<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JULY 19, 1995
REGISTRATION NO. 33-
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- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------------
ENVIRODYNE INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 3089 95-2677354
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Number) Identification Number)
incorporation or
organization)
</TABLE>
------------------------------
SEE TABLE OF ADDITIONAL REGISTRANTS
------------------------------
ENVIRODYNE INDUSTRIES, INC.
701 HARGER ROAD, SUITE 190
OAK BROOK, ILLINOIS 60521
(708) 571-8800
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
STEPHEN M. SCHUSTER
VICE PRESIDENT, SECRETARY AND GENERAL COUNSEL
ENVIRODYNE INDUSTRIES, INC.
701 HARGER ROAD, SUITE 190
OAK BROOK, ILLINOIS 60521
(708) 571-8800
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------------
Copy to:
DENNIS V. OSIMITZ
SIDLEY & AUSTIN
ONE FIRST NATIONAL PLAZA
CHICAGO, ILLINOIS 60603
(312) 853-7000
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box / /
------------------------------
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SECTION 8(A) MAY
DETERMINE.
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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TITLE OF EACH CLASS PROPOSED MAXIMUM PROPOSED MAXIMUM
OF SECURITIES AMOUNT TO OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED BE REGISTERED PER SECURITY OFFERING PRICE REGISTRATION FEE
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
12% First Priority Senior Secured
Notes due 2000, Series B........ $151,500,000 100% $151,500,000(1) $52,242
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Floating Rate First Priority
Senior Secured Notes due 2000,
Series D........................ $8,500,000 100% $8,500,000(1) $2,932
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Guarantees of Series B Notes and
Series D Notes.................. -- -- -- --(2)
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</TABLE>
(1) Estimated pursuant to Rule 457 solely for the purpose of calculating the
registration fee.
(2) Pursuant to Rule 457(n) no registration fee is payable with respect to the
Guarantees.
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<PAGE> 2
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TABLE OF ADDITIONAL REGISTRANTS
<TABLE>
<CAPTION>
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PRIMARY STANDARD I.R.S.
STATE OR INDUSTRIAL EMPLOYER
OTHER JURISDICTION CLASSIFICATION IDENTIFICATION
NAME OF INCORPORATION NUMBER NUMBER
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<S> <C> <C> <C>
Clear Shield National, Inc. ....... California 3089 95-2744847
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Sandusky Plastics, Inc. ........... Delaware 3089 36-2749566
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Sandusky Plastics of Delaware,
Inc. ............................ Delaware 3089 13-3312508
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Viskase Corporation................ Pennsylvania 3081 23-1919506
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Viskase Holding Corporation........ Delaware 3081 95-2761341
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Viskase Sales Corporation.......... Delaware 3081 36-3415851
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</TABLE>
ii
<PAGE> 3
ENVIRODYNE INDUSTRIES, INC.
CROSS REFERENCE SHEET PURSUANT TO ITEM 501(B)
OF REGULATION S-K SHOWING LOCATION IN THE PROSPECTUS
OF INFORMATION REQUIRED BY ITEMS OF FORM S-4
<TABLE>
<CAPTION>
ITEM AND HEADING IN FORM S-4 REGISTRATION
STATEMENT LOCATION OR CAPTION IN PROSPECTUS
- ------------------------------------------------- --------------------------------------------
<S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus.... Outside Front Cover Page; Inside Front Cover
Page
2. Inside Front and Outside Back Cover Pages
of Prospectus............................. Inside Front Cover Page; Outside Back Cover
Page
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information............. Prospectus Summary; Risk Factors; The
Company; Selected Historical Consolidated
Financial Data
4. Terms of the Transaction.................. Prospectus Summary; The Exchange Offer;
Description of Notes; Certain Federal Income
Tax Considerations
5. Pro Forma Financial Information........... Prospectus Summary; Unaudited Pro Forma
Consolidated Financial Data
6. Material Contacts with the Company Being
Acquired.................................. N/A
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters........................ Plan of Distribution
8. Interests of Named Experts and Counsel.... Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification of Securities Act
Liabilities............................... N/A
10. Information with Respect to S-3
Registrants............................... N/A
11. Incorporation of Certain Information by
Reference................................. N/A
12. Information with Respect to S-2 or S-3
Registrants............................... N/A
13. Incorporation of Certain Information by
Reference................................. N/A
14. Information with Respect to Registrants
Other than S-3 or S-2 Registrants......... Outside Front Cover Page; Available
Information; Prospectus Summary; Risk
Factors; The Company; The Subsidiary
Guarantors; Capitalization; Unaudited Pro
Forma Consolidated Financial Data; Selected
Historical Consolidated Financial Data;
Management's Discussion and Analysis of
Financial Condition and Results of
Operations; Business; Management; Certain
Transactions
15. Information with Respect to S-3
Companies................................. N/A
16. Information with Respect to S-2 or S-3
Companies................................. N/A
17. Information with Respect to Companies
Other than S-2 or S-3 Companies........... N/A
18. Information if Proxies, Consents or
Authorizations are to be Solicited........ N/A
19. Information if Proxies, Consents or
Authorizations are not to be solicited, or
in an Exchange Offer...................... Prospectus Summary; Management; Certain
Transactions
</TABLE>
iii
<PAGE> 4
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 July 19, 1995
PROSPECTUS
ENVIRODYNE INDUSTRIES, INC.
OFFER TO EXCHANGE ITS 12% FIRST PRIORITY SENIOR SECURED NOTES DUE 2000,
SERIES B, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
FOR ANY AND ALL OF ITS OUTSTANDING 12% FIRST PRIORITY SENIOR SECURED NOTES
DUE 2000, SERIES A, AND ITS FLOATING RATE FIRST PRIORITY SENIOR SECURED
NOTES DUE 2000, SERIES D, WHICH HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT FOR ANY AND ALL OF ITS OUTSTANDING FLOATING RATE FIRST PRIORITY
SENIOR SECURED NOTES DUE 2000, SERIES C
------------------------------
The Exchange Offer will expire at 5:00 p.m., New York City time on
, 1995, unless extended.
Envirodyne Industries, Inc., a Delaware corporation ("Envirodyne" or the
"Company"), hereby offers (the "Exchange Offer"), 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
(i) $1,000 principal amount of its new 12% First Priority Senior Secured Notes
due 2000, Series B (the "New Series B Notes"), for each $1,000 principal amount
of its outstanding 12% First Priority Senior Secured Notes due 2000, Series A
(the "Old Series A Notes"), of which $151,500,000 aggregate principal amount is
outstanding, and (ii) $1,000 principal amount of its new Floating Rate First
Priority Senior Secured Notes due 2000, Series D (the "New Series D Notes" and
collectively with the New Series B Notes, the "New Notes"), for each $1,000
principal amount of its outstanding Floating Rate First Priority Senior Secured
Notes due 2000, Series C (the "Old Series C Notes" and collectively with the Old
Series A Notes, the "Old Notes"), of which $8,500,000 aggregate principal amount
is outstanding. The form and terms of the New Notes are the same as the form and
terms of the Old Notes, except that the New Notes will have been registered
under the Securities Act of 1933, as amended (the "Securities Act"). The New
Notes will evidence the same debt as the Old Notes (which they replace) and will
be issued under, and entitled to benefits of, the indenture governing the Old
Notes dated as of June 20, 1995 (the "Indenture"). All references herein to the
"Notes" shall be references to the Old Notes and/or the New Notes, whichever
was, is or will be outstanding in the particular context. See "The Exchange
Offer" and "Description of Notes."
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 ,
1995, unless extended by the Company in its sole discretion (the "Expiration
Date"). Tenders of Old Notes may be withdrawn at any time prior to the
Expiration Date. The Exchange Offer is subject to certain customary conditions.
See "The Exchange Offer." Old Notes may be tendered only in integral multiples
of $1,000 principal amount.
The Old Notes were sold on June 20, 1995 in a transaction not registered
under the Securities Act in reliance upon the exemption provided in Section 4(2)
of the Securities Act. The New Notes are being offered to satisfy the
obligations of the Company under the Exchange and Registration Rights Agreement
relating to the Old Notes. See "The Exchange Offer -- Purpose and Effect of the
Exchange Offer." New Notes issued pursuant to the Exchange Offer in exchange for
the Old Notes may be offered for resale, resold or otherwise transferred by the
holders thereof (other than any holder which is an affiliate of the Company
within the meaning of Rule 405 under the Securities Act), without compliance
with the registration and prospectus delivery requirements of the Securities
Act, provided that such New Notes are acquired in the ordinary course of such
holders' business and such holders have no arrangement with any person to
participate in the distribution of such New Notes. Each broker-dealer that
receives New Notes for its own account pursuant to the Exchange Offer must
acknowledge that it will deliver a prospectus in connection with any resale of
such New Notes. The Letter of Transmittal states that by 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. See "The Exchange
Offer -- Purpose and Effect of the Exchange Offer" and "Plan of Distribution."
The Notes constitute securities for which there is no established trading
market. Any Old Notes not tendered and accepted in the Exchange Offer will
remain outstanding. The Company does not currently intend to list the New Notes
on any securities exchange. To the extent that any Old Notes are tendered and
accepted in the Exchange Offer, a holder's ability to sell untendered Old Notes
could be adversely affected. No assurances can be given as to the liquidity of
the trading market for either the Old Notes or the New Notes.
Interest on the New Notes shall accrue from the last June 15 or December 15
(an "Interest Payment Date") on which interest was paid on the Old Notes so
surrendered, or, if no interest has been paid on such Old Notes, from June 20,
1995.
SEE "RISK FACTORS" FOR A DESCRIPTION OF CERTAIN FACTORS THAT SHOULD BE
CONSIDERED IN CONNECTION WITH THE EXCHANGE OFFER AND AN INVESTMENT IN THE NEW
NOTES OFFERED HEREBY.
------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES 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 , 1995
<PAGE> 5
NO PERSON IS AUTHORIZED IN CONNECTION WITH ANY OFFERING MADE HEREBY TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THE PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THE EXCHANGE OFFER IS NOT BEING
MADE TO, NOR WILL THE COMPANY ACCEPT SURRENDERS FOR EXCHANGE FROM, HOLDERS OF
OLD NOTES IN ANY JURISDICTION IN WHICH THE EXCHANGE OFFER OR THE ACCEPTANCE
THEREOF WOULD NOT BE IN COMPLIANCE WITH THE SECURITIES OR BLUE SKY LAWS OF SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY EXCHANGE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY DATE SUBSEQUENT TO THE DATE
HEREOF.
Until , 1995 (90 days after commencement of this offering), all
dealers effecting transactions in the New Notes, whether or not participating in
this offering, may be required to deliver a Prospectus.
------------------
AVAILABLE INFORMATION
The Company and the Subsidiary Guarantors (as defined) have filed with the
Securities and Exchange Commission (the "Commission") a Registration Statement
on Form S-4 under the Securities Act for the registration of the New Notes
offered hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the Registration
Statement, certain items of which are contained in exhibits and schedules to the
Registration Statement as permitted by the rules and regulations of the
Commission. For further information with respect to the Company, the Subsidiary
Guarantors and the securities offered hereby, reference is made to the
Registration Statement, including the exhibits thereto, and financial statements
and notes filed as a part thereof. Statements made in this Prospectus concerning
the contents of any document referred to herein are not necessarily complete.
With respect to each such document filed with the Commission as an exhibit to
the Registration Statement, reference is made to the exhibit for a more complete
description of the matter involved, and each such statement shall be deemed
qualified in its entirety by such reference.
The Company is subject to the periodic reporting and other informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company with the Commission may be inspected at the
public reference facilities maintained by the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, or at its regional offices located at the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and Seven World Trade Center, Suite 1300, New York, New York 10048. Copies of
such material can be obtained from the public reference section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. As long as the Company is subject to such periodic reporting and
informational requirements, it will furnish all reports and other information
required thereby to the Commission and will furnish copies of such reports and
other information to the Trustee (as defined). In the event the Company ceases
to be required to file periodic reports and other information with the
Commission, the Company is required under the Indenture, so long as the Notes
remain outstanding, to file with the Commission and distribute to holders of the
Notes copies of the financial information that would have been contained in such
reports, information and other documents that the Company would have been
required to file with the Commission pursuant to the Exchange Act.
2
<PAGE> 6
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. As used herein, unless the context otherwise
requires, the "Company" refers to Envirodyne Industries, Inc. and its direct and
indirect wholly owned subsidiaries. Certain defined terms used throughout this
Prospectus have the meanings set forth in "Description of Notes -- Certain
Definitions."
THE COMPANY
Envirodyne Industries, Inc. manufactures food packaging products and
foodservice supplies through three primary operating subsidiaries -- Viskase
Corporation ("Viskase"), Sandusky Plastics, Inc. (together with Sandusky
Plastics of Delaware, Inc., "Sandusky") and Clear Shield National, Inc. ("Clear
Shield"). Viskase is the leading producer of cellulosic casings used in
preparing and packaging processed meat products and is a major producer of heat
shrinkable plastic bags and specialty films for packaging and preserving fresh
and processed meat products, poultry and cheeses. The Company is also a leading
domestic and international manufacturer of plasticized polyvinyl chloride
("PVC") films, primarily for use in packaging food items. Through Sandusky, the
Company is a producer of thermoformed and injection molded plastic containers,
used in the packaging of cultured dairy and delicatessen products, and of
horticultural trays and inserts. Finally, through Clear Shield, the Company is a
major domestic producer of disposable plastic cutlery, drinking straws, custom
dining kits and related products.
On June 20, 1995, the Company completed the sale to certain institutional
investors in a private placement of $160,000,000 aggregate principal amount of
Old Notes. The Company used the net proceeds of the offering primarily to repay
the Company's $86.1 million domestic term loan facility and reduce the amount of
the Company's revolving credit obligations by approximately $68.3 million. See
"Use of Proceeds" and "Capitalization." Concurrently with the sale of the Old
Notes, the Company entered into a $20 million domestic revolving credit facility
(the "Revolving Credit Facility") and a $28 million letter of credit facility
(the "Letter of Credit Facility"). The Notes and the obligations under the
Revolving Credit Facility and the Letter of Credit Facility are guaranteed by
the Company's significant domestic subsidiaries (the "Subsidiary Guarantors")
and secured by the following pool of collateral (the "Collateral Pool"): (i) all
accounts receivable (including intercompany receivables) and inventory; (ii) all
patents, trademarks and other intellectual property (subject to non-exclusive
licensing agreements); (iii) substantially all domestic fixed assets (other than
assets subject to a lease agreement with General Electric Capital Corporation);
and (iv) a pledge of 100% of the capital stock of the Company's significant
domestic subsidiaries and 65% of the capital stock of Viskase, S.A., a
subsidiary of the Company organized under the laws of France ("Viskase, S.A.").
Such guarantees and security are shared by the holders of the Notes and the
holders of the obligations under the Revolving Credit Facility on a pari passu
basis pursuant to an intercreditor agreement. Pursuant to such intercreditor
agreement, the security interest of the holders of the obligations under the
Letter of Credit Facility has priority over all other liens on the Collateral
Pool. See "Description of Notes -- Collateral and Security" and "Description of
Intercreditor Arrangements."
3
<PAGE> 7
THE EXCHANGE OFFER
EXCHANGE AND REGISTRATION
RIGHTS AGREEMENT.............. The Old Notes were sold in a private placement
by the Company on June 20, 1995 to certain
institutional investors through The Argosy
Securities Group L.P., as placement agent (the
"Placement Agent"). In connection therewith,
the Company executed and delivered, for the
benefit of the holders of the Old Notes, an
Exchange and Registration Rights Agreement
dated June 20, 1995 (the "Registration Rights
Agreement"), which grants the holders of Old
Notes certain exchange and registration rights.
See "The Exchange Offer -- Termination of
Certain Rights." The Exchange Offer is intended
to satisfy such rights, which terminate upon
the Consummation (as defined) of the Exchange
Offer. Therefore, the holders of New Notes will
not be entitled to any exchange or registration
rights with respect to the New Notes.
THE EXCHANGE OFFER............ $1,000 principal amount of New Series B Notes
in exchange for each $1,000 principal amount of
Old Series A Notes, and $1,000 principal amount
of New Series D Notes for each $1,000 principal
amount of Old Series C Notes. As of the date
hereof, $160,000,000 aggregate principal amount
of Old Notes is outstanding, $151,500,000 of
which is Old Series A Notes and $8,500,000 of
which is Old Series C Notes. The terms of the
New Notes are substantially identical in all
respects (including principal amount, interest
rate and maturity) to the terms of the Old
Notes for which they may be exchanged pursuant
to the Exchange Offer, except that the New
Notes will have been registered under the
Securities Act and will not bear legends
restricting their transfer. See "The Exchange
Offer -- Terms of the Exchange Offer" and "The
Exchange Offer -- Procedures for Tendering."
Based on an interpretation 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 Exchange
Offer in exchange for Old Notes may be offered
for resale, resold and otherwise transferred by
any holder or beneficial owner thereof (other
than any such holder or beneficial owner which
is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act or
a "broker" or "dealer" registered under the
Exchange Act) 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 or beneficial owner's business
and that such holder or beneficial owner has no
arrangement or understanding with any person to
participate in the distribution of such New
Notes. See "The Exchange Offer -- Resales of
the New Notes."
EXPIRATION DATE............... 5:00 p.m., New York City time, on ,
1995, unless the Exchange Offer is extended by
the Company in its sole discretion, in which
case the term "Expiration Date" means the
latest date and time to which the Exchange
Offer is extended.
4
<PAGE> 8
CONDITIONS OF THE EXCHANGE
OFFER......................... The Exchange Offer is subject to certain
customary conditions, which may be waived by
the Company. See "The Exchange Offer --
Conditions of the Exchange Offer."
PROCEDURES FOR TENDERING OLD
NOTES......................... Each holder of Old Notes wishing to accept the
Exchange Offer must complete, sign and date the
Letter of Transmittal, or a facsimile thereof,
in accordance with the instructions contained
herein and therein, and mail or otherwise
deliver such Letter of Transmittal, or such
facsimile, together with the Old Notes and any
other required documentation to the Exchange
Agent (as defined) at the address set forth
herein. By executing the Letter of Transmittal,
each holder will represent to the Company that,
among other things, the New Notes acquired
pursuant to the 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 has an
arrangement or understanding with any person to
participate in the distribution of such New
Notes and that neither the holder nor any such
other person is an "affiliate," as defined
under Rule 405 of the Securities Act, of the
Company. See "The Exchange Offer -- Procedures
for Tendering."
BROKERS OR DEALERS............ Any broker or dealer participating in the
Exchange Offer will be required to acknowledge
that it will deliver a prospectus in connection
with any resales of the New Notes received by
it in the Exchange Offer. A broker or dealer
registered under the Exchange Act that acquired
Old Notes for its own account pursuant to its
market-making or other trading activities
(other than Old Notes acquired directly from
the Company) may participate in the Exchange
Offer but may be deemed an underwriter under
the Securities Act and, therefore, must deliver
a prospectus relating to the New Notes in
connection with any resales by it of New Notes
acquired by it for its own account in the
Exchange Offer; only such brokers or dealers
may use this Prospectus in connection with
resales of the New Notes. See "Plan of
Distribution."
SPECIAL PROCEDURES FOR
BENEFICIAL OWNERS............. 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 such
registered holder promptly and instruct such
registered holder to tender on such beneficial
owner's behalf. See "The 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
immediately 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 Notes
according to the guaranteed delivery procedures
set forth under "The Exchange Offer --
Guaranteed Delivery Procedures."
WITHDRAWAL RIGHTS............. Old Notes tendered pursuant to the Exchange
Offer may be withdrawn at any time prior to the
Expiration Date.
5
<PAGE> 9
ACCEPTANCE OF OLD NOTES AND
DELIVERY OF NEW NOTES......... Subject to satisfaction or waiver of the
conditions of the Exchange Offer set forth
under "The Exchange Offer -- Conditions of the
Exchange Offer," the Company will accept for
exchange any and all Old Notes which are
properly tendered in the Exchange Offer prior
to the Expiration Date. The New Notes issued
pursuant to the Exchange Offer will be
delivered on the earliest practicable date
following the Expiration Date. See "The
Exchange Offer -- Terms of the Exchange Offer."
FEDERAL INCOME TAX
CONSEQUENCES.................. An exchange of Old Notes for New Notes pursuant
to the Exchange Offer should not be treated as
a sale, exchange or other taxable event for
federal income tax purposes because the New
Notes should not be considered to differ
materially in kind or extent from the Old
Notes. As a result, no material federal income
tax consequences should result from an exchange
of Old Notes for New Notes pursuant to the
Exchange Offer. For federal income tax
purposes, a New Note received by a beneficial
owner of an Old Note should be treated as a
continuation of the Old Note in the hands of
such owner. See "Certain Federal Income Tax
Consequences."
EFFECT ON HOLDERS OF THE OLD
NOTES......................... As a result of the making of, and upon
acceptance for exchange of all validly tendered
Old Notes pursuant to the terms of, the
Exchange Offer, the Company will have fulfilled
certain of its obligations contained in the
Registration Rights Agreement and, accordingly,
there will be no increase in the interest rate
on the Old Notes pursuant to the applicable
terms of the Registration Rights Agreement.
Holders of the Old Notes who do not tender
their Old Notes will be entitled to all the
rights and limitations applicable thereto under
the Indenture, dated as of June 20, 1995, (the
"Indenture") between the Company and Shawmut
Bank Connecticut, National Association, as
trustee (the "Trustee"), relating to the Old
Notes and the New Notes, and the Registration
Rights Agreement, except for any rights under
the Indenture or the Registration Rights
Agreement which by their terms, terminate or
cease to have further effect as a result of the
making of, and the acceptance for exchange of
all validly tendered Old Notes pursuant to, the
Exchange Offer. All untendered Old Notes will
continue to be subject to the restrictions on
transfer provided for in the Old Notes and in
the Indenture. To the extent that Old Notes are
tendered and accepted in the Exchange Offer,
the trading market for untendered Old Notes
could be adversely affected.
USE OF PROCEEDS............... There will be no cash proceeds to the Company
from the exchange pursuant to the Exchange
Offer. See "Use of Proceeds."
EXCHANGE AGENT................ Shawmut Bank Connecticut, National Association,
as Trustee, is serving as exchange agent (the
"Exchange Agent") in connection with the
Exchange Offer.
6
<PAGE> 10
SUMMARY OF TERMS OF THE NEW NOTES
The Exchange Offer relates to $160,000,000 aggregate principal amount of
Old Notes, consisting of $151,500,000 of Old Series A Notes and $8,500,000 of
Old Series C Notes. The form and terms of the New Notes are the same in all
material respects as the Old Notes except that the New Notes will have been
registered under the Securities Act and will not bear legends restricting their
transfer. The New Notes will evidence the same debt as the Old Notes (which they
replace) and will be issued under, and be entitled to the benefits of, the
Indenture governing the Old Notes. See "Description of Notes."
PRINCIPAL AMOUNT.............. $160,000,000, of which $151,500,000 are New
Series B Notes and $8,500,000 are New Series D
Notes.
MATURITY DATE................. $80,000,000 aggregate principal amount will be
subject to a mandatory redemption on June 15,
1999 and the remaining principal amount
outstanding will mature on June 15, 2000.
INTEREST RATE................. The New Series B Notes will bear interest at a
rate of 12% per annum. The New Series D Notes
will bear interest at a rate equal to the sum
of 5.75% plus the six month London Interbank
Offered Rate ("LIBOR").
INTEREST PAYMENT DATES........ June 15 and December 15 of each year,
commencing December 15, 1995. Interest on the
New Notes will accrue from the last June 15 or
December 15 on which interest was paid on the
Old Notes, or, if no interest has been paid on
the Old Notes, from June 20, 1995.
RANKING....................... The Notes are senior secured obligations of
Envirodyne, which rank senior to all senior
unsecured and subordinated indebtedness of
Envirodyne and rank pari passu with all other
existing and any permitted future senior
secured indebtedness of Envirodyne other than
the security interests in favor of the holders
of obligations under the Letter of Credit
Facility (subject to the respective security
interests, if any, held by other lenders).
SECURITY; GUARANTEES.......... The Notes are guaranteed by the Company's
significant domestic subsidiaries (the
"Subsidiary Guarantors") and secured by a
collateral pool (the "Collateral Pool")
comprised of: (i) all domestic accounts
receivable (including intercompany receivables)
and inventory; (ii) all patents, trademarks and
other intellectual property (subject to
non-exclusive licensing agreements); (iii)
substantially all domestic fixed assets (other
than assets subject to a lease agreement with
General Electric Capital Corporation); and (iv)
a senior pledge of 100% of the capital stock of
the Company's significant domestic subsidiaries
and 65% of the capital stock of Viskase, S.A.
Such guarantees and security are shared with
lenders under the Revolving Credit Facility on
a pari passu basis pursuant to an intercreditor
agreement. The security interest of the holders
of obligations under the Letter of Credit
Facility has priority over all other liens on
the Collateral Pool.
EXCESS CASH FLOW OFFER........ In the event that the Company has Excess Cash
Flow (as defined) in excess of $5 million in
any fiscal year, beginning with the fiscal year
ending December 28, 1995, the Company will be
required to make an offer to purchase Notes
from all holders on a pro rata basis in an
amount equal to the Excess CF Amount (as
defined) at
7
<PAGE> 11
a purchase price equal to 100% of the principal
amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase.
OPTIONAL REPAYMENT WITH
PREMIUM....................... Commencing immediately, the Notes are
redeemable by the Company, at its option, in
whole or in part, at a price equal to (i) 100%
of the principal amount of the Notes being
redeemed, plus (ii) accrued and unpaid interest
thereon to the optional redemption date and
(iii) the Yield Maintenance Amount (as
defined), if any, with respect thereto.
CHANGE OF CONTROL............. Upon the occurrence of a Change of Control (as
defined), each holder of the Notes will have
the right to require the Company to repurchase
such holder's Notes at a price equal to 100% of
the outstanding principal amount thereof
together with interest thereon to the date of
purchase and the Yield-Maintenance Amount with
respect thereto.
CERTAIN COVENANTS............. The Indenture contains covenants that, among
other things, limit (i) the incurrence of
Indebtedness by the Company and its
Subsidiaries, (ii) the payment of Restricted
Payments by the Company and its Subsidiaries,
(iii) the creation of Liens on any of the
Assets of the Company or its Subsidiaries, (iv)
the making of certain Investments by the
Company and its Subsidiaries (including the
Company and its Subsidiaries), (v) certain
transactions with affiliates by the Company and
its Subsidiaries and (vi) certain mergers,
consolidations and sales of assets of the
Company or its Subsidiaries. See "Description
of Notes -- Certain Covenants."
RISK FACTORS
See "Risk Factors" for a discussion of certain factors to be considered by
prospective investors.
8
<PAGE> 12
SUMMARY HISTORICAL CONSOLIDATED FINANCIAL DATA
The following summary financial data of the Company for the periods January
1, 1990 to December 29, 1994; January 1, 1990 to December 31, 1992 for Balance
Sheet Data and January 1, 1990 to December 31, 1993 for Statement of Operations
(Pre-consummation); and the periods January 1, 1993 to December 29, 1994 for
Balance Sheet Data and January 1, 1994 to December 29, 1994 for Statement of
Operations (Post-consummation) are derived from the Company's consolidated
financial statements audited by Coopers & Lybrand L.L.P., independent
accountants. The historical results of operations for the periods ended December
31, 1992 and prior for Balance Sheet Data and December 31, 1993 and prior for
Statement of Operations consist of the periods prior to the implementation of
the Plan of Reorganization and Fresh Start Reporting, Pre-consummation.
Subsequent periods reflect the Fresh Start Reporting that took place upon the
implementation of the Plan of Reorganization, Post-consummation. The information
below should be read in conjunction with the Consolidated Financial Statements
of Envirodyne Industries, Inc. and Subsidiaries and related notes thereto and
Management's Discussion and Analysis of Financial Condition and Results of
Operations appearing elsewhere in this Prospectus. Results for the interim
periods are not necessarily indicative of results for the years as a whole.
<TABLE>
<CAPTION>
POST-CONSUMMATION PRE-CONSUMMATION
--------------------------------------- ----------------------------------------------------------------
DECEMBER 30, DECEMBER 27, DECEMBER 28,
1994 JANUARY 1 JANUARY 1 JANUARY 1 1991 1990 JANUARY 1
TO TO TO TO TO TO TO
MARCH 30, MARCH 31, DECEMBER 29, DECEMBER 31, DECEMBER 31, DECEMBER 26, DECEMBER 27,
1995(1) 1994 1994(1) 1993(1) 1992 1991 1990
------------ --------- ------------ ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF
OPERATIONS:
Net sales........... $155,824 $ 142,593 $599,029 $ 587,385 $ 575,705 $ 543,969 $ 544,138
Cost of sales....... 113,689 102,119 432,746 416,410 398,876 374,214 368,823
Selling, general and
administrative
expenses.......... 33,446 30,764 127,063 117,343 109,623 108,256 104,154
Patent infringement
settlement
income............ 9,457
-------- --------- -------- ---------- ----------- ----------- -----------
Operating Income.... 8,689 9,710 48,677 53,632 67,206 61,499 71,161
Interest expense,
net............... 13,370 11,998 49,207 30,259 105,558 101,450 99,898
Minority interest in
loss of
subsidiary........ 50 50 717
Other income
(expense), net.... 591 281 1,668 (5,540) (12,644)(2) (332) 6,563
-------- --------- -------- ---------- ----------- ----------- -----------
Income (loss) before
income taxes,
reorganization
items and
extraordinary gain
(loss)............ (4,090) (1,957) 1,188 18,550 (50,996) (40,283) (22,174)
Reorganization
items, net........ 104,745
-------- --------- -------- ---------- ----------- ----------- -----------
Income (loss) before
income taxes, and
extraordinary gain
(loss)............ (4,090) (1,957) 1,188 (86,195) (50,996) (40,283) (22,174)
Provision (benefit)
for income
taxes............. (195) 550 4,800 12,000 (14,000) (11,030) (7,000)
-------- --------- -------- ---------- ----------- ----------- -----------
Income (loss) before
extraordinary
items............. (3,895) (2,507) (3,612) (98,195) (36,996) (29,253) (15,174)
Extraordinary gain
(loss), net of
tax(3)............ 183,784 (2,502)
-------- --------- -------- ---------- ----------- ----------- -----------
Net income (loss)... $ (3,895) $ (2,507) $ (3,612) $ 85,589 $ (36,996) $ (31,755) $ (15,174)
======== ========= ======== ========== =========== =========== ===========
Per share (loss)
before
extraordinary
gains (loss)...... (.29) (0.19) (.27) (306,859) (115,613) (91,416) (47,419)
Per share income
(loss) including
extraordinary gain
(loss)............ (.29) (0.19) (.27) 267,466 (115,613) (99,234) (47,419)
OTHER DATA:
EBDIAT(4)........... $ 22,585 $ 22,556 $100,064 $ 106,030 $ 116,516 $ 105,613 $ 113,524
Depreciation and
amortization under
capital lease..... 9,986 9,000 35,775 36,687 33,763 28,994 26,726
Amortization of
intangibles and
excess
reorganization
value............. 3,910 3,846 15,612 15,711 15,547 15,120 15,637
Amortization of
deferred financing
fees and
discount.......... 549 362 1,569 2,418 30,820 26,792 24,022
Capital
expenditures...... 7,631 7,354 32,566 40,887 29,018 44,938 49,478
Ratio of earnings to
fixed
charges(5)........ 1.00 1.52
Deficiency in the
coverage of fixed
charges by
earnings before
fixed charges..... (4,259) (2,202) (52,200) (41,301) (23,000)
BALANCE SHEET DATA:
Total assets........ $922,013 $ 885,886 $896,636 $ 867,680 $ 1,026,962 $ 1,086,457 $ 1,062,508
Working capital..... 114,291 98,909 91,727 82,440 (736,643)(6) (708,064)(6) 87,683
Cash and cash
equivalents and
time deposits..... 7,209 3,937 7,289 7,743 14,062 16,075 29,133
Net property, plant
and equipment
including those
under capital
lease............. 472,792 455,172 470,338 455,554 452,401 476,604 421,269
Debt obligations:
Short-term
debt(7)......... 28,221 18,888 25,798 15,610 40,365 34,937 42,670
Long-term debt
reclassified as
current......... 758,300 792,557
Long-term debt.... 510,944 500,231 489,358 482,379 12,524 18,833 761,606
Stockholders' equity
(deficit)(8)...... 134,010 133,057 135,349 135,000 (83,545) (40,303) (8,275)
</TABLE>
- ---------------
(1) Due to the implementation of the Plan of Reorganization and Fresh Start
Reporting, financial statements including outstanding shares for the new
restructured company (effective December 31, 1993) are not comparable to
those of the prior years.
(2) The 1992 amount includes $3,945 of fees and expenses associated with the
renegotiation of debt.
(3) Includes an extraordinary gain from the implementation of the Plan of
Reorganization in 1993, and an extraordinary loss on debt extinguishment in
1991.
(4) "EBDIAT" represents, for any relevant period, net income (loss) (except that
extraordinary, unusual and non-recurring gains and losses are excluded) plus
(i) net interest expense (including amortization of original issue discount
and non-cash interest); (ii) provision for taxes; (iii) depreciation; (iv)
amortization; and (v) other expense less other income, all determined in
accordance with generally accepted accounting principles.
(5) For purposes of these computations, the ratio of earnings to fixed charges
has been calculated by dividing earnings by fixed charges. Earnings, as used
to compute the ratio, equal the sum of income before income taxes,
reorganization items and extraordinary items, and fixed charges excluding
capitalized interest. Fixed charges are the total interest expenses
including capitalized interest, amortization of debt expense and a rental
factor that is representative of an interest factor (estimated to be one
third of annual rent expense) on operating leases.
(6) Includes $758,300 and $792,557 of long-term debt reclassified as current at
December 31, 1992 and December 26, 1991, respectively.
(7) Includes current portion of long-term debt.
(8) The Company has never paid a cash dividend.
9
<PAGE> 13
SUMMARY UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The table below presents summary unaudited pro forma consolidated
statements of operations of the Company for the periods December 30, 1994 to
March 30, 1995 and January 1, 1994 to December 29, 1994 as if the Company's
issuance of $160 million principal amount of Old Notes and the application of
the proceeds thereof had occurred at the start of fiscal year 1994. This summary
data should be read in conjunction with the unaudited pro forma financial
statements of the Company and the notes thereto appearing elsewhere herein. See
"Unaudited Pro Forma Consolidated Financial Data." The unaudited pro forma
results of operations do not necessarily indicate either future results or the
results that would have occurred if the events described above had occurred on
the dates indicated.
<TABLE>
<CAPTION>
DECEMBER 30, 1994 JANUARY 1
TO TO
MARCH 30, 1995 DECEMBER 29, 1994
----------------- -----------------
(IN THOUSANDS)
<S> <C> <C>
Net sales.................................................... $ 155,824 $ 599,029
Cost of sales................................................ 113,689 432,746
Selling, general and administrative(1)....................... 33,446 117,606
--------- ---------
Operating income............................................. 8,689 48,677
Interest expense, net........................................ 14,917 59,268
Other income, net............................................ 591 1,718
--------- ---------
Loss before income taxes..................................... (5,637) (8,873)
Income tax provision (benefit)............................... (798) 876
--------- ---------
Net loss..................................................... $ (4,839) $ (9,749)
========= =========
Pro forma ratio of earnings to fixed charges(2).............. -- --
Pro forma deficiency in the coverage of fixed charges by
earnings before fixed charges.............................. (5,806) (9,851)
</TABLE>
- ---------------
(1) Fiscal year January 1 to December 29, 1994 benefitted from a $9,457
settlement of a patent infringement suit.
(2) For purposes of these computations, the ratio of earnings to fixed charges
has been calculated by dividing earnings by fixed charges. Earnings, as
used to compute the ratio, equal the sum of income before income taxes and
fixed charges excluding capitalized interest. Fixed charges are the total
interest expenses including capitalized interest, amortization of debt
expense and a rental factor that is representative of an interest factor
(estimated to be one third of annual rent expense) on operating leases.
10
<PAGE> 14
RISK FACTORS
Prospective investors should carefully consider the following factors as
well as the other information set forth in this Prospectus.
HIGH LEVEL OF INDEBTEDNESS; ABILITY TO SERVICE INDEBTEDNESS
The Company is highly leveraged. At March 30, 1995, after giving effect to
the sale of the Old Notes and the use of the proceeds therefrom, the Company had
approximately $531 million of long-term debt. In addition, subject to the
restrictions in the Company's debt instruments (including the Indenture), the
Company may incur additional indebtedness from time to time to finance
acquisitions or capital expenditures or for other purposes.
The level of the Company's indebtedness could have important consequences
to holders of the Notes, including the following: (i) a substantial portion of
the Company's cash flow from operations must be dedicated to debt service and
will not be available for other purposes; (ii) the Company's ability to obtain
additional financing in the future, as needed, may be limited; (iii) the
Company's leveraged position and covenants contained in its debt instruments
(including the Indenture) could limit its ability to expand and make capital
improvements and acquisitions; and (iv) the Company's level of indebtedness
could make it more vulnerable to economic downturns, limit its ability to
withstand competitive pressures and limit its flexibility in reacting to changes
in the industry and economic conditions generally. The failure of the Company to
comply with covenants contained in the Indenture, the instruments governing the
Revolving Credit Facility and the Letter of Credit Facility and in the GECC
Lease Documents (as defined) would permit the Company's lenders under these
instruments to accelerate the maturity of the obligations thereunder and to
create cross-defaults permitting acceleration of substantially all of the
indebtedness of the Company.
The Company anticipates that its operating cash flow will be sufficient to
meet its operating expenses and to service its interest payments on the Notes
and its other outstanding indebtedness. The Company will be required to satisfy
its $80 million mandatory redemption obligation with respect to the Notes in
1999 and to pay the remaining principal amount of the Notes in 2000.
Additionally, the Company's 10.25% Senior Notes (the "10.25% Notes"), of which
$219.3 million principal amount is outstanding, will mature in December 2001.
The Company expects that in order to make these payments it will be required to
pursue one or more alternative strategies, such as refinancing its indebtedness,
selling additional equity capital, reducing or delaying capital expenditures, or
selling assets. There can be no assurance that any of these strategies could be
effected on satisfactory terms, if at all. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources."
CHANGE OF CONTROL
Upon the occurrence of a Change of Control (which includes the acquisition
by any person of more than 50% of the Company's Common Stock), each holder of
the Notes will have the right to require the Company to repurchase such holder's
Notes at a price equal to 100% of the outstanding principal amount thereof,
together with interest thereon to the date of purchase and the Yield-Maintenance
Amount with respect thereto. In addition, in the event of a change of control
(defined in the indenture governing the 10.25% Notes in a manner substantially
similar to the Indenture), the holders of the 10.25% Notes will have the right
to require the Company to repurchase all of their 10.25% Notes at a purchase
price equal to 101% of their aggregate principal amount plus accrued and unpaid
interest, if any, to the date of purchase. There can be no assurance that the
Company will have, or will have access to, sufficient funds to pay the required
purchase price for all Notes and 10.25% Notes tendered by holders under such
circumstances. The Company's failure to repurchase the Notes and the 10.25%
Notes tendered in connection therewith would constitute an event of default
under the Notes, the indenture governing the 10.25% Notes and under certain
other debt instruments of the Company. Certain of the events constituting a
Change of Control are beyond the control of the Company. As of July 1, 1995, The
Malcolm I. Glazer Trust (the "Glazer Trust") beneficially owned approximately
31% of the Company's Common Stock. The Company has been informed that on June
16, 1995 the Glazer Trust entered into a letter of intent with Zapata
Corporation ("Zapata") which contemplates
11
<PAGE> 15
the sale of all of the Glazer Trust's shares of the Company's Common Stock to
Zapata. See "Security Ownership." Zapata has publicly announced its intention to
evaluate the possibility of acquiring additional shares or proposing a merger
with or acquisition of Envirodyne in the future.
LIQUIDITY
The Company finances its working capital needs through a combination of
cash generated through operations and borrowings under the Revolving Credit
Facility. The availability of funds under the Revolving Credit Facility is
subject to the Company's compliance with certain covenants (which are
substantially similar to those included in the Indenture), to borrowing base
limitations measured by accounts receivable and inventory of the Company and to
reserves which may be established in the discretion of the lenders. The
available borrowing capacity under the Revolving Credit Facility was
approximately $16 million at June 29, 1995.
EFFECT OF INTERCREDITOR ARRANGEMENTS WITH LENDERS
The Company has entered into intercreditor agreements with the lenders
under the Revolving Credit Facility and the Letter of Credit Facility and with
General Electric Capital Corporation. These intercreditor arrangements provide
that with respect to the guarantees by the Subsidiary Guarantors and the
Collateral Pool, the lenders under the Letter of Credit Facility will have a
right to payment prior to the holders of the Notes and the holders of
obligations under the Revolving Credit Facility, who will share such security on
a pari passu basis. In addition, the intercreditor arrangements restrict the
ability of the holders of the Notes to exercise collateral rights or remedies
without the consent of the lenders under the Revolving Credit Facility and the
Letter of Credit Facility. See "Description of Intercreditor Arrangements."
COMPETITION
The Company faces competition in the U.S. and internationally from
competitors which may have substantially greater financial and other resources
than the Company. See "Business -- Viskase -- Competition." Viscofan, S.A., a
Spanish producer which had been barred from competing in the U.S. market since
1985, was allowed to enter the U.S. small diameter casings market in November
1994. The ten year ban was imposed by an administrative law judge who determined
that Viscofan had violated certain trade and patent laws by infringing on a
valid patent owned by Teepak, Inc. (a U.S. based producer of cellulosic casing),
and misappropriating Viskase's trade secrets. Viskase currently competes against
Viscofan in markets outside the United States in small diameter casings. The
management of Viskase believes that Viskase will experience pricing pressure as
a result of Viscofan's entrance into the United States market.
LIMITS ON COLLATERAL FOR NOTES; FRAUDULENT CONVEYANCE OR TRANSFER
Although the net book value of the Company's assets securing the Notes was
in excess of $400 million as of May 31, 1995, there can be no assurance that the
proceeds from the sale of the collateral included in the Collateral Pool
following a default under the Notes would be sufficient to satisfy the Company's
obligations under the Notes.
The Notes are an obligation of the Company and are guaranteed by the
Subsidiary Guarantors. The Company is a holding company. A substantial amount of
the assets of the Company are held by the Subsidiary Guarantors and a
substantial amount of the Company's operating revenue is derived from operations
of the Subsidiary Guarantors. Accordingly, the Company's ability to make
interest and principal payments when due to holders of the Notes substantially
depends upon the receipt of sufficient funds from the Subsidiary Guarantors. To
the extent that a court were to find that (i) a guarantee was incurred or a
security interest in connection therewith was granted by a Subsidiary Guarantor
with actual intent to hinder, delay or defraud any present or future creditor of
a Subsidiary Guarantor or (ii) such Subsidiary Guarantor did not receive fair
consideration or reasonably equivalent value in exchange for issuing its
guarantee or granting a security interest in connection with such guarantee and
such Subsidiary Guarantor (a) was insolvent on the date that such guarantee was
issued or such security interest was granted, (b) was rendered insolvent by
reason of the
12
<PAGE> 16
issuance of such guarantee or the grant of such security interest, (c) was
engaged in business or a transaction or was about to engage in business or a
transaction for which the remaining assets of such Subsidiary Guarantor
constituted unreasonably small capital, or (d) intended to incur, or believed
that it would incur, debts beyond its ability to pay such debts as they matured,
the court could avoid the obligation incurred by a Subsidiary Guarantor pursuant
to such guarantee or the security interest granted in connection therewith or
potentially subordinate such guarantee to the obligations owed by such
Subsidiary Guarantor to its other creditors. There can be no assurance as to
what standard a court would apply in order to determine solvency. Any legal
challenge of a guarantee on fraudulent conveyance grounds would likely involve,
among other things, consideration of the benefits, if any, realized by a
Subsidiary Guarantor as a result of the issuance by the Company of the Notes. To
the extent any guarantee were avoided as a fraudulent conveyance or held to be
unenforceable for any other reason, holders of the Notes would cease to have any
claim against such Subsidiary Guarantor in respect of such guarantee and would
continue to be creditors of the Company and any Subsidiary Guarantor whose
guarantee was not avoided or otherwise held unenforceable.
The incurrence by the Company of indebtedness (including the Notes) and the
Company's grant of a security interest in connection with such indebtedness may
be subject to review under relevant federal and state fraudulent conveyance and
similar laws in a bankruptcy or reorganization case or similar insolvency
proceeding or a lawsuit by or on behalf of creditors of the Company. Under such
laws, if a court were to find that (i) the obligations (including the Notes)
were incurred or a security interest in connection therewith was granted by the
Company with actual intent to hinder, delay or defraud any present or future
creditor of the Company or (ii) the Company did not receive fair consideration
or reasonably equivalent value in exchange for incurring its obligations or
granting a security interest in connection therewith and the Company either (a)
was insolvent at the time of incurring such obligations or granting such
security interest, (b) was rendered insolvent by reason of incurring such
indebtedness or granting such security interest, (c) was engaged in business or
a transaction or was about to engage in business or a transaction for which the
remaining assets of the Company constituted unreasonably small capital, or (d)
intended to incur, or believed that it would incur, debts beyond its ability to
pay such debts as they matured, the court could avoid such obligations
(including the Notes) or the security interest granted in connection therewith
or potentially subordinate such obligations (including the Notes) to the
obligations owed by the Company to its other creditors. There can be no
assurance as to what standard a court would apply in order to determine
solvency. To the extent any obligations (including the Notes) were avoided as a
fraudulent conveyance or held to be unenforceable for any other reason, holders
of the Notes would cease to have any claim against the Company in respect of
such obligations and would continue to be creditors of any Subsidiary Guarantor
whose guarantee was not avoided or otherwise held unenforceable.
RISE IN RAW MATERIAL PRICES
The total manufactured cost of the Company's products includes the cost of
certain raw materials, particularly certain pulp and resin products. The prices
of such raw materials have fluctuated significantly in the past. Significant
fluctuations in the price of these raw materials, without a coincident ability
to reflect such fluctuations in selling prices, could have a material adverse
effect on the Company's results of operations.
INTERNATIONAL OPERATIONS
International sales and operations may be subject to various risks
including, but not limited to, possible unfavorable exchange rate fluctuations,
political instability, governmental regulations (including import and export
controls), restrictions or currency repatriation, embargoes, labor relations
laws and the possibility of governmental expropriation. Viskase's foreign
operations generally are subject to taxes on the repatriation of funds. In
addition, international operations in certain parts of the world may be subject
to international balance of payments difficulties which may raise the
possibility of delay or loss in the collection of accounts receivable from sales
to customers in those countries.
13
<PAGE> 17
LITIGATION; ENVIRONMENTAL REGULATIONS
The Company is subject to a variety of litigation claims and environmental
regulations, none of which management believes will have a material adverse
effect on the Company's results of operations or financial condition. See
"Business -- Environmental Regulations" and "-- Legal Proceedings" and Note 11
to the Company's Consolidated Financial Statements.
ABSENCE OF PUBLIC MARKET FOR THE NOTES
The New Notes are being offered to the holders of the Old Notes. The Old
Notes were offered and sold to a small number of institutional investors and are
eligible for trading in the Private Offerings, Resale and Trading through
Automatic Linkages ("PORTAL") Market. Prior to the Exchange Offer, there has
been no market for the New Notes and the Company does not intend to apply for
listing of the New Notes on any securities exchange or for quotation through the
National Association of Securities Dealers Automated Quotation System. Future
trading prices of the New Notes will depend upon many factors including
prevailing interest rates, the Company's operating results and the market for
similar securities.
THE EXCHANGE OFFER
PURPOSE AND EFFECT OF THE EXCHANGE OFFER
As a condition to the obligations of the purchasers under the note
agreement relating to the offering of the Old Notes (the "Note Agreement"), the
Company and certain institutional investors entered into the Registration Rights
Agreement on June 20, 1995. Pursuant to the Registration Rights Agreement the
Company agreed (i) to file with the Commission a registration statement under
the Securities Act with respect to the New Notes within 30 days after the
closing of the sale of the Old Notes, (ii) to use its reasonable best efforts to
cause such registration statement to become effective under the Securities Act
as soon as practicable, but in no event later than 120 days after the Closing
Date, and (iii) upon effectiveness of the registration statement, to commence
the Exchange Offer and offer to the holders of the Old Notes the opportunity to
exchange their Old Notes for a like principal amount of New Notes. A copy of the
Registration Rights Agreement has been filed as an exhibit to the Registration
Statement of which this Prospectus is a part. This Registration Statement is
intended to satisfy the Company's obligations under the Registration Rights
Agreement and the Note Agreement.
Following the Consummation (as defined under "-- Termination of Certain
Rights") of the Exchange Offer, holders of Old Notes not tendered will not have
any further registration rights or rights to receive certain specified
liquidated damages and the Old Notes will continue to be subject to certain
restrictions on transfer. See "-- Termination of Certain Rights" and "--
Consequences of Failure to Exchange." Accordingly, the liquidity of the market
for the Old Notes could be adversely affected.
TERMS OF THE EXCHANGE OFFER
Upon the terms and subject to the conditions set forth in this Prospectus
and in the Letter of Transmittal, the Company will accept any and all Old Notes
validly tendered and not withdrawn prior to the Expiration Date. The Company
will issue $1,000 principal amount of New Notes of a series in exchange for each
$1,000 principal amount of outstanding Old Notes of the series accepted in the
Exchange Offer. Holders may tender some or all of their Old Notes pursuant to
the Exchange Offer. However, Old Notes may be tendered only in integral
multiples of $1,000 principal amount.
The form and terms of the New Notes are the same in all material respects
as the form and terms of the Old Notes except that (i) the New Notes will have
been registered under the Securities Act and hence will not bear legends
restricting their transfer pursuant to the Securities Act and (ii) holders of
New Notes will not be entitled to certain rights of holders of Old Notes under
the Registration Rights Agreement which will terminate upon the Consummation of
the Exchange Offer. The New Notes will evidence the same debt as the Old Notes
(which they replace) and will be issued under, and be entitled to the benefits
of, the Indenture governing the Old Notes.
14
<PAGE> 18
As of the date of this Prospectus, $160,000,000 aggregate principal amount
of the Old Notes was outstanding, $115,000,000 of which was registered in the
name of Cede & Co., as nominee for The Depository Trust Company (the
"Depository" or "DTC"), and there were approximately 20 beneficial owners.
Solely for reasons of administration (and for no other purpose) the Company has
fixed the close of business of , 1995 as the record date for the
Exchange Offer for purposes of determining the persons to whom this Prospectus
and the Letter of Transmittal will be mailed initially. Only a registered holder
of Old Notes (or such holder's legal representative or attorney-in-fact) as
reflected on the records of the Trustee under the Indenture may participate in
the Exchange Offer. There will be no fixed record date for determining
registered holders of Old Notes entitled to participate in the Exchange Offer.
Holders of Old Notes do not have any appraisal or dissenters' rights under
the Delaware General Corporation Law or the Indenture in connection with the
Exchange Offer. The Company intends to conduct the Exchange Offer in accordance
with the applicable requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
The Company shall be deemed to have accepted validly tendered Old Notes
when, as and if the Company has given oral or written notice thereof to the
Exchange Agent. The Exchange Agent will act as agent for the tendering holders
of Old Notes for the purposes 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 (or,
in the case of Old Notes tendered by book-entry transfer through DTC, will be
credited to an account maintained with DTC), without expense, to the tendering
holder thereof as promptly as practicable after the Expiration Date. See "--
Procedures for Tendering."
Holders who tender Old Notes in the Exchange Offer will not be required to
pay brokerage commissions or fees or, subject to the instructions in the Letter
of Transmittal, transfer taxes with respect to the exchange of Old Notes
pursuant to the Exchange Offer. The Company will pay all charges and expenses,
other than certain applicable taxes, in connection with the Exchange Offer. See
"-- Fees and Expenses."
EXPIRATION DATE; EXTENSIONS; AMENDMENTS
The term "Expiration Date" shall mean 5:00 p.m., New York City time, on
, 1995, unless the Company, in its sole discretion, extends the
Exchange Offer, in which case the term "Expiration Date" shall mean the latest
date and time to which the Exchange Offer is extended.
In order to extend the Exchange Offer, the Company will notify the Exchange
Agent of any extension by oral 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.
The Company reserves the right, in its sole discretion, (i) to delay
accepting any Old Notes, (ii) to extend the Exchange Offer, (iii) if any of the
conditions set forth below under "-- Conditions of the Exchange Offer" shall not
have been satisfied, to terminate the Exchange Offer by giving oral or written
notice of such delay, extension or termination to the Exchange Agent, or (iv) to
amend the terms of the Exchange Offer in any manner. Any such delay in
acceptance, extension, termination or amendment will be followed as promptly as
practicable by a public announcement thereof. If the Exchange Offer is amended
in a manner determined by the Company to constitute a material change, the
Company will promptly disclose such amendments by means of a prospectus
supplement that will be distributed to the registered holders of Old Notes, and
the Company will extend the 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 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 Exchange
Offer, the Company shall not have an obligation to publish, advertise, or
otherwise communicate any such public announcement, other than by making a
timely release to the Dow Jones News Service.
15
<PAGE> 19
PROCEDURES FOR TENDERING
Only a registered holder of Old Notes may tender such Old Notes in the
Exchange Offer. To tender in the Exchange Offer, a holder must complete, sign
and date the Letter of Transmittal, or a facsimile thereof, have the signatures
thereon guaranteed if required by the Letter of Transmittal, and mail or
otherwise deliver such Letter of Transmittal or such facsimile, together with
the Old Notes and any other required documents, to the Exchange Agent at the
address set forth below under "-- Exchange Agent" for receipt prior to the
Expiration Date; provided, however, that in lieu of the foregoing, a holder may
either (i) tender the Old Notes pursuant to the procedure for book-entry tender
set forth below, or (ii) comply with the guaranteed delivery procedure set forth
below.
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 METHOD OF DELIVERY OF OLD NOTES AND THE LETTER OF TRANSMITTAL AND ALL
OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT 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. 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 TRANSACTION 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. See "Instruction
to Registered Holder from Beneficial Owner" included with the Letter of
Transmittal.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be guaranteed by an Eligible Institution (as defined) unless
the Old Notes tendered pursuant thereto are tendered (i) by a registered holder
who has not completed the box entitled "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 of one of the following signature guarantee programs: the Securities
Transfer Agents Medallion Program (STAMP), the New York Stock Exchange Medallion
Signature Program (MSP) and the Stock Exchange Medallion Program (SEMP) (an
"Eligible Institution").
If the Letter of Transmittal is signed by a person other than the
registered holder of any Old Notes listed therein, such Old Notes must be
endorsed or accompanied by a properly completed bond power, signed by such
registered holder as such registered holder's name appears on such Old Notes.
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 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 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
16
<PAGE> 20
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 validly tendered and as to which the defects or
irregularities have not been cured or waived will be returned by the Exchange
Agent to the tendering holders, unless otherwise provided in the Letter of
Transmittal, as soon as practicable following the Expiration Date.
By tendering, each registered holder will represent to the Company that,
among other things, (i) the New Notes to be acquired by the holder and any
beneficial owner(s) of Old Notes ("Beneficial Owner(s)") in connection with the
Exchange Offer are being acquired by the holder and any Beneficial Owner(s) in
the ordinary course of business of the holder and any Beneficial Owner(s), (ii)
the holder and each Beneficial Owner are not participating, do not intend to
participate, and have no arrangement or understanding with any person to
participate, in the distribution of the New Notes, (iii) the holder and each
Beneficial Owner acknowledge and agree that any person participating in the
Exchange Offer for the purpose of distributing the New Notes must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction of the New Notes acquired by such
person and cannot rely on the position of the Staff of the Commission set forth
in no-action letters that are discussed herein under "-- Resales of the New
Notes", (iv) the holder and each Beneficial Owner understands that a secondary
resale transaction described in clause (iii) above should be covered by an
effective registration statement containing the selling securityholder
information required by Item 507 of Regulation S-K of the Commission, and (v)
neither the holder nor any Beneficial Owner(s) is an "affiliate," as defined
under Rule 405 of the Securities Act, of the Company except as otherwise
disclosed to the Company in writing.
EXCHANGING BOOK-ENTRY OLD NOTES
The Exchange Agent and DTC have confirmed that any financial institution
that has an account with DTC (a "Participant") may utilize DTC's Automated
Tender Offer Program ("ATOP") to tender Old Notes.
The Exchange Agent will request that DTC establish an account with respect
to the Old Notes for purposes of the Exchange Offer within two business days
after the date of the Exchange Offer. Any Participant may make book-entry
delivery of Old Notes by causing DTC to transfer such Old Notes into such
Exchange Agent's account in accordance with DTC's ATOP procedures for transfer.
However, the exchange for the Old Notes so tendered will only be made after
timely confirmation (a "Book-Entry Confirmation") of such book-entry transfer of
Old Notes into the Exchange Agent's account, and timely receipt by the Exchange
Agent of an Agent's Message (as defined) and any other documents required by the
Letter of Transmittal. The term "Agent's Message" means a message, transmitted
by DTC and received by the Exchange Agent and forming part of a Book-Entry
Confirmation, which states that DTC has received an express acknowledgment from
a Participant tendering Old Notes which are the subject of such Book-Entry
Confirmation that such Participant has received and agrees to be bound by the
terms of the Letter of Transmittal, and that the Company may enforce such
agreement against such Participant.
The method of delivery of Old Notes is at the option and risk of the
tendering holder and, except as otherwise provided in the Letter of Transmittal,
the delivery will be deemed to be made only when actually received by the
Exchange Agent.
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, the Letter of
Transmittal or any other required documents to the Exchange Agent prior to the
Expiration Date or (iii) who cannot comply with the procedure for book-entry
tender on a timely basis, may effect a tender if:
(a) The tender is made 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
17
<PAGE> 21
hand delivery) setting forth the name and address of the holder, the
certificate number(s) of such Old Notes and the principal amount of the Old
Notes being tendered, stating that the tender is being made thereby and
guaranteeing that, within five business days after the Expiration Date, the
Letter of Transmittal (or facsimile thereof) together with the
certificate(s) representing the Old Notes and any other documents required
by the Letter of Transmittal will be deposited by the Eligible Institution
with the Exchange Agent; and
(c) Such properly completed and executed Letter of Transmittal (or
facsimile thereof), as well as the certificate(s) representing all tendered
Old Notes in proper form for transfer and all other documents required by
the Letter of Transmittal, are received by the Exchange Agent within five
business 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, Old Notes tendered pursuant to the
Exchange Offer may be withdrawn at any time prior to the Expiration Date.
To withdraw a tender of Old Notes in the 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 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 (except in the case of
book-entry tenders) and principal amount at maturity (regardless of the means of
tendering) 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 Depositor
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 tendered pursuant to the procedure for book-entry tender set forth
above under "Exchanging Book-Entry Old Notes," a notice of withdrawal must
specify, in lieu of certificate numbers, the name and account number 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 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 have been tendered but which are not accepted for
exchange due to rejection of tender or termination of the Exchange Offer, or
which have been validly withdrawn, will be returned as soon as practicable to
the holder thereof without cost to such holder.
CONDITIONS OF THE EXCHANGE OFFER
Notwithstanding any other term of the Exchange Offer, the Company shall not
be required to accept for exchange, or exchange New Notes for, any Old Notes,
and may terminate the 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 Exchange Offer
which, in the sole judgment of the Company, might materially impair the
ability of the Company to proceed with the Exchange Offer or materially
impair the contemplated benefits of the 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
18
<PAGE> 22
(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 sole judgment of the Company, might materially
impair the ability of the Company to proceed with the Exchange Offer or
materially impair the contemplated benefits of the Exchange Offer to the
Company; or
(c) any law, statute, rule or regulation is proposed, adopted or
enacted, which, in the sole judgment of the Company, might materially
impair the ability of the Company to proceed with the Exchange Offer or
materially impair the contemplated benefits of the Exchange Offer to the
Company; or
(d) any governmental approval has not been obtained, which approval
the Company shall, in its sole discretion, deem necessary for the
consummation of the Exchange Offer as contemplated hereby.
If the Company determines in its sole discretion that any of the conditions
are not satisfied, the Company may (i) refuse to accept any Old Notes and return
(or, in the case of Old Notes tendered by book-entry transfer through DTC,
promptly credit to an account maintained with DTC) all tendered Old Notes to the
tendering holders, (ii) extend the Exchange Offer and retain all Old Notes
tendered prior to the Expiration Date, subject, however, to the rights of
holders to withdraw such Old Notes (see "-- Withdrawal of Tenders") or (iii)
waive such unsatisfied conditions with respect to the Exchange Offer and accept
all validly tendered Old Notes which have not been withdrawn. If such waiver
constitutes a material change to the 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 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
Exchange Offer would otherwise expire during such five to ten business day
period.
TERMINATION OF CERTAIN RIGHTS
Holders of the Old Notes to whom this Exchange Offer is made have special
rights under the Registration Rights Agreement that will terminate upon the
Consummation of the Exchange Offer. Under the Registration Rights Agreement, the
Exchange Offer shall be deemed consummated (the "Consummation") upon the
occurrence of (i) the filing and effectiveness under the Securities Act of a
registration statement relating to the New Notes to be issued in the Exchange
Offer, (ii) the maintenance of such registration statement continuously
effective for a period of not less than the minimum period required under
applicable federal and state securities law (provided that in no event shall
such Exchange Offer remain open and the registration statement relating thereto
remain continuously effective, in each case, for less than 30 days), and (iii)
the delivery by the Company to the Trustee under the Indenture of New Notes in
the same aggregate principal amount as the aggregate principal amount of Old
Notes tendered by holders thereof pursuant to the Exchange Offer. Such special
rights which will terminate include (a) the right to require the Company to
comply with the following: (x) to file with the Commission a registration
statement under the Securities Act with respect to the New Notes within 30 days
after the closing date of the private placement (the "Closing Date"), (y) to use
its reasonable best efforts to cause such registration statement to become
effective under the Securities Act as soon as practicable, but in no event later
than 120 days after the Closing Date (the "Effectiveness Deadline"), and (z)
upon effectiveness of the registration statement, to commence the Exchange Offer
and offer to the holders of the Old Notes the opportunity to exchange their Old
Notes for a like principal amount at maturity of New Notes; and (b) the right to
receive liquidated damages as follows: if the above has not been complied with,
commencing on the 121st day after the Closing Date (the "Registration Default
Date"), the Company will pay liquidated damages to each holder of Old Notes
during the first 90-day period immediately following such Registration Default
Date such that the per annum interest rate on the Notes shall increase to a rate
that is fifty (50) basis points above the interest rate on the Notes immediately
prior to such date and, for each subsequent 90-day period, the per annum
interest shall further increase over the rate then in effect by an additional
twenty-five (25) basis points.
EXCHANGE AGENT
Shawmut Bank Connecticut, National Association, has been appointed as
Exchange Agent for the Exchange Offer. Questions and requests for assistance,
requests for additional copies of this Prospectus or the
19
<PAGE> 23
Letter of Transmittal and requests for Notices of Guaranteed Delivery should be
directed to the Exchange Agent at (203) 986-1271 or addressed as follows:
By Overnight Courier/Mail/Hand: By Facsimile:
Shawmut Bank Connecticut, N.A. Shawmut Bank Connecticut, N.A.
Corporate Trust Operations, MSN 224 Attn: Patricia Williams
777 Main Street, Lower Level (203) 986-7908
Hartford, Connecticut 06115
Attn: Patricia Williams
FEES AND EXPENSES
The expenses of soliciting tenders will be borne by the Company. The
principal solicitations are being made by mail; however, additional
solicitations may be made by telegraph, 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
Exchange Offer and will not make any payments to brokers, dealers or others
soliciting acceptance of the Exchange Offer. The Company, however, will pay the
Exchange Agent reasonable and customary fees for its services and will reimburse
it for its reasonable out-of-pocket expenses in connection therewith.
The cash expenses to be incurred in connection with the Exchange Offer will
be paid by the Company and are estimated in the aggregate to be approximately
$ . 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 Exchange Offer. If, however, a transfer tax is
imposed for any reason other than the exchange of Old Notes pursuant to the
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 submitted with the Letter of Transmittal, the amount of such transfer
taxes will be billed directly to such tendering holder.
CONSEQUENCES OF FAILURE TO EXCHANGE
The Old Notes which are not exchanged for New Notes pursuant to the
Exchange Offer will remain restricted securities under the Securities Act.
Accordingly, such Old Notes may be resold only (i) to the Company (upon
redemption thereof or otherwise), (ii) so long as the Old Notes are eligible for
resale pursuant to Rule 144A under the Securities Act to a person whom the
seller reasonably believes is a qualified institutional buyer within the meaning
of Rule 144A, purchasing for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or other
transfer is being made in reliance on Rule 144A, (iii) in an offshore
transaction in accordance with Regulation S under the Securities Act, but only
in the case of a transfer that is effected by the delivery to the transferee of
Old Notes registered in its name (or its nominee's name) on the books maintained
by the registrar of the Old Notes, (iv) pursuant to an exemption from
registration in accordance with Rule 144 (if available) or Rule 145 under the
Securities Act, (v) in reliance on another exemption from the registration
requirements of the Securities Act, but only in the case of a transfer that is
effected by the delivery to the transferee of Old Notes registered in its name
(or its nominee's name) on the books maintained by the registrar of the Old
Notes, and subject to the receipt by the registrar or co-registrar of a
certification of the transferor and an opinion (satisfactory to the Company) of
counsel (satisfactory to the Company) to the effect that such transfer is in
compliance with the Securities Act, or (vi) pursuant to an effective
registration statement under the Securities Act, in each case in accordance with
any applicable securities laws of any state of the United States. Following the
Consummation of the Exchange Offer, holders of Old Notes will have no further
rights under the Registration Rights Agreement.
20
<PAGE> 24
ACCOUNTING TREATMENT
The carrying value of the Old Notes is not expected to be materially
different from the fair value of the New Notes at the time of the exchange.
Accordingly, no gain or loss for accounting purposes will be recognized. The
expenses of the Exchange Offer will be amortized over the term of the New Notes.
RESALES OF THE NEW NOTES
With respect to resales of New Notes, based on an interpretation by the
staff of the Commission set forth in no-action letters issued to third parties,
the Company believes that any holder or beneficial owner (other than a person
that is an affiliate of the Company within the meaning of Rule 405 under the
Securities Act or a "broker" or "dealer" registered under the Exchange Act) who
exchanges Old Notes for New Notes in the ordinary course of business and who is
not participating, does not intend to participate, and has no arrangement or
understanding with any person to participate, in the distribution of the New
Notes, will be allowed to resell the New Notes to the public without further
registration under the Securities Act and without delivering to the purchasers
of the New Notes a prospectus that satisfies the requirements of Section 10
thereof. The Company has not entered into any arrangement or understanding with
any person to participate in the distribution of the New Notes and, to
management's knowledge, the persons participating in the Exchange Offer are
acquiring the New Notes in the ordinary course of business and have not entered
into any arrangement or understanding with any person to participate in the
distribution of the New Notes. However, if any holder or beneficial owner
acquires New Notes in the Exchange Offer for the purpose of distributing or
participating in a distribution of the New Notes, such holder or beneficial
owner cannot rely on the position of the staff of the Commission enunciated in
Exxon Capital Holdings Corporation (available April 13, 1988) or similar
no-action letters or any similar interpretive letters and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction, unless an exemption from
registration is otherwise available.
A broker or dealer registered under the Exchange Act that acquired Old
Notes for its own account pursuant to its market-making or other trading
activities (other than Old Notes acquired directly from the Company) may
participate in the Exchange Offer but may be deemed to be an underwriter within
the meaning of the Securities Act and, therefore, must deliver a prospectus
relating to the New Notes in connection with any resales by it of New Notes
acquired for its own account in the Exchange Offer. The Company has agreed in
the Registration Rights Agreement that this Prospectus (as it may be amended or
supplemented by the Company) may be used by brokers and dealers in connection
with their resales of the New Notes for a period of six months from the date on
which the Registration Statement relating to the New Notes is declared
effective. The delivery of the Prospectus by a broker or dealer in connection
with its resales of the New Notes does not constitute an admission that such
broker or dealer is an "underwriter" under the Securities Act.
As contemplated by the above no-action letters and the Registration Rights
Agreement, each holder participating in the Exchange Offer is required by the
Letter of Transmittal to represent that (i) the New Notes are to be acquired by
the holder and any beneficial owners in the ordinary course of business, (ii)
the holder and any beneficial owners are not engaging and do not intend to
engage in the distribution of the New Notes, (iii) neither the holder nor any
beneficial owner is an affiliate of the Company within the meaning of Rule 405
under the Securities Act, and (iv) the holder and each beneficial owner
acknowledge that if such holder or beneficial owner participates in the Exchange
Offer for the purpose of distributing the New Notes such holder or beneficial
owner must comply with the registration and prospectus delivery requirements of
the Securities Act and cannot rely on the above no-action letters. See "Plan of
Distribution."
21
<PAGE> 25
THE COMPANY
Envirodyne Industries, Inc. manufactures food packaging products and
foodservice supplies through three primary operating subsidiaries -- Viskase
Corporation ("Viskase"), Sandusky Plastics, Inc. (together with Sandusky
Plastics of Delaware, Inc. "Sandusky") and Clear Shield National, Inc. ("Clear
Shield"). Viskase is the leading producer of cellulosic casings used in
preparing and packaging processed meat products and is a major producer of heat
shrinkable plastic bags and specialty films for packaging and preserving fresh
and processed meat products, poultry and cheeses. The Company is also a leading
domestic and international manufacturer of plasticized polyvinyl chloride
("PVC") films, primarily for use in packaging food items. Through Sandusky, the
Company is a producer of thermoformed and injection molded plastic containers,
used in the packaging of cultured dairy and delicatessen products, and of
horticultural trays and inserts. Finally, through Clear Shield, the Company is a
major domestic producer of disposable plastic cutlery, drinking straws, custom
dining kits and related products.
Envirodyne Industries, Inc. was incorporated under the laws of the state of
Delaware in 1970 and its principal executive offices are located at 701 Harger
Road, Suite 190, Oak Brook, Illinois 60521 (tel. 708-571-8800).
THE SUBSIDIARY GUARANTORS
The Old Notes are and the New Notes will be unconditionally guaranteed, on
a secured basis, as to payment of principal, the Yield-Maintenance Amount, if
any, and interest, jointly and severally, by the Subsidiary Guarantors, each of
which is a direct or indirect wholly-owned subsidiary of the Company. As of the
date hereof, the Subsidiary Guarantors are Viskase, Viskase Holding Corporation,
Viskase Sales Corporation, Sandusky Plastics, Inc., Sandusky Plastics of
Delaware, Inc. and Clear Shield National, Inc. The Indenture requires the
Company to cause future Significant Domestic Subsidiaries (as defined in the
Indenture), if any, of the Company to become Subsidiary Guarantors of the Notes.
USE OF PROCEEDS
The Company will receive no proceeds from the exchange of New Notes for Old
Notes.
The aggregate proceeds from the sale by the Company of the Notes were $160
million. In addition, concurrently with the sale of the Old Notes, the Company
borrowed $4 million under the Revolving Credit Facility. The Company used these
funds to (i) repay the Company's $86.1 million domestic term loan facility (the
"Bank Term Loan"), (ii) reduce the amount of the Company's revolving credit
obligations by $68.3 million and (iii) pay transaction fees and expenses.
The following table illustrates the sources and uses of these funds
(dollars in thousands):
<TABLE>
<S> <C>
Sources of Proceeds:
Sale of Notes................................................ $160,000
Revolving Credit Facility.................................... 4,000
--------
$164,000
========
Use of Proceeds:
Repayment of Bank Term Loan.................................. $ 86,125
Reduction of revolving credit obligations.................... 68,316
General corporate purposes................................... 2,359
Fees and expenses............................................ 7,200
--------
$164,000
========
</TABLE>
22
<PAGE> 26
CAPITALIZATION
The following table sets forth the unaudited historical capitalization of
the Company as of March 30, 1995 and the unaudited pro forma capitalization of
the Company as of March 30, 1995 after giving effect to the issuance of $160
million principal amount of Old Notes and the refinancing of the Company's bank
debt with the proceeds therefrom.
<TABLE>
<CAPTION>
MARCH 30, 1995
-------------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- -----------
(UNAUDITED) (IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C>
Current maturity of bank term loan...................... $ 11,100 $ (11,100)(1)
Current maturity of Viskase capital lease obligation.... 6,012 $ 6,012
Current maturity of Viskase Limited term loan........... 2,062 2,062
Other................................................... 9,047 (6,199)(2) 2,848
--------- --------- ---------
Total short-term debt including current portion of
long-term debt........................................ $ 28,221 $ (17,299) $ 10,922
========= ========= =========
Bank Credit Agreement:
Term loan due 1999.................................... $ 77,800 $ (77,800)(1)
Revolving loan due 1999............................... 62,112 (62,112)(1)
10.25% Senior Notes Due 2001............................ 219,262 $ 219,262
Old Notes............................................... 160,000(3) 160,000
Viskase capital lease obligation........................ 141,182 141,182
Viskase Limited term loan............................... 9,279 9,279
Other................................................... 1,309 1,309
--------- --------- ---------
Total long-term debt.................................... 510,944 20,088 531,032
--------- --------- ---------
Total stockholders' equity (deficit).................... 134,010 (4,243)(4) 129,767
--------- --------- ---------
Total capitalization.................................... $ 673,175 $ (1,454) $ 671,721
========= ========= =========
</TABLE>
- ---------------
(1) Elimination of prior secured bank debt.
(2) Represents outstanding lines of credit eliminated using excess cash from
refinancing.
(3) Principal amount of Old Notes, consisting of $151,500,000 of Series A Notes
and $8,500,000 of Series C Notes.
(4) Represents extraordinary loss, net of tax, for write-off of unamortized
deferred financing costs related to refinanced debt.
23
<PAGE> 27
UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL DATA
The following unaudited pro forma consolidated statements of operations for
periods December 30, 1994 to March 30, 1995 and January 1, 1994 to December 29,
1994 give effect to the Company's issuance of $160 million principal amount of
Old Notes used to refinance existing indebtedness and for general corporate
purposes as if the transaction had been completed on December 31, 1993. The
following unaudited pro forma consolidated balance sheet gives effect to the
refinancing as if the refinancing had been completed on March 30, 1995. The pro
forma information is based on the historical financial statements of the Company
and the adjustments and assumptions described in the accompanying notes to the
unaudited pro forma financial statements. The pro forma financial statements
should be read in conjunction with the historical consolidated financial
statements of the Company, including notes thereto contained elsewhere herein.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
MARCH 30, 1995
----------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
----------- ----------- ----------
(UNAUDITED) (IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents..................................... $ 7,209 $ 236(1) $ 7,445
Receivables, net......................................... 89,007 89,007
Inventories.............................................. 124,470 124,470
Other current assets..................................... 30,311 30,311
--------- --------- --------
Total current assets............................. 250,997 236 251,233
Property, plant and equipment, including those under
capital lease............................................ 518,958 518,958
Less accumulated depreciation and amortization........... 46,166 46,166
--------- --------- --------
Property, plant and equipment, net......................... 472,792 472,792
Deferred financing costs................................... 9,130 147(2) 9,277
Other assets............................................... 45,842 45,842
Excess reorganization value................................ 143,252 143,252
--------- --------- --------
$ 922,013 $ 383 $922,396
========= ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt including current portion of long-term
debt and obligation under capital lease............... $ 28,221 $ (17,299)(4) $ 10,922
Accounts payable......................................... 34,680 34,680
Accrued liabilities...................................... 73,805 4,637(3) 78,442
--------- --------- --------
Total current liabilities........................ 136,706 (12,662) 124,044
Long-term debt including obligation under capital lease.... 510,944 20,088(5) 531,032
Accrued employee benefits.................................. 56,927 56,927
Deferred and noncurrent income taxes....................... 83,426 (2,800)(6) 80,626
Commitments and contingencies
Stockholders' equity (deficit):
Preferred stock, $.01 par value; none outstanding........
Common stock, $.01 par value; 13,515,000 shares issued
and outstanding....................................... 135 135
Paid in capital.......................................... 134,865 134,865
Accumulated (deficit).................................... (7,507) (4,243)(7) (11,750)
Cumulative foreign currency translation adjustments...... 6,517 6,517
--------- --------- --------
Total stockholders' equity....................... 134,010 (4,243) 129,767
--------- --------- --------
$ 922,013 $ 383 $922,396
========= ========= ========
</TABLE>
24
<PAGE> 28
- ---------------
(1) Represents excess cash remaining from refinancing after repayments of
existing debt and payment of transaction costs.
(2) Represents net change in deferred financing fees:
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
--------------
(IN THOUSANDS)
<S> <C>
Deferred financing fees and expenses related to Old Notes incurred
subsequent to the balance sheet date................................. $ 7,190
Deferred financing related to refinanced debt written off.............. (7,043)
--------
Net increase in deferred financing fees................................ $ 147
========
</TABLE>
(3) Represents deferred financing fees and expenses related to the Old Notes
incurred subsequent to the balance sheet date, $7,190, less elimination of
accrued interest related to refinanced debt, $2,553.
(4) Adjustment of short-term debt, including current portion of long-term debt
obligations under capital lease, consists of the following:
<TABLE>
<S> <C>
Repayment of Senior Bank Term Loan......................................... $11,100
Excess cash applied to reduce outstanding credit lines..................... 6,199
-------
Total decrease in short-term debt.......................................... $17,299
=======
</TABLE>
(5) Adjustment of long-term debt consists of the following:
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS
--------------
(IN THOUSANDS)
<S> <C>
Old Notes.............................................................. $160,000
Repayment of Senior Bank Term Loan..................................... (77,800)
Repayment of Senior Bank Revolving Loans............................... (62,112)
--------
Net increase in long-term debt......................................... $ 20,088
========
</TABLE>
(6) Approximate tax effect of extraordinary loss on debt refinancing.
(7) Represents extraordinary loss, net of tax, for write-off of unamortized
deferred financing costs related to refinanced debt.
