irrevocably
designates, appoints and empowers the Borrower, with offices on the date hereof
at 250 East Fifth Street, Cincinnati, Ohio 45202 as its designee, appointee and
agent to receive, accept and acknowledge for and on its behalf, and in respect
of its property, service of any and all legal process, summons, notices and
documents which may be served in any such action or proceeding. If for any
reason the Borrower shall cease to be available to act as such, each Subsidiary
agrees to designate a new designee, appointee and agent in New York City on the
terms and for the purposes of this provision satisfactory to the Agent under
this Agreement. Each Credit Party further irrevocably consents to the service of
process out of any of the aforementioned courts in any such action or proceeding
by the mailing of copies thereof by registered or certified mail, postage
prepaid, to such Credit Party at its address set forth opposite its signature
below, such service to become effective 30 days after such mailing. Each Credit
Party hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any other Credit Document that service
of process was in any way invalid or ineffective. Nothing herein shall affect
the right of the Agents under this Agreement, any Lender, any Letter of Credit
Issuer or the holder of any Note to serve process in any other manner permitted
by law or to commence legal proceedings or otherwise proceed against any Credit
Party in any other jurisdiction.
(b) Each Credit Party hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid actions
or proceedings arising out of or in connection with this Agreement or any other
Credit Document brought in the courts referred to in clause (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such court
that any such action or proceeding brought in any such court has been brought in
an inconvenient forum.
(c) The Borrower hereby agrees with each other Credit Party, the Agent
and each Lender that the Borrower irrevocably accepts such appointment as agent
as set forth in clause (a) of this Section 12.08 and agrees that the Borrower
(i) shall inform the Agent promptly in writing of any change of its address,
(ii) shall notify the Agent of any termination of any of the agency
relationships created by clause (a) of this Section 12.08, (iii) shall perform
its obligations as such
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Agent in accordance with the provisions of clause (a) of this Section 12.08 and
(iv) shall forward promptly to each Subsidiary any legal process received by the
Borrower in its capacity as process agent. As process agent, the Borrower agrees
to discharge the above-mentioned obligations and will not refuse fulfillment of
such obligations under clause (a) of this Section 12.08. In addition, the
Borrower agrees that it shall maintain its qualification to do business in the
State of New York and shall at all times have a registered agent in New York to
receive service of process.
(d) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
Section 12.09. Counterparts. This Agreement may be executed in any number
of counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Agent.
Section 12.10. Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which each Credit Party, each of the Lenders and
the Agent shall have signed a counterpart hereof (whether the same or different
counterparts) and shall have delivered the same to the Agent at its Notice
Office or, in the case of the Lenders, shall have given to the Agent telephonic
(confirmed in writing), written, telex or facsimile notice (actually received)
at such office that the same has been signed and mailed to it. The Agent will
give each Borrower and each Lender prompt written notice of the occurrence of
the Effective Date.
Section 12.11. Headings Descriptive. The headings of the several sections
and subsections of this Agreement are inserted for convenience only and shall
not in any way affect the meaning or construction of any provision of this
Agreement.
Section 12.12. Amendment or Waiver; etc. (a) Neither this Agreement nor any
other Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the Borrower and the Required Lenders, provided that no
such change, waiver, discharge or termination shall, without the consent of each
Lender (with Obligations being directly affected in the case of following clause
(i)), (i) extend the final scheduled maturity of any Loan or Note, amend, modify
or waive any Scheduled Repayment, or extend the stated maturity of any Letter of
Credit beyond the applicable Maturity Date, or reduce the rate or extend the
time of payment of interest or Fees thereon, or reduce the principal amount
thereof (except to the extent repaid in cash), (ii) amend, modify or waive any
provision of this Section 12.12, (iii) reduce the percentage specified in the
definition of Required Lenders,
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(iv) release any Guarantor from its obligations under any Guaranty or release
any material portion of Collateral or amend the definition of Borrower Stock
Release Date or (v) consent to the assignment or transfer by the Borrower of any
of its rights and obligations under this Agreement; provided further, that no
such change, waiver, discharge or termination shall (u) increase the Commitments
of any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Commitment shall not constitute an increase of the Commitment of a
Lender and an increase in the available portion of any Commitment of any Lender
shall not constitute an increase in the Commitment of such Lender), (v) without
the consent of the Swingline Lender or the Letter of Credit Issuers, as the case
may be, amend, modify or waive any provision of Section 2 or alter its rights or
obligations with respect to Letters of Credit or Swingline Loans, as the case
may be, (w) without the consent of the Agent, amend, modify or waive any
provision of Section 11 as same applies to the Agent or any other provision as
same relates to the rights or obligations of the Agent, (x) without the consent
of the Collateral Agent, amend, modify or waive any provision relating to the
rights or obligations of the Collateral Agent, (y) without the consent of the
Majority Lenders of each Facility which is being allocated a lesser prepayment
or commitment reduction, alter the required application of any prepayments, as
between the various Facilities pursuant to Section 4.02.01(c), (d), (e), (f) or
(g) (although the Required Lenders may waive, in whole or in part, any such
prepayment or commitment reduction so long as the application, as amongst the
various Facilities, of any such prepayment or commitment reduction which is
still required to be made is not altered), (z) without the consent of the
Majority Lenders of the respective Facility, amend the definition of Majority
Lenders or amend, modify or waive the order of the application of any payment or
prepayment or (aa) without the consent of the Majority Lenders of the B Term
Loan Facility and the Majority Lenders of the C Term Loan Facility, amend
Section 4.02.03. If the Borrower requests a waiver of the terms of Section 8.02
and other related provisions of this Agreement in connection with the purchase
or other acquisition of any part of the property or assets of any Person, the
Agent and the Lenders shall use its best efforts to respond to such request
within 21 days of such request.
(b) If, in connection with any proposed change, waiver, discharge or
termination with respect to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 12.12(a), the consent of the Required Lenders is obtained but the
consent of one or more of such other Lenders whose consent is required is not
obtained, then the Borrower shall have the right, so long as all non-consenting
Lenders whose individual consent is required are treated as described below, to
replace each such non-consenting Lender or Lenders with one or more Replacement
Lenders pursuant to Section 1.13 so long as at the time of such replacement,
each such Replacement Lender consents to the proposed change, waiver, discharge
or termination, provided, that in any event the Borrower shall not have the
right to
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replace a Lender solely as a result of the exercise of such Lender's rights (and
the withholding of any required consent by such Lender) pursuant to the second
proviso to Section 12.12(a).
Section 12.13. Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.01 and 12.06 shall
survive the execution, delivery and termination of this Agreement and the Notes
and the making, repayment and assignment of the Loans.
Section 12.14. Domicile of Loans. Each Lender may transfer and carry its
Loans at, to or for the account of any office, Subsidiary or Affiliate of such
Lender. Notwithstanding anything to the contrary contained herein, to the extent
that a transfer of Loans pursuant to this Section 12.14 would, at the time of
such transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04
from those being charged by the respective Lender prior to such transfer, then
the Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
Section 12.15. Confidentiality. (a) Subject to the provisions of clause (b)
of this Section 12.15, each Lender agrees that it will use its reasonable
efforts not to disclose without the prior consent of the Borrower (other than to
its employees, auditors, advisors or counsel or to another Lender if the Lender
or such Lender's holding or parent company in its sole discretion determines
that any such party should have access to such information, provided such
Persons shall be subject to the provisions of this Section 12.15 to the same
extent as such Lender) any information with respect to the Borrower or any of
its Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document and which is designated by the Borrower
to the Lenders in writing as confidential (for purposes of this Section, all
information and notices provided by the Borrower pursuant to Section 7.01(i)
shall hereby be designated as confidential), provided that any Lender may
disclose any such information (a) as has become generally available to the
public, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors or to the National
Association of Insurance Commissioners, (c) as may be required or appropriate in
response to any summons or subpoena or in connection with any litigation, (d) in
order to comply with any law, order, regulation or ruling applicable to such
Lender, (e) to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about such Lender's investment portfolio in connection
with ratings issued with respect to such Lender, (f) to any prospective or
actual transferee or participant in connection with any contemplated transfer or
participation of any of the Notes, Commitments and/or Loans or any interest
therein by such
112
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<PAGE>
Lender, provided, that such prospective transferee agrees to abide by the
provisions contained in this Section and (g) to any direct or indirect
contractual counterparty in swap agreements or such contractual counterparty's
professional advisor (so long as such contractual counterparty or professional
advisor to such contractual counterparty agrees to be bound by the provisions
of this Section 12.15).
(b) The Borrower hereby acknowledges and agrees that each Lender may
share with any of its affiliates any information related to any Credit Party or
any of its Subsidiaries (including, without limitation, any nonpublic customer
information regarding the creditworthiness of the Borrower and its Subsidiaries,
provided such Persons shall be subject to the provisions of this Section 12.15
to the same extent as such Lender).
Section 12.16. Register. The Borrower hereby designates the Agent to serve
as the Borrower's agent, solely for purposes of this Section 12.16, to maintain
a register (the "Register") on which it will record the names and addresses of
the Lenders and the Commitments from time to time of each of the Lenders, the
Loans made by each of the Lenders and each repayment in respect of the principal
amount of the Loans of each Lender. Failure to make any such recordation, or any
error in such recordation shall not affect the Borrower's obligations in respect
of such Loans. With respect to any Lender, the transfer of the Commitment of
such Lender and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Agent with respect to ownership of
such Commitment and Loans and prior to such recordation all amounts owing to the
transferor with respect to such Commitment and Loans shall remain owing to the
transferor. The registration of assignment or transfer of all or part of any
Commitments and Loans shall be recorded by the Agent on the Register only upon
the acceptance by the Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.04(b). Coincident with the delivery
of such an Assignment and Assumption Agreement to the Agent for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Lender shall surrender
the Note evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Lender
and/or the new Lender. The Borrower agrees to indemnify the Agent from and
against any and all losses, claims, damages and liabilities of whatsoever nature
which may be imposed on, asserted against or incurred by the Agent in performing
its duties under this Section 12.16.
Section 12.17. Judgment Currency. (a) The Borrower's obligation hereunder
and under the other Credit Documents to make payments in Dollars (the
"Obligation Currency") shall not be discharged or satisfied by any tender or
recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Agent or the respective Lender
of the full amount of the Obligation Currency expressed to be payable to the
Agent or such Lender under this Agreement or the other Credit Documents. If for
the purpose of obtaining or enforcing judgment against the Borrower in any court
or in any jurisdiction, it becomes necessary to convert
113
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<PAGE>
into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made, at the rate of
exchange (as quoted by the Agent or if the Agent does not quote a rate of
exchange on such currency, by a known dealer in such currency designated by the
Agent) determined, in each case, as of the day immediately preceding the day on
which the judgment is given (such Business Day being hereinafter referred to as
the "Judgment Currency Conversion Date").
(b) If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the Borrower covenants and agrees to pay, or cause to be paid, such
additional amounts, if any (but in any event not a lesser amount) as may be
necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation Currency which could have been purchased
with the amount of Judgment Currency stipulated in the judgment or judicial
award at the rate or exchange prevailing on the Judgment Currency Conversion
Date.
(c) For purposes of determining any rate of exchange for this Section
12.17, such amounts shall include any premium and costs payable in connection
with the purchase of the Obligation Currency.
Section 12.18. Integration. This Agreement and the other Credit Documents
represent the entire agreement of the Credit Parties, the Agents and the Lenders
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by any Credit Party, any
Agent or any Lender relative to subject matter hereof or thereof not expressly
set forth or referred to herein or in the other Credit Documents.
114
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
E-P ACQUISITION, INC.
By /s/ JOEL P. WYLER
-------------------------------
Name: Joel P. Wyler
------------------------
Title: President
------------------------
Address:
Suite 500
- -------------------------
250 E. Fifth Street
- -------------------------
Cincinnati, Ohio 45202
- -------------------------
Attention: President
---------------------
Telephone: 513-721-7010
---------------------
Telecopy: 513-721-2431
---------------------
115
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to execute and deliver this Agreement as of the date first above
written.
E-P ACQUISITION, INC.
By /s/ Joel P. Wyler
--------------------------
Name: Joel P. Wyler
Title: President
Address: Suite 500
250 E. Fifth Street
Cincinnati, Ohio 45202
Attention: President
Telephone: 513-721-7010
Telecopy: 513-721-2431
<PAGE>
<PAGE>
ABN AMRO BANK N.V., individually and as
Agent
By /s/ Gregory D. Amoroso
--------------------------
Name: Gregory D. Amoroso
Title: Group Vice President
By /s/ Paul Widuch
--------------------------
Name: Paul Widuch
Title: Group Vice President
Address: 1325 Avenue of the Americas
9th Floor
New York, NY 10019
Attention: Agency Services
Telephone: (212) 314-1705
Telecopy: (212) 314-1709
<PAGE>
<PAGE>
PNC BANK, NATIONAL ASSOCIATION
By /s/ Bruce A. Kintner
--------------------------
Name: Bruce A. Kintner
Title: Vice President
Address: 201-East Fifth Street
3rd Floor
Cincinnati, OH 45202
Attention: Sandy Wilson
Telephone: (513) 651 -8984
Telecopy: (513) 651 -8951
<PAGE>
<PAGE>
DLJ CAPITAL FUNDING, INC.
By /s/ Stephen P. Hickey
--------------------------
Name: Stephen P. Hickey
Title: Managing Director
Address: Newport Tower
525 Washington Blvd.
Jersey City, NJ 07310
Attention: Ed Vowinkel
Telephone: (201) 610-1971
Telecopy: (201) 610-1965
<PAGE>
<PAGE>
THE BANK OF NOVA SCOCIA
By /s/ F.C.H. Ashby
---------------------------
Name: F.C.H. Ashby
Title: Senior Manager Loan Operations
Address: 600 Peachtree Street
Suite 2700
Atlanta, GA 30308
Attention: Shannon Dancila
Telephone: 404-888-1540
Telecopy: (404) 888-8998
<PAGE>
<PAGE>
BANK OF TOKYO - MITSUBISHI TRUST
COMPANY
By /s/ David C. McLaughlin
--------------------------
Name: David C. McLaughlin
Title: Vice President
Address: 1251 Avenue of the Americas
New York, NY 10020-1104
Attention: David McLaughlin, Vice President
Telephone: (212) 782-4331
Telecopy: (212) 782-4981
<PAGE>
<PAGE>
BANK ONE, NA
By /s/ Michael T. Vea
--------------------------
Name: Michael T. Vea
Title: President
Address: 500 Throckmorton
Fort Worth, TX
Attention: Margie Bryant
Telephone: (817) 884-4187
Telecopy: (817) 884-4651
<PAGE>
<PAGE>
COMERICA BANK
By /s/ Nicholas G. Mester
---------------------------
Name: Nicholas G. Mester
Title: Account Representative
Address: Mail Code 3265
500 Woodward Avenue
Detroit, MI 48226
Attention: Nick Mester
Telephone: (313) 222-9168
Telecopy: (313) 222-3776
<PAGE>
<PAGE>
CREDIT AGRICOLE INDOSUEZ
By /s/ W. Leroy Startz
-------------------------
Name: W. Leroy Startz
Title: First Vice President
By /s/ David Bouhl
-------------------------
Name: David Bouhl, EVP
Title: Head of Corporate Banking
Chicago
Address: 55 E. Monroe Street
Suite 4700
Chicago, IL 60603
Attention: Jerome Leblond
Telephone: (312) 917-7569
Telecopy: (312) 372-3724
<PAGE>
<PAGE>
CREDITANSTALT CORPORATE FINANCE, INC.
By /s/ Richard P. Buckanavage
----------------------------
Name: Richard P. Buckanavage
Title: Vice President
By /s/ Maura K. Connor
--------------------------
Name: Maura K. Connor
Title: Senior Associate
Address: 2 Greenwich Plaza
Greenwich, CT 06830
Attention: Jennifer Poccia
Telephone: (203) 861 -6423
Telecopy: (203) 861 -6594
Attention: Karen Marcella
Telephone: (203) 861 -6421
Telecopy: (203) 861 -6594
<PAGE>
<PAGE>
NBD BANK, N.A.
By /s/ Scott A. Dvornik
--------------------------
Name: Scott A. Dvornik
Title: Vice President
Address: 1 Indiana Square
Suite 7031
Indianapolis, IN 46266
Attention: Nina Windell
Telephone: (317) 266-7736
Telecopy: (317) 266-4163
<PAGE>
<PAGE>
PROVIDENT BANK
By /s/ Richard E. Wirthlin
--------------------------
Name: Richard E. Wirthlin
Title: Vice President
Address: One East 4th Street
5th Floor
Cincinnati, OH 45202
Attention: Richard E. Wirthlin
Telephone: (513) 579-2022
Telecopy: (513) 579-2201
<PAGE>
<PAGE>
ARAB BANKING CORPORATION (B.S.C.)
By /s/ Sheldon Tilney
--------------------------------------
Name: Sheldon Tilney
Title: Deputy General manager
Address: 277 Park Avenue
32nd Floor
New York, NY 10172-3299
Attention: Louise Bilbro
Telephone: (212) 583-4758
Telecopy: (212) 583-0932/0921
<PAGE>
<PAGE>
THE BANK OF NEW YORK
By Edward J. Dougherty
-------------------------------
Name: Edward J. Dougherty III
Title: Vice President
U.S. Commercial Banking
Address: One Wall Street
22nd Floor
New York, NY 10286
Attention: Edward J. Dougherty
Telephone: (212) 635-7842
Telecopy: (212) 635-6434
<PAGE>
<PAGE>
COMPAGNIE FINANCIERE de CIC et de
1'UNION EUROPEENNE
By /s/ Anthony Rock
-----------------------------------
Name: Anthony Rock
Title: Vice President
By /s/ Brian O'Leary
-----------------------------------
Name: Brian O'Leary
Title: Vice President
Address: 520 Madison Avenue
37th Floor
New York, NY 10022
Attention: Anthony Rock
Telephone: (212) 715-4666
Telecopy: (212) 715-4535
<PAGE>
<PAGE>
FIFTH THIRD BANK
By /s/ Kevin CM. Jones
-----------------------------------
Name: Kevin CM. Jones
Title: Assistant Vice President
Address: 38 Fountain Square Plaza
MD# 109054
Cincinnati, OH 45263
Attention: Kevin CM. Jones, Assistant Vice President
Telephone: (513) 744-8662
Telecopy: (513) 579-5226
<PAGE>
<PAGE>
HARRIS TRUST AND SAVINGS BANK
By /s/ W.A. McDonnell
--------------------------------
Name: W.A. McDonnell
Title: Vice President
(312) 461-5244
Address: 111 West Monroe Street
Chicago, IL 60603
Attention: Jennifer Miles-Muller
Telephone: (312) 461-1516
Telecopy: (312) 293-5041
<PAGE>
<PAGE>
IMPERIAL BANK
By /s/ John F. Farrace
--------------------------------
Name: John F. Farrace
Title: Vice President
Address: 9920 South La Cienega Blvd.
14th Floor
Inglewood, CA 90301
Attention: Judy Varner
Telephone: (310) 417-5721
Telecopy: (310) 417-5997
<PAGE>
<PAGE>
THE MITSUBISHI TRUST AND BANKING
CORPORATION
By /s/ Beatrice E. Kossodo
-------------------------------
Name: Beatrice E. Kossodo
Title: Senior Vice President
Address: 520 Madison Avenue
26th Floor
New York, NY 10022
Attention: Mildred Chiu
Telephone: (212) 891-8256
Telecopy: (212) 755-2349 or 486-0970
<PAGE>
<PAGE>
STAR BANK, NATIONAL ASSOCIATION
By /s/ William J. Goodwin
-------------------------------
Name: William J. Goodwin
Title: Senior Vice President
Address: 425 Walnut Street, 8th Floor
Mail Location 9150
Cincinnati, OH 45201-1038
Attention: Cathy Siegel
Telephone: (513) 632-4032
Telecopy: (513) 632-2965
<PAGE>
<PAGE>
THE SUMITOMO BANK, LIMITED, CHICAGO
BRANCH
By /s/ Ken-Ichiro Kobayashi
--------------------------------------
Name: Ken-Ichiro Kobayashi
Title: Joint General Manager
Address: 233 S. Wacker Drive
Suite 4800
Chicago, IL 60606-6448
Attention: Gary Rabishaw
Telephone: (312) 879-7697
Telecopy: (312) 876-6436
<PAGE>
<PAGE>
MASSACHUSETTS MUTUAL LIFE INSURANCE CO.
By /s/ John B. Wheeler
------------------------------
Name: John B. Wheeler
Title: Manager Director
Address: 1295 State Street
Springfield, MA 01111
Attention: Laura Hamel
Telephone: (413) 744-3978
Telecopy: (413) 744-7922
<PAGE>
<PAGE>
MASSMUTUAL HIGH YIELD PARTNERS LLC
By: HYP Management, Inc. as Managing
Member
By /s/ Michael P. Hermsen
----------------------------------
Name: Michael P. Hermsen
Title: Vice President
Address: 1295 State Street
Springfield, MA 01111
Attention: Laura Hamel
Telephone: (413) 744-3978
Telecopy: (413)744-7922
<PAGE>
<PAGE>
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By /s/ Jeffrey W. Maillet
----------------------------------
Name: Jeffrey W. Maillet
Title: Senior Vice President & Director
Address: 1 Parkview Plaza
Oakbrook Terrace, IL 60181
Attention: Brian Murphy
Telephone: (630) 684-6479
Telecopy: (630) 684-6740/6741
Address: State Street Bank & Trust
P.O. Box 778
Boston, MA 02102
Attention: Sean Emerson
Telephone: (617) 664-5481
Telecopy: (617) 664-5366/5367
<PAGE>
<PAGE>
KZH-CRESCENT-2 CORPORATION
By /s/ Virginia Conway
----------------------------------
Name: Virginia Conway
Title: Authorized Agent
Address: KZH-Crescent-2 Corporation
c/o The Chase Manhattan Bank
450 West 33rd Street - 15th Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Telecopy: (212) 946-7776
<PAGE>
<PAGE>
PRIME INCOME TRUST
By /s/ Rajesh K. Gupta
----------------------------------
Name: Rajesh K. Gupta
Title: Senior Vice President
Address: c/o Dean Witter Intercapital, Inc.
72nd Floor
Two World Trade Center
New York, NY 10048
Attention: April Chrysostomas
Telephone: (212) 392-5709
Telecopy: (212) 392-5345
<PAGE>
<PAGE>
ARCHIMEDES FUNDING, L.L.C.
By: ING CAPITAL ADVISORS, INC.
as Collateral Manager
By: /S/ MICHAEL D. HATLEY
____________________________________
Name: Michael D. Hatley
Title: Vice President & Portfolio
Manager
Address: c/o ING Capital Advisors, Inc.
333 S. Grande Ave., Suite #4250
Los Angeles, CA 90071
Attention: Lenore Crummey-Benoit
Telephone: (213) 346-3976
Telecopy: (213) 626-6552
<PAGE>
<PAGE>
KZH-ING-2 CORPORATION
By /S/ ANDREW J. TAYLOR
____________________________________
Name: Andrew J. Taylor
Title: Authorized Agent
Address: KZH-ING-2 Corporation
c/o The Chase Manhattan Bank
450 West 33rd Street -- 15th Floor
New York, New York 10001
Attention: Virginia Conway
Telephone: (212) 946-7575
Telecopy: (212) 946-7776
<PAGE>
<PAGE>
OCTAGON CREDIT INVESTORS LOAN PORTFOLIO
(A UNIT OF THE CHASE MANHATTAN BANK)
By: /S/ JAMES P. FERGUSON
____________________________________
James P. Ferguson
Managing Director
Address:
380 Madison Avenue-12th Fl.
New York, NY 10017
Phone: 212/622-3070
Fax: 212/622-3797
<PAGE>
<PAGE>
DELANO COMPANY
By PACIFIC INVESTMENT MANAGEMENT
COMPANY, as its Investment Advisor.
By /S/ RAYMOND KENNEDY
____________________________________
Name: Raymond Kennedy
Title: Vice President
Address: Delano Company
c/o Pacific Investment Management Co.
840 Newport Center Drive
Newport Beach, CA 92658
Attention: Jason R. Rosiak
Telephone: (714) 640-3407
Telecopy: (714) 720-8586
<PAGE>
<PAGE>
ROYALTON COMPANY
By PACIFIC INVESTMENT MANAGEMENT
COMPANY, as its Investment Advisor.
By /S/ RAYMOND KENNEDY
__________________________________
Name: Raymond Kennedy
Title: Vice President
Address: Royalton Company
c/o Pacific Investment Management Co.
840 Newport Center Drive
Newport Beach, CA 92658
Attention: Jason R. Rosiak
Telephone: (714) 640-3407
Telecopy: (714) 720-8586
<PAGE>
<PAGE>
ALLSTATE INSURANCE COMPANY
BY /S/ PATRICIA W. WILSON
____________________________________
Name: Patricia W. Wilson
Title: Authorized Signatories
By /S/ DANIEL C. LEIMBACH
____________________________________
Name: Daniel C. Leimbach
Title: Authorized Signatories
Address: 3075 Sanders Road
Suite G4A
Northbrook, IL 60062-7127
Attention: Mary Counley
Telephone: (847) 402-7048
Telecopy: (847) 326-5040
<PAGE>
<PAGE>
ASSUMPTION AGREEMENT
THIS ASSUMPTION AGREEMENT (the "Agreement") dated as of February 24,
1998 by and between EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation (the
"Company"), as survivor and successor by merger with E-P Acquisition, Inc., and
ABN AMRO Bank N.V., as Agent for the lenders from time to time party to the
Credit Agreement (as hereinafter defined) for the benefit of the Agents, the
Lenders, the Swingline Lender and the Letter of Credit Issuers. Capitalized
terms used herein without definition which are defined in the Credit Agreement
shall have the same meanings herein as ascribed to such terms in the Credit
Agreement.
WITNESSETH THAT:
WHEREAS, E-P Acquisition, Inc., a Delaware corporation ("Acquisition")
and ABN AMRO Bank N.V. ("ABN AMRO"), individually and as agent (ABN AMRO acting
as such agent and any successor or successors to ABN AMRO in such capacity being
hereinafter referred to as the "Agent") have entered into a Credit Agreement
dated as of February 19, 1998 ("Credit Agreement") pursuant to which (i) ABN
AMRO and such other banks, financial institutions and letter of credit issuers
from time to time parties thereto (ABN AMRO, in its individual capacity, and
such other banks and financial institutions being hereinafter referred to
collectively as the "Lenders" and such letter of credit issuers being
hereinafter referred to collectively as the "Letter of Credit Issuers") have
agreed to extend various credit facilities to the Company on a condition, among
others, that Acquisition shall have merged with and into the Company and (ii)
Acquisition has undertaken certain obligations (the "Assumed Obligations") in
contemplation of such merger; and
WHEREAS, Acquisition has today merged itself into the Company pursuant
to the laws of the States of Delaware and Ohio, with the Company as the
surviving and continuing entity and, as a result of such merger, the Company
has, by operation of law, assumed and become liable for the Assumed Obligations;
and
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, and for the purpose of acknowledging the Company's assumption of
the Assumed Obligations,
<PAGE>
<PAGE>
the Company agrees with the Agent, for the benefit of the Agents, the Lenders,
the Swingline Lender and the Letter of Credit Issuers as follows:
1. The Company hereby acknowledges and confirms that it has
assumed and is liable for the Assumed Obligations and agrees to pay the
same to the Agents, the Lenders, the Swingline Lenders and the Letter of
Credit Issuers, as applicable, together with interest thereon, on and
subject to the terms and conditions of the Credit Agreement to the same
extent and with the same force and effect as if the Company had
originally executed the Credit Agreement.
2. The Assumed Obligations shall be deemed "Obligations" of the
Company under and as defined in, and shall be subject to all of the
terms and conditions of, the Credit Agreement as supplemented hereby and
shall be secured by all the Collateral, and entitled to all other
benefits and security, described or referred to in the Credit Agreement
as so supplemented.
3. Notwithstanding the execution and delivery hereof, the Credit
Agreement shall be and remain in full force and effect as supplemented
hereby and any rights and remedies of the Agents, the Lenders, the
Swingline Lender and the Letter of Credit Issuers, and obligations of
Acquisition thereunder shall be and remain in full force and effect as
contemplated hereby and shall not be discharged.
4. In evidence of the foregoing, the Company hereby adopts the
Credit Agreement as a new and separate contract, all to the same extent
and with the same force and effect as if the Company had originally
executed the Credit Agreement and all references therein to Acquisition
(as therein referenced as "Borrower") were instead references to the
Company. The Company hereby acknowledges and agrees that all of the
terms and conditions contained in the Credit Agreement, in each case as
so adopted and otherwise supplemented hereby, shall be applicable to all
Obligations of the Company, including the Assumed Obligations (the term
"Obligations" as used herein to have the same meaning herein as such
term has in the Credit Agreement). The Company agrees to observe and
comply with all of the terms and conditions of the Credit Agreement
adopted by the Company herein and hereby repeats and reaffirms for the
benefit of the parties thereto all covenants, agreements,
representations and warranties contained in the Credit Agreement as so
supplemented hereby, each and all of which are and shall remain
applicable to the Company and all the Obligations.
5. In order to induce the Lenders, the Swingline Lender and the
Letter of Credit Issuers to extend credit to the Company under the
Credit Agreement as
<PAGE>
<PAGE>
supplemented hereby and to accept this Agreement, the Company hereby
represents and warrants to the parties to the Credit Agreement that as
of the date hereof, after giving effect to the Transaction, each of the
representations and warranties set forth in the Credit Agreement is and
shall be and remain true and correct and the Company shall be in full
compliance with all of the terms and conditions of the Credit Agreement
as so supplemented and no Default or Event of Default as defined in the
Credit Agreement as so supplemented shall have occurred and be
continuing.
6. The effectiveness of this Agreement is subject to the
condition precedent that the merger of Acquisition into the Company has
been successfully consummated and the Agent shall have received evidence
thereof.
7. This Agreement may be executed in any number of counterparts
and by different parties hereto on separate counterparts, each of which
when so executed shall be an original but all of which to constitute one
and the same instrument. The execution and acceptance of this Agreement
by the Lenders, the Swingline Lender, the Letter of Credit Issuers and
the Agents (other than the Agent) is not necessary for the effectiveness
of this Agreement. The execution and acceptance of this Agreement by the
Agent shall be deemed execution and acceptance of this Agreement by such
parties. Except as specifically supplemented hereby, all of the terms
and conditions of the Credit Agreement shall stand and remain unchanged
and in full force and effect. No reference to this Agreement need to be
made in any note, instrument or other document making reference to the
Credit Agreement, any reference to the Credit Agreement in any of such
to be deemed to be a reference to the Credit Agreement as supplemented
hereby. This instrument shall be construed and governed by and in
accordance with the internal laws of the State of New York.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first hereinabove written.
EAGLE-PICHER INDUSTRIES,
INC., as survivor and
successor by merger
with E-P Acquisition,
Inc.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------
Its President
--------------------------------------
ABN AMRO BANK N.V., as Agent
By: /s/ GREGORY D. AMOROSO
----------------------------------------
Name: Gregory D. Amoroso
----------------------------------
Title: Group Vice President
----------------------------------
By: /s/ PAUL WIDUCH
----------------------------------------
Name: Paul Widuch
----------------------------------
Title: Group Vice President
---------------------------------
<PAGE>
<PAGE>
SECURITY AGREEMENT
This Security Agreement (the "Agreement") is dated as of February 24,
1998, by and among EAGLE-PICHER INDUSTRIES, INC., a corporation organized and
existing under the laws of Ohio, as survivor and successor by merger with E-P
Acquisition, Inc., (as further defined in the Credit Agreement referred to
below, the "Borrower"), and the other parties executing this Agreement under the
heading "Debtors" (the Borrower and such other parties, along with any parties
who execute and deliver to the Agent an agreement attached hereto as Schedule D,
being hereinafter referred to collectively as the "Debtors" and individually as
a "Debtor"), each with its mailing address as set forth on its signature page
hereto, and ABN AMRO Bank N.V., a bank organized under the laws of The
Netherlands ("ABN AMRO"), with its mailing address at 1325 Avenue of the
Americas, New York, New York 10019, acting as agent hereunder for the Secured
Creditors hereinafter identified and defined (ABN AMRO acting as such agent and
any successor or successors to ABN AMRO acting in such capacity being
hereinafter referred to as the "Agent");
PRELIMINARY STATEMENTS
A. The Borrower and ABN AMRO, individually and as agent, have entered
into a Credit Agreement dated as of February 19, 1998 (such Credit Agreement as
the same may be amended, modified or restated from time to time being
hereinafter referred to as the "Credit Agreement"), pursuant to which ABN AMRO
and such other banks and financial institutions and letter of issuers from time
to time parties thereto (ABN AMRO, in its individual capacity, and such other
banks and financial institutions being hereinafter referred to collectively as
the "Lenders" and individually as a "Lender" and such letter of credit issuers
being hereinafter referred to collectively as the "Letter of Credit Issuers" and
individually as a "Letter of Credit Issuer") have agreed, subject to certain
terms and conditions, to extend credit and make certain other financial
accommodations available to the Borrower.
B. The Borrower may from time to time enter into one or more Interest
Rate Protection Agreements with one or more of the Lenders party to the Credit
Agreement or affiliates thereof for the purpose of hedging or otherwise
protecting the Borrower against changes in interest rates (the liability of the
Borrower in respect of such agreements with such Lenders or affiliates being
hereinafter referred to as the "Hedging Liability") (the Agent, the Lenders, the
Letter of Credit Issuers and such affiliates party to Interest Rate Protection
Agreements being hereinafter referred to collectively as the "Secured Creditors"
and individually as a "Secured Creditor").
C. As a condition to extending credit to the Borrower under the Credit
Agreement, the Secured Creditors have required, among other things, that each
Debtor grant to the Agent a lien on and security interest in the personal
property of such Debtor described herein subject to the terms and conditions
hereof.
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D. The Borrower owns, directly or indirectly, equity interests in each
other Debtor and the Borrower provides each other Debtor with financial,
management, administrative, and technical support which enables such Debtor to
conduct its business in an orderly and efficient manner in the ordinary course.
E. Each Debtor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
NOW, THEREFORE, for and in consideration of the execution and delivery
by the Secured Creditors of the Credit Agreement, and other good and valuable
consideration, receipt whereof is hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. Terms defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Debtor" and "Debtors" as used herein
shall mean and include the Debtors collectively and also each individually, with
all grants, representations, warranties and covenants of and by the Debtors, or
any of them, herein contained to constitute joint and several grants,
representations, warranties and covenants of and by the Debtors; provided,
however, that unless the context in which the same is used shall otherwise
require, any grant, representation, warranty or covenant contained herein
related to the Collateral shall be made by each Debtor only with respect to the
Collateral owned by it or represented by such Debtor as owned by it.