25
<PAGE> 29
UNAUDITED PRO FORMA CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
DECEMBER 30, 1994 TO MARCH 30, 1995
-----------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
NET SALES.............................................. $ 155,824 $ 155,824
Costs and Expense
Cost of sales........................................ 113,689 113,689
Selling, general and administrative.................. 29,536 29,536
Amortization of intangibles and excess reorganization
value............................................. 3,910 3,910
---------- ------- ----------
OPERATING INCOME....................................... 8,689 8,689
Interest income...................................... 64 64
Interest expense..................................... 13,434 1,547(1) 14,981
Other income, net.................................... 591 591
---------- ------- ----------
NET INCOME (LOSS) BEFORE INCOME TAXES.................. (4,090) (1,547) (5,637)
Income tax provision (benefit)....................... (195) (603)(2) (798)
---------- ------- ----------
NET (LOSS)............................................. $ (3,895) $ (944) $ (4,839)
========== ======= ==========
WEIGHTED AVERAGE COMMON SHARES......................... 13,515,000 13,515,000
========== ==========
PER SHARE AMOUNTS:
NET (LOSS)............................................. $ (0.29) $ (0.36)
========== ==========
</TABLE>
<TABLE>
<CAPTION>
JANUARY 1 TO DECEMBER 29, 1994
-----------------------------------------
PRO FORMA
HISTORICAL ADJUSTMENTS PRO FORMA
---------- ----------- ----------
(IN THOUSANDS)
<S> <C> <C> <C>
NET SALES.............................................. $ 599,029 $ 599,029
Costs and Expense
Cost of sales........................................ 432,746 432,746
Selling, general and administrative.................. 111,451 111,451
Patent infringement settlement income................ 9,457 9,457
Amortization of intangibles and excess reorganization
value............................................. 15,612 15,612
---------- ------- ----------
OPERATING INCOME....................................... 48,677 48,677
Interest income...................................... 307 307
Interest expense..................................... 49,514 10,061(1) 59,575
Other income, net.................................... 1,668 1,668
Minority interest in loss of subsidiary.............. 50 50
---------- ------- ----------
NET INCOME (LOSS) BEFORE INCOME TAXES.................. 1,188 (10,061) (8,873)
Income tax provision (benefit)....................... 4,800 (3,924)(2) 876
---------- ------- ----------
NET (LOSS)............................................. $ (3,612) $(6,137) $ (9,749)
========== ======= ==========
WEIGHTED AVERAGE COMMON SHARES......................... 13,500,703 13,500,703
========== ==========
PER SHARE AMOUNTS:
NET (LOSS)............................................. $ (0.27) $ (0.72)
========== ==========
</TABLE>
26
<PAGE> 30
- ---------------
(1) Adjustments to increase interest expense based upon pro forma debt
capitalization following the issuance of $160 million of Old Notes and
repayment of the prior bank debt.
<TABLE>
<CAPTION>
MARCH 30, DECEMBER 29,
1995 1994
--------- ------------
<S> <C> <C>
Interest associated with the Old Notes....................... $ 5,160 $ 20,640
Interest associated with the retired Senior Bank Term Loan... (2,384) (7,817)
Interest associated with the retired Senior Bank Revolving
Loans...................................................... (825) (1,500)
Interest associated with elimination of outstanding credit
lines...................................................... (404) (1,262)
------- --------
Net increase in interest expense............................. $ 1,547 $ 10,061
======= ========
</TABLE>
Amounts include amortization of deferred financing fees and commitment
fees.
(2) Reflects income tax effect of the increased interest expense.
27
<PAGE> 31
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
The following selected historical consolidated financial data of the Company
for the periods January 1, 1990 to December 29, 1994; January 1, 1990 to
December 31, 1992 for Balance Sheet Data and January 1, 1990 to December 31,
1993 for Statement of Operations (Pre-consummation); and the periods January 1,
1993 to December 29, 1994 for Balance Sheet Data and January 1, 1994 to December
29, 1994 for Statement of Operations (Post-consummation) are derived from the
Company's consolidated financial statements audited by Coopers & Lybrand L.L.P.,
independent accountants. The historical results of operations for the periods
ended December 31, 1992 and prior for Balance Sheet Data and December 31, 1993
and prior for Statement of Operations consist of the periods prior to the
implementation of the Plan of Reorganization and Fresh Start Reporting,
Pre-consummation. Subsequent periods reflect the Fresh Start Reporting that took
place upon the implementation of the Plan of Reorganization, Post-consummation.
The information below should be read in conjunction with the Consolidated
Financial Statements of Envirodyne Industries, Inc. and Subsidiaries and related
notes thereto and Management's Discussion and Analysis of Financial Condition
and Results of Operations appearing elsewhere in this Prospectus. Results for
the interim periods are not necessarily indicative of results for the years as a
whole.
<TABLE>
<CAPTION>
POST-CONSUMMATION PRE-CONSUMMATION
-------------------------------------- ----------------------------------------------------------
DECEMBER 30, DECEMBER 27, DECEMBER 28,
1994 JANUARY 1 JANUARY 1 JANUARY 1 1991 1990 JANUARY 1
TO TO TO TO TO TO TO
MARCH 30, MARCH 31, DECEMBER 29, DECEMBER 31, DECEMBER 31, DECEMBER 26, DECEMBER 27,
1995(1) 1994 1994(1) 1993(1) 1992 1991 1990
------------ ---------- ------------ ------------ ------------ ------------ ------------
(UNAUDITED) (UNAUDITED) (IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS:
Net sales..................... $155,824 $142,593 $599,029 $ 587,385 $ 575,705 $ 543,969 $ 544,138
Cost of sales................. 113,689 102,119 432,746 416,410 398,876 374,214 368,823
Selling, general and
administrative expenses...... 33,446 30,764 127,063 117,343 109,623 108,256 104,154
Patent infringement settlement
income....................... 9,457
-------- -------- -------- ---------- ---------- ---------- ----------
Operating Income.............. 8,689 9,710 48,677 53,632 67,206 61,499 71,161
Interest expense, net......... 13,370 11,998 49,207 30,259 105,558 101,450 99,898
Minority interest in loss of
subsidiary................... 50 50 717
Other income (expense), net... 591 281 1,668 (5,540) (12,644)(2) (332) 6,563
-------- -------- -------- ---------- ---------- ---------- ----------
Income (loss) before income
taxes, reorganization items
and extraordinary gain
(loss)....................... (4,090) (1,957) 1,188 18,550 (50,996) (40,283) (22,174)
Reorganizations item, net..... 104,745
-------- -------- -------- ---------- ---------- ---------- ----------
Income (loss) before income
taxes, and extraordinary gain
(loss)....................... (4,090) (1,957) 1,188 (86,195) (50,996) (40,283) (22,174)
Provision (benefit) for income
taxes........................ (195) 550 4,800 12,000 (14,000) (11,030) (7,000)
-------- -------- -------- ---------- ---------- ---------- ----------
Income (loss) before
extraordinary items.......... (3,895) (2,507) (3,612) (98,195) (36,996) (29,253) (15,174)
Extraordinary gain (loss), net
of tax(3).................... 183,784 (2,502)
-------- -------- -------- ---------- ---------- ---------- ----------
Net income (loss)............. $ (3,895) ($ 2,507) $ (3,612) $ 85,589 $ (36,996) $ (31,755) $ (15,174)
======== ======== ======== ========== ========== ========== ==========
Per share (loss) before
extraordinary gains (loss)... (.29) (0.19) (.27) (306,859) (115,613) (91,416) (47,419)
Per share income (loss)
including extraordinary gain
(loss)....................... (.29) (0.19) (.27) 267,466 (115,613) (99,234) (47,419)
OTHER DATA:
EBDIAT(4)..................... $ 22,585 22,556 $100,064 $ 106,030 $ 116,516 $ 105,613 $ 113,524
Depreciation and amortization
under capital lease.......... 9,986 9,000 35,775 36,687 33,763 28,994 26,726
Amortization of intangibles
and excess reorganization
value........................ 3,910 3,846 15,612 15,711 15,547 15,120 15,637
Amortization of deferred
financing fees and
discount..................... 549 362 1,569 2,418 30,820 26,792 24,022
Capital expenditures.......... 7,631 7,354 32,566 40,887 29,018 44,938 49,478
Ratio of earnings to fixed
charges(5)................... 1.00 1.52
Deficiency in the coverage of
fixed charges by earnings
before fixed charges......... (4,259) (2,202) (52,200) (41,301) (23,000)
BALANCE SHEET DATA:
Total assets.................. $922,013 885,886 $896,636 $ 867,680 $1,026,962 $1,086,457 $1,062,508
Working capital............... 114,291 98,909 91,727 82,440 (736,643)(6) (708,064)(6) 87,683
Cash and cash equivalents and
time deposits................ 7,209 3,937 7,289 7,743 14,062 16,075 29,133
Net property, plant and
equipment including those
under capital lease.......... 472,792 455,172 470,338 455,554 452,401 476,604 421,269
Debt obligations:
Short-term debt(7)........... 28,221 18,888 25,798 15,610 40,365 34,937 42,670
Long-term debt reclassified
as current................. 758,300 792,557
Long-term debt............... 510,944 500,231 489,358 482,379 12,524 18,833 761,606
Stockholders' equity
(deficit)(8)................. 134,010 133,057 135,349 135,000 (83,545) (40,303) (8,275)
</TABLE>
- ---------------
(1) Due to the implementation of the Plan of Reorganization and Fresh Start
Reporting, financial statements including outstanding shares for the new
restructured company (effective December 31, 1993) are not comparable to
those of the prior years.
(2) The 1992 amount includes $3,945 of fees and expenses associated with the
renegotiation of debt.
(3) Includes an extraordinary gain from the implementation of the Plan of
Reorganization in 1993, and an extraordinary loss on debt extinguishment in
1991.
(4) "EBDIAT" represents, for any relevant period, net income (loss) (except that
extraordinary, unusual and non-recurring gains and losses are excluded) plus
(i) net interest expense (including amortization of original issue discount
and non-cash interest); (ii) provision for taxes; (iii) depreciation; (iv)
amortization; and (v) other expense less other income, all determined in
accordance with generally accepted accounting principles.
(5) For purposes of these computations, the ratio of earnings to fixed charges
has been calculated by dividing earnings by fixed charges. Earnings, as used
to compute the ratio, equal the sum of income before income taxes,
reorganization items and extraordinary items, and fixed charges excluding
capitalized interest. Fixed charges are the total interest expenses
including capitalized interest, amortization of debt expense and a rental
factor that is representative of an interest factor (estimated to be one
third of annual rent expense) on operating leases.
(6) Includes $758,300 and $792,557 of long-term debt reclassified as current at
December 31, 1992 and December 26, 1991, respectively.
(7) Includes current portion of long-term debt.
(8) The Company has never paid a cash dividend.
28
<PAGE> 32
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The Company's operations include food packaging products (Viskase and
Sandusky) and disposable foodservice supplies (Clear Shield).
The accompanying management's discussion and analysis of financial
condition and results of operations should be read in conjunction with the
following table:
<TABLE>
<CAPTION>
THREE MONTHS ENDED DECEMBER 27,
---------------------- JANUARY 1 JANUARY 1, 1991 TO
MARCH 30, MARCH 31, TO DECEMBER TO DECEMBER DECEMBER 31,
1995 1994 29, 1994 31, 1993 1992
--------- --------- ------------ ------------ ------------
(IN THOUSANDS) (IN THOUSANDS)
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net sales:
Food packaging products................ $ 138,596 $ 126,864 $530,179 $522,363 $513,777
Disposable foodservice supplies........ 17,228 15,875 68,996 66,383 62,918
Other and eliminations................. (146) (146) (1,361) (990)
--------- --------- -------- -------- --------
$ 155,824 $ 142,593 $599,029 $587,385 $575,705
========= ======== ======== ======== ========
Operating income:
Food packaging products................ $ 8,990 $ 10,153 $ 48,145 $ 53,432 $ 66,949
Disposable foodservice supplies........ 1,264 1,148 6,514 5,223 5,913
Other and eliminations................. (1,565) (1,591) (5,982) (5,023) (5,656)
--------- --------- -------- -------- --------
$ 8,689 $ 9,710 $ 48,677 $ 53,632 $ 67,206
========= ======== ======== ======== ========
Depreciation and amortization under
capital lease and amortization of
intangibles expense:
Food packaging products................ $ 12,768 $ 11,499 $ 47,207 $ 46,715 $ 43,857
Disposable foodservice supplies........ 1,110 1,333 4,125 5,624 5,402
Corporate and other.................... 18 14 55 59 51
--------- --------- -------- -------- --------
$ 13,896 $ 12,846 $ 51,387 $ 52,398 $ 49,310
========= ======== ======== ======== ========
Capital expenditures:
Food packaging products................ $ 6,053 $ 6,638 $ 28,534 $ 37,673 $ 26,618
Disposable foodservice supplies........ 1,578 709 4,012 3,100 2,387
Corporate and other.................... 7 20 114 13
--------- --------- -------- -------- --------
$ 7,631 $ 7,354 $ 32,566 $ 40,887 $ 29,018
========= ======== ======== ======== ========
</TABLE>
RESULTS OF OPERATIONS
Three Months Ended March 30, 1995 Compared to the Three Months Ended March
31, 1994
The Company's sales for the first three months of 1995 were $155.8 million,
which represented an increase of 9.3% from the first three months of 1994. Net
sales at Viskase increased due to the expansion of Latin American sales,
selected sales price increases, strong worldwide film sales, combined with the
favorable effects of foreign currency translation. Net sales at Clear Shield
increased 8.5% from the prior year primarily due to selling price increases.
Sandusky sales declined 21.2% due to losing the business of Scott Paper Company
("Scott"), a major purchaser of containers for its premoistened baby wipes,
combined with reduced dairy and deli container sales.
Operating income for the first three months of 1995 was $8.7 million, which
represented a decline of $1 million from the first quarter of 1994. The decline
in operating income in 1995 was due to the continued increase in resin prices,
price competition in certain foreign markets coupled with additional selling,
general
29
<PAGE> 33
and administrative expenses resulting from strategic expansions in foreign
markets, including Europe, Latin America and Australia and the decline in
Sandusky's sales.
First quarter 1995 net interest expense totaled $13.4 million, which
represented an increase of $1.4 million from the first quarter of 1994. The
increase was primarily the result of both increased borrowings and higher rates
on the Company's term and revolving loan facilities, combined with additional
amortization of deferred financing fees.
The tax benefit in the first quarter of 1995 resulted from the benefit of
U.S. losses partially offset by the provision related to income from foreign
subsidiaries. Due to the permanent differences in the U.S. resulting from
non-deductible amortization and foreign losses for which no tax benefit is
provided, a benefit of $.2 million was provided on a loss before income taxes of
$4.1 million. The U.S. tax benefit was recorded as a reduction of the deferred
tax liability, and did not result in a refund of income taxes.
Year Ended December 29, 1994 Compared to Prior Periods
The Company's 1994 net sales were $599 million, which represented a 2.0%
increase over the prior year's sales of $587.4 million.
Net sales in 1994 for Viskase increased 2.5% over the prior year due to the
impact of increased film sales and foreign currency translation. Sandusky's
sales declined 8.1% due to the reduction in the baby wipe container sales
partially offset by an increase in dairy and deli container volumes. Clear
Shield's net sales increased 3.9% primarily due to the impact of third and
fourth quarter price increases combined with some volume increases in the
wrapped cutlery and retail product lines.
Operating income for 1994 was $48.7 million, which represented a decline of
$5.0 million from the prior year. Pro forma operating income for 1993, giving
effect to fresh start reporting and the implementation of the Plan of
Reorganization with the related financing as if such events had taken place on
January 1, 1993, was $54.6 million. The decline in gross margin in 1994 was due
to the impact of price competition in dairy and deli containers and in foreign
markets, reduced baby wipe container sales and increased resin prices. Operating
income in 1994 benefitted from a $9.5 million settlement of a patent
infringement suit. Selling, general and administrative expenses in 1994 include
$1.6 million of additional patent legal expenses, costs relating to the
expansion in Central and South America, additional corporate costs relating to
increased insurance and other costs associated with Envirodyne's status as a
public company following its emergence from bankruptcy, as well as increased
expenditures on research and development.
In 1995 another competitor in small diameter casings entered the United
States market. Management believes there will be some impact as a result of
increased competition in this segment of the market, but has yet to determine
its full extent.
During 1993, Scott notified Sandusky of its intention to purchase
containers from other suppliers, and the change was completed in September 1994.
Sandusky closed its Clayton, Delaware facility, which was primarily dedicated to
the production of baby wipe containers, in December 1994, and is consolidating
its manufacturing operations at its Sandusky, Ohio facility.
Net interest expense for 1994 totaled $49.2 million, which represented an
increase of $18.9 million from 1993. The 1994 net interest expense includes
$22.5 million of interest expense relating to the Company's 10 1/4% senior notes
due 2001 (the "10.25% Notes") versus $1.3 million of interest expense for the
first six days of 1993 on the Company's 14 1/2% Senior Discount Notes
(amortization of discount), 14% Senior Subordinated Debentures, 13 1/2%
Subordinated Notes and the 11 1/4% Pay-in-Kind Notes. As of January 7, 1993,
interest expense on those debt issues was no longer recorded due to the
Envirodyne bankruptcy case. The 1994 net interest expense benefitted from a
lower effective interest rate on the Company's domestic term loan and revolving
credit facility.
Other income (expense) of $1.7 million and $(5.5) million in 1994 and 1993,
respectively, included net foreign currency translation gains (losses) of $2.7
million and $(4.6) million, respectively.
30
<PAGE> 34
The 1994 and 1993 tax provisions consisted of the provisions on income from
the U.S. and foreign subsidiaries. Due to the permanent differences in the U.S.
resulting from non-deductible reorganization expenses and amortization and
foreign losses for which no tax benefit is provided, a provision of $4.8 million
and $12.0 million, respectively, was provided on income (loss) before income
taxes and extraordinary items of $1.2 million and $(86.2) million, respectively,
for 1994 and 1993. The 1992 period effective tax benefit rate of 27% for income
taxes resulted from the benefit of U.S. losses partially offset by the provision
related to income from foreign subsidiaries. Domestic cash income taxes paid in
1994, 1993 and 1992 were $1,510,000, $91,000 and $2,027,000, respectively.
Foreign cash income taxes paid in 1994, 1993 and 1992 were $3,548,000,
$1,063,000 and $3,131,000, respectively.
The 1993 reorganization items of $104.7 million consisted of $4.1 million
for the write-off of deferred financing fees on the Company's bank credit
agreement, $14.9 million for legal, financial advisory and other fees incurred
in connection with the Envirodyne bankruptcy case and $85.7 million of
adjustment to the fair value of assets and liabilities due to the reorganization
and adoption of Fresh Start Reporting (see Note 1 of Notes to Consolidated
Financial Statements). Fees and expenses of $3.9 million in 1992 associated with
the renegotiation of the Company's debt consisted of legal, financial advisory
and other fees.
The 1993 extraordinary gain of $183.8 million results from the
reorganization cancellation of indebtedness offset by the fair value of debt and
equity issued and is net of a tax provision of $8.3 million. For a further
discussion, see Note 1 of Notes to Consolidated Financial Statements.
The Company's 1993 net sales were $587.4 million, which represented a 2.0%
increase over the prior year's sales of $575.7 million.
Net sales in 1993 for Viskase were comparable to the prior year. Sandusky's
sales increased by 26.3% due to container volume increases resulting from the
liquidation of a major competitor offset partially by the effects of intense
price competition. Clear Shield's net sales increased 5.5% due to strong volumes
across all major product lines offset partially by competitive price conditions.
Operating income for 1993 was $53.6 million, which represented a decline of
$13.6 million from the prior year. The decline in operating income resulted from
intense price competition in containers and large diameter casings as well as
price pressure in European, Latin American, Japanese and Canadian markets. The
Company also recorded an additional $2 million of before tax expense for
postretirement benefits due to the adoption on January 1, 1993 of Statement of
Financial Accounting Standards No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." For further discussion, see Note
10 of Notes to Consolidated Financial Statements.
LIQUIDITY AND CAPITAL RESOURCES
On June 20, 1995, the Company completed the sale to certain institutional
investors in a private placement of $160,000,000 aggregate principal amount of
Old Notes, $151,500,000 of which bears interest at a rate of 12% per annum and
$8,500,000 of which bears interest at a rate equal to the sum of 5.75% plus the
six month London Interbank Offered Rate. The Company used the net proceeds of
the offering primarily to repay the Company's $86.1 million domestic term loan
facility and reduce the amount of the Company's revolving credit obligations by
$68.3 million. See "Use of Proceeds" and "Capitalization." Concurrently with the
sale of the Old Notes, the Company entered into the Revolving Credit Facility
and the Letter of Credit Facility. The Notes and the obligations under the
Revolving Credit Facility and the Letter of Credit Facility are guaranteed by
the Company's significant domestic subsidiaries and secured by the Collateral
Pool. Such guarantees and security are shared by the holders of the Notes and
the holders of the obligations under the Revolving Credit Facility on a pari
passu basis pursuant to an intercreditor agreement. Pursuant to such
intercreditor agreement, the security interest of the holders of the obligations
under the Letter of Credit Facility has priority over all other liens on the
Collateral Pool. See "Description of Notes -- Collateral and Security" and
"Description of Intercreditor Arrangements."
The Company finances its working capital needs through a combination of
cash generated through operations and borrowings under the Revolving Credit
Facility. The availability of funds under the Revolving
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<PAGE> 35
Credit Facility is subject to the Company's compliance with certain covenants
(which are substantially similar to those included in the Indenture), to
borrowing base limitations measured by accounts receivable and inventory of the
Company and to reserves which may be established in the discretion of the
lenders. The available borrowing capacity under the Revolving Credit Facility
was approximately $16 million at June 29, 1995.
The Company anticipates that its operating cash flow will be sufficient to
meet its operating expenses and to service its interest payments on the Notes
and its other outstanding indebtedness. The Company will be required to satisfy
its $80 million mandatory redemption obligation with respect to the Notes in
1999 and to pay the remaining principal amount of the Notes in 2000.
Additionally, the Company's 10.25% Notes, of which $219.3 million principal
amount is outstanding, will mature in December 2001. The Company expects that in
order to make these payments it will be required to pursue one or more
alternative strategies, such as refinancing its indebtedness, selling additional
equity capital, reducing or delaying capital expenditures, or selling assets.
There can be no assurance that any of these strategies could be effected on
satisfactory terms, if at all.
Capital expenditures for the first quarter of 1995 and 1994 totaled $7.6
million and $7.4 million, respectively. Capital expenditures totaled $32.6
million during 1994. This represents an $8.3 million decrease from 1993 capital
expenditure levels. The decreased level of capital expenditures in 1994 was
principally related to the completion of both the second phase of the European
expansion program and initial productive capacity investment program in Brazil
during the prior year. In 1995 and future years, capital expenditures are
expected to be approximately $30 million annually.
The Company acquired the minority shareholder's interest in Viskase's
Brazilian subsidiary for $4.2 million during the first quarter of 1994.
The Company has spent approximately $12 million to $17 million annually on
research and development programs, including product and process development,
and on new technology development during each of the past three years, and the
1995 research and development and product introduction expenses are expected to
be approximately $16 million. Among the projects included in the current
research and development efforts is the application of certain patents and
technology recently licensed by Viskase to the manufacture of cellulosic
casings. The commercialization of these applications and the related fixed asset
expense associated with such commercialization may require substantial financial
commitments in future periods.
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<PAGE> 36
BUSINESS
Envirodyne Industries, Inc. manufactures food packaging products and
foodservice supplies through three primary operating subsidiaries -- Viskase,
Sandusky and Clear Shield. Viskase is the leading producer of cellulosic casings
used in preparing and packaging processed meat products and is a major producer
of heat shrinkable plastic bags and specialty films for packaging and preserving
fresh and processed meat products, poultry and cheeses. The Company is also a
leading domestic and international manufacturer of plasticized polyvinyl
chloride ("PVC") films, primarily for use in packaging food items. Through
Sandusky, the Company is a producer of thermoformed and injection molded plastic
containers, used in the packaging of cultured dairy and delicatessen products,
and of horticultural trays and inserts. Finally, through Clear Shield, the
Company is a major domestic producer of disposable plastic cutlery, drinking
straws, custom dining kits and related products.
On January 7, 1993, Envirodyne and certain of its subsidiaries
(collectively, the "Debtors") filed petitions under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division (the "Bankruptcy Court"). On December 31,
1993, the Debtors consummated a plan of reorganization (the "Plan of
Reorganization") and emerged from bankruptcy. For additional information
regarding the Plan of Reorganization, see Note 1 of Notes to Consolidated
Financial Statements.
VISKASE
General
Viskase developed the basic process for producing cellulosic casings and
began commercial production in 1925. Since that time, Viskase has been the
leading worldwide producer of cellulosic casings. In 1964 Viskase entered the
specialty films business. Since then, it has continued to introduce new
specialty films products to customers in the fresh and processed meat, poultry
and cheese industries. Viskase also manufactures and sells PVC plastic film for
wrapping fresh meats, poultry and other products.
Cellulosic Casings
Cellulosic casing products are used in the production of processed meat and
poultry products, such as hot dogs, salami and bologna. To manufacture these
products, meat is stuffed into the casings prior to smoking and cooking. The
casings, which are non-edible, serve to hold the shape of the product during
these processes. For certain products, such as hot dogs, the casings are removed
and discarded prior to retail sale. Casings made of regenerated cellulose were
developed by Viskase to replace casings made of animal intestines. Cellulosic
casings generally afford greater uniformity, lower cost and greater reliability
of supply.
The production of regenerated cellulose casings generally involves three
principal steps: production of a viscose slurry from wood pulp, extrusion of a
continuous tube during the regeneration process, and "shirring" of the final
product. Shirring is a highly technical process of folding or compressing the
casing in tubular form for subsequent use in high-speed stuffing machines. The
production of regenerated cellulose involves a complex and continuous series of
chemical and manufacturing processes, and Viskase believes that its facilities
and expertise in the manufacturing of extruded cellulose are important factors
in maintaining its product quality and operating efficiencies.
Viskase's product line includes both NOJAX(R) cellulosic casings for small
sausage products such as hot dogs and paper-reinforced cellulosic casings for
large sausages, salami, hams and other processed meat products. Reinforced
cellulosic casings are known in the meat industry as fibrous casings.
Specialty Film Products
Since developing a technology for the extrusion of bioriented plastic films
in 1964, Viskase has continued to expand its product line of heat shrinkable
bags made from its specialty films. These shrinkable bags are sold under the
brand name PERFLEX(R). Viskase's shrinkable plastic bags are used by major
poultry, fresh and
33
<PAGE> 37
processed meat and cheese producers to package and preserve their products
during wholesale and retail distribution.
Viskase produces single layer and multilayer heat shrinkable plastic bags.
Single layer film bags are used primarily to protect fresh and frozen whole
turkeys and chickens from moisture loss and handling damage. Multilayer film
bags, referred to in the food industry as "barrier bags," are made of layers of
coextruded films, each of which contributes a special property. For example,
individual layers can provide mechanical strength or can reduce the transmission
of moisture, oxygen or ultraviolet light and can protect bagged products, such
as fresh meats, from weight loss and spoilage.
As part of its service orientation, Viskase also provides graphic art and
design services to its customers. Viskase's ability to print on the bags and
films directly with designs, illustrations and text in up to eight colors
further enhances the appeal of its customers' products.
PVC and Other Film Products
Viskase manufactures PVC stretch and single layer shrink films under the
Filmco(R) brand name, used for wrapping grocery products and for packaging
foods. In Europe, Viskase also converts oriented polypropylene films for use in
packaging bakery goods and manufactures rigid food packaging materials made from
oriented polystyrene.
International Operations
Viskase has seven manufacturing facilities located outside the continental
United States, in Beauvais, France; Thaon, France; Lindsay, Ontario, Canada;
Sedgefield, England (Great Britain); Swansea, Wales (Great Britain); Guarulhos,
Brazil and Nuevo Laredo, Mexico.
The aggregate of domestic exports and net sales of foreign operations
represents approximately 42% of Viskase's total net sales.
International sales and operations may be subject to various risks
including, but not limited to, possible unfavorable exchange rate fluctuations,
political instability, governmental regulations (including import and export
controls), restrictions on currency repatriation, embargoes, labor relations
laws and the possibility of governmental expropriation. Viskase's foreign
operations generally are subject to taxes on the repatriation of funds.
International operations in certain parts of the world may be subject to
international balance of payments difficulties which may raise the possibility
of delay or loss in the collection of accounts receivable from sales to
customers in those countries. Viskase believes that its allowance for doubtful
accounts makes adequate provision for the collectibility of its receivables.
Management believes that growth potential exists for many of Viskase's products
outside the United States and that Viskase is well positioned to participate in
these markets.
Sales and Distribution
Viskase has a broad base of customers, with no single customer accounting
for more than 5% of sales. Viskase sells its products in virtually every country
in the world. In the United States, Viskase has a staff of technical sales
representatives responsible for sales to fresh meat, processed meat and poultry
producers. Approximately 50 distributors market Viskase products to customers in
Europe, Africa, Asia, and Latin America. Its products are marketed through its
own subsidiaries in the United Kingdom, Germany, France, Italy, Brazil, Mexico
and Australia.
In the United States, Viskase sells its PVC film products primarily to the
retail grocery industry through packaging material distributors, food
wholesalers and a direct sales force. Additionally the sales organization is
supported by a technical service group. The United Kingdom operation sells
directly and through distributors, primarily to the retail grocery and
foodservice industries in Europe.
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<PAGE> 38
In the United States, Viskase operates casings service centers in Santa Fe
Springs, California; Atlanta, Georgia; and Bensalem, Pennsylvania, as well as
service centers within the Chicago, Illinois, and Pauls Valley, Oklahoma,
plants. In Europe, Viskase operates casings service centers in Milan, Italy and
Pulheim, Germany. Viskase also operates a service center in Brisbane, Australia.
These service centers provide finishing, inventory and delivery services to
Viskase customers.
Competition
Viskase is the world's leading producer of cellulosic casings and is a
major producer of films. Viskase seeks to maintain a competitive advantage by
introducing new products having superior performance characteristics over
competitive products, by responding quickly to customer product requirements, by
providing customers with assistance in production or formulation problems, by
producing niche products to fill particular individual customer requirements, by
providing technical support services to its customers and by manufacturing
products having outstanding quality and performance. From time to time, Viskase
experiences reduced market share or reduced profits due to price competition.
Viskase's principal competitors in cellulosic casings are Teepak, Inc. and
Viscofan, S.A. (located in Spain). Some of the other important competitors in
the cellulosic casings industry are Kalle Niederlassung der Hoechst AG located
in Germany; Wolff Walsrode AG, a wholly-owned subsidiary of Bayer AG, located in
Germany; Oy Visko AB located in Finland; Celanese Mexicana located in Mexico;
and Trificel located in Brazil.
In the specialty films area, the largest producer of heat shrinkable bags
is the Cryovac Division of W.R. Grace & Company. Cryovac developed heat
shrinkable films and a vacuumizing process for applying them in the early
1960's. Cryovac sells bags on a worldwide basis to all segments of the food
industry, including meat and poultry producers. American Can Company, a
subsidiary of Pechiney Corp., is another competitor in the specialty films area.
Management believes that Viskase is in the number two position in the world
behind Cryovac in the sale of heat shrinkable bags.
In the PVC films area, major competitors in the U.S. and Europe include
Borden, Inc., Huntsman Film Products Corporation and Anchor Plastics, which may
have substantially greater financial and other resources than those of the
Company.
Research and Development; Customer Support
Viskase's continuing emphasis on research and development is central to its
ability to maintain industry leadership. In particular, Viskase focuses on the
development of new products that increase customers' operating efficiency,
reduce their operating costs and expand their markets. Viskase's projects
include development of new processes and products to improve its manufacturing
efficiencies. Viskase's research scientists, engineers and technicians are
engaged in continuing product and equipment development and also provide direct
technical and educational support to its customers.
Viskase founded its Food Science and Quality Institute (the "Institute") in
1941 to assist the meat and poultry industry in the development of new food
items and more efficient production and packaging methods using Viskase
products. The Institute's staff works closely with Viskase's sales and marketing
professionals providing responsible, high-quality technical service to, and
support of, Viskase customers. The Institute is able to reproduce customers'
products and processes in order to help customers to solve their problems and to
experiment with new foods and production techniques. The Institute conducts Meat
Science Seminars that are attended by Viskase customers and production, research
and quality assurance personnel, as well as food scientists from leading
academic institutions.
Seasonality
Historically, domestic sales and profits of Viskase have been seasonal in
nature, increasing in the spring and summer months and again near the year-end
holiday season. Sales of specialty films to the fresh meat industry and sales
outside of the United States follow a relatively stable pattern throughout the
year. Sales of
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<PAGE> 39
PVC films experience only minor seasonality with sales generally increasing
during the second and third quarters.
Raw Materials
Raw materials used by Viskase include cellulose (from wood pulp), fibrous
paper, petroleum based resins, plasticizers and various other chemicals. Viskase
generally purchases its raw materials from a single or small number of suppliers
with whom it maintains good relations. Certain primary and alternative sources
of supply are located outside the United States. Viskase believes, but there can
be no assurance, that adequate alternative sources of supply currently exist for
all of Viskase's raw materials or raw material substitutes that Viskase could
modify its processes to utilize.
SANDUSKY
Sandusky is a leading producer of thermoformed and injection molded plastic
containers, used in the packaging of cultured dairy and delicatessen products,
and of horticultural trays and inserts. Sandusky sells a majority of its
products to dairy product manufacturers for packaging items such as yogurt and
cottage cheese and to supermarkets for in-store packaging of take-home foods.
The containers are normally custom printed in various colors with product
identification, company names, logos, nutritional information and universal
product codes in accordance with the customers' requirements. Sandusky and its
predecessors had been the principal supplier to Scott Paper Company ("Scott") of
containers for its premoistened baby wipes. During 1993, Scott notified Sandusky
of its intention to purchase containers from other suppliers, and the change was
completed in September 1994. Sandusky closed its Clayton, Delaware facility,
which was primarily dedicated to the production of baby wipe containers, in
December 1994, and is consolidating its manufacturing operations at its
Sandusky, Ohio facility.
Sandusky sells directly to its dairy and non-food customers through its
sales and marketing group. Delicatessen containers and horticultural products
are sold both directly and through commissioned brokers. Sandusky markets its
products primarily in the northeastern, southern and midwestern regions of the
United States. Plastic container sales are somewhat seasonal in nature, with
slightly higher delicatessen container sales in late spring and summer and
higher dairy sales in the fourth quarter.
All of Sandusky's thermoformed and injection molded products are produced
at its two Sandusky, Ohio plants. Thermoforming is a process by which plastic
resin pellets are melted and extruded into sheet stock, which is then heated and
formed into finished containers, lids and trays. Injection molding is a process
by which polypropylene and polyethylene pellets are melted and injected at high
pressure into precision molds to produce a finished container. The principal raw
materials used by Sandusky are prime high impact polystyrene, polypropylene and
polyethylene resins, which currently are available from several domestic
sources.
The dairy and delicatessen containers industry is highly fragmented.
Sandusky competes in the manufacture and sale of dairy and delicatessen
containers with several domestic manufacturers of thermoformed and injection
molded plastic containers. Major competitive factors in the dairy and
delicatessen container business are price, quality and customer service. Major
competitive factors in the specialized thermoformed container business are price
and technical and customer service capabilities.
CLEAR SHIELD
Clear Shield, headquartered in Wheeling, Illinois, is a major domestic
producer of disposable plastic cutlery, drinking straws, custom dining kits and
related foodservice products. Clear Shield is one of the largest producers of
plastic cutlery and drinking straws in the United States. These products are
sold primarily to institutional users, comprising principally major fast-food
restaurant chains, schools, and hospitals, and also to consumers through retail
outlets. Sales are made under registered trade names including CLEAR SHIELD(R)
and CARNIVAL(R). Institutional customers include such leading fast-food chains
as McDonald's Corporation, Burger King Corporation, Taco Bell, Hardee's, KFC
Restaurants and Pizza Hut.
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<PAGE> 40
Clear Shield's products are produced at plants in Wheeling, Illinois;
Leominster, Massachusetts; and Shreveport, Louisiana. Plastic cutlery is made by
melting polystyrene or polypropylene beads, which are then injected into
specially designed custom molds within high-speed injection molding machines.
Drinking straws are made by extruding molten polypropylene through specially
designed dies within high-speed extrusion machines. Certain completed products
are then specially wrapped using high-speed wrapping machines. Raw materials
used in the manufacturing process currently are available from alternative
sources. Raw material costs, in particular of polystyrene and polypropylene, are
a major portion of Clear Shield's production costs. Although Clear Shield is
generally able to pass on most raw material cost increases to customers, there
can be a delay which varies by customer and market.
Sales are made predominantly in the United States, primarily east of the
Rocky Mountains, using Clear Shield's own sales force augmented by a network of
non-exclusive, independent sales representatives. The majority of Clear Shield's
sales, consisting of bulk and individually packaged products for institutional
users, generally is not seasonal. Sales of retail packaged products are
seasonal, however, with the highest sales and operating profits historically
being achieved in the second and third quarters.
While competitive pricing generally is of key importance, Clear Shield also
competes by emphasizing responsive service to customers, by maintaining
consistent quality in its products and by capitalizing on its efficient and
flexible operations. These efficiencies stem largely from proprietary
improvements to the manufacturing process, high-volume manufacturing facilities
and a flexible work force that enable Clear Shield to produce and ship more than
50 million items per working day.
Clear Shield's primary competitors include several major corporations, some
of which are larger and better capitalized than Clear Shield and, in some cases,
offer a wider product line than Clear Shield. Clear Shield's competitors
periodically engage in aggressive price discounting to gain business. Clear
Shield believes, however, that such market conditions will not result in any
long-term material loss of business for Clear Shield, although its profit
margins may be affected from time to time.
EMPLOYEES
The Company generally maintains productive and amicable relationships with
its 4,900 employees worldwide. One of Viskase's domestic plants, located in
Loudon, Tennessee, is unionized, and all of its Canadian and European plants
have unions. From time to time union organization efforts have occurred at other
individual plant locations. Unions represent a total of approximately 1,500 of
Viskase's 4,000 employees. None of Clear Shield's approximate 525 employees is
represented by a union. Certain of the hourly production personnel of Sandusky's
Ohio thermoforming facility are members of a union.
TRADEMARKS AND PATENTS
Viskase holds patents on many of its major technologies, including those
used in its manufacturing processes and the technology embodied in products sold
to its customers. Because it believes its ongoing market leadership depends
heavily upon its technology, Viskase vigorously protects and defends its patents
against infringement by competitors on an international basis. Viskase, as part
of its research and development program, has developed and expects to continue
to develop new proprietary technology and has licensed proprietary technology
from third parties. Management believes these activities will enable Viskase to
maintain its competitive position. Viskase also owns numerous trademarks and
registered tradenames that are used actively in marketing its products. Viskase
periodically licenses its process and product patents to competitors to generate
royalty income.
The other Company operations also own trademarks and tradenames that are
used actively in marketing products. Sandusky has patents on new product
developments, but, with the exception of Viskase, patent protection is not
currently material to any of the operations as now conducted.
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RESEARCH AND DEVELOPMENT
Research and development costs are expensed as incurred and, on a
consolidated basis, totaled $16,852,000, $15,216,000 and $12,323,000 for 1994,
1993 and 1992, respectively. The majority of such costs are attributable to
Viskase's extensive research and development program.
Viskase believes it has achieved and maintained its position as a leading
producer of cellulosic casings and as a major domestic producer of specialty
films for packaging meats through significant expenditures on research and
development. The Company expects to continue its research and development
efforts. The commercialization of certain of these product and process
applications and related capital expenditures to achieve commercialization may
require substantial financial commitments in future periods. Should these
activities be curtailed or if capital resources are not available to develop its
projects, Viskase's ability to maintain its present market share could be
materially impaired.
ENVIRONMENTAL REGULATIONS
In manufacturing its products, the Company employs certain hazardous
chemicals and generates toxic and hazardous wastes. The use of these chemicals
and the disposal of such waste is subject to stringent regulation by several
governmental entities, including the United States Environmental Protection
Agency ("USEPA") and similar state, local and foreign environmental control
entities. The Company is subject to various environmental, health and safety
laws, rules and regulations including those of the United States Occupational
Safety and Health Administration and USEPA. These laws, rules and regulations
are subject to amendment and to future changes in public policy or
interpretation, which may affect the operations of the Company. The Company uses
its best reasonable efforts to comply with promulgated laws, rules and
regulations and participates in the rulemaking process.
For several years prior to 1989, Viskase was involved in regulatory
proceedings before the Illinois Pollution Control Board ("IPCB") in which the
IPCB sought to adopt air pollution control requirements applicable to emissions
of volatile organic material ("VOM") from sources located in the Chicago
metropolitan area. The IPCB was required to adopt such regulations pursuant to
provisions of the Clean Air Act requiring states to promulgate State
Implementation Plans ("SIP's") providing for reduction of VOM emissions. Such
regulations must require sources to control their emissions using "reasonably
available control technology" ("RACT"). The IPCB ultimately adopted a RACT
regulation for Viskase's Chicago facility that did not require installation of
additional control technology and did not impose substantial compliance costs
with respect to the facility.
In addition, the USEPA proposed rules for controlling VOM emissions in the
Chicago area on December 27, 1989. Viskase submitted extensive comments in
response to the regulatory proposal. Among those comments was that the rules do
not constitute RACT with respect to Viskase's Chicago facility. On June 29,
1990, the USEPA promulgated the rules in substantially the same form as had been
proposed. For most sources, the "effective date" of the rule was July 30, 1990,
and the compliance date was one year thereafter. Although the USEPA stated that
the rules would apply to Viskase, it has extended the effective date of the
rules for Viskase indefinitely to provide the USEPA with enough time to fully
consider the rules as applied to Viskase.
In 1991, pursuant to certain amendments to the federal Clean Air Act, the
Illinois Environmental Protection Agency ("IEPA") proposed to the IPCB emissions
control rules that were virtually identical to the federal regulations. Viskase
submitted comments on the proposed rules that pointed out that the IPCB had
previously adopted a site-specific rule for Viskase. Therefore, Viskase
requested that the IPCB exempt Viskase from the proposed new rules. The IPCB
granted Viskase's request and then submitted the proposed rules, which included
an exemption for Viskase, to the USEPA for review. The USEPA subsequently
commented on the proposed rules, but made no mention of the exemption for
Viskase. The IPCB then promulgated the rules, including the exemption for
Viskase. The final IPCB rules were submitted to the USEPA for its formal
approval as part of the state's SIP.
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During its technical review of the SIP, the USEPA objected to certain
provisions of the Illinois rules and requested that the IEPA incorporate
revisions. The revised rules, which the IPCB submitted to the USEPA in mid-1993,
codify the stay as to the effective date and compliance date of the rules
previously granted to Viskase.
In late 1994, the USEPA proposed a revision to the federal implementation
plan. The proposed USEPA rule would be virtually identical to the site-specific
rule applicable to Viskase that was adopted by the IPCB, the only difference
relating to monitoring requirements. Viskase believes that it can comply with
the USEPA proposed rules, and submitted comments on the proposed rule urging its
adoption. Viskase is optimistic that the proposed USEPA rule will be promulgated
as proposed, although if the proposed rule is not adopted it is possible that
USEPA action might result in significant costs at the Chicago facility or might
result in significant changes in the operation of this facility. Management
believes that this matter will be resolved without material impact on the
Company and does not expect that any such costs or changes associated with the
Chicago facility would have a material adverse effect on the consolidated
financial statements of the Company.
Certain of the Company's facilities are or may become potentially
responsible parties with respect to off-site waste disposal facilities.
The Economic Development Administration, an agency of the United States
Department of Commerce ("EDA"), and the USEPA filed a proof of claim in the
Envirodyne bankruptcy case relating to recovery of environmental response costs
incurred or to be incurred in connection with certain real property located at
2701 East 106th Street, Chicago, Illinois, the former location (the "Site") of
the operations of the subsidiaries of the Company constituting the former steel
and mining segment. Navistar International Transportation Corp. ("Navistar
Transportation"), which was the previous owner of the Site also filed a proof of
claim in the Envirodyne bankruptcy case in an unspecified amount with respect to
environmental liabilities at the Site. Envirodyne and Navistar Transportation
have negotiated a definitive settlement agreement, subject to final approval by
the EDA and USEPA, Bankruptcy Court approval and public comment pursuant to
regulations applicable to EDA and USEPA, to settle the claims against Envirodyne
through the payment of $5,000 to the USEPA and the issuance of 64,460 shares of
Common Stock to Navistar Transportation. In the event that the settlement is not
completed, Envirodyne believes that it has valid defenses to the claims and will
continue its objections to the claims. To the extent that USEPA, EDA or Navistar
Transportation were able to establish liability and damages as to their
respective proofs of claim, such parties would receive Common Stock under the
Plan of Reorganization in satisfaction of such claims. See Note 1 of Notes to
Consolidated Financial Statements.
As noted above, new environmental and health and safety laws can impose
significant compliance costs, including two forthcoming rules. Under the Clean
Air Act Amendments of 1990, various industries, including casings manufacturers,
will be required to meet air emissions standards for certain chemicals based on
use of the "maximum achievable control technology" ("MACT"). MACT standards for
casings manufacture have not yet been proposed or promulgated; therefore, at
this time no estimate of the cost of complying with MACT standards can be made.
Such rules, however, will likely impose similar costs on all casings
manufacturers in the United States.
Under the Resource Conservation and Recovery Act ("RCRA"), regulations have
been recently proposed that would, in some cases, impose additional effluent
limitations on wastewater discharged from wastewater treatment systems employing
surface impoundments. In addition, RCRA regulations to be proposed in the future
may impose design and/or operating requirements on such impoundments. Two of
Viskase's plants use surface impoundments. The Company is currently assessing
the potential impact of the proposed regulations.
Various state, local and foreign governments have enacted or are
considering enacting laws, rules or regulations concerning the disposal of
plastic products. While such legislative action has had a minor effect on
certain product sales and may have further effect in the future, the Company is
not aware of any existing legislative action that it currently expects to have a
material adverse effect on the Company.
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PROPERTIES
Viskase facilities
<TABLE>
<CAPTION>
LOCATION SQUARE FEET PRIMARY USE
-------- ----------- -----------
<S> <C> <C>
Manufacturing Facilities
Aurora, Ohio..................... 73,000 PVC film production
Barceloneta, Puerto Rico......... 156,000 Idle plant facilities held for sale
Beauvais, France (a)............. 235,000 Casings production and finishing
Centerville, Iowa................ 223,000 Specialty films production and finishing
Chicago, Illinois................ 991,000 Casings production, administration and
research
Guarulhos, Brazil................ 81,000 Specialty films production and casings
finishing
Huntsville, Alabama.............. 27,000 Idle plant facilities held for sale
Kentland, Indiana................ 125,000 Casings finishing
Lindsay, Ontario, Canada......... 269,000 Casings finishing and specialty films
finishing
Loudon, Tennessee................ 250,000 Casings production
Nuevo Laredo, Mexico (a)......... 22,000 Casings finishing
Osceola, Arkansas................ 223,000 Casings production and finishing
Pauls Valley, Oklahoma........... 110,000 Casings finishing, specialty films production
and finishing
Sedgefield, England.............. 132,000 PVC and rigid OPS production and OPP
conversion
Swansea, Wales (Great Britain)... 77,000 Specialty films production and finishing
Swansea, Wales (a)............... 28,000 Administrative facilities
Thaon, France.................... 239,000 Casings production and finishing
Service Centers
Atlanta, Georgia (a)
Bensalem, Pennsylvania
Brisbane, Australia (a)
Chicago, Illinois
Milan, Italy
Pauls Valley, Oklahoma
Pulheim, Germany (a)
Santa Fe Springs, California
Headquarters
Worldwide: Chicago, Illinois
Europe: Paris, France (a)
</TABLE>
- -------------------------
(a) Leased. All other properties are owned by the respective company or its
subsidiaries.
Clear Shield facilities
<TABLE>
<CAPTION>
LOCATION SQUARE FEET PRIMARY USE
-------- ----------- ------------
<S> <C> <C>
Leominster, Massachusetts........ 135,000 Cutlery, straws and combination kits
Shreveport, Louisiana............ 148,000 Cutlery, straws and combination kits
Wheeling, Illinois (two
plants)....................... 260,000 Cutlery, straws and combination kits;
Headquarters
</TABLE>
Sandusky facilities
<TABLE>
<CAPTION>
LOCATION SQUARE FEET PRIMARY USE
-------- ----------- ------------
<S> <C> <C>
Sandusky, Ohio................... 195,000 Manufacturing; Headquarters
Sandusky, Ohio................... 31,000 Warehouse
Sandusky, Ohio (a)............... 97,000 Warehouse
Sandusky, Ohio (a)............... 90,000 Manufacturing
Clayton, Delaware (a)............ 81,000 Vacant (lease expires October 1995)
</TABLE>
- -------------------------
(a) Leased. All other properties are owned by the respective company or its
subsidiaries.
40
<PAGE> 44
The Company's headquarters are located in leased facilities in Oak Brook,
Illinois. The Company believes that its properties generally are suitable and
adequate to satisfy the Company's present and anticipated needs. The United
States real property owned by the Company are included in the Collateral Pool.
LEGAL PROCEEDINGS
Lumpkin Litigation
On February 17, 1989, a complaint was filed against Envirodyne in the
United States District Court for the Northern District of Illinois ("District
Court") by a plaintiff class consisting of former union employees of WSC Corp.
("WSC"). WSC was a wholly-owned subsidiary of EDC Holding Company ("EDC") whose
operations consisted of the former steel and mining segment (SMD) of Navistar
International Corp. ("Navistar"). EDC, then a wholly-owned subsidiary of
Envirodyne, acquired SMD from Navistar in 1977 and transferred the SMD assets to
WSC and to other wholly-owned subsidiaries of EDC. In 1980, EDC and WSC filed
voluntary bankruptcy petitions and halted operations. The plaintiffs are seeking
to recover from Envirodyne certain pension and other benefits allegedly owed by
WSC under a collective bargaining agreement to which WSC (but not Envirodyne)
was a party. The complaint seeks to hold Envirodyne directly liable for these
benefits on an alter ego theory of liability. The plaintiffs seek (1) damages
under the WSC 1977-1980 collective bargaining agreement of $80 million to $100
million (less the amount of the plaintiffs' $14.8 million received in settlement
of litigation with Navistar), (2) unspecified equitable relief under ERISA
Section 502, and (3) other compensatory damages and punitive damages,
unspecified in amount, under ERISA Section 502 and Section 301 of the Labor
Management Relations Act.
After the bankruptcy of EDC and WSC, the same plaintiff class now suing
Envirodyne brought suit against Navistar for recovery of the same benefits now
claimed against Envirodyne. In determining whether a settlement agreement in the
Navistar case released Envirodyne from the liabilities asserted, the United
States Court of Appeals for the Seventh Circuit ("Court of Appeals") held that
the interpretation of the settlement agreement would require lower court
findings of fact with respect to the parties' intent in entering into the
settlement agreement. In addition, the Court of Appeals commented on the legal
principles that would be applicable to the plaintiffs' alter ego claim. While
the Court of Appeals observed that concerns for corporate form should be
secondary to the congressional intent of ERISA to provide for pension benefits,
the Court proceeded to note that to be successful the plaintiffs must establish
the presence of two factors: firstly, that there was a unity of interest and
ownership such that the separate corporate identities of Envirodyne and the two
subsidiaries no longer existed; and, secondly, that recognition of separate
corporate existence would sanction a fraud or promote injustice.
The Lumpkin litigation was stayed by the commencement of the Envirodyne
bankruptcy case in January 1993. Envirodyne and the plaintiffs are currently
participating in a District Court mediation process to attempt to resolve the
case. Because the claims relating to the Lumpkin litigation arose prior to the
commencement of the Envirodyne bankruptcy case, such claims are subject to the
Plan of Reorganization. Accordingly, to the extent that the plaintiffs in the
Lumpkin litigation were able to establish liability and damages, the plaintiffs
would under the Plan of Reorganization receive Common Stock in satisfaction of
such damages. For a description of the amount of Common Stock to which
Envirodyne general unsecured creditors were generally entitled, see Note 1 of
Notes to Consolidated Financial Statements. Therefore, although the Company
denies liability in the Lumpkin litigation, and in the absence of successful
mediation or other settlement negotiations will continue to vigorously defend
the case, an adverse finding of liability and damages in the case could result
in substantial dilution to the holders of the Common Stock.
Indemnification Claims
Litigation has been initiated with respect to events arising out of the
Envirodyne bankruptcy case and the 1989 acquisition of Envirodyne by Emerald
Acquisition Corporation ("Emerald") with respect to which, although Envirodyne
is not presently a party to such litigation, certain defendants have asserted
indemnity rights against Envirodyne.
41
<PAGE> 45
In ARTRA Group Incorporated v. Salomon Brothers Holding Company Inc,
Salomon Brothers Inc, D.P. Kelly & Associates, L.P., Donald P. Kelly, Charles K.
Bobrinskoy, James L. Massey, William Rifkind and Michael Zimmerman, Case No. 93
A 1616, United States Bankruptcy Court for the Northern District of Illinois,
Eastern Division, ARTRA Group Incorporated ("ARTRA") alleges breach of fiduciary
duty and tortious inference in connection with the negotiation and consummation
of the Plan of Reorganization. In ARTRA Group Incorporated v. Salomon Brothers
Holding Company Inc, Salomon Brothers Inc, D.P. Kelly & Associates, L.P., Donald
P. Kelly, Charles K. Bobrinskoy and Michael Zimmerman, Case No. 93 L 2198,
Circuit Court of the Eighteenth Judicial Circuit, DuPage County, Illinois, ARTRA
alleges negligence, breach of fiduciary duty, fraudulent misrepresentation and
deceptive business practices in connection with the 1989 acquisition of
Envirodyne by Emerald. The plaintiff seeks damages in the total amount of
$136,200,000 plus interest and punitive damages of $408,600,000. D.P. Kelly &
Associates, L.P. and Messrs. Kelly, Bobrinskoy, Massey, Rifkind and Zimmerman
have asserted common law and contractual rights of indemnity against Envirodyne
for attorneys' fees, costs and any ultimate liability relating to the claims set
forth in the complaints. Envirodyne is continuing its evaluation of the merits
of the indemnification claims against Envirodyne and the underlying claims in
the litigation. Upon the undertaking of D.P. Kelly & Associates, L.P. to repay
such funds in the event it is ultimately determined that there is no right to
indemnity, Envirodyne is advancing funds to D.P. Kelly & Associates, L.P. and
Mr. Kelly for the payment of legal fees in the case pending before the
Bankruptcy Court. Although the case is in a preliminary stage and the Company is
not a party thereto, the Company believes that the plaintiff's claims raise
similar factual issues to those raised in the Envirodyne bankruptcy case which,
if resolved in a manner similar to that in the Envirodyne bankruptcy case, would
render it difficult for the plaintiff to establish liability. Accordingly, the
Company believes that the indemnification claims would not have a material
adverse effect upon the business or financial position of the Company, even if
the claimants were successful in establishing their right to indemnification.
Treatment of Untendered Shares Under Plan of Reorganization
Certain of Envirodyne's stockholders prior to the acquisition of Envirodyne
by Emerald failed to exchange their certificates representing old Envirodyne
common stock for the $40 per share cash merger consideration specified by the
applicable acquisition agreement. In the Envirodyne bankruptcy case, Envirodyne
is seeking to equitably subordinate the interests of the holders of untendered
shares, in which event such holders would receive no distribution pursuant to
the Plan of Reorganization. The Bankruptcy Court granted Envirodyne's motion for
summary judgment to equitably subordinate the holders of untendered shares. The
United States District Court for the Northern District of Illinois has affirmed
the Bankruptcy Court's summary judgment. If such holders were nonetheless
ultimately successful in a further appeal of this matter, Envirodyne believes
that the maximum number of shares of Common Stock that it would be required to
issue to such claimants is approximately 106,000.
42
<PAGE> 46
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
The directors and executive officers of the Company are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Donald P. Kelly........................... 73 Chairman of the Board, President and Chief
Executive Officer and Director
F. Edward Gustafson....................... 53 Executive Vice President, Chief Operating
Officer and Director
J. S. Corcoran............................ 52 Executive Vice President and Chief Financial
Officer
Stephen M. Schuster....................... 39 Vice President, Secretary and General
Counsel
Gordon S. Donovan......................... 41 Vice President and Treasurer
Robert N. Dangremond...................... 52 Director
Avram A. Glazer........................... 34 Director
Malcolm I. Glazer......................... 66 Director
Michael E. Heisley........................ 58 Director
Gregory R. Page........................... 43 Director
Mark D. Senkpiel.......................... 42 Director
</TABLE>
Donald P. Kelly. Mr. Kelly has been Chairman of the Board, President and
Chief Executive Officer of the Company since May 1989. Mr. Kelly has also served
as President and Chief Executive Officer of D.P. Kelly & Associates, L.P.
("DPK"), a management services and private investment firm, since November 1988.
Previously, Mr. Kelly was Chairman of Beatrice Company; Chairman and Chief
Executive Officer of E-II Holdings Inc.; Chairman and Chief Executive Officer of
BCI Holdings Corporation; President of Kelly, Briggs & Associates; and Chairman,
President and Chief Executive Officer of Esmark, Inc. Mr. Kelly has served as a
director of the Company since 1989.
F. Edward Gustafson. Mr. Gustafson has been Executive Vice President and
Chief Operating Officer of the Company since May 1989. Mr. Gustafson was
President of Viskase Corporation, a wholly-owned subsidiary of the Company, from
February 1990 to August 1994. Mr. Gustafson has also served as Executive Vice
President and Chief Operating Officer of DPK since November 1988. Mr. Gustafson
previously held the positions of Vice President of Beatrice Companies, Inc.;
President of E-II Food Specialties Inc.; Executive Vice President of Beatrice
U.S. Food Inc.; and President of the Consumer Healthcare Division of Miles Inc.
Mr. Gustafson has served as a director of the Company since 1993.
J. S. Corcoran. Mr. Corcoran has been Executive Vice President and Chief
Financial Officer of the Company since May 1989. Mr. Corcoran has also served as
Executive Vice President and Chief Financial Officer of DPK since November 1988.
Stephen M. Schuster. Mr. Schuster has been Vice President, Secretary and
General Counsel of the Company since May 1989. Mr. Schuster has also served as
Vice President and General Counsel of DPK since January 1989.
Gordon S. Donovan. Mr. Donovan has been Treasurer of the Company since
November 1989 and was elected as Vice President in May 1995.
Robert N. Dangremond. Mr. Dangremond has been a principal with Jay Alix &
Associates, a consulting and accounting firm specializing in corporate
restructurings and turnaround activities, since August 1989. Mr. Dangremond was
Chairman of the Board, President and Chief Executive Officer of AM
International, Inc., a provider of graphics arts equipment, supplies and
services, from February 1993 to September 1994. From 1981 through 1989, Mr.
Dangremond was the Chief Financial Officer and Treasurer of the Leach &
43
<PAGE> 47
Garner Company. Mr. Dangremond is also a director of Standard Brands Paint
Company, a manufacturer and retailer of paints and related items, Barry's
Jewelers, a jewelry retailer, and AM International, Inc. Mr. Dangremond has
served as a director of the Company since 1993.
Avram A. Glazer. Mr. Avram A. Glazer has been employed by and worked on
behalf of, Malcolm I. Glazer and a number of entities owned and controlled by
Malcolm I. Glazer, for more than the past nine years, with his principal
responsibilities including identifying, implementing, monitoring and disposing
of Malcolm I. Glazer's investment interests, including serving as a Vice
President of First Allied Corporation ("First Allied"), an investment company,
since 1985. He has served as the President and Chief Executive Officer of Zapata
Corporation ("Zapata"), a natural gas company, since March 1995. He is also a
director of Zapata. He also serves as a director of Houlihan's Restaurant Group,
Inc. ("Houlihan's"), a restaurant holding company, and Specialty Equipment
Companies, Inc. ("Specialty"), a restaurant equipment manufacturer. Avram A.
Glazer is the son of Malcolm I. Glazer, who is a member of the Board of
Directors, and has served as a director of the Company since May 1995.
Malcolm I. Glazer. Mr. Malcolm I. Glazer has been a self-employed private
investor, whose diversified portfolio consists of investments in television
broadcasting, restaurants, health care, banking, real estate, stock and
corporate bonds, for more than the past nine years. He has been President and
Chief Executive Officer of First Allied since 1984. He is Chairman of the Board
of Zapata and Chairman of the Board of Houlihan's. He also serves as a director
of Specialty. Malcolm I. Glazer is the father of Avram A. Glazer, who is a
member of the Board of Directors, and has served as a director of the Company
since May 1995.
Michael E. Heisley. Mr. Heisley has for more than five years been the Chief
Executive Officer of Heico Acquisitions, through which Mr. Heisley has interests
in various manufacturing companies. Mr. Heisley is also a director of Capsonic
Group, Inc.; Pettibone Corporation; Heico, Inc.; Davis Wire Corp.; Tom's Foods,
Inc.; Robertson CECO, Inc.; and Nutri/System, Inc. Mr. Heisley has served as a
director of the Company since 1993.
Gregory R. Page. Mr. Page has been President of North American Beef
Operations of Cargill, Inc., a multi-national trader and processor of foodstuffs
and other commodities, since February 1992, and has prior thereto held various
other positions with Cargill, Inc. Mr. Page has served as a director of the
Company since 1993.
Mark D. Senkpiel. Mr. Senkpiel has for more than five years been Investment
Director of the Investment Management Division of Allstate Life Insurance
Company. Mr. Senkpiel has served as a director of the Company since 1993.
On January 7, 1993, Envirodyne and its major domestic subsidiaries filed
petitions under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy
Code"). On December 31, 1993, Envirodyne and the debtor subsidiaries consummated
a plan of reorganization and emerged from bankruptcy.
Mr. Dangremond was appointed Chairman of the Board, President and Chief
Executive Officer of AM International, Inc. ("AMI") in connection with
turnaround consulting services provided to AMI by Jay Alix & Associates, of
which Mr. Dangremond is a principal. On May 17, 1993, AMI filed a petition under
Chapter 11 of the Bankruptcy Code. On September 29, 1993, a plan of
reorganization was confirmed with respect to AMI.
44
<PAGE> 48
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Compensation of Directors. Each director who is not an officer of the
Company received an annual retainer of $20,000 in 1994 and a fee of $1,000 for
each attended meeting of the Board of Directors. Chairmen of committees of the
Board of Directors received an annual retainer of $1,500 in 1994. Directors also
received a fee for each attended meeting of a committee of the Board of
Directors of $1,000 ($500 in the case of committee meetings occurring
immediately before or after meetings of the full Board of Directors). Directors
who are officers of the Company do not receive compensation in their capacity as
members of the Board of Directors. On May 10, 1995 (the date of the Company's
annual meeting of stockholders), each non-employee director of the Company
received non-qualified stock options to purchase 2,000 shares of Common Stock at
an option exercise price equal to the fair market value of a share of Common
Stock on the date of grant in accordance with the terms of the 1993 Stock Option
Plan. Pursuant to such Plan, on the date of each subsequent annual meeting of
stockholders, non-employee directors will automatically be granted non-qualified
options to purchase 1,000 shares of Common Stock at an option exercise price
equal to the fair market value of a share of Common Stock on the date of grant.
The Board of Directors has established the following standing committees:
Audit Committee. The principal responsibilities and authority of the Audit
Committee are to review and recommend to the Board of Directors the selection of
the Company's independent accountants; to review with the independent
accountants the scope and results of the annual audit engagement and the system
of internal accounting controls; and to direct and supervise special audit
inquiries. The current members of the Audit Committee are Michael E. Heisley,
Chairman, and Mark D. Senkpiel.
Compensation and Nominating Committee. The principal responsibilities and
authority of the Compensation and Nominating Committee are to review and approve
certain matters involving executive compensation; to review and approve grants
of stock options and stock appreciation rights under the Company's incentive
plans; to review and recommend adoption of or revisions to compensation plans
and policies; and to review and make recommendations to the Board of Directors
regarding such matters as the size and composition of the Board of Directors,
criteria for director nominations, director candidates and such other related
matters as the Board of Directors may request from time to time. The current
members of the Compensation and Nominating Committee are Robert N. Dangremond,
Chairman, and Gregory R. Page.
The Board of Directors may from time to time establish other committees to
assist it in the discharge of its responsibilities.
Compensation Committee Interlocks and Insider Participation. The
Compensation and Nominating Committee of the Board of Directors consists of
Messrs. Dangremond and Page, each of whom is a non-employee director of the
Company. Mr. Page is the President of North American Beef Operations of Cargill,
Inc. In fiscal 1994, Viskase had sales of $14,779,000 made in the ordinary
course and on arm's-length terms to Cargill, Inc. and its affiliates. Cargill
Financial Services Corporation is the beneficial owner of 10.1% of the Company's
outstanding Common Stock.
45
<PAGE> 49
Summary of Cash and Certain Other Compensation of Executive Officers. The
Summary Compensation Table below provides certain summary information concerning
cash compensation paid by the Company during 1994, 1993 and 1992 for services
rendered by the Company's Chief Executive Officer and each of the other
executive officers of the Company serving at the end of the last completed
fiscal year whose total annual salary and bonus exceeded $100,000 in 1994. For
additional information, including a description of the Amended and Restated
Management Services Agreement dated as of December 31, 1993 between the Company
and DPK, see "Certain Relationships and Related Transactions."
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------------------- AWARDS
OTHER ANNUAL ------------ ALL OTHER
NAME AND SALARY BONUS COMPENSATION OPTIONS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) $(1) (#)(2) ($)(3)
- -------------------------------- ---- ------- ------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Donald P. Kelly................. 1994 450,000 -- 48,125 -- 472
Chairman of the Board, President 1993 450,000 -- -- -- 472
and Chief Executive Officer 1992 450,000 -- 202,771 -- 469
F. Edward Gustafson............. 1994 390,000 -- 61,496 -- 16,203
Executive Vice President and 1993 390,000 -- 110,370 -- 10,976
Chief Operating Officer 1992 390,000 -- 140,503 -- 9,724
J. S. Corcoran.................. 1994 390,000 -- 78,072 -- 472
Executive Vice President 1993 390,000 -- 85,186 -- 472
and Chief Financial Officer 1992 390,000 -- 81,287 -- 469
Stephen M. Schuster............. 1994 151,375 63,261 -- 22,850 6,197
Vice President, Secretary 1993 144,750 47,406 -- -- 6,320
and General Counsel(4) 1992 138,125 46,437 -- -- 6,136
</TABLE>
- -------------------------
(1) In 1994 and 1992 Mr. Kelly was reimbursed for personal travel expenses in
the amounts of $40,500 and $193,579, respectively. In 1994 and 1993 Mr.
Gustafson was reimbursed $33,503 and $31,543, respectively, for payment of
income taxes (gross ups) on certain benefits and in 1993 had personal use of
a Company auto at an aggregate incremental cost to the Company of $50,000.
In 1992 Mr. Gustafson was reimbursed for personal travel expenses in the
amount of $86,291. In 1994 Mr. Corcoran was reimbursed $30,092 for payment
of income taxes (gross ups) on certain benefits. In 1994 and 1993 Mr.
Corcoran had personal use of a Company auto at an aggregate incremental cost
to the Company of $30,861 and $33,000, respectively. Mr. Corcoran was
reimbursed for personal travel expenses in the amounts of $30,780 and
$33,870 in 1993 and 1992, respectively.
(2) Incentive stock options were granted on May 27, 1994 under the 1993 Stock
Option Plan.
(3) All Other Compensation consists primarily of the Company's contributions
pursuant to defined contribution plans. In 1994, Mr. Gustafson and Mr.
Schuster received $12,750 and $5,963, respectively, with respect to such
Company contributions.
(4) Mr. Schuster is eligible for payments under the Envirodyne Management
Incentive Plan. Bonus payments are determined based upon the Company's
overall financial performance and the individual's performance. Cash bonuses
under the Management Incentive Plan are earned with respect to the year
indicated and paid in the following year.
46
<PAGE> 50
Stock Option Grants. The following table provides information concerning
the grant of stock options to Mr. Schuster under the Company's 1993 Stock Option
Plan during fiscal 1994. Messrs. Kelly, Gustafson and Corcoran are not eligible
to participate in the 1993 Stock Option Plan. No stock appreciation rights
("SARs") have been granted under the 1993 Stock Option Plan.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
PERCENT OF ANNUAL
NUMBER OF TOTAL RATES OF STOCK PRICE
SECURITIES OPTIONS APPRECIATION FOR
UNDERLYING GRANTED TO OPTION
OPTIONS EMPLOYEES EXERCISE OR TERM(3)
GRANTED IN FISCAL BASE PRICE EXPIRATION --------------------
NAME (#)(1) YEAR ($/SHARE)(2) DATE 5%($) 10%($)
- ----------------------------- ---------- ---------- ------------ ---------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
Stephen M. Schuster.......... 22,850 5.7% 5.0625 05/27/04 72,749 184,361
</TABLE>
- -------------------------
(1) This grant provided that one-third of the options would become exercisable
on the first anniversary of the date of grant and an additional one-third of
the options would become exercisable on the second and third anniversaries,
respectively, of the date of grant, subject to the acceleration of
exercisability upon the occurrence of certain events. Such an acceleration
event occurred in November 1994.
(2) Exercise price is equal to the market value of the Common Stock on the grant
date, calculated as the average of the closing bid and asked prices on such
date as reported on the National Association of Securities Dealers Automated
Quotation System.
(3) The potential realizable value is based on the term of the option at the
date of grant (10 years). It is calculated by assuming that the stock price
on the date of grant appreciates at the indicated annual rate, compounded
annually for the entire term, and that the option is exercised and sold on
the last day of the option term for the appreciated stock price. These
amounts represent certain assumed rates of appreciation only. Actual gains,
if any, on stock option exercises and on the sale of shares of Common Stock
acquired upon exercise are dependent on the future performance of the Common
Stock and overall stock market conditions. There can be no assurance that
the amounts reflected in this table will be achieved.
Stock Option Exercises and Holdings. The following table provides
information concerning the exercise of options by Mr. Schuster during the last
fiscal year and the value of unexercised options held as of December 29, 1994.
Messrs. Kelly, Gustafson and Corcoran are not eligible to participate in the
1993 Stock Option Plan. No SARs have been granted under the 1993 Stock Option
Plan.
AGGREGATED OPTION EXERCISES IN 1994 AND DECEMBER 29, 1994 OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES
UNDERLYING VALUE OF
SHARES UNEXERCISED UNEXERCISED
ACQUIRED OPTIONS AT OPTIONS AT
ON VALUE 12/29/94(#) 12/29/94($)
EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE(1) UNEXERCISABLE
- --------------------------------------------- -------- -------- ---------------- -------------
<S> <C> <C> <C> <C>
Stephen M. Schuster.......................... -- -- -0-/22,850 -0-/-0-
</TABLE>
- -------------------------
(1) The grant of these options provided that one-third of the options would
become exercisable on the first anniversary of the date of grant and an
additional one-third of the options would become exercisable on the second
and third anniversaries, respectively, of the date of grant, subject to the
acceleration of exercisability upon the occurrence of certain events. Such
an acceleration event occurred in November 1994. Upon approval of the 1993
Stock Option Plan by the stockholders of the Company in May 1995, these
options became exercisable.
47
<PAGE> 51
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
DPK currently provides corporate management services to the Company under
the Amended Management Services Agreement. The initial term of the Amended
Management Services Agreement expires December 31, 1995. After the initial term,
the Amended Management Services Agreement extends for successive one-year
periods unless otherwise canceled upon one year's prior notice. The Amended
Management Services Agreement may be terminated at any time by the Company with
a severance payment equal to 12 months' compensation thereunder. The Amended
Management Services Agreement provides for the payment of $2,000,000, payable in
management fees and salaries, the reimbursement of expenses and the payment of
an annual bonus of up to $1,000,000 tied to the Company's earnings in comparison
to the projections set forth in the disclosure statement relating to the Plan of
Reorganization. For each of fiscal 1994, 1993 and 1992, the Company paid DPK
$770,000 for management services. In each of these years, Messrs. Kelly,
Gustafson and Corcoran, executive officers and limited partners in DPK, received
directly from the Company combined annual salaries of $1,230,000 as executive
officers of the Company.
In fiscal 1994, 1993 and 1992, the Company made payments of $560,000,
$354,000 and $681,000, respectively, to an affiliate of DPK for the use of a jet
aircraft on an as-needed basis. The usage charge is based upon an hourly rate
comparable to that which would be charged by a non-affiliated company for use of
a chartered corporate aircraft. During fiscal 1994, 1993 and 1992, the Company
purchased products in the ordinary course and on arm's-length terms from
affiliates of DPK in the amounts of $1,367,000, $941,000 and $285,000,
respectively. During fiscal 1994, 1993 and 1992, the Company sublet office space
from DPK for which it paid $151,000, $150,000 and $150,000, respectively, in
rent. The rent is comparable to that which would be charged to a non-affiliated
company for use of this office space.
In connection with the litigation described under "Business -- Legal
Proceedings -- Indemnification Claims," DPK and Mr. Kelly have asserted common
law and contractual rights of indemnity against the Company for attorneys' fees,
costs and any ultimate liability relating to the claims set forth in the
complaints. During fiscal 1994, the Company advanced a total of $118,000 to DPK
and Mr. Kelly with respect to the defense costs in the bankruptcy court
proceeding described therein, based upon DPK's undertaking to repay such funds
in the event it is ultimately determined that DPK is not entitled to
indemnification.
In fiscal 1994 and 1993, Viskase had sales of $14,779,000 and $13,030,000,
respectively, to Cargill, Inc. and its affiliates. Such sales were made in the
ordinary course and on arm's-length terms. Cargill Financial Services
Corporation is the beneficial owner of 10.1% of the Company's outstanding Common
Stock, and Gregory R. Page, President of North American Beef Operations of
Cargill, Inc., is a director of the Company.
SECURITY OWNERSHIP
The following table and notes set forth as of July 1, 1995 the beneficial
ownership, as defined by the regulations of the Commission, of Common Stock held
by (a) each person or group of persons known to the Company to beneficially own
more than 5% of the outstanding shares of Common Stock, (b) each director of the
Company, (c) each executive officer of the Company listed in the Summary
Compensation Table above and (d) all executive officers and directors of the
Company as a group. All information is taken from or based upon ownership
filings made by such persons with the Commission or upon information provided by
such persons to the Company.
<TABLE>
<CAPTION>
AMOUNT OF NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------------------------- ------------------- --------
<S> <C> <C>
Malcolm I. Glazer........................................ 4,191,298(1) 31.0%
The Malcolm I. Glazer Trust
1482 South Ocean Boulevard
Palm Beach, Florida 33480
Donald P. Kelly.......................................... 1,760,665(2)(3) 12.9%
701 Harger Road, Suite 190
Oak Brook, Illinois 60521
</TABLE>
48
<PAGE> 52
<TABLE>
<CAPTION>
AMOUNT OF NATURE OF
BENEFICIAL PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER OWNERSHIP OF CLASS
- --------------------------------------------------------- ------------------- --------
<S> <C> <C>
IDS Financial Corporation................................ 1,514,825(4) 11.2%
IDS Tower 10
Minneapolis, Minnesota 55440
Cargill Financial Services Corporation................... 1,363,343(5) 10.1%
6000 Clearwater Drive
Minnetonka, Minnesota 55343
F. Edward Gustafson...................................... 1,087,066(3)(6) 8.0%
701 Harger Road, Suite 190
Oak Brook, Illinois 60521
J. S. Corcoran........................................... 1,007,752(3)(7) 7.5%
701 Harger Road, Suite 190
Oak Brook, Illinois 60521
James D. Bennett......................................... 973,529(8) 7.2%
Restructuring Capital Associates L.P.
450 Park Avenue
New York, New York 10022
Robert N. Dangremond..................................... 4,000 *
Avram A. Glazer.......................................... 2,000 *
Michael E. Heisley....................................... 2,000 *
Gregory R. Page.......................................... 4,000 *
Stephen M. Schuster...................................... 39,944(9) *
Mark D. Senkpiel......................................... 4,000 *
All directors and executive officers of the Company
as a group (11 persons)................................ 6,094,267(1)(2)(3)
(6)(7)(9)(10) 44.6%
</TABLE>
- -------------------------
* Less than 1%
(1) The shares are owned by the Malcolm I. Glazer Trust (the "Glazer Trust"),
with respect to which Mr. Glazer is the sole trustee and, during his
lifetime, the sole beneficiary. The Company has been informed that on June
16, 1995, the Glazer Trust entered into a letter of intent ("Letter of
Intent") with Zapata Corporation ("Zapata") which contemplates the sale of
all of the Glazer Trust's 4,189,298 shares of Common Stock of the Company
to Zapata. Malcolm I. Glazer is Chairman of Zapata's Board of Directors and
Avram A. Glazer is the Chief Executive Officer and a director of Zapata.
The transaction contemplated by the Letter of Intent is subject to the
execution of a definitive purchase agreement which will include customary
conditions. The transaction is also subject to the approval of a special
committee of disinterested directors formed by Zapata's Board of Directors
to evaluate the transaction and the receipt of a fairness opinion from an
investment banking firm that the transaction is fair and reasonable to
Zapata and its stockholders from a financial point of view.
(2) The ownership indicated includes 181,266 shares owned by Mr. Kelly directly
and 462,012 shares owned by 701 Partners L.P., an Illinois limited
partnership of which Mr. Kelly is the general partner. The address of 701
Partners L.P. is 701 Harger Road, Suite 190, Oak Brook, Illinois 60521. 701
Partners also owns 111,658 warrants ("Warrants") to purchase Common Stock
at an exercise price of $17.25 per share, which are assumed to have been
exercised for purposes of disclosing the ownership indicated.