Section 2. Grant of Security Interest in the Collateral; Obligations
Secured. (a) Each Debtor hereby grants to the Agent for the benefit of the
Secured Creditors a lien on and security interest in, and acknowledges and
agrees that the Agent has and shall continue to have for the benefit of the
Secured Creditors a continuing lien on and security interest in, any and all
right, title and interest of each Debtor, whether now owned or existing or
hereafter created, acquired or arising, in and to the following:
(i) Receivables. All Receivables, whether now owned or existing
or hereafter created, acquired or arising, and however evidenced or
acquired, or in which such Debtor now has or hereafter acquires any
rights (the term "Receivables" means and includes all accounts, accounts
receivable, contract rights, instruments, notes, drafts, acceptances,
documents, chattel paper, any right of such Debtor to payment for goods
sold or leased or for services rendered, whether or not earned by
performance, and all other forms of obligations owing to such Debtor,
and all of such Debtor's rights to any merchandise or other goods
(including without limitation any returned or repossessed goods and the
right of stoppage in transit) which is represented by, arises from or is
related to any of the foregoing);
(ii) General Intangibles. All General Intangibles, whether now
owned or existing or hereafter created, acquired or arising, or in which
such Debtor now has or hereafter acquires any rights (the term "General
Intangibles" means and includes all general intangibles, all patents,
patent applications, patent licenses, trademarks, trademark
registrations, trademark licenses, trade styles, trade names,
copyrights,
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copyright registrations, copyright licenses and other licenses and
similar intangibles, all customer, client and supplier lists (in
whatever form maintained), all rights in leases and other agreements
relating to real or personal property, all causes of action and tax
refunds of every kind and nature, all privileges, franchises,
immunities, licenses, permits and similar intangibles, and all other
personal property (including things in action) not otherwise covered by
this Agreement);
(iii) Inventory. All Inventory, whether now owned or existing or
hereafter created, acquired or arising, or in which such Debtor now has
or hereafter acquires any rights and all documents of title at any time
evidencing or representing any part thereof (the term "Inventory" means
and includes all inventory and other goods which are held for sale or
lease or are to be furnished under contracts of service or consumed in
such Debtor's business, all goods which are raw materials,
work-in-process, finished goods, materials or supplies of every kind and
nature, in each case used or usable in connection with the acquisition,
manufacture, processing, supply, servicing, storing, packing, shipping,
advertising, selling, leasing or furnishing of such goods, and any
constituents or ingredients thereof, and all goods which are returned or
repossessed goods);
(iv) Equipment. All Equipment, whether now owned or existing or
hereafter created, acquired or arising, or in which such Debtor now has
or hereafter acquires any rights (the term "Equipment" means and
includes all equipment and other machinery, tools, fixtures, trade
fixtures, furniture, furnishings, office equipment, vehicles (including
vehicles subject to a certificate of title law) and all other goods now
or hereafter used or usable in connection with such Debtor's business,
together with all parts, accessories and attachments relating to any of
the foregoing);
(v) Investment Property. All Investment Property, whether now
owned or existing or hereafter created, acquired or arising, or in which
such Debtor now has or hereafter acquires any rights (the term
"Investment Property" means and includes all investment property and all
other securities (whether certificated or uncertificated), security
entitlements, securities accounts, commodity contracts, and commodity
accounts, including all substitutions and additions thereto, all
dividends, distributions and sums distributable or payable from, upon,
or in respect of such property, and all rights and privileges incident
to such property); provided, however that in no event will any of the
Investment Property described above be deemed to include any interest in
any joint venture or in any contract, contract right, or other similar
general intangible if the granting of a lien therein is prohibited by
the terms of the written agreement creating such joint venture or
creating or evidencing such contract, contract right, or similar general
intangible; provided further, that (x) to the extent not prohibited by
law, the Agent has and shall at all times have a security interest in
all rights to payments of money due or to become due under any joint
venture, contract, contract right, or similar general intangible and all
other proceeds thereof and (y) if and when the prohibition which
prevents the granting of a security interest in any such property is
removed, terminated or otherwise becomes unenforceable as a matter of
law, the Agent will be deemed to have, and at all times to have had, a
security interest
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in such property, and the Investment Property will be deemed to include,
and at all times to have included, such property;
(vi) Deposits and Property in Possession. All deposit accounts
(whether matured or unmatured and in whatever currency denominated) of
such Debtor maintained with any of the Secured Creditors and all sums
now or hereafter on deposit therein or payable thereon, and any and all
other property and interests in property which now is or may from time
to time hereafter come into the possession, custody or control of any of
the Secured Creditors, or any agent of any of them, in any way and for
any purpose (whether for safekeeping, custody, pledge, transmission,
collection or otherwise);
(vii) Records. All supporting evidence and documents relating to
any of the above-described property, including, without limitation,
computer programs, disks, tapes and related electronic data processing
media, and all rights of such Debtor to retrieve the same from third
parties, written applications, credit information, account cards,
payment records, correspondence, delivery and installation certificates,
invoice copies, delivery receipts, notes and other evidences of
indebtedness, insurance certificates and the like, together with all
books of account, ledgers and cabinets in which the same are reflected
or maintained, all whether now existing or hereafter arising;
(viii) Accessions and Additions. All accessions and additions to and
substitutions and replacements of any and all of the foregoing, whether
now existing or hereafter arising; and
(ix) Proceeds and Products. All proceeds and products of the
foregoing and all insurance of the foregoing and proceeds thereof,
whether now existing or hereafter arising;
all of the foregoing being herein sometimes referred to as the "Collateral". All
terms which are used herein which are defined in the Uniform Commercial Code of
the State of New York ("UCC") shall have the same meanings herein as such terms
are defined in the UCC, unless this Agreement shall otherwise specifically
provide.
(b) This Agreement is made and given to secure, and shall secure, the
prompt payment and performance when due of (i) any and all indebtedness,
obligations and liabilities of the Debtors, and of any of them individually, to
the Secured Creditors, and to any of them individually, under or in connection
with or evidenced by the Credit Agreement, the Notes of the Borrower heretofore
or hereafter issued under the Credit Agreement and the obligations of the
Borrower to reimburse the Secured Creditors for the amount of all drawings on
all Letters of Credit issued pursuant to the Credit Agreement, and all other
obligations of the Borrower under any and all applications for Letters of
Credit, and any and all liability of the Debtors, and of any of them
individually, arising under or in connection with or otherwise evidenced by
agreements with any one or more of the Secured Creditors with respect to any
Hedging Liability, and any and all liability of the Debtors, and
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of any of them individually, arising under any guaranty issued by it relating to
the foregoing or any part thereof, in each case whether now existing or
hereafter arising (and whether arising before or after the filing of a petition
in bankruptcy and including all interest accrued after the petition date), due
or to become due, direct or indirect, absolute or contingent, and howsoever
evidenced, held or acquired and (ii) any and all reasonable expenses and
charges, legal or otherwise, suffered or incurred by the Secured Creditors, and
any of them individually, in collecting or enforcing any of such indebtedness,
obligations and liabilities or in realizing on or protecting or preserving any
security therefor, including, without limitation, the lien and security interest
granted hereby (all of the indebtedness, obligations, liabilities, expenses and
charges described above being hereinafter referred to as the "Obligations").
Notwithstanding anything in this Agreement to the contrary, the right of
recovery against any Debtor (other than the Borrower to which this limitation
shall not apply) under this Agreement shall not exceed $1.00 less than the
amount which would render such Debtor's obligations under this Agreement void or
voidable under applicable law, including fraudulent conveyance law.
Section 3. Covenants, Agreements, Representations and Warranties. The
Debtors hereby covenant and agree with, and represent and warrant to, the
Secured Creditors that:
(a) Each Debtor is duly organized, validly existing and in good
standing under the laws of the state of its incorporation or
organization, is the sole and lawful owner of the Collateral for which a
security interest is granted by it hereunder and has the power and
authority to enter into this Agreement and to perform each and all of
the matters and things herein provided for. Each Debtor's Federal tax
identification number is set forth under its name under Column 1 on
Schedule A.
(b) Each Debtor's respective chief executive office is at the
location listed under Column 2 on Schedule A attached hereto opposite
such Debtor's name; and such Debtor has no other executive offices or
places of business other than those listed under Column 3 on Schedule A
attached hereto opposite such Debtor's name. The Collateral owned or
leased by each Debtor is and shall remain in such Debtor's possession or
control at the locations listed under Columns 2 and 3 on Schedule A
attached hereto opposite such Debtor's name (collectively for each
Debtor, the "Permitted Collateral Locations"), except as to any
Collateral sold or otherwise disposed of in accordance with this
Agreement and Section 8.02 of the Credit Agreement. If for any reason
any Collateral is at any time kept or located at a location other than a
Permitted Collateral Location, the Agent shall nevertheless have and
retain a lien on and security interest therein. No Debtor shall move its
chief executive office or maintain a place of business at a location
other than those specified under Columns 2 or 3 on Schedule A or permit
any Collateral to be located at a location other than a Permitted
Collateral Location, in each case without first providing the Agent at
least 30 days' prior written notice of the Debtor's intent to do so;
provided that each Debtor shall at all times maintain its chief
executive office and places of business in the United States of America
and Permitted Collateral Locations in the United States of America or
any province of Canada and, with respect to any new chief executive
office or place of business or location of Collateral, such Debtor
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shall have taken all action reasonably requested by the Agent to
maintain the lien and security interest of Agent in the Collateral at
all times fully perfected and in full force and effect.
(c) The Collateral and every part thereof is and shall be free
and clear of all security interests, liens (including, without
limitation, mechanics', laborers' and statutory liens), attachments,
levies and encumbrances of every kind, nature and description and
whether voluntary or involuntary, except for the lien and security
interest of the Agent therein, and other Liens permitted by Section 8.01
of the Credit Agreement (herein, the "Permitted Liens"). Each Debtor
shall warrant and defend the Collateral against any claims and demands
of all persons at any time claiming the same or any interest in the
Collateral adverse to any of the Secured Creditors.
(d) Each Debtor will promptly pay when due all taxes, assessments
and governmental charges and levies upon or against it or its
Collateral, 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 which prevent
attachment of any Lien resulting therefrom to, foreclosure on or other
realization upon any Collateral and preclude interference with the
operation of its business in the ordinary course and such Debtor shall
have established adequate reserves therefor.
(e) Each Debtor agrees it will not waste or destroy the
Collateral or any part thereof and will not be negligent in the care or
use of any Collateral. Each Debtor agrees it will not use, manufacture,
sell or distribute any Collateral in violation of any statute, ordinance
or other governmental requirement. Each Debtor will perform in all
material respects its obligations under any contract or other agreement
constituting part of the Collateral, it being understood and agreed that
the Secured Creditors have no responsibility to perform such
obligations.
(f) Subject to Sections 4(d), 5(a), 6(b), 6(c), and 7(c) hereof
and the terms of the Credit Agreement (including, without limitation,
Section 8.02 thereof), each Debtor agrees it will not, without the
Agent's prior written consent, sell, assign, mortgage, lease or
otherwise dispose of the Collateral or any interest therein.
(g) Each Debtor will insure its Collateral which is insurable
against such risks and hazards as other companies similarly situated
insure against, and including in any event loss or damage by fire,
theft, burglary, pilferage, and loss in transit, in amounts and under
policies containing loss payable clauses to the Agent as its interest
may appear (and, if the Agent requests, naming the Secured Creditors as
additional insureds therein) by insurers reasonably acceptable to the
Agent. All premiums on such insurance shall be paid by the Debtors and
the policies of such insurance (or certificates therefor) delivered to
the Agent. All insurance required hereby shall provide that any loss
shall be payable notwithstanding any act or negligence of the relevant
Debtor, shall provide that no cancellation thereof shall be effective
until at least 30 days after receipt by the relevant Debtor and the
Agent of written notice
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thereof, and shall be reasonably satisfactory to the Agent in all other
respects. In case of any material loss, damage to or destruction of the
Collateral or any part thereof, the relevant Debtor shall promptly give
written notice thereof to the Secured Creditors generally describing the
nature and extent of such damage or destruction. In case of any loss,
damage to or destruction of the Collateral or any part thereof, the
relevant Debtor, whether or not the insurance proceeds, if any, received
on account of such damage or destruction shall be sufficient for that
purpose, at such Debtor's cost and expense, will promptly repair or
replace the Collateral so lost, damaged or destroyed, except to the
extent such Collateral is not necessary to the conduct of such Debtor's
business in the ordinary course. In the event any Debtor shall receive
any proceeds of such insurance, such Debtor will immediately pay over
such proceeds to the Agent; provided that, in the absence of any Default
or Event of Default such Debtors shall be entitled to retain such
insurance proceeds to the extent such proceeds are used for such repair
or replacement in accordance with Section 4.02.01(g) of the Credit
Agreement. Each Debtor hereby authorizes the Agent, at the Agent's
option, to adjust, compromise and settle any losses under any insurance
afforded at any time after the occurrence and during the continuation of
any Event of Default, and such Debtor does hereby irrevocably constitute
the Agent, its officers, agents and attorneys, as such Debtor's
attorneys-in-fact, with full power and authority after the occurrence
and during the continuation of any Event of Default to effect such
adjustment, compromise and/or settlement and to endorse any drafts drawn
by an insurer of the Collateral or any part thereof and to do everything
necessary to carry out such purposes and to receive and receipt for any
unearned premiums due under policies of such insurance. Net insurance
proceeds received by the Agent under the provisions hereof or under any
policy or policies of insurance covering the Collateral or any part
thereof pursuant to the terms hereof shall be applied to the reduction
of the Obligations (whether or not then due); provided, however, that
the Agent agrees to release such insurance proceeds to the relevant
Debtor for replacement or restoration of the portion of the Collateral
lost, damaged or destroyed required by this Agreement to be so replaced
or restored if, but only if, (i) at the time of release no Default or
Event of Default exists hereunder, (ii) written application for such
release is received from such Debtor within 10 days of receipt of, or in
the event received by the Agent notice of Agent's receipt of, such
proceeds and (iii) the Agent has received evidence reasonably
satisfactory to it that the Collateral lost, damaged or destroyed has
been or will be replaced or restored in accordance with Section
4.02.01(g) of the Credit Agreement. All insurance proceeds shall be
subject to the lien and security interest of the Agent hereunder.
(h) Subject to Section 7.02 of the Credit Agreement, each Debtor
will allow the Secured Creditors, and their respective representatives
free access to and right of inspection of the Collateral.
(i) If any Collateral is in the possession or control of any
agents or processors of a Debtor and the Agent so requests, such Debtor
agrees to notify such agents or processors in writing of the Agent's
security interest therein and instruct them to hold all such Collateral
for the Agent's account and subject to the Agent's
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instructions. Each Debtor will, upon the request of the Agent, authorize
and instruct all bailees and any other parties, if any, at any time
processing, labeling, packaging, holding, storing, shipping or
transferring all or any part of the Collateral to permit the Secured
Creditors and their respective representatives to examine and inspect
any of the Collateral then in such party's possession and to verify from
such party's own books and records any information concerning the
Collateral or any part thereof which the Secured Creditors or their
respective representatives may seek to verify. As to any premises not
owned by a Debtor wherein any of the Collateral is located, if any, such
Debtor shall, upon the Agent's request, cause each party having any
right, title or interest in, or lien on, any of such premises to enter
into an agreement (any such agreement to contain a legal description of
such premises) whereby such party disclaims any right, title and
interest in, and lien on, the Collateral, allowing the removal of such
Collateral by the Agent and otherwise in form and substance reasonably
acceptable to the Agent.
(j) Upon the Agent's request, each Debtor agrees from time to
time to deliver to the any Secured Creditor such evidence of the
existence, identity and location of its Collateral and of its
availability as collateral security pursuant hereto, in each case as
such Secured Creditor may request. The Agent shall have the right to
verify all or any part of the Collateral in any manner, and through any
medium, which the Agent considers appropriate and reasonable, and each
Debtor agrees to furnish all assistance and information, and perform any
acts, which the Agent may require in connection therewith.
(k) Each Debtor will comply in all material respects with the
terms and conditions of any and all leases, easements, right-of-way
agreements and other agreements binding upon such Debtor or affecting
the Collateral, in each case which cover the premises wherein the
Collateral is located, and any orders, ordinances, laws or statutes of
any city, state or other governmental entity, department or agency
having jurisdiction with respect to such premises or the conduct of
business thereon.
(l) No Debtor has invoiced Receivables or otherwise transacted
business, and does not invoice Receivables or otherwise transact
business, under any trade names other than its name set forth on its
signature page to this Agreement or as otherwise set forth on Schedule B
hereto. Each Debtor agrees it will not change its name or transact
business under any other trade name, in each case without first giving
the Agent at least 30 days' prior written notice of its intent to do so.
(m) Each Debtor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents, and to do
all such other things, as the Agent may reasonably deem necessary or
appropriate to assure the Agent its lien and security interest
hereunder, including without limitation, (i) executing such financing
statement or other instruments and documents as the Agent may from time
to time reasonably require to comply with the UCC, and (ii) executing
such patent, trademark, and copyright agreements as the Agent may from
time to time reasonably require to comply with the filing requirements
of the United States Patent and
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Trademark Office and the United States Copyright Office. Each Debtor
hereby agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without prior notice thereof to such
Debtor wherever the Agent deems necessary or desirable to perfect or
protect the security interest granted hereby. In the event for any
reason the law of any jurisdiction other than New York becomes or is
applicable to the Collateral or any part thereof, or to any of the
Obligations, each Debtor agrees to execute and deliver all such
instruments and documents and to do all such other things as the Agent
deems necessary or appropriate to preserve, protect and enforce the
security interest of the Agent under the law of such other jurisdiction.
(n) On failure of a Debtor to perform any of the covenants and
agreements herein contained, the Agent may, at its option, perform the
same and in so doing may expend such sums as the Agent deems advisable
in the performance thereof, including, without limitation, the payment
of any insurance premiums, the payment of any taxes, liens and
encumbrances, expenditures made in defending against any adverse claims,
and all other expenditures which the Agent may be compelled to make by
operation of law or which the Agent may make by agreement or otherwise
for the protection of the security hereof. All such sums and amounts so
expended shall be repayable by such Debtor immediately upon demand,
shall constitute additional Obligations secured hereunder, and shall
bear interest from the date said amounts are expended at the rate per
annum (computed on the basis of a year of 365 or 366 days, as the case
may be, for the actual number of days elapsed) determined by adding 2%
to the Base Rate from time to time in effect plus the Applicable Base
Rate Margin for Revolving Loans, with any change in such rate per annum
as so determined by reason of a change in such Base Rate to be effective
on the date of such change in said Base Rate (such rate per annum as so
determined being hereinafter referred to as the "Default Rate"). No such
performance of any covenant or agreement by the Agent on behalf of a
Debtor, and no such advancement or expenditure therefor, shall relieve
any Debtor of any default under the terms of this Agreement or in any
way obligate any Secured Creditor to take any further or future action
with respect thereto. The Agent in making any payment hereby authorized
may do so according to any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged
without inquiry into the accuracy of such bill, statement or estimate or
into the validity of any tax assessment, sale, forfeiture, tax lien or
title or claim. The Agent in performing any act hereunder shall be the
sole judge of whether the relevant Debtor is required to perform the
same under the terms of this Agreement. The Agent is hereby authorized
to charge any depository or other account of any Debtor maintained with
the Agent for the amount of such sums and amounts so expended.
Section 4. Special Provisions Re: Receivables. (a) As of the time any
Receivable becomes subject to the security interest provided for hereby and at
all times thereafter, each Debtor shall be deemed to have warranted as to each
and all of its Receivables that all warranties of such Debtor set forth in this
Agreement are true and correct with respect to each such Receivable; that each
of its Receivable and all papers and documents relating thereto are genuine and
in all respects what they purport to be; that each of its Receivable is
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valid and existing and, if such Receivable is an account, arises out of a bona
fide sale of goods sold and delivered by such Debtor to, or in the process of
being delivered to, or out of and for services theretofore actually rendered by
such Debtor to, the account debtor named therein.
(b) To the extent any Receivables or other item of Collateral is
evidenced by an instrument, each Debtor shall cause such instrument to be
pledged and delivered to the Agent; provided, however, that, prior to the
existence of a Default or Event of Default and thereafter until otherwise
required by the Agent or the Required Lenders, a Debtor shall not be required to
deliver any such instrument if and only so long as the aggregate fair market
value of all such instruments held by the Debtors and not delivered to the Agent
under the Security Documents is less than $5,000,000 at any one time
outstanding.
(c) Unless and until an Event of Default hereunder occurs and is
continuing, any merchandise or other goods which are returned by a customer or
account debtor or otherwise recovered may be resold by the relevant Debtor in
the ordinary course of its business as presently conducted in accordance with
Section 6(b) hereof; upon the occurrence and during the continuation of any
Event of Default hereunder, such merchandise and other goods shall be set aside
at the request of the Agent and held by such Debtor as trustee for the Secured
Creditors and shall remain part of the Collateral. Unless and until an Event of
Default hereunder occurs and is continuing, the relevant Debtor may settle and
adjust disputes and claims with its customers and account debtors, handle
returns and recoveries and grant discounts, credits and allowances in the
ordinary course of its business as presently conducted for amounts and on terms
which such Debtor in good faith considers advisable. Upon the occurrence and
during the continuation of any Event of Default hereunder, unless the Agent
requests otherwise, each Debtor shall notify the Agent promptly of all returns
and recoveries and, on the Agent's request, deliver any such merchandise or
other goods to the Agent. Upon the occurrence and during the continuation of any
Event of Default hereunder, unless the Agent requests otherwise, each Debtor
shall also notify the Agent promptly of all disputes and claims and settle or
adjust them at no expense to the Secured Creditors hereunder, but no discount,
credit or allowance other than on normal trade terms in the ordinary course of
business as presently conducted shall be granted to any customer or account
debtor and no returns of merchandise or other goods shall be accepted by any
Debtor without the Agent's consent. The Agent may, at all times upon the
occurrence and during the continuation of any Event of Default hereunder, settle
or adjust disputes and claims directly with customers or account debtors for
amounts and upon terms which the Agent considers advisable.
Section 5. Collection of Receivables. (a) Except as otherwise provided
in this Agreement, each Debtor shall make collection of all of its Receivables
and may use the same to carry on its business in accordance with sound business
practice and otherwise subject to the terms hereof.
(b) Upon the occurrence and during the continuation of any Default or
Event of Default hereunder, whether or not the Agent has exercised any or all of
its rights under other provisions of this Section 5, in the event the Agent
requests any Debtor to do so:
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(i) all instruments and chattel paper at any time constituting
part of the Receivables (including any postdated checks) shall, upon
receipt by such Debtor, be immediately endorsed to and deposited with
Agent; and/or
(ii) such Debtor shall instruct all of its customers and account
debtors to remit all payments in respect of its Receivables to a lockbox
or lockboxes under the sole custody and control of Agent and which are
maintained at post offices selected by the Agent.
(c) Upon the occurrence and during the continuation of any Default or
Event of Default hereunder, whether or not the Agent has exercised any or all of
its rights under other provisions of this Section 5, the Agent or its designee
may notify the relevant Debtor's customers and account debtors at any time that
Receivables have been assigned to the Agent or of the Agent's security interest
therein, and either in its own name, or such Debtor's name, or both, demand,
collect (including, without limitation, through a lockbox analogous to that
described in Section 5(b)(ii) hereof), receive, receipt for, sue for, compound
and give acquittance for any or all amounts due or to become due on Receivables,
and in the Agent's discretion file any claim or take any other action or
proceeding which the Agent may deem reasonably necessary or appropriate to
protect and realize upon the security interest of the Agent in the Receivables.
(d) Any proceeds of Receivables or other Collateral transmitted to or
otherwise received by the Agent pursuant to any of the provisions of Sections
5(b) or 5(c) hereof may be handled and administered by the Agent in and through
a remittance account or accounts maintained at the Agent or by the Agent at a
commercial bank or banks selected by the Agent (collectively the "Depositary
Banks" and individually a "Depositary Bank"), and each Debtor acknowledges that
the maintenance of such remittance accounts by the Agent is solely for the
Agent's convenience and that the Debtors do not have any right, title or
interest in such remittance accounts or any amounts at any time standing to the
credit thereof. Subject to Section 4.05 of the Credit Agreement, the Agent may
apply all or any part of any proceeds of Receivables or other Collateral
received by it from any source to the payment of the Obligations (whether or not
then due and payable). The Agent need not apply or give credit for any item
included in proceeds of Receivables or other Collateral until the Depositary
Bank has received final payment therefor at its office in cash or final solvent
credits current at the site of deposit acceptable to the Agent and the
Depositary Bank as such. However, if the Agent does permit credit to be given
for any item prior to a Depositary Bank receiving final payment therefor and
such Depositary Bank fails to receive such final payment or an item is charged
back to the Agent or any Depositary Bank for any reason, the Agent may at its
election in either instance charge the amount of such item back against any such
remittance accounts or any depository account of any Debtor maintained with the
Agent, together with interest thereon at the rate then applicable to the Loan as
to which such item was applied. Concurrently with each transmission of any
proceeds of Receivables or other Collateral to any remittance account, upon the
Agent's request, the relevant Debtor shall furnish the Agent with a report in
such form as Agent shall reasonably require identifying the particular
Receivable or such other Collateral from which the same arises or relates. Each
Debtor hereby indemnifies the Secured Creditors from and against all
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<PAGE>
liabilities, damages, losses, actions, claims, judgments, and all reasonable
costs, expenses, charges and attorneys' fees suffered or incurred by any Secured
Creditor because of the maintenance of the foregoing arrangements; provided,
however, that no Debtor shall be required to indemnify any Secured Creditor for
any of the foregoing to the extent they arise solely from the gross negligence
or willful misconduct of the person seeking to be indemnified. The Secured
Creditors shall have no liability or responsibility to any Debtor for the Agent
or any other Depositary Bank accepting any check, draft or other order for
payment of money bearing the legend "payment in full" or words of similar import
or any other restrictive legend or endorsement whatsoever or be responsible for
determining the correctness of any remittance.
Section 6. Special Provisions Re: Inventory and Equipment. (a) Each
Debtor shall at its own cost and expense maintain, keep and preserve its
Inventory in good and merchantable condition and keep and preserve its Equipment
in good repair, working order and condition, ordinary wear and tear excepted,
and, without limiting the foregoing, make all necessary and proper repairs,
replacements and additions to its Equipment so that the operation thereof shall
be fully preserved and maintained.
(b) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, use, consume
and sell the Inventory in the ordinary course of its business, but a sale in the
ordinary course of business shall not under any circumstance include any
transfer or sale in satisfaction, partial or complete, of a debt owing by such
Debtor.
(c) Each Debtor may, until an Event of Default has occurred and is
continuing and thereafter until otherwise notified by the Agent, sell (x)
obsolete, worn out or unusable Equipment which is concurrently replaced with
similar Equipment at least equal in quality and condition to that sold and owned
by such Debtor free of any lien, charge or encumbrance other than the security
interest granted hereby and (y) Equipment to the extent permitted by Section
8.02 of the Credit Agreement.
(d) As of the time any Inventory or Equipment of a Debtor becomes
subject to the security interest provided for hereby and at all times
thereafter, such Debtor shall be deemed to have warranted as to any and all of
such Inventory and Equipment that all warranties of such Debtor set forth in
this Agreement are true and correct with respect to such Inventory and
Equipment; that all of such Inventory and Equipment is located at a location set
forth pursuant to Section 3(b) hereof. Each Debtor warrants and agrees that none
of its Inventory is or will be consigned to any other person or entity without
the Agent's prior written consent.
(e) Upon the Agent's or the Required Lenders' request, each Debtor shall
at its own cost and expense cause the lien of the Agent in and to any portion of
its Collateral subject to a certificate of title law to be duly noted on such
certificate of title or to be otherwise filed in such manner as is prescribed by
law in order to perfect such lien and will cause all such certificates of title
and evidences of lien to be deposited with the Agent.
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(f) Except for Equipment from time to time located on the real estate
described on Schedule C attached hereto or as otherwise hereafter disclosed to
the Secured Creditors in writing, none of the Equipment is or will be attached
to real estate in such a manner that the same may become a fixture.
(g) If any of the Inventory is at any time evidenced by a document of
title, such document shall be promptly delivered by the relevant Debtor to the
Agent.
Section 7. Special Provisions Re: Investment Property. (a) Unless and
until an Event of Default has occurred and is continuing and thereafter until
notified to the contrary by the Agent pursuant to Section 9(d) hereof:
(i) Each Debtor shall be entitled to exercise all voting and/or
consensual powers pertaining to its Investment Property or any part
thereof, for all purposes not inconsistent with the terms of this
Agreement, the Credit Agreement or any other document evidencing or
otherwise relating to any Obligations; and
(ii) Each Debtor shall be entitled to receive and retain all cash
dividends paid upon or in respect of its Investment Property.
(b) Certificates for all securities now or at any time constituting
Investment Property and part of the Collateral hereunder shall be promptly
delivered by the relevant Debtor to the Agent duly endorsed in blank for
transfer or accompanied by an appropriate assignment or assignments or an
appropriate undated stock power or powers, in every case sufficient to transfer
title thereto, including, without limitation, all stock received in respect of a
stock dividend or resulting from a split-up, revision or reclassification of the
Investment Property or any part thereof or received in addition to, in
substitution of or in exchange for the Investment Property or any part thereof
as a result of a merger, consolidation or otherwise. With respect to any
Investment Property held by a securities intermediary, commodity intermediary,
or other financial intermediary of any kind, the relevant Debtor shall execute
and deliver, and shall cause any such intermediary to execute and deliver, an
agreement among such Debtor, the Agent, and such intermediary in form and
substance satisfactory to the Agent which provides, among other things, for the
intermediary's agreement that it will comply with such entitlement orders, and
apply any value distributed on account of any Investment Property maintained in
an account with such intermediary, as directed by the Agent without further
consent by such Debtor. The Agent may at any time after the occurrence and
during the continuation of an Event of Default cause to be transferred into its
name or the name of its nominee or nominees any and all of the Investment
Property hereunder.
(c) Unless and until an Event of Default has occurred and is continuing,
each Debtor may sell or otherwise dispose of any of its Investment Property to
the extent permitted by the Credit Agreement, provided that except to the extent
permitted by Section 8.02 of the Credit Agreement, no Debtor shall sell or
otherwise dispose of any capital stock or other equity interest in any direct or
indirect Subsidiary without the prior written consent of the Agent. During the
existence of any Event of Default, no Debtor shall
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sell all or any part of the Investment Property without the prior written
consent of the Agent.
(d) Each Debtor represents that on the date of this Agreement, none of
its Investment Property consists of margin stock (as such term is defined in
Regulation U of the Board of Governors of the Federal Reserve System) except to
the extent such Debtor has delivered to the Agent a duly executed and completed
Form U-1 with respect to such stock. If at any time the Investment Property or
any part thereof consists of margin stock, the relevant Debtor shall promptly so
notify the Agent and deliver to the Agent a duly executed and completed Form U-1
and such other instruments and documents reasonably requested by the Agent in
form and substance satisfactory to the Agent.
Section 8. Power of Attorney. In addition to any other powers of
attorney contained herein, each Debtor hereby appoints the Agent, its nominee,
or any other person whom the Agent may designate as such Debtor's
attorney-in-fact, with full power to sign such Debtor's name on verifications of
accounts and other Collateral; to send requests for verification of Collateral
to such Debtor's customers, account debtors and other obligors; to endorse such
Debtor's name on any checks, notes, acceptances, money orders, drafts and any
other forms of payment or security that may come into the Agent's possession; to
endorse the Collateral in blank or to the order of the Agent or its nominee; to
sign such Debtor's name on any invoice or bill of lading relating to any
Collateral, on claims to enforce collection of any Collateral, on notices to and
drafts against customers and account debtors and other obligors, on schedules
and assignments of Collateral, on notices of assignment and on public records;
to notify the post office authorities to change the address for delivery of such
Debtor's mail to an address designated by the Agent; to receive, open and
dispose of all mail addressed to such Debtor; and to do all things necessary to
carry out this Agreement. Each Debtor hereby ratifies and approves all acts of
any such attorney and agrees that neither the Agent nor any such attorney will
be liable for any acts or omissions nor for any error of judgment or mistake of
fact or law other than such person's gross negligence or willful misconduct. The
Agent may file one or more financing statements disclosing its security interest
in any or all of the Collateral without any Debtor's signature appearing
thereon, and each Debtor also hereby grants the Agent a power of attorney to
execute any such financing statements, or amendments and supplements to
financing statements, on behalf of such Debtor without notice thereof to any
Debtor. The foregoing powers of attorney, being coupled with an interest, are
irrevocable until the Obligations have been fully paid and satisfied and the
commitments of the Lenders to extend credit to or for the account of the
Borrower have expired or otherwise been terminated.
Section 9. Defaults and Remedies. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement shall constitute an "Event of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC
(regardless of whether the UCC is the law of the jurisdiction where the rights
or remedies are asserted and regardless of whether the UCC
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applies to the affected Collateral), and further the Agent may, without demand
and without advertisement, notice, hearing or process of law, all of which each
Debtor hereby waives to the extent permitted by applicable law, at any time or
times, sell and deliver any or all Collateral held by or for it at public or
private sale, for cash, upon credit or otherwise, at such prices and upon such
terms as the Agent deems advisable, in its sole discretion. In the exercise of
any such remedies, the Agent may sell the Collateral as a unit even though the
sales price thereof may be in excess of the amount remaining unpaid on the
Obligations. Also, if less than all the Collateral is sold, the Agent shall have
no duty to marshal or apportion the part of the Collateral so sold as between
the Debtors, or any of them, but may sell and deliver any or all of the
Collateral without regard to which of the Debtors are the owners thereof. In
addition to all other sums due any Secured Creditor hereunder, each Debtor shall
pay the Secured Creditors all costs and expenses incurred by the Secured
Creditors, including reasonable attorneys' fees and court costs, in obtaining,
liquidating or enforcing payment of Collateral or the Obligations or in the
prosecution or defense of any action or proceeding by or against any Secured
Creditor or any Debtor concerning any matter arising out of or connected with
this Agreement or the Collateral or the Obligations, including, without
limitation, any of the foregoing arising in, arising under or related to a case
under the United States Bankruptcy Code (or any successor statute). Any
requirement of reasonable notice shall be met if such notice is personally
served on or mailed, postage prepaid, to the Debtors in accordance with Section
13(b) hereof at least 10 days before the time of sale or other event giving rise
to the requirement of such notice; provided, however, no notification need be
given to a Debtor if such Debtor has signed, after an Event of Default hereunder
has occurred, a statement renouncing any right to notification of sale or other
intended disposition. The Agent shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given. Any
Secured Creditor may be the purchaser at any such sale. Each Debtor hereby
waives all of its rights of redemption from any such sale. The Agent may
postpone or cause the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale, and such sale
may, without further notice, be made at the time and place to which the sale was
postponed or the Agent may further postpone such sale by announcement made at
such time and place. In the event any of the Collateral shall constitute
restricted securities within the meaning of any applicable securities laws, any
disposition thereof in compliance with such laws shall not render the
disposition commercially unreasonable.
(c) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default hereunder, the Agent shall have
the right, in addition to all other rights provided herein or by law, to take
physical possession of any and all of the Collateral and anything found therein,
the right for that purpose to enter without legal process any premises where the
Collateral may be found (provided such entry be done lawfully), and the right to
maintain such possession on the relevant Debtor's premises (each Debtor hereby
agreeing, to the extent it may lawfully do so, to lease such premises without
cost or expense to the Agent or its designee if the Agent so requests) or to
remove the Collateral or any part thereof to such other places as the Agent may
desire. Upon the occurrence and during the continuation of any Event of Default
hereunder, the Agent shall have the right to exercise any and all rights with
respect to deposit accounts of each Debtor maintained with any Secured Creditor,
including, without limitation, the right to collect,
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withdraw and receive all amounts due or to become due or payable under each such
deposit account. Upon the occurrence and during the continuation of any Event of
Default hereunder, each Debtor shall, upon the Agent's demand, assemble the
Collateral and make it available to the Agent at a place designated by the
Agent. If the Agent exercises its right to take possession of the Collateral,
each Debtor shall also at its expense perform any and all other steps requested
by the Agent to preserve and protect the security interest hereby granted in the
Collateral, such as placing and maintaining signs indicating the security
interest of the Agent, appointing overseers for the Collateral and maintaining
Collateral records.
(d) Without in any way limiting the foregoing, upon the occurrence and
during the continuation of any Event of Default, all rights of a Debtor to
exercise the voting and/or consensual powers which it is entitled to exercise
pursuant to Section 7(a)(i) hereof and/or to receive and retain the
distributions which it is entitled to receive and retain pursuant to Section
7(a)(ii) hereof, shall, at the option of the Agent, cease and thereupon become
vested in the Agent, which, in addition to all other rights provided herein or
by law, shall then be entitled solely and exclusively to exercise all voting and
other consensual powers pertaining to the Investment Property and/or to receive
and retain the distributions which such Debtor would otherwise have been
authorized to retain pursuant to Section 7(a)(ii) hereof and shall then be
entitled solely and exclusively to exercise any and all rights of conversion,
exchange or subscription or any other rights, privileges or options pertaining
to any Investment Property as if the Agent were the absolute owner thereof
including, without limitation, the rights to exchange, at its discretion, any
and all of the Investment Property upon the merger, consolidation,
reorganization, recapitalization or other readjustment of the respective issuer
thereof or upon the exercise by or on behalf of any such issuer or the Agent of
any right, privilege or option pertaining to any Investment Property and, in
connection therewith, to deposit and deliver any and all of the Investment
Property with any committee, depositary, transfer agent, registrar or other
designated agency upon such terms and conditions as the Agent may determine.
(e) Without in any way limiting the foregoing, each Debtor hereby grants
to the Secured Creditors a royalty-free irrevocable license and right to use all
of such Debtor's patents, patent applications, patent licenses, trademarks,
trademark registrations, trademark licenses, trade names, trade styles, and
similar intangibles in connection with any foreclosure or other realization by
the Agent or the Secured Creditors on all or any part of the Collateral to the
extent permitted by law.