(3) The ownership indicated includes 62,434 shares owned by D.P. Kelly &
Associates, L.P. ("DPK") of which Messrs. Corcoran, Gustafson and Kelly are
principals and officers. The general partner of DPK is C&G Management
Company, Inc. ("C&G Management"), which is owned by Messrs. Corcoran,
Gustafson and Kelly. The address of DPK and C&G Management is 701 Harger
Road, Suite 190, Oak
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Brook, Illinois 60521. DPK also owns 4,105 Warrants, which are assumed to
have been exercised for purposes of disclosing the ownership indicated. The
ownership indicated includes 939,190 shares owned by Volk Enterprises, Inc.
("Volk"), whose address is 1230-1232 South Avenue, Turlock, California
95380. Volk is controlled by Volk Holdings L.P. ("Volk Holdings"), whose
general partner is Wexford Partners I L.P. ("Wexford Partners"). The
general partner of Wexford Partners is Wexford Corporation ("Wexford
Corp."), which is owned by Messrs. Corcoran, Gustafson and Kelly. The
address for each of Volk Holdings, Wexford Partners and Wexford Corp. is
701 Harger Road, Suite 190, Oak Brook, Illinois 60521.
(4) American Express Company ("American Express"), whose address is American
Express Tower, World Financial Center, New York, New York 10285, is the
parent of IDS Financial Corporation ("IDS Financial") and may therefore be
deemed to be the beneficial owner of securities owned by IDS Financial.
American Express disclaims ownership of the Common Stock owned by IDS
Financial. The ownership indicated includes 727,116 shares owned by IDS
Extra Income Fund, Inc., whose address is IDS Tower 10, Minneapolis,
Minnesota 55440. IDS Extra Income Fund, Inc. is advised by IDS Financial.
(5) The ownership indicated includes 931,678 shares owned by Cargill Financial
Services Corporation ("CFSC"), 318,053 shares owned by Minnetonka Limited
Fund, L.P. ("MLFLP") and 113,612 shares owned by GAM-CARGILL Minnetonka
Fund Inc. ("GAM"). A subsidiary of CFSC acts as the general partner of
MLFLP and as the investment advisor to GAM.
(6) The ownership indicated includes 46,224 shares owned directly by Mr.
Gustafson and 23,619 shares owned by Mr. Gustafson's spouse. Mr. Gustafson
also owns 11,494 Warrants, which are assumed to have been exercised for
purposes of disclosing the ownership indicated.
(7) The ownership indicated includes 1,367 shares owned directly by Mr.
Corcoran. Mr. Corcoran also owns 656 Warrants, which are assumed to have
been exercised for purposes of disclosing the ownership indicated.
(8) The ownership indicated includes 738,184 shares owned by Bennett
Restructuring Fund, L.P., whose address is 450 Park Avenue, New York, New
York 10022, and 235,345 shares held by managed accounts over which Mr.
Bennett and Restructuring Capital Associates, L.P. ("RCA") have investment
discretion. RCA is the general partner of Bennett Restructuring Fund, L.P.
The general partner of RCA is Bennett Capital Corporation, of which Mr.
Bennett is the sole shareholder.
(9) The ownership indicated includes 15,094 shares owned directly by Mr.
Schuster and 2,000 shares owned by Mr. Schuster's spouse. Mr. Schuster has
been granted 22,850 options under the Company's 1993 Stock Option Plan, all
of which are currently exercisable.
(10) The ownership indicated includes currently exercisable options to purchase
an aggregate of 12,000 shares of Common Stock held by the non-employee
directors of the Company.
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DESCRIPTION OF NOTES
GENERAL
The Old Notes have been, and the New Notes will be, issued pursuant to an
indenture (the "Indenture") dated as of June 20, 1995 between the Company and
Shawmut Bank Connecticut, National Association, as trustee (the "Trustee"). The
terms of the Notes include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), as in effect on the date of the Indenture. The following
summary of certain provisions of the Indenture does not purport to be complete
and is qualified in its entirety by reference to the Indenture. The definitions
of certain terms used in the Indenture and in the following summary are set
forth below under "-- Certain Definitions." Capitalized terms used herein,
unless otherwise defined, have the meanings given them in the Indenture.
RANKING
The Notes are senior secured obligations of Envirodyne, which rank senior
to all senior unsecured and subordinated indebtedness of Envirodyne and rank
pari passu with all other existing and any permitted future senior secured
indebtedness of Envirodyne other then the security interests in favor of the
holders of obligations under the Letter of Credit Facility (subject to the
respective security interests, if any, held by other lenders).
PRINCIPAL, MATURITY AND INTEREST
The Notes are limited in aggregate principal amount at any time to
$160,000,000. The stated maturity of the Notes is June 15, 2000. The New Series
B Notes (to be exchanged for outstanding Old Series A Notes) will be limited in
aggregate principal amount to $151,500,000, and the New Series D Notes (to be
exchanged for outstanding Old Series C Notes) will be limited in aggregate
principal amount to $8,500,000.
The Old Series A Notes and New Series B Notes will bear interest at the
rate of 12% per annum, and the Old Series C Notes and New Series D Notes will
bear interest at the LIBOR Rate. Interest on the Securities will accrue from
June 20, 1995, or from the most recent date on which interest has been paid or
duly provided for, and be payable on December 15 and June 15 of each year,
commencing December 15, 1995. The Company will pay interest on overdue principal
at the Default Rate. In addition, the Company will pay interest on overdue
installments of interest and on overdue payments of the Yield Maintenance Amount
at the Default Rate.
FORM OF NOTES
Upon issuance, except as provided below, each series of Notes will be
represented by a Global Note. Each Global Note will be deposited with, or on
behalf of, the Depository and registered in the name of Cede & Co. as nominee of
the Depository. Notwithstanding the foregoing, any purchaser that is not a
"Qualified Institutional Buyer" under Rule 144A under the Securities Act will
receive the Notes in certificated form and will not be able to trade such
securities through the Depository until the Notes are sold to a Qualified
Institutional Buyer. If (i) the Depository is at any time unwilling or unable to
continue as Depository and a successor depositary is not appointed by the
Company within 90 days or (ii) an Event of Default has occurred and is
continuing under the Indenture, then upon surrender of each Global Note, Notes
in certificated form will be issued to each such person that the Depository or
its nominee identifies as the beneficial owner of the related Notes. In
addition, subject to certain conditions, any person having a beneficial interest
in any Global Note may, upon request to the Trustee, exchange that beneficial
interest for Notes in certificated 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 fully
registered form. To the extent Notes in definitive form are issued, such Notes
will be issued in denominations of $1,000 and integral multiples thereof.
Upon the issuance of each Global Note, the Depository will credit, on its
book-entry registration and transfer system, the respective principal amounts of
the Notes represented by each Global Note to the
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accounts of institutions that have accounts with the Depository
("Participants"). Ownership of beneficial interests in each Global Note will be
limited to Participants or persons that hold interests through Participants.
Ownership of beneficial interests in each Global Note will be shown on, and the
transfer of that ownership will be effected only through, records maintained by
the Depository with respect to Participants' interests or by Participants or by
persons that hold through Participants with respect to beneficial owners'
interests. The laws of some states require that certain purchasers of securities
take physical delivery of such securities in definitive form. Those ownership
limits and laws may impair the ability to transfer beneficial interests in each
Global Note.
Principal and interest payments on Notes registered in the name of the
Depository or its nominee will be made to the Depository or its nominee, as the
case may be, as the registered owner of the Global Note representing such Notes.
The Company expects that the Depository, upon receipt of any payment of
principal or interest in respect of a Global Note, will immediately credit
Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global Note as
shown on the records of the Depository. The Company also expects that payments
by Participants to owners of beneficial interests in each Global Note held
through such Participants will be governed by standing instructions and
customary practices, as is now the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of those Participants. None of the Company, the Trustee, any
paying agent or any registrar for the Notes will have any responsibility or
liability for any aspect of the records relating to or payment made on account
of beneficial ownership interests in each Global Note or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests.
The Depository Trust Company, New York, New York (the "Depository" or
"DTC"), will be the initial Depository with respect to the Notes. DTC has
advised the Company that it is a limited-purpose trust company organized under
the laws of the State of New York, a member of the Federal Reserve System, a
"clearing corporation" within the meaning of the Uniform Commercial Code and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act. DTC was created to hold securities of its Participants and to
facilitate the clearance and settlement of securities transactions among its
Participants in such securities through electronic book-entry changes in
accounts of the Participants, thereby eliminating the need for physical movement
of securities certificates. DTC's Participants include securities brokers and
dealers, banks, trust companies, clearing corporations and certain other
organizations, some of whom (and/or their representatives) own DTC. Access to
DTC's book-entry system is also available to others, such as banks, brokers,
dealers and trust companies 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 DTC only through
Participants.
So long as the Depository, or its nominee, is a holder of the Global Note,
the Depository or its nominee, as the case may be, will be considered the sole
owner or holder of the Notes represented by such Global Note for all purposes
under the Indenture and such Global Note. Except as set forth above, owners of
beneficial interests in such Global Note will not be entitled to have Notes
represented by such Global Note registered in their names, will not receive or
be entitled to receive physical delivery of Notes or such Global Note and will
not be considered the owners or holders thereof under the Indenture or such
Global Note. Accordingly, each person owning a beneficial interest in a Global
Note must rely on the procedures of the Depository and, if such person is not a
Participant, on the procedures of the Participant through which such person
directly or indirectly owns its interest, to exercise any rights of a holder
under the Indenture or each Global Note.
DTC has informed the Company that under existing DTC policies and industry
practices, if the Company requests any action of holders, or if any owner of a
beneficial interest in a Global Note desires to give any notice or take any
action that a holder is entitled to give or take under the Indenture or a Global
Note, DTC would authorize and cooperate with each Participant to whose account
any portion of the Notes represented by a Global Note is credited on DTC's books
and records to give such notice or take such action. Any person owning a
beneficial interest in such Global Note that is not a Participant must rely on
any contractual arrangements it has directly, or indirectly through its
immediate financial intermediary, with a Participant to give such notice or take
such action.
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GUARANTEES
The Company's obligations under the Notes will be guaranteed on a secured
basis by each Subsidiary Guarantor. The guarantees of the Notes by each
Subsidiary Guarantor (the "Guarantees") will rank pari passu in right of payment
with the guarantee by such guarantor of all obligations under the Revolving
Credit Agreement and will rank junior in right of payment with the guarantee by
such guarantor of all obligations under the Letter of Credit Agreement.
The Guaranty Agreement provides that in the event of a sale or disposition
of a Subsidiary Guarantor (or all or substantially all of its assets) to an
entity which is not a Subsidiary of the Company, such Subsidiary Guarantor shall
be released and relieved of its obligations under the Guarantee; provided that
such sale or disposition is otherwise in compliance with the terms of the
Indenture.
COLLATERAL AND SECURITY
Pursuant to the Collateral Documents, the Company and the Subsidiary
Guarantors have pledged to the Collateral Agent, for its benefit and the benefit
of the Holders of the Notes, the holders of obligations under the Revolving
Credit Agreement and the Letter of Credit Agreement, each of the following
assets of the Company and the Subsidiary Guarantors: (a) substantially all
domestic fixed assets (other than assets subject to the GECC Lease Documents),
(b) all domestic accounts receivable, (c) all items of equipment and fixtures,
(d) all inventory, (e) all patents, trademarks and other intellectual property
(subject to non-exclusive licensing agreements), (f) all capital stock of the
Company's Significant Domestic Subsidiaries and 65% of the capital stock of
Viskase, S.A., and (g) all proceeds of the foregoing.
The Holders of the Notes will share any proceeds of the foregoing
collateral on a pari passu basis with the holders of obligations under the
Revolving Credit Agreement pursuant to an intercreditor agreement. Pursuant to
such intercreditor agreement, the holders of obligations under the Letter of
Credit Agreement will have priority over all other liens on such collateral. See
"Description of Intercreditor Arrangements."
No appraisals of any of the Collateral have been prepared by or on behalf
of the Company or in connection with the sale of the New Notes. However, the net
book value of assets included in the Collateral as of May 31, 1995 was in excess
of $400 million. There can be no assurance that the proceeds of any sale of the
Collateral in whole pursuant to the Indenture and the Collateral Documents
following an Event of Default would be sufficient to satisfy payments due on the
Notes. In addition, the ability of the Holders of Notes to realize upon the
Collateral may be subject to certain Bankruptcy Law limitations in the event of
a bankruptcy. See "-- Certain Bankruptcy Limitations."
The release of any Collateral from the terms of the Collateral Documents
will not be deemed to impair the security under the Indenture in contravention
of the provisions thereof if and to the extent the Collateral is released
pursuant to the Collateral Documents. In connection with the release of
Collateral, the Trustee shall determine whether it has received all
documentation required by Section 314(d) of the Trust Indenture Act to permit
such release.
CERTAIN BANKRUPTCY LIMITATIONS
The right of the Collateral Agent, as agent for the holders of the
Consolidated Secured Debt (including the Notes), to repossess and dispose of the
Collateral upon the occurrence of an Event of Default is likely to be
significantly impaired by applicable bankruptcy law if a bankruptcy proceeding
were to be commenced by or against the Company or a Subsidiary Guarantor prior
to the Collateral Agent having repossessed and disposed of the Collateral. Under
Bankruptcy Law, secured creditors such as the holders of the Consolidated
Secured Debt are prohibited from repossessing their security from a debtor in a
bankruptcy case, or potentially from disposing of security repossessed from such
debtor, without bankruptcy court approval. Moreover, Bankruptcy Law permits the
debtor to continue to retain and to use collateral even though the debtor is in
default under the applicable debt instruments; provided that the secured
creditor is given "adequate protection." The meaning of the term "adequate
protection" may vary according to circumstances, but it is generally construed
to protect the value of the secured creditor's interest in the collateral as of
the date of the
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commencement of the bankruptcy proceeding and may include interim cash payments
or the granting of replacement liens, if and at such times as the court in its
discretion determines, for any diminution in the value of the collateral as a
result of the stay or any use or other disposition of the collateral by the
debtor during the pendency of the bankruptcy case. In view of the lack of a
precise definition of the term "adequate protection" and the broad discretionary
powers of a bankruptcy court, it is impossible to predict how long payments
under the Notes could be delayed following commencement of a bankruptcy case,
whether or when the Collateral Agent could vacate the automatic stay and
ultimately repossess or dispose of the Collateral or whether or to what extent
Holders of the Notes would be compensated for any diminution in the value of the
Collateral during the bankruptcy proceeding through the requirement of "adequate
protection."
MANDATORY REDEMPTION
The Company is required to redeem, on June 15, 1999 (the "Mandatory
Redemption Date"), Securities in the principal amount of $80,000,000 (or, if
less, the aggregate principal amount of all Securities then outstanding) at a
price (the "Mandatory Redemption Price") equal to 100% of the principal amount
thereof plus accrued and unpaid interest to the Mandatory Redemption Date. The
Mandatory Redemption Price will be due and payable on June 15, 1999.
OPTIONAL REDEMPTION
The Company may redeem (an "Optional Redemption") all or any portion of the
Securities at any time after the Effective Date at a price (the "Optional
Redemption Price") equal to 100% of the principal amount thereof, plus accrued
and unpaid interest to the Optional Redemption Date and plus the
Yield-Maintenance Amount, if any, with respect to the Securities to be so
redeemed.
If less than all of the outstanding Securities are to be redeemed, the
principal amount so redeemed will be allocated to all Securities at the time
outstanding in proportion to the respective outstanding principal amounts
thereof. In any proration, the Company will, in good faith, make such
adjustments, reallocations and eliminations as shall be necessary to the end
that the principal amount of Securities so prorated shall be $1,000 or a
multiple thereof, by increasing or decreasing or eliminating the amount which
would be allocable to any Holder on the basis of exact proportion by an amount
not exceeding $1,000.
At least 30 but not more than 60 days before a date fixed for redemption,
the Company will give a notice of redemption to each Holder whose Securities are
to be redeemed.
The notice shall identify the Securities to be redeemed and will state,
among other things, (a) the aggregate principal amount to be redeemed, the
amount of accrued interest, if any, thereon to be paid and whether a
Yield-Maintenance Amount is to be paid; and (b) if any Security is being
redeemed in part, the portion of the principal amount (equal to $1,000 or any
integral multiple thereof) of such Security to be redeemed and that, on or after
the date fixed for redemption, upon surrender of such Security, a new Security
or Securities in principal amount equal to the unredeemed portion thereof will
be issued. On and after any redemption date, interest will cease to accrue on
the Notes or part thereof called redemption as long as the Company has deposited
with the paying agent funds in satisfaction of the redemption price pursuant to
the Indenture.
OFFERS TO PURCHASE FOLLOWING CHANGE OF CONTROL AND EXCESS CASH FLOW.
Upon the occurrence of a Change of Control, each Holder of a Security shall
have the right to have such Security repurchased by the Company on the terms and
conditions precedent set forth in the Indenture. The Company shall, within 25
days following the date of the consummation of a transaction resulting in a
Change of Control, mail an offer with respect to an offer to purchase all
outstanding Securities at a purchase price equal to 100% of the outstanding
principal amount thereof together with interest thereon to the date of purchase
and the Yield-Maintenance Amount with respect thereto; provided, however, that
installments of interest whose Stated Maturity is on or prior to the purchase
date shall be payable to the Holders of such Securities, registered as such at
the close of business on the relevant record dates according to the terms of the
Securities. Each Holder shall be entitled to tender all or any portion of the
Securities owned by such Holder
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pursuant to the offer to purchase. The Company shall cause the purchase date to
be not less than five (5) Business Days prior to the "Purchase Date" (as such
term is defined in the 10.25% Notes Indenture) and any other purchase date that
may arise with respect to the repurchase or repayment of any debt instruments
following a Change of Control or other change in control, other than debt
instruments constituting Consolidated Senior Debt.
In the event that the Company has Excess Cash Flow in excess of $5,000,000
in any fiscal year of the Company, beginning with the fiscal year of the Company
ending in December 1995, the Company shall make an offer to purchase Securities
having an aggregate outstanding principal amount equal to the Excess CF Amount
relating to such Excess Cash Flow in such fiscal year, and, no later than April
15 of the year immediately following such fiscal year of the Company in which
Excess Cash Flow exceeds $5,000,000, mail an offer to each Holder to purchase
such outstanding principal amount of Securities at a purchase price equal to
100% of the outstanding principal amount thereof together with interest accrued
thereon to the purchase date therefor; provided, however, that installments of
interest whose Stated Maturity is on or prior to such purchase date shall be
payable to the Holders of such Securities, registered as such at the close of
business on the relevant record dates according to the terms of the Securities;
provided, further, that no such offer shall be made if, at the time of mailing
such offer, a Default or an Event of Default exists or would exist after giving
effect to the transactions contemplated by such offer (assuming such offer were
fully subscribed); provided, still further, that the Company, at its option, may
reduce the principal amount of Securities it must purchase by the principal
amount of Securities acquired by the Company in the open market prior to the
purchase date applicable to such purchase if (i) such previously acquired
Securities are retired prior to such purchase date, (ii) no such previously
acquired Security has theretofore been used as a credit by the Company or
otherwise to satisfy any obligations of the Company (including, without
limitation, the obligation of the Company pursuant to this covenant), and (iii)
the Company delivers an officers' certificate to the Trustee and each Holder to
the effect set forth in clauses (i) and (ii) above not less than ten (10)
Business Days prior to the applicable purchase date. To the extent that an offer
to purchase is not fully subscribed, the Company may retain the unutilized
amount of such Excess CF Amount for general corporate purposes in accordance
with the terms of the Indenture. To the extent that an offer to purchase is
over-subscribed, the principal amount of the Securities to be purchased shall be
allocated on a pro rata basis in proportion to the relative principal amounts as
to which the offer was accepted, and in connection with such proration the
Company shall, in good faith, make such adjustments, reallocations and
eliminations as shall be necessary to maintain the Securities in integral
multiples of $1,000.
On the purchase date in each of the foregoing offers, the Company shall (i)
accept for payment Securities or portions thereof tendered pursuant to the
offer, (ii) deposit with the paying agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust) money sufficient to pay the
purchase price of all Securities or portions thereof so accepted and (iii)
deliver or cause to be delivered to the Trustee all Securities so accepted
together with an officers' certificate stating the Securities or portions
thereof accepted for payment by the Company. The paying agent shall promptly
mail or deliver to Holders of Securities so accepted payment in an amount equal
to the purchase price, and the Trustee shall promptly authenticate and mail or
deliver to such Holders a new Security or Securities equal in principal amount
to any unpurchased portion of the Security surrendered as requested by the
Holder. Any Security not accepted for payment shall be promptly mailed or
delivered by the Company to the Holder thereof. The Company will publicly
announce the results of the offer to purchase on or as soon as practicable after
the purchase date.
Prior to the time required for the mailing of an offer with respect to the
foregoing, the Company will in good faith (i) seek to obtain any required
consent under the GECC Lease Documents so as to permit the making of the offer
to purchase and the purchase of Securities, or (ii) repay all or a portion of
the Indebtedness under the GECC Lease Documents to the extent necessary
(including, if necessary payment in full of such Indebtedness and payment of any
prepayment premiums, fees, expenses or penalties) to permit the making of the
offer to purchase and the purchase of Securities without such consent.
If any such offer to purchase is made, the Company covenants that it shall
(and if applicable shall cause its Subsidiaries to) comply with all applicable
tender offer rules and regulations under all state and Federal
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securities laws, including, but not limited to, Section 14(e) under the Exchange
Act and Rule 14e-1 thereunder.
CERTAIN COVENANTS
Consolidated Tangible Net Worth. The Company covenants that it will not
cause or permit Consolidated Tangible Net Worth, at any time:
(i) During each "Clause (i) Test Period" (as defined below) occurring
during the period commencing on the Effective Date and ending on December
28, 1995, to be less than an amount (the "Clause (i) Amount") equal to (1)
negative $37,000,000, plus (2) 50% of Consolidated Net Income for such
Clause (i) Test Period (or zero in the case of a deficit), plus (3) the
amount of any net gain realized by the Company or any of its Subsidiaries
on the exchange, redemption, purchase or other acquisition of any of its
debt securities (including, without limitation, the 10.25% Notes) during
such Clause (i) Test Period; where "Clause (i) Test Period" means, at any
time, the period (taken as one accounting period) commencing on March 31,
1995 and ending on the then most recently ended fiscal quarter of the
Company;
(ii) During each "Clause (ii) Test Period" (as defined below)
occurring during the period commencing on December 29, 1995 and ending on
December 26, 1996, to be less than an amount (the "Clause (ii) Amount")
equal to (1) the greater of (X) the Clause (i) Amount at December 28, 1995,
and (Y) negative $37,000,000, plus (2) 50% of Consolidated Net Income for
such Clause (ii) Test Period (or zero in the case of a deficit), plus (3)
the amount of any net gain realized by the Company or any of its
Subsidiaries on the exchange, redemption, purchase or other acquisition of
any of its debt securities (including, without limitation, the 10.25%
Notes) during such Clause (ii) Test Period; where "Clause (ii) Test Period"
means, at any time, the period (taken as one accounting period) commencing
on December 29, 1995 and ending on the then most recently ended fiscal
quarter of the Company;
(iii) During each "Clause (iii) Test Period" (as defined below)
occurring during the period commencing on December 27, 1996 and ending on
December 25, 1997, to be less than an amount (the "Clause (iii) Amount")
equal to (1) the greater of (X) the Clause (ii) Amount at December 26,
1996, and (Y) negative $37,000,000, plus (2) the greater of (X) 50% of
Consolidated Net Income for such Clause (iii) Test Period (or zero in the
case of a deficit), and (Y) $1,250,000 multiplied by the number of the
Company's fiscal quarters that have ended during such Clause (iii) Test
Period, plus (3) the amount of any net gain realized by the Company or any
of its Subsidiaries on the exchange, redemption, purchase or other
acquisition of any of its debt securities (including, without limitation,
the 10.25% Notes) during such Clause (iii) Test Period; where "Clause (iii)
Test Period" means, at any time, the period (taken as one accounting
period) commencing on December 27, 1996 and ending on the then most
recently ended fiscal quarter of the Company;
(iv) During each "Clause (iv) Test Period" (as defined below)
occurring during the period commencing on December 26, 1997 and ending on
December 31, 1998, to be less than an amount (the "Clause (iv) Amount")
equal to (1) the greater of (X) the Clause (iii) Amount at December 25,
1997, and (Y) negative $37,000,000, plus (2) the greater of (X) 50% of
Consolidated Net Income for such Clause (iv) Test Period (or zero in the
case of a deficit), and (Y) $2,500,000 multiplied by the number of the
Company's fiscal quarters, at the time of determination, that have ended
during such Clause (iv) Test Period, plus (3) the amount of any net gain
realized by the Company or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt securities
(including, without limitation, the 10.25% Notes) during such Clause (iv)
Test Period; where "Clause (iv) Test Period" means, at any time, the period
(taken as one accounting period) commencing on December 26, 1997 and ending
on the then most recently ended fiscal quarter of the Company; and
(v) During each "Clause (v) Test Period" (as defined below) occurring
after January 1, 1999 and thereafter, to be less than an amount equal to
(1) the greater of (X) the Clause (iv) Amount at December 31, 1998, and (Y)
negative $37,000,000, plus (2) 50% of Consolidated Net Income for such
Clause (v) Test Period (or zero in the case of a deficit), plus (3) the
amount of any net gain realized by
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the Company or any of its Subsidiaries on the exchange, redemption,
purchase or other acquisition of any of its debt securities (including,
without limitation, the 10.25% Notes) during such Clause (v) Test Period;
where "Clause (v) Test Period" means, at any time, the period (taken as one
accounting period) commencing on January 1, 1999 and ending on the then
most recently ended fiscal quarter of the Company.
Fixed Charge Coverage Ratio. The Company covenants that it will not cause
or permit the ratio of (i) Consolidated Cash Flow for the twelve month period
ending at the end of any fiscal quarter of the Company to (ii) Consolidated
Fixed Charges for each such twelve month period to be less than the ratio set
forth below for the period set forth below in which such fiscal quarter ends:
<TABLE>
<CAPTION>
RATIO PERIOD
- ------ ----------------------------------------------
<S> <C>
1.45:1 Effective Date through December 28, 1995
1.50:1 December 29, 1995 through December 26, 1996
1.55:1 December 27, 1996 and thereafter.
</TABLE>
Limitation on Restricted Payments and Restricted Investments.
The Company covenants that it will not, and will not permit any of its
Subsidiaries to, directly or indirectly: (i) declare or pay any dividend or make
any other distribution or payment on or in respect of Capital Stock of the
Company or its Subsidiaries or make any payment to the direct or indirect
holders (in their capacities as such) of Capital Stock of the Company or its
Subsidiaries, other than dividends, distributions or payments payable or made
solely in shares of Capital Stock in the Company of the same class held by such
holders (other than Redeemable Stock) or in options, warrants or other rights to
purchase such shares; (ii) purchase, redeem, defease or otherwise acquire or
retire for value any Capital Stock of the Company or any Subsidiary; (iii) make
any principal payment on, or purchase, redeem, repurchase, defease (including,
but not limited to, in-substance or legal defeasance) or otherwise acquire or
retire for value, prior to any stated or scheduled maturity, scheduled repayment
or scheduled sinking fund or mandatory redemption payment, any Restricted Debt
(the foregoing actions, set forth in clauses (i) through (iii) being referred to
as "Restricted Payments"); or (iv) make any Investment (the foregoing action
being referred to as a "Restricted Investment"); unless at the time of, and
immediately after giving effect to (determined on a pro forma basis), such
proposed Restricted Payment or proposed Restricted Investment:
(1) no Default or Event of Default exists or would exist; and
(2) (i) the aggregate amount expended for all Restricted Payments
subsequent to March 30, 1995, plus (ii) the aggregate amount expended for
all Restricted Investments made subsequent to March 30, 1995, does not
exceed the sum of:
(A) 50% (or minus 100% in the event of a deficit) of Consolidated
Net Income calculated on a cumulative basis for the period commencing on
March 31, 1995 and continuing through the last day of the Company's
fiscal quarter immediately preceding the Company's fiscal quarter in
which the Restricted Payment or Restricted Investment, as the case may
be, is proposed to be made; plus
(B) the aggregate net cash proceeds received by the Company (i)
from the issuance or sale (other than to a Subsidiary of the Company),
after the Effective Date, of Capital Stock in the Company (other than
Redeemable Stock), (ii) upon conversion after the Effective Date of any
Debt of the Company that is, by its original terms, convertible into
Capital Stock (other than Redeemable Stock) in the Company (with the
aggregate net cash proceeds being deemed to be the principal amount of
the Debt so converted), or (iii) from the exercise for cash after the
Effective Date of any options, warrants or other rights to acquire
Capital Stock (other than Redeemable Stock) in the Company; plus
(C) $10,000,000;
provided, however, that in no event may Restricted Payments made subsequent to
March 30, 1995 exceed the sum of the amounts described in clause (A) and (B)
above plus $5,000,000.
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<PAGE> 61
Notwithstanding the foregoing, the following will not be prohibited:
(1)(A) the payment by any Subsidiary of the Company of dividends or
other distributions to the Company or a Wholly Owned Subsidiary of the
Company or the redemption or repurchase by any such Subsidiary of any
Capital Stock in such Subsidiary owned by the Company or a Wholly Owned
Subsidiary of the Company, or (B) the payment of pro rata dividends to
holders of minority interests in the Capital Stock in a Subsidiary of the
Company; provided, however, that, in the case of clause (B) no Default or
Event or Default has occurred and is continuing or would occur as a result
thereof;
(2)(A) consummation of the 10.25% Notes Exchange, so long as no
Default or Event of Default has occurred and is continuing or would occur
as a result thereof; and (B) consummation of the exchange of Series B
Securities for Series A Securities, and Series D Securities for Series C
Securities, as contemplated by the Registration Rights Agreement and (C)
consummation of an exchange of Subsequent Second Priority Notes solely for
Second Priority Notes;
(3) certain approved Investments in the amounts existing on the
Effective Date;
(4) Investments by the Company in Wholly Owned Subsidiaries of the
Company having lines of business that are substantially similar or
materially related to the Company's lines of business existing on the
Effective Date, so long as no Default or Event of Default has occurred and
is continuing or would occur as a result thereof;
(5) Investments in Cash Equivalents;
(6) the acquisition, redemption or retirement of Capital Stock in the
Company solely in exchange for (A) Capital Stock in the Company of the same
class as the Capital Stock that is being acquired, redeemed or retired or
(B) Common Stock of the Company; and
(7) the acquisition, redemption or retirement of Debt of the Company
or its Subsidiaries (A) which is subordinated in right of payment to the
Securities solely in exchange for Common Stock in the Company, or (B) as
part of a refinancing thereof permitted by the Indenture.
Limitation on Indebtedness.
The Company covenants that it will not, and will not permit any of its
Subsidiaries to, directly or indirectly permit to exist, create, incur, issue,
assume, guaranty or otherwise become liable with respect to, extend the maturity
of or become responsible for the payment of, any Debt (including, without
limitation, any Acquired Debt) other than:
(i) Debt of the Company evidenced by the Securities;
(ii) Debt of the Company evidenced by the 10.25% Notes;
(iii) Debt of the Company evidenced by the Second Priority Notes and
the Subsequent Second Priority Notes, provided, however, that: (1) the
aggregate principal amount of the Second Priority Notes and the Subsequent
Second Priority Notes do not at any time exceed $50,000,000, (2) such
Second Priority Notes and Subsequent Second Priority Notes have terms
substantially identical to the 10.25% Notes and in any event no less
favorable to the Company than those set forth in the 10.25% Notes and the
10.25% Notes Indenture (provided, however, that the Second Priority Notes
and Subsequent Second Priority Notes may be secured by Liens that are
Permitted Liens described in clause (xi) of the definition of Permitted
Liens and the final maturity thereof may be prior to the final maturity of
the 10.25% Notes, subject to clause (3) below), (3) the final maturity of
such Second Priority Notes and Subsequent Second Priority Notes is not
prior to June 15, 2000, and (4) without limiting the foregoing clause (3),
such Second Priority Notes and Subsequent Second Priority Notes will not
have any scheduled principal installment or other principal payments due
until after the final maturity of the Securities;
(iv) Debt of the Company under the Revolving Credit Agreement
(including any refinancings thereof), provided, that the aggregate
principal amount of such Debt does not at any time exceed $35,000,000;
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<PAGE> 62
(v) Debt of the Company or any of its Subsidiaries under the Letter of
Credit Agreement (and any refinancing thereof), provided the aggregate
amount of such Debt does not exceed $28,000,000 at any time;
(vi) Debt of the Company and certain Subsidiaries of the Company under
the GECC Lease Documents (including any refinancings thereof) in an
aggregate principal amount not to exceed the principal amount thereof
outstanding as of the Effective Date less any scheduled amortization after
the Effective Date of such Indebtedness when actually paid by the Company
or its Subsidiaries; provided, however, that no refinancing of such Debt
under the GECC Lease Documents will be permitted unless: (1) such
refinancing Debt will have an Average Life at the time such refinancing is
incurred that is equal to or greater than the Average Life of the Debt to
be refinanced, (2) such refinancing Debt will be in a principal amount not
in excess of the principal amount of the Debt to be refinanced (including
the amount (if any), up to $10,000,000, by which the Stipulated Loss Value
exceeds the then outstanding principal amount of the Debt to be
refinanced);
(vii) Debt evidenced by guaranties made by the Company's Subsidiaries
of the Debt described in clauses (i), (iii), (iv) and (v) above;
(viii) Debt of the Company or any of its Subsidiaries under Currency
Agreements and Interest Rate Agreements; provided, that such Currency
Agreements and Interest Rate Agreements do not increase the outstanding
Debt of the Company other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(ix) Debt of a Wholly Owned Subsidiary of the Company to the Company
or another Wholly Owned Subsidiary of the Company;
(x) approved Debt of the Company's Subsidiaries existing on the
Effective Date;
(xi) other Debt of a Subsidiary of the Company that directly
refinances any Debt of such Subsidiary described in the immediately
foregoing clause (x); provided, however, that (1) the principal amount of
such refinancing Debt does not exceed the principal amount of the Debt to
be refinanced, (2) the terms of such refinancing Debt are, in all material
respects, no less favorable to such Subsidiary than the terms of the Debt
to be refinanced and (3) without limiting the foregoing clause (2) no
refinancing Debt may be secured to any greater extent than is the Debt to
be refinanced; provided, further, that notwithstanding clause (1) above,
the aggregate principal amount of Debt refinancing existing lines of credit
of the Company's Subsidiaries may equal up to $10,000,000 (or the
applicable foreign currency equivalent thereof reasonably determined by the
Company at the time any such refinancing Debt is incurred);
(xii) Debt of the Company or any of its Subsidiaries (A) resulting
from the endorsement of negotiable instruments for collection in the
ordinary course of business, or (B) arising under guarantees incurred in
the ordinary course of business (and not in connection with the borrowing
of money) with respect to suppliers, licensees, franchisees or customers of
the Company or such Subsidiary;
(xiii) other Debt of the Company and the Company's Subsidiaries
(including, without limitation, Purchase Money Indebtedness and Acquired
Debt); provided, however, that the aggregate outstanding principal amount
thereof will at no time exceed $15,000,000 (or the applicable foreign
currency equivalent thereof reasonably determined by the Company at the
time such Debt is incurred); provided, further, that the aggregate
outstanding amount of Purchase Money Indebtedness to be incurred in
connection with the purchase of any Property will not exceed 90% of the
cash purchase price to be paid for such Property; and
(xiv) other Debt of the Company (not secured by any Lien);
provided, however, that at no time will (1) Consolidated Senior Debt be more
than 52.5% of Consolidated Total Capitalization, or (2) Consolidated Debt be
more than 85% of Consolidated Total Capitalization.
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<PAGE> 63
Limitation on Liens.
The Company covenants that it will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create, incur or permit to exist any
Lien of any nature whatsoever on any of its properties (including, without
limitation, Capital Stock), whether owned on the Effective Date or thereafter
acquired, other than Permitted Liens.
Limitation on Company Mergers, Consolidations, and Sales.
The Company covenants that it will not merge or consolidate with any other
Person or, directly or indirectly, Transfer, all or substantially all of its
Property in a single transaction or series of related transactions, unless in
any such case:
(i) at the time of, and immediately after giving effect to (determined
on a pro forma basis), such proposed merger, consolidation or Transfer, no
Default or Event of Default exists or would exist after giving effect
thereto;
(ii) in the event that the Company is to consolidate with or merge
into another Person, or to Transfer all or substantially all of its
Property to another Person, such Person will be a corporation organized and
validly existing under the laws of a State of the United States of America
or the District of Columbia and will expressly assume in writing all
obligations of the Company under all credit documents to which the Company
is a party pursuant to such written agreements and instruments as the
Trustee may request (which will include an indenture supplemental to the
Indenture) and which in each case will be in form and substance
satisfactory to the Trustee; and
(iii) the Company has delivered to the Trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger or Transfer (and if a supplemental indenture is
required, such supplemental indenture) complies with this covenant and that
all conditions precedent with respect thereto have been completely
satisfied.
Upon any consolidation of the Company with, or merger of the Company with
or into, any other Person or any Transfer of all or substantially all of the
Property of the Company in accordance with this covenant, the entity formed by
or surviving such transaction will succeed to, and be substituted for, and may
exercise every right and power of, the Company under the Indenture with the same
effect as if such successor Person had been named as the Company herein, and
thereafter, except in the case of a lease, the predecessor Person will be
relieved of all obligations and covenants under the Indenture and the
Securities.
Limitation on Certain Asset Sales and Subsidiary Mergers.
The Company covenants that (i) it will not, and will not permit any of its
Subsidiaries to, directly or indirectly Transfer any of its Property, and (ii)
the Company will not permit any of its Subsidiaries to merge or consolidate with
any other Person except:
(a) any Wholly Owned Subsidiary of the Company may merge with, or sell
all or substantially all of its Property to, the Company or another Wholly
Owned Subsidiary of the Company if at the time of and immediately after
giving effect to (determined on a pro forma basis) such proposed
transaction no Default or Event of Default exists or would exist after
giving effect thereto;
(b) the Company may Transfer assets (excluding Capital Stock of a
Material Subsidiary) to the extent permitted under the "Limitation on
Company Mergers, Consolidation, and Sales" covenant;
(c) the Company or any such Subsidiary may sell inventory in the
ordinary course of business and equipment that is determined to be obsolete
in accordance with GAAP or concurrently replaced by equipment (not subject
to any Lien other than Permitted Liens) of the same type having a fair
market value at least equal to the fair market value of the equipment so
replaced;
(d) the Company or any such Subsidiary (subject to clause (f) below)
may otherwise Transfer Property (excluding Capital Stock of a Material
Subsidiary), and any such Subsidiary (subject to
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<PAGE> 64
clause (f) below) may consummate a Transfer by Merger; provided that after
giving effect thereto (1) the Percentage of Total Assets Transferred in any
fiscal year of the Company (excluding assets described in clauses (a) and
(c) above) will not exceed 10%; and (2) the Percentage of Total Assets
Transferred (excluding assets described in clauses (a) and (c) above) at
any time after the Effective Date on a cumulative basis will not exceed
15%; and
(e) the Company or any Subsidiary of the Company (subject to clause
(f) below) may Transfer other Property (not constituting Capital Stock of
any Material Subsidiary), and any Subsidiary of the Company (subject to
clause (f) below) may consummate other Transfers by Merger if:
(1) at the time of and immediately after giving effect to
(determined on a pro forma basis) such proposed Transfer of Property or
Transfer by Merger (as the case may be) no Default or Event of Default
exists or would exist;
(2) the consideration to be paid to the Company or such Subsidiary
(as the case may be) is at least equal to the fair market value of the
assets to be Transferred (or, in the case of a Transfer by Merger, the
fair market value of the Subsidiary subject thereto), in each case as
reasonably determined by the Board of Directors; and
(3) the proceeds from such Transfer of Property or Transfer by
Merger (net of (X) reasonable expenses incurred by the Company or the
Subsidiary (as the case may be) incidental thereto, (Y) the amount of
any taxes (reasonably determined by the Company in good faith) owing by
the Company or such Subsidiary (as the case may be) as a result thereof,
and (Z) any mandatory repayment of permitted Debt (if any) secured by a
Permitted Lien on the Property being Transferred that is prior to the
Lien securing the Consolidated Secured Debt) are immediately applied to
redeem the Securities and otherwise repay the other Consolidated Secured
Debt outstanding at such time, such application of proceeds to be made
pro rata to the holders of the Consolidated Secured Debt based on the
then outstanding principal amount of each such holder's holding of
Consolidated Secured Debt (or, in the case of the Lender, the Revolving
Loan Commitment) in proportion to the aggregate amount of Consolidated
Secured Debt then outstanding (or, in the case of the Lender, the
Revolving Loan Commitment); provided, however, that such redemption or
repayment pursuant to this clause (3) will be deferred until the amount
of proceeds to be so redeemed and otherwise repaid equals or exceeds
$5,000,000, with any such lesser amounts not used for redemption or
repayment to be aggregated with proceeds subsequently received from
Transfers to be utilized for redemption or repayment at such point as
such aggregate amount equals or exceeds $5,000,000.
The Company will make each redemption required under clause (e)(3)
above on a date (the "Transfer Redemption Date") which is the first
Business Day next following the 30th day after the date of the Transfer or
Transfer by Merger giving rise thereto (such date of Transfer or Merger by
Transfer, the "Transfer Date"). If less than all of the outstanding
Securities are to be redeemed under clause (e)(3) above, the principal
amount so redeemed will be allocated to all Securities at the time
outstanding in proportion to the respective outstanding principal amounts
thereof. The redemption price for each Security (or portion thereof)
redeemed under clause (e)(3) above (the "Transfer Redemption Price") will
equal 100% of the principal amount thereof plus the Yield-Maintenance
Amount, if any, with respect thereto. The Company will give written notice
on the Transfer Date of such redemption to the Trustee and all Holders.
(f) Notwithstanding anything to the contrary, the Company will not
permit any Material Subsidiary, directly or indirectly, to Transfer all or
substantially all of its assets in a single transaction or series of
related transactions or merge or consolidate with any Person other than as
permitted under clause (a) above.
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<PAGE> 65
Limitation on Payment Restrictions Affecting Subsidiaries.
The Company covenants that it will not, and will not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction which by its terms
expressly restricts the ability of any Subsidiary of the Company to: (a) pay
dividends or make any other distributions on the Capital Stock in such
Subsidiary or any other interest or participation in, or measured by, its
profits owned by, or pay any Debt owed to, the Company or any such Subsidiary,
(b) make any loans or advances to the Company or any such Subsidiary or (c)
transfer any of its Property to the Company or to any such Subsidiary, except
for (i) such encumbrances or restrictions existing under or by reason of any
encumbrance or restriction existing by reason of applicable law; (ii) such
encumbrances or restrictions existing and approved on the Effective Date; (iii)
such encumbrances or restrictions as may exist under refinancing Debt permitted
under the Indenture; provided, however, that any such encumbrances or
restrictions are, in no material respect, any more onerous to the Company or
such Subsidiary than the encumbrances or restrictions included in the Debt to be
refinanced; (iv) such encumbrances or restrictions as may exist under any
Acquired Debt at the time incurred by the Company or such Subsidiary; provided,
however, that such encumbrances or restrictions are, in no material respect, any
more onerous to the Company or such Subsidiary as the then existing most onerous
such encumbrances and restrictions applicable to the Company or such Subsidiary;
(v) the provisions of any lease governing a leasehold interest or of any supply,
license or other agreement entered into in the ordinary course of business of
the Company or any Subsidiary that restrict in a customary manner transfer,
subleasing or assignment; and (vi) any restrictions with respect to a Subsidiary
imposed pursuant to an agreement entered into for the sale or disposition of
Capital Stock or assets of such Subsidiary pending the closing of such sale or
disposition.
Transactions with Affiliates.
The Company covenants that it will not, and will not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist any
transaction or series of related transactions (including, without limitation,
any purchase, sale or exchange of Property, the making of any Investment, the
giving of any guarantee or the rendering of any service), with any Affiliate of
the Company or of any Subsidiary of the Company unless the terms of such
transaction or series of related transactions are no less favorable to the
Company or such Subsidiary, as the case may be, than those that might be
obtained at the time of such transaction from a Person who is not such an
Affiliate; provided, however, that in addition to the foregoing, any such
transaction (or series of related transactions), other than certain exempted
transactions, that has a fair market value to the Company or such Subsidiary of
$10,000,000 or more will be deemed to be on terms no less favorable to the
Company or such Subsidiary than those obtainable at the time of the transaction
from a Person who is not such an Affiliate only if the Board of Directors of the
Company receives and delivers to the Trustee, prior to such transaction, a
written opinion of a nationally recognized investment banking firm stating that
the transaction is fair to the Company or such Subsidiary from a financial point
of view.
The provisions set forth above will not apply to (i) the payment of fees,
salaries or other amounts to DPK in accordance with the express terms of the
Management Agreement, provided, however, that the aggregate amount of all such
fees, salaries and other amounts will not exceed $5,000,000 (determined without
regard to the value of options to purchase the Company's Common Stock) in the
aggregate in any consecutive twelve month period, (ii) any transaction between
the Company and any of its Wholly Owned Subsidiaries, (iii) the payment of
reasonable and customary fees (including options to purchase the Company's
Common Stock) to directors of the Company or any of the Subsidiaries of the
Company who are not employees of the Company or any Subsidiary of the Company as
the same may be deemed advisable or appropriate by the Board of Directors, or
(iv) loans or advances to officers, members of the Board of Directors and
employees of the Company or any of its Subsidiaries for travel, entertainment or
moving and other relocation expenses made in the ordinary course of business of
the Company and its Subsidiaries as the same may be deemed advisable or
appropriate by the Board of Directors.
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Limitations on the Sale of Stock and Debt of Subsidiaries.
The Company covenants that it will not, and will not permit any of its
Subsidiaries to, sell or otherwise dispose of, or part with control of, any
Capital Stock (other than directors' qualifying shares or nominee shares) or
Indebtedness of any Subsidiary of the Company, except to the Company or a Wholly
Owned Subsidiary of the Company, and except that all Capital Stock and
Indebtedness of any such Subsidiary may be sold as an entirety provided that (a)
at the time of such sale, such Subsidiary will not own, directly or indirectly,
any Capital Stock or Indebtedness of any other Subsidiary (unless all of the
Capital Stock and Indebtedness of such other Subsidiary are simultaneously being
sold), and (b) such sale would be permitted by the "Limitation on Company
Mergers, Consolidations, and Sales" covenant and the "Limitation on Certain
Asset Sales and Subsidiary Mergers" covenant.
Limitation on Issuance and Sale of Capital Stock of Subsidiaries.
The Company covenants that it will not (a) permit any Subsidiary of the
Company to issue or sell any Capital Stock in such Subsidiary other than to the
Company or a Wholly Owned Subsidiary of the Company or (b) permit any Person
other than the Company or a Wholly Owned Subsidiary of the Company to hold any
Capital Stock issued after the Effective Date in any Subsidiary of the Company;
provided, however, that the Company or any Subsidiary of the Company may sell
Common Stock to the extent permitted under the "Limitation on Certain Asset
Sales and Subsidiary Mergers" covenant; provided, further, that this covenant
will not be deemed to prohibit the Company or any Subsidiary of the Company from
making any Investment (including, without limitation, Investments in a Person
such that after giving effect thereto such Person may be a less than wholly
owned Subsidiary of the Company) permitted by the "Restricted Payments"
covenant.
EVENTS OF DEFAULT
Events of Default under the Indenture include the following:
(a) the Company defaults in the payment of any principal of, or
Yield-Maintenance Amount with respect to, any Security when the same will
become due, either by the terms thereof or otherwise as provided in the
Indenture or any note purchase agreement relating thereto; or
(b) the Company defaults in the payment of any interest on any
Security for more than 5 Business Days after the date due; or
(c) the Company or any Subsidiary of the Company defaults (whether as
primary obligor or as guarantor or other surety) in any payment of
principal of or interest on the 10.25% Notes, the Second Priority Notes (if
any), the Subsequent Second Priority Notes (if any), any loan under the
Revolving Credit Agreement, any reimbursement obligations under the Letter
of Credit Agreement, any Capital Lease Obligation under the GECC Lease
Documents or any other obligation for money borrowed (or any Capital Lease
Obligation, any obligation under a conditional sale or other title
retention agreement, any obligation issued or assumed as full or partial
payment for property whether or not secured by a purchase money mortgage or
any obligation under notes payable or drafts accepted representing
extensions of credit or any obligation to pay or reimburse any Person for
any amount paid under any letter of credit, any proposal, bid, performance
or other bond, or under any indemnity agreement) beyond any period of grace
provided with respect thereto, or the Company or any such Subsidiary fails
to perform or observe any other agreement, term or condition contained in
any agreement under which any such obligation is created (or if any other
event thereunder or under any such agreement will occur and be continuing)
and the effect of such failure or other event is to cause, or to permit the
holder or holders of such obligation (or a trustee on behalf of such holder
or holders) to cause, such obligation to become due (or to be repurchased
by the Company or any such Subsidiary) prior to any stated maturity,
provided that, except in respect of the Revolving Credit Agreement, the
Letter of Credit Agreement and the GECC Lease Documents, the aggregate
amount of all obligations as to which such a payment default will occur and
be continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) will occur and be
continuing exceeds $5,000,000; or
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<PAGE> 67
(d) any representation or warranty made by the Company or any
Subsidiary of the Company or any Responsible Officer thereof in any writing
or statement furnished in connection with or pursuant to the Indenture, the
Securities or any other credit document will be false in any material
respect on the date as of which made; or
(e) the Company fails to observe or perform its obligation to purchase
Securities following a Change of Control or in the event the Company has
Excess Cash Flow or the Company fails to observe any negative covenant
contained in the Indenture; or
(f) the Company fails to observe or perform any covenant, condition or
agreement on the part of the Company to be observed or performed pursuant
to the terms of the Indenture or the Securities (other than a covenant,
condition or agreement which is specifically dealt with elsewhere as an
Event of Default), and such failure continues for 30 days after any
Responsible Officer of the Company learns thereof; or
(g) the Company or any Material Subsidiary makes an assignment for the
benefit of creditors or is generally not paying its debts as such debts
become due; or
(h) any decree or order for relief in respect of the Company or any
Material Subsidiary is entered under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law, whether now or hereafter in effect (herein
called the "Bankruptcy Law"), of any jurisdiction; or
(i) the Company or any Material Subsidiary petitions or applies to any
tribunal for, or consents to the appointment of, or taking possession by, a
trustee, receiver, custodian, liquidator or similar official of the Company
or any Material Subsidiary, or of any substantial part of its assets or
commences a voluntary case under the Bankruptcy Law of any jurisdiction or
any proceedings relating to the Company or any such Material Subsidiary
under the Bankruptcy Law of any jurisdiction; or
(j) any such petition or application is filed, or any such proceedings
are commenced, against the Company or any Material Subsidiary and the
Company or such Material Subsidiary by any act indicates its approval
thereof, consent thereto or acquiescence therein, or an order, judgment or
decree is entered appointing any such trustee, receiver, custodian,
liquidator or similar official, or approving the petition in any such
proceedings, and such order, judgment or decree remains unstayed and in
effect for more than 60 days; or
(k) any order, judgment or decree is entered in any proceedings
against the Company or any Material Subsidiary decreeing the dissolution of
the Company or any such Material Subsidiary and such order, judgment or
decree remains unstayed and in effect for more than 60 days; or
(l) any order, judgment or decree is entered in any proceedings
against the Company or any Material Subsidiary of the Company decreeing a
split-up of the Company or such Material Subsidiary, and such order,
judgment or decree remains unstayed and in effect for more than 60 days; or
(m) one or more judgments or orders in an aggregate amount in excess
of $5,000,000 (net of cash proceeds actually received by, or paid on behalf
of, the Company with respect to such judgments or orders) are rendered
against the Company or any Subsidiary of the Company and, within 60 days
after entry thereof, such judgment is not discharged or execution thereof
stayed pending appeal, or within 60 days after the expiration of any such
stay, such judgment is not discharged; or
(n) the occurrence of any "Event of Default" (as defined in any Credit
Document other than the Indenture) or the breach of any covenant, warranty
or agreement set forth in any Credit Document (other than the Indenture or
the Securities), which Event of Default or breach continues beyond any
period of grace therein provided; or
(o) the Guaranty Agreement will fail to remain in full force or effect
or any action will be taken to discontinue or to assert the invalidity or
unenforceability or the Guaranty Agreement, or any guarantor
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thereunder will fail to comply with any of the terms or provisions of the
Guaranty Agreement or denies that it has any further liability under the
Guaranty Agreement, or gives notice to such effect; or
(p) the Collateral Agent will cease to possess at any time a valid,
first priority (subject to Permitted Liens) perfected Lien in and on any of
the Collateral (other than Collateral having a de minimis value); or
(q) certain defaults relating to ERISA;
then (1) if such event is an Event of Default specified in clause (h), (i) or
(j) above with respect to the Company, all of the Securities at the time
outstanding will automatically become immediately due and payable together with
interest accrued thereon and together with the Yield-Maintenance Amount, if any,
with respect to such Security, without presentment, demand, protest or notice of
any kind, all of which are waived by the Company, (2) if such event is an Event
of Default specified in clause (a) or clause (b) above, any Holder of a Security
at any time such Event of Default is continuing, at its option, by notice in
writing to the Company, may declare all or any part of the Securities owned by
such Holder to be, and all such Securities will thereupon be and become,
forthwith due and payable at par together with interest accrued thereon, without
presentment, demand, protest or notice of any kind, all of which are waived by
the Company, and (3) if such event is an Event of Default other than an Event of
Default specified in clause (h), (i) or (j) above with respect to the Company,
the Required Holders may at their option, or the Trustee will upon the written
request of the Required Holders, by notice in writing to the Company, declare
all of the Securities to be, and all of the Securities will thereupon be and
become, immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to each
Security, without presentment, demand, protest or other notice of any kind, all
of which are waived by the Company.
TERMINATION OF COMPANY'S OBLIGATIONS
The Company may terminate, and will be discharged from, all its obligations
under the Securities and the provisions of the Indenture (except as to (i)
rights of registrations of transfer, substitution and exchange of Securities),
(ii) rights of Holders to receive payments of principal and interest and
Yield-Maintenance Amount (if any) on the Securities, (iii) the rights,
obligations and immunities of the Trustee under the Indenture and (iv) certain
other specified provisions of the Indenture) when all Securities previously
authenticated and delivered (other than mutilated, destroyed, lost or stolen
Securities which have been replaced or paid or Securities for whose payment
money or securities have theretofore been held in trust and thereafter repaid to
the Company have been delivered to the Trustee for cancellation and the Company)
has paid to all Holders all sums payable by it under the Securities and the
provisions of the Indenture.
REPORTS
The Company will file with the Trustee within 15 days after it files them
with the Commission 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 Commission may by rules and regulations prescribe) which the Company
files with the Commission pursuant to Section 13 or 15(d) of the Exchange Act.
If the Company is not subject to Section 13 or 15(d) of the Exchange Act, the
Company will continue to file with the Commission and the Trustee on the same
timely basis such reports, information and other documents as the Company would
file if the Company were subject to the requirements of Section 13 or 15(d) of
the Exchange Act. The Company and any other obligor on the Securities also will
comply with the other provisions of Trust Indenture Act Section 314(a).
So long as Securities representing 5% or more of the aggregate principal
amount of Securities issued under the Indenture remain outstanding, the Company
will cause an annual report to stockholders and quarterly or other financial
reports furnished by it to stockholders, excluding internal management reports
and distributions to stockholders in their capacity as directors or officers of
the Company, to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Registrar,
in each case at the time of such furnishing to stockholders. If the Company is
not required to furnish annual or quarterly reports to its stockholders pursuant
to the Exchange Act at any time during which
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Securities representing 5% or more of the aggregate principal amount of
Securities issued hereunder are outstanding, the Company will cause its
consolidated financial statements, including any notes thereto, and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," comparable to that which would have been required to appear in
annual or quarterly reports filed under Section 13 or 15(d) of the Exchange Act
to be so filed with the Trustee and mailed to the Holders at their addresses
appearing in the register of Securities maintained by the Registrar within 105
days after the end of each fiscal year and within 60 days after the end of each
of the Company's first three fiscal quarters in each fiscal year.
TRANSFER AND EXCHANGE
A holder may transfer or exchange Notes in accordance with the Indenture.
The registrar and the Trustee may require a holder, among other things, to
furnish appropriate endorsements and transfer documents and the Company may
require a holder to pay any taxes and fees required by law or permitted by the
Indenture. The Company is not required to transfer or exchange any Note selected
for redemption. Also, the Company is not required to transfer or exchange any
Note for a period of 15 days before a selection of Notes to be redeemed.
The registered holder of a Note will be treated as the owner of such Note
for all purposes. See "Form of Notes" above.
AMENDMENT, SUPPLEMENT AND WAIVER
The Indenture will provide that without the consent of any holder of Notes,
the Company and the Trustee may amend or supplement the Indenture or the Notes
to cure any ambiguity, defect or inconsistency, to provide for the assumption of
the Company's obligations to holders of the Notes in the case of a merger or
consolidation, to comply with requirements of the Commission in order to effect
or maintain the qualification of the Indenture under the Trust Indenture Act or
to evidence the acceptance of appointment by a successor trustee.
In addition, the Indenture or the Notes may be amended or supplemented with
the consent of the holders of a majority in principal amount of the Notes then
outstanding (subject to the terms of the Intercreditor Agreement), provided that
no modification or supplement of the Indenture may be made that would (a) reduce
the amount of Securities whose Holders must consent to an amendment or waiver of
any provision of the Indenture; (b) reduce the rate of or change the method of
calculation, the time for payment or the manner of payment of interest or
Yield-Maintenance Amount on any Security; (c) reduce the principal of or change
the Stated Maturity of any Security, or change the date on which any Security
may be subject to redemption or reduce the Redemption Price therefor; (d) make
any Security payable in money other than that stated in the Security; (e) make
any change in the "Change of Control" or " Excess Cash Flow" covenants or the
definitions of "Change of Control" or "Excess Cash Flow"; (f) waive a Default in
the payment of the principal of, interest on or redemption payment under any
Security; or (g) affect the rankings or with respect to the Collateral, the
priority of the Securities, in each case in a manner adverse to the Holders.
Any existing Default or compliance with any provision of the Indenture or
the Notes may be waived (other than a continuing Default or Event of Default in
the payment of the principal or interest and Yield-Maintenance Amount (if any)
on any Note) with the consent of the holders of a majority in principal amount
of the then outstanding Notes (subject to the terms of the Intercreditor
Agreement).
CONCERNING THE TRUSTEE
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
shall occur (which shall not be cured), the Trustee will be required, in the
exercise of its power, to use the degree of care of a prudent person in the
conduct of his own affairs.
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CERTAIN DEFINITIONS
Set forth below are certain defined terms used in the Indenture. Reference
is made to the Indenture for a complete description of all such terms, as well
as any other capitalized terms used herein for which no definition is provided.
"Acquired Debt" means Debt of a Person existing on or prior to the time at
which such Person became a Subsidiary and not incurred in connection with, or in
contemplation of, such Person becoming a Subsidiary.
"Affiliate" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with such specified Person, (ii) which
beneficially owns or holds 10% or more of any class of the Voting Securities of
such specified Person, or (iii) of which 10% or more of the Voting Securities is
beneficially owned or held by such specified Person or by a Subsidiary of such
specified Person.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
"Average Life" means, as of any date, with respect to any debt security,
the quotient obtained by dividing (i) the sum of the products of (x) the numbers
of years from such date to the dates of each successive scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
"BTCC" means BT Commercial Corporation, a Delaware corporation, and its
successors and permitted assigns.
"Bankruptcy Law" means Title 11, U.S. code or any similar Federal, state or
foreign law for the relief of debtors.
"Board of Directors" of any corporation means the board of directors of
such corporation or any duly authorized committee of the board of directors of
such corporation.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City or Hartford, Connecticut are required or
authorized to be closed.
"Called Principal" means, with respect to any Security, the principal of
such Security that is to be redeemed or prepaid (as the case may be) pursuant to
the "Change of Control" covenant, the redemption obligations following a
Transfer of Property equal to $5,000,000 or more or an optional redemption, or
is declared to be immediately due and payable pursuant to an Event of Default,
as the context requires.
"Capital Lease Obligation" means, at any time, the amount of the liability
with respect to a lease that would be required at such time to be capitalized on
a balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than debt securities convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"Cash Equivalents" means: (i) debt instruments, with maturities of one year
or less from the date of acquisition, issued by the government of the United
States of America or any agency thereof (if fully guaranteed or insured by the
government of the United States of America), (ii) certificates of deposit, with
maturities of one year or less from the date of acquisition, of any commercial
bank incorporated under the laws of the United States of America having a
combined capital, surplus and undivided profits of not less than $100,000,000,
(iii) commercial paper of an issuer rated at least A-1 by Standard & Poor's
Corporation or P-1 by Moody's Investors Service, Inc., and (iv) tax exempt
floating rate tender bonds, as to which payments of principal, interest and
other charges may be made at the option of the holder upon not more than one
week's notice which are payable upon tender or any default from the proceeds of
an unconditional and irrevocable letter of credit issued by a United States
office of any commercial bank all of whose long-term debt securities are rated
at least AA by Standard & Poor's Corporation or Aa by Moody's Investors Service,
Inc.
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"Change of Control" means the occurrence of any of the following events
(whether or not approved by the Board of Directors of the Company or otherwise
permitted by the terms of the Indenture): (i) any person (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act), or any Affiliate of any such
person, is or becomes a "beneficial owner" (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that a person shall also be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the Common Stock of the
Company or such other amount of Voting Securities to provide the ability to
elect, directly or indirectly, a majority of the members of the Board of
Directors of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new or replacement directors whose
election by such Board or whose nomination for election by the shareholders of
the Company was approved by a vote of a majority of the directors of the Company
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) cease
for any reason to constitute a majority of the Board of Directors of the Company
then in office; (iii) any direct or indirect Transfer (in one transaction or a
series of related transactions) of all or substantially all of the consolidated
assets of the Company and its Subsidiaries to any person (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) or any Affiliate of any such
person; or (iv) the approval by the Company or its shareholders of any plan of
liquidation; or (v) any event constituting a "Change of Control" in respect of
10.25% Notes, the Revolving Credit Agreement, the Second Priority Notes or the
Subsequent Second Priority Notes.
"Collateral" means all the real, personal and mixed property made, or
intended or purported to be made, subject to a Lien pursuant to the Collateral
Documents.
"Collateral Agent" means BTCC, in its capacity as collateral agent under
the Intercreditor Agreement and the other Collateral Documents, and any
successor thereto.
"Collateral Documents" means, collectively, the Guaranty Agreement, Pledge
Agreement, Intercreditor Agreement, Intellectual Property Pledge Agreement,
Mortgage, Security Agreement, and all other instruments or documents now or
hereafter granting (or purporting to grant) Liens on property of the Company or
any of its Subsidiaries to the Collateral Agent, for the benefit of the "Secured
Parties" (as defined in the Intercreditor Agreement).
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalent (however designated) of Capital
Stock in such Person which is not preferred as to the payment of dividends or
the distribution of assets on any voluntary or involuntary liquidation over
shares of any other class of Capital Stock in such Person.
"Company" means Envirodyne Industries, Inc. unless and until a successor of
Envirodyne Industries, Inc. replaces it pursuant to the Indenture, and
thereafter means such successor.
"Consolidated Cash Flow" means, for any period, Consolidated Net Income for
such period, (A) increased by the sum of (i) Consolidated Fixed Charges for such
period, other than interest capitalized by the Company and its Subsidiaries
during such period, (ii) income tax expense of the Company and its Subsidiaries,
on a consolidated basis, for such period (other than income tax expense
attributable to sales or other dispositions of assets (other than sales of
inventory in the ordinary course of business)), (iii) depreciation expense of
the Company and its Subsidiaries, on a consolidated basis, for such period, (iv)
amortization expense of the Company and its Subsidiaries, on a consolidated
basis, for such period, and (v) other non-cash items reducing Consolidated Net
Income minus non-cash items increasing Consolidated Net Income for such period,
and (B) decreased by any revenues received or accrued by the Company or any of
its Subsidiaries from any other Person (other than the Company or any of its
Subsidiaries) in respect of any Investment for such period, all as determined in
accordance with GAAP.
"Consolidated Debt" means the aggregate amount of Debt of the Company and
its Subsidiaries, on a consolidated basis, determined in accordance with GAAP.
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"Consolidated Fixed Charges" means, for any period, (A) the sum of, without
duplication, (i) the aggregate amount of interest expense of the Company and its
Subsidiaries during such period (including, without limitation, all commissions,
discounts and other fees and charges owed by the Company and its Subsidiaries
with respect to letters of credit and bankers' acceptances or similar financing
facilities and the net costs associated with Interest Rate Agreements and
Currency Agreements of the Company and its Subsidiaries) paid, accrued or
scheduled to be paid or accrued during such period, including interest expense
not required to be paid in cash (including any amortization of original issue
debt discount), all determined in accordance with GAAP, plus all interest
capitalized by the Company and its Subsidiaries during such period, (ii) the
aggregate amount of the interest expense component of rentals in respect of
Capital Lease Obligations paid or accrued by the Company and its Subsidiaries
during such period, determined in accordance with GAAP, (iii) the aggregate
amount of all operating lease expense of the Company and its Subsidiaries during
such period, determined in accordance with GAAP, and (iv) to the extent any
interest payment obligation of any other Person is guaranteed by the Company or
any of its Subsidiaries (other than guarantees relating to obligations of
customers of the Company or any of its Subsidiaries that are made in the
ordinary course of business consistent with past practices of the Company or its
Subsidiaries), the aggregate amount of interest paid or accrued by such Person
in accordance with GAAP during such period attributable to any such interest
payment obligation, less (B) to the extent included in (A) above, amortization
or write-off of deferred financing costs by the Company and its Subsidiaries
during such period; in each case after elimination of intercompany accounts
among the Company and its Subsidiaries and as determined in accordance with
GAAP.
"Consolidated Intangible Assets" means, as at any date, (i) the amount of
all write-ups in the book value of any asset resulting from the revaluation
thereof and all write-ups in excess of the cost of assets acquired, plus (ii)
the amount of all unamortized original issue discount, unamortized debt expense,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization and development expense and other intangible assets, in each case
as would be taken into account in preparing a consolidated balance sheet of the
Company and its subsidiaries on a consolidated basis as at such date in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the aggregate net income
(or net loss, as the case may be) of the Company and its Subsidiaries for such
period on a consolidated basis, determined in accordance with GAAP; provided,
that there shall be excluded therefrom, without duplication, (i) gains and
losses from the sale or other disposition of assets (other than sales of
inventory in the ordinary course) or reserves relating thereto, (ii) items
classified as extraordinary or nonrecurring (including, without limitation, any
gains from any exchange of debt securities) and gains (but not losses) from
discontinued operations, (iii) the income (or loss) of any Joint Venture, except
to the extent of the amount of cash dividends or other distributions in respect
of Capital Stock therein actually paid during such period to the Company or any
of its Subsidiaries by such Joint Venture out of funds legally available
therefor (or, in the case of a loss, to the extent such loss is funded by the
Company or any such Subsidiary during such period), (iv) except to the extent
includable pursuant to clause (iii), the income (or loss) of any other Person
accrued or attributable to any period prior to the date it becomes a Subsidiary
of such Person or is merged into or consolidated with such Person or any of its
Subsidiaries or such other Person's Property (or a portion thereof) is acquired
by such Person or any of its Restricted Subsidiaries, and (v) non-cash items
decreasing or increasing Consolidated Net Income arising out of currency
translation effects.
"Consolidated Net Worth" means Net Worth without giving effect to any
purchase accounting adjustments if Consolidated Net Worth is being determined in
connection with any merger, consolidation or other acquisition of, or by, the
Company or any of its Subsidiaries.
"Consolidated Secured Debt" means, collectively, the outstanding principal
balance of the Debt evidenced by the Securities, the 10.25% Notes, the Second
Priority Notes and the Subsequent Second Priority Notes, if any, in an aggregate
principal amount of up to $50,000,000 and under the Revolving Credit Agreement
and the outstanding amount of unpaid reimbursement obligations for drawn letters
of credit with respect to the Debt under the Letter of Credit Agreement.
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"Consolidated Senior Debt" means, at any time, all Consolidated Debt at
such time, other than the then outstanding principal amount of: (i) the 10.25%
Notes, (ii) the Second Priority Notes, (iii) the Subsequent Second Priority
Notes, (iv) Debt of any Subsidiary of the Company payable to the Company or any
Wholly Owned Subsidiary of the Company, and (v) Debt of the Company that is not
secured by a Lien or that is junior in right of payment, and subordinate to, the
Securities, which Debt matures after the Stated Maturity of the Securities, and
has no principal payments scheduled until, a date which is at least six (6)
months after the maturity date of the Securities.
"Consolidated Tangible Net Worth" means, at any time, Consolidated Net
Worth at such time, less Consolidated Intangible Assets at such time.
"Consolidated Total Capitalization" means, at any time, the sum of: (i)
Consolidated Net Worth at such time, plus (ii) Consolidated Debt.
"Credit Documents" means, collectively, the Indenture, the Securities, the
Note Agreement, the Collateral Documents and all other agreements, instruments
and documents (including, without limitation, security agreements, loan
agreements, notes, guarantees, mortgages, deeds of trust, leasehold mortgages,
leasehold deeds of trust, subordination agreements, pledges, powers of attorney,
consents, assignments, intercreditor agreements, mortgagee waivers,
reimbursement agreements, contracts, notices, leases, financing statements and
all other written items) relating in any way to the aforementioned agreements
and instruments.
"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement, option or futures contract or other similar agreement
or arrangement designed to protect such Person or any of its Subsidiaries
against fluctuations in currency values (as opposed to being used in any way for
speculative trading purposes).
"Current Debt" means, with respect to any Person, all Indebtedness of such
Person for borrowed money which by its terms or by the terms of any instrument
or agreement relating thereto matures on demand or within one year from the date
of the creation thereof and is not directly or indirectly renewable or
extendible at the option of the debtor to a date more than one year from the
date of the creation thereof, provided that Indebtedness for borrowed money
outstanding under a revolving credit or similar agreement which obligates the
lender or lenders to extend credit over a period of more than one year shall
constitute Funded Debt and not Current Debt, even though such Indebtedness by
its terms matures on demand or within one year from the date of the creation
thereof.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian or similar official appointed under any Bankruptcy Law.
"Debt" means Current Debt and Funded Debt.
"Default" means any event which through the passage of time, the giving of
notice or both would mature into an Event of Default.
"Default Rate" means a rate per annum from time to time equal to the
greater of (i) 14.00%, and (ii) the LIBOR Rate plus 2.00%.
"Depository" means, with respect to any Security issuable or issued in the
form of one or more Global Securities, the Person designated as Depository by
the Company in or pursuant to the Indenture, which Person must be, to the extent
required by applicable law or regulation, a clearing agency registered under the
Exchange Act, and, if so provided with respect to any Security, any successor to
such Person. If at any time there is more than one such Person, "Depository"
shall mean, with respect to any Securities, the qualifying entity which has been
appointed with respect to such Securities. Unless and until otherwise designated
by the Company to the Trustee, the Depository shall be The Depository Trust
Company.
"Discounted Value" means, with respect to the Called Principal of any
Security, the amount obtained by discounting all Remaining Scheduled Payments
with respect to such Called Principal from their respective scheduled due dates
to the Settlement Date with respect to such Called Principal, in accordance with
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accepted financial practice and at a discount factor (applied on the same
periodic basis as that on which interest on the Securities is payable) equal to
the Reinvestment Yield with respect to such Called Principal.
"Domestic Subsidiary" means any Subsidiary organized under the laws of any
state of the United States of America or the District of Columbia.
"DPK" means D.P. Kelly & Associates, L.P., a Delaware limited partnership,
and its successors and assigns.
"Effective Date" means June 20, 1995.
"Excess CF Amount" means, as to any Excess Cash Flow in any fiscal year of
the Company, the aggregate amount of such Excess Cash Flow, less any repayments
of Debt under the Revolving Credit Agreement required to be made pursuant to the
terms of such Revolving Credit Agreement; provided, however, that the amount of
any such required repayment shall not exceed the Revolver Pro Rata Share of the
aggregate amount of such Excess Cash Flow.
"Excess Cash Flow" means, for any period, the Company's Consolidated Cash
Flow, less the sum of (i) consolidated cash interest expense (including the
interest portion of any payments associated with Capital Lease Obligations) of
the Company during such period, (ii) consolidated capital expenditures of the
Company during such period, (iii) principal payments on indebtedness (including
the principal portion of any Capital Lease Obligations) of the Company made or
paid during such period, (iv) additions (reductions) to Working Capital of the
Company during such period, (v) consolidated income tax expense of the Company
that is actually paid during such period, and (vi) $15,000,000, all determined
on a consolidated basis in accordance with GAAP.
"Funded Debt" means, with respect to any Person, all Indebtedness of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, more than one
year from, or is directly or indirectly renewable or extendable at the option of
the debtor to a date more than one year (including an option of the debtor under
a revolving credit or similar agreement obligating the lender or lenders to
extend credit over a period of more than one year) from, the date of the
creation thereof.
"GAAP" means, at any date, United States 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 applicable
to the circumstances as of the date of determination.
"GECC" means General Electric Capital Corporation, a New York corporation,
and its successors and assigns.
"GECC Intercreditor Agreement" means that certain GECC Intercreditor
Agreement, dated as of the Effective Date, among the Collateral Agent, GECC,
Shawmut Bank Connecticut, National Association, as Owner Trustee, and the
Company, as amended, supplemented or otherwise modified from time to time.
"GECC Lease Documents" means (i) the Lease Agreement dated as of December
18, 1990 between The Connecticut National Bank (now known as Shawmut Bank
Connecticut, National Association; "TCNB"), Owner Trustee, as lessor and Viskase
Corporation, as lessee, (ii) the Participation Agreement dated as of December
18, 1990 among Viskase Corporation, the Company, GECC and TCNB and (iii) the
related instruments and agreements with respect thereto, in each case as the
same may have heretofore been or may hereinafter be amended, modified, restated,
renewed or extended or refinanced from time to time.
"Global Security" means a Security issued in global form.
"Guaranty Agreement" means that certain Guaranty Agreement, dated as of the
Effective Date, made by each Significant Domestic Subsidiary in favor of the
Collateral Agent, as amended, supplemented or otherwise modified from time to
time.
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"Guarantee" means, with respect to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation will be protected against loss in respect thereof. The amount of any
Guarantee shall be equal to the outstanding principal amount of the obligation
guaranteed or such lesser amount to which the maximum exposure of the guarantor
shall have been specifically limited.
"Holder" means any Person in whose name a Security is registered on the
Registrar's books.
"Indebtedness" means, with respect to any Person, without duplication, (i)
all items (excluding items of contingency reserves or of reserves for deferred
income taxes) which in accordance with GAAP would be included in determining
total liabilities as shown on the liability side of a balance sheet of such
Person as of the date on which Indebtedness is to be determined, (ii) all
indebtedness secured by any Lien on any property or asset owned or held by such
Person subject thereto, whether or not the indebtedness secured thereby shall
have been assumed, (iii) all indebtedness of others with respect to which such
Person has become liable by way of a Guarantee (including, without limitation,
all obligations of such Person with respect to surety bonds, bank acceptances,
and letters of credit and other similar obligations), (iv) all obligations of
such Person in respect of Currency Agreements or Interest Rate Agreements and
(v) the maximum fixed repurchase price of any Redeemable Stock. For purposes of
the preceding sentence, the maximum fixed repurchase price of any Redeemable
Stock that does not have a fixed repurchase price shall be calculated in
accordance with the terms of such Redeemable Stock as if such Redeemable Stock
were repurchased on any date on which Indebtedness shall be required to be
determined pursuant to the Indenture; provided, that if such Redeemable Stock is
not then permitted to be repurchased, the repurchase price shall be the book
value of such Redeemable Stock.
"Intellectual Property Pledge Agreement" means, collectively, each
Intellectual Property Security Agreement made at any time by the Company or any
Subsidiary of the Company, respectively, in favor of the Collateral Agent, as
amended, supplemented or modified from time to time.
"Intercreditor Agreement" means that certain Intercreditor and Collateral
Agency Agreement, dated as of the Effective Date, by and among the Lender, the
Trustee, and BTCC, individually and as Collateral Agent and agent for the Letter
of Credit Lenders, as the same may be amended, amended and restated,
supplemented or modified from time to time.
"Interest Rate Agreement" of any Person means any arrangement with any
other Person whereby, directly or indirectly, such Person is entitled to receive
from time to time periodic payments calculated by applying either a floating or
fixed rate of interest on a notional amount in exchange for periodic payments
made by such Person calculated by applying a fixed or floating rate of interest
on the same notional amount and shall include, without limitation, any interest
rate swap agreement, interest rate cap, floor or collar agreement, option or
futures contract or other similar agreements or arrangements, designed to
protect such Person or any of its Subsidiaries from fluctuations in interest
rates (as opposed to being used in any way for speculative trading purposes).
"Investment" means, as to any investing Person, any direct or indirect
advance, loan (other than extensions of trade credit on commercially reasonable
terms in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of such Person or any of its Subsidiaries in
accordance
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with GAAP) or other extension of credit, guarantee or capital contribution to,
or any acquisition by, such Person of any Capital Stock, bonds, notes,
debentures or other securities or evidences of Indebtedness issued by any other
Person. In determining the amount of any Investment involving a transfer of
Property, such Property shall be valued at its fair market value at the time of
such transfer, and such fair market value shall be determined in good faith by
the Board of Directors of the investing Person, whose determination in such
regard shall be conclusive.
"Joint Venture" of a Person means any Person in which the investing Person
has a joint or shared equity interest but which is not a Subsidiary of such
investing Person.
"Lender" means, collectively, The Prudential Insurance Company of America,
as lender under the Revolving Credit Agreement and all other lenders (if any)
that exist under the Revolving Credit Agreement from time to time.
"Letter of Credit Agreement" means the Credit Agreement, dated as of the
Effective Date, between the Letter of Credit Lenders, BTCC, as agent for the
Letter of Credit Lenders, and the Company, as amended, supplemented or otherwise
modified from time to time.