(f) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Debtor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. Neither any Secured Creditor, nor any party acting
as attorney for any Secured Creditor, shall be liable hereunder for any acts or
omissions or for any error of judgment or mistake of fact or law other than
their gross negligence or willful misconduct. The rights and remedies of the
Secured Creditors under this Agreement shall be cumulative and not exclusive of
any other
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right or remedy which any Secured Creditor may have. For purposes of this
Agreement, an Event of Default shall be construed as continuing after its
occurrence until the same is waived in writing by the Lenders or the Required
Lenders or cured, as the case may be, in accordance with the Credit Agreement.
Section 10. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of the
Credit Agreement. The Debtors shall remain liable to the Secured Creditors for
any deficiency. Any surplus remaining after the full payment and satisfaction of
the Obligations shall be returned to the Borrower, as agent for the Debtors, or
to whomsoever the Agent reasonably determines is lawfully entitled thereto.
Section 11. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and the commitments of the Lenders to extend credit to or for the
account of the Borrower under the Credit Agreement have expired or otherwise
terminated. Upon such termination of this Agreement, the Agent shall, upon the
request and at the expense of the Debtors, forthwith release its security
interest hereunder and file appropriate termination statements with appropriate
offices (including, The United States Patent and Trademark Office and The United
States Copyright Office) or take other actions to evidence such termination.
Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in Section 11 of the Credit Agreement, all of which
provisions of said Section 11 are incorporated by reference herein with the same
force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the other Secured Creditors or any
other holders of the Obligations concerning the perfection of the liens and
security interests granted hereunder or in the value of any of the Collateral.
Section 13. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Debtor, its successors
and assigns and shall inure, together with the rights and remedies of the
Secured Creditors hereunder, to the benefit of the Secured Creditors and their
successors and permitted assigns; provided, however, that no Debtor may assign
its rights or delegate its duties hereunder without the Agent's prior written
consent. Without limiting the generality of the foregoing, and subject to the
provisions of the Credit Agreement, any Lender may assign or otherwise transfer
any indebtedness held by it secured by this Agreement to any other person, and
such other person shall thereupon become vested with all the benefits in respect
thereof granted to such Lender herein or otherwise.
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(b) All communications provided for herein shall be in writing, except
as otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, when given in accordance with Section 12.03 of the Credit
Agreement.
(c) No Secured Creditor (other than the Agent) shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
or other realization upon any Collateral subject to this Agreement or for the
execution of any trust or power hereof or for the appointment of a receiver, or
for the enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Secured Creditors (other than
the Agent) shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien and security interest of this Agreement by its or their
action or to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Secured Creditors.
(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed as
not containing such provision, but only as to such jurisdictions where such law
or interpretation is operative, and the invalidity or unenforceability of such
provision shall not affect the validity of any remaining provisions hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect. Without limiting the generality of the
foregoing, in the event that this Agreement shall be deemed to be invalid or
otherwise unenforceable with respect to any Debtor, such invalidity or
unenforceability shall not affect the validity of this Agreement with respect to
the other Debtors.
(e) The lien and security interest herein created and provided for stand
as direct and primary security for the Obligations of the Borrower arising under
or otherwise relating to the Credit Agreement as well as for any of the other
Obligations secured hereby. No application of any sums received by the Secured
Creditors in respect of the Collateral or any disposition thereof to the
reduction of the Obligations or any part thereof shall in any manner entitle any
Debtor to any right, title or interest in or to the Obligations or any
collateral or security therefor, whether by subrogation or otherwise, unless and
until all Obligations have been fully paid and satisfied and all agreements of
the Secured Creditors to extend credit to or for the account of each Debtor and
to or for the account of the Borrower have expired or otherwise have been
terminated. Each Debtor acknowledges that the lien and security interest hereby
created and provided are absolute and unconditional and shall not in any manner
be affected or impaired by any acts of omissions whatsoever of any Secured
Creditor or any other holder of any Obligations, and without limiting the
generality of the foregoing, the lien and security interest hereof shall not be
impaired by any acceptance by the Secured Creditors or any other holder of any
Obligations of any other security for or guarantors upon any of the Obligations
or by any failure, neglect or omission on the part of any Secured Creditor or
any other holder of any Obligations to realize upon or protect any of the
Obligations or any collateral or security therefor (including, without
limitation, impairment of collateral or failure to perfect security interest in
collateral). The lien and security interest hereof shall not in any manner be
impaired or affected by (and the
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Secured Creditors, without notice to anyone, are hereby authorized to make from
time to time) any sale, pledge, surrender, compromise, settlement, release,
renewal, extension, indulgence, alteration, substitution, exchange, change in,
modification or disposition of any of the Obligations or of any collateral or
security therefor, or of any guaranty thereof, or of any instrument or agreement
setting forth the terms and conditions pertaining to any of the foregoing. The
Secured Creditors may at their discretion at any time grant credit to the
Borrower without notice to the other Debtors in such amounts and on such terms
as the Secured Creditors may elect (all of such to constitute additional
Obligations hereby secured) without in any manner impairing the lien and
security interest created and provided for herein. In order to realize hereon
and to exercise the rights granted the Secured Creditors hereunder and under
applicable law, there shall be no obligation on the part of any Secured Creditor
or any other holder of any Obligations at any time to first resort for payment
to the Borrower or to any other Debtor or to any guaranty of the Obligations or
any portion thereof or to resort to any other collateral, security, property,
liens or any other rights or remedies whatsoever, and the Secured Creditors
shall have the right to enforce this Agreement against any Debtor or any of its
Collateral irrespective of whether or not other proceedings or steps seeking
resort to or realization upon or from any of the foregoing are pending.
(f) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Debtors hereunder or a party shall wish to
become a Debtor hereunder, such substituted or additional Debtor shall, upon
executing an agreement in the form attached hereto as Schedule D, become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Debtor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Debtor being replaced. Any such agreement shall
contain information as to such Debtor necessary to update Schedules A, B and C
hereto with respect to it. No such substitution shall be effective absent the
written consent of Agent nor shall it in any manner affect the obligations of
the other Debtors hereunder.
(g) This Agreement shall be deemed to have been made in the State of New
York and shall be governed by, and construed in accordance with, the laws of the
State of New York. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(h) Each Debtor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in the New York City for purposes of all legal
proceedings arising out of or relating to this Agreement, the other Loan
Documents or the transactions contemplated hereby or thereby. Each Debtor
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 form. EACH DEBTOR AND EACH SECURED
CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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(i) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same agreement.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, each Debtor has caused this Agreement to be duly
executed and delivered in New York, New York as of the date first above written.
"DEBTORS"
EAGLE-PICHER INDUSTRIES, INC.
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title President
---------------------------------
DAISY PARTS, INC.
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title Authorized Person
---------------------------------
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title President
---------------------------------
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EAGLE-PICHER FAR EAST, INC.
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title Authorized Person
---------------------------------
EAGLE-PICHER FLUID SYSTEMS, INC.
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title Authorized Person
---------------------------------
EAGLE-PICHER MINERALS, INC.
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title Authorized Person
---------------------------------
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HILLSDALE TOOL & MANUFACTURING CO.
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title Authorized Person
---------------------------------
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title Authorized Person
---------------------------------
EAGLE-PICHER TECHNOLOGIES, LLC
By /s/ ANDRIES RUIJSSENAARS
---------------------------------------
Name Andries Ruijssenaars
----------------------------------
Title Director-Manager
---------------------------------
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Accepted and agreed to in New York, New York as of the date first above written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Secured Creditors
By /s/ GREGORY D. AMOROSO
--------------------------------------
Its Group Vice President
-----------------------------------
By /s/ PAUL WIDUCH
--------------------------------------
Its Group Vice President
-----------------------------------
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SCHEDULE A
LOCATIONS
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
EAGLE-PICHER INDUSTRIES, INC. 250 East Fifth Street 2424 John Daly Road (Building 11)
(after merger with E-P Suite 500 Inkster, MI 48141-2453
Acquisition, Inc.) Cincinnati, OH 45202 (Offices)
Tax ID# 31-0268670
13323 IL Highway 133
Paris, IL 61944
(Plant)
1802 East 50th Street
Lubbock, TX 79404
(Plant)
1311 East 40th Street
Lubbock, TX 79412-1801
(Warehouse)
3280 Hageman Street
Sharonville, OH 45242
(Plant)
9036 Goldpark Drive
Hamilton, OH 45011-9764
(Plant)
250 East Fifth Street
Suite 500
Cincinnati, OH 45202
1500 Highway I-35 West
Denton, TX 76202
(Vacant Plant)
815 North Oak Avenue
Sidney, OH 45365
(Plant)
2500 Schenk Road
Sidney, OH 45365
(Plant)
2322 Schenk Road
Sidney, OH 45365
(Warehouse)
</TABLE>
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
19 Ohio Avenue
Norwich, CT 06360
(Plant)
382-384 Seymour Street
Stratford, CT 06497
(Plant)
5320 Industrial Drive South
Pine Bluff, AR 71602
(Plant)
7555-8 Tyler Boulevard
Mentor, OH 44060-4866
(Repackaging & Shipping)
829 U.S. 131 NW
Kalkaska, MI 49646
(Plant)
201 Industrial Park Road
Blacksburg, VA 24060
(Plant)
2638 Princess Street
Inkster, MI 48141
(Plant)
10825 CR 44
Leesburg, FL 34788
(Plant)
3175 State Street
Blacksburg, VA 24060
(Plant)
Vacant land located in
Harris County, TX
CINCINNATI INDUSTRIAL
MACHINERY SALES COMPANY
Block 26, 18D,
555 Victoria Road
Hong Kong
</TABLE>
A-2
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
EQUIPOS DE ACUNA
S.A. De C.V.
Parque Industrial Modelo
km 8.5 Presa de Amistad
CD Acuna, Coahuila Mexico
EAGLE-PICHER ESPANA S.A.
Poligono Las Casas
Apartado de Correos, 32
42080 Soria, Espana
EPTEC, S.A. De C.V.
Calle Avenida Libertad S/N
Zona Industrial C.P. 78090
San Luis Potosi, S.L.P.
Mexico
EAGLE-PICHER INDUSTRIES
OF CANADA LIMITED
(Mike Belec Office)
9680 Saint Laurent
Montreal, PQ, Canada
EAGLE-PICHER WOLVERINE GmbH
Verrenberger Weg 20
P. O. Box 1549
D-74605 Ohringen, Germany
EAGLE-PICHER INDUSTRIES EUROPE B.V.
Randwycksingel 20
P. O. Box 1376
NL-6201 BJ Maastricht
Netherlands
EAGLE-PICHER AUTOMOTIVE GmbH
Technologiepark
Friedrich-Ebert-Strasse
D-51429 Bergisch-Gladbach
Germany
(EP AUTOMOTIVE GmbH) WOLFSBURG OFFICE
Gerta-Overbeck-Ring, 9
D-38446 Wolfsburg
EAGLE-PICHER MATERIALS GmbH
An der Lehgrrube 14
P.O. Box 1549
D-74605 Ohringen, Germany
</TABLE>
A-3
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
EAGLE-PICHER HILLSDALE LIMITED
301, Relay Drive
GB - Tamworth
B77 5PT Staffordshire
United Kingdom
EAGLE-PICHER FLUID SYSTEMS LTD.
Taith House
Rockingham Road
Market Harborough
Leicestershire LE16 7QE
United Kingdom
Residential Properties near Inkster, MI
- -----------------------------------------------------------------------------------------------------------
EAGLE-PICHER TECHNOLOGIES, LLC "C" and Porter Streets 737 Highway 69A
Tax ID# 31-1587660 Joplin, MO 64801 Quapaw, OK 74363
(EOM Plant)
200 B.J. Tunnel Boulevard East
Miami, OK 74354
(ESAT Plant)
36 B.J. Tunnel Boulevard East
Miami, OK 74354
(ESAT Plant)
520 North Main Street
Miami, OK 74354-4850
(ESAT Shipping Facility)
1001 "A" Street N.W.
Miami, OK 74354-3206
(ESAT Plant)
510 North Main Street
Miami, OK 74354-4850
(ESAT Plant)
410 Adele Avenue
Joplin, MO 64801-3279
(Plant)
"F" & Schifferdecker Avenue
Joplin, MO 64801(Plant)
3970 Clearview Frontage Road
Colorado Springs, CO 80911-1220
(Warehouse & Plant)
</TABLE>
A-4
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
2850 Janitell Road
Colorado Springs, CO 80906-4141
(Plant)
Highway I-25, Exit 152
Socorro, NM 87801
(Vacant Plant)
425 North Main Street
Miami, OK 74354-4809
(ESAT Plant)
1927 West 4th Street
Joplin, MO 64801
(Plant)
3220 Industrial Road
Joplin, MO 64801-6137
(Plant)
Highway 10 & Industrial Park Road
Grove, OK 74344
(Plant)
798 Highway 69A
Quapaw, OK 74363
(Boron Plant)
3820 South Hancock Expressway
Colorado Springs, CO 80911-1231
(Plant)
13605 West 96th Terrace
Lenexa, KS 66215-1297
(Plant)
1701 South Vine Street
Harrisonville, MO 64701
(Plant)
Old Highway 66 -
East Clark Avenue
Galena, KS 66739
(Plant)
North Bethel Road
Seneca, MO 64865
(Plant)
</TABLE>
A-5
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
Northeast Edge of City
Stella, MO 64867
(Plant)
1215 West "B" Street
Joplin, MO 64801
(Plant)
20th & Irongate
Joplin, MO 64804
(Plant)
- ---------------------------------------------------------------------------------------------------------
EAGLE-PICHER DEVELOPMENT 250 East Fifth Street None
COMPANY, INC. Suite 500
Tax ID# 31-1215706 Cincinnati, OH 45202
- -----------------------------------------------------------------------------------------------------------
EAGLE-PICHER FAR EAST, INC. 250 East Fifth Street EAGLE-PICHER FAR EAST, INC.
Tax ID# 31-1235685 Suite 500 Nagoya Chogin Bldg. 4F
Cincinnati, OH 45202 1-17-19 Marunouchi
Naka-ku, Nagoya, 460
Japan
(EP FAR EAST) TOKYO OFFICE
Nihonseimei Sakuragi-cho AN Building 3F
6-113, Aioi-cho, Naka-ku
Yokohama, 231-0012
Japan
- ----------------------------------------------------------------------------------------------------------
EAGLE-PICHER FLUID SYSTEMS, INC. 7854 Lochlin Drive None
Tax ID# 31-1452637 Brighton, MI 48116
(Plant)
- ----------------------------------------------------------------------------------------------------------
EAGLE-PICHER MINERALS, INC. 6110 Plumas Street Highway I-80, 18 miles east of Reno
Tax ID# 31-1188662 Reno, NV 89509-6060 Clark Station, NV 89431 (Plant)
(Division HQ)
2630 Graham Boulevard
Vale, OR 97918
(Plant)
150 Coal Canyon Road
Lovelock, NV 89419
(Plant)
Colado Mining & Hauling Shop
Corner of Sixth & Dartmouth
Lovelock, NV 89419
(Mining Support)
</TABLE>
A-6
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
Intermodal
1382 Ipsen Road
Belvidere, IL 61008
Raw Materials
3860 W. 11th Street, #B
Houston, TX 77055
Mehaffey & Daigle
1200 Sams Avenue
Harahan, LA 70123
Advanced Distribution
1140 Commerce Road
Morrow, GA 30260
Oostdyk/Gerard Express
10 Industrial Road
Carlstadt, NJ 07072
Peerless
1440 Miami Chapel Road
Dayton, OH 4540
Burnham
9300 Van Horne Way
Richmond, BC V6X-1W2
Kiki & Sons
585 Michel Creek Road
Sparwood, BC V0B-2GO
Kindersley Transport
350 Third Ave. S.
Saskatoon, SK S7K-4J2
Burnham
2030 Notre-Dame Ave
Winnipeg, MB R3H-0JB
Groupe Robert
321 Orenda Road
Brampton, ON L6T-1G5
Transit Industriel
1775 Mary Victorin
St. Bruno, PQ J3V-6B7
Shoreline Fuels
Shediac, NB E1E-3Y8
</TABLE>
A-7
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
Labon
1250 Newton Street
Boucherville, PQ J4B-5H2
UNITED MINERALS GmbH & CO. KG
Breloher Strasse 85-101
D-29633 Munster, Germany
EAGLE-PICHER MINERAL INTERNATIONAL S.A.R.L.
9 Rue Auguste Buisson
92250 La Grareene Colombes
France
Mineral rights
owned or Mining
conducted in the
following
counties:
Pershing County, NV
Washoe County, NV
Storey County, NV
Churchill County, NV
Siskiyou County, CA
Harney County, OR
Malheur County, OR
- ---------------------------------------------------------------------------------------------------------
HILLSDALE TOOL & MANUFACTURING 135 E. South Street 651 Beck Road
CO. Tax ID# 38-0946293 Hillsdale, MI 49242 Jonesville, MI 49250
(Plant) (Plant)
215 Industrial Drive
Hillsdale, MI 49242
(Plant)
54 Willow Street
Hillsdale, MI
(Vacant Plant)
52 Willow Street
Hillsdale, MI
(Vacant Plant)
</TABLE>
A-8
<PAGE>
<PAGE>
<TABLE>
Name of Debtor
(and Federal Tax I.D. Number) Chief Executive Office Additional Places of Business
- ----------------------------- ---------------------- -----------------------------
<S> <C> <C>
221 Industrial Drive
(a/k/a 210 Uran Drive)
Hillsdale, MI 49242
(Plant)
263 Industrial Drive
Hillsdale, MI 49242
(Tech Center)
7790 South Homestead Drive
Hamilton, IN 46742
(Plant)
760 E. Huron Street
Vassar, MI 48768
(Plant)
Coffee County Interstate Industrial Park
285 Park Tower Drive
Manchester, TN 37355
(Plant)
- ---------------------------------- ---------------------------- ---------------------------------------------
MICHIGAN AUTOMOTIVE RESEARCH 1254 North Main Street None
CORPORATION Ann Arbor, MI 48104
Tax ID# 38-2185909 (Plant)
- ---------------------------------- ---------------------------- ---------------------------------------------
DAISY PARTS, INC. 135 E. South Street
Tax ID# 38-1406772 Hillsdale, MI 49242 None
(Plant)
- ---------------------------------- ---------------------------- ---------------------------------------------
A-9
<PAGE>
<PAGE>
SCHEDULE B
TRADE NAMES
</TABLE>
<TABLE>
<CAPTION>
NAME OF DEBTOR TRADE NAMES OF SUCH DEBTOR
- -----------------------------------------------------------------------------------------------
<S> <C>
Eagle-Picher Industries, Inc. Eagle-Picher
Eagle-Picher Industries
Cincinnati Industrial Machinery
Construction Equipment
Ross Aluminum
Rubber Molding
Technologies
Trim
Wolverine
Eagle-Picher Automotive
Ross Aluminum Foundries
Chemsyn Science Laboratories
Eagle-Picher Espana
Eagle-Picher Far East
Eagle-Picher Industries Europe
Eagle-Picher Industries Materials
EPTEC
Eagle-Picher Rubber Molding
Equipos de ACUNA
Wolverine Gasket
Wolverine Gasket & Manufacturing
- ------------------------------------------------------------------------------------------------
Daisy Parts, Inc. Eagle-Picher
Eagle-Picher Industries
- ------------------------------------------------------------------------------------------------
Eagle-Picher Development Company, Inc Eagle-Picher
Eagle-Picher Industries
- ------------------------------------------------------------------------------------------------
Eagle-Picher Far East, Inc Eagle-Picher
Eagle-Picher Industries
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
NAME OF DEBTOR TRADE NAMES OF SUCH DEBTOR
<S> <C>
Eagle-Picher Fluid Systems, Inc. Eagle-Picher
Eagle-Picher Industries
Eagle-Picher Automotive
Eagle-Picher Fluid Systems
- ------------------------------------------------------------------------------------------------
Eagle-Picher Minerals, Inc. Eagle-Picher
Eagle-Picher Industries
Eagle-Picher Minerals
Eagle-Picher Minerals International
Eagle-Picher Minerals of Canada
United Minerals (Europe only)
- ------------------------------------------------------------------------------------------------
Hillsdale Tool & Manufacturing Co. Eagle-Picher
Eagle-Picher Industries
Eagle-Picher Automotive
Daisy Parts
Hillsdale Tool
Hillsdale Tool & Manufacturing
- ------------------------------------------------------------------------------------------------
Michigan Automotive Research Corporation Eagle-Picher
Eagle-Picher Industries
Eagle-Picher Automotive
MARCO
Michigan Automotive Research Corporation
- ------------------------------------------------------------------------------------------------
Eagle-Picher Technologies, LLC Eagle-Picher
Eagle-Picher Industries
Technologies
Chemsyn Science Laboratories
- ------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
SCHEDULE C
REAL ESTATE LEGAL DESCRIPTIONS
<TABLE>
<S> <C>
2424 John Daly Road (Building 11) Coffee County Interstate Industrial Park
Inkster, MI 48141-2453 285 Park Tower Drive
Manchester, TN 37355
1802 East 50th Street 829 U.S. 131 NW
Lubbock, TX 79404 Kalkaska, MI 49646
3280 Hageman Street 1311 East 40th Street
Sharonville, OH 45242 Lubbock, TX
1721 West Pleasant Avenue 9036 Goldpark Drive
River Rouge, MI 48218 Hamilton, OH
1401 North American Street 7854 Lochlin Drive
Philadelphia, PA 19140 Brighton, MI 48116
135 E. South Street 580 Walnut Street
Hillsdale, MI 49242 Cincinnati, OH 45202-3175
651 Beck Road 250 East Fifth Street
Johnsville, MI 49250 Suite 500
Cincinnati, OH 45202
215 Industrial Drive 760 E. Huron Street
Hillsdale, MI 49242 Vassar, MI 48768
51 Willow Street 6110 Plumas Street
Hillsdale, MI Reno, NV 89509-6060
52 Willow Street 1254 North Main Street
Hillsdale, MI Ann Arbor, MI 48104
221 Industrial Drive 5320 Industrial Drive South
Hillsdale, MI 49242 Pine Bluff, AR 71602
263 Industrial Drive 7555-8 Tyler Boulevard
Hillsdale, MI 49242 Mentor, OH
7790 South Homestead Drive 410 Adele Avenue
Hamilton, IN 46742 Joplin, MO 64802
</TABLE>
C-1
<PAGE>
<PAGE>
<TABLE>
<S> <C>
150 Coal Canyon Road "F" & Schifferdecker Avenue
Lovelock, NV 89419 Joplin, MO
Highway I-80, 18 miles east of Reno 3970 Clearview Frontage Road
Clark Station, NV 89431 Colorado Springs, CO
2630 Graham Boulevard 2850 Janitell Road
Vale, OR 97918 Colorado Springs, CO 80906-4141
Colado Mining & Hauling Shop Highway I-25, Exit 152
Corner of Sixth & Dartmouth Socorro, NM 87801
Lovelock, NV 89419
1500 Highway I-35 West 520 North Main Street
Denton, TX Miami, OK
815 North Oak Avenue 1001 "A" Street N.W.
Sidney, OH 45365 Miami, OK
2500 Schenk Road 510 North Main Street
Sidney, OH 45365 Miami, OK
2322 Schenk Road 425 North Main Street
Sidney, OH 45365 Miami, OK
19 Ohio Avenue 3062/3064 Scott Blvd.
Norwich, CT 06360 Santa Clara, CA
382-384 Seymour Street Approximately 153 acres acquired 12/16/85
Stratford, CT 06497 from Turner at Book 85, Page 809.
737 Highway 69A Approximately 83 acres acquired 4/26/88
Quapaw, OK 74363 from State of Oregon at Book 88, Page 17742.
1927 West 4th Street Approximately 142 acres acquired 4/18/89
Joplin, MO 64801 from Schneider at Book 89, Page 31466.
"C" and Porter Streets Approximately 5.76 acres acquired 7/6/89
Joplin, MO 64810 from Bixby at Book 89, Page 35507.
3220 Industrial Road Approximately 5.52 acres acquired 10/16/90
Joplin, MO from Tolman at Book 93, Page 886.
Highway 10 & Industrial Park Road Approximately 5.75 acres acquired 10/16/90
Grove, OK 74344 from Tolman at Book 93, Page 884.
</TABLE>
C-2
<PAGE>
<PAGE>
<TABLE>
<S> <C>
3820 South Hancock Expressway Approximately 266 acres acquired 12/10/90
Colorado Springs, CO 80911-1231 from Tolman at Book 93, Page 888, and from
Torrey on 10/26/90 at Book 93, Page 889.
13605 West 96th Terrace Properties located in Seneca City
Lenexa, KS 66215-1297
200 B.J. Tunnel Boulevard East Eagle-Picher Espana S.A.
Miami, OK 74354 Poligono Las Casas
Apartado de Correos, 32
42080 Soria, Espana
1701 South Vine Street Eagle-Picher Fluid Systems Ltd.
Harrisonville, MO 64701 Taith House
Rockingham Road
Market Harborough
Leicestershier LE16 7QE
United Kingdom
Old Highway 66 - East Clark Avenue Eagle-Picher Hillsdale Limited
Galena, KS 66739 301, Relay Drive
GB - Tamworth
B77 5PT Staffordshire
United Kingdom
North Bethel Road Eagle-Picher Materials GmbH
Seneca, MO 64865 An der Lehmgrube 14
D-74605 Ohringen, Germany
Northeast Edge of City Eagle-Picher Wolverine GmbH
Stella, MO 64867 Verrenberger Weg 20
D-74605 Ohringen, Germany
1215 West "B" Street EPTEC, S.A. de C.V.
Joplin, MO 64801 Calle Avenida Libertad S/N
Zona Industrial C.P. 78090
San Luis Potosi, S.L.P
Mexico
20th & Irongate Equipos de Acuna S.A. de C.V.
Joplin, MO Parque Industrial Modelo
km 8.5 Presa de Amistad
CD Acuna, Coahuila Mexico
1915 Irongate (EP Automotive GmbH) Wolfsburg Office
Joplin, MO Gerta-Overbeck-Ring, 9
D-38446 Wolfsburg
Germany
</TABLE>
C-3
<PAGE>
<PAGE>
<TABLE>
<S> <C>
36 B.J. Tunnel Boulevard East Tokyo Office
Miami, OK Nihonseimei Sakuragi-cho
AN Building 3F, 6-113
Aioi-cho, Naka-ku
Yokohama, 231-0012
Japan
798 Highway 69A France Sales Office
Quapaw, OK 74363 9 Rue Auguste Buisson
92250 La Gareene Colombes
France
Couples Plant Centronic Limited
"C" and Porter Streets Centronic House
Joplin, MO 64802 King Henry's Drive
New Addington, Croydon CR9 OBG
England
201 Industrial Park Road Cincinnati Industrial Machinery Sales
Blacksburg, VA 24060 Company
Block 26, 18D, 555 Victoria Road
Hong Kong
2638 Princess Street Eagle-Picher Automotive GmbH
Inkster, MI 48141 Technologiepark
Friedrich-Ebert-Strasse
D-51429 Bergisch-Gladbach Germany
10825 CR 44 Eagle-Picher Far East, Inc.
Leesburg, FL 34788 Nagoya Chogin Bldg. 4F
1-17-19 Marunouchi
Naka-ku, Nagoya, 460
Japan
3175 State Street Eagle-Picher Industries Europe B.V.
Blacksburg, VA 24060 Randwycksingel 20
NL-6201 BJ Maastricht
Netherlands
3950 South Clear View Loop Eagle-Picher Industries of Canada Limited
Security, CO 9680 Saint Laurent
Montreal, PQ, Canada
Cherokee County United Minerals GmbH & Co. KG
Lenexa, KS Breloher Strasse 85-101
D-29633 Munster, Germany
</TABLE>
C-4
<PAGE>
<PAGE>
<TABLE>
<S> <C>
Cherokee County Yamanaka EP Corporation
Lenexa, KS 20 Toderacho Ohara
Sakyo-ku Kyoto Japan
211 Industrial Drive South of "C", North of "B"
Hillsdale, MI Joplin, MO
Wayne County C&A, Between Porter & Empire, Joplin, MO
Inkster, MI
26731 Trowbridge & North of "C", West of Porter
26737 Trowbridge Joplin, MO
Inkster, MI
Kalkaska County North of "C", West of Harlem
Kalkaska, MI Joplin, MO
Kalkaska County North of Porter, East of Harlem
Kalkaska, MI Joplin, MO
2418 John Dale Properties located in Ottawa County
(Lots 94 & 95) OK
Inkster, MI
Lots on Trowbridge Approximately 80 acres acquired 2/17/94
in Wayne County from Asamera Minerals (US) Inc. at Book
Inkster, MI 99, Page 344.
Mineral rights acquired 7/27/95 from Donan Approximately 640 acres acquired 12/14/93
Baird & Marie Fancher at Book 291, Page 566. from Asamera Minerals (US) Inc. at Book
98, Page 993.
Perlite mining rights leased from Walter M. Approximately 1.4 acres leased from So.
Fisk from 7/1/87 to 6/30/2047. Pacific Transportation Co., Lease No. 65202
Approximately 3,718 acres leased from the Rights leased 9/1/45 from Thomas Copeland
So. Pacific RR on 12/1/66. and James Knight d/b/a Nevada Celatom Co.,
recorded at Book 103, Page 370.
Approximately 5 acres acquired 6/30/70 from Approximately 120 acres acquired 3/12/75
C.W. Malone, Treas. at Book 467, Page 88. from Wight at Book 83, Page 103.
Approximately 5 acres acquired 6/30/70 from Rights on approximately 1,604 acres leased
C.W. Malone, Treas. at Book 467, Page 91. from So. Pacific Land Co., recorded at
Book 39, Page 113
</TABLE>
C-5
<PAGE>
<PAGE>
<TABLE>
<S> <C>
Approximately 2.5 acres leased from So. Rights on approximately 1.38 acres leased
Pacific Transportation Co., Lease No. from So. Pacific Transportation Co., Lease
173087, expired 10/10/93, now month to No. 190259
month.
Approximately 516 acres acquired 12/18/85 Rights leased on approximately 480 acres
C-W Nevada Inc. at Book 51, Page 514. in Lyon and Churchill Counties from
Approximately 0.04 acres of this parcel now Catherine Tweedt, J.H. and Emma Chatelle
leased to Airtouch Cellular until 3/31/01.
Approximately 480 acres acquired 12/16/85 Rights on approximately 1,040 acres leased from
Trner at Book 85, Page 809, presently Miles, et al.
from under farming leases.
Rights on approximately 640 acres leased Rights on approximately 1,480 acres leased
from State of Oregon from Diatomite Products Co.
</TABLE>
C-6
<PAGE>
<PAGE>
SCHEDULE D
ASSUMPTION AND SUPPLEMENTAL SECURITY AGREEMENT
THIS AGREEMENT dated as of this _____ day of ______________, ____ from
[NEW DEBTOR], a __________ corporation (the "New Debtor"), to ABN AMRO Bank N.V.
("ABN AMRO"), as agent for the Secured Creditors (defined in the Security
Agreement hereinafter identified and defined) (ABN AMRO acting as such agent and
any successor or successors to ABN AMRO in such capacity being hereinafter
referred to as the "Agent");
WITNESSETH THAT:
WHEREAS, E-P Acquisition, Inc. (the "Borrower") and certain other
parties have executed and delivered to the Agent that certain Security Agreement
dated as of February __, 1998 (such Security Agreement, as the same may from
time to time be modified or amended, including supplements thereto which add
additional parties as Debtors thereunder, being hereinafter referred to as the
"Security Agreement") pursuant to which such parties (the "Existing Debtors")
have granted to the Agent for the benefit of the Secured Creditors a lien on and
security interest in each such Existing Debtor's Collateral (as such term is
defined in the Security Agreement) to secure the Obligations (as such term is
defined in the Security Agreement); and
WHEREAS, the Borrower provides the New Debtor with substantial
financial, managerial, administrative, and technical support and the New Debtor
will directly and substantially benefit from credit and other financial
accommodations extended and to be extended by the Secured Creditors to the
Borrower;
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Secured Creditors from time to time, the New Debtor hereby
agrees as follows:
1. The New Debtor acknowledges and agrees that it shall become a
"Debtor" party to the Security Agreement effective upon the date the New
Debtor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Security
Agreement to the terms "Debtor" or "Debtors" shall be deemed to include the New
Debtor. Without limiting the generality of the foregoing, the New Debtor hereby
repeats and reaffirms all grants (including the grant of a lien and security
interest), covenants, agreements, representations and warranties contained in
the Security Agreement as amended hereby, each and all of which are and shall
remain applicable to the Collateral from time to time owned by the New Debtor or
in which the New Debtor from time to time has any rights. Without limiting the
foregoing, in order to secure payment of the Obligations, whether now existing
or hereafter arising, the New Debtor does hereby grant to the Agent for the
benefit of itself and the other Secured Creditors, and hereby agrees that the
Agent has and shall continue to have for the benefit of itself and the other
Secured Creditors a continuing lien on and security interest in, among
<PAGE>
<PAGE>
other things, all of the New Debtor's Collateral (as such term is defined in the
Security Agreement), including, without limitation, all of the New Debtor's
Receivables, General Intangibles, Inventory, Equipment, Investment Property, and
all of the other Collateral described in Section 2 of the Security Agreement,
each and all of such granting clauses being incorporated herein by reference
with the same force and effect as if set forth in their entirety except that all
references in such clauses to the Existing Debtors or any of them shall be
deemed to include references to the New Debtor. Nothing contained herein shall
in any manner impair the priority of the liens and security interests heretofore
granted in favor of the Agent under the Security Agreement.
2. Schedules A (Locations), B (Trade Names) and C (Real Estate) to the
Security Agreement shall be supplemented by the information stated below with
respect to the New Debtor:
SUPPLEMENT TO SCHEDULE A
NAME OF DEBTOR CHIEF
(AND FEDERAL TAX EXECUTIVE ADDITIONAL PLACES
I.D. NUMBER) OFFICE OF BUSINESS
- ---------------------------- ------------------------ ----------------------
- ----------------------------- ------------------------ ---------------------
SUPPLEMENT TO SCHEDULE B
TRADE NAMES OF
NAME OF DEBTOR SUCH DEBTOR
- ------------------------------- -----------------------------
SUPPLEMENT TO SCHEDULE C
REAL ESTATE LEGAL DESCRIPTIONS
-----------------------------------
-----------------------------------
3. The New Debtor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Security Agreement to the same extent and
with the same force and effect
-2-
<PAGE>
<PAGE>
as if the New Debtor had originally been one of the Existing Debtors under the
Security Agreement and had originally executed the same as such an Existing
Debtor.
4. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Security Agreement,
except that any reference to the term "Debtor" or "Debtors" and any provision of
the Security Agreement providing meaning to such term shall be deemed a
reference to the Existing Debtors and the New Debtor. Except as specifically
modified hereby, all of the terms and conditions of the Security Agreement shall
stand and remain unchanged and in full force and effect.
5. The New Debtor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent may
reasonably deem necessary or proper to carry out more effectively the purposes
of this Agreement.
6. No reference to this Agreement need be made in the Security
Agreement or in any other document or instrument making reference to the
Security Agreement, any reference to the Security Agreement in any of such to be
deemed a reference to the Security Agreement as modified hereby.
7. This Agreement shall be governed by and construed in accordance with
the State of New York (without regard to principles of conflicts of law).
[NEW DEBTOR]
By
---------------------------------
Its
------------------------------
Accepted and agreed to as of the date first above written.
ABN AMRO BANK N.V., as Agent
By
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Its
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By
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Its
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HOLDINGS PLEDGE AGREEMENT
This Pledge Agreement (the "Agreement") is dated as of February 24, 1998
by and between Eagle-Picher Holdings, Inc., a Delaware corporation (the
"Pledgor"), with its mailing address as set forth on its signature page hereto
and ABN AMRO Bank N.V., a bank organized under the laws of the Netherlands ("ABN
AMRO"), with its mailing address at 1325 Avenue of the Americas, New York, New
York 10019, acting as collateral agent hereunder for the Secured Creditors
hereinafter identified and defined (ABN AMRO acting as such agent and any
successor or successors to ABN AMRO acting in such capacity being hereinafter
referred to as the "Agent").