"Letter of Credit Lenders" means the financial institutions party to the
Letter of Credit Agreement as "Lenders" from time to time.
"LIBOR Business Day" means a day of the year on which dealings are carried
on in the London interbank market and banks are open for business in London and
not required or authorized to close in New York City.
"LIBOR Rate" means (i) for any Rate Period, the sum of 5.75% plus the six
month London Interbank Offered Rate at 11:00 A.M. (London time) two LIBOR
Business Days prior to Rate Day, for U.S. dollar deposits in the London
interbank market as such rate is reported on page 3750 by Telerate -- The
Financial Information Network published by Telerate Systems Incorporated
(Telerate), or its successor company; or (ii) if Telerate shall cease to report
such rates on a regular basis, the LIBOR Rate shall mean, for any Rate Period,
the sum of 5.75% plus the rate determined by the Trustee to be the arithmetic
average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of the rates
quoted to the Trustee by the Reference Banks two LIBOR Business Days prior to
Rate Day, for U.S. dollar deposits in the London interbank market.
"Lien" means any mortgage, pledge, lien, charge, security interest,
conditional sale or other title retention agreement (including, without
limitation, any Capital Lease Obligations in the nature thereof) or other
encumbrance of any kind or description, including, without limitation, any
agreement to give or grant a Lien.
"Management Agreement" means the Management Services Agreement dated as of
December 4, 1991 between the Company and DPK, as the same was amended and
restated by the Amended and Restated Management Services Agreement dated as of
December 31, 1993 between the Company and DPK and as the same may from time to
time, hereafter be amended, modified or restated upon the good faith approval,
pursuant to duly adopted resolutions, of a majority of members of the Company's
Board of Directors who are not Affiliates of DPK.
"Material Subsidiary" means (a) any Subsidiary of the Company if (i) the
total assets of such Subsidiary (and its Subsidiaries) exceed 10% of the total
assets of the Company and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP, or (ii) the revenues (or losses, as the case may be) of
such Subsidiary (and its Subsidiaries) for the four consecutive fiscal quarters
of such Subsidiary most recently ended (determined on a consolidated basis in
accordance with GAAP and whether or not such Person was a Subsidiary of the
Company during all or any part of the fiscal period of the Company referred to
below) exceed an amount equal to 10% of the revenues (or losses, as the case may
be) of the Company and its Subsidiaries for the four consecutive fiscal quarters
of the Company most recently ended (determined on a consolidated basis in
accordance with GAAP), and (b) in any event each of (i) Sandusky Plastics of
Delaware, Inc., a Delaware corporation; (ii) Sandusky Plastics, Inc., a Delaware
corporation; (iii) Viskase Corporation, a Pennsylvania corporation; (iv) Clear
Shield National, Inc., a California corporation; (v) Viskase Holding
Corporation, a Delaware corporation; (vi) Viskase Sales Corporation, a Delaware
corporation; and (vii) Viskase S.A.
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"Mortgage" means, collectively, any or all of the mortgages, deeds of trust
or other security instruments now or hereafter granting (or purporting to grant)
Liens on the real property or leasehold estates or on any other real property or
leasehold estates of the Company or its Subsidiaries to the Collateral Agent, as
they may be amended, supplemented or otherwise modified from time to time.
"Net Worth" means as of any date the aggregate amount of the capital,
surplus and retained earnings of the Company and its Subsidiaries as would be
shown on a consolidated balance sheet of the Company and its Subsidiaries
prepared as of such date in accordance with GAAP (and excluding minority
interests); provided that capital and surplus attributable to Redeemable Stock
and accumulated translation adjustments shall be excluded.
"Percentage of Total Assets Transferred" means, with respect to each asset
Transferred pursuant to the terms of the Indenture (including assets transferred
pursuant to a Transfer by Merger), the ratio (expressed as a percentage) of (i)
the greater of such asset's fair market value or the net book value of such
assets on the date of Transfer to (ii) the book value of the consolidated assets
of the Company and its Subsidiaries as of the last day of the fiscal quarter of
the Company immediately preceding the day of Transfer.
"Permitted Liens" in respect of any Person means (i) pledges or deposits
made by such Person under workers' compensation, unemployment insurance laws or
similar legislation, or good faith deposits in connection with bids, tenders,
contracts (other than contracts for the payment of money) or operating leases to
which such Person is a party, or deposits to secure statutory or regulatory
obligations of such Person or deposits of cash or U.S. Government Obligations to
secure surety or appeal bonds to which such Person is a party, or deposits as
security for contested taxes or import duties or for the payment of rent, in
each case incurred in the ordinary course of business; (ii) Liens arising by
operation of law such as carriers', warehousemen's and mechanics' Liens, in each
case arising in the ordinary course of business and with respect to amounts not
yet due or being contested in good faith by appropriate legal proceedings
promptly instituted and diligently conducted and for which a reserve or other
appropriate provision, if any, as shall be required in conformity with GAAP
shall have been made; (iii) Liens for taxes not yet subject to penalties for
non-payment or which are being contested in good faith and by appropriate legal
proceedings promptly instituted and diligently conducted and for which a reserve
or other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made; (iv) Liens evidenced by the Capitalized Lease
Obligations under GECC Lease Documents and Liens securing Debt of the Company or
its Subsidiaries permitted under the Indenture for refinancing the Debt under
the GECC Lease Documents; provided, however, that in connection with any such
refinancing any such new Lien shall be limited to all or part of the same
Property to which the original Lien applied; (v) minor survey exceptions, minor
encumbrances, easements or reservations of, or rights of others for, rights of
way, sewers, electric lines, telegraph and telephone lines and other similar
purposes, or zoning or other restrictions as to the use of real properties or
Liens incidental to the conduct of the business of such Person or to the
ownership of its Property which were not incurred in connection with Debt or
other extensions of credit and which do not in the aggregate materially
adversely affect the value of said Property or materially impair the use of such
Property in the operation of the business of such Person; (vi) Liens in favor of
the Collateral Agent to secure Debt evidenced by the Securities, Debt under the
Revolving Credit Agreement and the Letter of Credit Agreement and any related
guaranties; (vii) certain other Liens existing on the Effective Date; (viii)
Liens arising out of judgments or awards against such Person not giving rise to
an Event of Default with respect to which such Person is diligently prosecuting
an appeal or other proceedings for review; (ix) Liens to secure certain
refinancing Debt; provided, however, that any such new Lien shall be limited to
all or part of the same Property to which the original Lien applied; (x) Liens
to secure Purchase Money Indebtedness and Acquired Debt (to the extent such
Liens attach prior to or at the time of incurrence of such Debt); (xi) Liens to
secure the Debt (if any) evidenced by the Second Priority Notes and the
Subsequent Second Priority Notes in an aggregate principal amount not to exceed
$50,000,000; provided, however, that (a) the Lien securing such Debt is granted
only to the Collateral Agent and made subject to the terms of the Intercreditor
Agreement, and (b) the intercreditor Agreement is amended to the reasonable
satisfaction of the Collateral Agent to add the Second Priority Notes Trustee as
a party thereto, and to provide for such matters incidental thereto as the
Collateral Agent may reasonably require; and
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(xii) Liens securing Debt of Wholly Owned Subsidiaries of the Company to the
Company or another such Wholly Owned Subsidiary.
"Person" means any individual, partnership, corporation, limited liability
company, venture, joint venture, unincorporated organization, joint-stock
company, trust or any government or agency or political subdivision thereof or
other entity of any kind.
"Pledge Agreement" means, collectively, each Pledge Agreement made at any
time by the Company or any Subsidiary of the Company in favor of the Collateral
Agent, as amended, supplemented or otherwise modified from time to time.
"Property" means, with respect to any Person, any interest of such Person
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible, including, without limitation, Capital Stock in any other Person.
"Purchase Money Indebtedness" means, as to any Person, the Debt of such
Person incurred and owing in respect of all or part of the purchase price of
Property purchased where such Debt is fully secured by the Property purchased.
"Rate Day" means for each Rate Period the first day of such Rate Period;
provided, however, that if such day is not a LIBOR Business Day, then the next
LIBOR Business Day succeeding the first day of such Rate Period.
"Rate Period" means the period during which the LIBOR Rate remains in
effect and unchanged. For purposes of the Indenture, the Rate Period shall begin
on the fifteenth day of each June and December of each year, commencing with
June 15, 1995.
"Redeemable Stock" means, with respect to any Person, any class or series
of Capital Stock that, either by its terms, by the terms of any security into
which it is convertible or exchangeable by contract or otherwise, is or upon the
happening of an event or the passage of time would be, required to be redeemed
or is redeemable at the option of the holder thereof at any time prior to the
Stated Maturity of the principal of the Securities, or, at the option of the
holder thereof, is convertible into or exchangeable for debt securities maturing
at any time prior to the Stated Maturity of the principal of the Securities.
"Registered Exchange Offer" means the offer to exchange the Series B
Securities for all of the outstanding Series A Securities and the Series D
Securities for all of the outstanding Series C Securities, in each case in
accordance with the Registration Rights Agreement.
"Registration Rights Agreement" means the Exchange and Registration Rights
Agreement by and between the Company and the Holders party thereto, relating to
the Securities and dated the Effective Date, as amended, supplemented or
otherwise modified from time to time.
"Reinvestment Yield" means, with respect to the Called Principal of any
Security, 1.0% over the yield to maturity implied by (i) the yields reported, as
of 10:00 A.M. (New York City time) on the Business Day next preceding the
Settlement Date with respect to such Called Principal, on the display designated
as "Page 678" on the Telerate Service (or such other display as may replace Page
678 on the Telerate Service) for actively traded U.S. Treasury securities having
a maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time or
the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to the
Remaining Average Life of such Called Principal as of such Settlement Date. Such
implied yield shall be determined, if necessary, by (a) converting U.S. Treasury
bill quotations to bond-equivalent yields in accordance with accepted financial
practice and (b) interpolating linearly between reported yields.
"Remaining Average Life" means, with respect to the Called Principal of any
Security, the number of years (calculated to the nearest one-twelfth year)
obtained by dividing (i) such Called Principal into (ii) the
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sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" means, with respect to the Called Principal
of any Security, all payments of such Called Principal and interest thereon that
would be due on or after the Settlement Date with respect to such Called
Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Restricted Debt" means all Consolidated Debt other than Consolidated
Senior Debt.
"Required Holders" means the Holder or Holders of at least a majority of
the aggregate principal amount of the Securities from time to time outstanding
(without giving effect to any Securities owned of record by the Company or any
of its Affiliates).
"Responsible Officer" means, with respect to any corporation, the chief
executive officer, chief operating officer, chief financial officer, treasurer,
or chief accounting officer of such corporation or any other officer of such
corporation involved principally in its financial administration or its
controllership function.
"Revolving Credit Agreement" means that certain Revolving Credit Agreement,
dated as of the Effective Date between the Company and The Prudential Insurance
Company of America, as amended, supplemented or otherwise modified from time to
time or as replaced pursuant to a refinancing thereof.
"Revolving Loan Commitment" means, at any time, the aggregate principal
amount which may be borrowed under the Revolving Loan Agreement at such time
(determined without giving effect to any suspension or termination of the
Lender's obligation to make loans thereunder upon the occurrence of a default or
an "Event of Default" thereunder).
"Sale and Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold by such Person
or a Subsidiary of such Person and thereafter leased back from the purchaser
thereof by such Person or one of the Subsidiaries of such Person.
"Second Priority Notes" means the debt securities which may be issued by
the Company under an indenture (the "Second Priority Notes Indenture") pursuant
to the 10.25% Note Exchange.
"Second Priority Notes Indenture" has the meaning given to such term in the
definition of Second Priority Notes.
"Second Priority Notes Trustee" means trustee for the Second Priority Notes
and Subsequent Second Priority Notes, respectively (in such capacity) and each
successor thereto in such capacity.
"Security Agreement" means, collectively, each Security Agreement made at
any time by the Company or any Subsidiary of the Company in favor of the
Collateral Agent, as amended, supplemented or otherwise modified from time to
time.
"Securities" means the outstanding Series A Securities, Series B
Securities, Series C Securities or Series D Securities, as the case may be.
"Series A Securities" means the 12% First Priority Senior Secured Notes due
2000, Series A, being issued pursuant to the Indenture.
"Series B Securities" means the 12% First Priority Senior Secured Notes due
2000, Series B (the terms of which are identical to the Series A Securities
except that the Series B Securities shall be registered under the Securities
Act, and shall not contain the restrictive legend on the face of the form of the
Series A Securities), to be issued in exchange for the Series A Securities
pursuant to the Exchange Offer.
"Series C Securities" means the Floating Rate First Priority Senior Secured
Notes due 2000, Series C, being issued pursuant to the Indenture.
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"Series D Securities" means the Floating Rate First Priority Senior Secured
Notes due 2000, Series D (the terms of which are identical to the Series C
Securities except that the Series D Securities shall be registered under the
Securities Act, and shall not contain the restrictive legend on the face of the
form of the Series C Securities), to be issued in exchange for the Series C
Securities pursuant to the Exchange Offer.
"Settlement Date" means, with respect to the Called Principal of any
Security, the date on which such Called Principal is to be redeemed or prepaid
(as the case may be) pursuant to the "Change of Control" covenant, the
redemption obligations following a Transfer of Property equal to $5,000,000 or
more or an optional redemption, or is declared to be immediately due and payable
pursuant to an Event of Default, as the context requires.
"Significant Domestic Subsidiary" means each Domestic Subsidiary that, at
any time, is a Material Subsidiary.
"Stated Maturity" when used with respect to any Security or any installment
of interest thereon, means the date specified in such Security as the fixed date
on which the principal of such Security or such installment of interest is due
and payable.
"Stipulated Loss Value" means the Stipulated Loss Value, as defined in the
GECC Lease Documents (as such GECC Lease Documents are in effect on the
Effective Date.)
"Subsequent Second Priority Notes" means any and all debt securities issued
by the Company under an indenture in exchange for Second Priority Notes and
having terms identical to the Second Priority Notes and otherwise being the same
as the Second Priority Notes except that such debt securities are registered
under the Securities Act.
"Subsequent Securities" means, collectively, any and all Series B
Securities and Series D Securities issued by the Company.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Securities is at the time directly or indirectly owned
or Controlled by such Person, by one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries thereof, or (ii) any other Person
(other than a corporation) in which such Person, one or more Subsidiaries
thereof or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest with respect to voting in the election of directors or
trustees thereof (or such other Persons performing similar functions). For
purposes of this definition, any directors' qualifying shares shall be
disregarded in determining the ownership of a Subsidiary.
"Subsidiary Guarantor" means (i) each of the Significant Domestic
Subsidiaries existing on the Effective Date, and (ii) each of the Company's
other Subsidiaries which becomes a guarantor of the Securities.
"10.25% Note Exchange" means an exchange by the Company pursuant to which
the Company issues Second Priority Notes in an aggregate face amount of not more
than $50,000,000 in exchange for 10.25% Notes pursuant to an exchange ratio
(based on aggregate face amount) of no greater than 1:1.
"10.25% Notes" means, collectively, the 10.25% Senior Notes due 2001 issued
by the Company pursuant to the 10.25% Notes Indenture.
"10.25% Notes Indenture" means that certain Indenture, dated as of December
31, 1993, between the Company and Bankers Trust Company, as trustee, as amended,
supplemented or otherwise modified from time to time.
"Transfer" means any sale, exchange, conveyance, lease, transfer or other
disposition.
"Transfer by Merger" means, with respect to any Subsidiary of the Company,
a merger or consolidation of such Subsidiary with another Person such that after
giving effect thereto the surviving entity is no longer a Subsidiary of the
Company.
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"Voting Securities" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof,
under ordinary circumstances and in the absence of contingencies, to vote for
members of the Board of Directors of such Person (or Persons performing
functions equivalent to those of such members).
"Wholly Owned Subsidiary" of a Person means any Subsidiary of such Person
100% of the total capital stock of which, other than directors' qualifying
shares, is at the time owned by such Person and/or one or more Wholly Owned
Subsidiaries of such Person.
"Working Capital" means, current assets less current liabilities where
current assets equals accounts receivable, inventory and other current assets
(excluding cash and cash equivalents) and current liabilities equals accounts
payable and accrued liabilities (both excluding accrued interest payable,
accrued income taxes payable and any payables related to capital expenditures),
all as reflected on the Company's consolidated financial statements prepared in
accordance with GAAP.
"Yield-Maintenance Amount" means, with respect to any Security, an amount
equal to the excess, if any, of the Discounted Value of the Called Principal of
such Security over the sum of (i) such Called Principal plus (ii) interest
accrued thereon as of (including interest due on) the Settlement Date with
respect to such Called Principal. The Yield-Maintenance Amount shall in no event
be less than zero. The Yield-Maintenance Amount shall be calculated for purposes
of the Series C Securities and Series D Securities as if interest on such
Securities accrues at the same per annum rate as interest accrues on the Series
A Securities and Series B Securities.
DESCRIPTION OF INTERCREDITOR ARRANGEMENTS
In the event of a default under the Revolving Credit Agreement, the Letter
of Credit Agreement or the Indenture, collateral rights or remedies cannot be
exercised without the consent of the "Requisite Working Capital Lenders" (as
defined below) and Holders of 35% of the Notes; provided, however, that
following a "Serious Default" (as defined below), the Requisite Working Capital
Lenders may unilaterally commence "Enforcement" (as defined below) after
provision of notice to the Trustee under the Indenture and the passage of ninety
days. If the Requisite Working Capital Lenders, after the passage of such 90 day
period and at any time thereafter prior to the passage of 180 days, exercise
their unilateral enforcement rights without the consent of Holders of 35% of the
Notes, then the Requisite Working Capital Lenders are solely responsible for
indemnifying the Collateral Agent, the Holders of the Notes and any other
lenders not joining in such enforcement action against any liability, costs or
expenses incurred by any of them in connection with such Enforcement.
The term "Requisite Working Capital Lenders" means (i) at any time
commitments are outstanding under the Letter of Credit Agreement, letters of
credit are issued and outstanding under the Letter of Credit Agreement or the
Company has any payment obligations owing under the Letter of Credit Agreement,
the holders of the majority of the sum of (a) the commitments under the Letter
of Credit Agreement and (b) the outstanding reimbursement obligations and other
payment obligations under the Letter of Credit Agreement, and (ii) at any other
time, the holders of a majority of the revolving loans made under the Revolving
Credit Agreement.
The term "Serious Default" means an event of default under the Revolving
Credit Agreement or the Letter of Credit Agreement resulting from (i) a payment
default under either such agreement, or (ii) a violation by the Company of the
any of the negative covenants or of any of the other default provisions in
either such agreement.
The term "Enforcement" means (i) the exercise of any remedial provisions
under the Indenture, the Letter of Credit Agreement or the Revolving Credit
Agreement or the termination of any commitments to lend thereunder, (ii) the
exercise of enforcement remedies by the Collateral Agent, or (iii) the
commencement by or against the Company or any Subsidiary Guarantor, of any
bankruptcy proceeding.
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The Letter of Credit Lenders have agreed (i) not to increase the facility
provided under the Letter of Credit Agreement to the Company above $28,000,000
and (ii) not to amend, modify or waive any default provision (other than waivers
of default provisions neither relating to payment defaults or breaches of
negative covenants), negative covenant or material economic terms (such
defaults, covenants and material economic terms being collectively referred to
hereinafter as the "Specified Provisions") of the Letter of Credit Agreement
without the written consent of the lenders under the Revolving Credit Agreement
and of Holders of 35% of the Notes.
The lenders under the Revolving Credit Agreement have agreed not to make
revolving loans in excess of an aggregate of $35,000,000 at any one time
outstanding or to amend, modify or waive any Specified Provision in the
Revolving Credit Agreement without the written consent of the agent under the
Letter of Credit Agreement and Holders of 35% of the Notes.
The Trustee under the Indenture has agreed not to amend, modify or waive
any Specified Provision in the Indenture without the written consent of the
Requisite Working Capital Lenders.
Amounts received by the Collateral Agent or by any holder of the Notes or
the holders of indebtedness outstanding under the Letter of Credit Agreement or
the Revolving Credit Agreement (including amounts received in connection with
the exercise of setoff or similar rights) after Enforcement has occurred are in
relevant part applied to obligations of the Company in the following order of
priority:
(i) first, to reimburse the Collateral Agent for all costs, expenses
and indemnities incurred in connection with the performance of its duties
as Collateral Agent;
(ii) second, to pay any outstanding obligations under the Letter of
Credit Agreement;
(iii) third, to reimburse the Trustee under the Indenture for all
costs, expenses and indemnities owing to it under the Indenture;
(iv) fourth, to pay on a pari passu basis, interest and unpaid
prepayment premium due under the Revolving Credit Agreement and with
respect to the Notes;
(v) fifth, to pay on a pari passu basis, principal due under the
Revolving Credit Agreement and with respect to the Notes; and
(vi) sixth, to pay on a pari passu basis, all other amounts
outstanding under the Revolving Credit Agreement and with respect to the
Notes.
Pursuant to the Intercreditor Agreement, the Collateral Agent on behalf of
the holders of the Notes and the lenders under the Letter of Credit Agreement
and the Revolving Credit Agreement have entered into an Intercreditor Agreement
with General Electric Capital Corporation, as Owner Participant ("GECC"), and
Shawmut Bank Connecticut, National Association, as Owner Trustee (the "GECC
Intercreditor Agreement"). The GECC Intercreditor Agreement permits the
Collateral Agent to cure certain payment and nonpayment defaults which may arise
under the lease agreements relating to the plants subject thereto. In the event
GECC repossesses any of such plants, it must cooperate with the collateral agent
to utilize such plants to convert any inventory consisting of work in process
into finished goods inventory.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain material United States federal income
tax consequences of acquiring, holding and disposing of the New Notes. The
summary is based upon the Internal Revenue Code of 1986, as amended to the date
hereof (the "Code"), existing and proposed Treasury regulations, administrative
pronouncements and judicial decisions now in effect, all of which are subject to
change (possibly on a retroactive basis). This summary does not discuss all
aspects of federal income taxation that may be relevant to investors in light of
their particular circumstances or to certain types of investors subject to
special treatment under the federal income tax laws (for example, dealers in
securities, tax-exempt organizations and insurance companies). This summary does
not discuss the federal income tax consequences to a beneficial owner of a Note
who, for United States federal income tax purposes, is a non-resident alien
individual, a
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foreign corporation, a foreign partnership or a foreign estate or trust.
Furthermore, this summary does not discuss the consequences to an investor under
state, local or foreign tax laws. Prospective investors are advised to consult
their own tax advisors regarding the federal, state, local and other tax
considerations of holding and disposing of the New Notes.
The following summary assumes that holders of the New Notes will hold them
as "capital assets" within the meaning of Section 1221 of the Code. The
discussion is not binding on the courts or the Internal Revenue Service ("IRS").
The Company has not sought and will not seek any rulings from the IRS with
respect to the positions of the Company discussed herein. There can be no
assurance that the IRS will not take a different position concerning the tax
consequences of holding and disposing of the New Notes.
The Exchange
An exchange of Old Notes for New Notes pursuant to the Exchange Offer
should not be treated as a sale, exchange or other taxable event for federal
income tax purposes because the New Notes should not be considered to differ
materially in kind or extent from the Old Notes. As a result, no material
federal income tax consequences should result from an exchange of Old Notes for
New Notes pursuant to the Exchange Offer.
For federal income tax purposes, a New Note received by a beneficial owner
of an Old Note should be treated as a continuation of the Old Note in the hands
of such owner.
Stated Interest
A beneficial owner of a New Note (a "Holder") will generally be required to
report as ordinary income for federal income tax purposes interest received or
accrued on the New Note in accordance with the Holder's method of tax
accounting.
Market Discount and Bond Premium
A subsequent purchaser of a Note will be treated as having acquired a Note
at a "market discount" to the extent that such purchaser's tax basis in the Note
is less than (by more than a specified de minimis amount) the Note's outstanding
principal amount at the time of purchase. A Holder in whose hands a Note has
market discount generally will be required to treat as ordinary income any gain
recognized on the sale, exchange, redemption or other disposition of, or any
full or partial principal payment on, the Note to the extent of accrued market
discount. In general, market discount accrues on a ratable basis, although a
Holder of a Note may elect to accrue market discount on a constant-yield basis.
A Holder of a Note having market discount may be required to defer the deduction
of all or a portion of the interest on any indebtedness incurred or maintained
to purchase or carry the Note generally until the Note is disposed of in a
taxable transaction. A Holder of a Note having market discount may elect to
include market discount in income as it accrues, in which case the foregoing
market discount rules would not apply. The election generally applies to all
market discount bonds acquired by the electing Holder on or after the first day
of the first year of election and is generally irrevocable without the consent
of the IRS.
A subsequent purchaser of a Note will be treated as having acquired a Note
with "bond premium" to the extent that such purchaser's tax basis in the Note
(exclusive of any amount attributable to accrued and unpaid interest) exceeds
the Note's outstanding principal amount at the time of purchase. A Holder may
elect to amortize bond premium. In general, in the case of debt instruments,
such as the Notes, that are callable prior to maturity, the amortizable bond
premium will be determined with reference to the amount payable on maturity or,
if it results in a smaller amortization of premium attributable to the period
through the earlier call date, with reference to the amount payable on the
earlier call date (with adjustments to the amortization of bond premium
attributable to periods after the call date). The application of that rule is
not entirely clear in the case of debt instruments, such as the Notes, that are
callable on each day during their term. If bond premium is amortized, the amount
of interest which must be included in the Holder's income during a period will
be reduced by the portion of the premium allocable to such period. The election
to amortize bond
80
<PAGE> 84
premium generally applies to all debt instruments held by the Holder at the
beginning of the year of election or acquired thereafter.
Sale, Exchange or Redemption of Notes
Upon the sale, redemption or other disposition of a Note, a Holder will
recognize gain or loss equal to the difference between the amount of sale or
redemption proceeds (exclusive of proceeds attributable to accrued but unpaid
interest) and the Holder's adjusted tax basis in the Note. Proceeds attributable
to accrued but unpaid interest will be treated as interest income to the extent
not previously taken into income by a Holder. A Holder's adjusted tax basis
generally will equal the Holder's purchase price for the Note increased by any
market discount previously included in income by such Holder with respect to
such Note, and decreased by the aggregate amount of principal previously
received and any bond premium previously amortized by such Holder with respect
to such Note. Generally, any gain or loss recognized by a Holder of a Note upon
a sale, redemption or other disposition of the Note will be capital gain or
loss, except as described under "Market Discount and Bond Premium," above. Such
capital gain or loss will be long-term capital gain or loss provided the Note
has been held for more than one year.
Backup Withholding
A Holder of a Note may be subject to backup withholding at the rate of 31
percent with respect to interest and premium paid on the Notes and gross
proceeds from the sale of a Note, unless such Holder (a) is a corporation or
comes within certain other exempt categories and, when required, demonstrates
this fact or (b) provides a correct taxpayer identification number, certifies as
to no loss of exemption from backup withholding and otherwise complies with
applicable requirements of the backup withholding rules. A Holder of a Note who
does not provide the Company with the Holder's correct taxpayer identification
number may be subject to penalties imposed by the IRS. Any amount paid as backup
withholding will be creditable against the Holder's tax liability.
THE FOREGOING DISCUSSION OF CERTAIN FEDERAL INCOME TAX CONSEQUENCES IS NOT
TAX ADVICE. ACCORDINGLY, EACH PERSON CONSIDERING THE ACQUISITION OF NEW NOTES
SHOULD CONSULT A TAX ADVISOR WITH RESPECT TO THE TAX CONSEQUENCES TO HIM, HER OR
IT OF THE ACQUISITION, OWNERSHIP AND DISPOSITION OF THE NEW NOTES, INCLUDING THE
APPLICABILITY AND EFFECT OF STATE, LOCAL AND FOREIGN TAX LAWS AND OF CHANGES IN
APPLICABLE TAX LAWS.
PLAN OF DISTRIBUTION
Prior to the Offering, there was no market for any of the Notes and the
Company does not intend to apply for the listing of any of its securities on any
national securities exchange or for their quotation through the NASDAQ system.
The Old Notes are eligible for trading in the Private Offerings, Resales and
Trading through Automatic Linkages ("PORTAL") market. There can be no assurance
that an active trading market will develop for, or as to the liquidity of, any
of the Notes.
With respect to resales of New Notes, based on an interpretation by the
staff of the Commission set forth in no-action letters issued to third parties,
the Company believes that any holder or beneficial owner (other than a person
that is an affiliate of the Company within the meaning of Rule 405 under the
Securities Act or a "broker" or "dealer" registered under the Exchange Act) who
exchanges Old Notes for New Notes in the ordinary course of business and who is
not participating, does not intend to participate, and has no arrangement or
understanding with any person to participate, in the distribution of the New
Notes, will be allowed to resell the New Notes to the public without further
registration under the Securities Act and without delivering to the purchasers
of the New Notes a prospectus that satisfies the requirements of Section 10
thereof. However, if any holder or beneficial owner acquires New Notes in the
Exchange Offer for the purpose of distributing or participating in a
distribution of the New Notes, such holder or beneficial owner cannot rely on
the position of the staff of the Commission enunciated in Exxon Capital Holdings
Corporation (available April 13, 1988) or similar no-action letters or any
similar interpretive letters and must comply with the
81
<PAGE> 85
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction, unless an exemption from
registration is otherwise available.
As contemplated by the above no-action letters and the Registration Rights
Agreement, each holder accepting the Exchange Offer is required to represent to
the Company in the Letter of Transmittal that (i) the New Notes are to be
acquired by the holder and any beneficial owners in the ordinary course of
business, (ii) the holder and any beneficial owners are not engaging and do not
intend to engage in the distribution of the New Notes, (iii) neither the holder
nor any beneficial owner is an affiliate of the Company within the meaning of
Rule 405 under the Securities Act, and (iv) the holder and each beneficial owner
acknowledge that if such holder or beneficial owner participates in the Exchange
Offer for the purpose of distributing the New Notes, such holder or beneficial
owner must comply with the registration and prospectus delivery requirements of
the Securities Act and cannot rely on the above no-action letters.
Any broker or dealer registered under the Exchange Act (each a
"Broker-Dealer") who holds Old Notes that were acquired for its own account as a
result of market-making activities or other trading activities (other than Old
Notes acquired directly from the Company), may exchange such Old Notes for New
Notes pursuant to the Exchange Offer; however, such Broker-Dealer may be deemed
an underwriter within the meaning of the Securities Act and, therefore, must
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resales of the New Notes received by it in the Exchange
Offer, which prospectus delivery requirement may be satisfied by the delivery by
such Broker-Dealer of this Prospectus. Any Broker-Dealer participating in the
Exchange Offer will be required to acknowledge that it will deliver a prospectus
in connection with any resales of New Notes received by it in the Exchange
Offer. However only Broker-Dealers who exchange Old Notes that were acquired for
their own account as a result of market-making activities or other trading
activities (other than Old Notes acquired directly from the Company), may use
this Prospectus to satisfy the prospectus delivery requirements of the
Securities Act. The delivery by a Broker-Dealer of a prospectus in connection
with resales of New Notes shall not be deemed to be an admission by such Broker-
Dealer that it is an underwriter within the meaning of the Securities Act.
LEGAL MATTERS
Certain legal matters will be passed upon for the Company and the
Subsidiary Guarantors by Stephen M. Schuster, Esq., Oak Brook, Illinois. Mr.
Schuster beneficially owns 39,944 shares of Common Stock of the Company (which
includes options to purchase 22,850 shares and 2,000 shares owned by Mr.
Schuster's spouse).
EXPERTS
The consolidated balance sheets as of December 29, 1994 and December 31,
1993 and the consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the period January 1 to December 29, 1994
(Post-Consummation); the period January 1 to December 31, 1993
(Pre-Consummation) and the period December 27, 1991 to December 31, 1992
(Pre-Consummation) included in this Prospectus, have been included herein in
reliance on the report of Coopers & Lybrand L.L.P., independent accountants,
given on the authority of that firm as experts in accounting and auditing.
82
<PAGE> 86
INDEX TO FINANCIAL STATEMENTS
UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Consolidated balance sheets at March 30, 1995 (unaudited) and December 29, 1994...... F-2
Unaudited consolidated statements of operations for the three months ended March 30,
1995 and March 31, 1994............................................................ F-3
Unaudited consolidated statements of cash flows for the three months ended March 30,
1995 and March 31, 1994............................................................ F-4
Notes to consolidated financial statements........................................... F-5
CONSOLIDATED FINANCIAL STATEMENTS
Report of independent accountants.................................................... F-16
Consolidated balance sheets at December 29, 1994 and December 31, 1993............... F-17
Consolidated statements of operations for the years ended December 29, 1994, December
31, 1993 and December 31, 1992..................................................... F-18
Consolidated statements of stockholders' equity (deficit) for the years ended
December 29, 1994, December 31, 1993, December 31, 1992 and December 26, 1991...... F-19
Consolidated statements of cash flows for the years ended December 29, 1994, December
31, 1993 and December 31, 1992..................................................... F-20
Notes to consolidated financial statements........................................... F-21
</TABLE>
F-1
<PAGE> 87
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 30, DECEMBER 29,
1995 1994
--------- -------------
(UNAUDITED)
(IN THOUSANDS)
<S> <C> <C>
ASSETS
Current assets:
Cash and equivalents................................................ $ 7,209 $ 7,289
Receivables, net.................................................... 89,007 86,868
Inventories......................................................... 124,470 110,483
Other current assets................................................ 30,311 19,466
--------- ---------
Total current assets........................................ 250,997 224,106
Property, plant and equipment, including those under capital lease.... 518,958 506,099
Less accumulated depreciation and amortization...................... 46,166 35,761
--------- ---------
Property, plant and equipment, net.................................. 472,792 470,338
Deferred financing costs.............................................. 9,130 9,143
Other assets.......................................................... 45,842 47,181
Excess reorganization value........................................... 143,252 145,868
--------- ---------
$ 922,013 $ 896,636
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt including current portion of long-term debt and
obligation under capital lease................................... $ 28,221 $ 25,798
Accounts payable.................................................... 34,680 34,335
Accrued liabilities................................................. 73,805 72,246
--------- ---------
Total current liabilities................................... 136,706 132,379
Long-term debt including obligation under capital lease............... 510,944 489,358
Accrued employee benefits............................................. 56,927 56,217
Deferred and noncurrent income taxes.................................. 83,426 83,333
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value; none outstanding...................
Common stock, $.01 par value; 13,515,000 shares issued and
outstanding...................................................... 135 135
Paid in capital..................................................... 134,865 134,865
Accumulated (deficit)............................................... (7,507) (3,612)
Cumulative foreign currency translation adjustments................. 6,517 3,961
--------- ---------
Total stockholders' equity.................................. 134,010 135,349
--------- ---------
$ 922,013 $ 896,636
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-2
<PAGE> 88
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
MARCH 30, MARCH 31,
1995 1994
---------- ----------
(IN THOUSANDS, EXCEPT FOR
NUMBER OF SHARES AND PER
SHARE AMOUNTS)
<S> <C> <C>
NET SALES..................................................... $ 155,824 $ 142,593
COSTS AND EXPENSES
Cost of sales................................................. 113,689 102,119
Selling, general and administrative........................... 29,536 26,918
Amortization of intangibles and excess reorganization value... 3,910 3,846
---------- ----------
OPERATING INCOME.............................................. 8,689 9,710
Interest income............................................... 64 61
Interest expense.............................................. 13,434 12,059
Other income, net............................................. 591 281
Minority interest in loss of subsidiary....................... 50
---------- ----------
(LOSS) BEFORE INCOME TAXES.................................... (4,090) (1,957)
Income tax provision (benefit)................................ (195) 550
---------- ----------
NET (LOSS).................................................... $ (3,895) $ (2,507)
========== ==========
WEIGHTED AVERAGE COMMON SHARES................................ 13,515,000 13,500,000
PER SHARE AMOUNTS:
NET (LOSS).................................................... $ (.29) $ (.19)
========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-3
<PAGE> 89
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------
MARCH 30, MARCH 31,
1995 1994
--------- ---------
(IN THOUSANDS)
<S> <C> <C>
Cash flows from operating activities:
Net (loss)........................................................... $(3,895) $(2,507)
Adjustments to reconcile net (loss) to net cash provided by operating
activities:
Depreciation and amortization under capital lease................. 9,986 9,000
Amortization of intangibles and excess reorganization value....... 3,910 3,846
Amortization of deferred financing fees and discount.............. 549 362
Decrease in deferred and noncurrent income taxes.................. (907) (936)
Foreign currency transaction gain................................. (1,586) (837)
Changes in operating assets and liabilities:
Increase in accounts receivable................................. (438) (7,798)
Increase in inventories......................................... (12,192) (7,719)
Increase in other current assets................................ (10,615) (9,529)
Increase in accounts payable and accrued liabilities............ 254 1,954
Other........................................................... 398 949
------- -------
Total adjustments............................................ (10,641) (10,708)
------- -------
Net cash used in operating activities........................... (14,536) (13,215)
Cash flows from investing activities:
Capital expenditures................................................. (7,631) (7,354)
Proceeds from sale of property, plant and equipment.................. 20
Purchase of minority interest in subsidiary.......................... (4,200)
------- -------
Net cash (used in) investing activities......................... (7,631) (11,534)
Cash flows from financing activities:
Proceeds from revolving loan and long-term borrowings................ 42,249 25,836
Deferred financing costs............................................. (464) (10)
Repayment of revolving loan, long-term borrowings and capital lease
obligations....................................................... (19,973) (5,058)
------- -------
Net cash provided by financing activities....................... 21,812 20,768
Effect of currency exchange rate changes on cash....................... 275 175
------- -------
Net decrease in cash and equivalents................................... (80) (3,806)
Cash and equivalents at beginning of period............................ 7,289 7,743
------- -------
Cash, restricted cash and equivalents at end of period................. $ 7,209 $ 3,937
======= =======
- ------------------------------------------------------------------------------------------------
Supplemental cash flow information:
Interest paid........................................................ $16,330 $16,420
Income taxes paid.................................................... $ 1,045 $ 479
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-4
<PAGE> 90
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CHAPTER 11 REORGANIZATION PROCEEDINGS
On January 6, 1993, a group of bondholders filed an involuntary petition
for reorganization of Envirodyne Industries, Inc. under Chapter 11 of the U.S.
Bankruptcy Code. On January 7, 1993 Viskase Corporation, Viskase Sales
Corporation, Viskase Holding Corporation, Clear Shield National, Inc., Sandusky
Plastics of Delaware, Inc., Sandusky Plastics, Inc. and Envirodyne Finance
Company each filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division (the Bankruptcy Court). On December 17, 1993, the
Bankruptcy Court confirmed the First Amended Joint Plan of Reorganization as
twice modified (Plan of Reorganization) with respect to Envirodyne Industries,
Inc. (Envirodyne) and certain of its subsidiaries. The Plan of Reorganization
was consummated and Envirodyne and certain of its subsidiaries emerged from
Chapter 11 on December 31, 1993 (Effective Date). For accounting purposes, the
Plan of Reorganization was deemed to be effective as of December 31, 1993.
The Plan of Reorganization provided for the initial issuance of
approximately 13,500,000 shares of Envirodyne common stock, warrants to purchase
an additional 1,500,000 shares (subject to adjustment) and $219,262,000
principal amount of 10 1/4% Senior Notes Due 2001 (10 1/4% Notes).
Holders of allowed general unsecured claims of Envirodyne (as opposed to
subsidiaries of Envirodyne) became entitled to receive 32.28 shares of common
stock for each $500 amount of their prepetition claims, or a total of 8,070
shares of common stock, representing .06% of the common stock initially issued
pursuant to the Plan of Reorganization. These claims totaled approximately
$125,000. If the allowed amount of general unsecured claims of Envirodyne
exceeds $125,000, for example upon the resolution of disputed claims, additional
shares of common stock will have to be issued to the holders of allowed general
unsecured claims of Envirodyne in order to provide equitable allocation of value
among Envirodyne's unsecured creditors under the Plan of Reorganization. Such
additional shares of common stock would be distributed with respect to allowed
general unsecured claims of Envirodyne as follows: (i) approximately 2.58
additional shares per $500 in claims in the event allowed general unsecured
claims of Envirodyne are between $125,000 and $25,000,000; (ii) approximately
5.61 additional shares per $500 in claims in the event allowed general unsecured
claims of Envirodyne are between $25,000,000 and $50,000,000; (iii)
approximately 9.22 additional shares per $500 in claims in the event allowed
general unsecured claims of Envirodyne are between $50,000,000 and $75,000,000;
and (iv) approximately 13.58 additional shares per $500 in claims in the event
allowed general unsecured claims of Envirodyne are between $75,000,000 and
$100,000,000. Refer to Note 5 for a discussion of disputed claims which, if
determined adversely to Envirodyne, would result in the issuance of common
stock.
The Company accounted for the reorganization using the principles of fresh
start reporting 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." Accordingly, all assets and
liabilities were restated to reflect their reorganization value. A
reorganization value of the Company's equity of $135,000,000 was based on the
consideration of many factors and various valuation methods, including
discounted cash flows, comparable multiples of earnings and other applicable
measurements and valuation techniques believed by management and its financial
advisors to be representative of the Company's business and industry. The excess
of the reorganization value over the fair value of net assets and liabilities
has been reported as excess reorganization value and is being amortized over a
fifteen-year period.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) Principles of Consolidation
The consolidated financial statements include the accounts of Envirodyne
and its subsidiaries.
F-5
<PAGE> 91
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
3. INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
MARCH 30, DECEMBER 29,
1995 1994
--------- ------------
(IN THOUSANDS)
<S> <C> <C>
Raw materials................................................ $ 24,077 $ 20,358
Work in process.............................................. 41,732 37,613
Finished products............................................ 58,661 52,512
--------- --------
$ 124,470 $110,483
========= ========
</TABLE>
Approximately 54% of the inventories at March 30, 1995 were valued at
Last-In, First-Out (LIFO). These LIFO values exceeded current manufacturing cost
by approximately $4.4 million at March 30, 1995.
4. DEBT OBLIGATIONS
As described in Note 1, Chapter 11 Reorganization Proceedings, Envirodyne
and certain of its domestic Subsidiaries emerged from Chapter 11 on December 31,
1993.
The $219,262,000 principal amount of 10 1/4% Notes were issued pursuant to
an Indenture dated as of December 31, 1993 (10 1/4% Note Indenture) between
Envirodyne and Bankers Trust Company, as Trustee. The 10 1/4% Notes are the
unsecured senior obligations of Envirodyne, bear interest at the rate of 10 1/4%
per annum, payable on each June 1 and December 1, and mature on December 1,
2001. The 10 1/4% Notes are redeemable, in whole or from time to time in part,
at the option of Envirodyne, at the percentages of principal amount specified
below plus accrued and unpaid interest to the redemption date, if the 10 1/4%
Notes are redeemed during the 12-month period commencing on January 1 of the
following years:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---- ----------
<S> <C>
1995...................................................................... 105%
1996...................................................................... 104%
1997...................................................................... 103%
1998...................................................................... 102%
1999...................................................................... 101%
2000 and thereafter....................................................... 100%
</TABLE>
The 10 1/4% Note Indenture contains covenants with respect to Envirodyne
and its subsidiaries limiting (subject to a number of important qualifications),
among other things, (i) the ability to pay dividends on or redeem or repurchase
capital stock, (ii) the incurrence of indebtedness, (iii) certain affiliate
transactions and (iv) the ability of the Company to consolidate with or merge
with or into another entity or to dispose of substantially all its assets.
In connection with the consummation of the Plan of Reorganization,
Envirodyne and certain of its subsidiaries (Borrowers) entered into a Credit
Agreement dated December 31, 1993 (Credit Agreement) with the lenders party
thereto (Lenders) and with Bank of America Illinois (formerly Continental Bank
N.A.), Citibank International PLC and Citicorp North America, Inc., as agents
for the Lenders. The Credit Agreement provides for a $195,000,000 facility,
consisting of a $100,000,000 domestic term loan facility, a $65,000,000 domestic
revolving credit facility (which includes a $27,000,000 domestic letter of
credit facility) and a $30,000,000 amortizing multicurrency revolving credit
facility (which includes a $3,000,000 multicurrency letter of credit facility).
The commitment under the amortizing multicurrency revolver was $27,300,000 at
March 30, 1995. The initial borrowings under the Credit Agreement were used (i)
to pay indebtedness under the Postpetition Credit Agreement dated as of February
5, 1993 among the Debtors, the lenders party
F-6
<PAGE> 92
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
thereto (DIP Lenders) and Continental Bank N.A., as agent for the DIP Lenders,
(ii) to pay indebtedness under certain foreign credit facilities, (iii) to pay
the claims of subsidiary trade creditors under the Plan of Reorganization and
(iv) to pay certain fees and expenses relating to the Plan of Reorganization and
the Credit Agreement. Obligations under the Credit Agreement are collateralized
by substantially all of the assets of Envirodyne and its domestic subsidiaries
and by the pledge of the capital stock of substantially all of Envirodyne's
subsidiaries. Availability of funds under the Credit Agreement is subject to a
borrowing base measured by certain assets of Envirodyne and its subsidiaries.
The available borrowing capacity under the Credit Agreement was
approximately $11 million at March 30, 1995.
Borrowings under the domestic term loan facility and the domestic revolving
credit facility bear interest, at the Company's election, at a rate per annum
equal to (i) the Bank of America Illinois base rate plus 1.5% or (ii) the
Eurodollar rate plus 2.75%, subject to step downs of up to 0.5% if the Company
meets certain debt and interest coverage tests. The domestic term loan facility
terminates on December 31, 1999 and is subject to quarterly repayments of
principal as follows:
<TABLE>
<CAPTION>
CALENDAR QUARTERLY TOTAL REPAYMENT
YEAR REPAYMENT AMOUNT FOR CALENDAR YEAR
- -------- ---------------- ------------------
<S> <C> <C>
1995................................................... $2,775,000 $11,100,000
1996................................................... 4,075,000 16,300,000
1997................................................... 4,450,000 17,800,000
1998................................................... 4,625,000 18,500,000
1999................................................... 6,300,000 25,200,000
</TABLE>
The domestic revolving credit facility expires on December 31, 1999, with a
commitment fee of 0.5% per annum on the unused portion of the commitment. The
domestic letter of credit facility expires December 16, 1999, with fees on the
outstanding amount of the domestic letters of credit of 0.25% per annum to the
issuers and 2.5% per annum to the domestic Lenders, subject to step downs of up
to 0.5% if the Company meets certain debt and interest coverage tests.
The multicurrency revolving credit facility permits borrowings in U.S.
Dollars, German Marks, French Francs or Pounds Sterling at an interest rate per
annum equal to the applicable Eurocurrency rate plus 2.75%, subject to step
downs of up to 0.5% if the Company meets certain debt and interest coverage
tests. The multicurrency revolving credit facility expires on December 31, 1999
and the commitments thereunder are subject to mandatory quarterly reductions as
follows:
<TABLE>
<CAPTION>
CALENDAR QUARTERLY TOTAL REDUCTION
YEAR COMMITMENT REDUCTION FOR CALENDAR YEAR
- -------- --------------------- -----------------
<S> <C> <C>
1995................................................ $ 500,000 $2,000,000
1996................................................ 950,000 3,800,000
1997................................................ 1,075,000 4,300,000
1998................................................ 1,150,000 4,600,000
1999................................................ 775,000 3,100,000
</TABLE>
There is a commitment fee of 0.5% per annum on the unused portion of the
multicurrency revolving credit facility. The multicurrency letter of credit
facility expires December 16, 1999, with fees on the outstanding amount of the
multicurrency letters of credit of 0.25% per annum to the issuers and 2.5% per
annum to the multicurrency Lenders, subject to step downs of up to 0.5% if the
Company meets certain debt and interest coverage tests.
Envirodyne's obligations under the Credit Agreement bear interest at rates
that are expected to fluctuate over time. Envirodyne is required under the
Credit Agreement to enter into interest rate protection agreements
F-7
<PAGE> 93
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
with respect to a significant portion of the amounts outstanding from time to
time thereunder. Envirodyne has entered into $50 million of interest rate
protection agreements that cap the Company's LIBOR interest component (excludes
spread) at an average rate of 6.50% until January 1997. The fair value of
interest rate cap agreements is estimated by obtaining quotes from banks. At
March 30, 1995, the carrying amount and estimated fair value of interest rate
cap agreements were $1,021,000 and $353,000, respectively.
The Borrowers have made certain representations and have agreed to certain
covenants that restrict the operations of the Borrowers and their subsidiaries'
businesses. Among other things, the Borrowers may not, with limited exceptions,
place liens on their properties or assets, incur additional indebtedness, make
dividend or other distributions on capital stock, make investments (other than
cash equivalent investments), merge or consolidate with any other person,
dispose of assets outside the ordinary course of business or exceed stated
levels of capital expenditures. The Credit Agreement also contains a number of
financial covenants, including covenants relating to cash flow, interest and
fixed charge coverage ratios, net worth and debt to cash flow levels.
Unless cured within any applicable grace period, events of default include
failure to pay principal, interest or other amounts due to the Lenders, a
material breach of a representation or warranty, certain events related to
employee benefit plans, certain events of bankruptcy or insolvency, defaults on
other indebtedness having a principal amount in the aggregate in excess of
$5,000,000, failure to discharge judgments in an amount in excess of $5,000,000,
a change of control (as defined) and failure to comply with covenants, including
the financial covenants described above.
The Company and the Lenders entered into an amendment of the Credit
Agreement as of January 24, 1995 easing certain financial covenants and
permanently waiving the event of default arising from the ownership by the
Malcolm I. Glazer Trust (Trust) of more than 30% of the Company's Common Stock,
provided that the Trust's ownership does not later exceed 49% of the Company's
outstanding Common Stock. The Company is currently in compliance with the terms
of the Credit Agreement, including the financial covenants.
Outstanding short-term and long-term debt consisted of:
<TABLE>
<CAPTION>
MARCH 30, DECEMBER 29,
1995 1994
--------- -------------
(IN THOUSANDS)
<S> <C> <C>
Short-term debt, current maturity of long-term debt, and
capital lease obligation:
Current maturity of Bank Term Loan (9.3%)................... $ 11,100 $ 11,100
Current maturity of Viskase Capital Lease Obligation........ 6,012 5,450
Current maturity of Viskase Limited Term Loan (5.9%)........ 2,062 1,882
Other....................................................... 9,047 7,366
-------- --------
Total short-term debt............................... $ 28,221 $ 25,798
======== ========
Long-term debt:
Bank Credit Agreement:
Term Loan due 1999 (9.3%)................................... $ 77,800 $ 80,575
Revolving Loan due 1999 (8.9%).............................. 62,112 32,524
10.25% Senior Notes due 2001................................ 219,262 219,262
Viskase Capital Lease Obligation............................ 141,182 147,194
Viskase Limited Term Loan (5.9%)............................ 9,279 8,466
Other....................................................... 1,309 1,337
-------- --------
Total long-term debt................................ $510,944 $489,358
======== ========
</TABLE>
F-8
<PAGE> 94
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The fair value of the Company's debt obligation (excluding capital lease
obligation) is estimated based upon the quoted market prices for the same or
similar issues or on the current rates offered to the Company for the debt of
the same remaining maturities. At March 30, 1995, the carrying amount and
estimated fair value of debt obligations (excluding capital lease obligation)
were $391,971 and $352,504, respectively.
On December 28, 1990, Viskase and GECC entered into a sale and leaseback
transaction. The sale and leaseback of assets included the production and
finishing equipment at Viskase's four domestic casing production and finishing
facilities. The facilities are located in Chicago, Illinois; Loudon, Tennessee;
Osceola, Arkansas and Kentland, Indiana. Viskase, as the Lessee under the
relevant agreements, will continue to operate all of the facilities. The lease
has been accounted for as a capital lease.
The principal terms of the sale and leaseback transaction include: (a) a 15
year basic lease term (plus selected renewals at Viskase's option); (b) annual
rent payments in advance beginning in February 1991; and (c) a fixed price
purchase option at the end of the basic 15 year term and fair market purchase
options at the end of the basic term and each renewal term. Further, the Lease
Documents contain covenants requiring maintenance by the Company of certain
financial ratios and restricting the Company's ability to pay dividends, make
payments to affiliates, make investments and incur indebtedness.
Annual rental payments under the Lease will be approximately $19.2 million
through 1997, $21.4 million in 1998 and $23.5 million through the end of the
basic 15-year term. Viskase is required to provide credit support consisting of
a standby letter of credit in an amount up to one year's rent through at least
1997. This credit support can be reduced up to $4,000,000 currently if the
Company achieves and maintains certain financial ratios. As of March 30, 1995,
the Company had met the required financial ratios and the letter of credit has
been reduced by $4,000,000. The letter can be further reduced in 1997 or
eliminated after 1998 if the Company achieves and maintains certain financial
ratios. Envirodyne and its other principal subsidiaries guaranteed the
obligations of Viskase under the Lease.
The following is a schedule of minimum future lease payments under the
capital lease together with the present value of the net minimum lease payments
as of March 30, 1995:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER (000'S)
-------------------- --------
<S> <C>
1996...................................................................... $ 19,227
1997...................................................................... 19,227
1998...................................................................... 21,363
1999...................................................................... 23,499
2000...................................................................... 23,499
Thereafter................................................................ 117,495
--------
Net minimum lease payments................................................ 224,310
Less:
Amount representing interest............................................ (77,116)
--------
$147,194
========
</TABLE>
The 1995 rental payment of $19,227,000 was paid on February 28, 1995.
Principal payments under the capital lease obligation for the years ended 1995
through 1999 range from approximately $5 million to $13 million.
5. CONTINGENCIES
A class action lawsuit by former employees of subsidiary corporations
comprising most of the Company's former steel and mining division (SMD) was
pending as of the commencement of the bankruptcy case in which the plaintiffs
are seeking substantial damages. The Company and the plaintiffs are currently
F-9
<PAGE> 95
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
participating in a mediation process to attempt to resolve the case. Envirodyne
denies liability and in the absence of successful mediation or other settlement
negotiations will continue to vigorously defend these claims. However, inasmuch
as the Plan of Reorganization provides for the issuance of common stock with
respect to prepetition Envirodyne general unsecured claims (refer to Note 1), an
adverse finding of liability and damages could result in substantial dilution to
the holders of the common stock.
Litigation has been initiated with respect to events arising out of the
bankruptcy cases and the 1989 acquisition of Envirodyne by Emerald Acquisition
Corporation (Emerald) with respect to which, although Envirodyne is not
presently a party to such litigation, certain defendants have asserted indemnity
rights against Envirodyne. In ARTRA Group Incorporated v. Salomon Brothers
Holding Company Inc, Salomon Brothers Inc, D.P. Kelly & Associates, L.P., Donald
P. Kelly, Charles K. Bobrinskoy, James L. Massey, William Rifkind and Michael
Zimmerman, Case No. 93 A 1616, United States Bankruptcy Court for the Northern
District of Illinois, Eastern Division (Bankruptcy Court), ARTRA Group
Incorporated (ARTRA) alleges breach of fiduciary duty and tortious inference in
connection with the negotiation and consummation of the Plan of Reorganization.
In ARTRA Group Incorporated v. Salomon Brothers Holding Company Inc, Salomon
Brothers Inc, D.P. Kelly & Associates, L.P., Donald P. Kelly, Charles K.
Bobrinskoy and Michael Zimmerman, Case No. 93 L 2198, Circuit Court of the
Eighteenth Judicial Circuit, County of DuPage, State of Illinois, ARTRA alleges
negligence, breach of fiduciary duty, fraudulent misrepresentation and deceptive
business practices in connection with the 1989 acquisition of Envirodyne by
Emerald. The plaintiff seeks damages in the total amount of $136,200,000 plus
interest and punitive damages of $408,600,000. D.P. Kelly & Associates, L.P. and
Messrs. Kelly, Bobrinskoy, Massey, Rifkind and Zimmerman have asserted common
law and contractual rights of indemnity against Envirodyne for attorneys' fees,
costs and any ultimate liability relating to the claims set forth in the
complaints. Upon the undertaking of D.P. Kelly & Associates, L.P. to repay such
funds in the event it is ultimately determined that there is no right to
indemnity, Envirodyne is advancing funds to D.P. Kelly & Associates, L.P. and
Mr. Kelly for the payment of legal fees in the case pending before the
Bankruptcy Court. Although the case is in a preliminary stage and the Company is
not a party thereto, the Company believes that the plaintiff's claims raise
similar factual issues to those raised in the bankruptcy cases which, if
adjudicated in a manner similar to that in the bankruptcy cases, would render it
difficult for the plaintiff to establish liability. Accordingly, the Company
believes that the indemnification claims would not have a material adverse
effect upon the business or financial position of the Company, even if the
claimants were ultimately successful in establishing their right to
indemnification.
In the Envirodyne bankruptcy case the United States Environmental
Protection Agency (USEPA), the Economic Development Authority (EDA), and
Navistar International Transportation Corp. (Navistar Transportation) filed
proofs of claim with respect to unreimbursed environmental response costs at the
location of the former SMD operations. The parties have agreed in principle,
subject to the negotiation of a definitive settlement agreement, Bankruptcy
Court approval and public comment pursuant to regulations applicable to EDA and
USEPA, to settle the claims against Envirodyne through the payment of $5,000 to
the USEPA and the issuance of 64,460 shares of common stock to Navistar
Transportation. In the event that the settlement is not completed, Envirodyne
believes that it has valid defenses to the claims and will continue its
objections to the claims. To the extent that USEPA, EDA or Navistar
Transportation were able to establish liability and damages as to their
respective proofs of claim, such parties would receive Common Stock under the
Plan of Reorganization in satisfaction of their claims.
Certain of Envirodyne's stockholders prior to the acquisition of Envirodyne
by Emerald failed to exchange their certificates representing old Envirodyne
common stock for the $40 per share cash merger consideration specified by the
applicable acquisition agreement. In the Envirodyne bankruptcy case, Envirodyne
is seeking to equitably subordinate the interests of the holders of untendered
shares, in which event such holders would receive no distribution pursuant to
the Plan of Reorganization. The Bankruptcy Court granted Envirodyne's motion for
summary judgment to equitably subordinate the holders of untendered shares.
Certain holders have appealed the summary judgment to the United States District
Court for the
F-10
<PAGE> 96
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Northern District of Illinois. If such holders were ultimately successful,
Envirodyne believes that the maximum number of shares of common stock that it
would be required to issue to such claimants is approximately 106,000.
In August 1993, Clear Shield National, Inc. received a subpoena from the
Antitrust Division of the United States Department of Justice relating to a
grand jury investigation of the disposable plastic cutlery industry. Clear
Shield National, Inc. has cooperated fully with the investigation.
The Company and its subsidiaries are involved in various legal proceedings
arising out of its business and other environmental matters, none of which is
expected to have a material adverse effect upon its results of operations, cash
flows or financial position.
6. SUBSIDIARY GUARANTORS
On June 20, 1995, Envirodyne completed the sale of $160,000,000 aggregate
principal amount of senior secured notes to certain institutional investors in a
private placement. The senior secured notes were issued pursuant to an indenture
dated June 20, 1995 (Indenture) and consist of (i) $151,500,000 of 12% Senior
Secured Notes due 2000 and (ii) $8,500,000 of Floating Rate Senior Secured Notes
due 2000 (collectively, the Notes). Envirodyne used the net proceeds of the
offering primarily to (i) repay the Company's $86,125,000 domestic term loan,
(ii) repay the $68,316,000 of obligations under the Company's domestic and
foreign revolver and (iii) pay transaction fees and expenses. Concurrently with
the June 20, 1995 placement, Envirodyne entered into a new $20,000,000 domestic
revolving credit facility (Revolving Credit Facility) and a new $28,000,000
letter of credit facility (Letter of Credit Facility).
Envirodyne's payment obligations under the Notes are fully and
unconditionally guaranteed on a joint and several basis (collectively, the
"Subsidiary Guarantees") by Viskase Corporation, Viskase Holding Corporation,
Viskase Sales Corporation, Clear Shield National, Inc., Sandusky Plastics, Inc.
and Sandusky Plastics of Delaware, Inc., each a direct or indirect or indirect
wholly-owned subsidiary of the Envirodyne and each a "Guarantor." These
subsidiaries represent substantially all of the operations of Envirodyne
conducted in the United States. The other subsidiaries of Envirodyne generally
are foreign subsidiaries or otherwise related to foreign operations.
The obligations of each Guarantor under its Subsidiary Guarantee will be
the senior obligation of such Guarantor, and shall be secured, subject to
certain permitted liens, by substantially all of the domestic assets of the
Guarantor and, in the case of Viskase Holding Corporation, by a pledge of 65% of
the capital stock of Viskase S.A. The Subsidiary Guarantees and security are
shared with the lenders under Envirodyne's revolving credit facility on a pari
passu basis and are subject to the priority interest of the holders of
obligations under the Envirodyne's letter of credit facility, each pursuant to
an intercreditor agreement.
In accordance with previous positions taken by the Commission, the
following consolidating condensed financial data illustrate the composition of
the combined Guarantors. Separate complete financial statements of the
respective Guarantors would not provide additional material information that
would be useful in assessing the financial composition of the Guarantors. No
single Guarantor has any significant legal restrictions on the ability of
investors or creditors to obtain access to its assets in the event of a default
on the Subsidiary Guarantor other than its subordination to senior indebtedness
described above.
Investments in subsidiaries are accounted for by the parent on the equity
method for purposes of the supplemental consolidating presentation. Earnings of
subsidiaries are therefore reflected in the parent's investment accounts and
earnings. The principal elimination entries eliminate investments in
subsidiaries and intercompany balances and transactions.
F-11
<PAGE> 97
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING BALANCE SHEETS
MARCH 30, 1995
<TABLE>
<CAPTION>
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS(1) TOTAL
--------- ------------ ------------ --------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
ASSETS
Current assets:
Cash and equivalents........... $ 2,816 $ 2,814 $ 1,579 $ 7,209
Receivables, net............... 67,895 52,691 $ (31,579) 89,007
Inventories.................... 74,214 52,185 (1,929) 124,470
Other current assets........... 1,261 22,373 6,677 30,311
--------- -------- -------- --------- --------
Total current assets... 4,077 167,296 113,132 (33,508) 250,997
Property, plant and equipment
including those under capital
lease.......................... 189 372,954 145,815 518,958
Less accumulated depreciation
and amortization............ 73 33,854 12,239 46,166
--------- -------- -------- --------- --------
Property, plant and equipment,
net............................ 116 339,100 133,576 472,792
Deferred financing costs......... 8,031 1,099 9,130
Other assets..................... 44,301 1,541 45,842
Investment in subsidiaries....... 83,178 91,994 (175,172)
Excess reorganization value...... 94,372 48,880 143,252
--------- -------- -------- --------- --------
$ 95,402 $737,063 $298,228 $(208,680) $922,013
========= ======== ======== ========= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt including
current portion of long-term
debt and obligation under
capital lease............... $ 11,100 $ 8,260 $ 8,861 $ 28,221
Accounts payable............... 526 22,030 43,703 $ (31,579) 34,680
Accrued liabilities............ 16,932 31,527 25,346 73,805
--------- -------- -------- --------- --------
Total current
liabilities.......... 28,558 61,817 77,910 (31,579) 136,706
Long-term debt including
obligations under capital
lease.......................... 338,562 141,846 30,536 510,944
Accrued employee benefits........ 52,835 4,092 56,927
Deferred and noncurrent income
taxes.......................... 24,688 34,700 24,038 83,426
Other long-term liabilities(2)... (430,416) 404,765 25,706 (55)
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par
value; none outstanding.....
Common stock, $.01 par value;
13,515,000 shares issued and
outstanding................. 135 3 32,738 (32,741) 135
Paid in capital................ 134,865 41,119 56,968 (98,087) 134,865
Accumulated earnings
(deficit)................... (7,507) (22) 44,171 (44,149) (7,507)
Cumulative foreign currency
translation adjustments..... 6,517 2,069 (2,069) 6,517
--------- -------- -------- --------- --------
Total stockholders'
equity............... 134,010 41,100 135,946 (177,046) 134,010
--------- -------- -------- --------- --------
$ 95,402 $737,063 $298,228 $(208,680) $922,013
========= ======== ======== ========= ========
</TABLE>
- -------------------------
(1) Includes elimination of intercompany receivables, payables, loans and
investment accounts.
(2) Includes intercompany loans.
F-12
<PAGE> 98
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED MARCH 30, 1995
<TABLE>
<CAPTION>
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
------- ------------ ------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
NET SALES............................. $102,289 $ 62,520 $ (8,985) $155,824
COSTS AND EXPENSES
Cost of sales....................... 75,069 47,637 (9,017) 113,689
Selling, general and
administrative................... $ 1,573 17,354 10,609 29,536
Amortization of intangibles and
excess reorganization value...... 3,066 844 3,910
------- -------- -------- -------- --------
OPERATING INCOME (LOSS)............... (1,573) 6,800 3,430 32 8,689
Interest income..................... 25 39 64
Interest expense.................... 9,084 3,492 858 13,434
Intercompany interest expense
(income)......................... (9,352) 8,502 850
Management fees (income)............ (1,850) 1,558 292
Other expense (income), net......... (2,152) (43) 1,604 (591)
Equity Loss (income) in
subsidiary....................... 5,540 (5,540)
------- -------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES..... (2,843) (6,684) (135) 5,572 (4,090)
Income tax provision (benefit)...... 1,052 (1,868) 621 (195)
------- -------- -------- -------- --------
NET INCOME (LOSS)..................... $(3,895) $ (4,816) $ (756) $ 5,572 $ (3,895)
======= ======== ======== ======== ========
</TABLE>
CONSOLIDATING CASH FLOWS
FOR THREE MONTHS ENDED MARCH 30, 1995
<TABLE>
<CAPTION>
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
------- ------------ ------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities................ $(8,338) $ 12,237 $(18,435) $(14,536)
Cash flows from investing activities:
Capital expenditures................ (5,826) (1,805) (7,631)
------- -------- -------- --------- --------
Net cash (used in) investing
activities..................... (5,826) (1,805) (7,631)
Cash flows from financing activities:
Proceeds from revolving loan and
long term borrowings............. 13,900 28,349 42,249
Deferred financing costs............ (464) (464)
Repayment of revolving loan,
long-term borrowings and capital
lease obligations................ (2,837) (5,450) (11,686) (19,973)
------- -------- -------- --------- --------
Net cash provided by financing
activities.................. 10,599 (5,450) 16,663 21,812
Effect of currency exchange rate
changes on cash..................... 275 275
------- -------- -------- --------- --------
Net increase (decrease) in cash and
cash equivalents.................... 2,261 961 (3,302) (80)
Cash and cash equivalents at beginning
of period........................... 555 1,853 4,881 7,289
------- -------- -------- --------- --------
Cash and cash equivalents at end of
period.............................. $ 2,816 $ 2,814 $ 1,579 $ 7,209
======= ======== ======== ========= ========
</TABLE>
F-13
<PAGE> 99
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING STATEMENTS OF OPERATIONS
FOR THREE MONTHS ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
------- ------------ ------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
NET SALES............................. $ 98,360 $ 50,351 $ (6,118) $142,593
COSTS AND EXPENSES
Cost of sales....................... 70,601 37,412 (5,894) 102,119
Selling, general and
administrative................... $ 1,618 17,614 7,686 26,918
Amortization of intangibles and
excess reorganization value...... 3,700 146 3,846
------- -------- -------- -------- --------
OPERATING INCOME (LOSS)............... (1,618) 6,445 5,107 (224) 9,710
Interest income..................... 2 9 50 61
Interest expense.................... 7,669 3,538 852 12,059
Intercompany interest expense
(income)......................... (6,793) 5,669 1,124
Management fees (income)............ (1,850) 1,615 235
Other expense (income), net......... (806) 120 405 (281)
Equity loss (income) in
subsidiary....................... 2,520 (2,520)
Minority interest in subsidiary..... 50 50
------- -------- -------- -------- --------
INCOME (LOSS) BEFORE INCOME TAXES..... (2,356) (4,488) 2,541 2,346 (1,957)
Income tax provision (benefit)...... 151 (799) 1,198 550
------- -------- -------- -------- --------
NET INCOME (LOSS)..................... $(2,507) $ (3,689) $ 1,343 $ 2,346 $ (2,507)
======= ======== ======== ======== ========
</TABLE>
F-14
<PAGE> 100
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
CONSOLIDATING CASH FLOWS
FOR THREE MONTHS ENDED MARCH 31, 1994
<TABLE>
<CAPTION>
GUARANTOR NONGUARANTOR CONSOLIDATED
PARENT SUBSIDIARIES SUBSIDIARIES ELIMINATIONS TOTAL
-------- ------------ ------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities............... $(23,752) $ 13,360 $ (2,823) $(13,215)
Cash flows from investing activities:
Capital expenditures............... (7) (4,444) (2,903) (7,354)
Proceeds from sales of property,
plant and equipment............. 20 20
Purchase of minority interest in
subsidiary...................... (4,200) (4,200)
-------- --------- --------- --------- ---------
Net cash (used in) investing
activities................. (7) (8,624) (2,903) (11,534)
Cash flows from financing activities:
Proceeds from revolving loan and
long term borrowings............ 21,325 4,511 25,836
Deferred financing costs........... (10) (10)
Repayment of revolving loan,
long-term borrowings and capital
lease obligations............... (4,998) (60) (5,058)
-------- --------- --------- --------- ---------
Net cash provided by (used in)
financing activities....... 21,315 (4,998) 4,451 20,768
Effect of currency exchange rate
changes on cash.................... 175 175
-------- --------- --------- --------- ---------
Net (decrease) in cash and cash
equivalents........................ (2,444) (262) (1,100) (3,806)
Cash and cash equivalents at
beginning of period................ 930 1,922 4,891 7,743
-------- --------- --------- --------- ---------
Cash and cash equivalents at end of
period............................. $ (1,514) $ 1,660 $ 3,791 $ 3,937
======== ========= ========= ========= =========
</TABLE>
F-15
<PAGE> 101
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
Envirodyne Industries, Inc.
We have audited the consolidated financial statements and the financial
statement schedules of Envirodyne Industries, Inc. and Subsidiaries. These
financial statements and financial statement schedules are the responsibility of
the Company's management. Our responsibility is to express an opinion on these
financial statements and financial statement schedules 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.
As discussed in Note 1 to the consolidated financial statements, on
December 31, 1993, the Company completed a comprehensive financial restructuring
through the implementation of reorganization under Chapter 11 of the United
States Bankruptcy Code and applied fresh start reporting.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Envirodyne
Industries, Inc. and Subsidiaries as of December 29, 1994 and December 31, 1993,
and the consolidated results of their operations and their cash flows for the
period January 1 to December 29, 1994 (Post-consummation) and January 1 to
December 31, 1993 and December 27, 1991 to December 31, 1992 (Pre-consummation),
in conformity with generally accepted accounting principles. In addition, in our
opinion the schedules referred to above, when considered in relation to the
basic financial statements taken as a whole, present fairly, in all material
respects, the information required to be included therein.
Coopers & Lybrand L.L.P.
Chicago, Illinois
March 15, 1995,
(except with respect to the
matters discussed in Note 20,
as to which the date is July
19, 1995)
F-16
<PAGE> 102
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 29, DECEMBER 31,
1994 1993
------------ ------------
<S> <C> <C>
(IN THOUSANDS)
ASSETS
Current assets:
Cash and equivalents........................................ $ 7,289 $ 7,743
Receivables, net............................................ 86,868 72,516
Inventories................................................. 110,483 98,824
Other current assets........................................ 19,466 17,538
-------- --------
Total current assets................................. 224,106 196,621
Property, plant and equipment, including those under capital
lease....................................................... 506,099 455,554
Less accumulated depreciation and amortization.............. 35,761
-------- --------
Property, plant and equipment, net.......................... 470,338 455,554
Deferred financing costs....................................... 9,143 8,989
Other assets................................................... 47,181 50,765
Excess reorganization value.................................... 145,868 155,751
-------- --------
$896,636 $867,680
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt including current portion of long-term debt
and obligation under capital lease........................ $ 25,798 $ 15,610
Accounts payable............................................ 34,335 37,524
Accrued liabilities......................................... 72,246 61,047
-------- --------
Total current liabilities............................ 132,379 114,181
Long-term debt including obligation under capital lease........ 489,358 482,379
Accrued employee benefits...................................... 56,217 53,622
Deferred and noncurrent income taxes........................... 83,333 78,565
Minority interest in consolidated subsidiary................... 3,933
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value;
none outstanding
Common stock, $.01 par value;
13,515,000 shares issued and outstanding at December 29,
1994, and 13,500,000 shares at December 31, 1993....... 135 135
Paid in capital............................................. 134,865 134,865
Accumulated (deficit)....................................... (3,612)
Cumulative foreign currency translation adjustments......... 3,961
-------- --------
Total stockholders' equity........................... 135,349 135,000
-------- --------
$896,636 $867,680
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-17
<PAGE> 103
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
JANUARY 1, JANUARY 1, DECEMBER 27,
TO TO 1991 TO
DECEMBER 29, DECEMBER 31, DECEMBER 31,
1994 1993 1992
------------ ------------ ------------
(IN THOUSANDS, EXCEPT FOR NUMBER OF SHARES
AND PER SHARE AMOUNTS)
<S> <C> <C> <C>
NET SALES.......................................... $599,029 $ 587,385 $ 575,705
COSTS AND EXPENSES
Cost of sales.................................... 432,746 416,410 398,876
Selling, general and administrative.............. 111,451 101,632 94,076
Patent infringement settlement income............ 9,457
Amortization of intangibles and excess
reorganization value.......................... 15,612 15,711 15,547
-------- ---------- ----------
OPERATING INCOME................................... 48,677 53,632 67,206
Interest income.................................. 307 931 964
Interest expense................................. 49,514 31,190 106,522
Other expense (income), net...................... (1,668) 5,540 8,699
Fees and expenses associated with renegotiation
of debt....................................... 3,945
Minority interest in loss of subsidiary.......... 50 717
-------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES, REORGANIZATION
ITEMS AND EXTRAORDINARY ITEMS.................... 1,188 18,550 (50,996)
Reorganization items, net........................ 104,745
-------- ---------- ----------
INCOME (LOSS) BEFORE INCOME TAXES AND EXTRAORDINARY
ITEMS 1,188 (86,195) (50,996)
Income tax provision (benefit)................... 4,800 12,000 (14,000)
-------- ---------- ----------
(LOSS) BEFORE EXTRAORDINARY ITEMS.................. (3,612) (98,195) (36,996)
Extraordinary gain, net of tax................... 183,784
-------- ---------- ----------
NET INCOME (LOSS).................................. $ (3,612) $ 85,589 $ (36,996)
======== ========== ==========
WEIGHTED AVERAGE COMMON SHARES..................... 13,500,703 320 320
========== ========== ==========
PER SHARE AMOUNTS:
(LOSS) BEFORE EXTRAORDINARY ITEMS.................. $(.27) $ (306,859) $ (115,613)
===== ========== ==========
NET INCOME (LOSS).................................. $(.27) $ 267,466 $ (115,613)
===== ========== ==========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-18
<PAGE> 104
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
CUMULATIVE
RETAINED FOREIGN CURRENCY TOTAL
COMMON PAID IN EARNINGS TRANSLATION STOCKHOLDERS'
STOCK CAPITAL (DEFICIT) ADJUSTMENTS EQUITY (DEFICIT)
------ -------- --------- ---------------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Balance December 26, 1991....... $ 1 $ 12,900 $ (61,780) $ 8,576 $(40,303)
Net (loss)...................... (36,996) (36,996)
Translation adjustments......... (6,246) (6,246)
----- -------- --------- -------- --------
Balance December 31, 1992....... 1 12,900 (98,776) 2,330 (83,545)
Net income...................... 85,589 85,589
Translation adjustments......... (2,044) (2,044)
Cancellation of preconsummation
Common Stock.................. (1) (12,900) (12,901)
Elimination of accumulated
deficit and cumulative foreign
currency translation
adjustments................... 13,187 (286) 12,901
----- -------- --------- -------- --------
$ 0 $ 0 $ 0 $ 0 $ 0
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
Issuance of new Common Stock.... $135 $134,865 $135,000
----- -------- --------
Balance December 31, 1993....... 135 134,865 135,000
Net (loss)...................... $ (3,612) (3,612)
Translation adjustments......... $ 3,961 3,961
----- -------- --------- -------- --------
Balance December 29, 1994....... $135 $134,865 $ (3,612) $ 3,961 $135,349
===== ======== ========= ======== ========
</TABLE>
Due to the implementation of the Plan of Reorganization and Fresh Start
Reporting, the stockholders' equity at and subsequent to December 31, 1993 is
not comparable to the prior years. (Refer to Note 1 of Notes to Consolidated
Financial Statements.)
The accompanying notes are an integral part of the consolidated financial
statements.
F-19
<PAGE> 105
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
JANUARY 1, JANUARY 1, DECEMBER 27,
TO TO 1991 TO
DECEMBER 29, DECEMBER 31, DECEMBER 31,
1994 1993 1992
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash flows from operating activities:
(Loss) before extraordinary gain..................... $ (3,612) $ (98,195) $(36,996)
Extraordinary gain................................... 183,784
-------- ---------- --------
Net income (loss).................................... (3,612) 85,589 (36,996)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation and amortization under capital
lease........................................... 35,775 36,687 33,763
Amortization of intangibles and excess
reorganization value............................ 15,612 15,711 15,547
Amortization of deferred financing fees and
discount........................................ 1,569 2,418 30,820
Increase (decrease) in deferred and noncurrent
income taxes.................................... (52) 9,547 (14,994)
Foreign currency transaction loss (gain).......... (3,465) 3,380 5,089
Loss (gain) on sales of property, plant and
equipment....................................... (9) 650 2,089
Reorganization items and fresh start reporting.... (79,039)
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable...... (11,257) (1,319) 1,747
Decrease (increase) in inventories.............. (10,548) 4,163 6,527
Decrease (increase) in other current assets..... (1,607) (2,152) 1,137
Increase in accounts payable and accrued
liabilities.................................. 3,774 15,894 41,130
Other........................................... (2,894) 672 2,564
-------- ---------- --------
Total adjustments................................. 26,898 6,612 125,419
-------- ---------- --------
Net cash provided by operating activities before
reorganization expense....................... 23,286 92,201 88,423
Net cash used for reorganization items................. (14,929)
Cash flows from investing activities:
Capital expenditures (32,566) (40,887) (29,018)
Proceeds from sale of property, plant and
equipment......................................... 359 124 173
Investments and advances to affiliated companies..... (4,990)
Purchase of minority interest in subsidiary.......... (4,200)
Proceeds from sale of time deposits in Puerto Rico... 6,600
-------- ---------- --------
Net cash (used in) investing activities......... (36,407) (40,763) (27,235)
Cash flows from financing activities:
Proceeds from revolving loan and long-term
borrowings........................................ 37,668 106,003 3
Deferred financing costs............................. (1,608) (9,779) (12)
Repayment of revolving loan, long-term borrowings and
capital lease obligations......................... (22,617) (138,736) (57,439)
-------- ---------- --------
Net cash provided by (used in) financing
activities................................... 13,443 (42,512) (57,448)
Effect of currency exchange rate changes on cash....... (776) (316) 847
-------- ---------- --------
Net increase (decrease) in cash and cash equivalents... (454) (6,319) 4,587
Cash and cash equivalents at beginning of period....... 7,743 14,062 9,475
-------- ---------- --------
Cash and cash equivalents at end of period............. $ 7,289 $ 7,743 $ 14,062
======== ========== ========
- ----------------------------------------------------------------------------------------------------
Supplemental cash flow information:
Interest paid........................................ $ 43,484 $ 28,001 $ 31,461
Income taxes paid.................................... $ 5,058 $ 1,154 $ 5,158
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
F-20
<PAGE> 106
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. CHAPTER 11 REORGANIZATION PROCEEDINGS
On January 6, 1993, a group of bondholders filed an involuntary petition
for reorganization of Envirodyne Industries, Inc. under Chapter 11 of the U.S.
Bankruptcy Code. On January 7, 1993 Viskase Corporation, Viskase Sales
Corporation, Viskase Holding Corporation, Clear Shield National, Inc., Sandusky
Plastics of Delaware, Inc., Sandusky Plastics, Inc. and Envirodyne Finance
Company each filed voluntary petitions under Chapter 11 of the U.S. Bankruptcy
Code in the United States Bankruptcy Court for the Northern District of
Illinois, Eastern Division (the Bankruptcy Court). On December 17, 1993, the
Bankruptcy Court confirmed the First Amended Joint Plan of Reorganization as
twice modified (Plan of Reorganization) with respect to Envirodyne Industries,
Inc. (Envirodyne) and certain of its subsidiaries. The Plan of Reorganization
was consummated and Envirodyne and certain of its subsidiaries emerged from
Chapter 11 on December 31, 1993 (Effective Date). For accounting purposes, the
Plan of Reorganization was deemed to be effective as of December 31, 1993.
Pursuant to the Plan of Reorganization, Envirodyne's shares of common stock
that were outstanding prior to the effective date were canceled. Emerald
Acquisition Corporation, the sole stockholder of Envirodyne prior to the
consummation of the bankruptcy, received no distribution pursuant to the Plan of
Reorganization. The Plan of Reorganization provided for the initial issuance of
approximately 13,500,000 new shares of Envirodyne common stock (subject to
adjustment), warrants to purchase an additional 1,500,000 shares and
distributions to major creditors as follows:
-- Holders of the Envirodyne's former Senior Discount Notes Due 1997
(14.5%) (Old Discount Notes) with an accreted value as of January 6, 1993
of $200,838,211 became entitled to receive a pro rata portion of
$219,262,000 principal amount of 10 1/4% Senior Notes Due 2001 (10 1/4%
Notes).
-- Holders of Envirodyne's former $200,000,000 principal amount of 14%
Senior Subordinated Debentures Due 2001 (Old 14% Debentures), with
accrued but unpaid interest through January 6, 1993 of $42,812,000 became
entitled to receive a pro rata portion of 12,142,737 shares of the
Envirodyne common stock, par value $.01 per share, representing in the
aggregate approximately 89.95% of the common stock initially issued
pursuant to the Plan of Reorganization.
-- Holders of the Envirodyne's former $91,350,000 principal amount of
13 1/2% Subordinated Notes Due 1996 (Old 13 1/2% Notes), with accrued but
unpaid interest through January 6, 1993 of $13,603,842 became entitled to
receive a pro rata portion of (i) 903,625 shares of Envirodyne common
stock, representing in the aggregate approximately 6.69% of the common
stock initially issued pursuant to the Plan of Reorganization, and (ii)
warrants (Warrants) to purchase 1,500,000 shares of common stock. The
Warrants were issued pursuant to a Warrant Agreement dated as of December
31, 1993 between Envirodyne and Bankers Trust Company, as Warrant Agent.
The Warrants are exercisable at any time until December 31, 1998 at an
exercise price of $17.25 per share. The number of shares of common stock
for which a Warrant is exercisable, and the exercise price of the
Warrants, are subject to adjustment upon the occurrence of certain
events. In addition, holders of Old 13 1/2% Notes, other than Salomon
Brothers Inc (Salomon Brothers) and certain of its affiliates, who
elected to grant a limited release to Salomon Brothers and its affiliates
pursuant to the Plan of Reorganization, of all claims arising out of the
1989 leveraged buyout acquisition of Envirodyne, the Old 13 1/2% Notes or
Envirodyne, were entitled to share ratably in 445,928 shares of common
stock, representing in the aggregate approximately 3.30% of the common
stock initially issued pursuant to the Plan of Reorganization.
-- Holders of allowed general unsecured claims of Envirodyne (as opposed to
subsidiaries of Envirodyne) became entitled to receive 32.28 shares of
common stock for each $500 amount of their prepetition claims, or a total
of 8,070 shares of common stock, representing .06% of the common stock
initially issued pursuant to the Plan of Reorganization. These claims
totaled approximately $125,000.
F-21
<PAGE> 107
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
If the allowed amount of general unsecured claims of Envirodyne exceeds
$125,000, for example upon the resolution of disputed claims, additional
shares of common stock will have to be issued to the holders of allowed
general unsecured claims of Envirodyne in order to provide equitable
allocation of value among Envirodyne's unsecured creditors under the Plan
of Reorganization. Such additional shares of common stock would be
distributed with respect to allowed general unsecured claims of
Envirodyne as follows: (i) approximately 2.58 additional shares per $500
in claims in the event allowed general unsecured claims of Envirodyne are
between $125,000 and $25,000,000; (ii) approximately 5.61 additional
shares per $500 in claims in the event allowed general unsecured claims
of Envirodyne are between $25,000,000 and $50,000,000; (iii)
approximately 9.22 additional shares per $500 in claims in the event
allowed general unsecured claims of Envirodyne are between $50,000,000
and $75,000,000; and (iv) approximately 13.58 additional shares per $500
in claims in the event allowed general unsecured claims of Envirodyne are
between $75,000,000 and $100,000,000. Refer to Note 11 for a discussion
of disputed claims which, if determined adversely to Envirodyne, would
result in the issuance of common stock.
-- Holders of Envirodyne subsidiary allowed trade claims were paid in full.
-- Salomon Brothers Holding Company Inc 11.25% Pay-in-Kind Notes issued by
Envirodyne with an accreted value as of January 6, 1993 of $5,658,000
were canceled.
The contracts constituting the sale and leaseback transaction with General
Electric Capital Corporation were assumed by the relevant Envirodyne
subsidiaries under the Plan of Reorganization with minor changes thereto.
The Chapter 11 filing was related only to the Company's domestic operations
and did not include the foreign subsidiaries and various inactive domestic
subsidiaries.
The Company accounted for the reorganization using the principles of fresh
start reporting 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." Accordingly, all assets and
liabilities have been restated to reflect their reorganization value, which
approximates fair value.
The reorganization value of the Company's equity of $135,000,000 was based
on the consideration of many factors and various valuation methods, including
discounted cash flows, comparable multiples of earnings and other applicable
measurements and valuation techniques believed by management and its financial
advisors to be representative of the Company's business and industry. The excess
of the reorganization value over the fair value of net assets and liabilities is
reported as excess reorganization value and is being amortized over a
fifteen-year period.
F-22
<PAGE> 108
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The reorganization and the adoption of Fresh Start Reporting resulted in
the following adjustments to the Company's Consolidated Statement of Operations
for the period January 1 to December 31, 1993:
<TABLE>
<CAPTION>
INCOME
(EXPENSE)
---------
<S> <C>
Reorganization Items
- ---------------------------------------------------------------------------------
Legal, financial advisory and other fees associated with the Chapter 11
proceedings.................................................................... $ (14,929)
Write-off of deferred financing fees associated with the Bank Credit Agreement... (4,071)
Write-off of existing excess investment over net assets acquired, net of excess
reorganization value recorded, and fair market value adjustments to assets and
liabilities.................................................................... (85,745)
---------
$(104,745)
=========
Extraordinary Gain
- ---------------------------------------------------------------------------------
Accreted value of the Old Discount Notes less unamortized deferred financing..... $ 197,379
Principal amount of Old 14% Debentures plus accrued interest less unamortized
deferred financing............................................................. 237,125
Principal amount of Old 13 1/2% Notes plus accrued interest less unamortized
deferred financing............................................................. 103,918
Accreted value of 11 1/4% Pay-in-Kind Notes due to Related Party................. 5,658
Envirodyne untendered shares..................................................... 2,176
Envirodyne general unsecured creditors allowed claims............................ 90
Principal amount of 10 1/4% Notes exchanged for Old Discount Notes............... (219,262)
Fair value of equity exchanged for Old 14% Debentures, Old 13 1/2% Notes and
Envirodyne unsecured claims.................................................... (135,000)
---------
Extraordinary gain before tax provision.......................................... 192,084
Tax provision on extraordinary gain (refer to Note 13)......................... 8,300
---------
Extraordinary gain net of taxes.................................................. $ 183,784
=========
</TABLE>
F-23
<PAGE> 109
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Had the Fresh Start reporting and the Plan of Reorganization been
implemented with the related financing at the beginning of 1993, the pro forma
Envirodyne consolidated statement of operations would have been as follows:
(IN THOUSANDS, EXCEPT FOR NUMBER OF SHARES AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
PRO FORMA
JANUARY 1 TO
DECEMBER 31, 1993
-----------------
<S> <C>
(UNAUDITED)
Net sales.................................................................. $587,385
Cost of sales............................................................ 415,498
Selling, general and administrative...................................... 101,632
Amortization of intangibles and excess reorganization cost............... 15,612
--------
Operating income........................................................... 54,643
Interest income.......................................................... 931
Interest expense......................................................... 51,198
Other expense (income), net.............................................. 5,540
Minority interest in loss of subsidiary.................................. 717
--------
Income before income taxes................................................. (447)
Income tax provision..................................................... 6,140
--------
Net (loss)................................................................. $ (6,587)
========
Weighted average common shares............................................. 13,500,703
Net (loss) per share....................................................... $(.49)
=====
</TABLE>
The pro forma information reflects the changes in interest cost and
depreciation and amortization due to the implementation of the Plan of
Reorganization and Fresh Start Reporting.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF PRESENTATION
Effective in 1990 Envirodyne adopted a 52/53 week fiscal year ending on the
last Thursday of December. The 1993 financial statements include December 31,
1993 in order to present the effect of the consummation of the Plan of
Reorganization.
(B) PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Envirodyne
Industries, Inc. and its subsidiaries (the Company).
Reclassifications have been made to the prior year's financial statement to
conform to the 1994 presentation.
(C) CASH EQUIVALENTS
For purposes of the statement of cash flows, the Company considers cash
equivalents to consist of all highly liquid debt investments purchased with an
initial maturity of approximately three months or less. Due to the short-term
nature of these instruments, the carrying values approximate the fair market
value. Cash
F-24
<PAGE> 110
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
equivalents include $821,000 and $1,757,000 of short-term investments at
December 29, 1994 and December 31, 1993, respectively.
(D) INVENTORIES
Domestic inventories are valued primarily at the lower of last-in,
first-out (LIFO) cost or market. Remaining amounts, primarily foreign, are
valued at the lower of first-in, first-out (FIFO) cost or market.
(E) PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are carried at cost less accumulated
depreciation. Depreciation is computed on the straight-line method over the
estimated useful lives of the assets ranging from 3 to 32 years. Upon retirement
or other disposition, cost and related accumulated depreciation are removed from
the accounts, and any gain or loss is included in results of operations.
Effective December 31, 1993 and in conjunction with the Fresh Start Reporting,
property, plant and equipment was reported at the estimated fair value (refer to
Note 1).
(F) DEFERRED FINANCING COSTS
Deferred financing costs are amortized on a straight-line basis over the
expected term of the related debt agreement.
(G) PATENTS
Patents are amortized on the straight-line method over an estimated average
useful life of ten years.
(H) EXCESS REORGANIZATION VALUE AND EXCESS INVESTMENT OVER NET ASSETS ACQUIRED,
NET
Excess reorganization value is amortized on the straight-line method over
15 years.
Cost in excess of net assets acquired, net was amortized on a straight-line
method over 40 years in fiscal years 1993 and 1992.
The Company continues to evaluate the recoverability of excess
reorganization value based on projected and discounted cash flows of the
operating business units.
(I) PENSIONS
The North American operations of Viskase and the Company's operations in
Europe have defined benefit retirement plans covering substantially all salaried
and full time hourly employees. Pension cost is computed using the projected
unit credit method.
The Company's funding policy is consistent with funding requirements of the
applicable federal and foreign laws and regulations.
(J) POSTRETIREMENT BENEFITS OTHER THAN PENSIONS
The North American operations of Viskase have postretirement health care
and life insurance benefits. Effective January 1, 1993, postretirement benefits
other than pensions are accounted for in accordance with the provisions of
Statement of Financial Accounting Standards (SFAS) No. 106 "Employers'
Accounting for Postretirement Benefits Other Than Pensions." Prior year's
financial statements were accounted for using the pay-as-you-go method.
F-25
<PAGE> 111
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(K) POSTEMPLOYMENT BENEFITS
Effective December 31, 1993 and in conjunction with the Fresh Start
Reporting, the Company adopted SFAS No. 112 "Employers Accounting for
Postemployment Benefits." The impact of adopting SFAS No. 112 was not material.
(L) INCOME TAXES
Income taxes were accounted for in accordance with SFAS No. 109 for the
years ended December 29, 1994 and December 31, 1993.
(M) NET INCOME (LOSS) PER SHARE
Net income (loss) per share of common stock is based upon the weighted
average number of shares of common stock outstanding during the year. No effect
has been given to options outstanding under the Company's stock option plans and
warrants issued pursuant to the Plan of Reorganization as their effect is
anti-dilutive.
(N) REVENUE RECOGNITION
Sales to customers are recorded at the time of shipment net of discounts
and allowances.
(O) FOREIGN CURRENCY CONTRACTS
The Company has entered into forward foreign exchange contracts to hedge
certain foreign currency transactions on a continuing basis for periods
consistent with its committed foreign currency exposures. The effect of this
practice is to minimize the effect of foreign exchange rate movements on the
Company's operating results. The Company's hedging activities do not subject the
Company to exchange rate risk because gains and losses on these contracts offset
losses and gains on the transactions being hedged. The cash flows from forward
contracts accounted for as hedges of identifiable transactions or events are
classified consistent with the cash flows from the transactions or events being
hedged.
3. RECEIVABLES
Receivables consisted primarily of trade accounts receivable and were net
of allowances for doubtful accounts of $2,136,000 and $2,872,000 at December 29,
1994, and at December 31, 1993, respectively.
4. INVENTORIES
Inventories consisted of:
<TABLE>
<CAPTION>
DECEMBER 29, DECEMBER 31,
1994 1993
------------ ------------
<S> <C> <C>
(IN THOUSANDS)
Raw materials.................................................... $ 20,358 $ 17,477
Work in process.................................................. 37,613 34,158
Finished products................................................ 52,512 47,189
-------- --------
$110,483 $ 98,824
======== ========
</TABLE>
Approximately 55% and 60% of the Company's inventories at December 29,
1994, and December 31, 1993, respectively, were valued at LIFO. These LIFO
values exceeded current manufacturing cost by approximately $7,000,000 and
$11,000,000 at December 29, 1994, and December 31, 1993, respectively.
F-26
<PAGE> 112
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
5. PROPERTY, PLANT AND EQUIPMENT
<TABLE>
<CAPTION>
DECEMBER 29, DECEMBER 31,
1994 1993
------------ ------------
<S> <C> <C>
(IN THOUSANDS)
Property, plant and equipment:
Land and improvements.......................................... $ 15,930 $ 15,288
Buildings and improvements..................................... 76,202 60,867
Machinery and equipment........................................ 256,621 213,099
Construction in progress....................................... 20,178 29,132
Capital lease:
Machinery and equipment........................................ 137,168 137,168
-------- --------
$506,099 $455,554
======== ========
</TABLE>
Maintenance and repairs charged to costs and expenses for 1994, 1993, and
1992 aggregated $33,045,000, $32,636,000 and $31,747,000, respectively.
Depreciation is computed on the straight-line method over the estimated useful
lives of the assets ranging from 3 to 32 years.
6. OTHER ASSETS
Other assets were comprised of:
<TABLE>
<CAPTION>
DECEMBER 29, DECEMBER 31,
1994 1993
------------ ------------
<S> <C> <C>
(IN THOUSANDS)
Patents.......................................................... $ 50,000 $ 50,000
Less accumulated amortization.................................. 5,000
-------- --------
Patents, net................................................ 45,000 50,000
Other............................................................ 2,181 765
-------- --------
$ 47,181 $ 50,765
======== ========
</TABLE>
Patents are amortized on the straight-line method over an estimated average
useful life of ten years.
7. ACCRUED LIABILITIES
Accrued liabilities were comprised of:
<TABLE>
<CAPTION>
DECEMBER 29, DECEMBER 31,
1994 1993
------------ ------------
<S> <C> <C>
(IN THOUSANDS)
Compensation and employee benefits............................... $ 33,521 $ 30,712
Taxes, other than on income...................................... 6,454 4,956
Accrued interest................................................. 3,630 235
Accrued volume and sales discounts............................... 11,958 9,309
Accrued reorganization fees and expenses......................... 3,167 7,011
Other............................................................ 13,516 8,824
------------ ------------
$ 72,246 $ 61,047
========== ==========
</TABLE>
F-27
<PAGE> 113
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
8. DEBT OBLIGATIONS
As described in Note 1, Chapter 11 Reorganization Proceedings, Envirodyne
and certain of its domestic Subsidiaries emerged from Chapter 11 on December 31,
1993.
The $219,262,000 principal amount of 10 1/4% Notes were issued pursuant to
an Indenture dated as of December 31, 1993 (10 1/4% Note Indenture) between
Envirodyne and Bankers Trust Company, as Trustee. The 10 1/4% Notes are the
unsecured senior obligations of Envirodyne, bear interest at the rate of 10 1/4%
per annum, payable on each June 1 and December 1, and mature on December 1,
2001. The 10 1/4% Notes are redeemable, in whole or from time to time in part,
at the option of Envirodyne, at the percentages of principal amount specified
below plus accrued and unpaid interest to the redemption date, if the 10 1/4%
Notes are redeemed during the 12-month period commencing on January 1 of the
following years:
<TABLE>
<CAPTION>
YEAR PERCENTAGE
---------------------------------------------------------- -----------
<S> <C>
1995...................................................... 105%
1996...................................................... 104%
1997...................................................... 103%
1998...................................................... 102%
1999...................................................... 101%
2000 and thereafter....................................... 100%
</TABLE>
The 10 1/4% Note Indenture contains covenants with respect to Envirodyne
and its subsidiaries limiting (subject to a number of important qualifications),
among other things, (i) the ability to pay dividends on or redeem or repurchase
capital stock, (ii) the incurrence of indebtedness, (iii) certain affiliate
transactions and (iv) the ability of the Company to consolidate with or merge
with or into another entity or to dispose of substantially all its assets.
In connection with the consummation of the Plan of Reorganization,
Envirodyne and certain of its subsidiaries (Borrowers) entered into a Credit
Agreement dated December 31, 1993 (Credit Agreement) with the lenders party
thereto (Lenders) and with Bank of America Illinois (formerly Continental Bank
N.A.), Citibank International PLC and Citicorp North America, Inc., as agents
for the Lenders. The Credit Agreement provides for a $195,000,000 facility,
consisting of a $100,000,000 domestic term loan facility, a $65,000,000 domestic
revolving credit facility (which includes a $27,000,000 domestic letter of
credit facility) and a $30,000,000 amortizing multicurrency revolving credit
facility (which includes a $3,000,000 multicurrency letter of credit facility).
The commitment under the amortizing multicurrency revolver was $27,800,000 at
December 29, 1994. The initial borrowings under the Credit Agreement were used
(i) to pay indebtedness under the Postpetition Credit Agreement dated as of
February 5, 1993 among the Debtors, the lenders party thereto (DIP Lenders) and
Continental Bank N.A., as agent for the DIP Lenders, (ii) to pay indebtedness
under certain foreign credit facilities, (iii) to pay the claims of subsidiary
trade creditors under the Plan of Reorganization and (iv) to pay certain fees
and expenses relating to the Plan of Reorganization and the Credit Agreement.
Obligations under the Credit Agreement are collateralized by substantially all
of the assets of Envirodyne and its domestic subsidiaries and by the pledge of
the capital stock of substantially all of Envirodyne's subsidiaries.
Availability of funds under the Credit Agreement is subject to a borrowing base
measured by certain assets of Envirodyne and its subsidiaries.
The available borrowing capacity under the Credit Agreement was
approximately $41 million at December 29, 1994.
F-28
<PAGE> 114
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Borrowings under the domestic term loan facility and the domestic revolving
credit facility bear interest, at the Company's election, at a rate per annum
equal to (i) the Bank of America Illinois base rate plus 1.5% or (ii) the
Eurodollar rate plus 2.75%, subject to step downs of up to 0.5% if the Company
meets certain debt and interest coverage tests. The domestic term loan facility
terminates on December 31, 1999 and is subject to quarterly repayments of
principal as follows:
<TABLE>
<CAPTION>
QUARTERLY TOTAL REPAYMENT
CALENDAR YEAR REPAYMENT AMOUNT FOR CALENDAR YEAR
---------------------------------- ---------------- -----------------
<S> <C> <C>
1995.............................. $2,775,000 $11,100,000
1996.............................. 4,075,000 16,300,000
1997.............................. 4,450,000 17,800,000
1998.............................. 4,625,000 18,500,000
1999.............................. 6,300,000 25,200,000
</TABLE>
The domestic revolving credit facility expires on December 31, 1999, with a
commitment fee of 0.5% per annum on the unused portion of the commitment. The
domestic letter of credit facility expires December 16, 1999, with fees on the
outstanding amount of the domestic letters of credit of 0.25% per annum to the
issuers and 2.5% per annum to the domestic Lenders, subject to step downs of up
to 0.5% if the Company meets certain debt and interest coverage tests.
The multicurrency revolving credit facility permits borrowings in U.S.
Dollars, German Marks, French Francs or Pounds Sterling at an interest rate per
annum equal to the applicable Eurocurrency rate plus 2.75%, subject to step
downs of up to 0.5% if the Company meets certain debt and interest coverage
tests. The multicurrency revolving credit facility expires on December 31, 1999
and the commitments thereunder are subject to mandatory quarterly reductions as
follows:
<TABLE>
<CAPTION>
QUARTERLY TOTAL REDUCTION
CALENDAR YEAR COMMITMENT REDUCTION FOR CALENDAR YEAR
------------------------------- -------------------- -----------------
<S> <C> <C>
1995........................... $ 500,000 $2,000,000
1996........................... 950,000 3,800,000
1997........................... 1,075,000 4,300,000
1998........................... 1,150,000 4,600,000
1999........................... 775,000 3,100,000
</TABLE>
There is a commitment fee of 0.5% per annum on the unused portion of the
multicurrency revolving credit facility. The multicurrency letter of credit
facility expires December 16, 1999, with fees on the outstanding amount of the
multicurrency letters of credit of 0.25% per annum to the issuers and 2.5% per
annum to the multicurrency Lenders, subject to step downs of up to 0.5% if the
Company meets certain debt and interest coverage tests.
Envirodyne's obligations under the Credit Agreement bear interest at rates
that are expected to fluctuate over time. Envirodyne is required under the
Credit Agreement to enter into interest rate protection agreements with respect
to a significant portion of the amounts outstanding from time to time
thereunder. Envirodyne has entered into $50 million of interest rate protection
agreements that cap the Company's LIBOR interest component (excludes spread) at
an average rate of 6.50% until January 1997. The fair value of interest rate cap
agreements is estimated by obtaining quotes from banks. At December 29, 1994,
the carrying amount and estimated fair value of interest rate cap agreements
were $1,174,000 and $1,432,000, respectively.
The Borrowers have made certain representations and have agreed to certain
covenants that restrict the operations of the Borrowers and their subsidiaries'
businesses. Among other things, the Borrowers may not, with limited exceptions,
place liens on their properties or assets, incur additional indebtedness, make
dividend
F-29
<PAGE> 115
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
or other distributions on capital stock, make investments (other than cash
equivalent investments), merge or consolidate with any other person, dispose of
assets outside the ordinary course of business or exceed stated levels of
capital expenditures. The Credit Agreement also contains a number of financial
covenants, including covenants relating to cash flow, interest and fixed charge
coverage ratios, net worth and debt to cash flow levels.
Unless cured within any applicable grace period, events of default include
failure to pay principal, interest or other amounts due to the Lenders, a
material breach of a representation or warranty, certain events related to
employee benefit plans, certain events of bankruptcy or insolvency, defaults on
other indebtedness having a principal amount in the aggregate in excess of
$5,000,000, failure to discharge judgments in an amount in excess of $5,000,000,
a change of control (as defined) and failure to comply with covenants, including
the financial covenants described above.
The Company and the Lenders entered into an amendment of the Credit
Agreement as of January 24, 1995 easing certain financial covenants and
permanently waiving the event of default arising from the ownership by the
Malcolm I. Glazer Trust (Trust) of more than 30% of the Company's Common Stock,
provided that the Trust's ownership does not later exceed 49% of the Company's
outstanding Common Stock. The Company is currently in compliance with the terms
of the Credit Agreement, including the financial covenants.
Outstanding short-term and long-term debt consisted of:
<TABLE>
<CAPTION>
DECEMBER 29, DECEMBER 31,
1994 1993
------------ ------------
<S> <C> <C>
(IN THOUSANDS)
Short-term debt, current maturity of long-term debt, and capital
lease obligation:
Current maturity of Bank Term Loan (8.0%)...................... $ 11,100 $ 8,325
Current maturity of Viskase Capital Lease Obligation........... 5,450 4,940
Current maturity of Viskase Limited Term Loan (5.9%)........... 1,882 1,679
Other.......................................................... 7,366 666
-------- --------
Total short-term debt.......................................... $ 25,798 $ 15,610
======== ========
Long-term debt:
Bank Credit Agreement:
Term Loan due 1999 (8.0%)................................... $ 80,575 $ 91,675
Revolving Loan due 1999 (8.9%).............................. 32,524 5,999
10.25% Senior Notes due 2001................................... 219,262 219,262
Viskase Capital Lease Obligation............................... 147,194 152,644
Viskase Limited Term Loan (5.9%)............................... 8,466 9,233
Other.......................................................... 1,337 3,566
-------- --------
Total long-term debt........................................... $489,358 $482,379
======== ========
</TABLE>
The fair value of the Company's debt obligation (excluding capital lease
obligation) is estimated based upon the quoted market prices for the same or
similar issues or on the current rates offered to the Company for the debt of
the same remaining maturities. At December 29, 1994, the carrying amount and
estimated fair value of debt obligations (excluding capital lease obligation)
were $362,512 and $298,926, respectively.
On December 28, 1990, Viskase and GECC entered into a sale and leaseback
transaction. The sale and leaseback of assets included the production and
finishing equipment at Viskase's four domestic casing
F-30
<PAGE> 116
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
production and finishing facilities. The facilities are located in Chicago,
Illinois; Loudon, Tennessee; Osceola, Arkansas and Kentland, Indiana. Viskase,
as the Lessee under the relevant agreements, will continue to operate all of the
facilities. The lease has been accounted for as a capital lease.
The principal terms of the sale and leaseback transaction include: (a) a 15
year basic lease term (plus selected renewals at Viskase's option); (b) annual
rent payments in advance beginning in February 1991; and (c) a fixed price
purchase option at the end of the basic 15 year term and fair market purchase
options at the end of the basic term and each renewal term. Further, the Lease
Documents contain covenants requiring maintenance by the Company of certain
financial ratios and restricting the Company's ability to pay dividends, make
payments to affiliates, make investments and incur indebtedness.
Annual rental payments under the Lease will be approximately $19.2 million
through 1997, $21.4 million in 1998 and $23.5 million through the end of the
basic 15-year term. Viskase is required to provide credit support consisting of
a standby letter of credit in an amount up to one year's rent through at least
1997. This credit support can be reduced up to $4,000,000 currently if the
Company achieves and maintains certain financial ratios. As of December 29,
1994, the Company had met the required financial ratios and the letter of credit
has been reduced by $4,000,000. The letter can be further reduced in 1997 or
eliminated after 1998 if the Company achieves and maintains certain financial
ratios. Envirodyne and its other principal subsidiaries guaranteed the
obligations of Viskase under the Lease.
The following is a schedule of minimum future lease payments under the
capital lease together with the present value of the net minimum lease payments
as of December 29, 1994:
<TABLE>
<CAPTION>
YEAR ENDING DECEMBER (000'S)
-------------------------------------------------------- --------
<S> <C>
1995.................................................... $ 19,227
1996.................................................... 19,227
1997.................................................... 19,227
1998.................................................... 21,363
1999.................................................... 23,499
Thereafter.............................................. 140,994
--------
Net minimum lease payments.............................. 243,537
Less:
Amount representing interest............................ (90,893)
--------
$152,644
========
</TABLE>
The 1995 rental payment of $19,227,000 was paid on February 28, 1995.
Principal payments under the capital lease obligation for the years ended 1995
through 1999 range from approximately $5 million to $13 million.
Aggregate maturities of remaining long-term debt for each of the next five
fiscal years are (in thousands):
<TABLE>
<CAPTION>
TOTAL
-------
<S> <C>
1995..................................................... $20,897
1996..................................................... 23,258
1997..................................................... 26,305
1998..................................................... 34,870
1999..................................................... 33,982
</TABLE>
F-31
<PAGE> 117
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
9. OPERATING LEASES
The Company has operating lease agreements for machinery, equipment and
facilities. The majority of the facilities leases require the Company to pay
maintenance, insurance and real estate taxes.
Future minimum lease payments for operating leases that have initial or
remaining noncancelable lease terms in excess of one year as of December 29,
1994, are (in thousands):
<TABLE>
<S> <C>
1995...................................................... $4,748
1996...................................................... 2,876
1997...................................................... 1,175
1998...................................................... 747
1999...................................................... 287
Total thereafter..........................................
------
Total minimum lease payments.............................. $9,833
======
</TABLE>
Total rent expense during 1994, 1993 and 1992 amounted to $5,982,000,
$5,401,000, and $5,673,000, respectively.
10. RETIREMENT PLANS
The Company and its subsidiaries have defined contribution and defined
benefit plans varying by country and subsidiary.
At December 29, 1994, the North American operations of Viskase maintained
several non-contributory defined benefit retirement plans. The Viskase plans
cover substantially all salaried and full-time hourly employees, and benefits
are based on final average compensation and years of credited service.
As of the Viskase acquisition date, the former owner assumed the liability
for the accumulated benefit obligation under its plans. The effect of expected
future compensation increases on benefits accrued is recorded as a liability on
the Company's consolidated balance sheet.
PENSIONS -- NORTH AMERICA:
Net pension cost for the Viskase North American plans consisted of:
<TABLE>
<CAPTION>
JANUARY 1, JANUARY 1, DECEMBER 27,
TO TO 1991 TO
DECEMBER 29, DECEMBER 31, DECEMBER 31,
1994 1993 1992
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Service cost -- benefits earned during the year..... $ 3,662 $ 3,186 $ 3,031
Interest cost on projected benefit obligation....... 4,249 4,000 3,578
Actual (gain) loss on plan assets................... 874 (2,306) (1,168)
Net amortization and deferral....................... (3,696) (74) (1,026)
------- ------- -------
Net pension cost.................................... $ 5,089 $ 4,806 $ 4,415
======= ======= =======
</TABLE>
F-32
<PAGE> 118
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The amounts included in the consolidated balance sheet for the North
American plans of Viskase were:
<TABLE>
<CAPTION>
DECEMBER 29, DECEMBER 31,
1994 1993
------------ ------------
(IN THOUSANDS)
<S> <C> <C>
Actuarial present value of benefit obligation:
Vested benefits................................................ $39,165 $34,233
Nonvested benefits............................................. 4,316 3,369
------- -------
Accumulated benefit obligation................................... 43,481 37,602
Effect of projected future compensation increases................ 16,651 23,896
------- -------
Projected benefit obligation..................................... 60,132 61,498
Plan assets at fair value, primarily listed stocks and investment
grade corporate bonds.......................................... 33,678 31,736
------- -------
Amount underfunded............................................... 26,454 29,762
Unrecognized gain (loss)......................................... 3,778
Unrecognized prior service costs................................. 71
------- -------
Accrued liability included in consolidated balance sheet......... $30,303 $29,762
======= =======
Assumed discount rate............................................ 8.0% 7.0%
Assumed long-term compensation factor............................ 5.0% 4.5%
Assumed long-term return on plan assets.......................... 8.5% 8.0%
</TABLE>
SAVINGS PLANS:
The Company also has defined contribution savings and similar plans, which
vary by subsidiary, and, accordingly, are available to substantially all
full-time U.S. employees not covered by collective bargaining agreements. The
Company's aggregate contributions to these plans are based on eligible employee
contributions and certain other factors. The Company expense for these plans was
$2,109,000, $2,026,000 and $2,001,000 in 1994, 1993, and 1992, respectively.
INTERNATIONAL PLANS:
The Company maintains various pension and statutory separation pay plans
for its European employees. The expense for these plans in 1994, 1993 and 1992
was $1,043,000, $864,000 and $515,000, respectively. As of their most recent
valuation dates, in plans where vested benefits exceeded plan assets, the
actuarially computed value of vested benefits exceeded those plans' assets by
approximately $1,902,000; conversely, plan assets exceeded the vested benefits
in certain other plans by approximately $1,708,000.
OTHER POSTRETIREMENT BENEFITS:
The Company provides postretirement health care and life insurance benefits
to Viskase's North American employees. The Company does not fund postretirement
health care and life benefits in advance, and has the right to modify these
plans in the future.
F-33
<PAGE> 119
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Effective January 1, 1993, the company adopted the provisions of SFAS No.
106 "Employers' Accounting for Postretirement Benefits Other Than Pensions."
SFAS No. 106 requires that the expected cost of these benefits must be charged
to expense during the years that the employee renders service. In connection
with the 1989 acquisition of the Company, an accrual of $15,000,000 had been
recorded for the estimated postretirement benefits liability at the acquisition
date. On January 1, 1993, an additional liability and transition obligation was
recorded. Fresh Start accounting results in the write-off of the transition
obligation and statement of the liability for postretirement health care and
life insurance benefits at fair value. Net periodic postretirement benefit cost
for 1994 and 1993 includes the following components:
<TABLE>
<CAPTION>
MEDICAL LIFE TOTAL
----------------- --------------- -----------------
1994 1993 1994 1993 1994 1993
------- ------- ------ ------ ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Components of net periodic postretirement
benefit cost:
Service cost -- benefits earned during
the current year...................... $ 511 $ 417 $ 176 $ 176 $ 687 $ 593
Interest cost -- on accumulated
postretirement benefit obligation..... 1,208 1,150 442 437 1,650 1,587
Amortization of unrecognized transition
obligation............................ 142 53 195
------- ------- ------ ------ ------- -------
Net periodic benefit cost................ $ 1,719 $ 1,709 $ 618 $ 666 $ 2,337 $ 2,375
======= ======= ====== ====== ======= =======
Actuarial present value of benefit
obligations:
Retirees................................. $ 6,836 $ 6,488 $2,184 $2,170 $ 9,020 $ 8,658
Fully eligible active participants....... 2,238 2,358 2,435 2,586 4,673 4,944
Other active participants................ 7,660 8,075 1,612 1,767 9,272 9,842
------- ------- ------ ------ ------- -------
Total................................. 16,734 16,921 6,231 6,523 22,965 23,444
Unrecognized gains....................... 979 581 1,560
------- ------- ------ ------ ------- -------
Accumulated postretirement benefit
obligation............................... $17,713 $16,921 $6,812 $6,523 $24,525 $23,444
======= ======= ====== ====== ======= =======
Assumed discount rate.............................. 8.00%
Assumed medical trend rate......................... 11.00% in 1995 decreasing to 6.50% in 2004
Assumed long-term compensation factor.............. 5.00%
</TABLE>
The postretirement benefit obligation was determined by application of the
terms of the various plans, together with relevant actuarial assumptions. The
effect of a 1% annual increase in these assumed cost trend rates would increase
the accumulated postretirement benefit obligation at December 29, 1994 and
December 31, 1993 by $198,000 and $215,000, respectively, and the service and
interest cost components for 1994 and 1993 by a total of $22,000 and $13,000,
respectively.
11. CONTINGENCIES
A class action lawsuit by former employees of subsidiary corporations
comprising most of the Company's former steel and mining division (SMD) was
pending as of the commencement of the bankruptcy case in which the plaintiffs
are seeking substantial damages. The Company and the plaintiffs are currently
participating in a mediation process to attempt to resolve the case. Envirodyne
denies liability and in the absence of successful mediation or other settlement
negotiations will continue to vigorously defend these claims. However, inasmuch
as the Plan of Reorganization provides for the issuance of common stock with
respect to prepetition Envirodyne general unsecured claims (refer to Note 1), an
adverse finding of liability and damages could result in substantial dilution to
the holders of the common stock.
F-34
<PAGE> 120
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
Litigation has been initiated with respect to events arising out of the
bankruptcy cases and the 1989 acquisition of Envirodyne by Emerald with respect
to which, although Envirodyne is not presently a party to such litigation,
certain defendants have asserted indemnity rights against Envirodyne. In ARTRA
Group Incorporated v. Salomon Brothers Holding Company Inc, Salomon Brothers
Inc, D.P. Kelly & Associates, L.P., Donald P. Kelly, Charles K. Bobrinskoy,
James L. Massey, William Rifkind and Michael Zimmerman, Case No. 93 A 1616,
United States Bankruptcy Court for the Northern District of Illinois, Eastern
Division (Bankruptcy Court), ARTRA Group Incorporated (ARTRA) alleges breach of
fiduciary duty and tortious inference in connection with the negotiation and
consummation of the Plan of Reorganization. In ARTRA Group Incorporated v.
Salomon Brothers Holding Company Inc, Salomon Brothers Inc, D.P. Kelly &
Associates, L.P., Donald P. Kelly, Charles K. Bobrinskoy and Michael Zimmerman,
Case No. 93 L 2198, Circuit Court of the Eighteenth Judicial Circuit, County of
DuPage, State of Illinois, ARTRA alleges negligence, breach of fiduciary duty,
fraudulent misrepresentation and deceptive business practices in connection with
the 1989 acquisition of Envirodyne by Emerald. The plaintiff seeks damages in
the total amount of $136,200,000 plus interest and punitive damages of
$408,600,000. D.P. Kelly & Associates, L.P. and Messrs. Kelly, Bobrinskoy,
Massey, Rifkind and Zimmerman have asserted common law and contractual rights of
indemnity against Envirodyne for attorneys' fees, costs and any ultimate
liability relating to the claims set forth in the complaints. Upon the
undertaking of D.P. Kelly & Associates, L.P. to repay such funds in the event it
is ultimately determined that there is no right to indemnity, Envirodyne is
advancing funds to D.P. Kelly & Associates, L.P. and Mr. Kelly for the payment
of legal fees in the case pending before the Bankruptcy Court. Although the case
is in a preliminary stage and the Company is not a party thereto, the Company
believes that the plaintiff's claims raise similar factual issues to those
raised in the bankruptcy cases which, if adjudicated in a manner similar to that
in the bankruptcy cases, would render it difficult for the plaintiff to
establish liability. Accordingly, the Company believes that the indemnification
claims would not have a material adverse effect upon the business or financial
position of the Company, even if the claimants were ultimately successful in
establishing their right to indemnification.
In the Envirodyne bankruptcy case the United States Environmental
Protection Agency (USEPA), the Economic Development Authority (EDA), and
Navistar International Transportation Corp. (Navistar Transportation) filed
proofs of claim with respect to unreimbursed environmental response costs at the
location of the former SMD operations. The parties have agreed in principle,
subject to the negotiation of a definitive settlement agreement, Bankruptcy
Court approval and public comment pursuant to regulations applicable to EDA and
USEPA, to settle the claims against Envirodyne through the payment of $5,000 to
the USEPA and the issuance of 64,460 shares of common stock to Navistar
Transportation. In the event that the settlement is not completed, Envirodyne
believes that it has valid defenses to the claims and will continue its
objections to the claims. To the extent that USEPA, EDA or Navistar
Transportation were able to establish liability and damages as to their
respective proofs of claim, such parties would receive Common Stock under the
Plan of Reorganization in satisfaction of their claims.
Certain of Envirodyne's stockholders prior to the acquisition of Envirodyne
by Emerald failed to exchange their certificates representing old Envirodyne
common stock for the $40 per share cash merger consideration specified by the
applicable acquisition agreement. In the Envirodyne bankruptcy case, Envirodyne
is seeking to equitably subordinate the interests of the holders of untendered
shares, in which event such holders would receive no distribution pursuant to
the Plan of Reorganization. The Bankruptcy Court granted Envirodyne's motion for
summary judgment to equitably subordinate the holders of untendered shares.
Certain holders have appealed the summary judgment to the United States District
Court for the Northern District of Illinois. If such holders were ultimately
successful, Envirodyne believes that the maximum number of shares of common
stock that it would be required to issue to such claimants is approximately
106,000.
F-35
<PAGE> 121
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
In August 1993, Clear Shield National, Inc. received a subpoena from the
Antitrust Division of the United States Department of Justice relating to a
grand jury investigation of the disposable plastic cutlery industry. Clear
Shield National, Inc. has cooperated fully with the investigation.
The Company and its subsidiaries are involved in various legal proceedings
arising out of its business and other environmental matters, none of which is
expected to have a material adverse effect upon its results of operations, cash
flows or financial position.
12. CAPITAL STOCK, PAID IN CAPITAL, AND WARRANTS
Authorized shares of preferred stock ($.01 par value per share) and common
stock ($.01 par value per share) for the reorganized Envirodyne are 25,000,000
shares and 50,000,000 shares, respectively. 13,515,000 shares of common stock
were issued and outstanding as of December 29, 1994. In accordance with the Plan
of Reorganization, an additional 15,000 shares of common stock were issued to
the general unsecured creditors of Envirodyne during 1994. (Refer to Note 1.)
Prior to the December 31, 1993 reorganization, the authorized shares of
preferred stock and common stock were 1,000 shares and 320 shares, respectively.
Envirodyne issued 1,500,000 warrants pursuant to the Plan of
Reorganization. Each warrant is exercisable at any time until December 31, 1998
for one share of common stock at an exercise price of $17.25 per share. The
exercise price and the number of shares of common stock for which a warrant is
exercisable are subject to adjustment upon the occurrence of certain events.
The Plan of Reorganization provides for the issuance of common stock to
general unsecured creditors of Envirodyne. As of the date hereof, certain
parties have made claims as general unsecured creditors of Envirodyne the
allowance of which Envirodyne has denied. To the extent that such parties are
successful in establishing the allowance of their claims, they would be entitled
to receive common stock in satisfaction of such claims, which would result in
dilution to the existing holders of the common stock. (Refer to Note 11.)
13. INCOME TAXES
The provision (benefit) for income taxes consisted of:
<TABLE>
<CAPTION>
JANUARY 1, JANUARY 1, DECEMBER 27,
TO TO 1991 TO
DECEMBER 29, DECEMBER 31, DECEMBER 31,
1994 1993 1992
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Current:
Federal........................................... $ 200
Foreign........................................... 4,652 $ 2,453 $ 994
State and local...................................
------ ------- --------
4,852 2,453 994
------ ------- --------
Deferred:
Federal........................................... (194) 17,188 (13,206)
Foreign........................................... 128 (1,434) 174
State and local................................... 14 2,093 (1,962)
------ ------- --------
(52) 17,847 (14,994)
------ ------- --------
$4,800 $20,300 $(14,000)
====== ======= ========
</TABLE>
F-36
<PAGE> 122
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The income tax expense for the 1993 period was allocated between loss
before extraordinary gain for $12,000,000 and to the extraordinary gain for
$8,300,000.
A reconciliation from the statutory federal tax rate to the consolidated
effective tax rate follows:
<TABLE>
<CAPTION>
JANUARY 1, JANUARY 1, DECEMBER 27,
TO TO 1991 TO
DECEMBER 29, DECEMBER 31, DECEMBER 31,
1994 1993 1992
------------ ------------ ------------
<S> <C> <C> <C>
Statutory federal tax rate.......................... 35.0% 35.0% (34.0)%
Increase (decrease) in tax rate due to:
State and local taxes net of related federal tax
benefit........................................ .8 1.3 (2.5)
Net effect of taxes relating to foreign
operations..................................... 140.3 1.5 1.6
Intangibles amortization.......................... 214.1 2.3 5.8
U.S. alternative minimum tax
Non-taxable debt discharge income, fresh start
accounting and other bankruptcy related
expenses....................................... (22.9)
Tax rate changes.................................. 1.7
Other............................................. 13.8 .3 1.7
----- ----- -----
Consolidated effective tax rate..................... 404.0% 19.2% (27.4)%
===== ===== =====
</TABLE>
Temporary differences and carryforwards which give rise to a significant
portion of deferred tax assets and liabilities for 1994 are as follows:
<TABLE>
<CAPTION>
TEMPORARY DIFFERENCE TAX EFFECTED
----------------------------- -----------------------------
DEFERRED TAX DEFERRED TAX DEFERRED TAX DEFERRED TAX
ASSETS LIABILITIES ASSETS LIABILITIES
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Depreciation basis differences......... $319,256 $120,418
Inventory basis differences............ 31,456 12,268
Intangible basis differences........... 40,226 15,688
Lease transaction...................... $152,644 $59,531
Pension and healthcare................. 53,589 20,936
Reserves............................... 23,579 9,196
Foreign exchange and other............. 8,806 71,255 3,128 27,750
-------- -------- ------- --------
$238,618 $462,193 $92,791 $176,124
======== ======== ======= ========
</TABLE>
At December 29, 1994, the Company had $11,066,000 of undistributed earnings
of foreign subsidiaries considered permanently invested for which deferred taxes
have not been provided.
At December 29, 1994, the Company had federal income tax net operating loss
carryforwards of approximately $36 million. Such losses will expire in the year
2008, if not previously utilized. In addition the Company has alternative
minimum tax credit carryforwards of $3.5 million. Alternative minimum tax
credits have an indefinite carryforward period. Significant limitations on the
utilization of the net operating loss carryforwards and the alternative minimum
tax credit carryforwards exist under federal income tax rules and thus these
carryforwards have not been recognized for financial statement purposes due to
these limitations.
Domestic earnings or (losses) after extraordinary gain or loss and before
income taxes were approximately $(7,705,000), $107,622,000 and $(50,300,000) in
1994, 1993 and 1992, respectively. Foreign earnings or (losses) before income
taxes were approximately $8,893,000, $(1,733,000) and $(700,000) in 1994, 1993
and 1992, respectively.
F-37
<PAGE> 123
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
The Company joins in filing a U.S. consolidated federal income tax return
including all of its domestic subsidiaries.
14. RESEARCH AND DEVELOPMENT COSTS
Research and development costs are expensed as incurred and totaled
$16,852,000, $15,216,000 and $12,323,000, for 1994, 1993, and 1992,
respectively.
15. RELATED PARTY TRANSACTIONS
During each of 1994, 1993 and 1992, the Company paid DPK $770,000 for
management services. In fiscal 1994, 1993 and 1992, the Company made payments of
approximately $560,000, $354,000 and $681,000, respectively, to an affiliate of
DPK for the use of a jet aircraft on an as-needed basis.
During fiscal 1994, 1993, and 1992, the Company purchased product and
services from affiliates of DPK in the amounts of approximately $1,367,000,
$941,000 and $285,000, respectively. During fiscal 1994, 1993, and 1992, the
Company sublet office space from DPK for which it paid approximately $151,000,
$150,000 and $150,000, respectively, in rent.
During fiscal 1994, the Company advanced funds to and made payments on
behalf of DPK and Donald P. Kelly in the amount of $118,000 for legal fees
related to the litigation involving ARTRA GROUP Incorporated (refer to Note 11).
F-38
<PAGE> 124
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
16. BUSINESS SEGMENT INFORMATION AND GEOGRAPHIC AREA INFORMATION
Envirodyne primarily manufactures and sells polymeric food casings and
plastic packaging films and containers (food packaging products) and disposable
foodservice supplies. The Company's operations are primarily in North America
and Europe. Intercompany sales and charges (including royalties) have been
reflected as appropriate in the following information. Other income for 1994,
1993, and 1992 includes net foreign exchange transaction gains (losses) of
approximately $2,707,000, $(4,631,000), and $(7,568,000), respectively.
BUSINESS SEGMENT INFORMATION
<TABLE>
<CAPTION>
JANUARY 1, JANUARY 1, DECEMBER 27,
TO TO 1991 TO
DECEMBER 29, DECEMBER 31, DECEMBER 31,
1994 1993 1992
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net sales:
Food packaging products.............................. $530,179 $522,363 $ 513,777
Disposable foodservice supplies...................... 68,996 66,383 62,918
Other and eliminations............................... (146) (1,361) (990)
-------- -------- ----------
$599,029 $587,385 $ 575,705
======== ======== ==========
Earnings before income taxes:
Operating income:
Food packaging products.............................. $ 48,145 $ 53,432 $ 66,949
Disposable foodservice supplies...................... 6,514 5,223 5,913
Unallocated expenses, net -- primarily corporate..... (5,982) (5,023) (5,656)
-------- -------- ----------
48,677 53,632 67,206
Interest expense, net.................................. 49,207 30,259 105,558
Other expense (income), net............................ (1,668) 5,540 8,699
Fees and expenses associated with renegotiation of
debt................................................. 3,945
Minority interest in loss of subsidiary................ 50 717
-------- -------- ----------
$ 1,188 $ 18,550 $ (50,996)
======== ======== ==========
Identifiable assets:
Food packaging products.............................. $814,731 $790,125 $ 911,834
Disposable foodservice supplies...................... 71,530 64,879 89,753
Corporate and other, primarily cash equivalents...... 10,375 12,676 25,375
-------- -------- ----------
$896,636 $867,680 $1,026,962
======== ======== ==========
Depreciation and amortization under capital lease and
amortization of intangibles expense:
Food packaging products.............................. $ 47,207 $ 46,715 $ 43,857
Disposable foodservice supplies...................... 4,125 5,624 5,402
Corporate and other.................................. 55 59 51
-------- -------- ----------
$ 51,387 $ 52,398 $ 49,310
======== ======== ==========
Capital expenditures:
Food packaging products.............................. $ 28,534 $ 37,673 $ 26,618
Disposable foodservice supplies...................... 4,012 3,100 2,387
Corporate and other.................................. 20 114 13
-------- -------- ----------
$ 32,566 $ 40,887 $ 29,018
======== ======== ==========
</TABLE>
F-39
<PAGE> 125
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
GEOGRAPHIC AREA INFORMATION
<TABLE>
<CAPTION>
JANUARY 1, JANUARY 1, DECEMBER 27,
TO TO 1991 TO
DECEMBER 29, DECEMBER 31, DECEMBER 31,
1994 1993 1992
------------ ------------ ------------
(IN THOUSANDS)
<S> <C> <C> <C>
Net sales:
North/South American operations...................... $423,049 $426,644 $ 409,831
European operations.................................. 184,395 164,717 171,844
Other and eliminations............................... (8,415) (3,976) (5,970)
-------- -------- ----------
$599,029 $587,385 $ 575,705
======== ======== ==========
Operating profit:
North/South American operations...................... $ 28,124 $ 37,495 $ 48,263
European operations.................................. 20,553 16,137 18,943
-------- -------- ----------
$ 48,677 $ 53,632 $ 67,206
======== ======== ==========
Identifiable assets:
North/South American operations...................... $667,358 $669,240 $ 804,203
European operations.................................. 229,278 198,440 222,759
-------- -------- ----------
$896,636 $867,680 $1,026,962
======== ======== ==========
</TABLE>
The total assets and net assets of foreign businesses were approximately
$275,067 and $106,662 at December 29, 1994.
17. QUARTERLY DATA (UNAUDITED)
Quarterly financial information for 1994 is as follows (in thousands,
except for per share amounts):
<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
FISCAL 1994 QUARTER QUARTER QUARTER QUARTER ANNUAL
- ----------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C>
Net Sales.............................. $142,593 $150,788 $151,883 $153,765 $599,029
Operating Income....................... 9,710 18,739 9,755 10,473 48,677
Net income (loss)...................... (2,507) 3,448 (3,261) (1,292) (3,612)
Net income (loss) per share............ (0.19) 0.26 (0.24) (0.10) (0.27)
</TABLE>
The second quarter operating income benefitted from a $9.5 million
settlement of a patent infringement suit.
Net income (loss) per share amounts are computed independently for each of
the quarters presented using weighted average shares outstanding during each
quarter.
F-40
<PAGE> 126
ENVIRODYNE INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
18. STOCK OPTIONS
At December 29, 1994, the Company had outstanding options under the 1993
Stock Option Plan. Options were issued to certain employees to purchase shares
at not less than the fair market value of the shares on the grant date. The plan
options generally vest in three equal annual amounts beginning one year from the
grant date and expire ten years from the grant date.
Stock option activity for the year ended December 29, 1994, was:
<TABLE>
<CAPTION>
NUMBER OF
OPTION OPTION PRICE
SHARES PER SHARE
--------- ------------
<S> <C> <C>
Outstanding, December 31, 1993..................................... 0 --
Granted.......................................................... 402,020 $5.06
Exercised........................................................ -- --
Terminated....................................................... (13,100) 5.06
-------
Outstanding, December 29, 1994..................................... 388,920 5.06
=======
</TABLE>
At December 29, 1994, none of the option grants were exercisable because
the grants are conditioned upon the approval of the 1993 Stock Option Plan by
the Company's stockholders at the 1995 annual meeting.
19. FAIR VALUE OF FINANCIAL INSTRUMENTS
The following table presents the carrying value and estimated fair value as
of December 29, 1994 of the Company's financial instruments. (Refer to Notes 2
and 8.)
<TABLE>
<CAPTION>
CARRYING ESTIMATED
VALUE FAIR VALUE
-------- ----------
(IN THOUSANDS)
<S> <C> <C>
Assets:
Cash and equivalents............................................... $ 7,289 $ 7,289
Foreign currency contracts......................................... 4,614 4,649
Interest rate agreements........................................... 1,174 1,432
Liabilities:
Long-term debt (excluding capital lease)........................... 362,512 298,926
</TABLE>
20. SUBSEQUENT EVENT
On June 20, 1995, Envirodyne completed the sale of $160,000,000 aggregate
principal amount of senior secured notes to certain institutional investors in a
private placement. The senior secured notes were issued pursuant to an indenture
dated June 20, 1995 (Indenture) and consist of (i) $151,500,000 of 12% Senior
Secured Notes due 2000 and (ii) $8,500,000 of Floating Rate Senior Secured Notes
due 2000 (collectively, the Notes). Envirodyne used the net proceeds of the
offering primarily to (i) repay the Company's $86,125,000 domestic term loan,
(ii) repay the $68,316,000 of obligations under the Company's domestic and
foreign revolver and (iii) pay transaction fees and expenses. Concurrently with
the June 20, 1995 placement, Envirodyne entered into a new $20,000,000 domestic
revolving credit facility (Revolving Credit Facility) and a new $28,000,000
letter of credit facility (Letter of Credit Facility).
The $151,500,000 tranche of Notes bear interest at a rate of 12% per annum
and the $8,500,000 tranche bears interest at a rate equal to the six month
London Interbank Offered Rate (LIBOR) plus 575 basis points. The initial
interest rate on the floating rate tranche was approximately 11.7%. The interest
rate on the floating
F-41
<PAGE> 1
EXHIBIT 3.3
ARTICLES OF INCORPORATION
OF
GENERAL UTILITY SYSTEMS CORPORATION
KNOW ALL MEN BY THESE PRESENTS:
That we, the undersigned, have this day associated ourselves together
for the purpose of forming a corporation under the Corporation Code of the
State of California,
AND THAT WE HEREBY CERTIFY:
ARTICLE 1 - NAME
The name of the corporation is: GENERAL UTILITY SYSTEMS CORPORATION.
ARTICLE II - PURPOSES
The specific business, in which the corporation is to engage, is the
manufacturing, marketing, licensing, and installing of underground conduits,
and related products.
That in addition to the specific business in which the corporation is
to engage, the corporation shall be empowered to be engaged generally in the
business of:
(a) To manufacture, buy, sell, assemble and distribute any and all
products, wares or merchandise connected with, or unrelated to, the
aforementioned specific purpose for which the corporation is to be formed.
(b) To carry on any business whatsoever which this corporation may
deem proper or convenient in connection with any of the other purposes of which
may be calculated directly or indirectly to promote the interest of this
corporation, or to enhance the value of its property.
(c) To purchase, acquire, own, hold, use, lease, sell, exchange,
subdivide, mortgage, improve, cultivate, develop, maintain, construct, operate,
and generally deal in any and all real estate, improved or unimproved,
wheresoever situated, either in California, other states of the United States,
the District of Columbia, and territories and possessions of the United States
and in foreign countries.
-1-
<PAGE> 2
(d) To purchase, acquire, take hold, own, use and enjoy, and to
sell, lease, transfer, pledge, mortgage, convey, grant, assign or otherwise
dispose of, and generally to invest, trade, deal in and with oil royalties,
mineral rights of all kinds, mineral bearing lands and hydrocarbon products of
all kinds, oil, gas and mineral leases, and all rights and interests therein,
and in general products of the earth and deposits, both subsoil and surface, of
every nature and description.
(e) To enter into, make, perform and carry out contracts of very
kind for any lawful purpose without limit as to amount, with any person, firm,
association or corporation, municipality, country, parish, state, territory,
government (foreign or domestic) or other municipal or governmental
subdivision.
(f) To become a partner (either general or limited or both) and to
enter into agreements of partnership, with one or more other persons or
corporations, for the purpose of carrying on any business whatsoever which this
corporation may deem proper or convenient in connection with any of the
purposes herein set forth or otherwise, or with may be calculated, directly or
indirectly, to promote the interest of this corporation or to enhance the value
of its property or business.
(g) To acquire, by purchase or otherwise, the goodwill, business,
property rights, franchises and assets of every kind, with or without
undertaking, either wholly or in part, the liabilities of any person, firm,
association or corporation; and to acquire any property or business as a going
concern or otherwise, (a) by purchase of the assets thereof wholly or in part,
(b) by acquisition of the shares or any part thereof, or (c) in any other
manner; and to pay for the same in cash or in the shares or bonds or other
evidences of indebtedness of this corporation, or otherwise; to hold, maintain
and operate, or in any manner dispose of the whole or any part of the goodwill,
business, rights and property so acquired, and to conduct, in any lawful
manner, the whole or any part of any business so acquired; and to exercise all
the powers necessary or convenient in and about the management of such
business.
(h) To take, purchase and otherwise acquire, own, hold, use, sell,
assign, transfer, exchange, lease, mortgage, convey in trust, pledge,
hypothecate, grant licenses in respect of and otherwise dispose of letters
patent of the United States or any foreign country, patent rights, licenses and
privileges, inventions, improvements and processes, copyrights, trademarks and
trade names, and government, state, territorial, country and municipal grants
and concessions of every character which this corporation may deem advantageous
in the prosecution of its business or in the maintenance, operation,
development or extension of its properties.
-2-
<PAGE> 3
(i) To subscribe or cause to be subscribed for, and to take,
purchase and otherwise acquire, own, hold, use, sell, assign, transfer,
exchange, distribute and otherwise dispose of the whole or any part of the
shares of the capital stock, bonds, coupons, mortgages, deeds of trust,
debentures, securities, notes, goodwill, assets and properties of any and every
kind, or any part thereof of any other corporation, association, firm,
partnership, or other business entity, now or hereafter existing to exercise
all of the rights, powers and privileges of ownership of every kind and
description, including the right to vote thereon, with power to designate some
person or persons for that purpose from time to time, and to the same extent as
natural persons might or could do.
(j) To borrow and lend money, and to endorse, guarantee, co-sign
evidences of indebtedness or other securities.
(k) To issue bonds, notes, debentures, or other obligations of
this corporation from time to time for any of the objects or purposes of this
corporation, and to secure the same by mortgage, deed of trust, pledge or
otherwise acquire its own bonds, debentures or other evidences of its
indebtedness or obligations; to purchase, hold, sell, and transfer the shares
of its own capital stock to the extent and in the manner provided by the laws
of the State of California as the same are now in force or may be hereafter
amended.
(l) To conduct and carry on, directly or indirectly, research,
development and promotional or experimental activities, and to promote or aid
financially or otherwise, any person, firm or corporation engaged in such
activities, or any of them.
(m) To carry on any business whatsoever, either as principal,
agent or partner, which this corporation may deem proper or convenient in
connection with any of the foregoing purposes or otherwise, or which may be
calculated directly or indirectly to promote the interests of this corporation
or to enhance the value of its property or business; and to conduct its
business in this State, in other states, in the District of Columbia, in the
territories and possessions of the United States, and in foreign countries.
(n) To have and to exercise all the powers conferred by the laws
of California upon corporations formed under the laws pursuant to and under
which this corporation is formed, as such laws are now in effect or may at any
time hereafter be amended.
The foregoing statement of purposes shall be construed as a statement
of both purposes and powers, and the purposes and powers stated in each clause
shall, except where otherwise expressed, be in nowise limited or restricted by
any reference to or inference from the terms or provisions of any other clause,
but shall be regarded as independent purposes and powers.
-3-
<PAGE> 4
ARTICLE III - PRINCIPAL OFFICE
The county in the State of California where the principal office for
the transaction of business of the corporation is to be located in Los Angeles
County.
ARTICLE IV - DIRECTORS
(a) The number of directors of this corporation shall be three (3).
(b) First Directors: The names and addresses of the persons who
are appointed as First Directors are:
Names Addresses
Mark Lindsey 1314 Durant Street
Santa Ana, California
Joseph Hendricks 15712 Williams Street
Tustin, California
W. Mike McCray 13791 Judy Ann Lane
Santa Ana, California
(c) The number of directors of the corporation set forth in clause
(a) of this Article IV shall constitute the authorized number of directors
until changed by an amendment to these Articles of Incorporation or by a By-Law
duly adopted or by the written consent of the holders of a majority of the then
outstanding shares of stock of the corporation. (such By-Law may either fix
the exact number or may state that the number shall not be less than a stated
minimum (which in no case shall be less than five (5) nor more than a stated
maximum (which in no case shall exceed said stated minimum by more than three
(3), and in the event that the By-Laws provide for such an indefinite number of
directors, the exact number of directors shall be fixed within the limits
specified in the By-Laws, by a By-Law or amendment thereof duly adopted by the
shareholders or by the Board of Directors.
ARTICLE V - CAPITALIZATION
The total number of shares which the corporation is authorized to
issue is One Hundred Thousand (100,000). The aggregate par value of said
shares is One Hundred Thousand Dollars ($100,000.00) and the par value of each
share is One Dollar ($1.00).
This article can be amended only by the vote or written consent of
Fifty-One percent (51%) of the outstanding shares.
-4-
<PAGE> 5
ARTICLE VI - ASSESSMENT OF SHARES
There shall be no power to levy any assessment upon any shares of
stock of this corporation.
ARTICLE VII - PRE-EMPTIVE RIGHTS
Each shareholder or subscriber to shares of this corporation shall be
entitled to full-preemptive right or preferential rights as such rights have
been heretofore defined as common law, to purchase and/or subscribe for his
proportionate part of any shares which may be issued at any future time by this
corporation.
IN WITNESS WHEREOF, for the purpose of forming this corporation under
the laws of the State of California, we, the undersigned, constituting the
incorporators of this corporation, and including all of the persons named
herein as the first directors have executed these Articles of Incorporation
this 9th day of November, 1971.
/s/ Mark Lindsey
--------------------------
/s/ Joseph Hendricks
--------------------------
/s/ W. Mike McCray
--------------------------
STATE OF CALIFORNIA )
) ss.
COUNTY OF ORANGE )
On this 9th day of November, 1971, before me, a Notary Public in and
for said County and State, residing therein, duly commissioned and sworn,
personally appeared Mark Lindsey, Joseph Hendricks, and W. Mike McCray known to
me to be the persons whose names are subscribed to the foregoing Articles of
Incorporation, and who are also named therein as directors, and each duly
acknowledged to me that they executed the same.
IN WITNESS WHEREOF, I have hereunto affixed my hand and official seal.
/s/ Barb Ellenck
--------------------------
Notary Public in and
for said County and State
(Seal)
-5-
<PAGE> 6
NAME CHANGE TO: COMPOSITE MATERIALS, INC.
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
OF
GENERAL UTILITY SYSTEMS CORPORATION
GERALD A. MARXMAN and FRANK J. KOCSIS certify:
1. That they are the Vice President and Secretary, respectively,
of GENERAL UTILITY SYSTEMS CORPORATION, a California corporation.
2. That pursuant to Section 814.5 of the California Corporations
Code and the By-Laws of the corporation by unanimous written consent that the
board of directors of said corporation adopted the following resolution:
"RESOLVED: that Article I of the Articles of Incorporation of this
corporation be amended to read as follows:
'The name of the corporation is COMPOSITE MATERIALS, INC.'"
3. That the sole shareholder has adopted said amendment by
written consent. That the wording of the amended article, as set forth in the
shareholder's written consent, is the same as set forth in the directors'
resolution in Paragraph 2 above.
4. That the number of shares represented by written consent is
100. That the total number of shares entitled to vote on or consent to the
amendment is 100.
/s/ Gerald A. Marxman
--------------------------
Vice President
/s/ Frank J. Kocsis
--------------------------
Secretary
Each of the undersigned declares under penalty of perjury that the
matters set forth in the foregoing certificate are true and correct. Executed
at Los Angeles, California, on February 26, 1974.
/s/ Gerald A. Marxman /s/ Frank J. Kocsis
- --------------------------- ----------------------------
<PAGE> 7
NAME CHANGED TO: CMI-LIQUIDATING CORP.
CERTIFICATE OF AMENDMENT
OF
ARTICLES OF INCORPORATION
GERALD MARXMAN and MAXINE H. LINDE, certify:
1. That they are the President and the Secretary respectively of
Composite Materials, Inc., a California corporation.
2. That by unanimous written consent of the Board of Directors of
this corporation on July 26, 1976, the following resolution was adopted by the
directors:
"RESOLVED: That Article I of the Articles of Incorporation of
this corporation be amended to read as follows:
'The name of this corporation is CMI-LIQUIDATING CORP.'"
This consent action is taken under authority of Section 11, Article II
of the Company's By-Laws.
3. That the shareholders have adopted said amendment by written
consent. That the wording of the amended Article as set forth in the
shareholders' written consent is the same as that set forth in the Directors'
resolution referred to in Paragraph 2 above.
4. That the number of shares represented by written consent is
100 shares of Common Stock. That the total number of shares entitled to vote
on or consent to the amendment is 100 shares of Common Stock.
/s/ GERALD MARXMAN
--------------------------
/s/ MAXINE H. LINDE
--------------------------
Each of the undersigned declares under penalty of perjury that the
matters set forth in the foregoing certificate are true and correct. Executed
at Los Angeles, California, on July 26, 1976.
/s/ Gerald A. Marxman /s/ Maxine H. Linde
- ------------------------- ------------------------
<PAGE> 8
AGREEMENT OF MERGER
BETWEEN
OLI, INC.
ENVIRODYNE PRODUCTS CORP.
AND
CMI-LIQUIDATING CORP.
This Agreement of Merger is entered into and between CMI-LIQUIDATING
CORP., a California corporation (herein sometimes the "Surviving Corporation")
and OLI, INC., a Minnesota corporation and ENVIRODYNE PRODUCTS CORP., a
California corporation (herein sometimes called the "Merging Corporations").
(1) Merging Corporations shall be merged into Surviving
Corporation without amendment to the articles of the Surviving Corporation.
(2) The manner and basis of converting the outstanding shares of
the capital stock of the merging corporation shall be as follows: Inasmuch as a
sole stockholder owns all of the issued and outstanding stock of the merging
corporations and the surviving corporation, forthwith upon the merger becoming
effective, all of the issued and outstanding shares of the capital stock of the
merging corporations shall be surrendered and canceled, no shares of the
surviving corporation shall be issued in exchange therefor.
(3) The outstanding shares of the Surviving Corporation shall
remain outstanding and are not affected by the merger.
(4) Merging Corporations shall from time to time, as and when
requested by the Surviving Corporation, execute and deliver all such documents
and instruments and take all such action necessary or desirable to evidence or
carry out this merger.
(5) The effect of the merger and the effective date of the merger,
are as prescribed by law.
-1-
<PAGE> 9
IN WITNESS WHEREOF the parties have executed this Agreement of Merger
on December 14, 1981.
OLI, INC.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY R. BURESH
--------------------------
Secretary
ENVIRODYNE PRODUCTS CORP.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY R. BURESH
--------------------------
Secretary
CMI-LIQUIDATING CORP.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY R. BURESH
--------------------------
Secretary
-2-
<PAGE> 10
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Maxine H. Linde and Jeffrey J. Buresh, certify that:
(1) They are the President and Secretary respectively, of OLI,
INC., a Minnesota corporation.
(2) The principal terms of the Agreement of Merger in the form
attached were duly adopted by the Board of Directors of the corporation.
(3) The Agreement of Merger was approved by the holders of 100% of
the outstanding shares of the corporation. The total number of shares issued
is 1,000.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
The undersigned declare under penalty of perjury that the matters set forth in
the foregoing certificate are true of their knowledge.
Executed at Chicago, Illinois on this 14th day of December, 1981
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
<PAGE> 11
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Maxine H. Linde and Jeffrey J. Buresh, certify that:
(1) They are the President and Secretary respectively, of
ENVIRODYNE PRODUCTS CORP., a California corporation.
(2) The principal terms of the Agreement of Merger in the form
attached were duly adopted by the Board of Directors of the corporation.
(3) The Agreement of Merger was approved by the holders of 100% of
the outstanding shares of the corporation. The total number of shares issued
is 500.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
The undersigned declare under penalty of perjury that the matters set forth in
the foregoing certificate are true of their knowledge.
Executed at Chicago, Illinois on this 14th day of December, 1981.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
<PAGE> 12
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Maxine H. Linde and Jeffrey J. Buresh, certify that:
(1) They are the President and Secretary respectively, of
CMI-LIQUIDATING CORP., a California corporation.
(2) The principal terms of the Agreement of Merger in the form
attached were duly adopted by the Board of Directors of the corporation.
(3) The Agreement of Merger was entitled to be and was approved by
the Board of Directors alone under the provisions of section 1201 of the
Corporations Code.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
The undersigned declare under penalty of perjury that the matters set forth in
the foregoing certificate are true of their knowledge.
Executed at Chicago, Illinois on this 14th day of December, 1981.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
<PAGE> 13
NAME CHANGE TO: CLEAR SHIELD NATIONAL, INC.
AGREEMENT OF MERGER
BETWEEN
CLEAR SHIELD NATIONAL, INC.
AND
CMI-LIQUIDATING CORP.
This Agreement of Merger is entered into and between CLEAR SHIELD
NATIONAL, INC., an Illinois corporation (herein sometimes the "Merging
Corporation") and CMI-LIQUIDATING CORP., a California corporation (herein
sometimes called the "Surviving Corporation").
(1) Merging Corporation shall be merged into Surviving Corporation.
(2) Article I of the surviving corporation shall be amended to
read as follows:
The name of this corporation is CLEAR SHIELD NATIONAL, INC.
(3) The manner and basis of converting the outstanding shares of
the capital stock of the merging corporation shall be as follows: Inasmuch as a
sole stockholder owns all of the issued and outstanding stock of the merging
corporation and the surviving corporation, forthwith upon the merger becoming
effective, all of the issued and outstanding shares of the capital stock of the
merging corporation shall be surrendered and canceled, no shares of the
surviving corporation shall be issued in exchange therefor.
(4) The outstanding shares of the Surviving Corporation shall
remain outstanding and are not affected by the merger.
(5) Merging Corporation shall from time to time, as and when
requested by the Surviving Corporation, execute and deliver all such documents
and instruments and take all such action necessary or desirable to evidence or
carry out this merger.
(6) The effect of the merger and the effective date of the merger,
are as prescribed by law.
-1-
<PAGE> 14
IN WITNESS WHEREOF the parties have executed this Agreement of Merger
on September 5th, 1984.
CLEAR SHIELD NATIONAL, INC.
/s/ ROGER W. CAPPELLO
--------------------------
President
/s/ WILLIAM DOLATOWSKI
--------------------------
Secretary
CMI-LIQUIDATING CORP.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY R. BURESH
--------------------------
Secretary
-2-
<PAGE> 15
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Roger W. Cappello and William Dolatowski, certify that:
(1) They are the President and Secretary respectively, of CLEAR
SHIELD NATIONAL, INC., an Illinois corporation.
(2) The principal terms of the Agreement of Merger in the form
attached were duly adopted by the Board of Directors of the corporation.
(3) The Agreement of Merger was entitled to be and was approved by
the Board of Directors alone under the provisions of section 1201 of the
Corporations Code.
/s/ ROGER W. CAPPELLO
--------------------------
President
/s/ WILLIAM DOLATOWSKI
--------------------------
Secretary
The undersigned declare under penalty of perjury that the matters set forth in
the foregoing certificate are true of their knowledge.
Executed at Wheeling, Illinois on this 5th day of September, 1984.
/s/ ROGER W. CAPPELLO
--------------------------
President
/s/ WILLIAM DOLATOWSKI
--------------------------
Secretary
<PAGE> 16
CERTIFICATE OF APPROVAL
OF
AGREEMENT OF MERGER
Maxine H. Linde and Jeffrey J. Buresh, certify that:
(1) They are the President and Secretary respectively, of
CMI-LIQUIDATING CORP., a California corporation.
(2) The principal terms of the Agreement of Merger in the form
attached were duly adopted by the Board of Directors of the corporation.
(3) The Agreement of Merger was entitled to be and was approved by
the Board of Directors alone under the provisions of section 1201 of the
Corporations Code.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
The undersigned declare under penalty of perjury that the matters set forth in
the foregoing certificate are true of their knowledge.
Executed at Chicago, Illinois on this 4th day of September, 1984.
/s/ MAXINE H. LINDE
--------------------------
President
/s/ JEFFREY J. BURESH
--------------------------
Secretary
<PAGE> 1
EXHIBIT 3.4
CLEAR SHIELD NATIONAL, INC.
BYLAWS
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE.--The Registered office shall be
established and maintained at 1175 South Wheeling Road, Wheeling, Illinois
60093, and DENIS H. DAVIDSON the registered agent of this corporation in charge
thereof.
SECTION 2. OTHER OFFICES.--The corporation may establish other
offices, either within or without the State of Illinois, at such place or
places as the Board of Directors from time to time may designate or the
business of the corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS.--Annual meetings of stockholders shall be
held at Chicago, Illinois, on the first Monday of June of each year, commencing
with 1983, at the hour stated in the notice, or said meetings may be held at
such time and place, within or without the State of Illinois, as the Board of
Directors by resolution shall determine, and as set forth in the notice of the
meeting.
If the date of the annual meeting shall fall on a legal holiday of the
state in which the meeting is to be held, the meeting shall be held on the next
succeeding business day.
At each such annual meeting, the stockholders entitled to vote shall
elect a Board of Directors, and they may transact such other corporate business
as shall be stated in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS.--Special meetings of the stockholders,
for any purpose or purposes, may be called by the President or the Secretary,
or by resolution of the Board of Directors, and may be held at such time and
place as shall be stated in the notice of the meeting.
SECTION 3. NOTICE OF MEETINGS.--Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given as it appears on the records of the corporation, not
less than ten (10) nor more than fifty (50) days prior to the date of the
meeting. No business other than that stated in the notice shall be transacted
at any meeting without the unanimous consent of all of the stockholders
entitled to vote thereat.
<PAGE> 2
SECTION 4. VOTING.--Each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation, the provisions of these
Bylaws, and the laws of the State of Illinois, shall be entitled to one vote,
in person or by proxy, for each share of stock entitled to vote held by such
stockholder, but no proxy shall be voted after three (3) years from its date
unless such proxy provides for a longer period. Upon the demand of any
stockholder, the vote for Directors and the vote upon any question before the
meeting shall be by written ballot. All elections for Directors be decided by
plurality vote; all other questions shall be decided by majority vote, except
as otherwise provided by the Certificate of Incorporation or the laws of the
State of Illinois.
A complete list of the stockholders entitled to vote at a meeting,
arranged in alphabetical order, with the address of each, and the number of
shares held by each, 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 (10) 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 registered office of the
corporation in the StVate of Illinois. The list shall also be produced and
kept available at the time and place of the meeting, during the entire time
thereof, and may be inspected by any stockholder or his proxy who may be
present.
SECTION 5. QUORUM.--Except as otherwise required by law, by the
Certificate of Incorporation, or by these Bylaws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
issued and outstanding and entitled to vote shall constitute a quorum at all
meetings of stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat,
present either in person or by proxy, shall have power to adjourn the meeting,
from time to time, without notice other than an announcement at the meeting,
until the requisite amount of stock entitled to vote shall be present. At any
such adjourned meeting at which the requisite amount of stock entitled to vote
shall be represented, any business may be transacted which might have been
transacted at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed shall be entitled to vote
at any adjournment or adjournments thereof.