PRELIMINARY STATEMENTS
A. E-P Acquisition, Inc., a Delaware corporation (which has merged with
and into Eagle-Picher Industries, Inc.) (as further defined in the Credit
Agreement referred to below, the "Borrower"), and ABN AMRO, individually and as
agent, have entered into a Credit Agreement dated as of February 19, 1998 (such
Agreement as the same may be amended, modified or restated from time to time
being hereinafter referred to as the "Credit Agreement"), pursuant to which ABN
AMRO and other banks and financial institutions and letter of credit issuers
from time to time party to the Credit Agreement (ABN AMRO, in its individual
capacity, and such other banks and financial institutions which from time to
time become party to the Credit Agreement being hereinafter referred to
collectively as the "Lenders" and individually as a "Lender" and such letter of
credit issuers being hereinafter referred to collectively as the "Letter of
Credit Issuers" and individually as a "Letter of Credit Issuer") have agreed,
subject to certain terms and conditions, to extend credit and make certain other
financial accommodations available to the Borrower.
B. The Borrower may from time to time enter into one or more Interest
Rate Protection Agreements with one or more of the Lenders party to the Credit
Agreement or affiliates thereof for the purpose of hedging or otherwise
protecting the Borrower against changes in interest rates (the liability of the
Borrower in respect of such agreements with such Lenders or affiliates being
hereinafter referred to as the "Hedging Liability") (the Agent, the Lenders, the
Letter of Credit Issuers and such affiliates party to Interest Rate Protection
Agreements being hereinafter referred to collectively as the "Secured Creditors"
and individually as a "Secured Creditor").
C. As a condition to extending credit to the Borrower under the Credit
Agreement, the Secured Creditors have required, among other things, that the
Pledgor grant to the Agent for the benefit of the Secured Creditors a security
interest in certain personal property of such Pledgor described herein subject
to the terms and conditions hereof.
D. The Pledgor owns all of the issued and outstanding capital
stock of the Borrower.
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E. The Pledgor will benefit, directly and substantially, from
credit and other financial accommodations extended by the Secured Creditors to
the Borrower.
NOW, THEREFORE, for and in consideration of the execution and delivery
by the Secured Creditors of the Credit Agreement, and other good and valuable
consideration, receipt whereof is hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. Terms Defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement.
Section 2. Grant of Security Interest in the Collateral. The Pledgor
hereby grants to the Agent for the benefit of the Secured Creditors a lien on
and security interest in, and acknowledges and agrees that the Agent has and
shall continue to have for the benefit of the Secured Creditors a continuing
lien on and security interest in, any and all right, title and interest of the
Pledgor in and to the following, whether now owned or existing or hereafter
created, acquired or arising, and in whatever form:
(a) Pledged Securities. All of the issued and outstanding shares
of capital stock owned by the Pledgor of the Borrower (as set forth on
Schedule A attached hereto), together with the certificates (or other
agreements or instruments), if any, representing such shares, and all
options and other rights, contractual or otherwise, with respect thereto
(collectively, together with the shares of capital stock described in
Section 2(b) and 2(c) below and the rights and privileges described
hereunder with respect thereto, the "Pledged Securities"), including,
but not limited to, the following:
(x) all shares of securities representing a dividend on
any of the Pledged Securities, or representing a distribution or
return of capital upon or in respect of the Pledged Securities,
or resulting from a stock split, revision, reclassification or
other exchange therefor, and any subscriptions, warrants, rights
or options issued to the holder of, or otherwise in respect of,
the Pledged Securities; and
(y) without affecting the obligations of the Pledgor
under any provision prohibiting such action hereunder, in the
event of any consolidation or merger in which the Borrower is not
the surviving corporation, all shares of each class of the
capital stock of the successor corporation formed by or resulting
from such consolidation or merger.
(b) Other Equity Interests. Any and all other equity interests of
the Pledgor in the Borrower.
(c) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
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all of the foregoing being herein sometimes referred to as the "Collateral." All
terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of New York ("UCC") shall have the same meanings
herein as such terms are defined in the UCC, unless this Agreement shall
otherwise specifically provide.
Section 3. Obligations Hereby Secured. This Agreement is made and
given to secure, and shall secure, the prompt payment and performance of (i) any
and all indebtedness, obligations and liabilities of the Borrower to the Secured
Creditors, and to any of them individually, under or in connection with or
evidenced by the Credit Agreement, the Notes of the Borrower heretofore or
hereafter issued under the Credit Agreement and the obligations of the Borrower
to reimburse the Secured Creditors for the amount of all drawings on all Letters
of Credit issued pursuant to the Credit Agreement, and all other obligations of
the Borrower under any and all applications for Letters of Credit, and any and
all liability of the Borrower arising under or in connection with or otherwise
evidenced by agreements with any one or more of the Secured Creditors with
respect to any Hedging Liability, and any and all liabilities of the Pledgor
arising under the Guaranty Agreement of even date herewith (the "Holdings
Guaranty") executed by the Pledgor relating to the foregoing or any part
thereof, in each case whether now existing or hereafter arising (and whether
arising before or after the filing of a petition in bankruptcy and including all
interest accrued after the petition date), due or to become due, direct or
indirect, absolute or contingent, and howsoever evidenced, held or acquired and
(ii) any and all expenses and charges, legal or otherwise, suffered or incurred
by the Secured Creditors, and any of them individually, in collecting or
enforcing any of such indebtedness, obligations and liabilities or in realizing
on or protecting or preserving any security therefor, including, without
limitation, the lien and security interest granted hereby (all of the
indebtedness, obligations, liabilities, expenses and charges described above
being hereinafter referred to as the "Obligations").
Section 4. Covenants, Agreements, Representations and Warranties. The
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Secured Creditors that:
(a) The Pledgor is and shall be the sole and lawful legal, record
and beneficial owner of its Collateral. The Pledgor's chief executive
office is at the address listed under the Pledgor's name on Schedule A.
The Pledgor agrees that it will not change any location set forth on the
applicable Schedule hereto without at least 30 days' prior written
notice to the Agent. The Pledgor shall not, without the Agent's prior
written consent, sell, assign, or otherwise dispose of the Collateral or
any interest therein. The Collateral, and every part thereof, is and
shall be free and clear of all security interests, liens, rights,
claims, attachments, levies and encumbrances of every kind, nature and
description and whether voluntary or involuntary, except for the
security interest of the Agent hereunder. The Pledgor shall warrant and
defend the Collateral against any claims and demands of all persons at
any time claiming the same or any interest in the Collateral adverse to
any Secured Creditor.
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(b) The Pledgor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents and to do all
such other things as the Agent may deem reasonably necessary or
appropriate to assure the Agent its lien and security interest
hereunder, including such assignments, acknowledgments, stock powers,
financing statements, instruments and documents as the Agent may from
time to time require in order to comply with the UCC. The Pledgor hereby
agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without prior notice thereof to the
Pledgor wherever the Agent in its discretion desires to file the same.
In the event for any reason the law of any jurisdiction other than New
York becomes or is applicable to the Collateral or any part thereof, or
to any of the Obligations, the Pledgor agrees to execute and deliver all
such agreements, assignments, instruments and documents and to do all
such other things as the Agent in its discretion deems necessary or
appropriate to preserve, protect and enforce the lien and security
interest of the Agent under the law of such other jurisdiction.
(c) If, as and when the Pledgor delivers any securities for
pledge hereunder in addition to those listed on Schedule A hereto, the
Pledgor shall furnish to the Agent a duly completed and executed
amendment to such Schedule in substantially the form (with appropriate
insertions) of Schedule B hereto reflecting the additional securities
pledged hereunder after giving effect to such addition.
(d) None of the Collateral constitutes margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System).
(e) On failure of the Pledgor to perform any of the agreements
and covenants herein contained, the Agent may, at its option, perform
the same and in so doing may expend such sums as the Agent deems
advisable in the performance thereof, including, without limitation, the
payment of any taxes, liens and encumbrances, expenditures made in
defending against any adverse claim, and all other expenditures which
the Agent may be compelled to make by operation of law or which Agent
may make by agreement or otherwise for the protection of the security
hereof. All such sums and amounts so expended shall be repayable by the
Pledgor immediately without notice or demand, shall constitute
additional Obligations secured hereunder and shall bear interest from
the date said amounts are expended at the rate per annum (computed on
the basis of a year of 360 days, for the actual number of days elapsed)
determined by adding 2% to the Base Rate from time to time in effect
plus the Applicable Base Rate Margin for Revolving Loans, with any
change in such rate per annum as so determined by reason of a change in
such Base Rate to be effective on the date of such change in said Base
Rate (such rate per annum as so determined being hereinafter referred to
as the "Default Rate"). No such performance of any covenant or agreement
by the Agent on behalf of the Pledgor, and no such advancement or
expenditure therefor, shall relieve the Pledgor of any default under the
terms of this Agreement or in any way obligate any Secured Creditor to
take any further or future action with respect thereto. The Agent, in
making any payment hereby authorized, may do so according to any bill,
statement or estimate
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procured from the appropriate public office or
holder of the claim to be discharged without inquiry into the accuracy
of such bill, statement or estimate, or into the validity of any tax
assessment, sale, forfeiture, tax lien or title or claim. The Agent, in
performing any act hereunder, shall be the sole judge of whether the
Pledgor is required to perform the same under the terms of this
Agreement. The Agent is hereby authorized to charge any depository or
other account of the Pledgor maintained with the Agent for the amount of
such sums and amounts so expended.
Section 5. Special Provisions Re: Pledged Securities.
(a) The Pledgor has the right to vote the Pledged Securities and
there are no restrictions upon the voting rights associated therewith,
or the transfer of, any of the Pledged Securities, except as provided by
federal and state laws applicable to the sale of securities generally
and the terms of this Agreement.
(b) The certificates for all shares of the Pledged Securities
shall be delivered by the Pledgor to the Agent duly endorsed in blank
for transfer or accompanied by an appropriate assignment or assignments
or an appropriate undated stock power or powers, in every case
sufficient to transfer title thereto. The Agent may at any time after
the occurrence of an Event of Default cause to be transferred into its
name or into the name of its nominee or nominees any and all of the
Pledged Securities. The Agent shall at all times have the right to
exchange the certificates representing the Pledged Securities for
certificates of smaller or larger denominations.
(c) The Pledged Securities have been validly issued and, except
as described on Schedule A, are fully paid and non-assessable. Except as
set forth on Schedule A, there are no outstanding commitments or other
obligations of the issuers of any of the Pledged Securities to issue,
and no options, warrants or other rights of any individual or entity to
acquire, any share of any class or series of capital stock of such
issuers. The Pledged Securities listed and described on Schedule A
attached hereto constitute all of the issued and outstanding capital
stock of each series and class of the Borrower. The Pledgor further
agrees that in the event the Borrower shall issue any additional capital
stock of any series or class (whether or not entitled to vote) to the
Pledgor or otherwise on account of its ownership interest therein, the
Pledgor will forthwith pledge and deposit hereunder, or cause to be
pledged and deposited hereunder, all such additional shares of such
capital stock.
Section 6. Voting Rights and Dividends. Unless and until an Event of
Default hereunder has occurred and is continuing and thereafter until notified
by the Agent pursuant to Section 8(b) hereof:
(a) The Pledgor shall be entitled to exercise all voting and/or
consensual powers pertaining to the Collateral of the Pledgor, or any
part thereof, for all purposes not inconsistent with the terms of this
Agreement or any other document evidencing or otherwise relating to any
of the Obligations.
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(b) The Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are paid
in cash of whatsoever nature; provided, however, that such dividends and
distributions representing stock or liquidating dividends or a
distribution or return of capital upon or in respect of the Pledged
Securities or any part thereof or resulting from a split-up, revision or
reclassification of the Pledged Securities or any part thereof or
received in addition to, in substitution of or in exchange for the
Pledged Securities or any part thereof as a result of a merger,
consolidation or otherwise shall be paid, delivered or transferred, as
appropriate, directly to the Agent immediately upon the receipt thereof
by the Pledgor and may, in the case of cash, be applied by the Agent to
the Obligations, whether or not the same may then be due or otherwise
adequately secured and shall, in the case of all other property,
together with any cash received by the Agent and not applied as
aforesaid, be held by the Agent pursuant hereto as part of the
Collateral pledged under and subject to the terms of this Agreement.
(c) In order to permit the Pledgor to exercise such voting and/or
consensual powers which it is entitled to exercise under subsection (a)
above and to receive such distributions which the Pledgor is entitled to
receive and retain under subsection (b) above, the Agent will, if
necessary, upon the written request of the Pledgor, from time to time
execute and deliver to the Pledgor appropriate proxies and dividend
orders.
Section 7. Power of Attorney. The Pledgor hereby appoints the Agent,
its nominee, or any other person whom the Agent may designate as the Pledgor's
attorney-in-fact, with full power and authority to ask, demand, collect,
receive, receipt for, sue for, compound and give acquittance for any and all
sums or properties which may be or become due, payable or distributable in
respect of the Collateral or any part thereof, with full power to settle, adjust
or compromise any claim thereunder or therefor as fully as the Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of the Pledgor, or otherwise, which the Agent deems necessary or
appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the security intended to be afforded hereby. The
Pledgor hereby ratifies and approves all acts of any such attorney and agrees
that neither the Agent nor any such attorney will be liable for any such acts or
omissions nor for any error of judgment or mistake of fact or law other than
such person's gross negligence or willful misconduct. The Agent may file one or
more financing statements disclosing its security interest in all or any part of
the Collateral without the Pledgor's signature appearing thereon, and the
Pledgor also hereby grants the Agent a power of attorney to execute any such
financing statements, and any amendments or supplements thereto, on behalf of
the Pledgor without notice thereof to the Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the
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Obligations have been fully satisfied and all commitments of the Secured
Creditors to extend credit to or for the account of the Borrower have expired
or otherwise been terminated.
Section 8. Defaults and Remedies. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement or the occurrence of any default by the Pledgor in respect
to any of its obligations under the Holdings Guaranty shall constitute an "Event
of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default, all rights of the Pledgor to receive and retain the distributions which
they are entitled to receive and retain pursuant to Section 6(b) hereof shall,
at the option of the Agent cease and thereupon become vested in the Agent which,
in addition to all other rights provided herein or by law, shall then be
entitled solely and exclusively to receive and retain the distributions which
the Pledgor would otherwise have been authorized to retain pursuant to Section
6(b) hereof and all rights of the Pledgor to exercise the voting and/or
consensual powers which they are entitled to exercise pursuant to Section 6(a)
hereof shall, at the option of the Agent, cease and thereupon become vested in
the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to exercise all voting and other
consensual powers pertaining to the Collateral and to exercise any and all
rights of conversion, exchange or subscription and any other rights, privileges
or options pertaining thereto as if the Agent were the absolute owner thereof
including, without limitation, the right to exchange, at its discretion, the
Collateral or any part thereof upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the respective issuer thereof or upon
the exercise by or on behalf of any such issuer or the Agent of any right,
privilege or option pertaining to the Collateral or any part thereof and, in
connection therewith, to deposit and deliver the Collateral or any part thereof
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine. In the event
the Agent in good faith believes any of the Collateral constitutes restricted
securities within the meaning of any applicable securities law, any disposition
thereof in compliance with such laws shall not render the disposition
commercially unreasonable.
(c) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the UCC applies to the affected
Collateral), and further the Agent may, without demand and without
advertisement, notice, hearing or process of law, all of which the Pledgor
hereby waives to the extent permitted by applicable law, at any time or times,
sell and deliver any or all of the Collateral held by or for it at public or
private sale, at any securities exchange or broker's board or at any of the
Agent's offices or elsewhere, for cash, upon credit or otherwise, at such prices
and upon such terms as the Agent deems advisable, in its sole discretion. In the
exercise of any such remedies, the Agent may sell the Collateral as a unit even
though the sales price thereof may be in excess of the amount remaining unpaid
on the Obligations. In addition to all other sums due any Secured Creditor
hereunder, the Pledgor shall pay the Secured Creditors all costs and expenses
incurred by the Secured Creditors, including
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reasonable attorneys' fees and court costs, in obtaining, liquidating or
enforcing payment of Collateral or the Obligations or in the prosecution or
defense of any action or proceeding by or against any Secured Creditor or the
Pledgor concerning any matter arising out of or connected with this Agreement or
the Collateral or the Obligations including, without limitation, any of the
foregoing arising in, arising under or related to a case under the United States
Bankruptcy Code (or any successor statute). Any requirement of reasonable notice
shall be met if such notice is personally served on or mailed, postage prepaid,
to the Pledgor in accordance with Section 13(b) hereof at least 10 days before
the time of sale or other event giving rise to the requirement of such notice;
provided, however, no notification need be given to the Pledgor if the Pledgor
has signed, after an Event of Default has occurred, a statement renouncing any
right to notification of sale or other intended disposition. The Agent shall not
be obligated to make any sale or other disposition of the Collateral regardless
of notice having been given. Any Secured Creditor may be the purchaser at any
such sale. The Pledgor hereby waives all of its rights of redemption from any
such sale. The Agent may postpone or cause the postponement of the sale of all
or any portion of the Collateral by announcement at the time and place of such
sale, and such sale may, without further notice, be made at the time and place
to which the sale was postponed or the Agent may further postpone such sale by
announcement made at such time and place.
THE PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT,
RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, AND A SALE SUBJECT TO SUCH CONDITION SHALL BE DEEMED
COMMERCIALLY REASONABLE.
THE PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE
COLLATERAL, THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR
RESTRICTION IN CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED BY COUNSEL IS
NECESSARY IN ORDER TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT
LIMITATION, COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF
PROSPECTIVE BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE
BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE
PURCHASING FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE OF SUCH COLLATERAL), OR IN ORDER TO OBTAIN ANY REQUIRED
APPROVAL OF THE SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY
AUTHORITY OR OFFICIAL, AND THE PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE SHALL
NOT RESULT IN SUCH SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE IN A
COMMERCIALLY REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR ACCOUNTABLE TO
THE PLEDGOR FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT SUCH COLLATERAL
IS SOLD IN COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.
(d) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duties to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of
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the Collateral in its possession if the Collateral is accorded treatment
substantially equivalent to that which the Agent accords its own property,
consisting of similar types securities, it being understood, however, that the
Agent shall have no responsibility for (i) ascertaining or taking any action
with respect to calls, conversions, exchanges, maturities, tenders or other
matters relating to any Collateral, whether or not the Agent has or is deemed
to have knowledge of such matters, (ii) taking any necessary steps to preserve
rights against any parties with respect to any Collateral, or (iii) initiating
any action to protect the Collateral or any part thereof against the possibility
of a decline in market value. This Agreement constitutes an assignment of rights
only and not an assignment of any duties or obligations of the Pledgor in any
way related to the Collateral, and the Agent shall have no duty or obligation
to discharge any such duty or obligation. By its acceptance hereof, the Agent
does not undertake to perform or discharge and shall not be responsible or
liable for the performance or discharge of any such duties or responsibilities.
Neither any Secured Creditor, nor any party acting as attorney for any Secured
Creditor, shall be liable hereunder for any acts or omissions or for any error
of judgment or mistake of fact or law other than such person's gross negligence
or willful misconduct.
(e) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between the Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Secured Creditors
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which any Secured Creditor may have. For purposes of this Agreement, an
Event of Default shall be construed as continuing after its occurrence until the
same is waived in writing by the Lenders or the Required Lenders, as the case
may be, in accordance with the Credit Agreement.
Section 9. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of Section
4.05 the Credit Agreement. The Pledgor shall remain liable to the Secured
Creditors for any deficiency. Any surplus remaining after the full payment and
satisfaction of the Obligations shall be returned to the Borrower, as agent for
the Pledgor, or to whomsoever the Agent reasonably determines is lawfully
entitled thereto.
Section 10. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until the
earlier to occur of the following: (i) all of the Obligations, both for
principal and interest, have been fully paid and satisfied and the commitments
of the Secured Creditors to extend credit to or for the account of the Borrower
shall have expired or otherwise terminated or (ii) the Borrower Stock Release
Date, provided that no Event of Default has occurred and is continuing on such
date. Upon such termination of this Agreement, the Agent shall, upon the request
and at the expense of the Pledgor, forthwith release all its liens and security
interests hereunder.
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Section 11. Primary Security; Obligations Absolute. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations. No application of any sums received by the Agent in respect
of the Collateral or any disposition thereof to the reduction of the Obligations
or any portion thereof shall in any manner entitle the Pledgor to any right,
title or interest in or to the Obligations or any collateral security therefor,
whether by subrogation or otherwise, unless and until all Obligations have been
fully paid and satisfied and all commitments to extend credit constituting
Obligations to the Borrower shall have expired or otherwise terminated. The
Pledgor acknowledges and agrees that the lien and security hereby created and
provided for are absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of any Secured Creditor
or any other holder of any of the Obligations, and without limiting the
generality of the foregoing, the lien and security hereof shall not be impaired
by any acceptance by any Secured Creditor or any other holder of any of the
Obligations of any other security for or guarantors upon any Obligations or by
any failure, neglect or omission on the part of any Secured Creditor or any
other holder of any of the Obligations to realize upon or protect any of the
Obligations or any collateral security therefor (including, without limitation,
impairment of collateral or failure to perfect security interest in collateral).
The lien and security hereof shall not in any manner be impaired or affected by
(and the Secured Creditors, without notice to anyone, are hereby authorized to
make from time to time) any sale, pledge, surrender, compromise, settlement,
release, renewal, extension, indulgence, alteration, substitution, exchange,
change in, modification or disposition of any of the Obligations, or of any
collateral security therefor, or of any guaranty thereof, or of any instrument
or agreement setting forth the terms and conditions pertaining to any of the
foregoing. The Secured Creditors may at their discretion at any time grant
credit to the Borrower without notice to the Pledgor in such amounts and on such
terms as the Secured Creditors may elect without in any manner impairing the
lien and security hereby created and provided for. In order to realize hereon
and to exercise the rights granted the Secured Creditors hereunder and under
applicable law, there shall be no obligation on the part of any Secured Creditor
or any other holder of any of the Obligations at any time to first resort for
payment to the Borrower or any other pledgor or to any guaranty of the
Obligations or any portion thereof or to resort to any other collateral
security, property, liens or any other rights or remedies whatsoever, and the
Secured Creditors shall have the right to enforce this Agreement as against the
Pledgor or any of its Collateral irrespective of whether or not other
proceedings or steps seeking resort to or realization upon or from any of the
foregoing are pending.
Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in Section 11 of the Credit Agreement, all of which
provisions of said Section 11 are incorporated by reference herein with the same
force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the other Secured Creditors or any
other holders of the Obligations concerning the perfection of the liens and
security interests granted hereunder or in the value of the Collateral.
Section 13. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the
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<PAGE>
<PAGE>
Collateral and shall be binding upon the Pledgor, its successors and permitted
assigns, and shall inure, together with the rights and remedies of the Secured
Creditors hereunder, to the benefit of the Secured Creditors, and their
successors and assigns; provided, however, that the Pledgor may not assign its
rights or delegate its duties hereunder without the Agent's prior written
consent. Without limiting the generality of the foregoing, and subject to the
provisions of the Credit Agreement, any Secured Creditor may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other
person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Secured Creditor herein or
otherwise.
(b) All communications provided for herein shall be in writing, except
as otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to the Pledgor when given to the Borrower in accordance
with Section 12.03 of the Credit Agreement, or if to any Secured Creditor, when
given to such party in accordance with Section 12.03 of the Credit Agreement.
(c) No Secured Creditor (other than the Agent) shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
or other realization upon any Collateral subject to this Agreement or for the
execution of any trust or power hereof or for the appointment of a receiver, or
for the enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Secured Creditors (other than
the Agent) shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien and security interest of this Agreement by its or their
action or to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Secured Creditors.
(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed as
not containing such provision, but only as to such jurisdictions where such law
or interpretation is operative, and the invalidity or unenforceability of such
provision shall not affect the validity of any remaining provision hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect.
(e) The Pledgor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City 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 Pledgor
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 form. EACH OF THE PLEDGOR AND THE
SECURED CREDITORS HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER
CREDIT DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
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<PAGE>
<PAGE>
(f) This Agreement shall be deemed to have been made in the State of New
York and shall be governed by, and construed in accordance with, the laws of the
State of New York. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(g) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument.
[SIGNATURE PAGES TO FOLLOW]
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<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"PLEDGOR"
EAGLE-PICHER HOLDINGS, INC.
By /s/ JOEL P. WYLER
________________________
Name Joel P. Wyler
____________________
Title President
____________________
Acknowledged and agreed to in New York, New York as of the date first
above written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Secured Creditors
By /s/ GREGORY D. AMOROSO
----------------------------
Its Gregory D. Amoroso
------------------------
Group Vice President
By /s/ PAUL WIDUCH
----------------------------
Its Paul Widuch
------------------------
Group Vice President
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<PAGE>
<PAGE>
SCHEDULE A TO HOLDINGS PLEDGE AGREEMENT
THE PLEDGED SECURITIES
<TABLE>
<CAPTION>
NAME AND PERCENTAGE
LOCATION OF NAME OF ISSUER JURISDICTION OF NO. OF CERTIFICATE OF ISSUER'S
PLEDGOR INCORPORATION SHARES CLASS NO. STOCK
<S> <C> <C> <C> <C> <C> <C>
Eagle-Picher
Holdings, Inc.
250 East Fifth Street
Cincinnati, Ohio
45202 Eagle-Picher Common
Industries, Inc. Ohio 100 Stock 1 100%
</TABLE>
<PAGE>
<PAGE>
SCHEDULE B TO HOLDINGS PLEDGE AGREEMENT
AMENDMENT TO HOLDINGS PLEDGE AGREEMENT
Reference is hereby made to that certain Holdings Pledge Agreement dated
as of February 24, 1998 (as the same may be amended, the "Pledge Agreement"),
from the Pledgor to ABN AMRO Bank N.V., as Agent. Capitalized terms not
otherwise defined herein shall have the meaning set forth in the Pledge
Agreement.
Subsequent to the Pledgor's delivery of the Pledge Agreement, certain
shares of stock or equity interests have been added as Collateral under the
Pledge Agreement. As a result of such addition, Schedule A of the Pledge
Agreement does not accurately describe the shares of capital stock or other
equity interest currently held by the Agent as collateral under the Pledge
Agreement.
The Pledgor now desires to amend Schedule A to the Pledge Agreement to
reflect such addition, and this instrument shall constitute an agreement between
the Pledgor and the Agent amending the Pledge Agreement in the respects, but
only in the respects, hereinafter set forth:
1. Schedule A of the Pledge Agreement shall be and hereby is
amended and as so amended shall be restated in its entirety to read as
Annex A attached hereto.
2. As collateral security for the Obligations, the Pledgor
hereby grants to the Agent a continuing lien on and security interest
in, and acknowledges and agrees that the Agent has and shall continue to
have a continuing lien on and security interest in, all the shares of
capital stock or other equity interest of each issuer listed and
described on Annex A attached hereto and all the other properties,
rights, interests and privileges comprising the Collateral (as such term
is defined in the Pledge Agreement after giving effect to this
Amendment), to the same extent and with the same force and effect as if
the shares of stock or other equity interest described on Annex A had
originally been included on Schedule A to the Pledge Agreement. The
foregoing granting clause is in addition to and supplemental of and not
in substitution for the granting clause contained in the Pledge
Agreement. Neither the Pledgor nor the Agent intends by this Amendment
to in any way impair or otherwise affect the lien of the Pledge
Agreement on such of the Collateral which was subject to the Pledge
Agreement prior to giving effect to this Amendment.
3. The Pledgor hereby repeats and reaffirms all of its
covenants, agreements, representations and warranties contained in the
Pledge Agreement, each and all of which shall be applicable to all of
the properties, rights, interests and privileges subject to the lien of
the Pledge Agreement after giving effect to this Amendment. The Pledgor
hereby certifies that no Event of Default or event which, with notice or
lapse of time or both, would constitute an Event of Default exists under
the Pledge Agreement after giving effect to this Amendment.
<PAGE>
<PAGE>
4. No reference to this Amendment need be made in any note,
instrument or other document at any time referring to the Pledge
Agreement, any reference in any of such to the Pledge Agreement to be
deemed to reference to the Pledge Agreement as modified hereby.
5. Except as specifically modified hereby, all the terms and
conditions of the Pledge Agreement shall stand and remain unchanged and
in full force and effect.
PLEDGOR:
EAGLE-PICHER HOLDINGS, INC.
By
________________________________
Its____________________________
Acknowledged and agreed to as of the date first above written.
ABN AMRO BANK N.V., as Agent
By
________________________________
Its____________________________
By
________________________________
Its____________________________
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<PAGE>
<PAGE>
ANNEX A
TO AMENDMENT TO HOLDINGS PLEDGE AGREEMENT
THE PLEDGED SECURITIES
<TABLE>
<CAPTION>
NAME AND PERCENTAGE
LOCATION OF NAME OF JURISDICTION OF NO. OF CERTIFICATE OF ISSUER'S
PLEDGOR ISSUER INCORPORATION SHARES CLASS NO. STOCK
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
<PAGE>
BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
This Pledge Agreement (the "Agreement") is dated as of February 24, 1998
by and among EAGLE-PICHER INDUSTRIES, INC., a corporation organized and existing
under the laws of Ohio, as survivor and successor by merger with E-P
Acquisition, Inc., (as further defined in the Credit Agreement referred to
below, the "Borrower"), and the other parties executing this Agreement under the
heading "Pledgors" (the Borrower and such other parties, along with any parties
who execute and deliver to the Agent an agreement in the form attached hereto as
Schedule C being hereinafter referred to collectively as the "Pledgors" and
individually as a "Pledgor"), each with its mailing address as set forth on its
signature page hereto and ABN AMRO Bank N.V., a bank organized under the laws of
the Netherlands ("ABN AMRO"), with its mailing address at 1325 Avenue of the
Americas, New York, New York 10019, acting as collateral agent hereunder for the
Secured Creditors hereinafter identified and defined (ABN AMRO acting as such
agent and any successor or successors to ABN AMRO acting in such capacity being
hereinafter referred to as the "Agent");
PRELIMINARY STATEMENTS
A. The Borrower and ABN AMRO, individually and as agent, have entered
into a Credit Agreement dated as of February 19, 1998 (such Agreement as the
same may be amended, modified or restated from time to time being hereinafter
referred to as the "Credit Agreement"), pursuant to which ABN AMRO and other
banks and financial institutions and letter of credit issuers from time to time
party to the Credit Agreement (ABN AMRO, in its individual capacity, and such
other banks and financial institutions which from time to time become party to
the Credit Agreement being hereinafter referred to collectively as the "Lenders"
and individually as a "Lender" and such letter of credit issuers being
hereinafter referred to collectively as the "Letter of Credit Issuers" and
individually as a "Letter of Credit Issuer") have agreed, subject to certain
terms and conditions, to extend credit and make certain other financial
accommodations available to the Borrower.
B. The Borrower may from time to time enter into one or more Interest
Rate Protection Agreements with one or more of the Lenders party to the Credit
Agreement or affiliates thereof for the purpose of hedging or otherwise
protecting the Borrower against changes in interest rates (the liability of the
Borrower in respect of such agreements with such Lenders or affiliates being
hereinafter referred to as the "Hedging Liability") (the Agent, the Lenders, the
Letter of Credit Issuers and such affiliates party to Interest Rate Protection
Agreements being hereinafter referred to collectively as the "Secured Creditors"
and individually as a "Secured Creditor").
C. As a condition to extending credit to the Borrower under the Credit
Agreement, the Secured Creditors have required, among other things, that each
Pledgor grant to the Agent for the benefit of the Secured Creditors a security
interest in certain personal property of such Pledgor described herein subject
to the terms and conditions hereof.
<PAGE>
<PAGE>
D. The Borrower owns, directly or indirectly, equity interests in each
other Pledgor and the Borrower provides each other Pledgor with financial,
management, administrative, and technical support which enables such Pledgor to
conduct its business in an orderly and efficient manner in the ordinary course.
E. Each Pledgor will benefit, directly or indirectly, from credit and
other financial accommodations extended by the Secured Creditors to the
Borrower.
NOW, THEREFORE, for and in consideration of the execution and delivery
by the Secured Creditors of the Credit Agreement, and other good and valuable
consideration, receipt whereof is hereby acknowledged, the parties hereto hereby
agree as follows:
Section 1. Terms Defined in Credit Agreement. All capitalized terms
used herein without definition shall have the same meanings herein as such terms
have in the Credit Agreement. The term "Pledgor" and "Pledgors" as used herein
shall mean and include the Pledgors collectively and also each individually,
with all grants, representations, warranties and covenants of and by the
Pledgors, or any of them, herein contained to constitute joint and several
grants, representations, warranties and covenants of and by the Pledgors;
provided, however, that unless the context in which the same is used shall
otherwise require, any grant, representation, warranty or covenant contained
herein related to the Collateral shall be made by each Pledgor only with respect
to the Collateral owned by it or represented by such Pledgor as owned by it.
Section 2. Grant of Security Interest in the Collateral. Each Pledgor
hereby grants to the Agent for the benefit of the Secured Creditors a lien on
and security interest in, and acknowledges and agrees that the Agent has and
shall continue to have for the benefit of the Secured Creditors a continuing
lien on and security interest in, any and all right, title and interest of such
Pledgor in and to the following, whether now owned or existing or hereafter
created, acquired or arising, and in whatever form:
(a) Pledged Securities. (i) 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of capital
stock owned by such Pledgor of each Domestic Subsidiary (as set forth on
Schedule A attached hereto) and (ii) 65% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of each
class of capital stock or other ownership interests entitled to vote
(within the meaning of Treas. Reg. Section 1.956-2(c)(2)) ("Voting
Equity") and 100% (or, if less, the full amount owned by such Pledgor)
of the issued and outstanding shares of each class of capital stock or
other ownership interests not entitled to vote (within the meaning of
Treas. Reg. Section 1.956-2(c)(2)) ("Non-Voting Equity") owned by such
Pledgor of each First Tier Foreign Subsidiary (as set forth on Schedule
A attached hereto), in each case together with the certificates (or
other agreements or instruments), if any, representing such shares, and
all options and other rights, contractual or otherwise, with respect
thereto (collectively, together with the shares of capital stock
described in Section 2(b) and 2(c) below and the rights and privileges
described hereunder with respect thereto, the "Pledged Securities"),
including, but not limited to, the following:
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<PAGE>
<PAGE>
(x) all shares of securities representing a dividend on
any of the Pledged Securities, or representing a distribution or
return of capital upon or in respect of the Pledged Securities,
or resulting from a stock split, revision, reclassification or
other exchange therefor, and any subscriptions, warrants, rights
or options issued to the holder of, or otherwise in respect of,
the Pledged Securities; and
(y) without affecting the obligations of such Pledgor
under any provision prohibiting such action hereunder, in the
event of any consolidation or merger in which a Person set forth
on Schedule A is not the surviving corporation, all shares of
each class of the capital stock of the successor corporation
formed by or resulting from such consolidation or merger (or 65%
of Voting Equity and/or 100% of Non-Voting Equity if the
successor corporation is a First Tier Foreign Subsidiary).
(b) Additional Securities. 100% (or, if less, the full amount
owned by such Pledgor) of the issued and outstanding shares of capital
stock owned by such Pledgor of any Person which hereafter becomes a
Domestic Subsidiary and 65% (or, if less, the full amount owned by such
Pledgor) of the Voting Equity and 100% (or, if less, the full amount
owned by such Pledgor) of the Non-Voting Equity owned by such Pledgor of
any Person which hereafter becomes a First Tier Foreign Subsidiary,
including, without limitation, the certificates (or other agreements or
instruments), if any, representing such shares or Equity.
(c) Other Equity Interests. Any and all other equity interests of
each Pledgor in any Domestic Subsidiary or any First Tier Foreign
Subsidiary; provided that with respect to any Voting Equity in any First
Tier Foreign Subsidiary, not more than 65% of the capital stock or
equity interest in any such Foreign Subsidiary is pledged hereunder.
(d) Proceeds. All proceeds and products of the foregoing, however
and whenever acquired and in whatever form.
all of the foregoing being herein sometimes referred to as the "Collateral." All
terms which are used in this Agreement which are defined in the Uniform
Commercial Code of the State of New York ("UCC") shall have the same meanings
herein as such terms are defined in the UCC, unless this Agreement shall
otherwise specifically provide.
Section 3. Obligations Hereby Secured. This Agreement is made and
given to secure, and shall secure, the prompt payment and performance of (i) any
and all indebtedness, obligations and liabilities of the Borrower to the Secured
Creditors, and to any of them individually, under or in connection with or
evidenced by the Credit Agreement, the Notes of the Borrower heretofore or
hereafter issued under the Credit Agreement and the obligations of the Borrower
to reimburse the Secured Creditors for the amount of all drawings on all Letters
of Credit issued pursuant to the Credit Agreement, and all other obligations of
the Borrower under any and all applications for Letters of Credit, and any
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<PAGE>
<PAGE>
and all liability of the Borrower arising under or in connection with or
otherwise evidenced by agreements with any one or more of the Secured Creditors
with respect to any Hedging Liability, and any and all liability of the
Pledgors, and of any of them individually, arising under any guaranty issued by
it relating to the foregoing or any part thereof, in each case whether now
existing or hereafter arising (and whether arising before or after the filing of
a petition in bankruptcy and including all interest accrued after the petition
date), due or to become due, direct or indirect, absolute or contingent, and
howsoever evidenced, held or acquired and (ii) any and all expenses and charges,
legal or otherwise, suffered or incurred by the Secured Creditors, and any of
them individually, in collecting or enforcing any of such indebtedness,
obligations and liabilities or in realizing on or protecting or preserving any
security therefor, including, without limitation, the lien and security interest
granted hereby (all of the indebtedness, obligations, liabilities, expenses and
charges described above being hereinafter referred to as the "Obligations").
Notwithstanding anything in this Agreement to the contrary, the right of
recovery against any Pledgor (other than the Borrower to which this limitation
shall not apply) under this Agreement shall not exceed $1.00 less than the
amount which would render such Pledgor's obligations under this Agreement void
or voidable under applicable law, including fraudulent conveyance law.
Section 4. Covenants, Agreements, Representations and Warranties. Each
Pledgor hereby covenants and agrees with, and represents and warrants to, the
Secured Creditors that:
(a) Each Pledgor is and shall be the sole and lawful legal,
record and beneficial owner of its Collateral. Each Pledgor's chief
executive office is at the address listed under such Pledgor's name on
Schedule A. Each Pledgor agrees that it will not change any location set
forth on the applicable Schedule hereto without at least 30 days' prior
written notice to the Agent (provided in the case of any Domestic
Subsidiary such locations shall be within the United States of America).
No Pledgor shall, without the Agent's prior written consent, sell,
assign, or otherwise dispose of the Collateral or any interest therein,
except to the extent permitted by Section 8.02 of the Credit Agreement.
The Collateral, and every part thereof, is and shall be free and clear
of all security interests, liens, rights, claims, attachments, levies
and encumbrances of every kind, nature and description and whether
voluntary or involuntary, except for the security interest of the Agent
hereunder. Each Pledgor shall warrant and defend the Collateral against
any claims and demands of all persons at any time claiming the same or
any interest in the Collateral adverse to the any Secured Creditor.
(b) Each Pledgor agrees to execute and deliver to the Agent such
further agreements, assignments, instruments and documents and to do all
such other things as the Agent may deem reasonably necessary or
appropriate to assure the Agent its lien and security interest
hereunder, including such assignments, acknowledgments, stock powers,
financing statements, instruments and documents as the Agent may from
time to time require in order to comply with the UCC. Each Pledgor
hereby agrees that a carbon, photographic or other reproduction of this
Agreement or any such financing statement is sufficient for filing as a
financing statement by the Agent without prior
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<PAGE>
<PAGE>
notice thereof to such Pledgor wherever the Agent in its discretion desires to
file the same. In the event for any reason the law of any jurisdiction other
than New York becomes or is applicable to the Collateral or any part thereof, or
to any of the Obligations, each Pledgor agrees to execute and deliver all such
agreements, assignments, instruments and documents and to do all such other
things as the Agent in its discretion deems necessary or appropriate to
preserve, protect and enforce the lien and security interest of the Agent under
the law of such other jurisdiction.
(c) If, as and when any Pledgor delivers any securities for
pledge hereunder in addition to those listed on Schedule A hereto, the
Pledgors shall furnish to the Agent a duly completed and executed
amendment to such Schedule in substantially the form (with appropriate
insertions) of Schedule B hereto reflecting the additional securities
pledged hereunder after giving effect to such addition.
(d) None of the Collateral constitutes margin stock (within the
meaning of Regulation U of the Board of Governors of the Federal Reserve
System).
(e) On failure of any Pledgor to perform any of the agreements
and covenants herein contained, the Agent may, at its option, perform
the same and in so doing may expend such sums as the Agent deems
advisable in the performance thereof, including, without limitation, the
payment of any taxes, liens and encumbrances, expenditures made in
defending against any adverse claim, and all other expenditures which
the Agent may be compelled to make by operation of law or which Agent
may make by agreement or otherwise for the protection of the security
hereof. All such sums and amounts so expended shall be repayable by the
Pledgors immediately without notice or demand, shall constitute
additional Obligations secured hereunder and shall bear interest from
the date said amounts are expended at the rate per annum (computed on
the basis of a year of 360 days, for the actual number of days elapsed)
determined by adding 2% to the Base Rate from time to time in effect
plus the Applicable Base Rate Margin for Revolving Loans, with any
change in such rate per annum as so determined by reason of a change in
such Base Rate to be effective on the date of such change in said Base
Rate (such rate per annum as so determined being hereinafter referred to
as the "Default Rate"). No such performance of any covenant or agreement
by the Agent on behalf of such Pledgor, and no such advancement or
expenditure therefor, shall relieve such Pledgor of any default under
the terms of this Agreement or in any way obligate any Secured Creditor
to take any further or future action with respect thereto. The Agent, in
making any payment hereby authorized, may do so according to any bill,
statement or estimate procured from the appropriate public office or
holder of the claim to be discharged without inquiry into the accuracy
of such bill, statement or estimate, or into the validity of any tax
assessment, sale, forfeiture, tax lien or title or claim. The Agent, in
performing any act hereunder, shall be the sole judge of whether the
relevant Pledgor is required to perform the same under the terms of this
Agreement. The Agent is hereby authorized to charge any depository or
other account of any Pledgor maintained with the Agent for the amount of
such sums and amounts so expended.
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<PAGE>
<PAGE>
Section 5. Special Provisions Re: Pledged Securities.
(a) Each Pledgor has the right to vote the Pledged Securities (in
the case of Foreign Subsidiaries, which are Voting Equity) and there are
no restrictions upon the voting rights associated therewith, or the
transfer of, any of the Pledged Securities, except as provided by
federal and state laws applicable to the sale of securities generally
and the terms of this Agreement.
(b) The certificates for all shares of the Pledged Securities
shall be delivered by the relevant Pledgor to the Agent duly endorsed in
blank for transfer or accompanied by an appropriate assignment or
assignments or an appropriate undated stock power or powers, in every
case sufficient to transfer title thereto. The Agent may at any time
after the occurrence of an Event of Default cause to be transferred into
its name or into the name of its nominee or nominees any and all of the
Pledged Securities. The Agent shall at all times have the right to
exchange the certificates representing the Pledged Securities for
certificates of smaller or larger denominations.
(c) The pledge of shares of the Foreign Subsidiaries listed on
Schedule D shall be effected as set forth in such Schedule.
(d) The Pledged Securities have been validly issued and, except
as described on Schedule A, are fully paid and non-assessable. Except as
set forth on Schedule A, there are no outstanding commitments or other
obligations of the issuers of any of the Pledged Securities to issue,
and no options, warrants or other rights of any individual or entity to
acquire, any share of any class or series of capital stock of such
issuers. The Pledged Securities listed and described on Schedule A
attached hereto constitute the percentage of the issued and outstanding
capital stock of each series and class of the issuers thereof as set
forth thereon owned by the relevant Pledgor. Each Pledgor further agrees
that in the event any such issuer shall issue any additional capital
stock of any series or class (whether or not entitled to vote) to such
Pledgor or otherwise on account of its ownership interest therein, each
Pledgor will forthwith pledge and deposit hereunder, or cause to be
pledged and deposited hereunder, all such additional shares of such
capital stock provided that with respect to Voting Equity of any First
Tier Foreign Subsidiary, not more than 65% of Voting Equity of such
Foreign Subsidiary is pledged hereunder.
Section 6. Voting Rights and Dividends. Unless and until an Event of
Default hereunder has occurred and is continuing and thereafter until notified
by the Agent pursuant to Section 8(b) hereof:
(a) Each Pledgor shall be entitled to exercise all voting and/or
consensual powers pertaining to the Collateral of such Pledgor, or any
part thereof, for all purposes not inconsistent with the terms of this
Agreement or any other document evidencing or otherwise relating to any
of the Obligations.
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<PAGE>
<PAGE>
(b) Each Pledgor shall be entitled to receive and retain all
dividends and distributions in respect of the Collateral which are paid
in cash of whatsoever nature; provided, however, that such dividends and
distributions representing stock or liquidating dividends or a
distribution or return of capital upon or in respect of the Pledged
Securities or any part thereof or resulting from a split-up, revision or
reclassification of the Pledged Securities or any part thereof or
received in addition to, in substitution of or in exchange for the
Pledged Securities or any part thereof as a result of a merger,
consolidation or otherwise shall be paid, delivered or transferred, as
appropriate, directly to the Agent immediately upon the receipt thereof
by such Pledgor and may, in the case of cash, be applied by the Agent to
the Obligations, whether or not the same may then be due or otherwise
adequately secured and shall, in the case of all other property,
together with any cash received by the Agent and not applied as
aforesaid, be held by the Agent pursuant hereto as part of the
Collateral pledged under and subject to the terms of this Agreement.
(c) In order to permit each Pledgor to exercise such voting
and/or consensual powers which it is entitled to exercise under
subsection (a) above and to receive such distributions which such
Pledgor is entitled to receive and retain under subsection (b) above,
the Agent will, if necessary, upon the written request of such Pledgor,
from time to time execute and deliver to such Pledgor appropriate
proxies and dividend orders.
Section 7. Power of Attorney. Each Pledgor hereby appoints the Agent,
its nominee, or any other person whom the Agent may designate as such Pledgor's
attorney-in-fact, with full power and authority to ask, demand, collect,
receive, receipt for, sue for, compound and give acquittance for any and all
sums or properties which may be or become due, payable or distributable in
respect of the Collateral or any part thereof, with full power to settle, adjust
or compromise any claim thereunder or therefor as fully as such Pledgor could
itself do, to endorse or sign the Pledgor's name on any assignments, stock
powers, or other instruments of transfer and on any checks, notes, acceptances,
money orders, drafts, and any other forms of payment or security that may come
into the Agent's possession and on all documents of satisfaction, discharge or
receipt required or requested in connection therewith, and, in its discretion,
to file any claim or take any other action or proceeding, either in its own name
or in the name of such Pledgor, or otherwise, which the Agent deems necessary or
appropriate to collect or otherwise realize upon all or any part of the
Collateral, or effect a transfer thereof, or which may be necessary or
appropriate to protect and preserve the right, title and interest of the Agent
in and to such Collateral and the security intended to be afforded hereby. Each
Pledgor hereby ratifies and approves all acts of any such attorney and agrees
that neither the Agent nor any such attorney will be liable for any such acts or
omissions nor for any error of judgment or mistake of fact or law other than
such person's gross negligence or willful misconduct. The Agent may file one or
more financing statements disclosing its security interest in all or any part of
the Collateral without any Pledgor's signature appearing thereon, and each
Pledgor also hereby grants the Agent a power of attorney to execute any such
financing statements, and any amendments or supplements thereto, on behalf of
such Pledgor without notice thereof to such Pledgor. The foregoing powers of
attorney, being coupled with an interest, are irrevocable until the
-7-
<PAGE>
<PAGE>
Obligations have been fully satisfied and all commitments of the Secured
Creditors to extend credit to or for the account of the Borrower have expired or
otherwise been terminated.
Section 8. Defaults and Remedies. (a) The occurrence of any event or
the existence of any condition which is specified as an "Event of Default" under
the Credit Agreement shall constitute an "Event of Default" hereunder.
(b) Upon the occurrence and during the continuation of any Event of
Default, all rights of the Pledgors to receive and retain the distributions
which they are entitled to receive and retain pursuant to Section 6(b) hereof
shall, at the option of the Agent cease and thereupon become vested in the Agent
which, in addition to all other rights provided herein or by law, shall then be
entitled solely and exclusively to receive and retain the distributions which
the Pledgors would otherwise have been authorized to retain pursuant to Section
6(b) hereof and all rights of the Pledgors to exercise the voting and/or
consensual powers which they are entitled to exercise pursuant to Section 6(a)
hereof shall, at the option of the Agent, cease and thereupon become vested in
the Agent which, in addition to all other rights provided herein or by law,
shall then be entitled solely and exclusively to exercise all voting and other
consensual powers pertaining to the Collateral and to exercise any and all
rights of conversion, exchange or subscription and any other rights, privileges
or options pertaining thereto as if the Agent were the absolute owner thereof
including, without limitation, the right to exchange, at its discretion, the
Collateral or any part thereof upon the merger, consolidation, reorganization,
recapitalization or other readjustment of the respective issuer thereof or upon
the exercise by or on behalf of any such issuer or the Agent of any right,
privilege or option pertaining to the Collateral or any part thereof and, in
connection therewith, to deposit and deliver the Collateral or any part thereof
with any committee, depositary, transfer agent, registrar or other designated
agency upon such terms and conditions as the Agent may determine. In the event
the Agent in good faith believes any of the Collateral constitutes restricted
securities within the meaning of any applicable securities law, any disposition
thereof in compliance with such laws shall not render the disposition
commercially unreasonable.
(c) Upon the occurrence and during the continuation of any Event of
Default, the Agent shall have, in addition to all other rights provided herein
or by law, the rights and remedies of a secured party under the UCC (regardless
of whether the UCC is the law of the jurisdiction where the rights or remedies
are asserted and regardless of whether the UCC applies to the affected
Collateral), and further the Agent may, without demand and without
advertisement, notice, hearing or process of law, all of which each Pledgor
hereby waives to the extent permitted by applicable law, at any time or times,
sell and deliver any or all of the Collateral held by or for it at public or
private sale, at any securities exchange or broker's board or at any of the
Agent's offices or elsewhere, for cash, upon credit or otherwise, at such prices
and upon such terms as the Agent deems advisable, in its sole discretion. In the
exercise of any such remedies, the Agent may sell the Collateral as a unit even
though the sales price thereof may be in excess of the amount remaining unpaid
on the Obligations. Also, if less than all the Collateral is sold, the Agent
shall have no duty to marshal or apportion the part of the Collateral so sold as
between the Pledgors, or any of them, but may sell and deliver any or all of the
Collateral without regard to which of the Pledgors are the
-8-
<PAGE>
<PAGE>
owners thereof. In addition to all other sums due any Secured Creditor
hereunder, each Pledgor shall pay the Secured Creditors all costs and expenses
incurred by the Secured Creditors, including reasonable attorneys' fees and
court costs, in obtaining, liquidating or enforcing payment of Collateral or the
Obligations or in the prosecution or defense of any action or proceeding by or
against any Secured Creditor or any Pledgor concerning any matter arising out of
or connected with this Agreement or the Collateral or the Obligations including,
without limitation, any of the foregoing arising in, arising under or related to
a case under the United States Bankruptcy Code (or any successor statute). Any
requirement of reasonable notice shall be met if such notice is personally
served on or mailed, postage prepaid, to the Pledgors in accordance with Section
13(b) hereof at least 10 days before the time of sale or other event giving rise
to the requirement of such notice; provided, however, no notification need be
given to a Pledgor if such Pledgor has signed, after an Event of Default has
occurred, a statement renouncing any right to notification of sale or other
intended disposition. The Agent shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given. Any
Secured Creditor may be the purchaser at any such sale. Each Pledgor hereby
waives all of its rights of redemption from any such sale. The Agent may
postpone or cause the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale, and such sale
may, without further notice, be made at the time and place to which the sale was
postponed or the Agent may further postpone such sale by announcement made at
such time and place.
EACH PLEDGOR AGREES THAT IF ANY PART OF THE COLLATERAL IS SOLD AT ANY
PUBLIC OR PRIVATE SALE, THE AGENT MAY ELECT TO SELL ONLY TO A BUYER WHO WILL
GIVE FURTHER ASSURANCES, SATISFACTORY IN FORM AND SUBSTANCE TO THE AGENT,
RESPECTING COMPLIANCE WITH THE REQUIREMENTS OF THE FEDERAL SECURITIES ACT OF
1933, AS AMENDED, AND A SALE SUBJECT TO SUCH CONDITION SHALL BE DEEMED
COMMERCIALLY REASONABLE.
EACH PLEDGOR FURTHER AGREES THAT IN ANY SALE OF ANY PART OF THE
COLLATERAL, THE AGENT IS HEREBY AUTHORIZED TO COMPLY WITH ANY LIMITATION OR
RESTRICTION IN CONNECTION WITH SUCH SALE AS IT MAY BE ADVISED BY COUNSEL IS
NECESSARY IN ORDER TO AVOID ANY VIOLATION OF APPLICABLE LAW (INCLUDING, WITHOUT
LIMITATION, COMPLIANCE WITH SUCH PROCEDURES AS MAY RESTRICT THE NUMBER OF
PROSPECTIVE BIDDERS AND PURCHASERS AND/OR FURTHER RESTRICT SUCH PROSPECTIVE
BIDDERS OR PURCHASERS TO PERSONS WHO WILL REPRESENT AND AGREE THAT THEY ARE
PURCHASING FOR THEIR OWN ACCOUNT FOR INVESTMENT AND NOT WITH A VIEW TO THE
DISTRIBUTION OR RESALE OF SUCH COLLATERAL ), OR IN ORDER TO OBTAIN ANY REQUIRED
APPROVAL OF THE SALE OR OF THE PURCHASER BY ANY GOVERNMENTAL REGULATORY
AUTHORITY OR OFFICIAL, AND EACH PLEDGOR FURTHER AGREES THAT SUCH COMPLIANCE
SHALL NOT RESULT IN SUCH SALE BEING CONSIDERED OR DEEMED NOT TO HAVE BEEN MADE
IN A COMMERCIALLY REASONABLE MANNER, NOR SHALL THE AGENT BE LIABLE OR
ACCOUNTABLE TO ANY PLEDGOR FOR ANY DISCOUNT ALLOWED BY REASON OF THE FACT THAT
SUCH COLLATERAL IS SOLD IN COMPLIANCE WITH ANY SUCH LIMITATION OR RESTRICTION.
-9-
<PAGE>
<PAGE>
(d) The powers conferred upon the Agent hereunder are solely to protect
its interest in the Collateral and shall not impose on it any duties to exercise
such powers. The Agent shall be deemed to have exercised reasonable care in the
custody and preservation of the Collateral in its possession if the Collateral
is accorded treatment substantially equivalent to that which the Agent accords
its own property, consisting of similar types securities, it being
understood, however, that the Agent shall have no responsibility for
(i) ascertaining or taking any action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relating to any Collateral,
whether or not the Agent has or is deemed to have knowledge of such matters,
(ii) taking any necessary steps to preserve rights against any parties with
respect to any Collateral, or (iii) initiating any action to protect the
Collateral or any part thereof against the possibility of a decline in market
value. This Agreement constitutes an assignment of rights only and not an
assignment of any duties or obligations of the Pledgors in any way related to
the Collateral, and the Agent shall have no duty or obligation to discharge any
such duty or obligation. By its acceptance hereof, the Agent does not undertake
to perform or discharge and shall not be responsible or liable for the
performance or discharge of any such duties or responsibilities. Neither any
Secured Creditor, nor any party acting as attorney for any Secured Creditor,
shall be liable hereunder for any acts or omissions or for any error of judgment
or mistake of fact or law other than such person's gross negligence or willful
misconduct.
(e) Failure by the Agent to exercise any right, remedy or option under
this Agreement or any other agreement between any Pledgor and the Agent or
provided by law, or delay by the Agent in exercising the same, shall not operate
as a waiver; and no waiver shall be effective unless it is in writing, signed by
the party against whom such waiver is sought to be enforced and then only to the
extent specifically stated. The rights and remedies of the Secured Creditors
under this Agreement shall be cumulative and not exclusive of any other right or
remedy which any Secured Creditor may have. For purposes of this Agreement, an
Event of Default shall be construed as continuing after its occurrence until the
same is waived in writing by the Lenders or the Required Lenders, as the case
may be, in accordance with the Credit Agreement.
Section 9. Application of Proceeds. The proceeds and avails of the
Collateral at any time received by the Agent upon the occurrence and during the
continuation of any Event of Default shall, when received by the Agent in cash
or its equivalent, be applied by the Agent in reduction of, or held as
collateral security for, the Obligations in accordance with the terms of Section
4.05 of the Credit Agreement. The Pledgors shall remain liable to the Secured
Creditors for any deficiency. Any surplus remaining after the full payment and
satisfaction of the Obligations shall be returned to the Borrower, as agent for
Pledgors, or to whomsoever the Agent reasonably determines is lawfully entitled
thereto.
Section 10. Continuing Agreement. This Agreement shall be a continuing
agreement in every respect and shall remain in full force and effect until all
of the Obligations, both for principal and interest, have been fully paid and
satisfied and the commitments of the Secured Creditors to extend credit to or
for the account of the Borrower shall have expired or otherwise terminated. Upon
such termination of this
-10-
<PAGE>
<PAGE>
Agreement, the Agent shall, upon the request and at the expense of the Pledgors,
forthwith release all its liens and security interests hereunder.
Section 11. Primary Security; Obligations Absolute. The lien and
security herein created and provided for stand as direct and primary security
for the Obligations. No application of any sums received by the Agent in respect
of the Collateral or any disposition thereof to the reduction of the Obligations
or any portion thereof shall in any manner entitle any Pledgor to any right,
title or interest in or to the Obligations or any collateral security therefor,
whether by subrogation or otherwise, unless and until all Obligations have been
fully paid and satisfied and all commitments to extend credit constituting
Obligations to the Borrower shall have expired or otherwise terminated. Each
Pledgor acknowledges and agrees that the lien and security hereby created and
provided for are absolute and unconditional and shall not in any manner be
affected or impaired by any acts or omissions whatsoever of any Secured Creditor
or any other holder of any of the Obligations, and without limiting the
generality of the foregoing, the lien and security hereof shall not be impaired
by any acceptance by any Secured Creditor or any other holder of any of the
Obligations of any other security for or guarantors upon any Obligations or by
any failure, neglect or omission on the part of any Secured Creditor or any
other holder of any of the Obligations to realize upon or protect any of the
Obligations or any collateral security therefor (including, without limitation,
impairment of collateral or failure to perfect security interest in collateral).
The lien and security hereof shall not in any manner be impaired or affected by
(and the Secured Creditors, without notice to anyone, are hereby authorized to
make from time to time) any sale, pledge, surrender, compromise, settlement,
release, renewal, extension, indulgence, alteration, substitution, exchange,
change in, modification or disposition of any of the Obligations, or of any
collateral security therefor, or of any guaranty thereof, or of any instrument
or agreement setting forth the terms and conditions pertaining to any of the
foregoing. The Secured Creditors may at their discretion at any time grant
credit to the Borrower without notice to the other Pledgors in such amounts and
on such terms as the Secured Creditors may elect without in any manner impairing
the lien and security hereby created and provided for. In order to realize
hereon and to exercise the rights granted the Secured Creditors hereunder and
under applicable law, there shall be no obligation on the part of any Secured
Creditor or any other holder of any of the Obligations at any time to first
resort for payment to the Borrower or any other Pledgor or to any guaranty of
the Obligations or any portion thereof or to resort to any other collateral
security, property, liens or any other rights or remedies whatsoever, and the
Secured Creditors shall have the right to enforce this Agreement as against any
Pledgor or any of its Collateral irrespective of whether or not other
proceedings or steps seeking resort to or realization upon or from any of the
foregoing are pending.
Section 12. The Agent. In acting under or by virtue of this Agreement,
the Agent shall be entitled to all the rights, authority, privileges and
immunities provided in Section 11 of the Credit Agreement, all of which
provisions of said Section 11 are incorporated by reference herein with the same
force and effect as if set forth herein in their entirety. The Agent hereby
disclaims any representation or warranty to the other Secured Creditors or any
other holders of the Obligations concerning the perfection of the liens and
security interests granted hereunder or in the value of the Collateral.
-11-
<PAGE>
<PAGE>
Section 13. Miscellaneous. (a) This Agreement cannot be changed or
terminated orally. This Agreement shall create a continuing lien on and security
interest in the Collateral and shall be binding upon each Pledgor, its
successors and permitted assigns, and shall inure, together with the rights and
remedies of the Secured Creditors hereunder, to the benefit of the Secured
Creditors, and their successors and assigns; provided, however, that no Pledgor
may assign its rights or delegate its duties hereunder without the Agent's prior
written consent. Without limiting the generality of the foregoing, and subject
to the provisions of the Credit Agreement, any Lender may assign or otherwise
transfer any indebtedness held by it secured by this Agreement to any other
person, and such other person shall thereupon become vested with all the
benefits in respect thereof granted to such Lender herein or otherwise.
(b) All communications provided for herein shall be in writing, except
as otherwise specifically provided for hereinabove, and shall be deemed to have
been given or made, if to any Pledgor when given to the Borrower in accordance
with Section 12.03 of the Credit Agreement, or if to any Secured Creditor, when
given to such party in accordance with Section 12.03 of the Credit Agreement.
(c) No Secured Creditor (other than the Agent) shall have the right to
institute any suit, action or proceeding in equity or at law for the foreclosure
or other realization upon any Collateral subject to this Agreement or for the
execution of any trust or power hereof or for the appointment of a receiver, or
for the enforcement of any other remedy under or upon this Agreement; it being
understood and intended that no one or more of the Secured Creditors (other than
the Agent) shall have any right in any manner whatsoever to affect, disturb or
prejudice the lien and security interest of this Agreement by its or their
action or to enforce any right hereunder, and that all proceedings at law or in
equity shall be instituted, had and maintained by the Agent in the manner herein
provided for the benefit of the Secured Creditors.
(d) In the event that any provision hereof shall be deemed to be invalid
or unenforceable by reason of the operation of any law or by reason of the
interpretation placed thereon by any court, this Agreement shall be construed as
not containing such provision, but only as to such jurisdictions where such law
or interpretation is operative, and the invalidity or unenforceability of such
provision shall not affect the validity of any remaining provision hereof, and
any and all other provisions hereof which are otherwise lawful and valid shall
remain in full force and effect. Without limiting the generality of the
foregoing, in the event that this Agreement shall be deemed to be invalid or
otherwise unenforceable with respect to any Pledgor, such invalidity or
unenforceability shall not affect the validity of this Agreement with respect to
the other Pledgors.
(e) In the event the Secured Creditors shall at any time in their
discretion permit a substitution of Pledgors hereunder or a party shall wish to
become a Pledgor hereunder, such substituted or additional Pledgor shall, upon
executing an agreement in the form attached hereto as Schedule C become a party
hereto and be bound by all the terms and conditions hereof to the same extent as
though such Pledgor had originally executed this Agreement and, in the case of a
substitution, in lieu of the Pledgor being replaced. Any such
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<PAGE>
<PAGE>
agreement shall contain information as to such Pledgor necessary to update
Schedule A with respect to it. No such substitution shall be effective absent
the written consent of Agent nor shall it in any manner affect the obligations
of the other Pledgors hereunder.
(f) Each Pledgor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York state court sitting in New York City 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. Each Pledgor
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 form. EACH PLEDGOR AND EACH SECURED
CREDITOR HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER CREDIT
DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
(g) This Agreement shall be deemed to have been made in the State of New
York and shall be governed by, and construed in accordance with, the laws of the
State of New York. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning of any
provision hereof.
(h) This Agreement may be executed in any number of counterparts and by
different parties hereto on separate counterpart signature pages, each
constituting an original, but all together one and the same instrument.
[SIGNATURE PAGES TO FOLLOW]
-13-
<PAGE>
<PAGE>
IN WITNESS WHEREOF, each Pledgor has caused this Agreement to be duly
executed and delivered as of the date first above written.
"PLEDGORS"
EAGLE-PICHER INDUSTRIES, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------
Name Andries Ruijssenaars
---------------------------------
Title President
---------------------------------
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------
Name Andries Ruijssenaars
---------------------------------
Title Authorized Person
---------------------------------
EAGLE-PICHER MINERALS, INC.
By /s/ ANDRIES RUIJSSENAARS
-------------------------------------
Name Andries Ruijssenaars
---------------------------------
Title Authorized Person
--------------------------------
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<PAGE>
<PAGE>
Acknowledged and agreed to in New York, New York as of the date first
above written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Secured Creditors
By /s/ GREGORY D. AMOROSO
-----------------------------------
Its Group Vice President
-------------------------------
By /s/ PAUL WIDUCH
-----------------------------------
Its Group Vice President
-------------------------------
-15-
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE A TO BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
THE PLEDGED SECURITIES
PERCENTAGE
NAME AND LOCATION NAME OF JURISDICTION NO. OF CERTIFICATE OF
OF PLEDGOR ISSUER OF SHARES CLASS NO. ISSUER'S
INCORPORATION STOCK
<S> <C> <C> <C> <C> <C> <C>
Eagle-Picher Common
Industries, Inc. Daisy Parts, Inc. Michigan 1,890 Stock 32 100%
250 East Fifth Street, Eagle-Picher
Cincinnati, Ohio Development Common
45202 Company, Inc. Delaware 100 Stock 1 100%
Eagle-Picher Common
Far East, Inc. Delaware 100 Stock 100 100%
Eagle-Picher
Fluid Common
Systems, Inc. Michigan 100 Stock 1 100%
Eagle-Picher Common
Minerals, Inc. Nevada 1 Stock 1 100%
Hillsdale Tool &
Manufacturing Common
Co. Michigan 98,845 Stock 289 100%
EPTEC, S.A. de Common
C.V. Mexico 18,578,390 Share 3 65%
Series A
Equipo de Acuna Common
S.A. de C.V. Mexico 650 Share 11-A 65%
Series B
Common
12,866,621 Share 4-B 65%
Series C
980,362 Common 2-C 65%
Share
Eagle-Picher
Industries
Europe B.V. Netherlands 13,000 Shares N/A 65%
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND LOCATION NAME OF ISSUER JURISDICTION NO. OF CERTIFICATE OF ISSUER'S
OF PLEDGOR OF SHARES CLASS NO. STOCK
INCORPORATION
<S> <C> <C> <C> <C> <C> <C>
Eagle-Picher
Development
Company, Inc. Michigan
250 East Fifth Street Automotive
Cincinnati, Ohio Research Common
45202 Corporation Michigan 24,500 Stock 22 100%
Eagle-Picher Eagle-Picher
Minerals, Inc. Minerals
6110 Plumas Street, International
Reno, Nevada 89509, S.A.R.L. France 51,887 Shares N/A 65%
</TABLE>
-2-
<PAGE>
<PAGE>
SCHEDULE B TO BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
AMENDMENT TO PLEDGE AGREEMENT
Reference is hereby made to that certain Borrower and Subsidiary Pledge
Agreement dated as of February 24, 1998 (as the same may be amended, the "Pledge
Agreement"), from the Pledgors which are signatories thereto to ABN AMRO Bank
N.V., as Agent. Capitalized terms not otherwise defined herein shall have the
meaning set forth in the Pledge Agreement.
Subsequent to the Pledgors' delivery of the Pledge Agreement, certain
shares of stock or equity interests have been added as Collateral under the
Pledge Agreement. As a result of such addition, Schedule A of the Pledge
Agreement does not accurately describe the shares of capital stock or other
equity interest currently held by the Agent as collateral under the Pledge
Agreement.
The Pledgors now desire to amend Schedule A to the Pledge Agreement to
reflect such addition, and this instrument shall constitute an agreement between
the Pledgors and the Agent amending the Pledge Agreement in the respects, but
only in the respects, hereinafter set forth:
1. Schedule A of the Pledge Agreement shall be and hereby is
amended and as so amended shall be restated in its entirety to read as
Annex A attached hereto.
2. As collateral security for the Obligations, each Pledgor
hereby grants to the Agent a continuing lien on and security interest
in, and acknowledges and agrees that the Agent has and shall continue to
have a continuing lien on and security interest in, all the shares of
capital stock or other equity interest of each issuer listed and
described on Annex A attached hereto and all the other properties,
rights, interests and privileges comprising the Collateral (as such term
is defined in the Pledge Agreement after giving effect to this
Amendment), to the same extent and with the same force and effect as if
the shares of stock or other equity interest described on Annex A had
originally been included on Schedule A to the Pledge Agreement. The
foregoing granting clause is in addition to and supplemental of and not
in substitution for the granting clause contained in the Pledge
Agreement. Neither the Pledgors nor the Agent intends by this Amendment
to in any way impair or otherwise affect the lien of the Pledge
Agreement on such of the Collateral which was subject to the Pledge
Agreement prior to giving effect to this Amendment.
3. Each Pledgor hereby repeats and reaffirms all of its
covenants, agreements, representations and warranties contained in the
Pledge Agreement, each and all of which shall be applicable to all of
the properties, rights, interests and privileges subject to the lien of
the Pledge Agreement after giving effect to this Amendment. Each Pledgor
hereby certifies that no Event of Default or event which,
<PAGE>
<PAGE>
with notice or lapse of time or both, would constitute an Event of
Default exists under the Pledge Agreement after giving effect to this
Amendment.
4. No reference to this Amendment need be made in any note,
instrument or other document at any time referring to the Pledge
Agreement, any reference in any of such to the Pledge Agreement to be
deemed to reference to the Pledge Agreement as modified hereby.
5. Except as specifically modified hereby, all the terms and
conditions of the Pledge Agreement shall stand and remain unchanged and
in full force and effect.
PLEDGOR(S):
[NAME OF PLEDGORS]
By
----------------------------------------
Its
------------------------------------
Acknowledged and agreed to as of the date first above written.
ABN AMRO BANK N.V., as Agent
By
-----------------------------------------
Its
-------------------------------------
By
-----------------------------------------
Its
-------------------------------------
-2-
<PAGE>
<PAGE>
ANNEX A
TO AMENDMENT TO PLEDGE AGREEMENT
THE PLEDGED SECURITIES
<TABLE>
<CAPTION>
NAME AND PERCENTAGE
LOCATION OF NAME OF JURISDICTION OF NO. OF CERTIFICATE OF ISSUER'S
PLEDGOR ISSUER INCORPORATION SHARES CLASS NO. STOCK
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
<PAGE>
SCHEDULE C TO BORROWER AND SUBSIDIARY PLEDGE AGREEMENT
ASSUMPTION AND SUPPLEMENTAL PLEDGE AGREEMENT
THIS AGREEMENT dated as of this _____ day of ______________, ___ from
[NEW PLEDGOR], a __________ corporation/partnership/limited liability company
(the "New Pledgor"), to ABN AMRO Bank N.V. ("ABN AMRO") as collateral agent for
the Secured Creditors (defined in the Pledge Agreement hereinafter identified
and defined) (ABN AMRO acting as such agent and any successor or successors to
ABN AMRO in such capacity being hereinafter referred to as the "Agent");
PRELIMINARY STATEMENTS
A. Eagle-Picher Industries, Inc. (the "Borrower") and certain other
Pledgors have executed and delivered to the Agent that certain Pledge Agreement
dated as of February 24, 1998 (such Pledge Agreement, as the same may from time
to time be modified or amended, including supplements thereto which add
additional parties as Pledgors thereunder, being hereinafter referred to as the
"Pledge Agreement") pursuant to which such parties (the "Existing Pledgors")
have granted to the Agent for the benefit of the Secured Creditors a lien on and
security interest in such Existing Pledgors' Collateral (as such term is defined
in the Pledge Agreement) to secure the Obligations (as such term is defined in
the Pledge Agreement);
B. The Borrower provides the New Pledgor with substantial financial,
managerial, administrative, and technical support and the New Pledgor will
benefit from credit and other financial accommodations extended and to be
extended by the Secured Creditors to the Borrower.
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Secured Creditors from time to time, the New Pledgor hereby
agrees as follows:
1. The New Pledgor acknowledges and agrees that it shall become a
"Pledgor" party to the Pledge Agreement effective upon the date the New
Pledgor's execution of this Agreement and the delivery of this Agreement to the
Agent, and that upon such execution and delivery, all references in the Pledge
Agreement to the terms "Pledgor" or "Pledgors" shall be deemed to include the
New Pledgor. Without limiting the generality of the foregoing, the New Pledgor
hereby repeats and reaffirms all grants (including the grant of a lien and
security interest), covenants, agreements, representations and warranties
contained in the Pledge Agreement as amended hereby, each and all of which are
and shall remain applicable to the Collateral from time to time owned by the New
Pledgor or in which the New Pledgor from time to time has any rights. Without
limiting the foregoing, in order to secure payment of the Obligations, whether
now existing or hereafter arising, the New Pledgor does hereby grant to the
Agent for the benefit of the Secured Creditors, and hereby agrees that the Agent
has and shall continue to have for the benefit of the Secured Creditors
<PAGE>
<PAGE>
a continuing security interest in, among other things, all of the New Pledgor's
Collateral (as such term is defined in the Pledge Agreement) described in
Section 2 of the Pledge Agreement, each and all of such granting clauses being
incorporated herein by reference with the same force and effect as if set forth
in their entirety except that all references in such clauses to the Existing
Pledgor or any of them shall be deemed to include references to the New Pledgor.