SECTION 6. ACTION WITHOUT MEETING.--Any action to be taken by the
stockholders may be taken without a meeting if, prior to such action, all
stockholders entitled to vote thereon shall consent to the action by a writing
filed with the records of the meeting of stockholders, and such consent shall
be treated for all purposes as a vote at a meeting.
<PAGE> 3
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM.--The number of Directors shall be three
(3).
The Directors shall be elected at the annual meeting of stockholders,
and each Director shall be elected to serve until his successor shall be
elected and shall have qualified. Directors need not be stockholders.
SECTION 2. QUORUM.--Majority of the Directors shall constitute a
quorum for the transaction of business. If, at any meeting of the Board, there
shall be less than a quorum present, a majority of those present may adjourn
the meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
so adjourned.
SECTION 3. ELECTION OF OFFICERS.--At the first meeting, or at any
subsequent meeting called for that purpose, the Directors shall elect the
officers of the corporation, as more specifically set forth in ARTICLE IV of
these Bylaws. Such officers shall hold office until the next annual election
of officers, or until their successors are elected and shall have qualified.
SECTION 4. REGULAR MEETINGS.--Regular meetings of the Directors may
be held, without notice, at such places and times as from time to time shall be
determined by resolution of the Board of Directors.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Directors may
be called by the President, or by the Secretary on the written request of any
two Directors on at least two (2) hours' notice to each Director.
SECTION 6. PLACE OF MEETINGS.--The Directors may hold their meetings
at such places as from time to time may be determined by resolution of the
Board.
SECTION 7. ACTION WITHOUT MEETING.--Any action required or permitted
to be taken at any meeting of the Board of Directors may be taken without a
meeting if, prior to such action, a written consent thereto is signed by all
members of the Board and such written consent is filed with the minutes of
proceedings of the Board.
SECTION 8. POWERS.--The Board of Directors shall exercise all of the
powers of the corporation, except such as are by law, by the Articles of
Incorporation, or by these Bylaws conferred upon or reserved to the
stockholders.
<PAGE> 4
SECTION 9. COMPENSATION.--Directors shall not receive any stated
salary for their services as Directors but, by resolution of the Board, a fixed
fee and expenses of attendance may be allowed for attendance at each meeting.
Nothing herein contained shall be construed to preclude any Director
from serving the corporation in any other capacity as an officer, agent or
otherwise, and receiving compensation therefor.
ARTICLE IV
OFFICERS
SECTION 1. OFFICERS.--The officers shall be elected at the first
meeting of the Board of Directors after each annual meeting of stockholders.
The Directors shall elect a President, a Secretary and a Treasurer; they may
also elect one or more Vice President, and such Assistant Secretaries and
Assistant Treasurers as they may deem proper. None of the officers of the
corporation need be a Director. Any one person may hold two or more offices,
except those of President and Secretary. However, any person holding two or
more offices shall not sign any instrument in the capacity of more than one
office.
The Board of Directors may appoint such other officers and agents as
it may deem advisable, who shall hold office for such terms and shall exercise
such powers and perform such duties as from time to time shall be determined by
the Board of Directors.
SECTION 2.--PRESIDENT.--The President shall be the chief executive
officer of the corporation, and shall have the general powers and duties of
supervision and management usually vested in the office of President of a
corporation. He shall preside at all meetings of the stockholders, if present
thereat, and at all meetings of the Board of Directors. He shall have general
supervision, direction and control of the business of the corporation. Except
as the Board of Directors shall authorize the executive thereof in some other
manner, he shall execute bonds, mortgages and other contracts on behalf of the
corporation, and he shall cause the corporate seal to be affixed to any
instrument requiring it, and when so affixed the seal shall be attested by the
Secretary or the Treasurer, or an Assistant Secretary or an Assistant
Treasurer.
SECTION 3. VICE PRESIDENTS.--Each Vice President shall have such
powers and shall perform such duties as shall be assigned to him by the
Directors, and, in the absence of the President, or in the event of his
inability to act, the Vice Presidents, in the order of their seniority, shall
perform the functions of President.
SECTION 4. SECRETARY.--The Secretary shall give or cause to be given,
notice of all meetings of stockholders and Directors, and all other notices
required by law or by these Bylaws, and, in case of his absence or refusal or
neglect so to do, any such notice may
<PAGE> 5
be given by any person thereunto directed by the President, the Board of
Directors, or the stockholders, upon whose requisition the meeting is called as
provided in these Bylaws. He shall record all the proceedings of the meetings
of the stockholders and of the Board of Directors in a book to be kept for that
purpose, and shall perform such other duties as may be assigned to him by the
Directors or the President. He shall have custody of the corporate seal, and
shall affix the same to all instruments requiring it, when authorized by the
President or the Board of Directors, and shall attest the same.
SECTION 5. TREASURER.--The Treasurer shall have the custody of the
corporate funds and securities, and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation. He shall
deposit all monies and other valuables in the name and to the credit of the
corporation in such depositories as may be designated by the Board of
Directors.
The Treasurer shall disburse the funds of the corporation as may be
ordered by the Board of Directors or the President, taking proper vouchers for
such disbursements. He shall render to the President and the Board of
Directors, at the regular meetings of the Board, or whenever they may request
it, an accounting of all his transactions as Treasurer, and of the financial
condition of the corporation.
SECTION 6. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.--Assistant
Secretaries and Assistant Treasurers, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the Board of Directors.
ARTICLE V
RESIGNATIONS: FILLING OF VACANCIES:
INCREASE IN NUMBER OF DIRECTORS:
REMOVAL FROM OFFICE
SECTION 1. RESIGNATIONS.--Any Director or officer may resign at any
time. Such resignation shall be made in writing, and shall take effect at the
time specified therein, and, if no time be specified, at the time of its
receipt by the President or the Secretary. The acceptance of a resignation
shall not be necessary to make it effective.
SECTION 2. FILLING OF VACANCIES.--If the office of any officer or
Director becomes vacant, the remaining Directors in office, although less than
a quorum, may appoint, by a majority vote, any qualified person to fill such
vacancy, who shall hold office for the unexpired term of his predecessor, or
until his successor shall be duly chosen and shall have qualified.
Any vacancy occurring by reason of an increase in the number of
Directors may be filled by action of a majority of the entire Board, for the
term of office continuing only until the next
<PAGE> 6
election of Directors by the stockholders, or it may be filled by the
affirmative vote at an election of Directors.
SECTION 3. INCREASE IN NUMBER OF DIRECTORS.--The number of Directors
may be increased at any time by the affirmative vote of a majority of the
entire Board, or by the affirmative vote of a majority in interest of the
stockholders, at a special meeting called for that purpose, and, by like vote,
pursuant to SECTION 2 above, the additional Directors may be chosen at such
meeting to hold office until the next annual election or until their successors
are elected and shall have qualified.
SECTION 4. REMOVAL.--At a meeting of stockholders expressly called
for such purpose, any or all of the members of the Board of Directors may be
removed, with or without cause, by vote of the holders of a majority of the
shares then entitled to vote at an election of Directors, and said stockholders
may elect, at the meeting called for the purpose of removal, a successor or
successors to fill any resulting vacancies for the unexpired terms of the
removed Directors.
Any officer elected or appointed by the Board of Directors may be
removed by a majority vote of the entire Board whenever, in its judgment, the
best interests of the corporation will be served thereby.
ARTICLE VI
CAPITAL STOCK
SECTION 1. CERTIFICATES OF STOCK.--Certificates of stock, numbered,
and sealed with the seal of the corporation, and signed by the President or a
Vice President, and the Secretary or an Assistant Secretary, or the Treasurer
or an Assistant Treasurer, shall be issued to each stockholder certifying to
the number of shares owned by him in the corporation. When such certificates
are countersigned by (1) a transfer agent other than the corporation or its
employee, or (2) by a registrar other than the corporation or its employee, any
other signatures on the certificate may be facsimiles.
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, it may be issued by the corporation with the same effect as
if he were such officer, transfer agent or registrar at the date of issue.
SECTION 2. LOST CERTIFICATES.--A new certificate of stock may be
issued in place of any certificate theretofore issued by the corporation and
alleged to have been lost or destroyed, and the Directors may, at their
discretion, request the owner of the lost or destroyed certificates, or his
legal representative, to give the corporation a bond, in such sum at they may
direct, but not exceeding double the value of the stock, to indemnify the
<PAGE> 7
corporation against any claim that may be made against it on account of the
alleged loss of any such certificate.
SECTION 3. TRANSFER OF SHARES.-- The shares of stock of the
corporation shall be transferable pursuant to the provisions of the Uniform
Commercial Code.
SECTION 4. 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, or to express
consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect to any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall be not more than
sixty (60) nor less than ten (10) days prior to any other action. 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, however, that the Board of Directors may fix a new record date for
the adjourned meeting.
SECTION 5. DIVIDENDS.--Subject to the provisions of the Articles of
Incorporation and the laws of the State of Illinois, the Board of Directors, at
any regular or special meeting, may declare dividends upon the capital stock of
the corporation, as and when they may deem expedient.
ARTICLE VII
MISCELLANEOUS PROVISIONS
SECTION 1. CORPORATE SEAL.--The Board of Directors shall adopt and
may alter a common seal of the corporation. Said seal shall be circular in
form and shall contain the name of the corporation, the year of its creation
and the words: "CORPORATE SEAL ILLINOIS." If may be used by causing it or a
facsimile thereof to be impressed, affixed or otherwise reproduced.
SECTION 2. FISCAL YEAR.--The fiscal year of the corporation shall be
a calendar year.
SECTION 3. CHECKS, DRAFTS, NOTES.--All checks, drafts or other orders
for the payment of money, notes or other evidences of indebtedness issued in
the name of the corporation, shall be signed by such officer or officers, agent
or agents of the corporation, and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
SECTION 4. CORPORATE RECORDS.--The corporation shall keep correct and
complete books of account and minutes of the proceedings of its stockholders
and Directors, as well as an
<PAGE> 8
original stock ledger or list of stockholders, containing the names and
addresses of the stockholder, the number of shares held by them and the date of
issuance of said certificates of stock.
Any stockholder of record, in person or by attorney or other agent,
upon written demand under oath stating the purpose thereof, shall have the
right, during the usual hours for business, to inspect for any proper purpose
the books and records of the corporation, as well as its stock ledger and/or
list of stockholders, and to make copies or extracts therefrom. Such demand
under oath shall be directed to the corporation at its registered office in the
State of Illinois or at its principal place of business.
SECTION 5. NOTICE AND WAIVER OF NOTICE.--Whenever, pursuant to the
laws of the State of Illinois or these Bylaws, any notice is required to be
given, personal notice is not meant unless expressly so stated, and any notice
so required shall be deemed to be sufficient if given by depositing the same in
the United States mail, postage prepaid, addressed to the person entitled
thereto at his address as it appears on the records of the corporation, and
such notice shall be deemed to have been given on the day of such mailing.
Stockholders not entitled to vote shall not be entitled to receive notice of
any meetings except as otherwise provided by statute.
Any notice required to be given may be waived, in writing, by the
person or persons entitled to such notice, whether before or after the time
stated therein.
ARTICLE VIII
AMENDMENTS
SECTION 1. AMENDMENTS OF BYLAWS.--These Bylaws may be altered or
repealed, and Bylaws may be made at any annual meeting of stockholder, or at
any special meeting thereof if notice of the proposed alteration or repeal, or
Bylaw or Bylaws to be made, be contained in the notice of such special meeting,
by the affirmative vote of a majority of the stock issued and outstanding and
entitled to vote thereat; or by the affirmative vote of a majority of the
entire Board of Directors, at any regular meeting of the Board, or at any
special meeting thereof if notice of the proposed alteration or repeal, or
Bylaw or Bylaws to be made, be contained in the notice of such special meeting.
<PAGE> 1
EXHIBIT 3.5
AGREEMENT OF MERGER
OF
SANDUSKY PLASTICS, INC.
(a Delaware corporation)
AND
ENVIRODYNE WN CORP.
(a Delaware corporation)
AGREEMENT OF MERGER approved on December 29, 1988, by Sandusky
Plastics, Inc. a business corporation of the State of Delaware, and by
resolution adopted by its Board of Directors on said day, and approved on
December 29, 1988, by Envirodyne WN Corp., a business corporation of the State
of Delaware, and by resolution adopted by its Board of Directors on said date.
WHEREAS, Sandusky Plastics, Inc. is a business corporation of the
State of Delaware with its registered office therein located at 1013 Lancaster
Pike, City of Wilmington, County of New Castle; and
WHEREAS, the total number of shares of stock which Sandusky Plastics,
Inc. has authority to issue is 3,000, all of which are of one class and of a
par value of $.01 each; and
WHEREAS, Envirodyne WN Corp. is a business corporation of the State of
Delaware with its registered office therein located at 229 South State Street,
City of Dover, County of Kent; and
WHEREAS, the total number of shares of stock which Envirodyne WN Corp.
has authority to issue is 50,000, all of which are of one class and of a par
value of $1.00 each; and
WHEREAS, Sandusky Plastics, Inc. and Envirodyne WN Corp. and the
respective Boards of Directors thereof deem it advisable and to the advantage,
welfare and best interests of said corporations and their respective
stockholders to merge Sandusky Plastics, Inc. with and into Envirodyne WN Corp.
pursuant to the provisions of the General Corporation Law of the State of
Delaware upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
agreement of the parties hereto, being thereunto duly approved by a resolution
adopted by the Board of Directors of Sandusky Plastics, Inc. and duly approved
by a resolution adopted by the Board of Directors of Envirodyne WN Corp. the
Agreement of Merger and the terms and conditions thereof and the mode of
carrying the same into effect, together with any provisions required or
permitted to be set forth therein, are hereby determined and agreed upon as
hereinafter in this Agreement set forth.
<PAGE> 2
1. Sandusky Plastics, Inc. and Envirodyne WN Corp. shall,
pursuant to the provisions of the General Corporation Law of the State of
Delaware, be merged with and into a single corporation, to wit, Envirodyne WN
Corp., which shall be the surviving corporation from and after the effective
time of the merger, and which is sometimes hereinafter referred to as the
"surviving corporation", and which shall continue to exist as said surviving
corporation under the name Sandusky Plastics, Inc. pursuant to the provisions
of the General Corporation Law of the State of Delaware.
The separate existence of Sandusky Plastics, Inc., which is
hereinafter sometimes referred to as the "terminating corporation", shall cease
at the said effective time in accordance with the provisions of said General
Corporation Law of the State of Delaware.
2. The Certificate of Incorporation of the surviving corporation,
as now in force and effect, shall continue to be the Certificate of
Incorporation of said surviving corporation except that Article I thereof,
relating to the name of the corporation is hereby amended and changed so as to
read as follows at the effective time of the merger:
"The name of the corporation is
SANDUSKY PLASTICS, INC."
and said Certificate of Incorporation as herein amended and changed shall
continue in full force and effect until further amended and changed int he
manner prescribed by the provisions of the General Corporation Law of the State
of Delaware.
3. The present by-laws of the surviving corporation will be the
by-laws of said surviving corporation and will continue in full force and
effect until changed, altered or amended as therein provided and in the manner
prescribed by the provisions of the General Corporation Law of the State of
Delaware.
4. The directors and officers in office of the surviving
corporation at the effective time of the merger shall be the members of the
first Board of Directors and the first officers of the surviving corporation,
all of whom shall hold their directorships and offices until the election and
qualification of their respective successors or until their tenure is otherwise
terminated in accordance with the by-laws of the surviving corporation.
5. Each issued share of the terminating corporation shall, at the
effective time of the merger, be retired and not converted into any shares of
the surviving corporation. The issued shares of the surviving corporation
shall not be converted or exchanged in any manner, but each said share which is
issued as of the effective time of the merger shall continue to represent one
issued share of the surviving corporation.
<PAGE> 3
6. In the event that this Agreement of Merger shall have been
fully adopted upon behalf of the terminating corporation and of the surviving
corporation in accordance with the provisions of the General Corporation Law of
the State of Delaware, the said corporations agree that they will cause to be
executed and filed and recorded any document or documents prescribed by the
laws of the State of Delaware, and that they will cause to be performed all
necessary acts within the state of Delaware and elsewhere to effectuate the
merger herein provided for.
7. The Board of Directors and the proper officers of the
terminating corporation and of the surviving corporation are hereby authorized,
empowered and directed to do any and all acts and things, and to make, execute,
deliver, file and record any and all instruments, papers and documents which
shall be or become necessary, proper or convenient to carry out or put into
effect any of the provisions of this Agreement of Merger or of the merger
herein provided for.
IN WITNESS WHEREOF, this Agreement of Merger is hereby signed and
attested upon behalf of each of the constituent corporations parties thereto.
Dated: December 29, 1988
SANDUSKY PLASTICS, INC.
By:
----------------------------
Thomas J. Aylward, President
Attest:
- ---------------------------
Maxine H. Linde
Assistant Secretary
Dated: December 29, 1988
ENVIRODYNE WN CORP.
By:
----------------------------
Maxine H. Linde, President
Attest:
- -----------------------------
Lawrence C. Henry
Secretary
<PAGE> 4
CERTIFICATE OF ASSISTANT SECRETARY
OF
SANDUSKY PLASTICS, INC.
The undersigned, being the Assistant Secretary of Sandusky Plastics, Inc., does
hereby certify that the sole stockholder of all the outstanding stock of said
corporation consented in writing, pursuant to the provisions of Section 228 of
the General Corporation Law of the State of Delaware, to the adoption of the
foregoing Agreement of Merger.
Dated: December 29, 1988
----------------------------
Maxine H. Linde
<PAGE> 5
CERTIFICATE OF ASSISTANT SECRETARY
OF
ENVIRODYNE WN CORP.
The undersigned, being the Assistant Secretary of Envirodyne WN Corp., does
hereby certify that the sole stockholder of all the outstanding stock of said
corporation consented in writing, pursuant to the provisions of Section 228 of
the General Corporation Law of the State of Delaware, to the adoption of the
foregoing Agreement of Merger.
Dated: December 29, 1988
----------------------------
Lawrence C. Henry
<PAGE> 6
CERTIFICATE OF MERGER
OF
INTERNATIONAL LINCOLN CORP.
INTO
ENVIRODYNE WN CORP.
The undersigned corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware,
DOES HEREBY CERTIFY:
FIRST: That the name and state of incorporation of each of
the constituent corporations of the merger is as follows:
Name State of Incorporation
INTERNATIONAL LINCOLN CORP. Delaware
ENVIRODYNE WN CORP. Delaware
SECOND: That an agreement of merger between the parties to
the merger has been approved, adopted, certified, executed and acknowledged by
each of the constituent corporations in accordance with the requirements of
sub-section (c) of section 251 of the General Corporation Law of the State of
Delaware.
THIRD: The name of the surviving corporation of the merger is
ENVIRODYNE WN CORP.
FOURTH: That the Certificate of Incorporation of ENVIRODYNE
WN CORP. shall become the Certificate of Incorporation of the surviving
corporation without change.
FIFTH: That the executed agreement of merger is on file at
the principal place of business of the surviving corporation. The address of
the principal place of business of the surviving
<PAGE> 7
corporation is 1180 South Beverly Drive, Suite 601, Los Angeles, California
90035.
SIXTH: That a copy of the agreement of merger will be
furnished by the surviving corporation, on request and without cost to any
stockholder of any constituent corporation.
SEVENTH: This Certificate of Merger shall be effective on
April 4, 1975.
ENVIRODYNE WN CORP.
By:
----------------------------
President
ATTEST:
By:
------------------------
Secretary
(Corporate Seal)
<PAGE> 8
CERTIFICATE OF INCORPORATION
OF
ENVIRODYNE WN CORP.
1. The name of the corporation is
ENVIRODYNE WN CORP.
2. The address of its registered office in the State of Delaware
is No. 100 West Tenth 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. The nature of the business or purposes to be conducted or
promoted is to engage in any lawful act or activity for which corporations may
be organized under the General Corporation Law of Delaware.
4. The total number of shares of stock which the corporation
shall have authority to issue is fifty thousand (50,000) and the par value of
each of such shares is One Dollar ($1.00) amounting in the aggregate to fifty
Thousand Dollars ($50,000.00)
5. The name and mailing address of each incorporator is as
follows:
NAME MAILING ADDRESS
B. A. Pennington 100 West Tenth Street
Wilmington, Delaware 19801
W. J. Reif 100 West Tenth Street
Wilmington, Delaware 19801
R. F. Andrews 100 West Tenth Street
Wilmington, Delaware 19801
6. The corporation is to have perpetual existence.
7. In furtherance and not in limitation of the powers conferred
by statute, the board of directors is expressly
<PAGE> 9
authorized to make, alter or repeal the by-laws of the corporation.
8. Meetings of stockholders may be held within or without the
State of Delaware, as the by-laws may provide. The books of the corporation
may be kept (subject to any provision contained in the statutes) outside the
State of Delaware at such place or places as may be designated from time to
time by the board of directors or in the by-laws of the corporation. Elections
of directors need not be by written ballot unless the by-laws of the
corporation shall so provide.
Whenever a compromise or arrangement is proposed between this
corporation and its creditors or any class of them and/or between this
corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this corporation under
the provisions of section 291 to Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders of class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of
<PAGE> 10
this corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this corporation, as the case may be, and also on this
corporation.
9. The corporation reserves the right to amend, alter, change or
repeal any provision contained in this certificate of incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
WE, THE UNDERSIGNED, being each of the incorporators hereinbefore
named, for the purpose of forming a corporation pursuant to the General
Corporation Law of the State of Delaware, do make this certificate, hereby
declaring and certifying that this is our act and deed and the facts herein
stated are true, and accordingly have hereunto set our hands this 12th day of
February, 1975.
B. A. Pennington
----------------------------
W. J. Reif
----------------------------
R. F. Andrews
----------------------------
<PAGE> 1
EXHIBIT 3.6
ENVIRODYNE WN CORP.
BY-LAWS
ARTICLE I
OFFICES
Section 1. The registered office shall be in the City of
Wilmington, County of New Castle, State of Delaware.
Section 2. The corporation may also have offices at such
other places both within and without the State of Delaware as the board of
directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
Section 1. All meetings of the stockholders for the election
of directors shall be held in the City of Los Angeles, State of California, at
such place as may be fixed from time to time by the board of directors, or at
such other place either within or without the State of Delaware as shall be
designated from time to time by the board of directors and stated in the notice
of the meeting. Meetings of stockholders for any other purpose may be held at
such time and place, within or without the State of Delaware, as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Annual Meetings of stockholders, commencing with
the year 1973, shall be held on the first Monday of June if not a legal
holiday, and if a legal holiday, than on the next secular day following, at
10:30 A.M., or at such other date and time as shall be designated from time to
time by the board of directors and stated in the notice of the meeting, at
which they shall elect by a plurality vote a board of directors, and transact
such other business as may properly be brought before the meeting.
Section 3. Written notice of the annual meeting stating the
place, date and hour of the meeting shall be given to each stockholder entitled
to vote at such meeting not less then ten nor more than sixty days before the
date of the meeting.
Section 4. The officer who has charge of the stock ledger of
the corporation shall prepare and make, at least ten days before every meeting
of stockholders, a complete list of the stockholders 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
<PAGE> 2
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 5. Special meetings of stockholders, for any purpose
of purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding
and entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.
Section 6. Written notice of a special meeting stating the
place, date and hour of the meeting and the purpose or purposes for which the
meeting is called, 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.
Section 7. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders 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 quorum shall be present or represented. At such
adjourned meeting, at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. 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 9. When a quorum is present at any meeting, the vote
of the holders of a majority of the stock having voting power present in person
or represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or
of the certificate of incorporation, a different vote is required in which case
such express provision shall govern and control the decision of such question.
<PAGE> 3
Section 10. Unless otherwise provided in the certificate of
incorporation each stockholder shall at every meeting of stockholders be
entitled to one vote in person or by proxy for each share of the capital stock
having voting power held by such stockholder, but no proxy shall be voted on
after three years from its date, unless the proxy provides for a longer period.
Section 11. Unless otherwise provided in the certificate of
incorporation, any action required 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 in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to
those stockholders who have not consented in writing.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the
whole board shall be three. The directors shall be elected at the annual
meeting of the stockholders, except as provided in Section 2 of this Article,
and each director elected shall hold office until his successor is elected and
qualified. Directors need not be stockholders.
Section 2. Vacancies and newly created directorships
resulting from any increase in the authorized number of directors may be filled
by a majority of the directors then in office, though less than a quorum, or by
a sole remaining director, and the directors so chosen shall hold office until
the next annual election and until their successors are duly elected and shall
qualify, unless sooner displaced. If there are no directors in office, than an
election of directors may be held in the manner provided by statute. If, at
the time of filling any vacancy or any newly created directorship, the
directors then in office shall constitute less than a majority of the whole
board (as constituted immediately prior to any such increase), the Court of
Chancery may, upon application of any stockholder or stockholders holding at
least ten percent of the total number of the shares at the time outstanding
having the right to vote for such directors, summarily order an election to be
held to fill any such vacancies or newly created directorships, or to replace
the directors chosen by the directors then in office.
Section 3. The business of the corporation shall be managed
by its board of directors which may exercise all such powers of the corporation
and do all such lawful acts and things as
<PAGE> 4
are not by statute or by the certificate of incorporation or by these by-laws
directed or required to be exercised or done by the stockholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the State of
Delaware.
Section 5. The first meeting of each newly elected board of
directors shall be held at such time and place as shall be fixed by the vote of
the stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of
the stockholders to fix the time or place of such first meeting of the newly
elected board of directors, or in the event such meeting is not held at the
time and place so fixed by the stockholders, the meeting may be held at such
time and place as shall be specified in a notice given as hereinafter provided
for special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.
Section 6. Regular meetings of the board of directors may be
held without notice at such time and at such place as shall from time to time
be determined by the board of directors.
Section 7. Special meetings of the board of directors may be
called by the president on one day's notice to each director, either personally
or by mail or by telegram; special meetings shall be called by the president or
secretary in like manner and on like notice on the written request of two
directors.
Section 8. At all meetings of the board a majority of the
directors shall constitute a quorum for the transaction of business and the act
of a majority of the directors present at any meeting at which there is a
quorum shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.
Section 9. 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 the members of the board of directors or committee,
as the case may be, consent thereto in writing, and the writing or writings are
filed with the minutes or proceedings of the board or committee.
COMMITTEES OF DIRECTORS
<PAGE> 5
Section 10. 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. Any such committee, to the extent provided in the resolution of
the board of directors, 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, 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, or amending
the by-laws of the corporation; and, unless the resolution or the certificate
of incorporation expressly so provide, no such committee shall have the power
or authority to declare a dividend or to authorize the issuance of stock. Such
committee or committees shall have such name or names as may be determined from
time to time by resolution adopted by the board of directors.
Section 11. Each committee shall keep regular minutes of its
meetings and report the same to the board of directors when required.
COMPENSATION OF DIRECTORS
Section 12. Unless otherwise restricted by the certificate of
incorporation, the board of directors shall have the authority to fix the
compensation of directors. The directors may be paid their expenses, if any,
of attendance at each meeting of the board of directors and may be paid a fixed
sum for attendance at each meeting of the board of directors or a stated salary
as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for
attending committee meetings.
ARTICLE IV
NOTICES
Section 1. Whenever, under the provisions of the statutes or
of the certificate of incorporation or of these by-laws, notice is required to
be given to any director or stockholder, it shall not be construed to mean
personal notice, but such notice may be given in writing, by mail, addressed to
such director or stockholder, at his address as it appears on the records of
the corporation, with postage thereon prepaid, and such notice shall be deemed
to be given at the time when the same shall be deposited in
<PAGE> 6
the United States mail. Notice to directors may also be given by telegram.
Section 2. Whenever any notice is required to be given under
the provisions of the statutes or of the certificate of incorporation or of
these by-laws, a waiver thereof in writing, signed by the person or persons
entitled to said notice, whether before or after the time stated therein, shall
be deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by
the board of directors and shall be a president, a vice-president, a secretary
and a treasurer. The board of directors may also choose additional
vice-presidents, and one or more assistant secretaries and assistant
treasurers. Any number of offices may be held by the same person, unless the
certificate of incorporation or these by-laws otherwise provide.
Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer.
Section 3. The board of directors may appoint such other
officers and agents as it shall deem necessary who shall hold their offices for
such terms and shall exercise such powers and perform such duties as shall be
determined from time to time by the board.
Section 4. The salaries of all officers and agents of the
corporation shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office
until their successors are chosen and qualify. Any officer elected or
appointed by the board of directors may be removed at any time by the
affirmative vote of a majority of the board of directors. Any vacancy
occurring in any office of the corporation shall be filled by the board of
directors.
THE PRESIDENT
Section 6. The president shall be the chief executive officer
of the corporation, shall preside at all meetings of the stockholders and the
board of directors, shall have general and active management of the business of
the corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.
Section 7. He shall execute all bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof
<PAGE> 7
shall be expressly delegated by the board of directors to some other officer or
agent of the corporation.
THE VICE-PRESIDENTS
Section 8. In the absence of the president or in the event of
his inability or refusal to act, the vice-president (or in the event there be
more than one vice-president, the vice-presidents in the order designated, or
in the absence of any designation, then in the order of their election) shall
perform the duties of the president, and when so acting, shall have all the
powers of and be subject to all the restrictions upon the president. The vice-
presidents shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 9. The secretary shall attend all meetings of the board of
directors and all meetings of stockholders and record all the proceedings of
the meetings of the corporation and the board of directors in a book to be kept
for that purpose and shall perform like duties for the standing committees when
required. He shall give, or cause to be given, notice of all meetings of the
stockholders and special meetings of the board of directors, and shall perform
such other duties as may be prescribed by the board of directors or president,
under whose supervision he shall be. He shall have custody of the seal of the
corporation and he, or an assistant secretary, shall have authority to affix
the same to any instrument requiring it and when so affixed, it may be attested
by the signature of such assistant secretary. The board of directors may give
general authority to any other officer to affix the seal of the corporation and
to attest the affixing by his signature.
Section 10. The assistant secretary, or if there be more than
one, the assistant secretaries in the order determined by the board of
directors (or if there be no such determination, then in the order of their
election), shall, in the absence of the secretary or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
secretary and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 11. The treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the corporation in such depositories as may be designated by the board of
directors.
Section 12. He shall disburse the funds of the corporation as
may be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the
<PAGE> 8
board of directors, at its regular meetings, or when the board of directors so
requires, an account of all his transactions as treasurer and of the financial
condition of the corporation.
Section 13. If required by the board of directors, he shall
give the corporation a bond (which shall be renewed every six years) in such
sum and with such surety or sureties as shall be satisfactory to the board of
directors for the faithful performance of the duties of his office and for the
restoration to the corporation, in case of his death, resignation, retirement
or removal from office, of all books, papers, vouchers, money and other
property of whatever kind in his possession or under his control belonging to
the corporation.
Section 14. The assistant treasurer, if there shall be more
than one, the assistant treasurers in the order determined by the board of
directors (or if there be no such determination, then in the order of their
election), shall in the absence of the treasurer or in the event of his
inability or refusal to act, perform the duties and exercise the powers of the
treasurer and shall perform such other duties and have such other powers as the
board of directors may from time to time prescribe.
ARTICLE VI
CERTIFICATES OF STOCK
Section 1. 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 or the president or
a vice-president and the treasurer or an assistant treasurer, or the secretary
or an assistant secretary of the corporation, certifying the number of shares
owned by him in the corporation.
Section 2. Any of or all the signatures 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 he were such officer, transfer agent or registrar at the date of issue.
LOST CERTIFICATES
Section 3. The board of directors may direct a new
certificate to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the person claiming
the certificate of stock to be lost, stolen or destroyed. When authorizing
such issue of a new certificate or certificates, the board of directors may, in
its discretion and as a condition precedent to the issuance thereof, require
the owner of such lost, stolen or destroyed certificate, or
<PAGE> 9
his legal representative, to advertise the same in such manner as it shall
require and/or to give the corporation a bond in such sum as it may direct as
indemnity against any claim that may be made against the corporation with
respect to the certificate alleged to have been lost, stolen or destroyed.
TRANSFER OF STOCK
Section 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction on its books.
FIXING THE RECORD DATE
Section 5. 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, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or 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, in advance, a record
date, which shall not be more than sixty nor less than ten days before the date
of such meeting, nor more than sixty days prior to any other action. 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, however, that the board of directors may fix a new record date for
the adjourned meeting.
REGISTERED STOCKHOLDERS
Section 6. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the capital stock of the
corporation, subject to the provisions of the certificate of
<PAGE> 10
incorporation, if any, may be declared by the board of directors at any regular
or special meeting, pursuant to law. Dividends may be paid in cash, in
property, or in shares of the capital stock, subject to the provisions of the
certificate of incorporation.
Section 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum or
sums as the directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for equalizing
dividends, or for repairing or maintaining any property of the corporation, or
for such other purpose as the directors shall think conducive to the interest
of the corporation, and the directors may modify or abolish any such reserve in
the manner in which it was created.
ANNUAL STATEMENT
Section 3. The board of directors shall present at each
annual meeting, and at any special meeting of the stockholders when called for
by vote of the stockholders, a full and clear statement of the business and
condition of the corporation.
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed
by resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon
the name of the Corporation, the year of its organization and the words
"Corporate Seal, Delaware". The seal may be used by causing it or a facsimile
thereof to be impressed or affixed or reproduced or otherwise.
ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed
or new by-laws may be adopted by the stockholders or by the board of directors,
when such power is conferred upon by the board of directors by the certificate
of incorporation, at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption of new
by-laws be contained in the notice of such special
<PAGE> 11
meeting.
<PAGE> 1
EXHIBIT 3.7
CERTIFICATE OF INCORPORATION
OF
SANDUSKY PLASTICS OF DELAWARE, INC.
THE UNDERSIGNED, for the purpose of forming a corporation pursuant to
the provisions of the General Corporation Law of the State of Delaware, DOES
HEREBY CERTIFY as follows:
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is
SANDUSKY PLASTICS OF DELAWARE, INC.
SECOND: The registered office of the Corporation in the State of
Delaware is to be located at 1209 Orange Street, in the City of Wilmington,
County of New Castle. The name of its registered agent is The Corporation
Trust Company, whose address is Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware.
THIRD: The nature of the business of the Corporation and the purposes
to be promoted by it are as follows:
1. To engage in the production, marketing, purchase, sale,
trading and brokering of various plastics and plastics products,
including, without limitation, the taking of all actions and the
conduct of all activities necessary or desirable in relations thereto.
2. To do everything necessary, proper, advisable or convenient
for the accomplishment of any of the purposes or for attainment of any
of the objects or the furtherance of any of the powers herein set
forth and to do every other act and thing incidental thereto or
connected therewith, provided the same be not forbidden by the laws of
the State of Delaware.
3. In general, to engage in any lawful act or activity for which
corporations may be organized under the General Corporation Law of
Delaware; and to do any and all of the acts and things herein set
forth to the same extent as natural persons could do, and in any part
of the world, as principal, factor, agent, contractor, trustee or
otherwise in conjunction with any person, entity, syndicate,
partnership, association or corporation, governmental, municipal or
public authority, domestic or foreign; to establish and maintain
offices and agencies and to exercise all or any of its corporate
powers and rights throughout the world.
<PAGE> 2
The foregoing clauses of this Article THIRD shall be construed as
powers as well as objects and purposes. The matters expressed in each clause
shall, unless herein otherwise expressly provided, be in no wise limited by
reference or to inference from the terms of any other clause, but shall be
regarded as independent objects, purposes and powers, and the enumeration of
specific objects, purposes and powers shall not be construed to the limit or
restrict in any manner the meaning of general terms or the general powers of
the Corporation; nor shall the expression of one thing be deemed to exclude
another not expressed, although it be of like nature; provided, however, that
nothing herein contained shall be construed as authorizing the Corporation to
carry on the business of constructing, maintaining, or operating public
utilities in the State of Delaware or elsewhere; and provided further, however,
that the Corporation shall not carry on any business or exercise any power in
any state, territory or country which, under the laws thereof, the Corporation
may not lawfully carry on or exercise.
FOURTH: The total number of shares of stock which the Corporation
shall have authority to issue is One Hundred (100) shares of Common Stock, or
the par value of $.10 per share.
FIFTH: The name and mailing address of the incorporator of the
Corporation is as follows:
Name Mailing Address
Ambrose M. Richardson Gray & Richardson
50 Rockefeller Plaza
Suite 830
New York, New York 10020
SIXTH: (a) Subject to the provisions of the General Corporation
Law of the State of Delaware, the number of directors of the Corporation shall
be determined as provided by the By-Laws.
<PAGE> 3
(b) The election of directors need not be by written
ballot.
SEVENTH: All corporate powers of the Corporation shall be exercised
by the Board of Directors consisting of not less than one (1) nor more than
three (3) members. In furtherance and not in limitation of the powers
conferred by the laws of the State of Delaware, the Board of Directors is
expressly authorized and empowered.
1. To make, alter or repeal the By-laws of the
Corporation, except as may be otherwise provided with respect to one
or more of the By-laws by resolution of the stockholders in making,
altering, amending or repealing such By-law or By-laws.
2. By a suitable By-law or by a resolution passed by a
majority of the whole membership of the Board, to designate two or
more of their number to name or names as may be determined from time
to time by resolution of the Board of Directors, which such resolution
or resolutions or in the By-laws of the Corporation, shall have and
may exercise the powers of the Board of Directors in the management of
the business and affairs of the Corporation, and may have power to
authorize the seal of the Corporation to be affixed to all papers
which may require it.
3. To determine, whether any and, if any, what part of
the net profits of the Corporation or of its capital surplus shall be
declared in dividends and paid to the stockholders, and to direct and
determine the use and disposition of any such net profits or of any
such surplus or of any net assets in excess of capital.
4. To determine, from time to time, to the extent now or
hereinafter permitted by the laws of the State of Delaware, whether
and to what extent, and at what times and places and under what
conditions and regulations, the accounts and books of the Corporation
or any of them shall be open to the inspection of the stockholders,
and no stockholder shall have any right to inspect any account, book
or document of the Corporation, except as conferred by the laws of the
State of Delaware, unless otherwise authorized by resolution of the
Board of Directors.
5. From time to time, to the extent now or hereafter
permitted by the laws of the State of Delaware, to sell, lease,
exchange or otherwise dispose of any part of the property and assets
of this Corporation which the Board of Directors deems it expedient
and for the best interests of the
<PAGE> 4
Corporation to dispose of, or disadvantageous to continue to own,
without assets of the stockholders by vote or otherwise; and, pursuant
to the affirmative vote of the holders of a majority of stock issued
and outstanding having voting power, given at a stockholders' meeting
duly called for that purpose, the Board of Directors shall have power
and authority pursuant to action (whether a regular or special meeting
and whether or not notice of such purpose shall have been given prior
to such meeting), to sell, lease or exchange all of the property and
assets of the Corporation, including, if the Board of Directors shall
so desire, its goodwill and its corporate franchises, for such
consideration and upon such terms and conditions as the Board of
Directors deem expedient and for the best interests of the
Corporation.
6. To remove at any time, for cause or without cause,
any officer or employee of the Corporation, or to confer such power on
any committee or officer, provided, however, that any officer elected
or appointed by the Board of Directors may be removed only by the
affirmative vote of a majority of the Board of Directors then in
office.
7. Without the assent or vote of the stockholders, to
authorize the issue obligations of the Corporation, secured and
unsecured, to include therein such provisions as to redeemability,
convertibility or otherwise, as the Board of Directors may determine,
and to authorize the mortgaging or pledging, as security therefor, of
any property of the Corporation, real or personal, including
after-acquired property.
8. To set apart out of any funds of the Corporation
available for dividends a reserve or reserves for any proper purpose
and to abolish any such reserve or reserves, to make such other
provisions, if any, as are deemed necessary or advisable for working
capital, for additions, improvements and betterments to plant and
equipment, for expansion of the Corporation's business (including the
acquisition of real and personal property for the purpose) and for any
other purposes of the Corporation, and from time to time to authorize
the use of the surplus of the Corporation for the purpose of acquiring
any of the capital stock of the Corporation.
9. From time to time, to offer for subscription, or
otherwise to issue or sell, or to grant options for the subscription
to or purchase of, any or all of the authorized stock of the
Corporation, for such consideration (including the cancellation of
accrued and unpaid dividends on outstanding preferred stock of the
Corporation) as the Board of Directors may determine, without the
assent or vote of the stockholders and at the time of such issue and
sale, or at the time of granting of such options, to specify in
dollars the part of the consideration received on such issue and sale
which shall be capital, and which shall be surplus, respectively;
provided, however, that as to any shares having a par value the amount
of the part of such consideration so
<PAGE> 5
determined to be capital need be only equal to the aggregate par value
of such shares.
10. Subject to the provisions of the statutes of the
State of Delaware, to exercise any and all other powers, in addition
to the powers expressly conferred by law and by this Certificate of
Incorporation, which may be conferred upon it by the Corporation
through appropriate By-law provisions.
EIGHTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof, or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code on the
application of trustees in dissolution or of any receiver or receivers
appointed for this Corporation under the provisions of Section 279 of Title 8
of the Delaware Code, order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this Operation, as the
case may be, agree to any compromise or arrangement and to any reorganization
of this Corporation as consequence of such compromise or arrangement, the said
compromise or arrangement and the said reorganization shall, if sanctioned by
the court to which the said application has been made, be binding on all the
creditors or class of creditors, and/or on all the stockholders or class of
stockholders, of this Corporation, as the case may be, and also on this
Corporation.
NINTH: The Corporation shall have the power to indemnify any
director, officer, employee or agent of the Corporation or any person who
served at the request of the Corporation as a director,
<PAGE> 6
officer, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, to the extent permitted by the General Corporation
Law of the State of Delaware.
TENTH: Both the stockholders and the directors shall have power to
hold their meetings, if the By-laws so provide, and keep the books, documents
and papers of the Corporation, outside of the State of Delaware and to have one
or more offices within or without the State of Delaware, at such places as may
be from time to time designated by the By-laws or by resolution of the
stockholders or the directors, except as otherwise required by the laws of the
State of Delaware.
ELEVENTH: If so determined by the Board of Directors, the Corporation
may from time to time receive money or other property as a contribution to
surplus, which contribution may consist of an undivided part of money or other
property. Against any surplus there may be charged from time to time any
losses incurred by the Corporation or any items or debt or bond or stock
discount and expense. Such surplus may also be reduced from time to time by
dividends or by transfer to capital or to some other appropriate account, and
the amount of capital may be increased from time to time by the capitalization
of surplus or net profits without the issuance of additional shares.
TWELFTH: The Corporation reserves the right to create any preferred
or special stocks or to amend, alter, change or repeal any provisions contained
in this Certificate of Incorporation in the manner now or hereafter prescribed
by the laws of the State of Delaware, and all right and interests of the
stockholders of the Corporation are granted subject to these reservations.
<PAGE> 7
IN WITNESS WHEREOF, the undersigned has executed this CERTIFICATE OF
INCORPORATION on the 2nd day of July, 1985, and does hereby affirm the
statements contained herein as true under penalties of perjury.
----------------------------
Ambrose M. Richardson
As Incorporator
50 Rockefeller Plaza
New York, New York 10020
STATE OF NEW YORK )
: SS.:
COUNTY OF NEW YORK )
BE IT REMEMBERED that on this 2nd day of July 1985, personally
appeared before me, Barbara J. Tutino, a Notary Public in and for the County
and State aforesaid, Ambrose M. Richardson, being the party to the foregoing
Certificate of Incorporation, known to me personally to be such, and I having
first made known to him the contents of said Certificate, did acknowledge said
Certificate of Incorporation to be his act and deed, and the facts therein
stated are truly set forth.
Given under my hand and seal of office the day and year aforesaid.
--------------------------------
Notary Public
Barbara J. Tutino
Notary Public, State of New York
No. 30-4706864
Qualified in Nassau County
Term Expires March 30, 1987
<PAGE> 1
EXHIBIT 3.8
SANDUSKY PLASTICS OF DELAWARE, INC.
BYLAWS
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained at the office of the UNITED STATES CORPORATION
COMPANY, located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware, and said UNITED STATES CORPORATION COMPANY shall be
the registered agent of the corporation thereof.
SECTION 2. OTHER OFFICES. The corporation may establish
other offices, either within or without the State of Delaware, at such place or
places as the Board of Directors, from time to time, may designate or the
business of the corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders
shall be held on the first Monday of June each year, commencing with 1989, at
such time as shall be stated in the notice, or said meetings may be held at
such time and place, either within or without the State of Delaware, as the
Board of Directors by resolution shall determine, and as set forth in the
notice of the meeting.
If the date of the annual meeting shall fall on a legal
holiday of the state in which the meeting is to be held, the meeting shall be
held on the next succeeding business day.
At each annual meeting, the stockholders entitled to vote
shall elect a Board of Directors, and they may transact such other corporate
business as shall be stated in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose or purposes, may be called by the President or
the Secretary, or by resolution of the Board of Directors, and may be held at
such time and place as shall be stated in the notice of the meeting.
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SECTION 3. NOTICE OF MEETINGS. Written notice, stating the
place, date and time of the meeting, and the general nature of the business to
be considered, shall be given to each stockholder entitled to vote thereat, at
his address as it appears on the records of the corporation, not less than ten
(10) nor more than fifty (50) days prior to the date of the meeting. No
business other than that stated in the notice shall be transacted at any
meeting without the unanimous consent of all of the stockholders entitled to
vote thereat.
SECTION 4. VOTING. Each stockholder entitled to vote in
accordance with the terms of the Certificate of Incorporation, the provisions
of these Bylaws, and the laws of the State of Delaware, shall be entitled to
one vote, in person or by proxy, for each share of stock entitled to vote held
by such stockholder, but no proxy shall be voted after three (3) years from its
date unless such proxy provides for a longer period. Upon the demand of any
stockholder, the vote for Directors and the vote upon any question before the
meeting shall be by written ballot. All elections for Directors shall be
decided by plurality vote; all other questions shall be decided by majority
vote, except as otherwise provided by the Certificate of Incorporation or the
laws of the State of Delaware.
A complete list of the stockholders entitled to vote at a
meeting, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be open to the examination of any
stockholders, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten (10) 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
registered office of the corporation in the State of Delaware. The list shall
also be produced and kept available at the time and place of the meeting,
during the entire time thereof, and may be inspected by any stockholder or his
proxy who may be present.
SECTION 5. QUORUM. Except as otherwise required by law, by
the Certificate of Incorporation, or by these Bylaws, the presence, in person
or by proxy, of stockholders holding a majority of the stock of the corporation
issued and outstanding and entitled to vote shall constitute a quorum at all
meetings of stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat,
present either in person or by proxy, shall have power to adjourn the meeting,
from time to time, without notice other than an announcement at the meeting,
until the requisite amount of stock entitled to vote shall be present. At any
such adjourned meeting at which the requisite amount of stock entitled to vote
shall be represented, any business may be transacted which might have been
transacted at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed
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shall be entitled to vote at any adjournment or adjournments thereof.
SECTION 6. ACTION WITHOUT MEETING. Any action to be taken by
the stockholders may be taken without a meeting if, prior to such action, all
stockholders entitled to vote thereon shall consent to the action by a writing
filed with the records of the meetings of stockholders, and such consent shall
be treated for all purposes as a vote at a meeting.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. The number of Directors, to be
determined by the Board of Directors, shall be not less than three (3) nor more
than five (5), until changed by amendment of these Bylaws. The Directors shall
be elected at the annual meeting of stockholders, and each Director shall be
elected to serve until his successor shall be elected and shall have qualified.
The Directors need not be stockholders.
SECTION 2. QUORUM. A majority of the Directors shall
constitute a quorum for the transaction of business. If at any meeting of the
Board there shall be less than a quorum present, a majority of those present
may adjourn the meeting from time to time until a quorum is obtained, and no
further notice thereof need be given other than by announcement at the meeting
which shall be so adjourned.
SECTION 3. ELECTION OF OFFICERS. The Directors shall elect
the officers of the corporation annually, as more specifically set forth in
ARTICLE V of these Bylaws. Such officers shall hold office until the next
annual election of officers, or until their successors are elected and shall
have qualified.
SECTION 4. REGULAR MEETINGS. Regular meetings of the
Directors may be held, without notice, at such places and times as from time to
time shall be determined by resolution of the Board of Directors.
SECTION 5. SPECIAL MEETINGS. Special meetings of the Board
of Directors may be called by the President, or by the Secretary on the written
request of any two Directors on at least two (2) days' notice to each Director.
SECTION 6. PLACE OF MEETINGS. The Directors may hold their
meetings, and have one or more offices outside the State of
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<PAGE> 4
Delaware, at such places as from time to time may be determined by resolution
of the Board.
SECTION 7. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors, or any
committees thereof, may be taken without a meeting if, prior to such action, a
written consent thereto is signed by all members of the Board or of such
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board or committee.
SECTION 8. POWERS. The Board of Directors shall exercise all
of the powers of the corporation, except such as are by law, by the Certificate
of Incorporation, or by these Bylaws conferred upon or reserved to the
stockholders.
SECTION 9. COMPENSATION. Directors shall not receive any
stated salary for their service as Directors or as members of committees, but,
by resolution of the Board, a fixed fee and expenses of attendance may be
allowed for attendance at each meeting.
Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity as an officer,
agent or otherwise, and receiving compensation therefor.
ARTICLE IV
COMMITTEES
SECTION 1. The Board of Directors may, by resolution or
resolutions passed by a majority of the entire Board, designate an executive
committee and one or more other committees, each committee to consist of two or
more Directors of the corporation, which, to the extent provided in said
resolution or resolutions, or in these Bylaws, shall have and may exercise the
powers of the Board of Directors in the management of the business of the
corporation between meetings of the Board.
SECTION 2. Committee shall keep regular minutes of their
proceedings, and report the same to the Board of Directors when required.
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<PAGE> 5
ARTICLE V
OFFICERS
SECTION 1. OFFICERS. The officers shall be elected at the
first meeting of the Board of Directors after each annual meeting of
stockholders. The directors shall elect a President, a Secretary and a
Treasurer; they may also elect a Chairman of the Board, a Vice-Chairman of the
Board, one or more Vice-Presidents, and such Assistant Secretaries and
Assistant Treasurers as they may deem proper. None of the officers of the
corporation, with the exception of the Chairman of the Board and the
Vice-Chairman of the Board, need be a Director. Any one person may hold two or
more offices, except those of President and Secretary. However, any person
holding two or more offices shall not sign any instrument in the capacity of
more than one office.
The Board of Directors may appoint such other officers and
agents as it may deem advisable, who shall hold office for such terms and shall
exercise such powers and perform such duties as from time to time shall be
determined by the Board of Directors.
SECTION 2. CHAIRMAN OF THE BOARD. The Chairman of the Board
of Directors, if one is elected, shall preside at all meetings of the Board of
Directors, and he shall have and perform such other duties as from time to time
may be assigned to him by the Board of Directors.
SECTION 2.5. VICE-CHAIRMAN OF THE BOARD. The Vice-Chairman
of the Board, if one is elected, shall have such powers and shall perform such
duties as from time to time may be assigned to him by the Board of Directors,
and, in the absence of the Chairman, or in the event of his inability to act,
the Vice-Chairman shall perform the functions of the Chairman of the Board.
SECTION 3. PRESIDENT. The President shall be the chief
executive officer of the corporation, and shall have the general powers and
duties of supervision and management usually vested in the office of President
of a corporation. He shall preside at all meetings of the stockholders, if
present thereat, and, in the absence or non-election of the Chairman of the
Board, at all meetings of the Board of Directors. He shall have general
supervision, direction and control of the business of the corporation. Except
as the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts on behalf of the
corporation, and he shall cause the corporate seal to be affixed to any
instrument requiring it, and when so affixed the seal shall be attested by the
Secretary or the Treasurer, or an Assistant Secretary or an Assistant
Treasurer.
SECTION 4. VICE-PRESIDENTS. Each Vice-President shall
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<PAGE> 6
have such powers and shall perform such duties as shall be assigned to him by
the Directors, and, in the absence of the President, or in the event of his
inability to act, the Vice-Presidents, in the order of their seniority, shall
perform the functions of the President.
SECTION 5. SECRETARY. The Secretary shall give, or cause to
be given, notice of all meetings of stockholders and Directors, and all other
notices required by law or by these Bylaws, and, in case of his absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the President, the Board of Directors, or the
stockholders, upon whose requisition the meeting is called as provided in these
Bylaws. He shall record all the proceedings of the meetings of the
stockholders and of the Board of Directors in a book to be kept for that
purpose, and shall perform such other duties as may be assigned to him by the
Directors or the President. He shall have custody of the corporate seal, and
shall affix the same to all instruments requiring it, when authorized by the
President or the Board of Directors, and shall attest the same.
SECTION 6. TREASURER. The Treasurer shall have the custody
of the corporate funds and securities, and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the corporation.
He shall deposit all moneys and other valuables in the name and to the credit
of the corporation in such depositories as may be designated by the Board of
Directors.
The Treasurer shall disburse the funds of the corporation as
may be ordered by the Board of Directors or the President, taking proper
vouchers for such disbursements. He shall render to the President and the
Board of Directors, at the regular meetings of the Board, or whenever they may
request it, an accounting of all his transactions as Treasurer, and of the
financial condition of the corporation.
If required by the Board of Directors, the Treasurer shall
give the corporation a bond for the faithful discharge of his duties, in such
amount and with such surety as the Board shall prescribe.
SECTION 7. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.
Assistant Secretaries and Assistant Treasurers, if any, shall be elected and
shall have such powers and shall perform such duties as shall be assigned to
them, respectively, by the Board of Directors.
ARTICLE VI
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<PAGE> 7
RESIGNATIONS; FILLING OF VACANCIES;
INCREASE IN NUMBER OF DIRECTORS;
REMOVAL FROM OFFICE
SECTION 1. RESIGNATIONS. Any Director, member of a
committee, or other officer may resign at any time. Such resignation shall be
made in writing, and shall take effect at the time specified therein, and, if
no time be specified, at the time of its receipt by the President or the
Secretary. The acceptance of a resignation shall not be necessary to make it
effective.
SECTION 2. FILLING OF VACANCIES. If the office of any
officer, Director or member of a committee becomes vacant, the remaining
Directors in office, although less than a quorum may appoint, by a majority
vote, any qualified person to fill such vacancy, who shall hold office for the
unexpired term of his predecessor, or until his successor shall be duly chosen
and shall have qualified.
Any vacancy occurring by reason of an increase in the number
of Directors may be filled by action of a majority of the entire Board, for the
term of office continuing only until the next election of Directors by the
stockholders, or it may be filled by the affirmative vote of the holders of a
majority of the shares then entitled to vote at an election of Directors.
SECTION 3. INCREASE IN NUMBER OF DIRECTORS. The number of
Directors may be increased at any time by the affirmative vote of a majority of
the entire Board, or by the affirmative vote of a majority in interest of the
stockholders, at a special meeting called for that purpose, and, by like vote,
pursuant to SECTION 2 above, the additional Directors may be chosen at such
meeting to hold office until the next annual election or until their successors
are elected and shall have qualified.
SECTION 4. REMOVAL. At a meeting of stockholders expressly
called for such purpose, any or all of the members of the Board of Directors
may be removed, with or without cause, by vote of the holders of a majority of
the shares then entitled to vote at an election of Directors, and said
stockholders may elect, at the meeting called for the purpose of removal, a
successor or successors to fill any resulting vacancies for the unexpired terms
of the removed Directors.
Any officer, agent or member of a committee, elected or
appointed by the Board of Directors, may be removed by a majority vote of the
entire Board whenever, in its judgment, the best interests of the corporation
will be served thereby.
ARTICLE VII
7
<PAGE> 8
CAPITAL STOCK
SECTION 1. CERTIFICATES OF STOCK. Certificates of stock,
numbered, and sealed with the seal of the corporation, and signed by the
Chairman of the Board of Directors or the Vice-Chairman of the Board of
Directors, or the President or a Vice-President, and the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Treasurer, shall be
issued to each stockholder certifying to the number of shares owned by him in
the corporation. When such certificates are countersigned by (1) a transfer
agent other than the corporation or its employee, or (2) by a registrar other
than the corporation or its employee, any other signatures on the certificate
may be facsimiles.
In case any officer, transfer agent, or registrar who has
signed or whose facsimile signature has been placed upon a certificate shall
have ceased to be such officer, transfer agent or registrar before such
certificate is issued, it may be issued by the corporation with the same effect
as if he were such officer, transfer agent or registrar at the date of issue.
SECTION 2. LOST CERTIFICATES. A new certificate of stock may
be issued in place of any certificate theretofore issued by the corporation and
alleged to have been lost or destroyed, and the Directors may, at their
discretion, request the owner of the lost or destroyed certificates, or his
legal representative, to give the corporation a bond, in such sum as they may
direct, but not exceeding double the value of the stock to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss of such certificate.
SECTION 3. TRANSFER OF SHARES. Pursuant to the provisions of
the Uniform Commercial Code.
SECTION 4. 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, or to express
consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect to any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall be not more than
sixty (60) nor less than ten (10) days prior to the date of such meeting, nor
more than sixty (60) days prior to any other action. 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, however,
that the Board of Directors may fix a new record date for the adjourned
meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the
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Certificate of Incorporation and the laws of the State of Delaware, the Board
of Directors, at any regular or special meeting, may declare dividends upon the
capital stock of the corporation, as and when they may deem expedient.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 1. CORPORATE SEAL. The Board of Directors shall
adopt and may alter a common seal of the corporation. Said seal shall be
circular in form and shall contain the name of the corporation, the year of its
creation, and the words: "CORPORATE SEAL DELAWARE". It may be used by causing
it or a facsimile thereof to be impressed, affixed, or otherwise reproduced.
SECTION 2. FISCAL YEAR. The fiscal year of the corporation
shall end on December 31st.
SECTION 3. CHECKS, DRAFTS, NOTES. All checks, drafts, or
other orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation, shall be signed by such officer or
officers, agent or agents of the corporation, and in such manner as shall from
time to time be determined by resolution of the Board of Directors.
SECTION 4. CORPORATE RECORDS. The corporation shall keep
correct and complete books of account and minutes of the proceedings of its
stockholders and Directors, as well as an original stock ledger or list of
stockholders, containing the names and addresses of the stockholders, the
number of shares held by them, and the date of issuance of said certificates of
stock.
Any stockholder of record, in person or my attorney or other
agent, upon written demand under oath stating the purpose thereof, shall have
the right, during the usual hours for business, to inspect for any proper
purpose the books and records of the corporation, as well as its stock ledger
and/or list of stockholders, and to make copies or extracts therefrom. Such
demand under oath shall be directed to the corporation at its registered office
in the State of Delaware of at its principal place of business.
SECTION 5. NOTICE AND WAIVER OF NOTICE. Whenever, pursuant
to the laws of the State of Delaware or these Bylaws, any notice is required to
be given, personal notice is not meant unless expressly so stated, and any
notice so required shall be deemed to be sufficient if given by depositing the
same in the United States mail, postage prepaid, addressed to the person
entitled thereto at his address as it appears on the records of the
corporation, and such notice shall be deemed to have been given on the day of
such
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<PAGE> 10
mailing. Stockholders not entitled to vote shall not be entitled to receive
notice of any meetings except as otherwise provided by statute.
Any notice required to be given may be waived, in writing, by
the person or persons entitled to such notice, whether before or after the time
stated therein.
ARTICLE IX
AMENDMENTS
SECTION 1. AMENDMENTS OF BYLAWS. These Bylaws may be altered
or repealed, and Bylaws may be made at any annual meeting of stockholders, or
at any special meeting thereof if notice of the proposed alteration or repeal,
or Bylaw or Bylaws to be made, be contained in the notice of such special
meeting, by the affirmative vote of a majority of the stock issued and
outstanding and entitled to vote thereat; or by the affirmative vote of a
majority of the entire Board of Directors, at any regular meeting of the Board,
or at any special meeting thereof if notice of the proposed alteration or
repeal, or Bylaw or Bylaws to be made, be contained in the notice of such
special meeting.
10
<PAGE> 1
EXHIBIT 3.9
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
In compliance with the requirements of section 806 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. Section 18061, the
undersigned corporation, desiring to amend its Articles, does hereby certify
that
1. The name of the Corporation is:
ENVIRODYNE PLANALOG, INC.
2. The location and post office address of the initial registered office
of the corporation in this Commonwealth is:
123 South Broad Street, Philadelphia, Pennsylvania 19109,
c/o C T Corporation System, County of Philadelphia
3. The corporation is incorporated under the Business Corporation Law of
the Commonwealth of Pennsylvania for the following purpose or
purposes:
To manufacture equipment for displaying critical path networks; to
provide consulting services in the project management field; to
design total project management systems; and to organize and conduct
management training seminars and work shops.
In general, to engage in any lawful activity for which corporations
may be organized under the Pennsylvania Business Corporation Law.
4. The term for which the corporation is to exist is: Perpetual
5. The aggregate number of shares which the corporation shall have
authority to issue is: One thousand (1,000) shares of common stock of
the par value of One Dollar ($1.00) each, amounting in the aggregate
value of One Thousand Dollars ($1,000.00).
6. The name(s) and post office address(es) of each incorporator(s) is
(are):
Name Address Number and class of shares
George Lewis 123 S. Broad St.,
Phila., PA 19109 3
7. The director may make, alter, amend and repeal the by-laws subject to
the power of the shareholders to change such action.
<PAGE> 2
IN TESTIMONY WHEREOF, the undersigned corporation has (have) signed
and sealed these Articles of Incorporation this 28th day of February, 1974.
By: /s/ George Lewis
----------------------
<PAGE> 3
COMMONWEALTH OF PENNSYLVANIA
DEPARTMENT OF STATE
CORPORATION BUREAU
In compliance with the requirements of section 806 of the Business
Corporation Law, act of May 5, 1933 (P.L. 364) (15 P.S. Section 18061, the
undersigned corporation, desiring to amend its Articles, does hereby certify
that
1. The name of the Corporation is:
ENVIRODYNE PLANALOG, INC.
2. The location of its registered office in this Commonwealth is (the
Department of State is hereby authorized to correct the following
statement to conform to the records of the Department):
140 MILL CREEK ROAD, GLADWYNE, PENNSYLVANIA 19035
3. The statute by or under which it was incorporated is:
PENNSYLVANIA BUSINESS CORPORATION LAW
4. The date of its incorporation is: 3/1/74
5. (Check, and if appropriate, complete one of the following):
[ ] The meeting of the shareholders of the corporation at which
the amendment was adopted was held at the time and place and pursuant
to the kind and period of notice herein stated.
Time: The ______ day of ______________, 19__.
Place: _____________________________________________________
Kind and period of notice:__________________________________
[X] The amendment was adopted by a consent in writing, setting
forth the action so taken, signed by all of the shareholders entitled
to vote thereon and filed with the Secretary of the corporation.
6. At the time of the action of shareholders:
(a) The total number of shares outstanding was: n/a
(b) The number of shares entitled to vote was: n/a
7. In the action taken by the shareholders:
<PAGE> 4
(a) The number of shares voted in favor of the amendment was: n/a
(b) The number of shares voted against the amendment was: n/a
8. The amendment adopted by the shareholders, set forth in full, as
follows:
"1. The name of the corporation is
VISKASE CORPORATION"
IN TESTIMONY WHEREOF, the undersigned corporation has caused these
Articles of Amendment to be signed by a duly authorized officer and its
corporate seal, duly attested by another such officer, to be hereunto affixed
this 14th day of January, 1986.
By: /s/ Lawrence L. Henry
-----------------------
President
Attest:
Maxine H. Linde
------------------
Secretary
(Corporate Seal)
<PAGE> 1
EXHIBIT 3.10
VISKASE CORPORATION
AMENDED AND RESTATED BY-LAWS
ARTICLE I
OFFICES
Section 1. The registered office shall be located in the City of
Philadelphia, Commonwealth of Pennsylvania.
Section 2. The corporation may also have offices at such other places
both within and without the Commonwealth of Pennsylvania as the board of
directors may from time to time determine or the business of the corporation
may require.
ARTICLE II
MEETING OF SHAREHOLDERS
Section 1. All meetings of the shareholders shall be held at such
place within or without the Commonwealth, as may be from time to time fixed or
determined by the board of directors. One or more shareholders may participate
in a meeting of the shareholders by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting may hear each other.
Section 2. An annual meeting of the shareholders, commencing with the
year 1974, shall be held at such time and date as the board of directors may
determine or on the first Monday of June if not a legal holiday and, if a legal
holiday, then on the next secular day following at 10:00 A.M., when they shall
elect by a plurality vote a board of directors, and transact such other
business as may properly be brought before the meeting.
<PAGE> 2
Section 3. Special meetings of the shareholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the articles of
incorporation, may be called at any time by the chairman of the board of
directors, the president, or a majority of the board of directors, or the
holders of not less than one-fifth of all the shares issued and outstanding and
entitled to vote at the particular meeting, upon written request delivered to
the secretary of the corporation. Such request shall state the purpose or
purposes of the proposed meeting. Upon receipt of any such request, it shall
be the duty of the secretary to call a special meeting of the shareholders to
be held at such time, not more than sixty days thereafter, as the secretary may
fix. If the secretary shall neglect to issue such call, the person or persons
making the request may issue the call.
Section 4. Written notice of every meeting of the shareholders,
specifying the place, date and hour and the general nature of the business of
the meeting, shall be served upon or mailed, postage prepaid, at least five
days prior to the meeting, unless a greater period of notice is required by
statute, to each shareholder entitled to vote thereat.
Section 5. The officer having charge of the transfer books for shares
of the corporation shall prepare and make, at least five days before each
meeting of shareholders, a complete list of the shareholders entitled to vote
at the meeting, arranged in alphabetical order with the address and the number
of shares held
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by each, which list shall be kept on file at the registered office of the
corporation and shall be subject to inspection by any shareholder at any time
during usual business hours. Such list shall also be produced and kept open at
the time and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting.
Section 6. Business transacted at all special meetings of
shareholders shall be limited to the purposes stated in the notice.
Section 7. The holders of a majority of the issued and outstanding
shares entitled to vote, present in person or represented by proxy, shall be
requisite and shall constitute a quorum at all meetings of the shareholders for
the transaction of business, except as otherwise provided by statute or by the
articles of incorporation or by these by-laws. If, however, any meeting of
shareholders cannot be organized because a quorum has not attended, the
shareholders entitled to vote thereat, present in person or by proxy, shall
have power, except as otherwise provided by statute, to adjourn the meeting to
such time and place as they may determine, but in the case of any meeting
called for the election of directors such meeting may be adjourned only from
day to day or for such longer periods not exceeding fifteen days each as the
holders of a majority of the shares present in person or by proxy shall direct,
and those who attend the second of such adjourned meetings, although less than
a quorum, shall nevertheless constitute a quorum for the purpose of electing
directors. At any
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adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting as
originally notified.
Section 8. When a quorum is present or represented at any meeting,
the vote of the holders of a majority of the shares having voting powers,
present in person or represented by proxy, shall decide any question brought
before such meeting, unless the question is one upon which, by express
provision of the statutes or of the articles of incorporation or of these
by-laws, a different vote is required in which case such express provision
shall govern and control the decision of such question.
Section 9. Each shareholder shall at every meeting of the
shareholders be entitled to one vote in person or by proxy for each share
having voting power held by such shareholder, but no proxy shall be voted on
after three years from its date, unless coupled with an interest, and, except
where the transfer books of the corporation have been closed or a date has been
fixed as a record date for the determination of its shareholders entitled to
vote, transferees of shares which are transferred on the books of the
corporation within ten days next preceding the date of such meeting shall not
be entitled to vote at such meeting.
Section 10. In advance of any meeting of shareholders, the board of
directors may appoint judges of election, who need not be shareholders, to act
at such meeting or any adjournment thereof. If judges of election be not so
appointed, the chairman of any such
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<PAGE> 5
meeting may and, on the request of any shareholder or his proxy, shall make
such appointment at a meeting. The number of judges shall be one or three. If
appointed at a meeting on the request of one or more shareholders or proxies,
the majority of shares present and entitled to vote shall determine whether one
or three judges are to be appointed. No person who is a candidate for office
shall act as a judge. The judges of election shall do all such acts as may be
proper to conduct the election or vote with fairness to all shareholders, and
shall make a written report of any matter determined by them and execute a
certificate of any fact found by them, if requested by the chairman of the
meeting or any shareholder or his proxy. If there be three judges of election
the decision, act or certificate of a majority, shall be effective in all
respects as the decision, act or certificate of all.
Section 11. Any action which may be taken at a meeting of the
shareholders may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the shareholders who would
be entitled to vote at a meeting for such purpose and shall be filed with the
secretary of the corporation.
ARTICLE III
DIRECTORS
Section 1. The number of directors which shall constitute the whole
board shall be four (4). The directors shall be elected at the annual meeting
of the shareholders, except as provided in
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Section 2 of this article, and each director shall hold office until his
successor is elected and qualified. Directors need not be shareholders.
Section 2. Vacancies and newly created directorships resulting from
any increase in the authorized number of directors shall be filled by a
majority of the remaining directors, though less than a quorum and each person
so elected shall be a director until his successor is elected by the
shareholders, who may make such election at the next annual meeting of the
shareholders or at any special meeting duly called for that purpose and held
prior thereto.
Section 3. The business of the corporation shall be managed by its
board of directors which may exercise all such powers of the corporation and do
all such lawful acts and things as are not by statute or by the articles of
incorporation or by these by-laws directed or required to be exercised and done
by the shareholders.
MEETINGS OF THE BOARD OF DIRECTORS
Section 4. The board of directors of the corporation may hold
meetings, both regular and special, either within or without the Commonwealth
of Pennsylvania. One or more directors may participate in a meeting of the
board or of a committee of the board by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other.
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<PAGE> 7
Section 5. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the shareholders at
the meeting at which such directors were elected and no notice of such meeting
shall be necessary to the newly elected directors in order legally to
constitute the meeting, provided a majority of the whole board shall be
present. In the event of the failure of the shareholders to fix the time or
place of such first meeting of the newly elected board of directors, or in the
event such meeting is not held at the time and place so fixed by the
shareholders, the meeting may be held at such time and place as shall be
specified in a notice given as hereinafter provided for such meetings of the
board of directors, or as shall be specified in a written waiver signed by all
of the directors.
Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by resolution of at least a majority of the board at a duly convened
meeting, or by unanimous written consent.
Section 7. Special meetings of the board may be called by the
chairman of the board of directors or the president on one (1) days' notice to
each director, either personally or by mail or by telegram; special meetings
shall be called by the chairman of the board of directors, the president or the
secretary in like manner and on like notice on the written request of two
directors.
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<PAGE> 8
Section 8. At all meetings of the board a majority of the directors
in office shall be necessary to constitute a quorum for the transaction of
business, and the acts of a majority of the directors present at a meeting at
which a quorum is present shall be the acts of the board of directors, except
as may be otherwise specifically provided by statute or by the articles of
incorporation. If a quorum shall not be present at any meeting of directors,
the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall be
present.
Section 9. If all the directors shall severally or collectively
consent in writing to any action to be taken by the corporation, such action
shall be as valid a corporate action as though it had been authorized at a
meeting of the board of directors.
COMMITTEES
Section 10. The board of directors may, by resolution adopted by a
majority of the whole board, designate one or more committees, each committee
to consist to two 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. Any
such committee to the extent provided in such resolution or in these by-laws,
shall have and exercise the authority of the board of directors in the
management of the business and affairs of the
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corporation. In the absence or disqualification of any member of such
committee or committees, the members or members thereof present at any meeting
and not disqualified from voting, whether or not he or they constitute a
quorum, may unanimously appoint another director to act at the meeting in the
place of any such absent or disqualified member. The committees shall keep
regular minutes of the proceedings and report the same to the board when
required.
COMPENSATION OF DIRECTORS
Section 11. Directors as such shall not receive any stated salary for
their services but, by resolution of the board, a fixed sum, and expenses of
attendance if any, may be allowed for attendance at each regular or special
meeting of the board or at meetings of the executive committee; provided that
nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
ARTICLE IV
NOTICES
Section 1. Notices to directors and shareholders shall be in writing
and delivered personally or mailed to the directors or shareholders at their
addresses appearing on the books of the corporation. Notice by mail shall be
deemed to be given at the time when the same shall be mailed. Notice to
directors may also be given by telegram.
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<PAGE> 10
Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the articles of incorporation or of these
by-laws, a waiver thereof in writing signed by the person or persons entitled
to said notice, whether before or after the time stated therein, shall be
deemed equivalent thereto.
ARTICLE V
OFFICERS
Section 1. The officers of the corporation shall be chosen by the
board of directors and shall be a chairman of the board of directors, a
president, a vice-president, a secretary and a treasurer. The chairman of the
board of directors, the president and the secretary shall be natural persons of
full age; the treasurer may be a corporation but, if a natural person, shall be
of full age. The board of directors may also choose additional vice-presidents
and one or more assistant secretaries and assistant treasurers. Any two of the
aforesaid offices may be held by the same person.
Section 2. The board of directors, immediately after each annual
meeting of shareholders, shall elect a chairman of the board of directors, who
shall be a director, and a president, a vice-president, a secretary and a
treasurer, each of whom may, but need not be a director.
Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their
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<PAGE> 11
offices for such terms and shall exercise such powers and perform such duties
as shall be determined from time to time by the board.
Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.
Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualify. Any officer elected or appointed by
the board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.
THE CHAIRMAN OF THE BOARD OF DIRECTORS
Section 6. The chairman of the board of directors shall preside at
all meetings of the stockholders and of the board of directors. Except where
by law the signature of the president is required, the chairman of the board of
directors shall possess the same power as the president to sign all contracts,
certificates and other instruments of the corporation which may be authorized
by the board of directors. During the absence or disability of the president,
the chairman of the board of directors shall exercise all the powers and
discharge all the duties of the president. The chairman of the board of
directors shall also perform such other duties and may exercise such other
powers as from time to time may be assigned to him by these by-laws or by the
board of directors.
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THE PRESIDENT
Section 7. The president shall, subject to the control of the board
of directors and the chairman of the board of directors, be the chief executive
officer of the corporation, shall have general and active management of the
business of the corporation and shall see that all orders and resolutions of
the board of directors are carried into effect.
Section 8. He shall execute bonds, mortgages and other contracts
requiring a seal, under the seal of the corporation, except where required or
permitted by law to be otherwise signed and executed and except where the
signing and execution thereof shall be expressly delegated by the board of
directors to some other officer or agent of the corporation.
THE VICE-PRESIDENTS
Section 9. The vice-president, or if there shall be more than one,
the vice-presidents in the order determined by the board of directors, shall,
in the absence or disability of the president and the chairman of the board of
directors, perform the duties and exercise the powers of the president, and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.
THE SECRETARY AND ASSISTANT SECRETARIES
Section 10. The secretary shall attend all meetings of the board of
directors and all meetings of the shareholders and record all the proceedings
of the meetings of the corporation and of the
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board of directors in a book to be kept for that purpose and shall perform like
duties for the executive committee when required. He shall give, or cause to
be given, notice of all meetings of the shareholders and special meetings of
the board of directors, and shall perform such other duties as may be
prescribed by the board of directors or president, under whose supervision he
shall be. He shall keep in safe custody the seal of the corporation and, when
authorized by the board of directors, affix the same to any instrument
requiring it and, when so affixed, it shall be attested by his signature or by
the signature of an assistant secretary.
Section 11. The assistant secretary, or if there be more than one,
the assistant secretaries in the order determined by the board of directors,
shall, in the absence or disability of the secretary, perform the duties and
exercise the powers of the secretary and shall perform such other duties and
have such other powers as the board of directors may from time to time
prescribe.
THE TREASURER AND ASSISTANT TREASURERS
Section 12. The treasurer shall have the custody of the corporate
funds and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all
moneys and other valuable effects in the name and to the credit of the
corporation in such depositories as may be designated by the board of
directors.
Section 13. He shall disburse the funds of the corporation as may be
ordered by the board of directors, taking proper vouchers
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for such disbursements, and shall render to the chairman of the board of
directors and the president and to the board of directors, at its regular
meetings, or when the board of directors so requires, an account of all his
transactions as treasurer and of the financial condition of the corporation.
Section 14. If required by the board of directors, he shall give the
corporation a bond in such sum and with such surety or sureties as shall be
satisfactory to the board of directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of his
death, resignation, retirement or removal from office, of all books, papers,
vouchers, money and other property of whatever kind in his possession or under
his control belonging to the corporation.
Section 15. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of
directors, shall, in the absence or disability of the treasurer, perform the
duties and exercise the powers of the treasurer and shall perform such other
duties and have such other powers as the board of directors may from time to
time prescribe.
ARTICLE VI
CERTIFICATES OF SHARES
Section 1. The certificates of shares of the corporation shall be
numbered and registered in a share register as they are issued. They shall
exhibit the name of the registered holder and the number and class of shares
and the series, if any, represented
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thereby and the par value of each share or a statement that such shares are
without par value as the case may be. If more than one class of shares is
authorized, the certificate shall state that the corporation will furnish to
any shareholder, upon request and without charge a full or summary statement of
the designations, preferences, limitations, and relative rights of the shares
of each class authorized to be issued, and the variations thereof between the
shares of each series, and the authority of the board of directors to fix and
determine the relative rights and preferences of subsequent series.
Section 2. Every share certificate shall be signed by the chairman of
the board of directors, the president or a vice-president and the secretary or
an assistant secretary or the treasurer or an assistant treasurer and shall be
sealed with the corporate seal which may be facsimile, engraved or printed.
Section 3. Where a certificate is signed by a transfer agent or an
assistant transfer agent or a registrar, the signature of any such chairman of
the board of directors, president, vice-president, secretary, assistant
secretary, treasurer or assistant treasurer may be facsimile. In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on, any such certificate or certificates shall cease to be such
officer or officers of the corporation, whether because of death, resignation
or otherwise, before such certificate or certificates have been delivered by
the corporation, such certificate or certificates may
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nevertheless be adopted by the corporation and be issued and delivered as
though the person or persons who signed such certificate or certificates or
whose facsimile signature or signatures have been used thereon had not ceased
to be such officer or officers of the corporation.