Nothing contained herein shall in any manner impair the priority of the liens
and security interests heretofore granted in favor of the Agent under the Pledge
Agreement.
2. The following information shall be added to Schedules A to the
Pledge Agreement:
SCHEDULE A
THE PLEDGED SECURITIES
<TABLE>
<CAPTION>
PERCENTAGE
NAME AND NAME OF JURISDICTION OF NO. OF CERTIFICATE OF ISSUER'S
LOCATION OF ISSUER INCORPORATION SHARES CLASS NO. STOCK
PLEDGOR
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
3. The New Pledgor hereby acknowledges and agrees that the Obligations
are secured by all of the Collateral according to, and otherwise on and subject
to, the terms and conditions of the Pledge Agreement to the same extent and with
the same force and effect as if the New Pledgor had originally been one of the
Existing Pledgors under the Pledge Agreement and had originally executed the
same as such an Existing Pledgor.
4. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Pledge Agreement,
except that any reference to the term "Pledgor" or "Pledgors" and any provision
of the Pledge Agreement providing meaning to such term shall be deemed a
reference to the Existing Pledgors and the New Pledgor. Except as specifically
modified hereby, all of the terms and conditions of the Pledge Agreement shall
stand and remain unchanged and in full force and effect.
5. The New Pledgor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent may
reasonably deem necessary or proper to carry out more effectively the purposes
of this Agreement.
6. No reference to this Agreement need be made in the Pledge Agreement
or in any other document or instrument making reference to the Pledge Agreement,
any reference to the Pledge Agreement in any of such to be deemed a reference to
the Pledge Agreement as modified hereby.
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<PAGE>
<PAGE>
7. This Agreement shall be governed by and construed in accordance with
the State of New York (without regard to principles of conflicts of law).
[NEW PLEDGOR]
By
-------------------------------------
Its
---------------------------------
Acknowledged and agreed to as of the date first above written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Secured Creditors
By
-------------------------------------
Its
---------------------------------
By
-------------------------------------
Its
----------------------------------
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<PAGE>
<PAGE>
SCHEDULE D
1. Eagle-Picher Minerals International S.A.R.L.
A pledge of 51,887 shares of Eagle-Picher Minerals International
S.A.R.L., a French corporation ("EPMI SARL"), representing 65% of its corporate
capital, shall be effected by (i) the execution of the pledge agreement (the
"French Pledge") substantially in the form of Exhibit A attached to this
Schedule D, (ii) the filling of the French Pledge with the French Tax
Administration, and (iii) the notification of such filing being sent to EPMI
SARL through a bailiff.
2. Eagle-Picher Industries Europe B.V.
A pledge of 13,000 shares of Eagle-Picher Industries Europe B.V., a
Dutch corporation ("EPIE BV"), representing 65% of the issued and outstanding
capital of EPIE BV shall be effected by (i) the execution of the powers of
attorney (the "Powers of Attorney"), substantially in the form of Exhibit B
attached to this Schedule D, which will allow the notary in The Netherlands to
pass the share pledge agreement (the "Dutch Pledge") substantially in the form
of Exhibit C attached to this Schedule D and (ii) the delivery of the fully
executed Powers of Attorney, the Credit Agreement and this Agreement to Moret
Ernst & Young of Rotterdam, The Netherlands.
<PAGE>
<PAGE>
HOLDINGS GUARANTY AGREEMENT
This Holdings Guaranty Agreement (the "Guaranty") dated as of February
24, 1998, by Eagle-Picher Holdings, Inc., a Delaware corporation (the
"Guarantor").
WITNESSETH:
WHEREAS, the Guarantor owns all of the issued and outstanding capital
stock of EAGLE-PICHER INDUSTRIES, INC., an Ohio corporation, as survivor and
successor by merger with E-P Acquisition, Inc. (as further defined in the Credit
agreement referred to below, the "Borrower"); and
WHEREAS, the Borrower and ABN AMRO Bank N.V. ("ABN AMRO"), individually
and as agent (ABN AMRO acting as such agent and any successor or successors to
ABN AMRO in such capacity being hereinafter referred to as the "Agent") have
entered into a Credit Agreement dated as of February 19, 1998 (such Credit
Agreement as the same may from time to time hereafter be modified, amended or
restated being hereinafter referred to as the "Credit Agreement") pursuant to
which ABN AMRO and such other banks, financial institutions and letter of credit
issuers from time to time parties thereto (ABN AMRO, in its individual capacity,
and such other banks and financial institutions being hereinafter referred to
collectively as the "Lenders" and individually as a "Lender" and such letter of
credit issuers being hereinafter referred to collectively as the "Letter of
Credit Issuers" and individually as a "Letter of Credit Issuer") have extended
various credit facilities to the Borrower; and
WHEREAS, the Borrower may from time to time enter into one or more
Interest Rate Protection Agreements with one or more of the Lenders party to the
Credit Agreement or affiliates thereof for the purpose of hedging or otherwise
protecting the Borrower against changes in interest rates (the liability of the
Borrower in respect of such agreements with such Lenders or affiliates being
hereinafter referred to as the "Hedging Liability") (the Agent, the Lenders, the
Letter of Credit Issuers and such affiliates party to Interest Rate Protection
Agreements being hereinafter referred to collectively as the "Guaranteed
Creditors" and individually as a "Guaranteed Creditor"); and
WHEREAS, as a condition to extending the credit facilities to the
Borrower under the Credit Agreement, the Guaranteed Creditors have required,
among other things, that the Guarantor execute and deliver this Guaranty; and
WHEREAS, the Guarantor will directly and substantially benefit from
credit and other financial accommodations extended and to be extended by the
Guaranteed Creditors to the Borrower; and
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Guaranteed Creditors from time to time, the Guarantor hereby
makes the following
<PAGE>
<PAGE>
representations and warranties to the Guaranteed Creditors
and hereby covenants and agrees with the Guaranteed Creditors as follows:
Section 1. Definitions. All capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the
Credit Agreement.
Section 2. Guaranty. (a) The Guarantor hereby guarantees to the
Guaranteed Creditors, the due and punctual payment when due of (i) any and all
indebtedness, obligations and liabilities of the Borrower to the Guaranteed
Creditors, and to any of them individually, under or in connection with or
evidenced by the Credit Agreement, the Notes of the Borrower heretofore or
hereafter issued under the Credit Agreement and the obligations of the Borrower
to reimburse the Guaranteed Creditors, or any of them individually, for the
amount of all drawings on all Letters of Credit issued pursuant to the Credit
Agreement, and all other obligations of the Borrower under any and all
applications for Letters of Credit, and any and all liability of the Borrower
arising under or in connection or otherwise evidenced by agreements with any one
or more of the Guaranteed Creditors with respect to any Hedging Liability, in
each case whether now existing or hereafter arising (and whether arising before
or after the filing of a petition in bankruptcy and including all interest
accrued after the petition date), due or to become due, direct or indirect,
absolute or contingent, and howsoever evidenced, held or acquired and (ii) any
and all expenses and charges, legal or otherwise, suffered or incurred by the
Guaranteed Creditors, and any of them, in collecting or enforcing any of such
indebtedness, obligations and liabilities or in realizing on or protecting or
preserving any security therefor. The indebtedness, obligations and liabilities
described in the immediately preceding clauses (i) and (ii) are hereinafter
referred to as the "indebtedness hereby guaranteed". In case of failure by the
Borrower punctually to pay any indebtedness hereby guaranteed, the Guarantor
hereby agrees 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. All payments hereunder by the Guarantor shall be made in immediately
available funds in Dollars without setoff, counterclaim or other defense or
withholding or deduction of any nature.
(b) The Guarantor further agrees to pay on demand all reasonable
expenses, legal and/or otherwise (including court costs and reasonable
attorneys' fees), paid or incurred by any Guaranteed Creditor in endeavoring to
collect the indebtedness hereby guaranteed, or any part thereof, or in enforcing
or endeavoring to enforce the Guarantor's obligations hereunder, or any part
thereof, or in protecting, defending or enforcing this Guaranty in any
litigation, bankruptcy or insolvency proceedings or otherwise.
(c) The Guarantor agrees that, upon demand, it will then pay to the
Agent for the benefit of the Guaranteed Creditors the full amount of the
indebtedness hereby guaranteed then due whether or not any one or more of the
other guarantors shall then or thereafter pay any amount whatsoever in respect
to their obligations under any other guaranty.
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<PAGE>
<PAGE>
(d) The Guarantor agrees that it will not exercise or enforce any right
of exoneration, contribution, reimbursement, recourse or subrogation available
to it against any person liable for payment of the indebtedness hereby
guaranteed, or as to any security therefor, unless and until the full amount
owing to the Guaranteed Creditors of the indebtedness hereby guaranteed has been
fully paid and satisfied and each of the commitments by the Guaranteed Creditors
to extend any indebtedness hereby guaranteed shall have expired or otherwise
terminated. The payment by the Guarantor of any amount or amounts to the
Guaranteed Creditors pursuant hereto shall not in any way entitle the Guarantor,
either at law, in equity or otherwise, to any right, title or interest (whether
by way of subrogation or otherwise) in and to the indebtedness hereby guaranteed
or any part thereof or any collateral security therefor or any other rights or
remedies in any way relating thereto or in and to any amounts theretofor, then
or thereafter paid or applicable to the payment thereof howsoever such payment
may be made and from whatsoever source such payment may be derived unless and
until all of the indebtedness hereby guaranteed and all costs and expenses
suffered or incurred by the Guaranteed Creditors in enforcing this Guaranty have
been paid and satisfied in full and each of the commitments by the Guaranteed
Creditors to extend any indebtedness hereby guaranteed shall have expired or
otherwise terminated and unless and until such payment in full and termination,
any payments made by the Guarantor hereunder and any other payments from
whatsoever source derived on account of or applicable to the indebtedness hereby
guaranteed or any part thereof shall be held and taken to be merely payments in
gross to the Guaranteed Creditors reducing pro tanto the indebtedness hereby
guaranteed.
(e) To the extent permitted by the Credit Agreement, each Guaranteed
Creditor may, without any notice whatsoever to the Guarantor, sell, assign, or
transfer all of the indebtedness hereby guaranteed, or any part thereof, and in
that event each and every immediate and successive assignee or transferee, of
all or any part of the indebtedness hereby guaranteed, shall have the right
through the Agent pursuant to Section 6(c) hereof to enforce this Guaranty, by
suit or otherwise, for the benefit of such assignee or transferee as fully as if
such assignee or transferee were herein by name specifically given such rights,
powers and benefits; but each Guaranteed Creditor through the Agent pursuant to
Section 6(c) hereof shall have an unimpaired right to enforce this Guaranty for
its own benefit, as to so much of the indebtedness hereby guaranteed that it has
not sold, assigned or transferred.
(f) This Guaranty is a continuing, absolute and unconditional Guaranty,
and shall remain in full force and effect until written notice of its
discontinuance executed by the Borrower and the Guarantor shall be actually
received by the Guaranteed Creditors, and also until any and all of the
indebtedness hereby guaranteed which was created or existing before receipt of
such notice shall be fully paid and satisfied and each of the commitments by the
Guaranteed Creditors to extend any indebtedness hereby guaranteed shall have
expired or otherwise terminated. The dissolution of the Guarantor shall not
terminate this Guaranty until notice of such dissolution shall have been
actually received by the Guaranteed Creditors, nor until all of the indebtedness
hereby guaranteed, created or existing or committed to be extended in each case
before receipt of such notice shall be fully paid and satisfied. The Guaranteed
Creditors may at any time or from time to time release any
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<PAGE>
<PAGE>
guarantor from its obligations under any other guaranty or effect any compromise
with any such guarantor and no such release or compromise shall in any manner
impair or otherwise affect the obligations hereunder of the Guarantor. No
release, compromise, or discharge of any guarantor under any other guaranty
shall release, compromise or discharge the obligations of the Guarantor
hereunder.
(g) In case of the dissolution, liquidation or insolvency (howsoever
evidenced) of, or the institution of bankruptcy or receivership proceedings
against the Guarantor, the Borrower or any of its Subsidiaries, all of the
indebtedness hereby guaranteed which is then existing shall immediately become
due or accrued and payable from the Guarantor. All payments received from the
Borrower or on account of the indebtedness hereby guaranteed from whatsoever
source, shall be taken and applied as payment in gross, and this Guaranty shall
apply to and secure any ultimate balance that shall remain owing to the
Guaranteed Creditors.
(h) The liability hereunder shall in no way be affected or impaired by
(and the Guaranteed Creditors are hereby expressly authorized to make from time
to time, without notice to the Guarantor), any sale, pledge, surrender,
compromise, settlement, release, renewal, extension, impairment, indulgence,
alteration, substitution, exchange, change in, modification or other disposition
of any of the indebtedness hereby guaranteed, either express or implied, or of
any Credit Document or any other contract or contracts evidencing any thereof,
or of any security or collateral therefor or any guaranty thereof. The liability
hereunder shall in no way be affected or impaired by any acceptance by the
Guaranteed Creditors of any security for or other guarantors upon any of the
indebtedness hereby guaranteed, or by any failure, neglect or omission on the
part of the Guaranteed Creditors to realize upon or protect any of the
indebtedness hereby guaranteed, or any collateral or security therefor
(including, without limitation, impairment of collateral and failure to perfect
security interest in any collateral), or to exercise any lien upon or right of
appropriation of any moneys, credits or property of the Borrower or any
guarantor, possessed by any of the Guaranteed Creditors, toward the liquidation
of the indebtedness hereby guaranteed, or by any application of payments or
credits thereon. The Guaranteed Creditors shall have the exclusive right to
determine how, when and what application of payments and credits, if any, shall
be made on said indebtedness hereby guaranteed, or any part of same. In order to
hold the Guarantor liable hereunder, there shall be no obligation on the part of
the Guaranteed Creditors, at any time, to resort for payment to the Borrower or
to any other guarantor, or to any other person, its property or estate, or
resort to any collateral, security, property, liens or other rights or remedies
whatsoever, and the Guaranteed Creditors shall have the right to enforce this
Guaranty against the Guarantor irrespective of whether or not other proceedings
or steps are pending seeking resort to or realization upon or from any of the
foregoing are pending.
(i) All diligence in collection or protection, and all presentment,
demand, protest and/or notice, as to any and everyone, whether or not the
Borrower or the Guarantor or others, of dishonor and of default and of
non-payment and of the creation and existence of any and all of said
indebtedness hereby guaranteed, and of any security and collateral
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<PAGE>
<PAGE>
therefor, and of the acceptance of this Guaranty, and of any and all extensions
of credit and indulgence hereunder, are expressly waived.
(j) No act of commission or omission of any kind, or at any time, upon
the part of the Guaranteed Creditors in respect to any matter whatsoever, shall
in any way affect or impair this Guaranty.
(k) The Guarantor waives any and all defenses, claims and discharges of
the Borrower, or any other obligor or guarantor, pertaining to the indebtedness
hereby guaranteed, except the defense of discharge by payment in full. Without
limiting the generality of the foregoing, the Guarantor will not assert, plead
or enforce against the Guaranteed Creditors any defense of waiver, release,
discharge in bankruptcy, statute of limitations, res judicata, statue of frauds,
anti-deficiency statute, fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to the Borrower or any other person
liable in respect of any of the indebtedness hereby guaranteed, or any set-off
available against the Guaranteed Creditors to the Borrower or any such other
person, whether or not on account of a related transaction. The Guarantor agrees
that it shall be and remain liable for any deficiency remaining after
foreclosure or other realization on any lien or security interest securing the
indebtedness hereby guaranteed, whether or not the liability of the Borrower or
any other obligor for such deficiency is discharged pursuant to statute or
judicial decision.
(l) If any payment applied by the Guaranteed Creditors to the
indebtedness hereby guaranteed is thereafter set aside, recovered, rescinded or
required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of the Borrower or any other obligor),
the indebtedness hereby guaranteed to which such payment was applied shall for
the purposes of this Guaranty be deemed to have continued in existence,
notwithstanding such application, and this Guaranty shall be enforceable as to
such of the indebtedness hereby guaranteed as fully as if such application had
never been made.
(m) The liability of the Guarantor under this Guaranty is in addition to
and shall be cumulative with all other liabilities of the Guarantor after the
date hereof to the Guaranteed Creditors as a Guarantor of the indebtedness
hereby guaranteed, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
Section 3. Representations and Warranties. In order to induce the
Guaranteed Creditors to enter into the Credit Agreement, to make the Loans,
issue (or deemed issued) (and participate in) the Letters of Credit as provided
therein and/or enter into the Interest Rate Protection Agreements, the Guarantor
makes the following representations and warranties, in each case after giving
effect to the consummation of the Transaction on the Closing Date, all of which
shall survive the execution and delivery of this Guaranty, with the occurrence
of the Closing Date and the occurrence of each Credit Event on or after the
Closing Date being deemed to constitute a representation and warranty that the
matters specified in this Section 3 are true and correct in all material
respects on and as of the Closing Date and on the date of each such Credit
Event.
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<PAGE>
<PAGE>
(a) The Guarantor (i) is a duly organized and validly existing
corporation in good standing under the laws of the State of Delaware, (ii) has
the power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified as a foreign corporation and in good standing in each
jurisdiction where the ownership of property or the conduct of its business
requires such qualification except where the failure to be so qualified could
not reasonably be expected to have a material adverse effect on the business,
properties, assets, liabilities or financial condition of the Guarantor.
(b) The Guarantor has the corporate power and authority to execute,
deliver and perform the terms and provisions of each of the Credit Documents to
which it is a party and has taken all necessary corporate action to authorize
the execution, delivery and performance by it of each of such Credit Documents.
The Guarantor has duly executed and delivered each of the Credit Documents to
which it is a party, and each of such Credit Documents constitutes its legal,
valid and binding obligation enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance or
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
(c) Neither the execution, delivery or performance by the Guarantor of
the Credit Documents to which it is a party, nor compliance by it with the terms
and provisions thereof, nor the consummation of the transactions contemplated
herein or therein (i) will contravene any material provision of any law,
statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict or be inconsistent
with or result in any breach of any of the terms, covenants, conditions or
provisions of, or constitute a default under, or (other than pursuant to the
Security Documents) result in the creation or imposition of (or the obligation
to create or impose) any Lien upon any of the property or assets of the
Guarantor pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement, loan agreement or any other material agreement, contract or
instrument to which any of the Credit Parties or any of their Subsidiaries is a
party or by which it or any of its property or assets are bound or to which it
may be subject (except that, as of the Closing Date, the Borrower has not
obtained certain consents required in connection with the Merger, as set forth
in Schedule 6.03 to the Credit Agreement) or (iii) will violate any provision of
the certificate of incorporation or by-laws (or the equivalent charter
documents) of the Guarantor.
(d) No order, consent, approval, license, authorization or validation
of, or filing, recording or registration with (except as have been obtained or
made on or prior to the Closing Date and which remain in full force and effect),
or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document to
which the Guarantor is a party, (ii) the legality, validity, binding effect or
enforceability of any Credit Document to which the Guarantor is a party or (iii)
the consummation of the Transaction.
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<PAGE>
<PAGE>
(e) The pro forma consolidated balance sheet of the Guarantor and its
Subsidiaries as of the Closing Date reflects the pro forma financial position of
the Guarantor and its Subsidiaries after giving effect to the Transaction, as if
such Transaction had occurred on December 1, 1997.
Section 4. Covenants. The Guarantor shall not, directly or indirectly,
(i) enter into or permit to exist any transaction or agreement (including
without limitation any transaction or agreement with respect to any incurrence
or assumption of Indebtedness, any purchase, sale, lease or exchange of any
property or the rendering of any service or payment of any funds) between itself
and any other Person (including any Affiliate), other than Permitted Holdings
Transactions, (ii) issue any capital stock other than the Holdings Preferred
Stock or Holding Common Stock, or incur or assume any Indebtedness other than
pursuant to Permitted Holdings Transactions, (iii) engage in any business or
conduct any activity (including the making of any investment or payment) other
than the ownership of the capital stock of the Borrower and the performance of
Permitted Holdings Transactions in accordance with the terms thereof, or sell,
exchange or otherwise transfer any of its assets, (iv) consolidate or merge with
or into any other Person, (v) redeem or purchase any of the Holdings Preferred
Stock or the Exchange Debentures or any portion thereof, (vi) make any dividend
payment in respect of the Holdings Preferred Stock prior to September 1, 2003 or
make any interest payment on the Exchange Debentures prior to September 1, 2003,
or (vii) amend or modify its certificate of incorporation, including its
certificate of designations and any terms of the Holding Preferred Stock or
Exchange Debentures. The Guarantor shall preserve, renew and keep in full force
and effect its corporate existence and any rights, privileges and franchises
necessary or desirable in the conduct of its business, and shall comply in all
material respects with all material applicable laws, ordinances, rules,
regulations, and requirements of governmental authorities, provided that the
Guarantor may terminate any such right, privilege or franchise (other than its
corporate existence) if its board of directors in good faith determines that
such termination is in the best interest of the Guarantor and not materially
disadvantageous to the Guaranteed Creditors. The Guarantor shall apply any
dividends which it receives from the Borrower to the payment of dividends on the
Holdings Preferred Stock or interest on the Exchange Debenture, as the case may
be, and for no other purpose.
Section 5. Event of Default. Upon the occurrence of (i) any default by
the Guarantor in respect of any of its covenants hereunder or (ii) any Mandatory
Redemption Event (as defined in the Holdings Preferred Stock) in respect of the
Holdings Preferred Stock, or (iii) any Event of Default in respect of the
Exchange Debentures (as defined in the Exchange Debentures), all of the
indebtedness hereby guaranteed which is then existing shall immediately become
due and payable from the Guarantor irrespective of whether such indebtedness is
otherwise then due and payable.
Section 6. Miscellaneous. (a) Any invalidity or unenforceability of
any provision or application of this Guaranty shall not affect other lawful
provisions and applications hereof, and to this end the provisions of this
Guaranty are declared to be severable.
(b) Any demand for payment on this Guaranty or any other notice required
or desired to be given hereunder to the Guarantor shall be in writing
(including, without
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<PAGE>
limitation, notice by telecopy) and shall be given to it in accordance with
Section 12.03 of the Credit Agreement, or such other address or telecopier
number as such party may hereafter specify by notice to the Agent given by
United States certified or registered mail, by telecopy or by other
telecommunication device capable of creating a written record of such notice and
its receipt. 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 and a confirmation of such telecopy has been
received by the sender, (ii) if given by mail, five (5) days after such
communication is deposited in the mail, certified or registered with return
receipt requested, addressed as aforesaid or (iii) if given by any other means,
when delivered at the addresses specified in this Section.
(c) No Guaranteed Creditor (other than the Agent) shall have the right
to institute any suit, action or proceeding in equity or at law in connection
with this Guaranty for the enforcement of any remedy under or upon this
Guaranty; it being understood and intended that no one or more of the Guaranteed
Creditors (other than the Agent) shall have any right in any manner whatsoever
to enforce any right hereunder, and that all proceedings at law or in equity
shall be instituted, had and maintained by the Agent in the manner herein
provided and for the benefit of the Guaranteed Creditors.
(d) THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE
LAW OF THE STATE OF NEW YORK (without regard to principles of conflicts of laws)
in which state it shall be performed by the Guarantor and may not be waived,
amended, released or otherwise changed except by a writing signed by the
Guaranteed Creditors. This Guaranty and every part thereof shall be effective
upon delivery to the Agent, without further act, condition or acceptance by the
Guaranteed Creditors, shall be binding upon the Guarantor and upon the legal
representatives, successors and assigns of the Guarantor, and shall inure to the
benefit of the Guaranteed Creditors, their successors, legal representatives and
assigns. The Guarantor waives notice of the Guaranteed Creditors' acceptance
hereof. This Guaranty may be executed in counterparts and by different parties
hereto on separate counterparts each of which shall be an original, but all
together to be one and the same instrument.
(e) The Guarantor's obligation hereunder to make payments in Dollars
(the "Obligation Currency") shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Guaranteed Creditors of the
full amount of the Obligation Currency expressed to be payable to the Guaranteed
Creditors under this Guaranty. If for the purpose of obtaining or enforcing
judgment against the Guarantor in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made at the rate of exchange (as quoted by the Agent or if the Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Agent) determined, in each case, as of the day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date"). If there is
a change
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<PAGE>
in the rate of exchange prevailing between the Judgment Currency
Conversion Date and the date of actual payment of the amount due, the Guarantor
covenants and agrees to pay, or cause to be paid, such additional amounts, if
any (but in any event not a lesser amount) as may be necessary to ensure that
the amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate or exchange prevailing
on the Judgment Currency Conversion Date. For purposes of determining any rate
of exchange for this Section, such amounts shall include any premium and costs
payable in connection with the purchase of the Obligation Currency.
(f) The Guarantor hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of New York and of any
New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Guaranty or the transactions
contemplated hereby. The Guarantor 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 court has been brought in an inconvenient
forum. EACH OF THE GUARANTOR, THE AGENT AND THE GUARANTEED CREDITORS HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
[SIGNATURE PAGES TO FOLLOW]
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<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
executed and delivered as of the date first above written.
"GUARANTOR"
EAGLE-PICHER HOLDINGS, INC.
By /s/ JOEL P. WYLER
________________________
Name Joel P. Wyler
___________________
Title President
___________________
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<PAGE>
<PAGE>
Accepted and agreed to in New York, New York as of the date first above
written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Guarantee
Creditors
By /s/ GREGORY D. AMOROSO
___________________________
Its Group Vice President
_______________________
By /s/ PAUL WIDUCH
___________________________
Its Group Vice President
_______________________
Address:
1325 Avenue of the Americas
New York, New York
Attention: Agency Services
Telephone: (212) 314-1705
Telecopy: (212) 314-1709
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<PAGE>
<PAGE>
SUBSIDIARY GUARANTY AGREEMENT
This Subsidiary Guaranty Agreement (the "Guaranty") dated as of February
24, 1998, by the parties who have executed this Guaranty (such parties, along
with any other parties who execute and deliver to the Agent hereinafter
identified and defined an agreement in the form attached hereto as Exhibit A,
being herein referred to collectively as the "Guarantors" and individually as a
"Guarantor").
WITNESSETH:
WHEREAS, each of the Guarantors is a direct or indirect subsidiary of
Eagle-Picher Industries, Inc., an Ohio corporation, as survivor and successor by
merger with E-P Acquisition, Inc. (as further defined in the Credit Agreement
defined below, the "Borrower"); and
WHEREAS, E-P Acquisition, Inc. and ABN AMRO Bank N.V. ("ABN AMRO"),
individually and as agent (ABN AMRO acting as such agent and any successor or
successors to ABN AMRO in such capacity being hereinafter referred to as the
"Agent") have entered into a Credit Agreement dated as of February 19, 1998
(such Credit Agreement as the same may from time to time hereafter be modified,
amended or restated being hereinafter referred to as the "Credit Agreement")
pursuant to which ABN AMRO and such other banks, financial institutions and
letter of credit issuers from time to time parties thereto (ABN AMRO, in its
individual capacity, and such other banks and financial institutions being
hereinafter referred to collectively as the "Lenders" and individually as a
"Lender" and such letter of credit issuers being hereinafter referred to
collectively as the "Letter of Credit Issuers" and individually as a "Letter of
Credit Issuer") have extended various credit facilities to the Borrower; and
WHEREAS, the Borrower may from time to time enter into one or more
Interest Rate Protection Agreements with one or more of the Lenders party to the
Credit Agreement or affiliates thereof for the purpose of hedging or otherwise
protecting the Borrower against changes in interest rates (the liability of the
Borrower in respect of such agreements with such Lenders or affiliates being
hereinafter referred to as the "Hedging Liability") (the Agent, the Lenders, the
Letter of Credit Issuers and such affiliates party to Interest Rate Protection
Agreements being hereinafter referred to collectively as the "Guaranteed
Creditors" and individually as a "Guaranteed Creditor"); and
WHEREAS, the Borrower provides each of the Guarantors with substantial
financial, management, administrative, and technical support; and
WHEREAS, as a condition to extending the credit facilities to the
Borrower under the Credit Agreement, the Guaranteed Creditors have required,
among other things, that the Guarantors execute and deliver this Guaranty; and
<PAGE>
<PAGE>
WHEREAS, each Guarantor will directly and substantially benefit from
credit and other financial accommodations extended and to be extended by the
Guaranteed Creditors to the Borrower; and
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Guaranteed Creditors from time to time, each Guarantor hereby
makes the following representations and warranties to the Guaranteed Creditors
and hereby covenants and agrees with the Guaranteed Creditors as follows:
1. All capitalized terms used herein without definition shall have the
same meanings herein as such terms have in the Credit Agreement.
2. Each Guarantor hereby jointly and severally guarantees to the
Guaranteed Creditors, the due and punctual payment when due of (i) any and all
indebtedness, obligations and liabilities of the Borrower and the Guarantors,
and of any of them individually, to the Guaranteed Creditors, and to any of them
individually, under or in connection with or evidenced by the Credit Agreement,
the Notes of the Borrower heretofore or hereafter issued under the Credit
Agreement and the obligations of the Borrower to reimburse the Guaranteed
Creditors, or any of them individually, for the amount of all drawings on all
Letters of Credit issued pursuant to the Credit Agreement, and all other
obligations of the Borrower under any and all applications for Letters of
Credit, and any and all liability of the Borrower and the Guarantors, and of any
of them individually, arising under or in connection or otherwise evidenced by
agreements with any one or more of the Guaranteed Creditors with respect to any
Hedging Liability, in each case whether now existing or hereafter arising (and
whether arising before or after the filing of a petition in bankruptcy and
including all interest accrued after the petition date), due or to become due,
direct or indirect, absolute or contingent, and howsoever evidenced, held or
acquired and (ii) any and all expenses and charges, legal or otherwise, suffered
or incurred by the Guaranteed Creditors, and any of them, in collecting or
enforcing any of such indebtedness, obligations and liabilities or in realizing
on or protecting or preserving any security therefor. The indebtedness,
obligations and liabilities described in the immediately preceding clauses (i)
and (ii) are hereinafter referred to as the "indebtedness hereby guaranteed". In
case of failure by the Borrower punctually to pay any indebtedness hereby
guaranteed, each Guarantor hereby jointly and severally agrees 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. All payments
hereunder by any Guarantor shall be made in immediately available funds in
Dollars without setoff, counterclaim or other defense or withholding or
deduction of any nature. Notwithstanding anything in this Guaranty to the
contrary, the right of recovery against a Guarantor under this Guaranty shall
not exceed $1 less than the amount which would render such Guarantor's
obligations under this Guaranty void or voidable under applicable law, including
fraudulent conveyance law.
3. Each Guarantor further jointly and severally agrees to pay on demand
all reasonable expenses, legal and/or otherwise (including court costs and
reasonable attorneys'
-2-
<PAGE>
<PAGE>
fees), paid or incurred by any Guaranteed Creditor in endeavoring to collect
the indebtedness hereby guaranteed, or any part thereof, or in enforcing or
endeavoring to enforce any Guarantor's obligations hereunder, or any part
thereof, or in protecting, defending or enforcing this Guaranty in any
litigation, bankruptcy or insolvency proceedings or otherwise.
4. Each Guarantor agrees that, upon demand, such Guarantor will then
pay to the Agent for the benefit of the Guaranteed Creditors the full amount of
the indebtedness hereby guaranteed then due (subject to the right of recovery
from such Guarantor pursuant to the last sentence of Section 2 above) whether or
not any one or more of the other Guarantors shall then or thereafter pay any
amount whatsoever in respect to their obligations hereunder.
5. Each of the Guarantors agrees that such Guarantor will not exercise
or enforce any right of exoneration, contribution, reimbursement, recourse or
subrogation available to such Guarantor against any person liable for payment of
the indebtedness hereby guaranteed, or as to any security therefor, unless and
until the full amount owing to the Guaranteed Creditors of the indebtedness
hereby guaranteed has been fully paid and satisfied and each of the commitments
by the Guaranteed Creditors to extend any indebtedness hereby guaranteed shall
have expired or otherwise terminated. The payment by any Guarantor of any amount
or amounts to the Guaranteed Creditors pursuant hereto shall not in any way
entitle any such Guarantor, either at law, in equity or otherwise, to any right,
title or interest (whether by way of subrogation or otherwise) in and to the
indebtedness hereby guaranteed or any part thereof or any collateral security
therefor or any other rights or remedies in any way relating thereto or in and
to any amounts theretofor, then or thereafter paid or applicable to the payment
thereof howsoever such payment may be made and from whatsoever source such
payment may be derived unless and until all of the indebtedness hereby
guaranteed and all costs and expenses suffered or incurred by the Guaranteed
Creditors in enforcing this Guaranty have been paid and satisfied in full and
each of the commitments by the Guaranteed Creditors to extend any indebtedness
hereby guaranteed shall have expired or otherwise terminated and unless and
until such payment in full and termination, any payments made by any Guarantor
hereunder and any other payments from whatsoever source derived on account of or
applicable to the indebtedness hereby guaranteed or any part thereof shall be
held and taken to be merely payments in gross to the Guaranteed Creditors
reducing pro tanto the indebtedness hereby guaranteed.
6. To the extent permitted by the Credit Agreement, each Guaranteed
Creditor may, without any notice whatsoever to any of the Guarantors, sell,
assign, or transfer all of the indebtedness hereby guaranteed, or any part
thereof, and in that event each and every immediate and successive assignee or
transferee of all or any part of the indebtedness hereby guaranteed, shall have
the right through the Agent pursuant to Section 18 hereof to enforce this
Guaranty, by suit or otherwise, for the benefit of such assignee or transferee,
as fully as if such assignee or transferee were herein by name specifically
given such rights, powers and benefits; but each Guaranteed Creditor through the
Agent pursuant to Section 18 hereof shall have an unimpaired right to enforce
this Guaranty for its own benefit, as to so much of the indebtedness hereby
guaranteed that it has not sold, assigned or transferred.
-3-
<PAGE>
<PAGE>
7. This Guaranty is a continuing, absolute and unconditional Guaranty,
and shall remain in full force and effect until written notice of its
discontinuance executed by the Borrower and all the Guarantors shall be actually
received by the Guaranteed Creditors, and also until any and all of the
indebtedness hereby guaranteed which was created or existing before receipt of
such notice shall be fully paid and satisfied and each of the commitments by the
Guaranteed Creditors to extend any indebtedness hereby guaranteed shall have
expired or otherwise terminated. The dissolution of any Guarantor shall not
terminate this Guaranty as to such Guarantor until notice of such dissolution
shall have been actually received by the Guaranteed Creditors, nor until all of
the indebtedness hereby guaranteed, created or existing or committed to be
extended in each case before receipt of such notice shall be fully paid and
satisfied. The Guaranteed Creditors may at any time or from time to time release
any Guarantor from its obligations hereunder or effect any compromise with any
Guarantor and no such release or compromise shall in any manner impair or
otherwise affect the obligations hereunder of the other Guarantors. No release,
compromise, or discharge of any one or more of the Guarantors shall release,
compromise or discharge the obligations of the other Guarantors hereunder.
8. In case of the dissolution, liquidation or insolvency (howsoever
evidenced) of, or the institution of bankruptcy or receivership proceedings
against Holdings, the Borrower or any Guarantor, all of the indebtedness hereby
guaranteed which is then existing shall immediately become due or accrued and
payable from the Guarantors. All payments received from the Borrower or on
account of the indebtedness hereby guaranteed from whatsoever source, shall be
taken and applied as payment in gross, and this Guaranty shall apply to and
secure any ultimate balance that shall remain owing to the Guaranteed Creditors.
9. The liability hereunder shall in no way be affected or impaired by
(and the Guaranteed Creditors are hereby expressly authorized to make from time
to time, without notice to any of the Guarantors), any sale, pledge, surrender,
compromise, settlement, release, renewal, extension, impairment, indulgence,
alteration, substitution, exchange, change in, modification or other disposition
of any of the indebtedness hereby guaranteed, either express or implied, or of
any Credit Document or any other contract or contracts evidencing any thereof,
or of any security or collateral therefor or any guaranty thereof. The liability
hereunder shall in no way be affected or impaired by any acceptance by the
Guaranteed Creditors of any security for or other guarantors upon any of the
indebtedness hereby guaranteed, or by any failure, neglect or omission on the
part of the Guaranteed Creditors to realize upon or protect any of the
indebtedness hereby guaranteed, or any collateral or security therefor
(including, without limitation, impairment of collateral and failure to perfect
security interest in any collateral), or to exercise any lien upon or right of
appropriation of any moneys, credits or property of Holdings, the Borrower or
any Guarantor, possessed by any of the Guaranteed Creditors, toward the
liquidation of the indebtedness hereby guaranteed, or by any application of
payments or credits thereon. The Guaranteed Creditors shall have the exclusive
right to determine how, when and what application of payments and credits, if
any, shall be made on said indebtedness hereby guaranteed, or any part of same.
In order to hold any Guarantor liable hereunder, there shall be no obligation on
the part of the Guaranteed Creditors, at any time, to resort for
-4-
<PAGE>
<PAGE>
payment to the Borrower or to any other Guarantor, or to any other person, its
property or estate, or resort to any collateral, security, property, liens or
other rights or remedies whatsoever, and the Guaranteed Creditors shall have the
right to enforce this Guaranty against any Guarantor irrespective of whether or
not other proceedings or steps are pending seeking resort to or realization upon
or from any of the foregoing are pending.
10. In the event the Guaranteed Creditors shall at any time in their
discretion permit a substitution of Guarantors hereunder or a party shall wish
to become Guarantor hereunder, such substituted or additional Guarantor shall,
upon executing an agreement in the form attached hereto as Exhibit A, become a
party hereto and be bound by all the terms and conditions hereof to the same
extent as though such Guarantor had originally executed this Guaranty and in the
case of a substitution, in lieu of the Guarantor being replaced. No such
substitution shall be effective absent the written consent of the Guaranteed
Creditors delivered in accordance with the terms of the Credit Agreement, nor
shall it in any manner affect the obligations of the other Guarantors hereunder.
11. All diligence in collection or protection, and all presentment,
demand, protest and/or notice, as to any and everyone, whether or not the
Borrower or the Guarantors or others, of dishonor and of default and of
non-payment and of the creation and existence of any and all of said
indebtedness hereby guaranteed, and of any security and collateral therefor, and
of the acceptance of this Guaranty, and of any and all extensions of credit and
indulgence hereunder, are expressly waived.
12. No act of commission or omission of any kind, or at any time, upon
the part of the Guaranteed Creditors in respect to any matter whatsoever, shall
in any way affect or impair this Guaranty.
13. The Guarantors waive any and all defenses, claims and discharges of
the Borrower, or any other obligor or guarantor, pertaining to the indebtedness
hereby guaranteed, except the defense of discharge by payment in full. Without
limiting the generality of the foregoing, the Guarantors will not assert, plead
or enforce against the Guaranteed Creditors any defense of waiver, release,
discharge in bankruptcy, statute of limitations, res judicata, statue of frauds,
anti-deficiency statute, fraud, incapacity, minority, usury, illegality or
unenforceability which may be available to the Borrower or any other person
liable in respect of any of the indebtedness hereby guaranteed, or any set-off
available against the Guaranteed Creditors to the Borrower or any such other
person, whether or not on account of a related transaction. The Guarantors agree
that the Guarantors shall be and remain jointly and severally liable for any
deficiency remaining after foreclosure or other realization on any lien or
security interest securing the indebtedness hereby guaranteed, whether or not
the liability of the Borrower or any other obligor for such deficiency is
discharged pursuant to statute or judicial decision.
14. If any payment applied by the Guaranteed Creditors to the
indebtedness hereby guaranteed is thereafter set aside, recovered, rescinded or
required to be returned for any reason (including, without limitation, the
bankruptcy, insolvency or reorganization of the Borrower or any other obligor),
the indebtedness hereby guaranteed to which such payment
-5-
<PAGE>
<PAGE>
was applied shall for the purposes of this Guaranty be deemed to have continued
in existence, notwithstanding such application, and this Guaranty shall be
enforceable as to such of the indebtedness hereby guaranteed as fully as if such
application had never been made.
15. The liability of the Guarantors under this Guaranty is in addition
to and shall be cumulative with all other liabilities of the Guarantors after
the date hereof to the Guaranteed Creditors as a Guarantor of the indebtedness
hereby guaranteed, without any limitation as to amount, unless the instrument or
agreement evidencing or creating such other liability specifically provides to
the contrary.
16. Any invalidity or unenforceability of any provision or application
of this Guaranty shall not affect other lawful provisions and applications
hereof, and to this end the provisions of this Guaranty are declared to be
severable. Without limiting the generality of the foregoing, any invalidity or
unenforceability against any Guarantor of any provision or application of the
Guaranty shall not affect the validity or enforceability of the provisions or
application of this Guaranty as against the other Guarantors.
17. Any demand for payment on this Guaranty or any other notice required
or desired to be given hereunder to any Guarantor shall be in writing
(including, without limitation, notice by telecopy) and shall be given to the
relevant party in accordance with Section 12.03 of the Credit Agreement, or such
other address or telecopier number as such party may hereafter specify by notice
to the Agent given by United States certified or registered mail, by telecopy
or by other telecommunication device capable of creating a written record of
such notice and its receipt. 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 and a confirmation of such
telecopy has been received by the sender, (ii) if given by mail, five (5) days
after such communication is deposited in the mail, certified or registered with
return receipt requested, addressed as aforesaid or (iii) if given by any other
means, when delivered at the addresses specified in this Section.
18. No Guaranteed Creditor (other than the Agent) shall have the right
to institute any suit, action or proceeding in equity or at law in connection
with this Guaranty for the enforcement of any remedy under or upon this
Guaranty; it being understood and intended that no one or more of the Guaranteed
Creditors (other than the Agent) shall have any right in any manner whatsoever
to enforce any right hereunder, and that all proceedings at law or in equity
shall be instituted, had and maintained by the Agent in the manner herein
provided and for the benefit of the Guaranteed Creditors.
19. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE
LAW OF THE STATE OF NEW YORK (without regard to principles of conflicts of laws)
in which state it shall be performed by the Guarantors and may not be waived,
amended, released or otherwise changed except by a writing signed by the
Guaranteed Creditors. This Guaranty and every part thereof shall be effective
upon delivery to the Agent, without further act, condition or acceptance by the
Guaranteed Creditors, shall be binding upon the Guarantors and upon the legal
representatives, successors and assigns of the Guarantors, and
-6-
<PAGE>
<PAGE>
shall inure to the benefit of the Guaranteed Creditors, their successors, legal
representatives and assigns. The Guarantors waive notice of the Guaranteed
Creditors' acceptance hereof. This Guaranty may be executed in counterparts and
by different parties hereto on separate counterparts each of which shall be an
original, but all together to be one and the same instrument.
20. The Guarantors' obligation hereunder to make payments in Dollars
(the "Obligation Currency") shall not be discharged or satisfied by any tender
or recovery pursuant to any judgment expressed in or converted into any currency
other than the Obligation Currency, except to the extent that such tender or
recovery results in the effective receipt by the Guaranteed Creditors of the
full amount of the Obligation Currency expressed to be payable to the Guaranteed
Creditors under this Guaranty. If for the purpose of obtaining or enforcing
judgment against any Guarantor in any court or in any jurisdiction, it becomes
necessary to convert into or from any currency other than the Obligation
Currency (such other currency being hereinafter referred to as the "Judgment
Currency") an amount due in the Obligation Currency, the conversion shall be
made at the rate of exchange (as quoted by the Agent or if the Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Agent) determined, in each case, as of the day immediately
preceding the day on which the judgment is given (such Business Day being
hereinafter referred to as the "Judgment Currency Conversion Date"). If there is
a change in the rate of exchange prevailing between the Judgment Currency
Conversion Date and the date of actual payment of the amount due, the Guarantors
covenant and agree to pay, or cause to be paid, such additional amounts, if any
(but in any event not a lesser amount) as may be necessary to ensure that the
amount paid in the Judgment Currency, when converted at the rate of exchange
prevailing on the date of payment, will produce the amount of the Obligation
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate or exchange prevailing
on the Judgment Currency Conversion Date. For purposes of determining any rate
of exchange for this Section 20, such amounts shall include any premium and
costs payable in connection with the purchase of the Obligation Currency.
21. Each Guarantor hereby submits to the nonexclusive jurisdiction of
the United States District Court for the Southern District of New York and of
any New York State court sitting in New York City for purposes of all legal
proceedings arising out of or relating to this Guaranty or the transactions
contemplated hereby. Each Guarantor 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 court has been brought in an inconvenient
forum. EACH OF THE GUARANTORS, THE AGENT AND THE GUARANTEED CREDITORS HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
[SIGNATURE PAGES TO FOLLOW]
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<PAGE>
<PAGE>
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be
executed and delivered as of the date first above written.
"GUARANTORS"
DAISY PARTS, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------------
Name Andries Ruijssenaars
---------------------------------------
Title Authorized Person
--------------------------------------
EAGLE-PICHER TECHNOLOGIES, LLC
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------------
Name Andries Ruijssenaars
---------------------------------------
Title Director-Manager
--------------------------------------
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<PAGE>
<PAGE>
EAGLE-PICHER DEVELOPMENT COMPANY, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------------
Name Andries Ruijssenaars
----------------------------------------
Title President
----------------------------------------
EAGLE-PICHER FAR EAST, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------------
Name Andries Ruijssenaars
----------------------------------------
Title Authorized Person
---------------------------------------
EAGLE-PICHER FLUID SYSTEMS, INC.
By /s/ ANDRIES RUIJSSENAARS
--------------------------------------------
Name Andries Ruijssenaars
---------------------------------------
Title Authorized Person
--------------------------------------
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<PAGE>
<PAGE>
EAGLE-PICHER MINERALS, INC.
By /s/ ANDRIES RUIJSSENAARS
-----------------------------------------------
Name Andries Ruijssenaars
---------------------------------------------
Title Authorized Person
--------------------------------------------
HILLSDALE TOOL & MANUFACTURING CO.
By /s/ ANDRIES RUIJSSENAARS
-----------------------------------------------
Name Andries Ruijssenaars
-----------------------------------------
Title Authorized Person
-----------------------------------------
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION
By /s/ ANDRIES RUIJSSENAARS
-----------------------------------------------
Name Andries Ruijssenaars
---------------------------------------------
Title Authorized Person
--------------------------------------------
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<PAGE>
<PAGE>
Accepted and agreed to in New York, New York as of the date first above
written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Guaranteed Creditors
By /s/ GREGORY D. AMOROSO
-------------------------------------------
Its Group Vice President
---------------------------------------
By /s/ PAUL WIDUCH
-------------------------------------------
Its Group Vice President
---------------------------------------
Address:
1325 Avenue of the Americas
New York, New York
Attention: Agency Services
Telephone: (212) 314-1705
Telecopy: (212) 314-1709
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<PAGE>
<PAGE>
EXHIBIT A
TO
SUBSIDIARY GUARANTY AGREEMENT
ASSUMPTION AND SUPPLEMENT TO SUBSIDIARY GUARANTY AGREEMENT
This Assumption and Supplement to Subsidiary Guaranty Agreement (the
"Agreement") is dated as of this _____ day of ____________, _____, made by [NEW
GUARANTOR], a ___________ corporation (the "New Guarantor");
WITNESSETH THAT:
WHEREAS, certain parties have executed and delivered to the Guaranteed
Creditors that certain Subsidiary Guaranty Agreement dated as of February 24,
1998 (such Subsidiary Guaranty Agreement, as the same may from time to time be
modified or amended, including supplements thereto which add or substitute
parties as Guarantors thereunder, being hereinafter referred to as the
"Guaranty") pursuant to which such parties (the "Existing Guarantors") have
guaranteed to the Guaranteed Creditors the full and prompt payment of, among
other things, any and all indebtedness, obligations and liabilities of the
Borrower (as defined in the Guaranty) arising under or relating to the Credit
Agreement and the Credit Documents as defined therein and certain Interest Rate
Protection Agreements; and
WHEREAS, the Borrower provides the New Guarantor with substantial
financial, managerial, administrative and technical support and the New
Guarantor will directly and substantially benefit from credit and other
financial accommodations extended and to be extended by the Guaranteed Creditors
to the Borrower;
NOW, THEREFORE, FOR VALUE RECEIVED, and in consideration of advances
made or to be made, or credit accommodations given or to be given, to the
Borrower by the Guaranteed Creditors from time to time, the New Guarantor hereby
agrees as follows:
1. The New Guarantor acknowledges and agrees that it shall become a
"Guarantor" party to the Guaranty effective upon the date of the New Guarantor's
execution of this Agreement and the delivery of this Agreement to the Agent on
behalf of the Guaranteed Creditors, and that upon such execution and delivery,
all references in the Guaranty to the terms "Guarantor" or "Guarantors" shall be
deemed to include the New Guarantor.
2. The New Guarantor hereby assumes and becomes liable (jointly and
severally with all the other Guarantors) for the indebtedness hereby guaranteed
(as defined in the Guaranty) and agrees to pay and otherwise perform all of the
obligations of a Guarantor under the Guaranty according to, and otherwise on and
subject to, the terms and conditions of the Guaranty to the same extent and with
the same force and effect as if the New Guarantor had originally been one of the
Existing Guarantors under the Guaranty and had originally executed the same as
such an Existing Guarantor.
<PAGE>
<PAGE>
3. All capitalized terms used in this Agreement without definition
shall have the same meaning herein as such terms have in the Guaranty, except
that any reference to the term "Guarantor" or "Guarantors" and any provision of
the Guaranty providing meaning to such term shall be deemed a reference to the
Existing Guarantors and the New Guarantor. Except as specifically modified
hereby, all of the terms and conditions of the Guaranty shall stand and remain
unchanged and in full force and effect.
4. The New Guarantor agrees to execute and deliver such further
instruments and documents and do such further acts and things as the Agent or
the Guaranteed Creditors may deem necessary or proper to carry out more
effectively the purposes of this Agreement.
5. No reference to this Agreement need be made in the Guaranty or in
any other document or instrument making reference to the Guaranty, any reference
to the Guaranty in any of such to be deemed a reference to the Guaranty as
modified hereby.
6. This Agreement shall be governed by and construed in accordance with
the State of New York (without regard to principles of conflicts of law) in
which state it shall be performed by the New Guarantor.
[NEW GUARANTOR]
By
----------------------------------
Its
---------------------------------
Acknowledged and agreed to in New York, New York as of the date first
above written.
ABN AMRO BANK N.V., as Agent as
aforesaid for the Guaranteed Creditors
By
------------------------------------
Its
--------------------------------
By
------------------------------------
Its
--------------------------------
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<PAGE>
<PAGE>
TRADEMARK COLLATERAL AGREEMENT
This 24th day of February, 1998, Eagle-Picher Industries, Inc., an Ohio
corporation ("Assignor") with its principal place of business and mailing
address at 250 East Fifth Street, Cincinnati, Ohio 45202, in consideration of
ten dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, assigns, mortgages and pledges to
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, acting
as agent for the Secured Creditors under that certain Security Agreement
referred to below, with its mailing address at 1325 Avenue of the Americas, New
York, New York 10019, and its successors and assigns ("Assignee"), and grants to
Assignee a continuing security interest in, the following property:
(i) Each trademark, trademark registration and trademark
application listed on Schedule A-1 hereto, and all of the goodwill of
the business connected with the use of, and symbolized by, each such
trademark, trademark registration and trademark application; and
(ii) Each trademark license listed on Schedule A-2 hereto and all
royalties and other sums due or to become due under or in respect of
each such trademark license, together with the right to sue for and
collect all such royalties and other sums; and
(iii) All proceeds of the foregoing, including without limitation
any claim by Assignor against third parties for damages by reason of
past, present or future infringement of any trademark or trademark
registration listed on Schedule A-1 hereto or of any trademark licensed
under a trademark license listed on Schedule A-2 or by reason of injury
to the goodwill associated with any such trademark, trademark
registration or trademark license, in each case together with the right
to sue for and collect said damages;
in each case, to secure performance of all Obligations of Assignor as set out in
that certain Security Agreement bearing even date herewith by and between
Assignor and Assignee (the "Agreement").
Assignor does hereby further acknowledge and affirm that the rights and
remedies of Assignee with respect to the assignment, mortgage, pledge and
security interest in the trademarks, trademark registrations, trademark
applications and trademark licenses made and granted hereby are more fully set
forth in the Agreement, the terms and provisions of which are incorporated by
reference herein as if fully set forth herein.
All terms defined in the Agreement, whether by reference or otherwise,
when used herein, shall have their respective meanings set forth therein, unless
the context requires otherwise.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Assignor has caused this Agreement to be duly
executed as of the date and year last above written.
EAGLE-PICHER INDUSTRIES, INC.
(CORPORATE SEAL)
By /s/ Andries Ruijssenaars
-------------------------
Its President
---------------------
ATTEST:
Andries Ruijssenaars
-------------------------
(Type or Print Name)
/s/ James A. Ralston
- -------------------------------
Its Secretary
ABN AMRO BANK N.V., as agent
James A. Ralston
- -------------------------------
(Type or Print Name)
By /s/ Gregory D. Amoroso / /s/ Paul Widuch
---------------------------------------
Its Group Vice President GVP
-----------------------------------
(Type or Print Name)
Gregory D. Amoroso Paul Widuch
---------------------------------------
(Type or Print Name)
-2-
<PAGE>
<PAGE>
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK)
I, Catherine Jones, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Gregory D. Amoroso, Group Vice President of
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Group Vice President, appeared before me this day
in person and acknowledged that he signed and delivered the said instrument as
his own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth.
Given under my hand and notarial seal, this 24 day of February, 1998.
/s/ Catherine Jones
----------------------------
(NOTARIAL SEAL) Notary Public
Catherine Jones
----------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK)
I, Catherine Jones, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Paul Widuch, Group Vice President of
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Group Vice President, appeared before me this day
in person and acknowledged that he signed and delivered the said instrument as
his own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth.
Given under my hand and notarial seal, this 24 day of February, 1998.
/s/ Catherine Jones
----------------------------
(NOTARIAL SEAL) Notary Public
Catherine Jones
----------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
STATE OF NEW YORK )
) SS
COUNTY OF NEW YORK)
I, Catherine Jones a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Andries Ruijssenaars, President of
Eagle-Picher Industries, Inc., an Ohio corporation, and James A. Ralston,
_____________________ Secretary of said corporation, who are personally known to
me to be the same persons whose names are subscribed to the foregoing instrument
as such President and ________________ Secretary, respectively, appeared before
me this day in person and acknowledged that they signed and delivered the said
instrument as their own free and voluntary act and as the free and voluntary act
and deed of said corporation for the uses and purposes therein set forth; and
the said ___________________ Secretary then and there acknowledged that he, as
custodian of the corporate seal of said corporation, did affix the corporate
seal of said corporation to said instrument as his own free and voluntary act
and as the free and voluntary act of said corporation, for the uses and purposes
therein set forth.
Given under my hand and notarial seal, this 24th day of February, 1998.
/s/ Catherine Jones
----------------------------
(NOTARIAL SEAL) Notary Public
Catherine Jones
----------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
SCHEDULE A-1
TO TRADEMARK COLLATERAL AGREEMENT
REGISTERED TRADEMARKS
AND TRADEMARK APPLICATIONS
FEDERAL TRADEMARK REGISTRATIONS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------
MARKS REG. NO. GRANTED
- ----------------------------------------- ------------------------------------
<S> <C> <C>
SUPERSUBLIMED 198,268 5/12/25
- ------------------------------------------------------------------------------
ORCOTITE 395,057 5/12/42
- ------------------------------------------------------------------------------
VULKOL 397,529 9/8/42
- ------------------------------------------------------------------------------
LO-TORK 539,936 5/27/51
- ------------------------------------------------------------------------------
ORTEX 793,038 7/20/65
- ------------------------------------------------------------------------------
DIALOAM 794,297 8/17/65
- ------------------------------------------------------------------------------
ALUM-N 800,364 12/14/65
- ------------------------------------------------------------------------------
NEO-CORK 806,370 3/29/66
- ------------------------------------------------------------------------------
PRE-CO-FLOC 816,429 10/11/66
- ------------------------------------------------------------------------------
STEEL-N 819,099 11/22/66
- ------------------------------------------------------------------------------
EPISTATIC 896,288 8/11/70
- ------------------------------------------------------------------------------
LO-TORK 922,818 10/26/71
- ------------------------------------------------------------------------------
ROSS ALUMINUM
FOUNDRIES AND DESIGN 952,424 1/30/73
- ------------------------------------------------------------------------------
CAREFREE 953,058 2/13/73
- ------------------------------------------------------------------------------
POWER TUBE 1,106,578 11/21/78
- ------------------------------------------------------------------------------
CAREFREE MAGNUM 1,124,671 9/4/79
- ------------------------------------------------------------------------------
MAGNUM 1,157,119 6/9/81
- ------------------------------------------------------------------------------
KEEPER AND DESIGN 1,179,937 12/1/81
- ------------------------------------------------------------------------------
DIALOSE 1,214,549 11/2/82
- ------------------------------------------------------------------------------
ORCOMATIC 1,221,728 12/28/82
- ------------------------------------------------------------------------------
ABSORB-O-SOX 1,471,838 1/12/88
- ------------------------------------------------------------------------------
SOLID-A-SORB 1,473,737 1/26/88
- ------------------------------------------------------------------------------
LAMISEAL 1,559,815 10/10/89
- ------------------------------------------------------------------------------
FOAMET 1,560,900 10/17/89
- ------------------------------------------------------------------------------
CASTEC 1,692,436 6/9/92
- ------------------------------------------------------------------------------
AXIS 1,830,754 4/12/94
- ------------------------------------------------------------------------------
ALL GONE! 1,886,900 4/4/95
- ------------------------------------------------------------------------------
QUALISORB 1,927,733 10/17/95
- ------------------------------------------------------------------------------
CELATOM 1,927,873 10/17/95
- ------------------------------------------------------------------------------
DIASORB 1,967,143 4/9/96
- ------------------------------------------------------------------------------
PLAY BALL! 2,005,259 10/1/96
- ------------------------------------------------------------------------------
HE AND DESIGN 2,059,020 5/6/97
- ------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
PENDING FEDERAL TRADEMARK APPLICATIONS
MARK SERIAL NO. FILED
-- NONE KNOWN --
COMMON LAW MARKS AND TRADE NAMES
CINCINNATI INDUSTRIAL MACHINERY
EAGLE-PICHER
CONSTRUCTION EQUIPMENT
EAGLE-PICHER AUTOMOTIVE
EAGLE-PICHER FLUID SYSTEMS
EAGLE-PICHER INDUSTRIES
DAISY PARTS
HILLSDALE TOOL
HILLSDALE TOOL & MANUFACTURING
MARCO
MICHIGAN AUTOMOTIVE RESEARCH CORPORATION
EAGLE-PICHER MINERALS
EAGLE-PICHER MINERALS INTERNATIONAL
EAGLE-PICHER MINERALS OF CANADA
UNITED MINERALS
ROSS ALUMINUM
ROSS ALUMINUM FOUNDRIES
EAGLE-PICHER RUBBER MOLDING
RUBBER MOLDING
CHEMSYN SCIENCE LABORATORIES
TECHNOLOGIES
TRIM
WOLVERINE GASKET
WOLVERINE GASKET & MANUFACTURING
EAGLE-PICHER ESPANA
EAGLE-PICHER FAR EAST
EAGLE-PICHER INDUSTRIES EUROPE
EAGLE-PICHER INDUSTRIES MATERIALS
EPTEC
EQUIPOS DE ACUNA
-2-
<PAGE>
<PAGE>
REGISTERED STATE TRADEMARKS
AND TRADEMARK APPLICATIONS
-- NONE KNOWN --
REGISTERED FOREIGN TRADEMARKS
AND TRADEMARK APPLICATIONS
<TABLE>
<CAPTION>
MARK COUNTRY REG. NO. GRANTED
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CELATOM PERU 026,789 6/27/96
- ------------------------------------------------------------------------------------------------------
CELATOM BENELUX 056,508 11/8/71
- ------------------------------------------------------------------------------------------------------
CELATOM ITALY 278,780 1/13/72
- ------------------------------------------------------------------------------------------------------
CELATOM AUSTRALIA 289,728 8/15/75
- ------------------------------------------------------------------------------------------------------
CELATOM CHINA 328,058 4/20/89
- ------------------------------------------------------------------------------------------------------
CELATOM GERMANY 982,888 1/11/72
- ------------------------------------------------------------------------------------------------------
CELATOM ARGENTINA 1,432,116 12/17/70
- ------------------------------------------------------------------------------------------------------
CELATOM FRANCE 1,469,544 9/4/88
- ------------------------------------------------------------------------------------------------------
CELATOM JAPAN 2,283,178 11/30/90
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER BENELUX 056,507 8/11/71
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER FRANCE 1,065,778 9/4/78
- ------------------------------------------------------------------------------------------------------
ORCO CANADA 20,592 3/31/43
- ------------------------------------------------------------------------------------------------------
ORCOMATIC and GERMANY 1,030,779 3/12/82
DESIGN
- ------------------------------------------------------------------------------------------------------
CAREFREE DENMARK 2382-1976 7/9/76
- ------------------------------------------------------------------------------------------------------
CAREFREE NORWAY 96,925 7/15/76
- ------------------------------------------------------------------------------------------------------
</TABLE>
-3-
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------
CAREFREE VENEZUELA 144,830 6/3/91
- ------------------------------------------------------------------------------------------------------
CAREFREE SWEDEN 155,376 12/17/75
- ------------------------------------------------------------------------------------------------------
CAREFREE PORTUGAL 196,511 7/5/85
- ------------------------------------------------------------------------------------------------------
CAREFREE ITALY 325,560 3/9/81
- ------------------------------------------------------------------------------------------------------
CAREFREE BENELUX 336,648 2/20/76
- ------------------------------------------------------------------------------------------------------
CAREFREE SPAIN 863,400 11/25/77
- ------------------------------------------------------------------------------------------------------
FRANCE
CAREFREE F/K/A 941,602 1,332,790 11/28/85
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER
CAREFREE AUSTRIA 87,561 2/22/78
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER
CAREFREE CANADA 229,828 8/18/78
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER
CAREFREE AUSTRALIA 352,662 N/A
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER
CAREFREE GERMANY 954,333 3/29/76
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER GREAT BRITAIN & N. 1,065,502 7/9/76
CAREFREE IRELAND
- ------------------------------------------------------------------------------------------------------
EAGLE-PICHER
CAREFREE and SWITZERLAND 282,771 3/30/76
DESIGN
- ------------------------------------------------------------------------------------------------------
</TABLE>
-4-
<PAGE>
<PAGE>
SCHEDULE A-2
TO TRADEMARK COLLATERAL AGREEMENT
TRADEMARK LICENSES
1. Use Restriction Agreement of 2/7/95 with SCRAS of Paris, France,
limiting the appearance of the DIASORB mark of Eagle-Picher to avoid prior use
by SCRAS of white letters in certain fonts on a particular red background for
anti-diarrheal agents, and prohibiting certain uses by Eagle-Picher.
<PAGE>
<PAGE>
PATENT COLLATERAL AGREEMENT
This 24th day of February, 1998, Eagle-Picher Industries, Inc., an Ohio
corporation ("Assignor") with its principal place of business and mailing
address at 250 East Fifth Street, Cincinnati, Ohio 45202, in consideration of
ten dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, assigns, mortgages and pledges to
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, acting
as agent for the Secured Creditors under that certain Security Agreement
referred to below, with its mailing address at 1325 Avenue of the Americas, New
York, New York 10019, and its successors and assigns ("Assignee"), and grants to
Assignee a continuing security interest in, the following property:
(i) Each patent and patent application listed on Schedule A-1
hereto and all of the inventions described and claimed therein and any
and all reissues, continuations, continuations-in-part or extensions
thereof; and
(ii) Each patent license listed on Schedule A-2 hereto and all
royalties and other sums due or to become due under or in respect of
each such patent license, together with the right to sue for and collect
all such royalties and other sums; and
(iii) All proceeds of the foregoing, including without limitation
any claim by Assignor against third parties for damages by reason of
past, present or future infringement of any patent listed on Schedule
A-1 hereto or of any patent licensed under a patent license listed on
Schedule A-2 hereto, in each case together with the right to sue for and
collect said damages;
in each case, to secure performance of all Obligations of Assignor as set out in
that certain Security Agreement bearing even date herewith by and between
Assignor and Assignee (the "Agreement").
Assignor does hereby further acknowledge and affirm that the rights and
remedies of Assignee with respect to the assignment, mortgage, pledge and
security interest in the patents, patent applications and patent licenses made
and granted hereby are more fully set forth in the Agreement, the terms and
provisions of which are incorporated by reference herein as if fully set forth
herein.
All terms defined in the Agreement, whether by reference or otherwise,
when used herein, shall have their respective meanings set forth therein, unless
the context requires otherwise.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Assignor has caused this Agreement to be duly
executed as of the date and year last above written.
<TABLE>
EAGLE-PICHER INDUSTRIES, INC.
<S> <C>
(CORPORATE SEAL)
By /s/ ANDRIES RUIJSSENAARS
____________________________
Its President
________________________
ATTEST:
Andries Ruijssenaars
----------------------------
(Type or Print Name)
/s/ JAMES A. RALSTON
- -------------------------------
Its Secretary
ABN AMRO BANK N.V., as agent
/s/ JAMES A. RALSTON
- ------------------------------- By /s/ GEORGE D. AMOROSO /s/ PAUL WIDUCH
(Type or Print Name) _______________________________________
Its Group Vice President GVP
-----------------------------------
GEORGE D. AMOROSO PAUL WIDUCH
_______________________________________
(Type or Print Name)
</TABLE>
-2-
<PAGE>
<PAGE>
STATE OF New York )
_______________ )
) SS
COUNTY OF New York )
______________ )
I, Catherine Jones, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Andries Ruijssenaars, President of
Eagle-Picher Industries, Inc., an Ohio corporation, and James A. Ralston,
Secretary of said corporation, who are personally known to me to be the same
persons whose names are subscribed to the foregoing instrument as such President
and _______________ Secretary, respectively, appeared before me this day in
person and acknowledged that they signed and delivered the said instrument as
their own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth; and the said
________________ Secretary then and there acknowledged that he, as custodian
of the corporate seal of said corporation, did affix the corporate seal of said
corporation to said instrument as his own free and voluntary act and as the
free and voluntary act of said corporation, for the uses and purposes therein
set forth.
Given under my hand and notarial seal, this 24th day of February, 1998.
/s/ CATHERINE JONES
----------------------------------
(NOTARIAL SEAL) Notary Public
CATHERINE JONES
----------------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
-3-
<PAGE>
<PAGE>
STATE OF New York )
_______________ )
) SS
COUNTY OF New York )
______________ )
I, Catherine Jones, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Gregory D. Amoroso, Group Vice President of
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Group Vice President appeared before me this day
in person and acknowledged that he signed and delivered the said instrument as
his own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth.
Given under my hand and notarial seal, this 24th day of February, 1998.
/s/ CATHERINE JONES
----------------------------------
(NOTARIAL SEAL) Notary Public
CATHERINE JONES
----------------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
STATE OF New York )
_______________ )
) SS
COUNTY OF New York )
______________ )
I, Catherine Jones, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Paul Widuch, Group Vice President of
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Group Vice President appeared before me this day
in person and acknowledged that he signed and delivered the said instrument as
his own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth.
Given under my hand and notarial seal, this 24th day of February, 1998.
/s/ CATHERINE JONES
----------------------------------
(NOTARIAL SEAL) Notary Public
CATHERINE JONES
----------------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
SCHEDULE A-1
TO PATENT COLLATERAL AGREEMENT
U.S. PATENT NUMBERS
AND PENDING U.S. PATENT APPLICATION NUMBERS
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
U.S. PATENT EXPIRATION
NUMBER TITLE OF PATENT INVENTOR(S) DATE ISSUED DATE
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
4,249,930 Ionic Compounds Formed From Iron and Urea Atkisson 2/10/81 3/8/99
- ----------------------------------------------------------------------------------------------------------------------
4,292,357 Zinc/Zinc Oxide Laminated Anode Assembly Erisman et al. 9/29/81 7/25/99
- ----------------------------------------------------------------------------------------------------------------------
4,422,667 Suspension For A Tractor-Scraper Perry 12/27/83 12/30/2001
- ----------------------------------------------------------------------------------------------------------------------
4,425,412 Lead/Acid Battery Having Horizontal Plates Dittmann et al. 1/10/84 5/26/2002
- ----------------------------------------------------------------------------------------------------------------------
4,477,540 Metal-Gas Cell With Electrolyte Reservoir Miller et al. 10/16/84 10/3/2003
- ----------------------------------------------------------------------------------------------------------------------
4,477,546 Lattice For A Battery Electrode Substrate Wheeler et al. 10/16/84 2/3/2003
- ----------------------------------------------------------------------------------------------------------------------
4,537,759 Production Of Elemental Silicon From Impure Walker et al. 8/27/85 6/27/2003
Silane Feed
- ----------------------------------------------------------------------------------------------------------------------
4,554,056 Impregnation Of Nickel Electrodes Using Whitford 11/19/85 4/18/2005
Electric PH Control Circuits
- ----------------------------------------------------------------------------------------------------------------------
4,626,335 Lithium Alloy Anode For Thermal Cells Cupp et al. 12/2/86 9/26/2005
- ----------------------------------------------------------------------------------------------------------------------
4,663,819 Method of Mounting A Metal Yoke To A Traylor 5/12/87 11/4/2005
Composite Tube
- ----------------------------------------------------------------------------------------------------------------------
4,699,965 Heat Curable Solventless Liquid Prepolymer Markle et al. 10/13/87 6/28/2005
And Novel Monomer Derived Hexylcarbitol For
Use Therewith
- ----------------------------------------------------------------------------------------------------------------------
4,772,296 Method of Purifying And Depositing Group Potts 9/20/88 5/12/2007
IIIA and Group VA Compounds To Produce
Epitaxial Films
- ----------------------------------------------------------------------------------------------------------------------
4,812,521 Elastomer Modified Epoxies Markle 3/14/89 9/21/2007
- ----------------------------------------------------------------------------------------------------------------------
4,894,299 Cell Having A Dome-Shaped Solid Ceramic Morse 1/16/90 12/2/2008
Electrolyte
- ----------------------------------------------------------------------------------------------------------------------
4,939,271 Mercapto-Modified N-(R-Oxymethyl) Markle 7/3/90 1/5/2009
Acrylamide-Rubber/Formable Monomer/(Meth)
Acrylonitrile Terpolymers
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
-5-
<PAGE>
<PAGE>
<TABLE>
<S> <C> <C> <C> <C>
4,952,195 Graphite Drive Shaft Assembly Traylor 8/28/90 9/28/2007
- ----------------------------------------------------------------------------------------------------------------------
4,979,632 Portable Vessel For The Safe Storage of Lee 12/25/90 5/9/2010
Explosives
- ----------------------------------------------------------------------------------------------------------------------
4,986,721 Extendable Boom Fork Life Vehicle Lowder et al. 1/22/91 9/17/2009
- ----------------------------------------------------------------------------------------------------------------------
5,189,819 Trenching Apparatus Holloway et al. 3/2/93 5/8/2011
- ----------------------------------------------------------------------------------------------------------------------
5,228,222 Digging And Propulsion Unit For A Trenching Holloway et al. 7/20/93 9/17/2012
Apparatus
- ----------------------------------------------------------------------------------------------------------------------
5,247,743 Method And Apparatus For Digging Trenches Holloway et al. 9/28/93 7/2/2012
- ----------------------------------------------------------------------------------------------------------------------
5,249,379 Mounting Structure For The Linear Actuators Baker et al. 10/5/93 9/15/2012
Of A Trenching Apparatus
- ----------------------------------------------------------------------------------------------------------------------
5,257,463 Method And Apparatus For Cooling Or Heating Wheeler et al. 11/2/93 5/5/2012
Battery Cells During Electrical Testing
- ----------------------------------------------------------------------------------------------------------------------
5,416,962 Method of Manufacture of Vibration Damper Passarella 5/23/95 12/8/2013
- ----------------------------------------------------------------------------------------------------------------------
5,464,701 Leakproof, Valve Regulated, Rey 11/7/95 2/27/2015
Maintenance-Free Lead Acid Battery
- ----------------------------------------------------------------------------------------------------------------------
5,518,833 Nonwoven Electrode Construction Repplinger et al. 5/21/96 5/24/2014
- ----------------------------------------------------------------------------------------------------------------------
5,564,448 Container Washing Apparatus And System Lincoln 10/15/96 12/14/2014
- ----------------------------------------------------------------------------------------------------------------------
Des. 367,255 Battery Rey 2/20/96 2/20/2010
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
- --------------------------------------------------------------------------------
SCHEDULE A-2
- --------------------------------------------------------------------------------
TO PATENT COLLATERAL AGREEMENT
PATENT LICENSES
-- NONE KNOWN --
<PAGE>
<PAGE>
COPYRIGHT COLLATERAL AGREEMENT
This 24th day of February, 1998, Eagle-Picher Industries, Inc., an Ohio
corporation ("Assignor") with its principal place of business and mailing
address at 250 East Fifth Street, Cincinnati, Ohio 45202, in consideration of
ten dollars ($10.00) and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, assigns, mortgages and pledges to
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, acting
as agent for the Secured Creditors under that certain Security Agreement
referred to below, with its mailing address at 1325 Avenue of the Americas, New
York, New York 10019, and its successors and assigns ("Assignee"), and grants to
Assignee a continuing security interest in, the following property:
(i) Each copyright and copyright application listed on Schedule
A-1 hereto and all works of authorship and other intellectual property
rights therein; and
(ii) Each copyright license listed on Schedule A-2 hereto and all
royalties and other sums due or to become due under or in respect of
each such copyright license, together with the right to sue for and
collect all such royalties and other sums; and
(iii) All proceeds of the foregoing, including without limitation
any claim by Assignor against third parties for damages by reason of
past, present or future infringement of any copyright listed on Schedule
A-1 hereto or of any copyright licensed under a copyright license listed
on Schedule A-2 hereto, in each case together with the right to sue for
and collect said damages;
in each case, to secure performance of all Obligations of Assignor as set out in
that certain Security Agreement bearing even date herewith by and between
Assignor and Assignee (the "Agreement").