LOST CERTIFICATES
Section 4. The board of directors shall direct a new certificate or
certificates to be issued in place of any certificate or certificates
theretofore issued by the corporation alleged to have been lost, destroyed or
wrongfully taken, upon the making of an affidavit of that fact by the person
claiming the share certificate to be lost, destroyed or wrongfully taken. When
authorizing such issue of a new certificate or certificates, the board of
directors may, in its discretion and as a condition precedent to the issuance
thereof, require the owner of such lost, destroyed or wrongfully taken
certificate or certificates, or his legal representative, to advertise the same
in such manner as it shall require and give the corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against the
corporation with respect to the certificate or certificates alleged to have
been lost, destroyed or wrongfully taken.
TRANSFERS OF SHARES
Section 5. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignment or
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authority to transfer, it shall be the duty of the corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
CLOSING OF TRANSFER BOOKS
Section 6. The board of directors may fix a time, not more than fifty
days, prior to the date of any meeting of shareholders or the date fixed for
the payment of any dividend or distribution or the date for the allotment of
rights or the date when any change or conversion or exchange of shares will be
made or go into effect, as a record date for the determination of the
shareholders entitled to notice of and to vote at any such meeting or entitled
to receive payment of any such dividend or distribution or to receive any such
allotment of rights or to exercise the rights with respect to any such change,
conversion or exchange of shares. In such case only such shareholders as shall
be shareholders of record on the date so fixed shall be entitled to notice of
and to vote at such meeting or to receive payment of such dividend or to
receive such allotment of rights or to exercise such rights, as the case may
be, notwithstanding any transfer of any shares on the books of the corporation
after any record date so fixed. The board of directors may close the books of
the corporation against transfers of shares during the whole or any part of
such period and in such case written or printed notice thereof shall be mailed
at least ten days before the closing thereof to each shareholder of record at
the
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address appearing on the records of the corporation or supplied by him to the
corporation for the purpose of notice.
REGISTERED SHAREHOLDERS
Section 7. The corporation shall be entitled to treat the holder of
record of any share or shares as the holder in fact 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, and shall not be liable for any registration or
transfer of shares which are registered or to be registered in the name of a
fiduciary or the nominee of a fiduciary unless made with actual knowledge that
a fiduciary or nominee of a fiduciary is committing a breach of trust in
requesting such registration or transfer, or with knowledge of such facts that
its participation therein amounts to bad faith.
ARTICLE VII
GENERAL PROVISIONS
DIVIDENDS
Section 1. Dividends upon the shares of the corporation, subject to
the provisions of the articles of incorporation, if any, may be declared by the
board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in its shares, subject to the
provisions of the articles of incorporation.
Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends
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such sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for such other purpose as the directors shall think conducive
to the interest of the corporation, and the directors may modify or abolish any
such reserve in the manner in which it was created.
FINANCIAL REPORT TO SHAREHOLDERS
Section 3. The directors shall not be required to send, or cause to
be sent, to the shareholders, a financial report as of the closing date of the
preceding fiscal year.
CHECKS
Section 4. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other person or
persons as the board of directors may from time to time designate.
FISCAL YEAR
Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.
SEAL
Section 6. The corporate seal shall have inscribed thereon the name
of the corporation, the year of its organization and the words "Corporate Seal,
Pennsylvania." The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.
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ARTICLE VIII
AMENDMENTS
Section 1. These by-laws may be altered, amended or repealed by a
majority vote of the shareholders entitled to vote thereon at any regular or
special meeting duly convened after notice to the shareholders of that purpose
or by a majority vote of the members of the board of directors at any regular
or special meeting duly convened after notice to the directors of that purpose,
subject always to the power of the shareholders to change such action by the
directors.
ARTICLE IX
INDEMNIFICATION
Section 1. This corporation shall indemnify its officers, directors
and employees to the fullest extent permitted by the laws of the Commonwealth
of Pennsylvania.
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EXHIBIT 3.11
CERTIFICATE OF OWNERSHIP AND MERGER
of
VISKASE HOLDING CORPORATION
(a California corporation)
into
CHARLEY & COMPANY
(a Delaware corporation)
It is hereby certified that:
1. Viskase Holding Corporation (hereinafter called the
"Corporation") is a corporation of the State of California, the laws of which
permit a merger of a corporation of that jurisdiction with a corporation of
another jurisdiction.
2. The Corporation, as the owner of all of the outstanding shares
of the stock of Charley & Company, hereby merges itself into Charley & Company,
a corporation of the State of Delaware.
3. The following is a copy of the resolutions adopted on the 14th
day of April, 1987, by the Board of Directors of the Corporation to merge the
Corporation into Charley & Company:
RESOLVED that this Corporation be reincorporated in the State
of Delaware by merging itself into Charley & Company, which shall be
the surviving Corporation in a transaction qualifying as a
reorganization within the meaning of Section 368(a)(1)(F) of the
Internal Revenue Code, pursuant to the laws of the State of California
and the State of Delaware as hereinafter provided, so that the
separate existence of this Corporation shall cease as soon as the
merger shall become effective, and thereupon this Corporation and
Charley & Company will become a single corporation named Viskase
Holding Corporation, which shall continue to exist under, and be
governed by, the laws of the State of Delaware.
RESOLVED that the terms and conditions of the proposed merger
are as follows:
(a) From and after the effective time of the merger, all
of the estate property, rights, privileges, powers, and Franchises of
this Corporation shall become vested in and be held by Charley &
Company as fully and entirely and without change or diminution as the
same were before held and enjoyed by this Corporation, and Charley &
Company shall assume all of the obligations of this Corporation.
<PAGE> 2
(b) No pro rata issuance of the shares of stock of
Charley & Company which are owned by this Corporation immediately
prior to the effective time of the merger shall be made, and such
shares shall be surrendered and extinguished.
(c) Each share of common stock, $1.00 par value, of this
Corporation which shall be issued and outstanding immediately prior to
the effective time of the merger shall be converted into one issued
and outstanding share of common stock, $1.00 par value, of Charley &
Company, and, from and after the effective time of the merger, the
holder of all of said issued and outstanding shares of common stock of
this Corporation shall automatically be and become the holder of
shares of Charley & Company upon the basis above specified, whether or
not certificates representing said shares are then issued and
delivered.
(d) After the effective time of the merger, the holder of
record of the outstanding certificate or certificates theretofore
representing common stock of this Corporation may surrender the same
to Charley & Company or its office in Delaware, and such holder shall
be entitled upon such surrender to receive in exchange therefor a
certificate or certificates representing an equal number of shares of
common stock of Charley & Company. Until so surrendered, each
outstanding certificate which prior to the effective time of the
merger represented one or more shares of common stock of this
Corporation shall be deemed for all corporate purposes to evidence
ownership of an equal number of shares of common stock of Charley &
Company.
(e) From and after the effective time of the merger, the
Certificate of Incorporation and the By-Laws of Charley & Company
shall be the Certificate of Incorporation and the By-Laws of Charley &
Company as in effect immediately prior to such effective time, except
that the name of Charley & Company shall be changed to Viskase Holding
Corporation.
(f) The members of the Board of Directors and officers of
Charley & Company shall be the members of the Board of Directors and
the corresponding officers of Charley & Company immediately before the
effective time of the merger.
(g) From and after the effective time of the merger, the
assets and liabilities of this Corporation and of Charley & Company
shall be entered on the books of Charley & Company at the amounts at
which they shall be carried at such time on the respective books of
this Corporation and of Charley & Company, subject to such
inter-corporate adjustments or eliminations, if any, as
<PAGE> 3
may be required to give effect to the merger; and, subject to such
action as may be taken by the Board of Directors of Charley & Company,
in accordance with generally accepted accounting principles, the
capital and surplus of Charley & Company shall be equal to the capital
and surplus of this Corporation and of Charley & Company.
4. The proposed merger herein certified has been approved in
writing by the holder of all of the outstanding stock entitled to vote of the
Corporation in accordance with the provisions of Section 228 of the General
Corporation Law of Delaware.
Signed and attested to on April 14, 1987.
/s/ Nancy L. Erdle
--------------------------------------
President, Viskase Holding Corporation
Attest:
/s/ Maxine H. Linde
- ------------------------------------------------
Assistant Secretary, Viskase Holding Corporation
<PAGE> 4
CERTIFICATE OF INCORPORATION
OF
CHARLEY & COMPANY
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified and
referred to as the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter called the "Corporation") is
CHARLEY & COMPANY
SECOND: The address, including street, number, city, and county of the
registered office of the corporation in the State of Delaware is 229 South
State Street, City of Dover, County of Kent; and the name of the registered
agent of the corporation in the State of Delaware as such address is United
States Corporation Company.
THIRD: The nature of the business and of the purposes to be conducted
and promoted by the corporation, which shall be in addition to the authority of
the corporation to conduct any lawful business, to promote any lawful purpose,
and to engage in any lawful act or activity for which corporations may be
organized under the General Corporation Law of the State of delaware, is as
follows:
To purchase, receive, take by grant, gift, devise, bequest or
otherwise, lease, or otherwise acquire, own, hold, improve, employ,
use and otherwise deal in and with real or personal property, or any
interest therein, wherever situated, and to sell, convey, lease,
exchange, transfer or otherwise dispose of, or mortgage or pledge, all
or any of its property and assets, or any interest therein, wherever
situated.
To engage generally in the real estate business as principal,
agent, broker, and in any lawful capacity, and generally to take,
lease, purchase, or otherwise acquire, and to own, use, hold, sell,
convey, exchange, lease, mortgage, work, clear, improve, develop,
divide, and otherwise handle, manage, operate, deal in and dispose of
real estate, real property, lands, multiple-dwelling structures,
houses, buildings and other works and any interest or right therein;
to take, lease, purchase or
<PAGE> 5
otherwise handle, and deal in and dispose of, as principal, agent,
broker, and in any lawful capacity, such personal property, chattels,
chattels real, rights, easements, privileges, choses in action, notes,
bonds, mortgages, and securities as may lawfully be acquired, held, or
disposed of; and to acquire, purchase, sell, assign, transfer, dispose
of, and generally deal in and with as principal, agent, broker, and in
any lawful capacity, mortgages and other interests in real, personal,
and mixed properties; to carry on a general construction, contracting,
building, and realty management business as principal, agent,
representative, contractor, subcontractor, and in any other lawful
capacity.
To carry on a general mercantile, industrial, investing, and
trading business in all its branches; to devise, invent, manufacture,
fabricate, assemble, install, service, maintain, alter, buy, sell,
import, export, license as licensor or licensee, lease as lessor or
lessee, distribute, job, enter into, negotiate, execute, acquire, and
assign contracts in respect of, acquire, receive, grant, and assign
licensing arrangements, options, franchises, and other rights in
respect of, and generally deal in and with, at wholesale and retail,
as principal, and as sales, business, special or general agent,
representative, broker, factor, merchant, distributor, jobber,
advisor, and in any other lawful capacity, goods, wares, merchandise,
commodities, and unimproved, improved, finished, processed, and other
real, personal, and mixed property of any and all kinds, together with
the components, resultants, and by-products thereof.
To apply for, register, obtain, purchase, lease, take licenses
in respect of or otherwise acquire, and to hold, own, use, operate,
develop, enjoy, turn to account, grant licenses and immunities in
respect of, manufacture under and to introduce, sell, assign,
mortgage, pledge or otherwise dispose of, and, in any manner deal with
and contract with reference to:
(a) inventions, devices, formulae, processes and any
improvements and modifications thereof;
(b) letters patent, patent rights, patented processes,
copyrights, designs, and similar rights, trade-marks, trade
names, trade symbols and other indications of origin and
ownership granted by or recognized under the laws of the
United States of America, the District of Columbia, any state
or subdivision thereof, and any commonwealth, territory,
<PAGE> 6
possession, dependency, colony, possession, agency or
instrumentality of the United States of America and of any
foreign country, and all rights connected therewith or
appertaining thereunto;
(c) franchises, licenses, grants and concessions.
To guarantee, purchase, take, receive, subscribe for, and
otherwise acquire, own, hold, use, and otherwise employ, sell, lease,
exchange, transfer, and otherwise dispose of, mortgage, lend, pledge,
and otherwise deal in and with, securities (which term, for the
purpose of this Article THIRD, includes, without limitation of the
generality thereof, any shares of stock, bonds, debentures, notes,
mortgages, other obligations, and any certificates, receipts or other
instruments representing rights to receive, purchase or subscribe for
the same, or representing any other rights or interests therein or in
any property or assets) of any persons, domestic and foreign firms,
associations, and corporations, and by any government or agency or
instrumentality thereof; to make payment therefor in any lawful
manner; and, while owner of any such securities, to exercise any and
all rights, powers and privileges in respect thereof, including the
right to vote.
To make, enter into, perform and carry out contracts of every
kind and description with any person, firm, association, corporation
or government or agency or instrumentality thereof.
To acquire by purchase, exchange or otherwise, all, or any
part of, or any interest in, the properties, assets, business and good
will of any one or more persons, firms, associations or corporations
heretofore or hereafter engaged in any business for which a
corporation may now or hereafter be organized under the laws of the
State of Delaware; to pay for the same in cash, property or its own or
other securities; to hold, operate, reorganize, liquidate, sell or in
any manner dispose of the whole or any part thereof; and in connection
therewith, to assume or guarantee performance of any liabilities,
obligations or contracts of such persons, firms, associations or
corporations, and to conduct the whole or any part of any business
thus acquired.
To lend money in furtherance of its corporate purposes and to
invest and reinvest its funds from time to time to such extent, to
such persons, firms, associations, corporations, governments or
agencies or instrumentalities thereof, and on such terms and on such
<PAGE> 7
security, of any, as the Board of Directors of the corporation may
determine.
To make contracts of guaranty and suretyship of all kinds and
endorse or guarantee the payment of principal, interest or dividends
upon, and to guarantee the performance of sinking fund or other
obligations of, any securities, and to guarantee in any way permitted
by law the performance of any of the contracts or other undertakings
in which the corporation may otherwise be or become interested, of any
persons, firm, association, corporation, government or agency or
instrumentality thereof, or of any other combination, organization or
entity whatsoever.
To borrow money without limit as to amount and at such rates
of interest as it may determine; from time to time to issue and sell
its own securities, including its shares of stock, notes, bonds,
debentures, and other obligations, in such amounts, on such terms and
conditions, for such purposes and for such prices, now or hereafter
permitted by the laws of the State of Delaware and by this certificate
of incorporation, as the Board of Directors of the corporation may
determine; and to secure any of its obligations by mortgage, pledge or
other encumbrance of all or any of its property, franchises and
income.
To be a promoter or manager of other corporations of any type
or kind; and to participate with others in any corporation,
partnership, limited partnership, joint venture, or other association
of any kind, or in any transaction, undertaking or arrangement which
the corporation would have power to conduct by itself, whether or not
such participation involves sharing or delegation of control with or
to others.
To draw, make, accept, endorse, discount, execute, and issue
promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, and other negotiable or transferable instruments and
evidences of indebtedness whether secured by mortgage or otherwise, as
well as to secure the same by mortgage or otherwise, so far as may be
permitted by the laws of the State of Delaware.
To purchase, receive, take, reacquire or otherwise acquire,
own and hold, sell, lend, exchange, reissue, transfer or otherwise
dispose of, pledge, use, cancel, and otherwise deal in and with its
own shares and its other securities from time to time to such an
extent and in such manner and upon such terms as the Board of
Directors of the corporation shall determine; provided that the
corporation shall not use its funds or property for the purchase of
its own shares of capital stock when
<PAGE> 8
its capital is impaired or when such use would cause any impairment of
its capital, except to the extent permitted by law.
To organize, as an incorporator, or cause to be organized
under the laws of the State of Delaware, or of any other State of the
United States of America, or of the District of Columbia, or of any
commonwealth, territory, dependency, colony, possession, agency, or
instrumentality of the United States of America, or of any foreign
country, a corporation or corporations may be organized, and to
dissolve, wind up, liquidate, merge or consolidate any such
corporation or corporations or to cause the same to be dissolved,
wound up, liquidated, merged or consolidated.
To conduct its business, promote its purposes, and carry on
its operations in any and all of its branches and maintain offices
both within and without the State of Delaware, in any and all States
of the United States of America, in the District of Columbia, and in
any or all commonwealths, territories, dependencies, colonies,
possessions, agencies, or instrumentalities of the United States of
America and of foreign governments.
To promote and exercise all or any part of the foregoing
purposes and powers in any and all parts of the world, and to conduct
its business in all or any of its branches as principal, agent,
broker, factor, contractor, and in any other lawful capacity, either
alone or through or in conjunction with any corporations,
associations, partnerships, firms, trustees, syndicates, individuals,
organizations, and other entities in any part of the world, and, in
conducting its business and promoting any of its purposes, to maintain
offices, branches and agencies in any part of the world, to make and
perform any contracts and to do any acts and things, and to carry on
any business, and to exercise any powers and privileges suitable,
convenient, or proper for the conduct, promotion, and attainment of
any of the business and purposes herein specified or which at any time
may be incidental thereto or may appear conducive to or expedient for
the accomplishment of any of such business and purposes and which
might be engaged in or carried on by a corporation incorporated or
organized under the General Corporation Law of the State of Delaware,
and to have and exercise all of the powers conferred by the laws of
the State of Delaware upon corporations incorporated or organized
under the General Corporation Law of the State of Delaware.
The foregoing provisions of this Article THIRD shall be construed both
as purposes and powers and each as an independent purpose and power. The
foregoing enumeration of specific purposes
<PAGE> 9
and powers shall not be held to limit or restrict in any manner the purposes
and powers of the corporation, and the purposes and powers herein specified
shall, except when otherwise provided in this Article THIRD, be in no wise
limited or restricted by reference to, or inference from, the terms of any
provision of this or any other Article of this certificate of incorporation;
provided, that the corporation shall not conduct any business, promote any
purpose, or exercise any power or privilege within or without the State of
Delaware which, under the laws thereof, the corporation may not lawfully
conduct, promote, or exercise.
FOURTH: The total number of shares of stock which the
corporation shall have authority to issue is One Thousand (1,000). The par
value of each of such shares is One Dollar ($1.00). All such shares are of one
class and are shares of Common Stock.
FIFTH: The name and mailing address of the incorporator are
as follows:
NAME MAILING ADDRESS
T.M. Bonovich 229 South State Street, Dover, Delaware 19901
SIXTH: The corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed
between this corporation and its creditors or any class of them and/or between
this corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in
a summary way of this corporation or of any creditor or stockholder thereof or
on the application of any receiver or receivers appointed for this corporation
under the provisions of section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers
appointed for this corporation under the provisions of section 279 of Title 8
of the Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation, as the
case may be, to be summoned in such manner as the said court directs. If a
majority in number representing three-fourths in value of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this corporation, as the case may be,
and also on this corporation.
EIGHTH: For the management of the business and for the
conduct of the affairs of the corporation, and in further definition,
limitation and regulation of the powers of the
<PAGE> 10
corporation and of its directors and of its stockholders or any class thereof,
as the case may be, it is further provided:
1. The management of the business and the conduct of the
affairs of the corporation shall be vested in its Board of Directors.
The number of directors which shall constitute the whole Board of
Directors shall be fixed by, or in the manner provided in, the
By-Laws. The phrase "whole Board" and the phrase "total number of
directors" shall be deemed to have the same meaning, to wit, the total
number of directors which the corporation would have if there were no
vacancies. No election of directors need be by written ballot.
2. After the original or other By-Laws of the
corporation have been adopted, amended, or repealed, as the case may
be, in accordance with the provisions of Section 109 of the General
Corporation Law of the State of Delaware, and, after the corporation
has received any payment for any of its stock, the power to adopt,
amend, or repeal the By-Laws of the corporation may be exercised by
the Board of Directors of the corporation; provided, however, that any
provision for the classification of directors of the corporation for
staggered terms pursuant to the provisions of subsection (d) of
Section 141 of the General Corporation Law of the State of Delaware
shall be set forth in an initial By-Law or in a By-Law adopted by the
stockholders entitled to vote of the corporation unless provisions for
such classification shall be set forth in this certificate of
incorporation.
3. Whenever the corporation shall be authorized to issue
only one class of stock, each outstanding share shall entitle the
holder thereof to notice of, and the right to vote at, any meeting of
stockholders. Whenever the corporation shall be authorized to issue
more than one class of stock, no outstanding share of any class of
stock which is denied voting power under the provisions of the
certificate of incorporation shall entitle the holder thereof to the
right to vote at any meeting of stockholders except as the provisions
of paragraph (2) of subsection (b) of Section 242 of the General
Corporation Law of the State of Delaware shall otherwise require;
provided, that no share of any such class which is otherwise denied
voting power shall entitle the holder thereof to vote upon the
increase or decrease in the number of authorized shares of said class.
NINTH: The personal liability of the directors of the corporation is
hereby eliminated to the fullest extent permitted by paragraph (7) of
subsection (b) of Section 102 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented.
<PAGE> 11
TENTH: The corporation shall, to the fullest extent
permitted by Section 145 of the General Corporation Law of the State of
Delaware, as the same may be amended and supplemented, indemnify any and all
persons whom it shall have power to indemnify under said section from and
against any and all of the expenses, liabilities or other matters referred to
in or covered by said section, and the indemnification provided for herein
shall not be deemed exclusive of any other rights to which those indemnified
may be entitled under any By-Law, agreement, vote of stockholders or
disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors and
administrators of such a person.
ELEVENTH: From time to time any of the provisions of this
certificate of incorporation may be amended, altered or repealed, and other
provisions authorized by the laws of the State of Delaware at the time in force
may be added or inserted in the manner and at the time prescribed by said laws,
and all rights at any time conferred upon the stockholders of the corporation
by this certificate of incorporation are granted subject to the provisions of
this Article ELEVENTH.
Signed on April 1, 1987.
s/s T. M. Bonovich
-------------------
Incorporator
<PAGE> 1
EXHIBIT 3.12
(CHARLEY & COMPANY)
VISKASE HOLDING CORPORATION
BYLAWS
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained at the office of the UNITED STATES CORPORATION
COMPANY, located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware, and said UNITED STATES CORPORATION COMPANY shall be
the registered agent of the corporation thereof.
SECTION 2. OTHER OFFICES. The corporation may establish other
offices, either within or without the State of Delaware, at such place or
places as the Board of Directors, from time to time, may designate or the
business of the corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders
shall be held on the first Monday of June each year, at such time as shall be
stated in the notice, or said meetings may be held at such time and place,
either within or without the State of Delaware, as the Board of Directors by
resolution shall determine, and as set forth in the notice of the meeting.
If the date of the annual meeting shall fall on a legal holiday
of the state in which the meeting is to be held, the meeting shall be held on
the next succeeding business day.
At each annual meeting, the stockholders entitled to vote shall
elect a Board of Directors, and they may transact such other corporate business
as shall be stated in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose or purposes, may be called by the President or
the Secretary, or by resolution of the Board of Directors, and may be held at
such time and place as shall be stated in the notice of the meeting.
1
<PAGE> 2
SECTION 3. NOTICE OF MEETINGS. Written notice, stating the
place, date and time of the meeting, and the general nature of the business to
be considered, shall be given to each stockholder entitled to vote thereat, at
his address as it appears on the records of the corporation, not less than ten
(10) nor more than fifty (50) days prior to the date of the meeting. No
business other than that stated in the notice shall be transacted at any
meeting without the unanimous consent of all of the stockholders entitled to
vote thereat.
SECTION 4. VOTING. Each stockholder entitled to vote in
accordance with the terms of the Certificate of Incorporation, the provisions
of these Bylaws, and the laws of the State of Delaware, shall be entitled to
one vote, in person or by proxy, for each share of stock entitled to vote held
by such stockholder, but no proxy shall be voted after three (3) years from its
date unless such proxy provides for a longer period. Upon the demand of any
stockholder, the vote for Directors and the vote upon any question before the
meeting shall be by written ballot. All elections for Directors shall be
decided by plurality vote; all other questions shall be decided by majority
vote, except as otherwise provided by the Certificate of Incorporation or the
laws of the State of Delaware.
A complete list of the stockholders entitled to vote at a
meeting, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be open to the examination of any
stockholders, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten (10) 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
registered office of the corporation in the State of Delaware. The list shall
also be produced and kept available at the time and place of the meeting,
during the entire time thereof, and may be inspected by any stockholder or his
proxy who may be present.
SECTION 5. QUORUM. Except as otherwise required by law, by the
Certificate of Incorporation, or by these Bylaws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
issued and outstanding and entitled to vote shall constitute a quorum at all
meetings of stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat,
present either in person or by proxy, shall have power to adjourn the meeting,
from time to time, without notice other than an announcement at the meeting,
until the requisite amount of stock entitled to vote shall be present. At any
such adjourned meeting at which the requisite amount of stock entitled to vote
shall be represented, any business may be transacted which might have been
transacted at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed
2
<PAGE> 3
shall be entitled to vote at any adjournment or adjournments thereof.
SECTION 6. ACTION WITHOUT MEETING. Any action to be taken by
the stockholders may be taken without a meeting if, prior to such action, all
stockholders entitled to vote thereon shall consent to the action by a writing
filed with the records of the meetings of stockholders, and such consent shall
be treated for all purposes as a vote at a meeting.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. The number of Directors, to be
determined by the Board of Directors, shall be not less than three (3) nor more
than five (5), until changed by amendment of these Bylaws. The number of
initial Directors shall be three (3). The Directors shall be elected at the
annual meeting of stockholders, and each Director shall be elected to serve
until his successor shall be elected and shall have qualified.
The Directors need not be stockholders.
SECTION 2. QUORUM. A majority of the Directors shall constitute
a quorum for the transaction of business. If at any meeting of the Board there
shall be less than a quorum present, a majority of those present may adjourn
the meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
so adjourned.
SECTION 3. FIRST MEETING. The newly elected Directors may hold
their first meeting for the purpose of organization and the transaction of
business, if a quorum be present, immediately after the annual meeting of the
stockholders; or writing of all the directors.
SECTION 4. ELECTION OF OFFICERS. At the first meeting, or at
any subsequent meeting called for that purpose, the Directors shall elect the
officers of the corporation, as more specifically set forth in ARTICLE V of
these Bylaws. Such officers shall hold office until the next annual election
of officers, or until their successors are elected and shall have qualified.
SECTION 5. REGULAR MEETINGS. Regular meetings of the Directors
may be held, without notice, at such places and times as from time to time
shall be determined by resolution of the Board of Directors.
SECTION 6. SPECIAL MEETINGS. Special meetings of the
3
<PAGE> 4
Board of Directors may be called by the President, or by the Secretary on the
written request of any two Directors on at least two (2) days' notice to each
Director.
SECTION 7. PLACE OF MEETINGS. The Directors may hold their
meetings, and have one or more offices outside the State of Delaware, at such
places as from time to time may be determined by resolution of the Board.
SECTION 8. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors, or any
committees thereof, may be taken without a meeting if, prior to such action, a
written consent thereto is signed by all members of the Board or of such
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board or committee.
SECTION 9. POWERS. The Board of Directors shall exercise all of
the powers of the corporation, except such as are by law, by the Certificate of
Incorporation, or by these Bylaws conferred upon or reserved to the
stockholders.
SECTION 10. COMPENSATION. Directors shall not receive any
stated salary for their service as Directors or as members of committees, but,
by resolution of the Board, a fixed fee and expenses of attendance may be
allowed for attendance at each meeting.
Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity as an officer,
agent or otherwise, and receiving compensation therefor.
ARTICLE IV
COMMITTEES
SECTION 1. The Board of Directors may, by resolution or
resolutions passed by a majority of the entire Board, designate an executive
committee and one or more other committees, each committee to consist of two or
more Directors of the corporation, which, to the extent provided in said
resolution or resolutions, or in these Bylaws, shall have and may exercise the
powers of the Board of Directors in the management of the business of the
corporation between meetings of the Board.
SECTION 2. Committee shall keep regular minutes of their
proceedings, and report the same to the Board of Directors when required.
ARTICLE V
4
<PAGE> 5
OFFICERS
SECTION 1. OFFICERS. The officers shall be elected at the first
meeting of the Board of Directors after each annual meeting of stockholders.
The directors shall elect a President, a Secretary and a Treasurer; they may
also elect a Chairman of the Board, a Vice-Chairman of the Board, one or more
Vice-Presidents, and such Assistant Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the corporation, with the
exception of the Chairman of the Board and the Vice-Chairman of the Board, need
be a Director. Any one person may hold two or more offices, except those of
President and Secretary. However, any person holding two or more offices shall
not sign any instrument in the capacity of more than one office.
The Board of Directors may appoint such other officers and agents
as it may deem advisable, who shall hold office for such terms and shall
exercise such powers and perform such duties as from time to time shall be
determined by the Board of Directors.
SECTION 2. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors, if one is elected, shall preside at all meetings of the Board of
Directors, and he shall have and perform such other duties as from time to time
may be assigned to him by the Board of Directors.
SECTION 2.5. VICE-CHAIRMAN OF THE BOARD. The Vice-Chairman of
the Board, if one is elected, shall have such powers and shall perform such
duties as from time to time may be assigned to him by the Board of Directors,
and, in the absence of the Chairman, or in the event of his inability to act,
the Vice-Chairman shall perform the functions of the Chairman of the Board.
SECTION 3. PRESIDENT. The President shall be the chief
executive officer of the corporation, and shall have the general powers and
duties of supervision and management usually vested in the office of President
of a corporation. He shall preside at all meetings of the stockholders, if
present thereat, and, in the absence or non-election of the Chairman of the
Board, at all meetings of the Board of Directors. He shall have general
supervision, direction and control of the business of the corporation. Except
as the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts on behalf of the
corporation, and he shall cause the corporate seal to be affixed to any
instrument requiring it, and when so affixed the seal shall be attested by the
Secretary or the Treasurer, or an Assistant Secretary or an Assistant
Treasurer.
SECTION 4. VICE-PRESIDENTS. Each Vice-President shall have such
powers and shall perform such duties as shall be assigned
5
<PAGE> 6
to him by the Directors, and, in the absence of the President, or in the event
of his inability to act, the Vice-Presidents, in the order of their seniority,
shall perform the functions of the President.
SECTION 5. SECRETARY. The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and Directors, and all other
notices required by law or by these Bylaws, and, in case of his absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the President, the Board of Directors, or the
stockholders, upon whose requisition the meeting is called as provided in these
Bylaws. He shall record all the proceedings of the meetings of the
stockholders and of the Board of Directors in a book to be kept for that
purpose, and shall perform such other duties as may be assigned to him by the
Directors or the President. He shall have custody of the corporate seal, and
shall affix the same to all instruments requiring it, when authorized by the
President or the Board of Directors, and shall attest the same.
SECTION 6. TREASURER. The Treasurer shall have the custody of
the corporate funds and securities, and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
corporation in such depositories as may be designated by the Board of
Directors.
The Treasurer shall disburse the funds of the corporation as may
be ordered by the Board of Directors or the President, taking proper vouchers
for such disbursements. He shall render to the President and the Board of
Directors, at the regular meetings of the Board, or whenever they may request
it, an accounting of all his transactions as Treasurer, and of the financial
condition of the corporation.
If required by the Board of Directors, the Treasurer shall give
the corporation a bond for the faithful discharge of his duties, in such amount
and with such surety as the Board shall prescribe.
SECTION 7. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.
Assistant Secretaries and Assistant Treasurers, if any, shall be elected and
shall have such powers and shall perform such duties as shall be assigned to
them, respectively, by the Board of Directors.
ARTICLE VI
6
<PAGE> 7
RESIGNATIONS; FILLING OF VACANCIES;
INCREASE IN NUMBER OF DIRECTORS;
REMOVAL FROM OFFICE
SECTION 1. RESIGNATIONS. Any Director, member of a committee,
or other officer may resign at any time. Such resignation shall be made in
writing, and shall take effect at the time specified therein, and, if no time
be specified, at the time of its receipt by the President or the Secretary.
The acceptance of a resignation shall not be necessary to make it effective.
SECTION 2. FILLING OF VACANCIES. If the office of any officer,
Director or member of a committee becomes vacant, the remaining Directors in
office, although less than a quorum may appoint, by a majority vote, any
qualified person to fill such vacancy, who shall hold office for the unexpired
term of his predecessor, or until his successor shall be duly chosen and shall
have qualified.
Any vacancy occurring by reason of an increase in the number of
Directors may be filled by action of a majority of the entire Board, for the
term of office continuing only until the next election of Directors by the
stockholders, or it may be filled by the affirmative vote of the holders of a
majority of the shares then entitled to vote at an election of Directors.
SECTION 3. INCREASE IN NUMBER OF DIRECTORS. The number of
Directors may be increased at any time by the affirmative vote of a majority of
the entire Board, or by the affirmative vote of a majority in interest of the
stockholders, at a special meeting called for that purpose, and, by like vote,
pursuant to SECTION 2 above, the additional Directors may be chosen at such
meeting to hold office until the next annual election or until their successors
are elected and shall have qualified.
SECTION 4. REMOVAL. At a meeting of stockholders expressly
called for such purpose, any or all of the members of the Board of Directors
may be removed, with or without cause, by vote of the holders of a majority of
the shares then entitled to vote at an election of Directors, and said
stockholders may elect, at the meeting called for the purpose of removal, a
successor or successors to fill any resulting vacancies for the unexpired terms
of the removed Directors.
Any officer, agent or member of a committee, elected or appointed
by the Board of Directors, may be removed by a majority vote of the entire
Board whenever, in its judgment, the best interests of the corporation will be
served thereby.
ARTICLE VII
7
<PAGE> 8
CAPITAL STOCK
SECTION 1. CERTIFICATES OF STOCK. Certificates of stock,
numbered, and sealed with the seal of the corporation, and signed by the
Chairman of the Board of Directors or the Vice-Chairman of the Board of
Directors, or the President or a Vice-President, and the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Treasurer, shall be
issued to each stockholder certifying to the number of shares owned by him in
the corporation. When such certificates are countersigned by (1) a transfer
agent other than the corporation or its employee, or (2) by a registrar other
than the corporation or its employee, any other signatures on the certificate
may be facsimiles.
In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent or registrar at the date of issue.
SECTION 2. LOST CERTIFICATES. A new certificate of stock may be
issued in place of any certificate theretofore issued by the corporation and
alleged to have been lost or destroyed, and the Directors may, at their
discretion, request the owner of the lost or destroyed certificates, or his
legal representative, to give the corporation a bond, in such sum as they may
direct, but not exceeding double the value of the stock to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss of such certificate.
SECTION 3. TRANSFER OF SHARES. Pursuant to the provisions of
the Uniform Commercial Code.
SECTION 4. 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, or to express
consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect to any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall be not more than
sixty (60) nor less than ten (10) days prior to the date of such meeting, nor
more than sixty (60) days prior to any other action. 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, however,
that the Board of Directors may fix a new record date for the adjourned
meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the
8
<PAGE> 9
Certificate of Incorporation and the laws of the State of Delaware, the Board
of Directors, at any regular or special meeting, may declare dividends upon the
capital stock of the corporation, as and when they may deem expedient.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 1. CORPORATE SEAL. The Board of Directors shall adopt
and may alter a common seal of the corporation. Said seal shall be circular in
form and shall contain the name of the corporation, the year of its creation,
and the words: "CORPORATE SEAL DELAWARE". It may be used by causing it or a
facsimile thereof to be impressed, affixed, or otherwise reproduced.
SECTION 2. FISCAL YEAR. The fiscal year of the corporation
shall end on December 31st.
SECTION 3. CHECKS, DRAFTS, NOTES. All checks, drafts, or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation, shall be signed by such officer or
officers, agent or agents of the corporation, and in such manner as shall from
time to time be determined by resolution of the Board of Directors.
SECTION 4. CORPORATE RECORDS. The corporation shall keep
correct and complete books of account and minutes of the proceedings of its
stockholders and Directors, as well as an original stock ledger or list of
stockholders, containing the names and addresses of the stockholders, the
number of shares held by them, and the date of issuance of said certificates of
stock.
Any stockholder of record, in person or my attorney or other
agent, upon written demand under oath stating the purpose thereof, shall have
the right, during the usual hours for business, to inspect for any proper
purpose the books and records of the corporation, as well as its stock ledger
and/or list of stockholders, and to make copies or extracts therefrom. Such
demand under oath shall be directed to the corporation at its registered office
in the State of Delaware of at its principal place of business.
SECTION 5. NOTICE AND WAIVER OF NOTICE. Whenever, pursuant to
the laws of the State of Delaware or these Bylaws, any notice is required to be
given, personal notice is not meant unless expressly so stated, and any notice
so required shall be deemed to be sufficient if given by depositing the same in
the United States mail, postage prepaid, addressed to the person entitled
thereto at his address as it appears on the records of the corporation, and
such notice shall be deemed to have been given on the day of such
9
<PAGE> 10
mailing. Stockholders not entitled to vote shall not be entitled to receive
notice of any meetings except as otherwise provided by statute.
Any notice required to be given may be waived, in writing, by the
person or persons entitled to such notice, whether before or after the time
stated therein.
ARTICLE IX
AMENDMENTS
SECTION 1. AMENDMENTS OF BYLAWS. These Bylaws may be altered or
repealed, and Bylaws may be made at any annual meeting of stockholders, or at
any special meeting thereof it notice of the proposed alteration or repeal, or
Bylaw or Bylaws to be made, be contained in the notice of such special meeting,
by the affirmative vote of a majority of the stock issued and outstanding and
entitled to vote thereat; or by the affirmative vote of a majority of the
entire Board of Directors, at any regular meeting of the Board, or at any
special meeting thereof if notice of the proposed alteration or repeal, or
Bylaw or Bylaws to be made, be contained in the notice of such special meeting.
10
<PAGE> 1
EXHIBIT 3.13
CERTIFICATE OF INCORPORATION
OF
VISKASE SALES CORPORATION
THE UNDERSIGNED, in order to form a corporation for the purpose
hereinafter stated, under and pursuant to the provisions of the General
Corporation Law of the State of Delaware, does hereby certify as follows:
FIRST: The name of the Corporation is
VISKASE SALES CORPORATION
SECOND: The registered office of the corporation is to be located at
306 South State Street, in the City of Dover, in the County of Kent, in the
State of Delaware. The name of its registered agent at that address is the
UNITED STATES CORPORATION COMPANY.
THIRD: The purpose of the Corporation is to engage in any lawful act
or activity for which a corporation may be organized under the General
Corporation Law of Delaware.
FOURTH: The total number of shares of stock which the corporation is
authorized to issue is One Thousand (1,000), Common; and the par value of each
of such shares is One Dollar ($1.00).
FIFTH: The name and address of the Incorporator are as follows:
C. Baclet 6430 Sunset Boulevard, Suite 1218
Los Angeles, California 90028
SIXTH: The corporation is to have perpetual existence.
SEVENTH: The following provisions are inserted for the management of
the business and for the conduct of the affairs of the Corporation, and for
further definition, limitation and
<PAGE> 2
regulation of the powers of the Corporation and of its directors and
stockholders.
(1) The number of directors of the Corporation shall be
such as from time to time shall be fixed by, or in the manner provided in the
By-laws. Election of directors need not be by ballot unless the By-laws so
provide.
(2) The Board of Directors shall have power without the
assent or vote of the stockholders to make, alter, amend, change, add to or
repeal the By-laws of the Corporation; to fix and vary the amount to be
reserved for any proper purpose; to authorize and cause to be executed
mortgages and liens upon all or any part of the property of the Corporation; to
determine the use and disposition of any surplus or net profits; and to fix the
times for the declaration and payment of dividends.
(3) The directors in their discretion may submit any
contract or act for approval or ratification at any annual meeting of the
stockholders or at any meeting of the stockholders called for the purpose of
considering any such act or contract, and any contract or act that shall be
approved or be ratified by the vote of the holders of a majority of the stock
of the Corporation which is represented in person or by proxy at such meeting
and entitled to vote thereat (provided that a lawful quorum of stockholders be
there represented in person or by proxy) shall be as valid and as binding upon
the Corporation and upon all the stockholders as though it had been approved or
ratified by every stockholder of the Corporation, whether or not the contract
or act would otherwise be open to legal attach because of directors' interest,
or for any other reason.
(4) In addition to the powers and authorities
hereinbefore or by statute expressly conferred upon them, the directors are
hereby empowered to exercise all such powers and do all such acts and things as
may be exercised or done by the Corporation; subject, nevertheless, to the
provisions of the statutes of Delaware, of this Certificate, and to any By-laws
from time to time made by the stockholders; provided, however, that no By-laws
so made shall invalidate any prior act of the directors which would have been
valid if such By-law had not been made.
EIGHTH: The Corporation shall, to the full extent permitted by
Section 145 of the Delaware General Corporation law, as amended from time to
time, indemnify all persons whom it may indemnify pursuant thereto.
NINTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them
<PAGE> 3
and/or between this Corporation and its stockholders or any class of them, any
court of equitable jurisdiction within the State of Delaware, may, on the
application in a summary way of this Corporation or of any creditor or
stockholder thereof or on the application of any receiver or receivers
appointed for this Corporation under the provisions of Section 291 of Title 8
of the Delaware Code or on the application of trustees in dissolution or of any
receiver or receivers appointed for this Corporation under the provisions of
Section 279 of Title 8 of the Delaware Code order a meeting of the creditors or
class of creditors, and/or of the stockholders of this Corporation, as the case
may be, agree to any compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders of this Corporation, as the case may be,
and also on this Corporation.
TENTH: The corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation in the
manner now or hereafter prescribed by law, and all rights and powers conferred
herein on stockholders, directors and officers are subject to this reserved
power.
IN WITNESS WHEREOF, I have hereunto set my hand and seal.
-------------------------
C. Bacelet, Incorporator
<PAGE> 4
PLAN AND AGREEMENT OF MERGER
OF
FILMCO INDUSTRIES, INC.
(a Utah corporation)
with and into
VISKASE SALES CORPORATION
(a Delaware corporation)
Pursuant to Section 252 of the General Corporation
Law of the State of Delaware
This Plan and Agreement of Agreement of Merger entered into as of
December 27, 1990 by and between VISKASE SALES CORPORATION, a Delaware
corporation ("VSC") and FILMCO INDUSTRIES, INC., a Utah corporation ("Filmco").
Filmco desires to merge with and into VSC in accordance with the
corporate laws of the States of Delaware and Utah and in accordance with an
Agreement and Plan of Reorganization among Viskase Corporation, a Pennsylvania
corporation ("Viskase"), VSC and Filmco of even date herewith (the "Plan of
Reorganization") and this Plan and Agreement of Merger (the "Merger
Agreement"). The transaction described in this Merger Agreement is referred to
as the "Merger".
VSC is a business corporation organized under the laws of the State of
Delaware with its registered office therein located at 32 Loockerman Square,
Suite L-100, city of Dover, county of Kent. VSC has the authority to issue its
One Thousand (1,000) shares of common stock having par value of $1.00 per share,
One Thousand (1,000) shares of which are issued and outstanding, all of which
shares are owned beneficially and of record by Viskase.
Filmco is a business corporation organized under the laws of the State
of Utah with its registered office therein located at 600 Deseret Plaza, 15
East First South, city of Salt Lake City, county of Salt Lake. Filmco has
authority to issue Three Hundred Thousand (300,000) shares of common Stock
having a par value of $1.00 per share, One Thousand (1,000) shares of which are
issued and outstanding (individually, a "Filmco Share" or collectively the
"Filmco Shares").
The Business Corporation Act of the State of Utah, as amended ("Utah
Act") permits a merger of a business corporation of the State of Utah with and
into a business corporation of another jurisdiction. The General Corporation
Law of the State of Delaware, as amended ("Delaware Corporate Law") permits a
merger of a business corporation of another jurisdiction with and into a
business corporation of the State of Delaware.
<PAGE> 5
The respective Boards of Directors of Viskase, VSC and Filmco deem the
Merger advisable and in the best interests of each corporation and their
respective shareholders. The respective Boards of Directors of VSC and Filmco
have, by unanimous consent, duly adopted, approved and executed and delivered
the Plan Reorganization and the Merger Agreement. The respective Boards of
Directors of VSC and Filmco have directed that this Merger Agreement be
submitted to VSC's and Filmco's shareholders for adoption and approval, and
recommend to their shareholders that this Merger Agreement be adopted and
approved pursuant to the provisions of Delaware Corporate Law and the Utah Act
and upon the terms and provisions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, agreements and provisions hereinafter contained, the parties hereto
do hereby prescribe the terms and conditions of said Merger and the mode of
carrying the same into effect as follows:
1. Filmco and VSC shall, pursuant to the provisions of the Utah
Act and the provisions of Delaware Corporate law, be merged with and into a
single corporation, to wit, VSC, which shall be the surviving corporation from
and after the Effective Time (as hereinafter defined) and which is sometimes
hereinafter referred to as the "surviving corporation", and which shall
continue to exist as the surviving corporation under its present name of
"Viskase Sales Corporation" pursuant to the provisions of Delaware Corporate
Law. The separate existence of Filmco, which is sometimes hereinafter referred
to as the "terminating corporation" shall cease at the Effective Time in
accordance with the provisions of the Utah Act. The surviving corporation
shall be governed by and shall have all the rights, privileges, immunities and
powers and shall be subject to all of the duties and liabilities of a
corporation organized under the Delaware Corporate Law.
2. At the Effective Time, the present Certificate of
Incorporation of VSC shall be the Certificate of Incorporation of the surviving
corporation and will continue in full force and effect until changed, altered
or amended as therein provided and in the manner prescribed by the provisions
of Delaware Corporate Law.
3. At the Effective Time, the present by-laws of VSC shall be the
by-laws of the surviving corporation and will continue in full force and effect
until changed, altered or amended as therein provided and in the manner
prescribed by the provisions of Delaware Corporate Law.
4. The directors and officers in office of VSC at the Effective
Time shall be the members of the first Board of Directors and the first
officers of the surviving corporation, all of whom shall hold their
directorships and offices until the election and qualification of their
respective successors or until their tenure is otherwise terminated in
accordance with the by-laws of the surviving corporation.
<PAGE> 6
5. At the Effective Time of the Merger:
(A) Each twenty-five (25) Filmco Shares which are
outstanding immediately prior to the Effective Time of the Merger
shall be converted into the right to receive two (2) shares of common
stock of Viskase, par value $1.00 per share.
(B) Each share of VSC common stock issued and outstanding
prior to the Effective Time shall not be converted or exchanged, and
each such share, by virtue of the Merger, shall continue to be the
issued and outstanding common stock of the surviving corporation.
(C) After the Effective Time each holder of an
outstanding certificate or certificates representing Filmco Shares
shall surrender the same to the surviving corporation.
6. At the Effective Time all the property, rights, privileges,
franchises, patents, trademarks, licenses, registrations and other assets of
every kind and description of Filmco and VSC shall be transferred to, vested in
and devolve upon the surviving corporation and shall be effectively the
property of the surviving corporation as they were of Filmco and VSC and being
subject to all of the restrictions, disabilities and duties of each of such
corporations so merged; but all rights of creditors and all liens upon the
property of either of Filmco and VSC shall be preserved and unimpaired, and all
debts, liabilities and duties of Filmco and VSC shall thenceforth attach to the
surviving corporation and may be enforced against it to the same extent as if
the debts, liabilities and duties had been incurred or contracted by the
surviving corporation.
7. If, at any time after the Effective Time of the Merger, the
surviving corporation shall determine that any further assignments or
assurances or any other acts are necessary or desirable to vest, perfect or
confirm, of record or otherwise, in the surviving corporation its rights, title
or interest in, to, or under any of the rights, properties or assets of Filmco
or VSC acquired or to be acquired by the surviving corporation as a result of,
or in connection with, the Merger, or to otherwise carry out the purposes of
this Merger Agreement, then VSC and Filmco and their respective officers and
directors shall be deemed to have granted to the surviving corporation an
irrevocable power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to do all acts necessary or proper to
vest, perfect, or confirm title to and possession of such rights, properties,
or assets in the surviving corporation and to otherwise carry out the purposes
of this Merger Agreement. The proper officers and directors of the surviving
corporation are fully authorized in the name of VSC and Filmco or otherwise to
take any and all such action as may be contemplated in this paragraph.
<PAGE> 7
8. The surviving corporation hereby (i) agrees that it may be
served with process in the state of Utah in any proceeding for the enforcement
of any obligation of Filmco and in any proceeding for the enforcement of the
rights of a dissenting shareholder of Filmco against the surviving corporation;
(ii) irrevocably appoints the director of the Division of Corporations and
Commercial Code of Utah as its agent to accept service of process in any such
proceeding; and (iii) agrees that it will promptly pay to dissenting
shareholders of Filmco the amount, if any, to which they shall be entitled
under the provisions of the Utah Act with respect to the rights of dissenting
shareholders.
9. The mode of carrying the Merger into effect is as follows:
(A) This Merger Agreement having been approved by at
least a majority vote of the members of the Board of Directors of both Filmco
and VSC, shall be executed and acknowledged by their respective presidents or
vice-presidents and attested to by their respective secretaries and assistant
secretaries.
(B) This Merger Agreement; having been duly executed and
acknowledged, shall be submitted to the shareholder of each corporation who
shall approve this Merger Agreement the fact of which approval shall be set
forth in a certificate attached to this Merger Agreement by the secretary or
assistant secretary of each corporation.
(C) This Merger Agreement having been duly adopted and
certified, Articles of Merger shall be filed with and on forms prescribed by
the Utah Secretary of State in accordance with the Utah Act and this Merger
Agreement shall be filed with the Delaware Secretary of State in accordance
with Delaware Corporate Law and upon certification of the same by the Delaware
Secretary of State, such certificate shall be filed for record in the office of
the recorder of deeds or the like of the county in which the registered office
VSC is located.
10. The Board of Directors and the proper officers of the
terminating corporation and of the surviving corporation are hereby authorized,
empowered and directed to do any and all acts and things, and to make, execute,
deliver, file and record any and all instruments, papers and documents which
shall be or become necessary, proper or convenient to carry out or put into
effect any of the provisions of this Merger Agreement or of the Merger.
11. As used in this Merger Agreement "Effective Time" and the time
of the Merger provided for herein shall become effective in the States of Utah
and Delaware shall be January 2, 1991.
12. Anything herein or elsewhere to the contrary notwithstanding
this Merger Agreement and the Merger contemplated herein may be terminated or
abandoned by the board of directors of either corporation for any reason at any
time prior to the filing
<PAGE> 8
thereof with the Delaware Secretary of State or at any time prior to the filing
of the Articles of Merger with the Utah Secretary of State.
IN WITNESS WHEREOF, this Plan and Agreement of Merger is hereby
executed on behalf of the parties hereto as of the date first written above.
FILMCO INDUSTRIES, INC.,
a Utah corporation
By:
--------------------------
Stephen M. Schuster,
Vice President
ATTEST:
- ------------------------
Gordon S. Donovan,
Assistant Secretary
VISKASE SALES CORPORATION,
a Delaware corporation
By:
--------------------------
Stephen M. Schuster,
Vice President
ATTEST:
- -------------------------
Gordon S. Donovan,
Assistant Secretary
<PAGE> 9
CERTIFICATION OF PLAN AND AGREEMENT OF MERGER
VISKASE SALES CORPORATION
I, Gordon S. Donovan, being the duly elected and qualified Assistant
Secretary of Viskase Sales Corporation, a Delaware corporation ("VSC"), do
hereby certify that the holder of all of the outstanding shares of VSC
dispensed with a meeting and vote of the shareholder, and the sole shareholder
entitled to vote consented in writing, pursuant to the provisions of Section
228 of the General Corporation Law of the State of Delaware, to the adoption
and approval of the foregoing Plan and Agreement of Merger.
IN WITNESS WHEREOF, I have executed this instrument as of December 27,
1990.
VISKASE SALES CORPORATION
--------------------------
Gordon S. Donovan
Assistant Secretary
<PAGE> 10
CERTIFICATION OF PLAN AND AGREEMENT OF MERGER
FILMCO INDUSTRIES, INC.
I, Gordon S. Donovan, being the duly elected and qualified Assistant
Secretary of Filmco Industries, Inc., a Utah corporation ("Filmco"), do hereby
certify that the holder of all of the outstanding shares of Filmco dispensed
with a meeting and vote of the shareholder, and the sole shareholder entitled
to vote consented in writing, pursuant to the provisions of Section 16-10-138
of the Utah Business Corporation Act, to the adoption and approval of the
foregoing Plan and Agreement of Merger.
IN WITNESS WHEREOF, I have executed this instrument as of December 27,
1990.
VISKASE SALES CORPORATION
--------------------------
Gordon S. Donovan
Assistant Secretary
<PAGE> 1
EXHIBIT 3.14
VISKASE SALES CORPORATION
BYLAWS
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office shall be
established and maintained at the office of the UNITED STATES CORPORATION
COMPANY, located at 32 Loockerman Square, Suite L-100, City of Dover, County of
Kent, State of Delaware, and said UNITED STATES CORPORATION COMPANY shall be
the registered agent of the corporation thereof.
SECTION 2. OTHER OFFICES. The corporation may establish other
offices, either within or without the State of Delaware, at such place or
places as the Board of Directors, from time to time, may designate or the
business of the corporation may require.
ARTICLE II
STOCKHOLDERS
SECTION 1. ANNUAL MEETINGS. Annual meetings of stockholders
shall be held on the first Monday of June each year, commencing with 1986, at
such time as shall be stated in the notice, or said meetings may be held at
such time and place, either within or without the State of Delaware, as the
Board of Directors by resolution shall determine, and as set forth in the
notice of the meeting.
If the date of the annual meeting shall fall on a legal holiday
of the state in which the meeting is to be held, the meeting shall be held on
the next succeeding business day.
At each annual meeting, the stockholders entitled to vote shall
elect a Board of Directors, and they may transact such other corporate business
as shall be stated in the notice of the meeting.
SECTION 2. SPECIAL MEETINGS. Special meetings of the
stockholders, for any purpose or purposes, may be called by the President or
the Secretary, or by resolution of the Board of Directors, and may be held at
such time and place as shall be stated in the notice of the meeting.
SECTION 3. NOTICE OF MEETINGS. Written notice, stating
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the place, date and time of the meeting, and the general nature of the business
to be considered, shall be given to each stockholder entitled to vote thereat,
at his address as it appears on the records of the corporation, not less than
ten (10) nor more than fifty (50) days prior to the date of the meeting. No
business other than that stated in the notice shall be transacted at any
meeting without the unanimous consent of all of the stockholders entitled to
vote thereat.
SECTION 4. VOTING. Each stockholder entitled to vote in accordance with
the terms of the Certificate of Incorporation, the provisions of these Bylaws,
and the laws of the State of Delaware, shall be entitled to one vote, in
person or by proxy, for each share of stock entitled to vote held by such
stockholder, but no proxy shall be voted after three (3) years from its
date unless such proxy provides for a longer period. Upon the demand of any
stockholder, the vote for Directors and the vote upon any question before the
meeting shall be by written ballot. All elections for Directors shall be
decided by plurality vote; all other questions shall be decided by majority
vote, except as otherwise provided by the Certificate of Incorporation or the
laws of the State of Delaware.
A complete list of the stockholders entitled to vote at a
meeting, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be open to the examination of any
stockholders, for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten (10) 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
registered office of the corporation in the State of Delaware. The list shall
also be produced and kept available at the time and place of the meeting,
during the entire time thereof, and may be inspected by any stockholder or his
proxy who may be present.
SECTION 5. QUORUM. Except as otherwise required by law, by the
Certificate of Incorporation, or by these Bylaws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
issued and outstanding and entitled to vote shall constitute a quorum at all
meetings of stockholders. In case a quorum shall not be present at any
meeting, a majority in interest of the stockholders entitled to vote thereat,
present either in person or by proxy, shall have power to adjourn the meeting,
from time to time, without notice other than an announcement at the meeting,
until the requisite amount of stock entitled to vote shall be present. At any
such adjourned meeting at which the requisite amount of stock entitled to vote
shall be represented, any business may be transacted which might have been
transacted at the meeting as originally noticed; but only those stockholders
entitled to vote at the meeting as originally noticed shall be entitled to vote
at any adjournment or adjournments thereof.
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SECTION 6. ACTION WITHOUT MEETING. Any action to be taken by
the stockholders may be taken without a meeting if, prior to such action, all
stockholders entitled to vote thereon shall consent to the action by a writing
filed with the records of the meetings of stockholders, and such consent shall
be treated for all purposes as a vote at a meeting.
ARTICLE III
DIRECTORS
SECTION 1. NUMBER AND TERM. The number of Directors, to be
determined by the Board of Directors, shall be not less than three (3) nor more
than five (5), until changed by amendment of these Bylaws. The number of
initial Directors shall be three (3). The Directors shall be elected at the
annual meeting of stockholders, and each Director shall be elected to serve
until his successor shall be elected and shall have qualified.
The Directors need not be stockholders.
SECTION 2. QUORUM. A majority of the Directors shall constitute
a quorum for the transaction of business. If at any meeting of the Board there
shall be less than a quorum present, a majority of those present may adjourn
the meeting from time to time until a quorum is obtained, and no further notice
thereof need be given other than by announcement at the meeting which shall be
so adjourned.
SECTION 3. FIRST MEETING. The newly elected Directors may hold
their first meeting for the purpose of organization and the transaction of
business, if a quorum be present, immediately after the annual meeting of the
stockholders; or writing of all the directors.
SECTION 4. ELECTION OF OFFICERS. At the first meeting, or at
any subsequent meeting called for that purpose, the Directors shall elect the
officers of the corporation, as more specifically set forth in ARTICLE V of
these Bylaws. Such officers shall hold office until the next annual election
of officers, or until their successors are elected and shall have qualified.
SECTION 5. REGULAR MEETINGS. Regular meetings of the Directors
may be held, without notice, at such places and times as from time to time
shall be determined by resolution of the Board of Directors.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of
Directors may be called by the President, or by the
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Secretary on the written request of any two Directors on at least two (2) days'
notice to each Director.
SECTION 7. PLACE OF MEETINGS. The Directors may hold their
meetings, and have one or more offices outside the State of Delaware, at such
places as from time to time may be determined by resolution of the Board.
SECTION 8. ACTION WITHOUT MEETING. Any action required or
permitted to be taken at any meeting of the Board of Directors, or any
committees thereof, may be taken without a meeting if, prior to such action, a
written consent thereto is signed by all members of the Board or of such
committee, as the case may be, and such written consent is filed with the
minutes of proceedings of the Board or committee.
SECTION 9. POWERS. The Board of Directors shall exercise all of
the powers of the corporation, except such as are by law, by the Certificate of
Incorporation, or by these Bylaws conferred upon or reserved to the
stockholders.
SECTION 10. COMPENSATION. Directors shall not receive any
stated salary for their service as Directors or as members of committees, but,
by resolution of the Board, a fixed fee and expenses of attendance may be
allowed for attendance at each meeting.
Nothing herein contained shall be construed to preclude any
Director from serving the corporation in any other capacity as an officer,
agent or otherwise, and receiving compensation therefor.
ARTICLE IV
COMMITTEES
SECTION 1. The Board of Directors may, by resolution or resolutions
passed by a majority of the entire Board, designate an executive
committee and one or more other committees, each committee to consist of two or
more Directors of the corporation, which, to the extent provided in said
resolution or resolutions, or in these Bylaws, shall have and may exercise the
powers of the Board of Directors in the management of the business of the
corporation between meetings of the Board.
SECTION 2. Committee shall keep regular minutes of their
proceedings, and report the same to the Board of Directors when required.
ARTICLE V
4
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OFFICERS
SECTION 1. OFFICERS. The officers shall be elected at the first
meeting of the Board of Directors after each annual meeting of stockholders.
The directors shall elect a President, a Secretary and a Treasurer; they may
also elect a Chairman of the Board, a Vice-Chairman of the Board, one or more
Vice-Presidents, and such Assistant Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the corporation, with the
exception of the Chairman of the Board and the Vice-Chairman of the Board, need
be a Director. Any one person may hold two or more offices, except those of
President and Secretary. However, any person holding two or more offices shall
not sign any instrument in the capacity of more than one office.
The Board of Directors may appoint such other officers and agents
as it may deem advisable, who shall hold office for such terms and shall
exercise such powers and perform such duties as from time to time shall be
determined by the Board of Directors.
SECTION 2. CHAIRMAN OF THE BOARD. The Chairman of the Board of
Directors, if one is elected, shall preside at all meetings of the Board of
Directors, and he shall have and perform such other duties as from time to time
may be assigned to him by the Board of Directors.
SECTION 2.5. VICE-CHAIRMAN OF THE BOARD. The Vice-Chairman of
the Board, if one is elected, shall have such powers and shall perform such
duties as from time to time may be assigned to him by the Board of Directors,
and, in the absence of the Chairman, or in the event of his inability to act,
the Vice-Chairman shall perform the functions of the Chairman of the Board.
SECTION 3. PRESIDENT. The President shall be the chief
executive officer of the corporation, and shall have the general powers and
duties of supervision and management usually vested in the office of President
of a corporation. He shall preside at all meetings of the stockholders, if
present thereat, and, in the absence or non-election of the Chairman of the
Board, at all meetings of the Board of Directors. He shall have general
supervision, direction and control of the business of the corporation. Except
as the Board of Directors shall authorize the execution thereof in some other
manner, he shall execute bonds, mortgages and other contracts on behalf of the
corporation, and he shall cause the corporate seal to be affixed to any
instrument requiring it, and when so affixed the seal shall be attested by the
Secretary or the Treasurer, or an Assistant Secretary or an Assistant
Treasurer.
SECTION 4. VICE-PRESIDENTS. Each Vice-President shall have such
powers and shall perform such duties as shall be assigned
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to him by the Directors, and, in the absence of the President, or in the event
of his inability to act, the Vice-Presidents, in the order of their seniority,
shall perform the functions of the President.
SECTION 5. SECRETARY. The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and Directors, and all other
notices required by law or by these Bylaws, and, in case of his absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the President, the Board of Directors, or the
stockholders, upon whose requisition the meeting is called as provided in these
Bylaws. He shall record all the proceedings of the meetings of the
stockholders and of the Board of Directors in a book to be kept for that
purpose, and shall perform such other duties as may be assigned to him by the
Directors or the President. He shall have custody of the corporate seal, and
shall affix the same to all instruments requiring it, when authorized by the
President or the Board of Directors, and shall attest the same.
SECTION 6. TREASURER. The Treasurer shall have the custody of
the corporate funds and securities, and shall keep full and accurate accounts
of receipts and disbursements in books belonging to the corporation. He shall
deposit all moneys and other valuables in the name and to the credit of the
corporation in such depositories as may be designated by the Board of
Directors.
The Treasurer shall disburse the funds of the corporation as may
be ordered by the Board of Directors or the President, taking proper vouchers
for such disbursements. He shall render to the President and the Board of
Directors, at the regular meetings of the Board, or whenever they may request
it, an accounting of all his transactions as Treasurer, and of the financial
condition of the corporation.
If required by the Board of Directors, the Treasurer shall give
the corporation a bond for the faithful discharge of his duties, in such amount
and with such surety as the Board shall prescribe.
SECTION 7. ASSISTANT SECRETARIES AND ASSISTANT TREASURERS.
Assistant Secretaries and Assistant Treasurers, if any, shall be elected and
shall have such powers and shall perform such duties as shall be assigned to
them, respectively, by the Board of Directors.
ARTICLE VI
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RESIGNATIONS; FILLING OF VACANCIES;
INCREASE IN NUMBER OF DIRECTORS;
REMOVAL FROM OFFICE
SECTION 1. RESIGNATIONS. Any Director, member of a committee,
or other officer may resign at any time. Such resignation shall be made in
writing, and shall take effect at the time specified therein, and, if no time
be specified, at the time of its receipt by the President or the Secretary.
The acceptance of a resignation shall not be necessary to make it effective.
SECTION 2. FILLING OF VACANCIES. If the office of any officer,
Director or member of a committee becomes vacant, the remaining Directors in
office, although less than a quorum may appoint, by a majority vote, any
qualified person to fill such vacancy, who shall hold office for the unexpired
term of his predecessor, or until his successor shall be duly chosen and shall
have qualified.
Any vacancy occurring by reason of an increase in the number of
Directors may be filled by action of a majority of the entire Board, for the
term of office continuing only until the next election of Directors by the
stockholders, or it may be filled by the affirmative vote of the holders of a
majority of the shares then entitled to vote at an election of Directors.
SECTION 3. INCREASE IN NUMBER OF DIRECTORS. The number of
Directors may be increased at any time by the affirmative vote of a majority of
the entire Board, or by the affirmative vote of a majority in interest of the
stockholders, at a special meeting called for that purpose, and, by like vote,
pursuant to SECTION 2 above, the additional Directors may be chosen at such
meeting to hold office until the next annual election or until their successors
are elected and shall have qualified.
SECTION 4. REMOVAL. At a meeting of stockholders expressly
called for such purpose, any or all of the members of the Board of Directors
may be removed, with or without cause, by vote of the holders of a majority of
the shares then entitled to vote at an election of Directors, and said
stockholders may elect, at the meeting called for the purpose of removal, a
successor or successors to fill any resulting vacancies for the unexpired terms
of the removed Directors.
Any officer, agent or member of a committee, elected or appointed
by the Board of Directors, may be removed by a majority vote of the entire
Board whenever, in its judgment, the best interests of the corporation will be
served thereby.
ARTICLE VII
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CAPITAL STOCK
SECTION 1. CERTIFICATES OF STOCK. Certificates of stock,
numbered, and sealed with the seal of the corporation, and signed by the
Chairman of the Board of Directors or the Vice-Chairman of the Board of
Directors, or the President or a Vice-President, and the Secretary or an
Assistant Secretary, or the Treasurer or an Assistant Treasurer, shall be
issued to each stockholder certifying to the number of shares owned by him in
the corporation. When such certificates are countersigned by (1) a transfer
agent other than the corporation or its employee, or (2) by a registrar other
than the corporation or its employee, any other signatures on the certificate
may be facsimiles.
In case any officer, transfer agent, or registrar who has signed
or whose facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent or registrar before such certificate
is issued, it may be issued by the corporation with the same effect as if he
were such officer, transfer agent or registrar at the date of issue.
SECTION 2. LOST CERTIFICATES. A new certificate of stock may be
issued in place of any certificate theretofore issued by the corporation and
alleged to have been lost or destroyed, and the Directors may, at their
discretion, request the owner of the lost or destroyed certificates, or his
legal representative, to give the corporation a bond, in such sum as they may
direct, but not exceeding double the value of the stock to indemnify the
corporation against any claim that may be made against it on account of the
alleged loss of such certificate.
SECTION 3. TRANSFER OF SHARES. Pursuant to the provisions of the Uniform
Commercial Code.
SECTION 4. 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, or to express
consent to corporate action in writing without a meeting, or entitled to
receive payment of any dividend or other distribution or allotment of any
rights, or entitled to exercise any rights in respect to any change, conversion
or exchange of stock or for the purpose of any other lawful action, the Board
of Directors may fix, in advance, a record date, which shall be not more than
sixty (60) nor less than ten (10) days prior to the date of such meeting, nor
more than sixty (60) days prior to any other action. 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, however,
that the Board of Directors may fix a new record date for the adjourned
meeting.
SECTION 5. DIVIDENDS. Subject to the provisions of the
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Certificate of Incorporation and the laws of the State of Delaware, the Board
of Directors, at any regular or special meeting, may declare dividends upon the
capital stock of the corporation, as and when they may deem expedient.
ARTICLE VIII
MISCELLANEOUS PROVISIONS
SECTION 1. CORPORATE SEAL. The Board of Directors shall adopt
and may alter a common seal of the corporation. Said seal shall be circular in
form and shall contain the name of the corporation, the year of its creation,
and the words: "CORPORATE SEAL DELAWARE". It may be used by causing it or a
facsimile thereof to be impressed, affixed, or otherwise reproduced.
SECTION 2. FISCAL YEAR. The fiscal year of the corporation
shall end on December 31st.
SECTION 3. CHECKS, DRAFTS, NOTES. All checks, drafts, or other
orders for the payment of money, notes or other evidences of indebtedness
issued in the name of the corporation, shall be signed by such officer or
officers, agent or agents of the corporation, and in such manner as shall from
time to time be determined by resolution of the Board of Directors.
SECTION 4. CORPORATE RECORDS. The corporation shall keep
correct and complete books of account and minutes of the proceedings of its
stockholders and Directors, as well as an original stock ledger or list of
stockholders, containing the names and addresses of the stockholders, the
number of shares held by them, and the date of issuance of said certificates of
stock.
Any stockholder of record, in person or my attorney or other agent, upon
written demand under oath stating the purpose thereof, shall have the right,
during the usual hours for business, to inspect for any proper purpose the
books and records of the corporation, as well as its stock ledger and/or list
of stockholders, and to make copies or extracts therefrom. Such demand under
oath shall be directed to the corporation at its registered office in the
State of Delaware of at its principal place of business.
SECTION 5. NOTICE AND WAIVER OF NOTICE. Whenever, pursuant to
the laws of the State of Delaware or these Bylaws, any notice is required to be
given, personal notice is not meant unless expressly so stated, and any notice
so required shall be deemed to be sufficient if given by depositing the same in
the United States mail, postage prepaid, addressed to the person entitled
thereto at his address as it appears on the records of the corporation, and
such notice shall be deemed to have been given on the day of such
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mailing. Stockholders not entitled to vote shall not be entitled to receive
notice of any meetings except as otherwise provided by statute.
Any notice required to be given may be waived, in writing, by the
person or persons entitled to such notice, whether before or after the time
stated therein.
ARTICLE IX
AMENDMENTS
SECTION 1. AMENDMENTS OF BYLAWS. These Bylaws may be altered or
repealed, and Bylaws may be made at any annual meeting of stockholders, or at
any special meeting thereof it notice of the proposed alteration or repeal, or
Bylaw or Bylaws to be made, be contained in the notice of such special meeting,
by the affirmative vote of a majority of the stock issued and outstanding and
entitled to vote thereat; or by the affirmative vote of a majority of the
entire Board of Directors, at any regular meeting of the Board, or at any
special meeting thereof if notice of the proposed alteration or repeal, or
Bylaw or Bylaws to be made, be contained in the notice of such special meeting.
10
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EXHIBIT 4.3
ENVIRODYNE INDUSTRIES, INC.
And
Shawmut Bank Connecticut, National Association,
As Trustee
INDENTURE
Dated as of June 20, 1995
$160,000,000
First Priority Senior Secured Notes Due 2000
<PAGE> 2
CROSS-REFERENCE TABLE*/
<TABLE>
<CAPTION>
Trust Indenture Reference
Act Section Section
- -------------------------------------------------------------
<S> <C>
310(a)(1)........................................ 6.10
(a)(2)........................................ 6.10
(a)(3)........................................ N.A.
(a)(4)........................................ N.A.
(a)(5)........................................ 6.10
(b)........................................... 6.08, 6.10, 12.02
(c)........................................... N.A.
311(a)........................................... 6.11
(b)........................................... 6.11
(c)........................................... N.A.
312(a)........................................... 2.05
(b)........................................... 12.03
(c)........................................... 12.03
313(a)........................................... 6.06
(b)(1)........................................ N.A.
(b)(2)........................................ 6.06
(c)........................................... 6.05, 6.06, 12.02
(d)........................................... 6.06
314(a)........................................... 3.02
(b)........................................... N.A.
----
(c)(1)........................................ 12.04
(c)(2)........................................ 12.04
(c)(3)........................................ 12.04
(d)........................................... 11.03
(e)........................................... 12.05
(f)........................................... N.A.
315(a)........................................... 6.01
(b)........................................... 6.05
(c)........................................... 6.01(a)
(d)........................................... 5.06, 6.01(c)
(e)........................................... 5.12, 6.08
316(a)(last sentence)............................ 2.09
(a)(1)(A)..................................... 5.06
(a)(1)(B)..................................... 5.05
(a)(2)........................................ N.A.
(b)........................................... 5.08
(c)........................................... 8.07
317(a)(1)........................................ 5.09
(a)(2)........................................ 5.10
(b)........................................... 2.04
318(a)........................................... 12.01
318(c)........................................... 12.01
</TABLE>
N.A. means not applicable
_________________
*/ This Cross-Reference Table shall not for any purposes be deemed a part
of this Indenture.
<PAGE> 3
TABLE OF CONTENTS*/
<TABLE>
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<S> <C>
ARTICLE 1 - DEFINITIONS AND INCORPORATION BY REFERENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.01. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. Accounting Principles, Terms and Determinations . . . . . . . . . . . . . . . . . . . . 27
SECTION 1.03. Yield-Maintenance Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
SECTION 1.04. Incorporation by Reference of Trust Indenture Act . . . . . . . . . . . . . . . . . . . 29
SECTION 1.05. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 2 - THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.01. Form and Dating . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount . . . . . . . . . . . . . . . 30
SECTION 2.03. Registrar and Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
SECTION 2.04. Paying Agent to Hold Money in Trust . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.05. Holder Lists . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.06. Transfer and Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 2.07. Replacement Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
SECTION 2.08. Outstanding Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.09. Treasury Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
SECTION 2.10. Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.11. Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.12. Overdue Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
SECTION 2.13. CUSIP Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.14. Book-Entry Provisions for Global Securities . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 2.15. Special Transfer Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
SECTION 2.16. Certificates setting forth LIBOR Rate and Yield-Maintenance Amount. . . . . . . . . . . 40
ARTICLE 3 - AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.01. Payment of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.02. SEC Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
SECTION 3.03. Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
SECTION 3.04. Conduct of Business; Maintenance of Existence; Compliance with Laws . . . . . . . . . . 43
SECTION 3.05. Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.06. Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . 43
SECTION 3.07. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.08. Maintenance of Office or Agency . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 3.09. Offers to Purchase Following Change of Control and Excess Cash Flow . . . . . . . . . . 45
SECTION 3.11 GECC Closing Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>
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<TABLE>
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ARTICLE 4 - NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.01. Certain Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
SECTION 4.02. Limitation on Restricted Payments and Restricted Investments . . . . . . . . . . . . 51
SECTION 4.03. Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
SECTION 4.04. Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
SECTION 4.05. Limitation on Company Mergers, Consolidations, and Sales . . . . . . . . . . . . . . 55
SECTION 4.06. Limitation on Certain Asset Sales and Subsidiary Mergers . . . . . . . . . . . . . . 56
SECTION 4.07. Limitation on Payment Restrictions Affecting Subsidiaries . . . . . . . . . . . . . . 59
SECTION 4.08. Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 4.09. Limitations on the Sale of Stock and Debt of Subsidiaries . . . . . . . . . . . . . . 60
SECTION 4.10. Sale and Lease-Back Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.11. Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.12. Pension Plan Funding Deficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 4.13. Limitation on Issuance and Sale of Capital Stock of Subsidiaries . . . . . . . . . . 61
SECTION 4.14. Limitation on Fiscal Year Change . . . . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE 5 - DEFAULTS AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.01. Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
SECTION 5.02. Other Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 5.03. Rescission of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 5.04. Notice of Acceleration or Rescission . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 5.05. Waiver of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
SECTION 5.06. Control by Majority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.07 Limitation on Suits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
SECTION 5.08. Rights of Holders to Receive Payment . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.09. Collection Suit by Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.10. Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . . . . . . . . . . 68
SECTION 5.11. Priorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
SECTION 5.12. Undertaking for Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
ARTICLE 6 - TRUSTEE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
SECTION 6.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.03. Individual Rights of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
SECTION 6.04. Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.05. Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.06. Reports by Trustee to Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
SECTION 6.07. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
SECTION 6.08. Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
SECTION 6.09. Successor Trustee by Merger, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . 76
</TABLE>
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SECTION 6.10. Eligibility; Disqualification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
SECTION 6.11. Preferential Collection of Claims Against Company . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE 7 - DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 7.01. Termination of Company's Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 7.02. Application of Trust Money . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 7.03. Repayment to Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
SECTION 7.04. Reinstatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
ARTICLE 8 - AMENDMENTS, SUPPLEMENTS AND WAIVERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 8.01. Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 8.02. With Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
SECTION 8.03. Compliance with Trust Indenture Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 8.04. Effect of Supplemental Indentures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 8.05. Notation on or Exchange of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 8.06. Trustee Protected . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80
SECTION 8.07. Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
ARTICLE 9 - REDEMPTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
SECTION 9.01. Mandatory and Optional Redemptions; Notice to Trustee . . . . . . . . . . . . . . . . . . . 81
SECTION 9.02. Pro Rata Allocation of the Securities to be Redeemed . . . . . . . . . . . . . . . . . . . 82
SECTION 9.03. Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
SECTION 9.04. Effect of Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.05. Deposit of Redemption Price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
SECTION 9.06. Securities Redeemed in Part . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 9.07. Partial Redemptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
ARTICLE 10 - MEETINGS OF HOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 10.01. Purposes for Which Meetings May Be Called . . . . . . . . . . . . . . . . . . . . . . . . . 84
SECTION 10.02. Manner of Calling Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.03. Call of Meetings by Company or Holders . . . . . . . . . . . . . . . . . . . . . . . . . . 85
SECTION 10.04. Who May Attend and Vote at Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.05. Regulations May Be Made by Trustee; Conduct of the Meeting; Voting Rights;
Adjournment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
SECTION 10.06. Voting at the Meeting and Record to Be Kept . . . . . . . . . . . . . . . . . . . . . . . . 87
SECTION 10.07. Exercise of Rights of Trustee or Holders May Not Be Hindered or Delayed by Call of
Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
</TABLE>
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ARTICLE 11 - CERTAIN COLLATERAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 11.01. Collateral Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88
SECTION 11.02. Recording and Opinions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.03. Certificates of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
SECTION 11.04. Authorization of Receipt of Funds by the Trustee Under the Collateral Documents . . . . . . 90
ARTICLE 12 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.01. Trust Indenture Act Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
SECTION 12.03. Communication by Holders with Other Holders . . . . . . . . . . . . . . . . . . . . . . . . 91
SECTION 12.04. Certificate and Opinion as to Conditions Precedent . . . . . . . . . . . . . . . . . . . . 92
SECTION 12.05. Statements Required in Certificate or Opinion . . . . . . . . . . . . . . . . . . . . . . . 92
SECTION 12.06. Rules by Trustee and Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.07. Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.08. No Recourse Against Others . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.09. Benefits of Indenture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.10. Duplicate Originals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.11. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.12. No Adverse Interpretation of Other Agreements . . . . . . . . . . . . . . . . . . . . . . . 93
SECTION 12.13. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 12.14. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 12.15. Table of Contents, Headings, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 12.16. Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
SECTION 12.17. Notice of Note Agreement Amendment, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . 94
SIGNATURES
Exhibit A-1 - Form of Series A Security
Exhibit A-2 - Form of Series B Security
Exhibit A-3 - Form of Series C Security
Exhibit A-4 - Form of Series D Security
Exhibit B - Form of Legend for Global Securities
Exhibit C - Transferee Certificate for Non-QIB
Accredited Investors
Exhibit D - Transferee Certificate for Transfers
Pursuant to Regulation S
Exhibit E - Subordination Terms
Schedule 4.02 - Schedule of Investments
Schedule 4.03 - Schedule of Subsidiary Debt
Schedule 4.04 - Schedule of Liens
Schedule 4.07 - Schedule of Certain Restrictions
</TABLE>
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INDENTURE dated as of June 20, 1995 between ENVIRODYNE INDUSTRIES, INC.,
a Delaware corporation (the "Company"), and SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION (the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation and issuance of its First
Priority Senior Secured Notes Due 2000 (the "Securities") of substantially the
tenor and amount set forth in Exhibits A-1, A-2, A-3 and A-4 attached hereto
and made a part hereof, and to provide therefor the Company has duly authorized
the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid and binding obligations of the Company, and to make this
Indenture a valid and binding agreement of the Company, all in accordance with
their respective terms, have been done.