Assignor does hereby further acknowledge and affirm that the rights and
remedies of Assignee with respect to the assignment, mortgage, pledge and
security interest in the copyrights, copyright applications and copyright
licenses made and granted hereby are more fully set forth in the Agreement, the
terms and provisions of which are incorporated by reference herein as if fully
set forth herein.
All terms defined in the Agreement, whether by reference or otherwise,
when used herein, shall have their respective meanings set forth therein, unless
the context requires otherwise.
<PAGE>
<PAGE>
IN WITNESS WHEREOF, Assignor has caused this Agreement to be duly
executed as of the date and year last above written.
EAGLE-PICHER INDUSTRIES, INC.
(CORPORATE SEAL)
By /s/ ANDRIES RUIJSSENAARS
__________________________
Its President
______________________
ATTEST:
ANDRIES RUIJSSENAARS
---------------------------
(Type or Print Name)
/s/ JAMES A. RALSTON
- -------------------------------
Its Secretary
ABN AMRO BANK N.V., as agent
/s/ JAMES A. RALSTON
- -------------------------------
(Type or Print Name)
By /s/ GREGORY D. AMOROSO / /s/ PAUL WIDUCH
___________________________________
Its Group Vice President GVP
-------------------------------
GREGORY D. AMOROSO PAUL WIDUCH
-----------------------------------
(Type or Print Name)
-2-
<PAGE>
<PAGE>
STATE OF New York )
_______________ )
) SS
COUNTY OF New York )
________________ )
I, Catherine Jones, a Notary Public in and for said County, in the
State aforesaid, do hereby certify that Andries Ruijssenaars, President of
Eagle-Picher Industries, Inc., an Ohio corporation, and James A. Ralston,
Secretary of said corporation, who are personally known to me to be the same
persons whose names are subscribed to the foregoing instrument as such President
and _______________ Secretary, respectively, appeared before me this day in
person and acknowledged that they signed and delivered the said instrument as
their own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth; and the said
________________ Secretary then and there acknowledged that he, as custodian of
the corporate seal of said corporation, did affix the corporate seal of said
corporation to said instrument as his own free and voluntary act and as the
free and voluntary act of said corporation, for the uses and purposes therein
set forth.
Given under my hand and notarial seal, this 24th day of February, 1998.
/s/ Catherine Jones
-------------------------------
(NOTARIAL SEAL) Notary Public
Catherine Jones
-------------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
STATE OF New York )
_______________ )
) SS
COUNTY OF New York )
________________ )
I, Catherine Jones, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Gregory D. Amoroso, Group Vice President of
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Group Vice President, appeared before me this day
in person and acknowledged that he signed and delivered the said instrument as
his own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth.
Given under my hand and notarial seal, this 24th day of February, 1998.
/s/ Catherine Jones
-------------------------------
(NOTARIAL SEAL) Notary Public
Catherine Jones
-------------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
STATE OF New York )
_______________ )
) SS
COUNTY OF New York )
________________ )
I, Catherine Jones, a Notary Public in and for said County, in the State
aforesaid, do hereby certify that Paul Widuch, Group Vice President of
ABN AMRO Bank N.V., a bank organized under the laws of The Netherlands, who is
personally known to me to be the same person whose name is subscribed to the
foregoing instrument as such Group Vice President, appeared before me this day
in person and acknowledged that he signed and delivered the said instrument as
his own free and voluntary act and as the free and voluntary act and deed of
said corporation for the uses and purposes therein set forth.
Given under my hand and notarial seal, this 24th day of February, 1998.
/s/ Catherine Jones
-------------------------------
(NOTARIAL SEAL) Notary Public
Catherine Jones
-------------------------------
My Commission Expires: (Type or Print Name)
11/17/99
- ---------------------------------
<PAGE>
<PAGE>
SCHEDULE A-1
TO COPYRIGHT COLLATERAL AGREEMENT
U.S. COPYRIGHT NUMBERS
AND PENDING U.S. COPYRIGHT APPLICATION NUMBERS
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------
U.S.
COPYRIGHT DATE EXPIRATION
NUMBER TITLE OF COPYRIGHT AUTHOR ISSUED DATE
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TX-269-361 Eagle-Picher industrial insulation, 50 EAGLE-PICHER 4/24/79 12/31/2054
years of insulation leadership INDUSTRIES, INC
- -------------------------------------------------------------------------------------------------------------
TX-540-694 Six reasons why Pre-Co-Floc cellulose EAGLE-PICHER 7/22/80 12/31/2055
fiber filter aids provide superior INDUSTRIES, INC
performance
- -------------------------------------------------------------------------------------------------------------
TXu-292-266 Eagle-Picher surface analysis program EAGLE-PICHER 8/12/87 12/31/2062
INDUSTRIES, INC.
- -------------------------------------------------------------------------------------------------------------
TX-37-119 20th Annual National Swimming Pool EAGLE-PICHER
Exposition: November 3-6, 1977, Brooks INDUSTRIES, INC. 3/12/78 12/31/2053
Hall Civil Auditorium, San Francisco,
California: souvenir guide
- -------------------------------------------------------------------------------------------------------------
TX-173-697 21st Annual National Swimming Pool EAGLE-PICHER
Exposition, November 15-18, 1978, INDUSTRIES, INC. 11/17/78 12/31/2053
Atlanta, Georgia, Georgia World
Congress Center, Hall B: souvenir guide
compliments of Celatom Products
Department
- -------------------------------------------------------------------------------------------------------------
TX-508-501 1-2-3 reasons why Eagle-Picher EAGLE-PICHER
Floor-dry is America's largest selling INDUSTRIES, INC. 7/14/80 12/31/2055
diatomite floor absorbent
- -------------------------------------------------------------------------------------------------------------
TX-942-209 Celatom diatomite from Eagle-Picher EAGLE-PICHER 7/19/82 12/31/2057
INDUSTRIES, INC.
- -------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
SCHEDULE A-2
TO COPYRIGHT COLLATERAL AGREEMENT
COPYRIGHT LICENSES
-- NONE KNOWN --
<PAGE>
<PAGE>
SUBORDINATION AGREEMENT
THIS SUBORDINATION AGREEMENT is dated as of February 24, 1998 and by and
among E-P ACQUISITION, INC., a Delaware corporation (the "BORROWER"), and EACH
OF THE CORPORATIONS LISTED ON THE ATTACHED SUBSIDIARIES SCHEDULE I (the
"SUBSIDIARIES" being collectively referred to herein together with Borrower as
the "COMPANIES" and individually as a "COMPANY"), and for the benefit of the
Guaranteed Creditors (as defined in the Credit Agreement defined below) and ABN
AMRO BANK N.V., in its capacity as agent for the Guaranteed Creditors (the
"AGENT"). Each capitalized term used herein shall, unless otherwise defined
herein, have the same meaning given to such term in the Credit Agreement dated
as of February 19, 1998 (as it may hereafter be amended, restated, supplemented
or otherwise modified from time to time, the "CREDIT AGREEMENT") by and among
the Borrower, the Lenders (as defined in the Credit Agreement) and the Agent.
WITNESSETH THAT:
WHEREAS, pursuant to the Credit Agreement, the Lenders intend to extend
certain credit facilities to the Borrower as provided therein;
WHEREAS, the Companies are now or may hereafter become indebted to each
other (all present and future indebtedness of the Companies to each other,
whether created directly or acquired by assignment or otherwise, and interest
and premiums, if any, thereon and other amounts payable in respect thereof are
hereinafter collectively referred to as the "INTERCOMPANY DEBT"); and
WHEREAS, the obligation of the Lenders to extend such credit facilities to
the Borrower are subject to the condition, among others, that the Companies
subordinate the Intercompany Debt to the Obligations of the Credit Parties to
the Guaranteed Creditors pursuant to the Credit Documents and the obligations of
the Borrower under Interest Rate Protection Agreements with any Lender or
affiliate thereof (the "SENIOR DEBT") in the manner set forth herein.
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto
covenant and agree as follows:
1. INTERCOMPANY DEBT SUBORDINATED TO SENIOR DEBT. The recitals set
forth above are hereby incorporated by reference. All Intercompany Debt shall be
<PAGE>
<PAGE>
subordinate and subject in right of payment to the prior indefeasible payment in
full of all Senior Debt pursuant to the provisions contained herein.
2. PAYMENT OVER OF PROCEEDS UPON DISSOLUTION, ETC. Upon any
distribution of assets of any Company (a) in the event of any insolvency or
bankruptcy case or proceeding, or any receivership, liquidation, reorganization,
assignment for the benefit of creditors or other similar case or proceeding
in connection therewith, relative to any such Company or to its assets, or (b)
after the occurrence and during the continuance of an Event of Default or
Default under the Credit Agreement or any liquidation, dissolution or other
winding up of any such Company, whether voluntary or involuntary and whether or
not involving insolvency or bankruptcy, or (c) in the event of any assignment
for the benefit of creditors or any marshalling of assets and liabilities of any
such Company (a Company distributing assets as set forth herein being referred
to in such capacity as a "Distributing Company"), then and in any such event the
Guaranteed Creditors shall be entitled to receive indefeasible payment in full
of all amounts due or to become due (whether or not an Event of Default has
occurred under the terms of the Credit Documents or the Senior Debt has been
declared due and payable prior to the date on which it would otherwise have
become due and payable) on or in respect of any and all Senior Debt before the
holder of any Intercompany Debt owed by the Distributing Company is entitled to
receive any payment on account of the principal of or interest on such
Intercompany Debt, and to that end the Guaranteed Creditors shall be entitled to
receive, for application to the payment of the Senior Debt, any payment or
distribution of any kind or character, whether in cash, property or securities,
which may be payable or deliverable in respect of the Intercompany Debt owed by
the Distributing Company in any such case, proceeding, dissolution, liquidation
or other winding up or event.
3. NO COMMENCEMENT OF ANY PROCEEDING. Each Company agrees that, so long
as the Senior Debt shall remain unpaid, it will not commence, or join with any
credit other than the Guaranteed Creditors or the Agent on behalf of the
Guaranteed Creditors in commencing, any collection or enforcement proceeding
against any other Company, including, but not limited to, those described in
Section 2 hereof, or any other enforcement action of any kind against any
Company in respect of the Intercompany Debt.
4. PRIOR PAYMENT OF SENIOR DEBT UPON ACCELERATION OF INTERCOMPANY DEBT.
If any portion of the Intercompany Debt owed by any Company becomes or is
declared due and payable before its stated maturity, then and in such event the
Guaranteed Creditors shall be entitled to receive indefeasible payment in full
of all
<PAGE>
<PAGE>
amounts due and to become due on or in respect of the Senior Debt (whether or
not an Event of Default has occurred under the terms of the Credit Agreement or
the Senior Debt has been declared due and payable prior to the date on which it
would otherwise have become due and payable) before the holder of any such
Intercompany Debt is entitled to receive any payment thereon.
5. NO PAYMENT WHEN SENIOR DEBT IN DEFAULT. If any Event of Default
under the Credit Agreement shall have occurred and be continuing or such an
Event of Default would result from or exist after giving effect to a payment
with respect to any portion of the Intercompany Debt, unless the Lenders or
Required Lenders shall have consented to or waived the same, so long as any of
the Senior Debt shall remain outstanding, no payment shall be made by the
Company owing such Intercompany Debt on account of principal or interest on any
portion of the Intercompany Debt.
6. PAYMENT PERMITTED IF NO DEFAULT. Nothing contained in this Agreement
shall prevent any of the Companies, at any time, except during the pendency of
any of the conditions described in Sections 2, 4 and 5, from making the
regularly scheduled payments of the Intercompany Debt, or the retention thereof
by any of the Companies of any money deposited with it for the regularly
scheduled payments of or on account of the Intercompany Debt.
7. RECEIPT OF PROHIBITED PAYMENTS. If, notwithstanding the foregoing
provisions of Sections 2, 4, 5 and 6, a Company which is owed Intercompany Debt
by a Distributing Company shall have received any payment or distribution of
assets from the Distributing Company of any kind or character, whether in cash,
property or securities, other than as expressly permitted by the terms of this
Agreement, then and in such event such payment or distribution shall be held in
trust for the benefit of the Guaranteed Creditors, shall be segregated from
other funds and property held by such Company, and shall be forthwith paid over
to the Agent for the benefit of the Guaranteed Creditors in the same form as so
received (with any necessary endorsement) to be applied (in the case of cash) to
or held as collateral (in the case of non-cash property) for the payment or
prepayment of the Senior Debt in accordance with the terms of the Credit
Agreement.
8. RIGHTS OF SUBROGATION. Each Company agrees that no payment or
distribution to the Guaranteed Creditors pursuant to the provisions of this
Agreement shall entitle the Company to exercise any rights of subrogation in
respect thereof until the Senior Debt shall have been indefeasibly paid in full
and the Commitments under the Credit Agreement shall have terminated.
<PAGE>
<PAGE>
9. INSTRUMENTS EVIDENCING INTERCOMPANY DEBT. At the request of the
Agent, each Company shall cause each instrument which now or hereafter evidences
all or a portion of the Intercompany Debt to be conspicuously marked as follows:
"This instrument is subject to the terms of a
Subordination Agreement dated as of February 24,
1998, in favor of ABN AMRO Bank N.V., as Agent, which
Subordination Agreement is incorporated herein by
reference. Notwithstanding any contrary statement
contained in the within instrument, no payment on
account of the principal thereof or interest thereon
shall become due or payable except in accordance with
the express terms of said Subordination Agreement."
and promptly deliver such instrument to the Agent to be pledged under the
Security Agreement. At the Agent's request, each Company will further mark its
books of account in such a manner as shall be effective to give proper notice to
the effect of this Agreement.
10. AGREEMENT SOLELY TO DEFINE RELATIVE RIGHTS. The purpose of
this Agreement is solely to define the relative rights of the Companies, on
the one hand, and the Guaranteed Creditors, on the other hand. Nothing contained
in this Agreement is intended to or shall prevent the Companies from exercising
all remedies otherwise permitted by applicable law upon default under any
agreement pursuant to which the Intercompany Debt is created, subject to
Sections 2, 3, 4, 5 and 6 hereof, including, without limitation, the rights
under this Agreement of the Guaranteed Creditors to receive cash, property or
securities otherwise payable or deliverable with respect to the Intercompany
Debt.
11. NO IMPLIED WAIVERS OF SUBORDINATION. No right of the Guaranteed
Creditors to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part of any
Company, by any act or failure to act by any Guaranteed Creditor, or by any
non-compliance by any Company with the terms, provisions and covenants of any
agreement pursuant to which the Intercompany Debt is created, regardless of any
knowledge thereof any Guaranteed Creditor may have or be otherwise charged with.
Each Company by its acceptance hereof agrees that, so long as there is Senior
Debt outstanding or any Commitment is in effect under the Credit Agreement, such
Company shall not agree to sell, assign, pledge, encumber or
<PAGE>
<PAGE>
otherwise dispose of, the obligations of the Intercompany Debt, other than by
means of payment of such Intercompany Debt according to its terms, without the
prior written consent of the Agent.
Without in any way limiting the generality of the foregoing paragraph,
in accordance with the Credit Agreement, the Agent on behalf of the Lenders, the
Lenders, or the Required Lenders, as the case may be, at any time and from time
to time, without the consent of or notice to the Companies, except to the extent
required by the Credit Agreement or other Credit Documents, without incurring
responsibility to the Companies and without impairing or releasing the
subordination provided in this Agreement or the obligations hereunder of the
Companies to the Guaranteed Creditors, may do any one or more of the following:
(i) change the manner, place or terms of payment, or extend the time of payment,
renew or alter the Senior Debt or otherwise amend, restate, supplement or
otherwise modify the Senior Debt or the Credit Documents; (ii) release any
collateral or any person liable in any manner for the payment or collection of
the Senior Debt; and (iii) exercise or refrain from exercising any rights
against any of the Companies and any other person or entity.
12. ADDITIONAL SUBSIDIARIES. The Companies covenant and agree that each
of them shall cause any Subsidiary (including, without limitation, each direct
or indirect Subsidiary) which it creates or acquires after the date hereof to
become a party to this Agreement by executing a joinder to this Agreement in a
form acceptable to and approved by the Agent promptly after such Company
acquires or creates such Subsidiary.
13. CONTINUING FORCE AND EFFECT. This Agreement shall continue in force
until all of the Senior Debt is indefeasibly paid in full and the Commitments
under the Credit Agreement have terminated, it being contemplated that this
Agreement be of a continuing nature.
14. MODIFICATION, AMENDMENTS OR WAIVERS. Any and all agreements
amending or changing any provision of this Agreement or the rights of the Agent
on behalf of the Guaranteed Creditors or the Guaranteed Creditors hereunder, and
any and all waivers or consents to any departures from the due performance of
the Companies hereunder shall be made only by written agreement, waiver or
consent signed by the Agent and the Credit Parties.
15. EXPENSES. In accordance with the Credit Agreement, the Companies
each unconditionally and jointly and severally agree upon demand to
<PAGE>
<PAGE>
pay to the Agent the amount of any and all reasonable and necessary
out-of-pocket costs, expenses and disbursements, including but not limited to
reasonable fees and expenses of counsel, which may be incurred by the Guaranteed
Creditors in connection with (a) the exercise or enforcement of any of the
rights of the Guaranteed Creditors hereunder, or (b) the failure by the
Companies to perform or observe any of the provisions hereof.
16. SEVERABILITY. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid or
unenforceable in whole or in part in any jurisdiction, such provision shall, as
to such jurisdiction, be ineffective to the extent of such invalidity or
unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any
jurisdiction.
17. GOVERNING LAW. This Agreement shall be a contract under the
internal laws of the State of New York and for all purposes shall be construed
in accordance with the laws of said State without giving effect to its conflicts
of law principles.
18. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit
of the Guaranteed Creditors and their respective successors and assigns, and the
obligations of the Companies shall be binding upon their respective successors
and assigns. The duties and obligations of each of the Companies may not be
delegated or transferred by it.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which, when executed and delivered, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument.
20. ATTORNEYS-IN-FACT. Each Company hereby authorizes and empowers the
Agent, at its election and in the name of either itself, or in the name of each
Company after an Event of Default, to execute and file proofs and documents and
take any other action the Agent may deem advisable to enforce the Guaranteed
Creditors' interests relating to the Intercompany Debt created hereunder and
their right of enforcement thereof as set forth herein, and to that end the
Companies hereby irrevocably make, constitute and appoint the Agent, its
officers, employees and agents, or any of them, with full power of substitution,
as the true and lawful attorney-in-fact and agent of such Company and with full
power for such Company and in the name, place and stead of such Company for
<PAGE>
<PAGE>
the purpose of carrying out the provisions of this Agreement and taking any
action and executing, delivering, filing and recording any instruments which the
Agent may deem necessary or advisable to accomplish the purposes hereof, which
power of attorney, being given for security, is coupled with an interest and
irrevocable. Each Company hereby ratifies and confirms and agrees to ratify and
confirm all action taken by the Agent, its officers, employees or agents
pursuant to the foregoing power of attorney.
21. APPLICATION OF PAYMENTS. In the event any payments are received by
the Agent on behalf of the Guaranteed Creditors or any Guaranteed Creditor under
the terms of this Agreement for application to the Senior Debt at any time when
the Senior Debt has not been declared due and payable and prior to the date on
which it would otherwise become due and payable, such payment shall constitute a
voluntary prepayment of the Senior Debt for all purposes under the Credit
Agreement.
22. REMEDIES. In the event of a breach by any of the Companies in the
performance of any of the terms of this Agreement, the Agent on behalf of the
Guaranteed Creditors or any Guaranteed Creditor may demand specific performance
of this Agreement and seek injunctive relief and may exercise any other remedy
available at law or in equity, it being recognized that the remedies of the
Guaranteed Creditors at law may not fully compensate the Guaranteed Creditors
for the damages it may suffer in the event of a breach hereof.
23. CONSENT TO JURISDICTION; WAIVER OR JURY TRIAL. EACH COMPANY HEREBY
IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE
COURT SITTING IN NEW YORK CITY AND THE UNITED STATES DISTRICT COURT FOR THE
SOUTHERN DISTRICT OF NEW YORK, AND EACH COMPANY WAIVES TRIAL BY JURY IN ANY
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT TO THE FULL EXTENT PERMITTED
BY LAW.
<PAGE>
<PAGE>
WITNESS the due execution hereof as of the day and year first above
written.
E-P ACQUISITION, INC.
By:.........................................
Name:.......................................
Title:......................................
Each of the Subsidiaries listed on
the attached Schedule I
By:.........................................
Name:.......................................
Title:......................................
of each of the Subsidiaries listed
on Schedule I
<PAGE>
<PAGE>
SCHEDULE I TO SUBORDINATION AGREEMENT
LIST OF SUBSIDIARIES
<PAGE>
<PAGE>
MANAGEMENT AGREEMENT, dated as of February 24, 1998 (the
"Agreement"), between Granaria Holdings B.V., a Netherlands
corporation ("Granaria"), and Eagle-Picher Industries, Inc., an
Ohio corporation (the "Company").
INTRODUCTION
Granaria has previously provided services to the Company in
connection with the transactions contemplated by the Merger Agreement, dated as
of December 23, 1997, as amended, among the Company, the Eagle-Picher Injury
Settlement Trust, Eagle-Picher Holdings, Inc. and E-P Acquisition, Inc. The
Company desires for Granaria to provide certain ongoing consulting and advisory
services to the Company, and Granaria is willing to provide such services
subject to the terms and conditions contained in this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt
of which is hereby acknowledged, the parties hereby agree as follows:
1. Services. The Company hereby engages Granaria for the term of
this Agreement and upon the terms and conditions herein set forth to provide
consulting and management advisory services to the Company, as reasonably
requested by the Board of Directors of the Company. These services will be in
connection with financial and strategic corporate planning and such other
management services as Granaria and the Board of Directors of Company shall
mutually agree.
2. Compensation. In consideration of the services previously
provided and to be provided in accordance with Section 1, the Company shall pay
to Granaria (and/or to such of Granaria's affiliates as Granaria may direct) an
annual management fee equal to $1.75 million to be paid to Granaria by the
Company in equal quarterly installments each year, payable in arrears beginning
May 31, 1998.
3. Indemnification. In addition to its agreements and obligations
under this Agreement, the Company agrees to indemnify and hold harmless
Granaria, and its affiliates (including its officers, directors, stockholders,
partners, members, employees and agents) from and against any and all claims,
liabilities, losses and damages (or actions in respect thereof), relating to or
arising out of the advisory and consulting services contemplated by this
Agreement or the engagement of Granaria pursuant to, and the performance by the
Granaria of the services contemplated by, this Agreement and to reimburse
Granaria and any other such indemnified person for all costs and expenses
incurred by it in connection with or relating to investigating, preparing to
defend, or defending any actions, claims or other proceedings (including any
investigation or inquiry) arising in any manner out of or in connection with
Granaria's performance under this Agreement (whether or not such indemnified
person is a named party in such proceeding); provided, however, that the Company
will not be liable under the foregoing indemnification provision for any claims,
liabilities, losses, damages or expenses to the extent that they are determined
by a court, in a final judgment from which no appeal may be taken, to have
<PAGE>
<PAGE>
resulted solely from the gross negligence or willful misconduct of Granaria (or
such other indemnified person).
4. Permissible Activities. Subject to all applicable provisions
of applicable law that impose fiduciary liabilities upon Granaria or its
affiliates or their respective officers and directors, nothing in this Agreement
shall in any way preclude Granaria, its affiliates or their respective officers
and directors from engaging in any business activities or from performing
services for its or their own account of others, including companies which may
be in competition with the business conducted by the Company.
5. Notice. All notices hereunder, to be effective, shall be in
writing and shall be mailed by certified mail, postage prepaid as follows:
(i) If to Granaria:
Granaria Holdings B.V.
Lange Voorhout 16
P.O. Box 233
2501 CE The Hague
The Netherlands
Attention: Joel P. Wyler
Chairman
(ii) If to the Company:
Eagle-Picher Industries, Inc.
Suite 500
250 East Fifth Street
Cincinnati, Ohio 45201
Attention: Andries Ruijssenaars
President
6. Termination. This Agreement may be terminated by Granaria at
any time by written notice to the Company. In addition, this Agreement will
terminate automatically as of the earlier of (i) the tenth anniversary of this
Agreement and (ii) the end of the fiscal year in which Granaria and its
affiliates, in the aggregate, beneficially own less than 10% of the Company's
outstanding common stock.
7. Modifications. This Agreement constitutes the entire agreement
between the parties hereto with regard to the subject matter hereof, superseding
all prior understandings and agreements whether written or oral. This Agreement
may not be amended or revised except by a writing signed by the parties.
8. Successors and Assigns. This Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and
assigns but may not be assigned by either party without the prior written
consent of the other. Notwithstanding the foregoing,
2
<PAGE>
<PAGE>
Granaria may elect to have its obligations hereunder performed in whole or in
part by a partnership or other entity affiliated with Granaria, and Granaria may
direct that any compensation (including all or a portion of the management fee)
be paid to the affiliate performing the services hereunder with respect thereto.
9. Captions. Captions have been inserted solely for the
convenience of reference and in no way define, limit or describe the scope or
substance of any provision and shall not affect the validity of any other
provision.
10. Governing Law. This Agreement shall be construed under and
governed by the laws of New York, without reference to its conflicts of law
principles.
11. Counterparts. This Agreement may be signed in two
counterparts, each of which shall be deemed an original but which together shall
constitute one and the same instrument.
3
<PAGE>
<PAGE>
IN WITNESS WHEREOF, the parties have duly executed this Agreement
as a sealed instrument as of the date first above written.
GRANARIA HOLDINGS B.V.
By: /s/ JOEL P. WYLER
---------------------------
Name: Joel P. Wyler
Title: Chairman
EAGLE-PICHER INDUSTRIES, INC.
By: /S/ ANDRIES RUIJSSENAARS
---------------------------
Name: Andries Ruijssenaars
Title: President
4
<PAGE>
<PAGE>
Subsidiaries
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Name Jurisdiction Other names under which Subsidiary
of Incorporation does business
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. DOMESTIC OPERATING SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------
Daisy Parts, Inc. Michigan Eagle-Picher
Eagle-Picher Industries
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Development Company, Delaware Eagle-Picher
Inc. Eagle-Picher Industries
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Far East, Inc. Delaware Eagle-Picher
Eagle-Picher Industries
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Fluid Systems, Inc. Michigan Eagle-Picher
Eagle-Picher Industries
Eagle-Picher Automotive
Eagle-Picher Fluid Systems
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Minerals, Inc. Nevada Eagle-Picher
Eagle-Picher Industries
Eagle-Picher Automotive
Eagle-Picher Fluid Systems
- --------------------------------------------------------------------------------------------------------
Hillsdale Tool & Manufacturing Co. Michigan Eagle-Picher
Eagle-Picher Industries
Eagle-Picher Automotive
Daisy Parts
Hillsdale Tool
Hillsdale Tool & Manufacturing
- --------------------------------------------------------------------------------------------------------
Michigan Automotive Research Michigan Eagle-Picher
Corporation Eagle-Picher Industries
Eagle-Picher Automotive
MARCO
Michigan Automotive Research
Corporation
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Technologies, LLC Delaware Eagle-Picher
Eagle-Picher Industries
Technologies
Chemsyn Science Laboratories
- --------------------------------------------------------------------------------------------------------
2. FOREIGN SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Automotive GmbH Germany
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Espana, S.A. Spain
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Fluid Systems Ltd. England & Wales
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Hillsdale Limited England & Wales
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Industries Europe B.V. Netherlands
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Technologies GmbH Germany
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Industries of Canada Ontario, Canada
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
Name Jurisdiction Other names under which Subsidiary
of Incorporation does business
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
Limited
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Minerals International France
S.A.R.L.
- --------------------------------------------------------------------------------------------------------
Eagle-Picher UK Limited England & Wales
- --------------------------------------------------------------------------------------------------------
Eagle-Picher Wolverine GmbH Germany
- --------------------------------------------------------------------------------------------------------
Eagle-Picher, Inc. Virgin Islands
- --------------------------------------------------------------------------------------------------------
EPTEC, S.A. de C.V. Mexico
- --------------------------------------------------------------------------------------------------------
Equipos de Acuna, S.A. de C.V. Mexico
- --------------------------------------------------------------------------------------------------------
United Minerals GmbH & Co. KG Germany
- --------------------------------------------------------------------------------------------------------
United Minerals Verwaltungs-und Germany
Beteiligungs GmbH
- --------------------------------------------------------------------------------------------------------
3. IMMATERIAL SUBSIDIARIES
- --------------------------------------------------------------------------------------------------------
Fabricon Corporation Michigan
- --------------------------------------------------------------------------------------------------------
Fabricon Products Corporation of Pennsylvania
Pennsylvania
- --------------------------------------------------------------------------------------------------------
Ross Aluminum Foundries, Inc. Ohio
- --------------------------------------------------------------------------------------------------------
Wolverine Gasket and Manufacturing Michigan
Company
- --------------------------------------------------------------------------------------------------------
Cincinnati Industrial Machinery Sales Ohio
Company
- --------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<PAGE>
INDEPENDENT AUDITORS' CONSENT
We consent to the use in the Registration Statement of Eagle-Picher
Industries, Inc. on Form S-4, related to the $220,000,000 Senior Subordinated
Notes due 2008, of our reports dated January 15, 1998 on our audits of the
consolidated financial statements of (1) Eagle-Picher Industries, Inc. as of and
for the year ended November 30, 1997, and (2) Eagle-Picher Holdings, Inc. as of
December 22, 1997, appearing in the Prospectus, which is part of this
Registration Statement.
We also consent to the reference to us under the heading 'Experts' in such
Prospectus.
/s/ Deloitte & Touche LLP
Cincinnati, Ohio
April 10, 1998
<PAGE>
<PAGE>
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Eagle-Picher Holdings, Inc.:
We consent to the use of our report included herein and to the reference
to our firm under the heading 'Experts' in the prospectus.
Our report dated February 5, 1997 was unqualified except for consistency
in the application of accounting principles as a result of the Company's change
in its method of computing LIFO for certain inventories.
KPMG Peat Marwick LLP
Cincinnati, Ohio
April 10, 1998
<PAGE>
<PAGE>
THIS CONFORMING PAPER FORMAT DOCUMENT IS BEING SUBMITTED
PURSUANT TO RULE 901(d) OF REGULATION S-T
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) [ ]
-------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
-------------------
EAGLE-PICHER INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Ohio 31-0268670
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
Table of Additional Registrants
<TABLE>
<S> <C> <C>
Eagle-Picher Holdings, Inc. Delaware 13-3989553
Daisy Parts, Inc. Michigan 38-1406772
Eagle-Picher Development
Company, Inc. Delaware 31-1215706
Eagle-Picher Far East, Inc. Delaware 31-1235685
Eagle-Picher Fluid Systems, Inc. Michigan 31-1452637
Eagle-Picher Minerals, Inc. Nevada 31-1188662
Eagle-Picher Technologies, LLC Delaware 31-1587660
Hillsdale Tool & Manufacturing Co. Michigan 38-0946293
Michigan Automotive Research
Corporation Michigan 38-2185909
Suite 500
250 East Fifth Street
Cincinnati, Ohio 45202
(Address of principal executive offices) (Zip code)
</TABLE>
----------------------
9-3/8% Senior Subordinated Notes due 2008
(Title of the indenture securities)
================================================================================
<PAGE>
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
<S> <C>
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
</TABLE>
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7a-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(d).
1. A copy of the Organization Certificate of The Bank of New York (formerly
Irving Trust Company) as now in effect, which contains the authority to
commence business and a grant of powers to exercise corporate trust
powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1 filed
with Registration Statement No. 33-21672 and Exhibit 1 to Form T-1 filed
with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
-2-
<PAGE>
<PAGE>
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-3-
<PAGE>
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 8th day of April, 1998.
THE BANK OF NEW YORK
By: /s/ JAMES W.P. HALL
--------------------------
Name: James W.P. Hall
Title: Vice President
-4-
<PAGE>
<PAGE>
Exhibit 7
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from
depository institutions:
Noninterest-bearing balances and
currency and coin................................ $ 5,004,638
Interest-bearing balances......................... 1,271,514
Securities:
Held-to-maturity securities....................... 1,105,782
Available-for-sale securities..................... 3,164,271
Federal funds sold and Securities
purchased under agreements to resell............... 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ............................. 34,916,196
LESS: Allowance for loan and
lease losses ....................... 581,177
LESS: Allocated transfer risk
reserve............................. 429
Loans and leases, net of unearned
income, allowance, and reserve................. 34,334,590
Assets held in trading accounts..................... 2,035,284
Premises and fixed assets (including
capitalized leases)............................... 671,664
Other real estate owned............................. 13,306
Investments in unconsolidated
subsidiaries and associated
companies......................................... 210,685
Customers' liability to this bank on
acceptances outstanding........................... 1,463,446
Intangible assets................................... 753,190
Other assets........................................ 1,784,796
-----------
Total assets........................................ $57,536,995
===========
LIABILITIES
Deposits:
In domestic offices............................... $27,270,824
Noninterest-bearing .................. 12,160,977
Interest-bearing ..................... 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs................. 14,687,806
Noninterest-bearing ................. 657,479
Interest-bearing ..................... 14,030,327
Federal funds purchased and Securities
sold under agreements to repurchase............... 1,946,099
Demand notes issued to the U.S.
Treasury.......................................... 283,793
Trading liabilities................................. 1,553,539
Other borrowed money:
With remaining maturity of one year
or less......................................... 2,245,014
With remaining maturity of more than
one year through three years.................... 0
With remaining maturity of more than
three years..................................... 45,664
Bank's liability on acceptances
executed and outstanding.......................... 1,473,588
Subordinated notes and debentures................... 1,018,940
Other liabilities................................... 2,193,031
-----------
Total liabilities................................... 52,718,298
-----------
EQUITY CAPITAL
Common stock........................................ 1,135,284
Surplus............................................. 731,319
Undivided profits and capital
reserves.......................................... 2,943,008
Net unrealized holding gains
(losses) on available-for-sale
securities........................................ 25,428
Cumulative foreign currency
translation adjustments........................... (16,342)
-----------
Total equity capital................................ 4,818,697
-----------
Total liabilities and equity
capital........................................... $57,536,995
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
J. Carter Bacot )
Thomas A. Renyi ) Directors
Alan R. Griffith )
<PAGE>