NOW, THEREFORE, each party agrees as follows for the benefit of the
other party and for the equal and ratable benefit of the Holders of the
Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION
BY REFERENCE
SECTION 1.01. Certain Definitions.
As used herein, the following terms shall have the following meanings:
"Accountants' Certificate" means a written opinion or verification that
complies with Section 12.05 of this Indenture from a nationally recognized firm
of independent public accountants acceptable to the Trustee.
"Acquired Debt" means Debt of a Person existing on or prior to the time
at which such Person became a Subsidiary and not incurred in connection with,
or in contemplation of, such Person becoming a Subsidiary.
"Affiliate" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with such specified Person, (ii)
which beneficially owns or holds 10% or more of any class of the Voting
Securities of such specified Person, or (iii) of which 10% or more of the
Voting Securities is beneficially owned or held by such specified Person or by
a Subsidiary of such specified Person.
"Agent" means any Registrar, Paying Agent or Co-Registrar.
<PAGE> 8
"Agent Members" shall have the meaning given to such term in Section
2.14(a).
"Average Life" means, as of any date, with respect to any debt security,
the quotient obtained by dividing (i) the sum of the products of (x) the
numbers of years from such date to the dates of each successive scheduled
principal payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
"Broad Affiliate" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with such specified Person, (ii)
which beneficially owns or holds 25% or more of any class of the Voting
Securities of such specified Person, or (iii) of which 25% or more of the
Voting Securities is beneficially owned or held by such specified Person or by
a Subsidiary of such specified Person.
"BTCC" means BT Commercial Corporation, a Delaware corporation, and its
successors and permitted assigns.
"Bankruptcy Law" has the meaning given to such term in Section 5.01(h).
"Board of Directors" of any corporation means the board of directors of
such corporation or any duly authorized committee of the board of directors of
such corporation.
"Business Day" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City or Hartford, Connecticut are required
or authorized to be closed.
"Capital Lease Obligation" means, at any time, the amount of the
liability with respect to a lease that would be required at such time to be
capitalized on a balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than debt securities convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"Cash Equivalents" means: (i) debt instruments, with maturities of one
year or less from the date of acquisition, issued by the government of the
United States of America or any agency thereof (if fully guaranteed or insured
by the government of the United States of America), (ii) certificates of
deposit, with maturities of one year or less from the date of acquisition, of
any commercial bank incorporated under the laws of the United States of
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<PAGE> 9
America having a combined capital, surplus and undivided profits of not less
than $100,000,000, (iii) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc., and
(iv) tax exempt floating rate tender bonds, as to which payments of principal,
interest and other charges may be made at the option of the holder upon not
more than one week's notice which are payable upon tender or any default from
the proceeds of an unconditional and irrevocable letter of credit issued by a
United States office of any commercial bank all of whose long-term debt
securities are rated at least AA by Standard & Poor's Corporation or Aa by
Moody's Investors Service, Inc.
"Change of Control" means the occurrence of any of the following events
(whether or not approved by the Board of Directors of the Company or otherwise
permitted by the terms of this Indenture): (i) any person (as such term is
used in Sections 13(d) and 14(d) of the Exchange Act), or any Affiliate of any
such person, is or becomes a "beneficial owner" (as defined in Rules 13d-3 and
13d-5 under the Exchange Act, except that a person shall also be deemed to have
"beneficial ownership" of all shares that any such person has the right to
acquire whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the Common Stock of the
Company or such other amount of Voting Securities to provide the ability to
elect, directly or indirectly, a majority of the members of the Board of
Directors of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new or replacement directors whose
election by such Board or whose nomination for election by the shareholders of
the Company was approved by a vote of a majority of the directors of the
Company 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)
cease for any reason to constitute a majority of the Board of Directors of the
Company then in office; (iii) any direct or indirect Transfer (in one
transaction or a series of related transactions) of all or substantially all of
the consolidated assets of the Company and its Subsidiaries to any person (as
such term is used in Sections 13(d) and 14(d) of the Exchange Act) or any
Affiliate of any such person; or (iv) the approval by the Company or its
shareholders of any plan of liquidation; or (v) any event constituting a
"Change of Control" in respect of 10.25% Notes, the Revolving Credit Agreement,
the Second Priority Notes or the Subsequent Second Priority Notes.
"Clause (i) Amount" shall have the meaning given to such term in Section
4.01(a)(i).
"Clause (i) Test Period" shall have the meaning given to such term in
Section 4.01(a)(i).
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<PAGE> 10
"Clause (ii) Amount" shall have the meaning given to such term in
Section 4.01(a)(ii).
"Clause (ii) Test Period" shall have the meaning given to such term in
Section 4.01(a)(ii).
"Clause (iii) Amount" shall have the meaning given to such term in
Section 4.01(a)(iii).
"Clause (iii) Test Period" shall have the meaning given to such term in
Section 4.01(a)(iii).
"Clause (iv) Amount" shall have the meaning given to such term in
Section 4.01(a)(iv).
"Clause (iv) Test Period" shall have the meaning given to such term in
Section 4.01(a)(iv).
"Clause (v) Test Period" shall have the meaning given to such term in
Section 4.01(a)(v).
"Collateral" means all the real, personal and mixed property made, or
intended or purported to be made, subject to a Lien pursuant to the Collateral
Documents.
"Collateral Agent" means BTCC, in its capacity as collateral agent under
the Intercreditor Agreement and the other Collateral Documents, and any
successor thereto.
"Collateral Documents" means, collectively, the Guaranty Agreement,
Pledge Agreement, Intercreditor Agreement, Intellectual Property Pledge
Agreement, Mortgage, Security Agreement, and all other instruments or documents
now or hereafter granting (or purporting to grant) Liens on property of the
Company or any of its Subsidiaries to the Collateral Agent, for the benefit of
the "Secured Parties" (as defined in the Intercreditor Agreement).
"Common Stock" means, with respect to any Person, any and all shares,
interests, participations or other equivalent (however designated) of Capital
Stock in such Person which is not preferred as to the payment of dividends or
the distribution of assets on any voluntary or involuntary liquidation over
shares of any other class of Capital Stock in such Person.
"Company" means Envirodyne Industries, Inc. unless and until a successor
of Envirodyne Industries, Inc. replaces it pursuant to this Indenture, and
thereafter means such successor.
"Consolidated Cash Flow" means, for any period, Consolidated Net Income
for such period, (A) increased by the sum of (i) Consolidated Fixed Charges for
such period, other than interest capitalized by the Company and its
Subsidiaries during such period, (ii)
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<PAGE> 11
income tax expense of the Company and its Subsidiaries, on a consolidated
basis, for such period (other than income tax expense attributable to sales or
other dispositions of assets (other than sales of inventory in the ordinary
course of business)), (iii) depreciation expense of the Company and its
Subsidiaries, on a consolidated basis, for such period, (iv) amortization
expense of the Company and its Subsidiaries, on a consolidated basis, for such
period, and (v) other non-cash items reducing Consolidated Net Income minus
non-cash items increasing Consolidated Net Income for such period, and (B)
decreased by any revenues received or accrued by the Company or any of its
Subsidiaries from any other Person (other than the Company or any of its
Subsidiaries) in respect of any Investment for such period, all as determined
in accordance with GAAP.
"Consolidated Debt" means the aggregate amount of Debt of the Company
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
"Consolidated Fixed Charges" means, for any period, (A) the sum of,
without duplication, (i) the aggregate amount of interest expense of the
Company and its Subsidiaries during such period (including, without limitation,
all commissions, discounts and other fees and charges owed by the Company and
its Subsidiaries with respect to letters of credit and bankers' acceptances or
similar financing facilities and the net costs associated with Interest Rate
Agreements and Currency Agreements of the Company and its Subsidiaries) paid,
accrued or scheduled to be paid or accrued during such period, including
interest expense not required to be paid in cash (including any amortization of
original issue debt discount), all determined in accordance with GAAP, plus all
interest capitalized by the Company and its Subsidiaries during such period,
(ii) the aggregate amount of the interest expense component of rentals in
respect of Capital Lease Obligations paid or accrued by the Company and its
Subsidiaries during such period, determined in accordance with GAAP, (iii) the
aggregate amount of all operating lease expense of the Company and its
Subsidiaries during such period, determined in accordance with GAAP, and (iv)
to the extent any interest payment obligation of any other Person is guaranteed
by the Company or any of its Subsidiaries (other than guarantees relating to
obligations of customers of the Company or any of its Subsidiaries that are
made in the ordinary course of business consistent with past practices of the
Company or its Subsidiaries), the aggregate amount of interest paid or accrued
by such Person in accordance with GAAP during such period attributable to any
such interest payment obligation, less (B) to the extent included in (A) above,
amortization or write-off of deferred financing costs by the Company and its
Subsidiaries during such period; in each case after elimination of intercompany
accounts among the Company and its Subsidiaries and as determined in accordance
with GAAP.
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<PAGE> 12
"Consolidated Intangible Assets" means, as at any date, (i) the amount
of all write-ups in the book value of any asset resulting from the revaluation
thereof and all write-ups in excess of the cost of assets acquired, plus (ii)
the amount of all unamortized original issue discount, unamortized debt
expense, goodwill, patents, trademarks, service marks, trade names, copyrights,
organization and development expense and other intangible assets, in each case
as would be taken into account in preparing a consolidated balance sheet of the
Company and its subsidiaries on a consolidated basis as at such date in
accordance with GAAP.
"Consolidated Net Income" means, for any period, the aggregate net
income (or net loss, as the case may be) of the Company and its Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, that there shall be excluded therefrom, without duplication, (i)
gains and losses from the sale or other disposition of assets (other than sales
of inventory in the ordinary course) or reserves relating thereto, (ii) items
classified as extraordinary or nonrecurring (including, without limitation, any
gains from any exchange of debt securities) and gains (but not losses) from
discontinued operations, (iii) the income (or loss) of any Joint Venture,
except to the extent of the amount of cash dividends or other distributions in
respect of Capital Stock therein actually paid during such period to the
Company or any of its Subsidiaries by such Joint Venture out of funds legally
available therefor (or, in the case of a loss, to the extent such loss is
funded by the Company or any such Subsidiary during such period), (iv) except
to the extent includable pursuant to clause (iii), the income (or loss) of any
other Person accrued or attributable to any period prior to the date it becomes
a Subsidiary of such Person or is merged into or consolidated with such Person
or any of its Subsidiaries or such other Person's Property (or a portion
thereof) is acquired by such Person or any of its Restricted Subsidiaries, and
(v) non-cash items decreasing or increasing Consolidated Net Income arising out
of currency translation effects.
"Consolidated Net Worth" means Net Worth without giving effect to any
purchase accounting adjustments if Consolidated Net Worth is being determined
in connection with any merger, consolidation or other acquisition of, or by,
the Company or any of its Subsidiaries.
"Consolidated Secured Debt" means, collectively, the outstanding
principal balance of the Debt described in Sections 4.03(a)(i) and (a)(iv) and
the outstanding amount of unpaid reimbursement obligations for drawn letters of
credit with respect to the Debt described in Section 4.03(a)(v).
"Consolidated Senior Debt" means, at any time, all Consolidated Debt at
such time, other than the then outstanding principal
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amount of: (i) the 10.25% Notes, (ii) the Second Priority Notes, (iii) the
Subsequent Second Priority Notes, (iv) Debt of any Subsidiary of the Company
payable to the Company or any Wholly Owned Subsidiary of the Company, and (v)
Debt of the Company that is not secured by a Lien or that is junior in right of
payment, and subordinate to, the Securities pursuant to subordination terms in
the form of Exhibit E hereto, which Debt matures after the Stated Maturity of
the Securities, and has no principal payments scheduled until, a date which is
at least six (6) months after the maturity date of the Securities.
"Consolidated Tangible Net Worth" means, at any time, Consolidated Net
Worth at such time, less Consolidated Intangible Assets at such time.
"Consolidated Total Capitalization" means, at any time, the sum of: (i)
Consolidated Net Worth at such time, plus (ii) Consolidated Debt.
"Control" means (except as otherwise specifically provided herein) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Securities, by agreement or otherwise; and the terms
"Controlling" and "Controlled" have meanings correlative to the foregoing.
"Control Group" means a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which the Company is
a member, any group of corporations or entities under common control with the
Company within the meaning of Section 414(c) of the Internal Revenue Code of
which the Company is a member or any affiliated service group within the
meaning of Section 414(m) of the Internal Revenue Code of which the Company is
a member.
"Corporate Trust Office" means the Corporate Trust Office of the Trustee
at which at any particular time its corporate trust business shall be
principally administered, which on the date hereof is the address of the
Trustee specified in Section 12.02.
"Credit Documents" means, collectively, this Indenture, the Securities,
the Note Agreement, the Collateral Documents and all other agreements,
instruments and documents (including, without limitation, security agreements,
loan agreements, notes, guarantees, mortgages, deeds of trust, leasehold
mortgages, leasehold deeds of trust, subordination agreements, pledges, powers
of attorney, consents, assignments, intercreditor agreements, mortgagee
waivers, reimbursement agreements, contracts, notices, leases, financing
statements and all other written items) relating in any way to the
aforementioned agreements and instruments.
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"Currency Agreement" of any Person means any foreign exchange contract,
currency swap agreement, option or futures contract or other similar agreement
or arrangement designed to protect such Person or any of its Subsidiaries
against fluctuations in currency values (as opposed to being used in any way
for speculative trading purposes).
"Current Debt" means, with respect to any Person, all Indebtedness of
such Person for borrowed money which by its terms or by the terms of any
instrument or agreement relating thereto matures on demand or within one year
from the date of the creation thereof and is not directly or indirectly
renewable or extendible at the option of the debtor to a date more than one
year from the date of the creation thereof, provided that Indebtedness for
borrowed money outstanding under a revolving credit or similar agreement which
obligates the lender or lenders to extend credit over a period of more than one
year shall constitute Funded Debt and not Current Debt, even though such
Indebtedness by its terms matures on demand or within one year from the date of
the creation thereof.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator, custodian or similar official appointed under any Bankruptcy Law.
"Debt" shall mean Current Debt and Funded Debt.
"Default" means any event which through the passage of time, the giving
of notice or both would mature into an Event of Default.
"Default Rate" means a rate per annum from time to time equal to the
greater of (i) 14.00%, and (ii) the LIBOR Rate plus 2.00%.
"Depository" means, with respect to any Security issuable or issued in
the form of one or more Global Securities, the Person designated as Depository
by the Company in or pursuant to this Indenture, which Person must be, to the
extent required by applicable law or regulation, a clearing agency registered
under the Exchange Act, and, if so provided with respect to any Security, any
successor to such Person. If at any time there is more than one such Person,
"Depository" shall mean, with respect to any Securities, the qualifying entity
which has been appointed with respect to such Securities. Unless and until
otherwise designated by the Company to the Trustee, the Depository shall be The
Depository Trust Company.
"Domestic Subsidiary" means any Subsidiary organized under the laws of
any state of the United States of America or the District of Columbia.
"DPK" means D.P. Kelly & Associates, L.P., a Delaware limited
partnership, and its successors and assigns.
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"Effective Date" means the date of this Indenture.
"Environmental Laws" means any and all federal, state, local and foreign
statutes, laws, regulations, ordinances, rules, judgments, orders, decrees,
permits, concessions, grants, franchises, licenses, agreements or other
governmental restrictions relating to the environment or to emissions,
discharges, releases or threatened releases of pollutants, contaminants,
chemicals or industrial, toxic or hazardous substances or wastes into the
environment, including, without limitation, ambient air, surface water, ground
water or land, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or industrial, toxic or hazardous
substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder.
"Event of Default" means the occurrence of any event described in
Section 5.01.
"Excess CF Amount" means, as to any Excess Cash Flow in any fiscal year
of the Company, the aggregate amount of such Excess Cash Flow, less any
repayments of Debt under the Revolving Credit Agreement required to be made
pursuant to the terms of such Revolving Credit Agreement; provided, however,
that the amount of any such required repayment shall not exceed the Revolver
Pro Rata Share of the aggregate amount of such Excess Cash Flow.
"Excess Cash Flow" means, for any period, the Company's Consolidated
Cash Flow, less the sum of (i) consolidated cash interest expense (including
the interest portion of any payments associated with Capital Lease Obligations)
of the Company during such period, (ii) consolidated capital expenditures of
the Company during such period, (iii) principal payments on indebtedness
(including the principal portion of any Capital Lease Obligations) of the
Company made or paid during such period, (iv) additions (reductions) to Working
Capital of the Company during such period, (v) consolidated income tax expense
of the Company that is actually paid during such period, and (vi) $15,000,000,
all determined on a consolidated basis in accordance with GAAP.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"Exempted Transactions" means (i) transactions with Cargill Financial
Services and its Affiliates (collectively, "Cargill") so long as Cargill is not
a Broad Affiliate of the Company; (ii) transactions with Reliance Insurance Co.
and its Affiliates (collectively, "Reliance") so long as Reliance is not a
Broad
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<PAGE> 16
Affiliate of the Company; (iii) purchases of turkey timers from Volk
Enterprises, Inc. and (iv) purchases of chemicals from Weskem-Hall, Inc.
"Fiscal Year Change" shall have the meaning given to such term in
Section 4.14.
"Foreign Subsidiary" means any Subsidiary that is not a Domestic
Subsidiary.
"Funded Debt" means, with respect to any Person, all Indebtedness of
such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, more than
one year from, or is directly or indirectly renewable or extendable at the
option of the debtor to a date more than one year (including an option of the
debtor under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year) from, the date of
the creation thereof.
"GAAP" means, at any date, United States 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 applicable to the circumstances as of the date of determination.
"GECC" means General Electric Capital Corporation, a New York
corporation, and its successors and assigns.
"GECC Intercreditor Agreement" means that certain GECC Intercreditor
Agreement, dated as of the Effective Date, among the Collateral Agent, GECC,
Shawmut Bank Connecticut, National Association, as Owner Trustee, and the
Company, as amended, supplemented or otherwise modified from time to time.
"GECC Lease Documents" means (i) the Lease Agreement dated as of
December 18, 1990 between The Connecticut National Bank (now known as Shawmut
Bank Connecticut, National Association; "TCNB"), Owner Trustee, as lessor and
Viskase Corporation, as lessee, (ii) the Participation Agreement dated as of
December 18, 1990 among Viskase Corporation, the Company, GECC and TCNB and
(iii) the related instruments and agreements with respect thereto, in each case
as the same may have heretofore been or may hereinafter be amended, modified,
restated, renewed or extended or refinanced from time to time.
"Global Security" means a Security issued in global form.
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"Guaranty Agreement" means that certain Guaranty Agreement, dated as of
the Effective Date, made by each Significant Domestic Subsidiary in favor of
the Collateral Agent, as amended, supplemented or otherwise modified from time
to time.
"Guarantee" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or services regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
"Holder" means any Person in whose name a Security is registered on the
Registrar's books.
"Indebtedness" means, with respect to any Person, without duplication,
(i) all items (excluding items of contingency reserves or of reserves for
deferred income taxes) which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as of the date on which Indebtedness is to be determined, (ii)
all indebtedness secured by any Lien on any property or asset owned or held by
such Person subject thereto, whether or not the indebtedness secured thereby
shall have been assumed, (iii) all indebtedness of others with respect to which
such Person has become liable by way of a Guarantee (including, without
limitation, all obligations of such Person with respect to surety bonds, bank
acceptances, and letters of credit and other similar obligations), (iv) all
obligations of such Person in respect of Currency Agreements or Interest Rate
Agreements and (v) the maximum fixed repurchase price of any Redeemable Stock.
For purposes of the preceding sentence, the maximum fixed repurchase price of
any Redeemable Stock that does
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not have a fixed repurchase price shall be calculated in accordance with the
terms of such Redeemable Stock as if such Redeemable Stock were repurchased on
any date on which Indebtedness shall be required to be determined pursuant to
this Indenture; provided, that if such Redeemable Stock is not then permitted
to be repurchased, the repurchase price shall be the book value of such
Redeemable Stock.
"Indenture" means this Indenture as originally executed and as it may
from time to time be amended or supplemented by one or more supplemental
indentures hereto entered into pursuant to the applicable provisions hereof.
"Initial Purchasers" means each Person listed on the Purchaser Schedule
attached to the Note Agreement on the Effective Date.
"Institutional Accredited Investor" means an institution that is an
"accredited investor" as that term is defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act.
"Intellectual Property Pledge Agreement" means, collectively, each
Intellectual Property Security Agreement made at any time by the Company or any
Subsidiary of the Company, respectively, in favor of the Collateral Agent, as
amended, supplemented or modified from time to time.
"Intercreditor Agreement" means that certain Intercreditor and
Collateral Agency Agreement, dated as of the Effective Date, by and among the
Lender, the Trustee, and BTCC, individually and as Collateral Agent and agent
for the Letter of Credit Lenders, as the same may be amended, amended and
restated, supplemented or modified from time to time.
"Interest Rate Agreement" of any Person means any arrangement with any
other Person whereby, directly or indirectly, such Person is entitled to
receive from time to time periodic payments calculated by applying either a
floating or fixed rate of interest on a notional amount in exchange for
periodic payments made by such Person calculated by applying a fixed or
floating rate of interest on the same notional amount and shall include,
without limitation, any interest rate swap agreement, interest rate cap, floor
or collar agreement, option or futures contract or other similar agreements or
arrangements, designed to protect such Person or any of its Subsidiaries from
fluctuations in interest rates (as opposed to being used in any way for
speculative trading purposes).
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the rules and regulations promulgated
thereunder.
"Investment" means, as to any investing Person, any direct or indirect
advance, loan (other than extensions of trade credit on
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<PAGE> 19
commercially reasonable terms in the ordinary course of business that are
recorded as accounts receivable on the balance sheet of such Person or any of
its Subsidiaries in accordance with GAAP) or other extension of credit,
guarantee or capital contribution to, or any acquisition by, such Person of any
Capital Stock, bonds, notes, debentures or other securities or evidences of
Indebtedness issued by any other Person. In determining the amount of any
Investment involving a transfer of Property, such Property shall be valued at
its fair market value at the time of such transfer, and such fair market value
shall be determined in good faith by the Board of Directors of the investing
Person, whose determination in such regard shall be conclusive.
"Joint Venture" of a Person means any Person in which the investing
Person has a joint or shared equity interest but which is not a Subsidiary of
such investing Person.
"Lender" shall mean, collectively, The Prudential Insurance Company of
America, as lender under the Revolving Credit Agreement and all other lenders
(if any) that exist under the Revolving Credit Agreement from time to time.
"Letter of Credit Agreement" means the Credit Agreement, dated as of the
Effective Date, between the Letter of Credit Lenders, BTCC, as agent for the
Letter of Credit Lenders, and the Company, as amended, supplemented or
otherwise modified from time to time.
"Letter of Credit Lenders" means the financial institutions party to the
Letter of Credit Agreement as "Lenders" from time to time.
"LIBOR Business Day" means a day of the year on which dealings are
carried on in the London interbank market and banks are open for business in
London and not required or authorized to close in New York City.
"LIBOR Rate" means (i) for any Rate Period, the sum of 5.75% plus the
six month London Interbank Offered Rate at 11:00 A.M. (London time) two LIBOR
Business Days prior to Rate Day, for U.S. dollar deposits in the London
interbank market as such rate is reported on page 3750 by Telerate - The
Financial Information Network published by Telerate Systems Incorporated
(Telerate), or its successor company; or (ii) if Telerate shall cease to report
such rates on a regular basis, the LIBOR Rate shall mean, for any Rate Period,
the sum of 5.75% plus the rate determined by the Trustee to be the arithmetic
average (rounded upwards, if necessary, to the nearest 1/16 of 1%) of the rates
quoted to the Trustee by the Reference Banks two LIBOR Business Days prior to
Rate Day, for U.S.dollar deposits in the London interbank market.
"Lien" means any mortgage, pledge, lien, charge, security interest,
conditional sale or other title retention agreement
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(including, without limitation, any Capital Lease Obligations in the nature
thereof) or other encumbrance of any kind or description, including, without
limitation, any agreement to give or grant a Lien.
"Management Agreement" means the Management Services Agreement dated as
of December 4, 1991 between the Company and DPK, as the same was amended and
restated by the Amended and Restated Management Services Agreement dated as of
December 31, 1993 between the Company and DPK and as the same may from time to
time, hereafter be amended, modified or restated upon the good faith approval,
pursuant to duly adopted resolutions, of a majority of members of the Company's
Board of Directors who are not Affiliates of DPK.
"Mandatory Redemption Date" has the meaning given to such term in
Section 9.01(a).
"Material Adverse Effect" means a material adverse effect on (i) the
consolidated financial condition, operations, business or prospects of the
Company and its Subsidiaries (taken as a whole), (ii) the ability of the
Company or any of its Subsidiaries to perform its obligations under any of the
Credit Documents, or (iii) the validity or enforceability of any of the Credit
Documents.
"Material Subsidiary" means (a) any Subsidiary of the Company if (i) the
total assets of such Subsidiary (and its Subsidiaries) exceed 10% of the total
assets of the Company and its Subsidiaries, determined on a consolidated basis
in accordance with GAAP, or (ii) the revenues (or losses, as the case may be)
of such Subsidiary (and its Subsidiaries) for the four consecutive fiscal
quarters of such Subsidiary most recently ended (determined on a consolidated
basis in accordance with GAAP and whether or not such Person was a Subsidiary
of the Company during all or any part of the fiscal period of the Company
referred to below) exceed an amount equal to 10% of the revenues (or losses, as
the case may be) of the Company and its Subsidiaries for the four consecutive
fiscal quarters of the Company most recently ended (determined on a
consolidated basis in accordance with GAAP), and (b) in any event each of (i)
Sandusky Plastics of Delaware, Inc., a Delaware corporation; (ii) Sandusky
Plastics, Inc., a Delaware corporation; (iii) Viskase Corporation, a
Pennsylvania corporation; (iv) Clear Shield National, Inc., a California
corporation; (v) Viskase Holding Corporation, a Delaware corporation; and (vi)
Viskase Sales Corporation, a Delaware corporation and (vii) Viskase S.A.
"Mortgage" means, collectively, any or all of the mortgages, deeds of
trust or other security instruments now or hereafter granting (or purporting to
grant) Liens on the real property or leasehold estates or on any other real
property or leasehold
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estates of the Company or its Subsidiaries to the Collateral Agent, as they may
be amended, supplemented or otherwise modified from time to time.
"Multiemployer Plan" means any Plan which is a "multiemployer plan" (as
such term is defined in Section 4001(a)(3) of ERISA).
"Net Worth" means as of any date the aggregate amount of the capital,
surplus and retained earnings of the Company and its Subsidiaries as would be
shown on a consolidated balance sheet of the Company and its Subsidiaries
prepared as of such date in accordance with GAAP (and excluding minority
interests); provided that capital and surplus attributable to Redeemable Stock
and accumulated translation adjustments shall be excluded.
"Non-U.S. Person" means any Person that is not a "U.S. Person" as such
term is defined in Regulation S.
"Note Agreement" means the Note Agreement, dated as of the Effective
Date, between the Company and each Initial Purchaser, as amended, supplemented
or otherwise modified from time to time.
"Offer to Purchase" means a written offer (the "Offer") sent by the
Company by first class mail, postage prepaid, to each Holder on the date of the
Offer offering to purchase up to the principal amount of Securities specified
in such Offer at the purchase price specified in such Offer ("Purchase Price").
Unless otherwise required by applicable law, the Offer shall specify an
expiration date (the "Expiration Date") of the Offer to Purchase which shall
be, subject to any contrary requirements of applicable law or this Indenture,
not less than 30 days or more than 60 days after the date of such Offer and a
settlement date (the "Purchase Date") for the purchase of Securities within
five Business Days after the Expiration Date. The Company shall notify the
Trustee at least 15 Business Days (or such shorter period as is acceptable to
the Trustee) prior to the mailing of the Offer of the Company's obligation to
make an Offer to Purchase, and the Offer shall be mailed by the Company or, at
the Company's request, by the Trustee in the name and at the expense of the
Company. The Offer shall contain information concerning the business of the
Company and its Subsidiaries which the Company in good faith believes will
enable such Holders to make an informed decision with respect to the Offer to
Purchase (which at a minimum will include (i) a description of material
developments in the Company's business subsequent to the date of the latest of
financial statements delivered to the Holders pursuant to Section 3.02, (ii) if
applicable, appropriate pro forma financial information concerning the Offer to
Purchase and the events requiring the Company to make the Offer to Purchase,
and (iii) any other information required by applicable law to be included
therein). The Offer shall contain all instructions and materials necessary to
enable such Holders to tender Securities pursuant to the Offer to Purchase.
The Offer shall also state:
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(1) the Section of this Indenture pursuant to which the Offer
to Purchase is being made;
(2) the Expiration Date and the Purchase Date;
(3) the aggregate principal amount of the outstanding
Securities offered to be purchased by the Company pursuant to the Offer
to Purchase (the "Purchase Amount");
(4) the Purchase Price to be paid by the Company for each of
the Securities accepted for payment;
(5) that the Holder may tender all or any portion of the
Securities registered in the name of such Holder;
(6) the instructions that Holders must follow in order to
tender their Securities;
(7) that interest on any Security not tendered or tendered but
not purchased by the Company pursuant to the Offer to Purchase will
continue to accrue;
(8) that on the Purchase Date the Purchase Price will become
due and payable upon each Security accepted for payment pursuant to the
Offer to Purchase and that upon payment in full of the Purchase Price on
the Purchase Date interest thereon shall cease to accrue;
(9) that each Holder electing to tender a Security pursuant to
the Offer to Purchase will be required to surrender such Security
(except to the extent otherwise set forth in paragraph 7A of the Note
Agreement) at the place or places specified in the Offer prior to the
close of business on the Expiration Date (such Security being, if the
Company (or its Paying Agent) so requires, duly endorsed by, or
accompanied by a written instrument of transfer duly executed by, the
Holder thereof or his attorney duly authorized in writing and, if
reasonably requested, bearing appropriate signature guarantees);
(10) that Holders will be entitled to withdraw all or any
portion of the Securities tendered if the Company (or its Paying Agent)
receives, not later than the close of business on the Expiration Date, a
telegram, telex, facsimile transmission or letter setting forth the name
of the Holder, the principal amount of the Security the Holder tendered,
the certificate number of the Security the Holder tendered and a
statement that such Holder is withdrawing all or a portion of such
tender;
(11) that (a) if Securities with an aggregate principal amount
less than or equal to the Purchase Amount are duly
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tendered and not withdrawn pursuant to the Offer to Purchase, the
Company shall purchase all such Securities and (b) if Securities with an
aggregate principal amount in excess of the Purchase Amount are tendered
and not withdrawn pursuant to the Offer to Purchase, the Company shall
purchase Securities having an aggregate principal amount equal to the
Purchase Amount on a pro rata basis; and
(12) that in the case of any Holder whose Security is purchased
only in part the Company shall execute, and the Trustee shall
authenticate and deliver to such Holder without service charge, a new
Security or Securities, of any authorized denomination as requested by
such Holder, in an aggregate principal amount equal to and in exchange
for the unpurchased portion of the Security so tendered.
"Officers' Certificate" of any corporation means a certificate delivered
to the Trustee that complies with Section 12.05 of this Indenture and that is
signed by two Responsible Officers of such corporation, or by a Responsible
Officer of such corporation and by the Secretary or any Assistant Secretary or
any Assistant Treasurer of such corporation.
"Offshore Physical Securities" shall have the meaning given to such term
in Section 2.02.
"Opinion of Counsel" means a written opinion that complies with Section
12.05 of this Indenture from legal counsel who is reasonably acceptable to the
Trustee. Such legal counsel may be an employee of or counsel to the Company or
the Trustee.
"Optional Redemption Date" has the meaning given to such term in Section
9.01(b)(ii).
"Optional Redemption Price" has the meaning given to such term in
Section 9.01(b)(i).
"Pension Benefit Guaranty Corporation" means the Pension Benefit
Guaranty Corporation under ERISA (and any successor thereto).
"Paying Agent" has the meaning given such term in Section 2.03 of this
Indenture.
"Percentage of Total Assets Transferred" means, with respect to each
asset Transferred pursuant to clause (d) of Section 4.06 (including assets
transferred pursuant to a Transfer by Merger), the ratio (expressed as a
percentage) of (i) the greater of such asset's fair market value or the net
book value of such assets on the date of Transfer to (ii) the book value of the
consolidated assets of the Company and its Subsidiaries as of the last day of
the fiscal quarter of the Company immediately preceding the day of Transfer.
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"Permitted Liens" in respect of any Person shall mean (i) pledges or
deposits made by such Person under workers' compensation, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than contracts for the payment of money)
or operating leases to which such Person is a party, or deposits to secure
statutory or regulatory obligations of such Person or deposits of cash or U.S.
Government Obligations to secure surety or appeal bonds to which such Person is
a party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case incurred in the ordinary course of business;
(ii) Liens arising by operation of law such as carriers', warehousemen's and
mechanics' Liens, in each case arising in the ordinary course of business and
with respect to amounts not yet due or being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made; (iii) Liens for taxes
not yet subject to penalties for non-payment or which are being contested in
good faith and by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made; (iv)
Liens evidenced by the Capitalized Lease Obligations under GECC Lease Documents
and Liens securing Debt of the Company or its Subsidiaries permitted under
Section 4.03(a)(vi) for refinancing the Debt under the GECC Lease Documents;
provided, however, that in connection with any such refinancing any such new
Lien shall be limited to all or part of the same Property to which the original
Lien applied; (v) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, rights of way, sewers, electric
lines, telegraph and telephone lines and other similar purposes, or zoning or
other restrictions as to the use of real properties or Liens incidental to the
conduct of the business of such Person or to the ownership of its Property
which were not incurred in connection with Debt or other extensions of credit
and which do not in the aggregate materially adversely affect the value of said
Property or materially impair the use of such Property in the operation of the
business of such Person; (vi) Liens in favor of the Collateral Agent to secure
Debt permitted under Sections 4.03(a)(i), (iv), (v), and (vii); (vii) Liens
existing on the Effective Date and described on Schedule 4.04 hereto; (viii)
Liens arising out of judgments or awards against such Person not giving rise to
an Event of Default under Section 5.01(m) (but without limiting Section
5.01(p)) with respect to which such Person is diligently prosecuting an appeal
or other proceedings for review; (ix) Liens to secure Debt permitted under
Section 4.03(a)(xi); provided, however, that any such new Lien shall be limited
to all or part of the same Property to which the original Lien applied; (x)
Liens to secure Debt permitted under Section 4.03(a)(xiii) (to the extent such
Liens attach prior to or at the time of incurrence of such Debt); (xi) Liens to
secure the Debt (if any) permitted under Section 4.03(a)(iii); provided,
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however, that (a) the Lien securing such Debt is granted only to the Collateral
Agent and made subject to the terms of the Intercreditor Agreement, and (b) the
Intercreditor Agreement is amended to the reasonable satisfaction of the
Collateral Agent to add the Second Priority Notes Trustee as a party thereto,
and to provide for such matters incidental thereto as the Collateral Agent may
reasonably require; and (xii) Liens securing Debt of Wholly Owned Subsidiaries
of the Company to the Company or another such Wholly Owned Subsidiary permitted
under Section 4.03(a)(ix).
"Person" means any individual, partnership, corporation, limited
liability company, venture, joint venture, unincorporated organization,
joint-stock company, trust or any government or agency or political subdivision
thereof or other entity of any kind.
"Physical Securities" shall have the meaning given to such term in
Section 2.02.
"Plan" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any member of the Control Group.
"Pledge Agreement" means, collectively, each Pledge Agreement made at
any time by the Company or any Subsidiary of the Company in favor of the
Collateral Agent, as amended, supplemented or otherwise modified from time to
time.
"Private Placement Legend" means the legend initially set forth on the
Securities in the form set forth on Exhibit A-1.
"Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in any
other Person.
"Purchase Date" shall have the meaning given to such term in the
definition of Offer to Purchase.
"Purchase Amount" has the meaning given to such term in the definition
of Offer to Purchase.
"Purchase Money Indebtedness" means, as to any Person, the Debt of such
Person incurred and owing in respect of all or part of the purchase price of
Property purchased where such Debt is fully secured by the Property purchased.
"Purchase Price" shall have the meaning given to such term in the
definition of Offer to Purchase.
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"Qualified Institutional Buyer" or "QIB" shall have the meaning
specified in Rule 144A under the Securities Act.
"Qualified Plan" means any Plan, other than a Multiemployer Plan, which
is intended to meet the qualification requirements of Section 401(a) of the
Internal Revenue Code.
"Rate Day" means for each Rate Period the first day of such Rate Period;
provided, however, that if such day is not a LIBOR Business Day, then the next
LIBOR Business Day succeeding the first day of such Rate Period.
"Rate Period" means the period during which the LIBOR Rate remains in
effect and unchanged. For purposes of this Indenture, the Rate Period shall
begin on the fifteenth day of each June and December of each year, commencing
with June 15, 1995.
"Redeemable Stock" means, with respect to any Person, any class or
series of Capital Stock that, either by its terms, by the terms of any security
into which it is convertible or exchangeable by contract or otherwise, is or
upon the happening of an event or the passage of time would be, required to be
redeemed or is redeemable at the option of the holder thereof at any time prior
to the Stated Maturity of the principal of the Securities, or, at the option of
the holder thereof, is convertible into or exchangeable for debt securities
maturing at any time prior to the Stated Maturity of the principal of the
Securities.
"Redemption Date" means the Mandatory Redemption Date, the Optional
Redemption Date or the Transfer Redemption Date, as the case may be.
"Redemption Price" means the Mandatory Redemption Price, Optional
Redemption Price or Transfer Redemption Price, as the case may be.
"Reference Banks" means Morgan Guaranty Trust Company of New York,
Citibank, N.A. and The Chase Manhattan Bank (National Association).
"Registered Exchange Offer" means the offer to exchange the Series B
Securities for all of the outstanding Series A Securities and the Series D
Securities for all of the outstanding Series C Securities, in each case in
accordance with the Registration Rights Agreement.
"Registrar" has the meaning given to such term in Section 2.03.
"Registration Rights Agreement" means the Exchange and Registration
Rights Agreement by and between the Company and the
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Holders party thereto, relating to the Securities and dated the Effective Date,
as amended, supplemented or otherwise modified from time to time.
"Regulation S" means Regulation S under the Securities Act.
"Restricted Debt" means all Consolidated Debt other than Consolidated
Senior Debt.
"Required Holders" means the Holder or Holders of at least a majority of
the aggregate principal amount of the Securities from time to time outstanding
(without giving effect to any Securities owned of record by the Company or any
of its Affiliates).
"Responsible Officer" means, with respect to any corporation, the chief
executive officer, chief operating officer, chief financial officer, treasurer,
or chief accounting officer of such corporation or any other officer of such
corporation involved principally in its financial administration or its
controllership function.
"Restricted Investment" shall have the meaning given to such term in
Section 4.02(a).
"Restricted Payments" shall have the meaning given to such term in
Section 4.02(a).
"Restricted Security" shall have the meaning given to such term in Rule
144.
"Revolver Pro Rata Share" means, as to any requirement to make an Offer
to Purchase under Section 3.09, the percentage obtained by dividing (i) the
amount of the Revolving Loan Commitment in effect on the date the Company first
sends such Offer to Purchase, by (ii) the sum of (a) the amount of such
Revolving Loan Commitment in effect on such date, and (b) the aggregate
principal amount of the Securities outstanding on such date.
"Revolving Credit Agreement" means that certain Revolving Credit
Agreement, dated as of the Effective Date between the Company and The
Prudential Insurance Company of America, as amended, supplemented or otherwise
modified from time to time or as replaced pursuant to a refinancing thereof
permitted under Section 4.03.
"Revolving Loan Commitment" means, at any time, the aggregate principal
amount which may be borrowed under the Revolving Loan Agreement at such time
(determined without giving effect to any suspension or termination of the
Lender's obligation to make loans thereunder upon the occurrence of a default
or an "Event of Default" thereunder).
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"Rule 144" means Rule 144 promulgated by the SEC under the Securities
Act and as in effect from time to time.
"Rule 144A" means Rule 144A promulgated by the SEC under the Securities
Act and as in effect from time to time.
"Sale and Leaseback Transaction" means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold by such
Person or a Subsidiary of such Person and thereafter leased back from the
purchaser thereof by such Person or one of the Subsidiaries of such Person.
"SEC" means the Securities and Exchange Commission, as from time to time
constituted, or any similar agency then having jurisdiction to enforce the
Securities Act.
"Second Priority Notes" means the debt securities which may be issued by
the Company under an indenture (the "Second Priority Notes Indenture") pursuant
to the 10.25% Note Exchange.
"Second Priority Notes Indenture" has the meaning given to such term in
the definition of Second Priority Notes.
"Second Priority Notes Trustee" means trustee for the Second Priority
Notes and Subsequent Second Priority Notes, respectively (in such capacity) and
each successor thereto in such capacity.
"Security Agreement" means, collectively, each Security Agreement made
at any time by the Company or any Subsidiary of the Company in favor of the
Collateral Agent, as amended, supplemented or otherwise modified from time to
time.
"Securities" has the meaning set forth in the first recital paragraph of
this Indenture.
"Securities Act" means the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the SEC promulgated thereunder.
"Series A Securities" means the 12% First Priority Senior Secured Notes
due 2000, Series A, being issued pursuant to this Indenture.
"Series B Securities" means the 12% First Priority Senior Secured Notes
due 2000, Series B (the terms of which are identical to the Series A Securities
except that the Series B Securities shall be registered under the Securities
Act, and shall not contain the restrictive legend on the face of the form of
the Series A Securities), to be issued in exchange for the Series A Securities
pursuant to the Registered Exchange Offer and this Indenture.
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"Series C Securities" means the Floating Rate First Priority Senior
Secured Notes due 2000, Series C, being issued pursuant to this Indenture.
"Series D Securities" means the Floating Rate First Priority Senior
Secured Notes due 2000, Series D (the terms of which are identical to the
Series C Securities except that the Series D Securities shall be registered
under the Securities Act, and shall not contain the restrictive legend on the
face of the form of the Series C Securities), to be issued in exchange for the
Series C Securities pursuant to the Registered Exchange Offer and this
Indenture.
"Significant Domestic Subsidiary" means each Domestic Subsidiary that,
at any time, is a Material Subsidiary.
"Stated Maturity" when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Stipulated Loss Value" means the Stipulated Loss Value, as defined in
the GECC Lease Documents (as such GECC Lease Documents are in effect on the
Effective Date.)
"Subsequent Second Priority Notes" means any and all debt securities
issued by the Company under an indenture in exchange for Second Priority Notes
and having terms identical to the Second Priority Notes and otherwise being the
same as the Second Priority Notes except that such debt securities are
registered under the Securities Act.
"Subsequent Securities" means, collectively, any and all Series B
Securities and Series D Securities issued by the Company.
"Subsidiary" means, with respect to any Person, (i) a corporation a
majority of whose Voting Securities is at the time directly or indirectly owned
or Controlled by such Person, by one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries thereof, or (ii) any other Person
(other than a corporation) in which such Person, one or more Subsidiaries
thereof or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest with respect to voting in the election of directors or
trustees thereof (or such other Persons performing similar functions). For
purposes of this definition, any directors' qualifying shares shall be
disregarded in determining the ownership of a Subsidiary.
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"Subsidiary Guarantor" means (i) each of the Significant Domestic
Subsidiaries existing on the Effective Date, and (ii) each of the Company's
other Subsidiaries which becomes a guarantor of the Securities pursuant to
Section 3.05.
"10.25% Note Exchange" means an exchange by the Company pursuant to
which the Company issues Second Priority Notes in an aggregate face amount of
not more than $50,000,000 in exchange for 10.25% Notes pursuant to an exchange
ratio (based on aggregate face amount) of no greater than 1:1.
"10.25% Notes" means, collectively, the 10.25% Senior Notes due 2001
issued by the Company pursuant to the 10.25% Notes Indenture.
"10.25% Notes Indenture" means that certain Indenture, dated as of
December 31, 1993, between the Company and Bankers Trust Company, as trustee,
as amended, supplemented or otherwise modified from time to time.
"Termination Event" means any one or more of the following event or
events which, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect:
(i) A reportable event as defined in Section 4043 of ERISA and
regulations issued thereunder for which the 30 day notice requirement
has not been waived occurs with respect to any Title IV Plan other than
those described in Sections 4043(c)(9) and (11) of ERISA (or PBGC
Regulation Sections 2615.23 or 2615.22);
(ii) There occurs (a) the complete or partial withdrawal (as
defined in Sections 4203 and 4205 of ERISA) by the Company or any member
of the Control Group from any Multiemployer Plan, or (b) the receipt by
the Company or any member of the Control Group of a demand from any
Multiemployer Plan for withdrawal liability (as defined in Section 4201
of ERISA);
(iii) The Company or any member of the Control Group files, or is
reasonably expected to file, a notice of intent to terminate any Title
IV Plan or adopts a plan amendment that constitutes a termination of any
Title IV Plan, under Section 4041 of ERISA;
(iv) There occurs any action causing the termination of any
Multiemployer Plan under Section 4041A of ERISA;
(v) Any other event or condition occurs that is reasonably
expected to constitute grounds under Sections 4041A or
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4042 of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or any Multiemployer Plan;
(vi) The Pension Benefit Guaranty Corporation shall have notified
the Company or any member of the Control Group that a Plan may become a
subject of any proceedings under Section 4042 of ERISA to terminate or
appoint a trustee to administer the Plan, or any such proceedings are
instituted;
(vii) An accumulated funding deficiency (as defined in Section 302
of ERISA or Section 412 of the Code) exists with respect to any Title IV
Plan on the last day of any plan year;
(viii) A waiver of the minimum funding standards of ERISA or
the Code, or any extension of any amortization period related to such a
waiver, is sought by or granted to, the Company or any member of the
Control Group, under Section 412 of the Code;
(ix) The Company or any member of the Control Group shall have
incurred, or is reasonably expected to incur, any liability pursuant to
Title I or IV of ERISA or the penalty or excise tax provisions of the
Code relating to employee benefit plans;
(x) As of the last day of any plan year, there exists unfunded
benefit liabilities (within the meaning of Section 4001(a)(18) of ERISA)
of any Title IV Plan, as determined by such Plan's independent
actuaries;
(xi) As of the last day of any plan year, there exists unfunded
benefit liabilities (within the meaning of Section 4001(a)(18) of ERISA)
of all Title IV Plans, as determined by such Plans' independent
actuaries; or
(xii) The Company or any member of the Control Group establishes
or amends any employee welfare benefit plan (as defined in Section 3(1)
of ERISA) that provides post-employment welfare benefits in a manner
that would increase the liability of the Company or any member of the
Control Group.
"TIA" means the Trust Indenture Act of 1939 as in effect on the date of
execution of this Indenture, except as provided in Section 8.03 of this
Indenture.
"Title IV Plan" means any Qualified Plan that is a defined benefit plan
(as defined in Section 3(35) of ERISA) and is subject to Title IV of ERISA.
"Transfer" means any sale, exchange, conveyance, lease, transfer or
other disposition.
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"Transfer by Merger" means, with respect to any Subsidiary of the
Company, a merger or consolidation of such Subsidiary with another Person such
that after giving effect thereto the surviving entity is no longer a Subsidiary
of the Company.
"Transfer Redemption Date" has the meaning given to such term in Section
4.06(e)(3).
"Transfer Redemption Price" has the meaning given such term in Section
4.06(e)(3).
"Trustee" means the Person named as such in this Indenture until a
successor replaces such Person in accordance with the terms of this Indenture,
and thereafter means such successor.
"Trust Officer", when used with respect to the Trustee, means any
officer assigned to and working in the corporate trust department of the
Trustee (or any successor group) of the Trustee, including, without limitation,
any vice president, assistant vice president, assistant secretary, or any other
officer or assistant officer of the Trustee customarily performing functions
similar to those performed by any of the above-designated officers who shall,
in any case, be responsible for the administration of this document or have
familiarity with it, and also means, with respect to a particular corporate
trust matter, any other officer to whom such matter is referred at the
Corporate Trust Office because of his or her knowledge of and familiarity with
the particular subject.
"U.S. Government Obligations" means (i) any direct non-callable
obligation of, or obligation guaranteed by, the United States of America for
the payment of which the full faith and credit of the United States of America
is pledged and which is not callable at the issuer's option, and (ii) any
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided, that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
"U.S. Physical Securities" shall have the meaning given to such term in
Section 2.02.
"Voting Securities" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof,
under ordinary circumstances and in
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the absence of contingencies, to vote for members of the Board of Directors of
such Person (or Persons performing functions equivalent to those of such
members).
"Wholly Owned Subsidiary" of a Person means any Subsidiary of such
Person 100% of the total capital stock of which, other than directors'
qualifying shares, is at the time owned by such Person and/or one or more
Wholly Owned Subsidiaries of such Person.
"Working Capital" means, current assets less current liabilities where
current assets equals accounts receivable, inventory and other current assets
(excluding cash and cash equivalents) and current liabilities equals accounts
payable and accrued liabilities (both excluding accrued interest payable,
accrued income taxes payable and any payables related to capital expenditures),
all as reflected on the Company's consolidated financial statements prepared in
accordance with GAAP.
SECTION 1.02. Accounting Principles, Terms and Determinations.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all determinations with respect to accounting matters
hereunder shall be made, and all unaudited financial statements and
certificates and reports as to financial matters required to be furnished
hereunder shall be prepared, in accordance with GAAP, applied on a basis
consistent with the most recent audited consolidated financial statements of
the Company and its Subsidiaries.
SECTION 1.03. Yield-Maintenance Terms.
"Called Principal" shall mean, with respect to any Security, the
principal of such Security that is to be redeemed or prepaid (as the case may
be) pursuant to Section 3.09(a), Section 4.06(e)(3) or Section 9.01(b), or is
declared to be immediately due and payable pursuant to Section 5.01, as the
context requires.
"Discounted Value" shall mean, with respect to the Called Principal of
any Security, the amount obtained by discounting all Remaining Scheduled
Payments with respect to such Called Principal from their respective scheduled
due dates to the Settlement Date with respect to such Called Principal, in
accordance with accepted financial practice and at a discount factor (applied
on the same periodic basis as that on which interest on the Securities is
payable) equal to the Reinvestment Yield with respect to such Called Principal.
"Reinvestment Yield" shall mean, with respect to the Called Principal of
any Security, 1.0% over the yield to maturity implied by (i) the yields
reported, as of 10:00 A.M. (New York City time) on the Business Day next
preceding the Settlement Date with respect to such Called Principal, on the
display designated as "Page 678"
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on the Telerate Service (or such other display as may replace Page 678 on the
Telerate Service) for actively traded U.S. Treasury securities having a
maturity equal to the Remaining Average Life of such Called Principal as of
such Settlement Date, or if such yields shall not be reported as of such time
or the yields reported as of such time shall not be ascertainable, (ii) the
Treasury Constant Maturity Series yields reported, for the latest day for which
such yields shall have been so reported as of the Business Day next preceding
the Settlement Date with respect to such Called Principal, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for
actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, if necessary, by (a) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (b) interpolating linearly between reported yields.
"Remaining Average Life" shall mean, with respect to the Called
Principal of any Security, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled
Payment of such Called Principal (but not of interest thereon) by (b) the
number of years (calculated to the nearest one- twelfth year) which will elapse
between the Settlement Date with respect to such Called Principal and the
scheduled due date of such Remaining Scheduled Payment.
"Remaining Scheduled Payments" shall mean, with respect to the Called
Principal of any Security, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.
"Settlement Date" shall mean, with respect to the Called Principal of
any Security, the date on which such Called Principal is to be redeemed or
prepaid (as the case may be) pursuant to Section 3.09(a), Section 4.06(e)(3)
or Section 9.01(b), or is declared to be immediately due and payable pursuant
to Section 5.01, as the context requires.
"Yield-Maintenance Amount" shall mean, with respect to any Security, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Security over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield-Maintenance Amount shall in
no event be less than zero. The Yield-Maintenance Amount shall be calculated
for purposes of the Series C Securities and Series D Securities as if interest
on such Securities accrues at the same per annum rate as interest accrues on
the Series A Securities and Series B Securities.
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SECTION 1.04. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision
is incorporated by reference in and made a part of this Indenture. The
following TIA terms used in this Indenture have the following meanings:
"indenture securities" means the Securities;
"indenture security holder" means a Holder;
"indenture to be qualified" means this Indenture;
"indenture trustee" or "institutional trustee" means the Trustee;
"obligor" on the indenture securities means the Company or the
Surviving Corporation, as the case may be, or any other obligor on the
Securities.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the
TIA and not otherwise defined herein have the meanings assigned to them
therein.
SECTION 1.05. Rules of Construction.
Unless the context otherwise requires:
(a) a term defined in this Article has the meaning in this Indenture
assigned to it in this Article;
(b) except as otherwise set forth in this Indenture, an accounting
term not otherwise defined herein has the meaning assigned to it in
accordance with GAAP in effect on the date of this Indenture;
(c) "or" is not exclusive;
(d) words in the singular include the plural, and words in the plural
include the singular;
(e) provisions apply to successive events and transactions;
(f) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision; and
(g) reference herein to any Article or Section refers to such Article
or Section hereof.
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ARTICLE 2
THE SECURITIES
SECTION 2.01. Form and Dating.
(a) The Series A Securities, Series B Securities, Series C
Securities and Series D Securities shall be generally designated the Company's
First Priority Senior Secured Notes Due 2000. Their stated maturity shall be
June 15, 2000. The Series A Securities and Series B Securities shall bear
interest at the rate of 12% per annum, and the Series C Securities and Series D
Securities shall bear interest at the LIBOR Rate. Interest on the Securities
shall accrue from June 20, 1995, or from the most recent date on which interest
has been paid or duly provided for, and be payable on December 15 and June 15
of each year, commencing December 15, 1995, and at the Stated Maturity of the
principal of the Securities (or such earlier date on which such principal shall
become due hereunder), until the principal thereof is paid or duly provided
for. The Series A Securities, Series B Securities, Series C Securities and
Series D Securities (and the Trustee's certificate of authentication with
respect thereto) shall be substantially in the form of Exhibits A-1, A-2, A-3
and A-4, respectively, attached hereto and hereby expressly made a part of this
Indenture. The Securities may have notations, legends or endorsements required
by law, stock exchange rule, usage or agreements to which the Company is a
party and such appropriate insertions, omissions, substitutions and other
variations as are permitted by this Indenture. The Company shall furnish any
such notations, legends or endorsements to the Trustee in writing. Each
Security shall be dated the date of its authentication.
(b) The terms and provisions contained in the Securities shall
constitute, and are hereby expressly made, a part of this Indenture, and to the
extent applicable the Company and the Trustee, by their execution and delivery
of this Indenture, expressly agree to such terms and provisions and to be bound
thereby.
(c) The interest rate on each Security shall automatically be
increased (and, if applicable, thereafter automatically decreased but in any
event not below the original rate of interest therein) as and to the extent
required pursuant to the terms of Section 6 of the Registration Rights
Agreement, notwithstanding anything to the contrary elsewhere in this Indenture
or the Securities.
SECTION 2.02. Execution and Authentication; Aggregate Principal Amount.
The Securities shall be signed for the Company by the Company's
President or a Vice President and shall be attested by the Company's Secretary
or an Assistant Secretary, in each case by
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manual or facsimile signature. The Company's seal may be reproduced or
imprinted on the Securities by facsimile or otherwise.
If a Person whose signature is on a Security no longer holds his office
at the time the Security is authenticated, the Security shall nevertheless be
valid.
A Security shall not be valid until executed and issued by the Company
and authenticated by the manual signature of the Trustee. The signature of the
Trustee shall be conclusive evidence that the Security has been authenticated
under this Indenture.
The Trustee shall authenticate Series A Securities for original issue in
the aggregate principal amount of up to $151,500,000, and shall authenticate
Series C Securities for original issue in the aggregate principal amount of up
to $8,500,000,in each case upon receipt of a written order of the Company in
the form of an Officers' Certificate. In addition, on or prior to the date of
the Registered Exchange Offer, the Trustee or an authenticating agent shall
authenticate Series B Securities to be issued at the time of the Registered
Exchange Offer in the aggregate principal amount of up to $151,500,000, and
shall authenticate Series D Securities to be issued at the time of the
Registered Exchange Offer in the aggregate principal amount of up to
$8,500,000, in each case upon receipt of a written order of the Company signed
by a Responsible Officer of the Company. In each case, the Officers'
Certificate shall specify the amount of Securities to be authenticated and the
date on which the Securities are to be authenticated. The aggregate principal
amount of Securities outstanding at any time may not exceed $160,000,000,
except as provided in Section 2.07. Upon receipt of a written order of the
Company in the form of an Officers' Certificate, the Trustee shall authenticate
Securities in substitution of Securities originally issued to reflect any name
change of the Company.
Securities offered and sold in reliance on Rule 144A may, at the option
of the Company but subject to the terms of Rule 144A, be issued initially in
the form of one or more permanent Global Securities in registered form
deposited with the Trustee, as custodian for the Depository. The aggregate
principal amount of any Global Security may from time to time be increased or
decreased by adjustments made on the records of the Trustee, as custodian for
the Depository, as hereinafter provided.
Securities offered and sold in offshore transactions in reliance on
Regulation S may, at the option of the Company but subject to the terms of
Regulation S, be issued in the form of certificated Securities in registered
form (the "Offshore Physical Securities"). Securities offered and sold in
reliance on any other exemption from registration under the Securities Act
other than as described in the preceding paragraph shall be issued, and
Securities offered and sold in reliance on Rule 144A may, at the option
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of the Company but subject to Rule 144A and all other applicable laws and
regulations, be issued, in the form of certificated Securities in registered
form (the "U.S. Physical Securities"). The Offshore Physical Securities and
the U.S. Physical Securities are sometimes collectively herein referred to as
the "Physical Securities."
The Securities shall be issuable only in registered form without coupons
and only in denominations of $1,000 and any integral multiple thereof.
The Trustee may appoint an authenticating agent acceptable to the
Company to authenticate Securities, which authenticating agent shall be
compensated by the Company. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Securities whenever the Trustee may do
so, except with regard to the original issuance of the Securities. Except as
provided in the preceding sentence, 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 an Affiliate of the Company.
SECTION 2.03. Registrar and Paying Agent.
The Company shall maintain an office or agency where Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where Securities may be presented for payment ("Paying
Agent"). The Registrar shall keep a register of the Securities and of their
transfer and exchange. At all reasonable times, the Securities register shall
be open to inspection by the Trustee. 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, any Subsidiary of
the Company or any of their respective Affiliates may act as Paying Agent,
Registrar or co-Registrar.
The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which shall implement the provisions of
this Indenture that relate to such Agent. The Company may change or add any
Paying Agent, Registrar or co-Registrar without notice to any Holder, but only
upon notice given to the Trustee of such change or addition and of the address
of any Agent not a party to this Indenture. If the Company fails to maintain a
Registrar or Paying Agent, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
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SECTION 2.04. Paying Agent to Hold Money in Trust.
The Company shall require each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree that such Paying Agent will:
(a) hold in trust for the benefit of Holders or the Trustee
all money held by the Paying Agent for the payment of principal of or
interest and Yield-Maintenance Amount (if any) on the Securities
(whether such money has been paid to it by the Company or any other
obligor on the Securities) until such sums shall be paid to Holders or
otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company
(or any other obligor on the Securities) in making any such payment; and
(c) at any time during the continuance of any such Default,
upon the written request of the Trustee, to forthwith pay to the Trustee
all sums so held in trust by such Paying Agent and account for any funds
disbursed. If the Company, any Subsidiary of the Company or any of
their respective Affiliates acts as Paying Agent, it shall segregate the
money and hold it as a separate trust fund for the benefit of Holders.
The Company at any time may require a Paying Agent to pay all money held
by it to the Trustee and account for any funds disbursed. Upon doing
so, the Paying Agent shall have no further liability for the money so
paid over to the Trustee.
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. If the Trustee is not the Registrar, the Company and each other
obligor on the Securities shall furnish to the Trustee not less than ten
Business Days before each interest payment date and at such other times as the
Trustee may request in writing all information in the possession or control of
the Company or any Paying Agent as to the names and addresses of Holders, in
such form and as of such date as the Trustee may reasonably require. The
Trustee and the Registrar may rely on the accuracy of such list as the same may
be amended from time to time.
SECTION 2.06. Transfer and Exchange.
Securities may be transferred or exchanged only on the Securities
register maintained pursuant to Section 2.03. Prior to due presentment of a
Security for registration of transfer, the Holder of any Securities, as shown
on such Securities register, shall be deemed the absolute owner thereof for all
purposes, and none of the Company, the Trustee, or any agent of the Company or
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the Trustee shall be affected by any notice to the contrary, and payment of or
on account of the principal or interest with respect to such Securities shall
be made only to or in accordance with the written order of such Holder or of
his attorney duly authorized in writing. All such payments shall satisfy and
discharge the liabilities upon such Securities to the extent of the amounts so
paid.
When Securities are presented to the Registrar or a co-Registrar with a
request to register a transfer or make an exchange for an equal principal
amount of Securities of other denominations, the Registrar or co-Registrar
shall register the transfer or make the exchange if its requirements therefor
are met; provided, that every Security presented or surrendered for
registration of transfer or exchange shall be duly endorsed, or be accompanied
by a written instrument of transfer in a form satisfactory to the Registrar and
the Trustee duly executed by the Holder thereof or his attorney duly authorized
in writing. To permit registrations of transfer and exchanges, the Company
shall execute and issue and the Trustee shall authenticate Securities at the
Registrar's request. No service charge to the Holder shall be made for any
registration of transfer or exchange, but the Company may require from the
transferring or exchanging Holder payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charges payable
upon transfers or exchanges pursuant to Sections 2.10, 3.09, 4.06, 8.05, 9.01
or 9.06 hereof).
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
The Company shall not be required to and, without the prior written
consent of the Company, the Registrar shall not be required to, register the
transfer or exchange of (i) any Securities selected for redemption under
Section 9.02 hereof and (ii) any Securities during a period commencing 15 days
prior to the date of any selection of Securities for redemption under Section
9.02 and ending at the close of business on such date of selection.
SECTION 2.07. Replacement Securities.
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of like tenor and principal amount and bearing a number
not contemporaneously outstanding. If the Company and the Trustee receive
evidence to their satisfaction that a Security has been lost, destroyed or
wrongfully taken, the Company shall issue and the Trustee shall authenticate a
replacement Security if the Company's and the
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Trustee's requirements are met and in the absence of notice to the Company or
the Trustee that the Security has been acquired by a bona fide purchaser. If
required by the Trustee or the Company, such Holder shall provide an indemnity
bond sufficient in the judgment of both the Company and the Trustee to protect
the Company, the Trustee, any Agent or any authenticating agent from any loss
which any of them may suffer if a Security is replaced. The Company may charge
the Holder who obtains a replacement Security pursuant to this Section 2.07 for
the Company's and the Trustee's expenses in replacing such Security.
Every replacement Security issued pursuant to the provisions of this
Section 2.07 by virtue of the fact that any Security is destroyed, lost or
stolen shall constitute an additional contractual obligation of the Company,
whether or not the destroyed, lost or stolen Security shall be found at any
time, and shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Securities duly issued hereunder. The
provisions of this Section are exclusive and shall preclude (to the extent
lawful) all other rights and remedies against the Company and the Trustee with
respect to the replacement or payment of mutilated, destroyed, lost or stolen
Securities.
Notwithstanding the foregoing, the provisions of this Section 2.07 shall
be, and hereby are, superseded by the provisions of paragraph 7F of the Note
Agreement to the extent inconsistent herewith.
SECTION 2.08. Outstanding Securities.
The Securities outstanding at any time are all the Securities executed
on behalf of the Company and authenticated by the Trustee except for those
cancelled by the Trustee, those delivered to the Trustee for cancellation and
those described in this Section as not outstanding.
If a Security is replaced pursuant to Section 2.07, 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 3.01, they cease to be
outstanding and interest on them ceases to accrue.
Except as and to the extent provided in Section 2.09, a Security does
not cease to be outstanding because the Company, any of its Subsidiaries or any
of their respective Affiliates holds the Security.
SECTION 2.09. Treasury Securities.
In determining whether the Holders of the required principal amount of
Securities have concurred in any request, demand,
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authorization, notice, direction, amendment, supplement, waiver or consent,
Securities owned of record or beneficially by the Company or any Affiliate of
the Company or any other obligor on the Securities or any Affiliate thereof
shall be considered as though they are not outstanding, except that for the
purposes of determining whether the Trustee shall be protected in relying on
any such request, demand, authorization, notice, direction, amendment,
supplement, waiver or consent, only Securities which the Trustee knows are so
owned shall be considered as though they are not outstanding. The Trustee may
require an Officers' Certificate listing the Securities owned by the Company
and its Affiliates.
SECTION 2.10. Temporary Securities.
Until definitive Securities are ready for delivery, the Company may
execute and issue, and the Trustee shall authenticate upon written order of the
Company signed by two Responsible Officers, temporary Securities. Temporary
Securities shall be substantially in the form of definitive Securities but may
have variations that the Company and the Trustee consider appropriate for
temporary Securities. Without unreasonable delay, the Company shall execute
and issue, and the Trustee shall authenticate, definitive Securities in
exchange for temporary Securities. Until such exchange, such temporary
Securities shall be entitled to the same rights, benefits and privileges as the
definitive Securities.
SECTION 2.11. Cancellation.
The Company at any time may deliver Securities to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Securities surrendered to them for registration of transfer, exchange or
payment. The Trustee and no one else shall cancel all Securities surrendered
for registration of transfer, exchange, payment, replacement or cancellation
and the Trustee shall destroy cancelled Securities in accordance with its
customary procedures and deliver a certificate of such destruction to the
Company. Subject to Section 2.07, the Company may not issue new Securities to
replace Securities that it has paid or that have been delivered to the Trustee
for cancellation. If the Company or any Subsidiary of the Company shall
acquire any of the Securities, such acquisition shall not operate as a
redemption or satisfaction of the Indebtedness represented by such Securities
unless and until the same are surrendered to the Trustee for cancellation
pursuant to this Section 2.11.
SECTION 2.12. Overdue Interest.
If the Company fails to make a payment of interest on the Securities
when due by the terms thereof, it shall pay interest on such overdue
installments of interest thereafter in any lawful manner to the Persons who are
Holders on a subsequent special record date, in each case at the rate provided
in the Securities
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and in Section 3.01. The Company shall promptly fix such special record date
and special payment date after consultation with and notice to the Trustee. At
least 15 days before the special record date, the Company shall give Holders
notice that states the special record date, related payment date and amount of
such interest to be paid.
SECTION 2.13. CUSIP Number.
The Company in issuing the Securities may use a "CUSIP" number and, if
so, the Company shall use the CUSIP number in notices of redemption 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 the CUSIP number
printed in the notice or on the Securities and that reliance may be placed only
on the other identification numbers printed on the Securities. The Company
shall promptly notify the Trustee of any change in the CUSIP number.
SECTION 2.14. Book-Entry Provisions for Global Securities.
(a) The Global Securities initially shall (i) be registered
in the name of the Depository or the nominee of such Depository, (ii) be
delivered to the Trustee as custodian for such Depository and (iii) bear
legends as set forth in Exhibit B.
Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global
Security held on their behalf by the Depository, or the Trustee as its
custodian, or under the Global Security, and the Depository may be
treated by the Company, the Trustee and any agent of the Company or the
Trustee as the absolute owner of the Global Security 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 Depository or impair, as between the Depository and its
Agent Members, the operation of customary practices governing the
exercise of the rights of a Holder of any Security.
(b) Transfers of Global Securities shall be limited to
transfers in whole, but not in part, to the Depository, its successors
or their respective nominees. Interests of beneficial owners in the
Global Securities may be transferred or exchanged for Physical
Securities in accordance with the rules and procedures of the Depository
and the provisions of Section 2.15. In addition, Physical Securities
shall be transferred to all beneficial owners in exchange for their
beneficial interests in Global Securities if (i) the Depository notifies
the Company that it is unwilling or unable to continue
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as Depository for any Global Security and a successor depositary is not
appointed by the Company within 90 days of such notice or (ii) an Event
of Default has occurred and is continuing and the Registrar has received
a request from the Depository to issue Physical Securities.
(c) In connection with any transfer or exchange of a
portion of the beneficial interest in any Global Security to beneficial
owners pursuant to clause (b), the Registrar shall (if one or more
Physical Securities are to be issued) reflect on its books and records
the date and a decrease in the principal amount of the Global Security
in an amount equal to the principal amount of the beneficial interest in
the Global Security to be transferred, and the Company shall execute,
and the Trustee shall authenticate and deliver, one or more Physical
Securities of like tenor and amount.
(d) In connection with the transfer of Global Securities as
an entirety to beneficial owners pursuant to paragraph (b), the Global
Securities 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
Depository in exchange for its beneficial interest in the Global
Securities, an equal aggregate principal amount of Physical Securities
of authorized denominations.
(e) Any Physical Security constituting a Restricted
Security delivered in exchange for an interest in a Global Security
pursuant to paragraph (b) or (c) shall, except as otherwise provided by
paragraphs (a) (i) (x) and (c) of Section 2.15, bear the legend
regarding transfer restrictions applicable to the Physical Securities
set forth in Exhibit A-1.
(f) The Holder of any Global Security 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 Securities.
SECTION 2.15. Special Transfer Provisions.
(a) Transfers to Non-QIB Institutional Accredited Investors
and Non-U.S. Persons. The following provisions shall apply with respect
to the registration of any proposed transfer of a Security constituting
a Restricted Security to any Institutional Accredited Investor which is
not a QIB or to any Non-U.S. Person:
(i) the Registrar shall register the transfer of
any Security constituting a Restricted Security, whether or not
such Security bears the Private Placement Legend, if
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(x) in the case of a transfer to any Non-U.S.Person, the
requested transfer is after July 31, 1995 or (y) (1) in the case
of a transfer to an Institutional Accredited Investor which is
not a QIB (excluding Non-U.S. Persons), the proposed transferee
has delivered to the Registrar a certificate substantially in the
form of Exhibit C hereto or (2) in the case of a transfer to a
Non-U.S. Person, the proposed transferee has delivered to the
Registrar a certificate substantially in the form of Exhibit D
hereto; and
(ii) if the proposed transferor is an Agent Member
holding a beneficial interest in a Global Security, upon receipt
by the Registrar of (x) the certificate, if any, required by
paragraph (i) above and (y) instructions given in accordance
with the Depository's and the Registrar's procedures,
whereupon (a) the Registrar shall reflect on its books and records the date and
(if the transfer does not involve a transfer of outstanding Physical
Securities) a decrease in the principal amount of a Global Security in an
amount equal to the principal amount of the beneficial interest in a Global
Security to be transferred, and (b) the Issuer shall execute and the Trustee
shall authenticate and deliver one or more Physical Securities of like tenor
and amount.
(b) Transfers to QIBs. The following provisions shall
apply with respect to the registration of any proposed transfer of a
Security constituting a Restricted Security to a QIB (excluding
transfers to Non-U.S. Persons):
(i) 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 Security 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 Security stating, or has otherwise
advised the Company and the Registrar in writing, that it is
purchasing the Security 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; and
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(ii) if the proposed transferee is an Agent Member,
and the Securities to be transferred consist of Physical
Securities which after transfer are to be evidenced by an
interest in the Global Security, upon receipt by the Registrar
of instructions given in accordance with the Depository'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 Global Security in an amount equal to the
principal amount of the Physical Securities to be transferred,
and the Trustee shall cancel the Physical Securities so
transferred.
(c) Private Placement Legend. Upon the transfer, exchange
or replacement of Securities not bearing the Private Placement Legend,
the Registrar shall deliver Securities that do not bear the Private
Placement Legend. Upon the transfer, exchange or replacement of
Securities bearing the Private Placement Legend, the Registrar shall
deliver only Securities that bear the Private Placement Legend unless
(i) the circumstances contemplated by paragraph (a) (i) (x) of this
Section 2.15 exist, (ii) 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 or (iii) such Security has been sold pursuant to an
effective registration statement under the Securities Act.
(d) General. By its acceptance of any Security bearing the
Private Placement Legend, each Holder of such a Security acknowledges
the restrictions on transfer of such Security set forth in this
Indenture and in the Private Placement Legend and agrees that it will
transfer such Security only as provided in this Indenture.
The Registrar shall retain copies of all letters, notices and other
written communications received pursuant to Section 2.14 or this Section 2.15.
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 2.16. Certificates setting forth LIBOR Rate and Yield-Maintenance
Amount.
(a) The Company shall, on the Effective Date and each Rate
Day thereafter, provide the Trustee with an Officers' Certificate
setting forth the LIBOR Rate determined in accordance with clause (i) of
the definition thereof (which determination shall be deemed to be
conclusive absent manifest error).
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The Company shall promptly notify the Trustee after any Responsible
Officer learns that Telerate has ceased to report the LIBOR Rate on a
regular basis.
(b) In the event that any Yield-Maintenance Amount is
payable by the Company, the Company shall deliver to the Trustee and
each Holder to whom such payment is to be made, on or before the date
payment thereof is due, an Officers' Certificate setting forth in
reasonable detail the Company's calculation of such Yield-Maintenance
Amount (which calculation shall not be deemed to be conclusive to the
Trustee or to any Holder to whom such Yield-Maintenance Amount is to be
paid without the Trustee's or such Holder's prior written consent
thereto).
ARTICLE 3
AFFIRMATIVE COVENANTS
SECTION 3.01. Payment of Securities.
The Company shall punctually pay, or cause to be paid, the principal of
and interest and Yield-Maintenance Amount (if any) on the Securities on the
dates and in the manner provided in this Indenture and in the Securities.
Except to the extent otherwise set forth in paragraph 7A of the Note Agreement,
any payment of principal (including any redemption or other purchase of
Securities pursuant to Sections 3.09, 4.06(e)(3), or 9.01), interest and
Yield-Maintenance Amount (if any) shall be considered paid on the date due if
the Paying Agent holds on or prior to 10:00 A.M. on that date money in
accordance with this Indenture designated in trust for and sufficient to make
such payment and is not prohibited from paying such money to the Holders
pursuant to the terms of this Indenture.
The Company shall pay interest on overdue principal at the Default Rate.
In addition, the Company shall pay interest on overdue installments of interest
and on overdue payments of the Yield-Maintenance Amount at the Default Rate, to
the extent lawful.
SECTION 3.02. 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) which the Company files with
the SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Company is
not subject to Section 13 or 15(d) of the Exchange Act, the Company shall
continue to file with the SEC and the Trustee on the same timely basis such
reports, information and other documents as the Company would file if the
Company were subject to the
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requirements of Section 13 or 15(d) of the Exchange Act. The Company and any
other obligor on the Securities also shall comply with the other provisions of
TIA Section 314(a).
So long as Securities representing 5% or more of the aggregate principal
amount of Securities issued hereunder remain outstanding, the Company shall
cause an annual report to stockholders and quarterly or other financial reports
furnished by it to stockholders, excluding internal management reports and
distributions to stockholders in their capacity as directors or officers of the
Company, to be filed with the Trustee and mailed to the Holders at their
addresses appearing in the register of Securities maintained by the Registrar,
in each case at the time of such furnishing to stockholders. If the Company is
not required to furnish annual or quarterly reports to its stockholders
pursuant to the Exchange Act at any time during which Securities representing
5% or more of the aggregate principal amount of Securities issued hereunder are
outstanding, the Company shall cause its consolidated financial statements,
including any notes thereto, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations," comparable to that which would
have been required to appear in annual or quarterly reports filed under Section
13 or 15(d) of the Exchange Act to be so filed with the Trustee and mailed to
the Holders at their addresses appearing in the register of Securities
maintained by the Registrar within 105 days after the end of each fiscal year
and within 60 days after the end of each of the Company's first three fiscal
quarters in each fiscal year.
SECTION 3.03. Compliance Certificate.
The Company shall deliver to the Trustee, within 60 days after the end
of each of the first three quarters of each of the Company's fiscal years and
within 105 days after the end of each of the Company's fiscal years, an
Officers' Certificate signed by the principal executive officer, principal
financial officer or principal accounting officer of the Company stating that a
review of the activities of the Company and its Subsidiaries during the
preceding quarter or fiscal year (as the case may be) has been made under the
supervision of the signing Persons with a view to determining whether the
Company has kept, observed, performed and fulfilled its obligations under this
Indenture, and further stating, as to each such Person signing such
certificate, that to the best of his knowledge the Company has kept, observed,
performed and fulfilled each and every covenant contained in this Indenture and
is not in default in the performance or observance of any of the terms,
provisions and conditions hereof (or, if a Default or Event of Default shall
have occurred, describing all such Defaults or Events of Default of which he
may have knowledge) and that to the best of his knowledge no event has occurred
and remains in existence by reason of which payments on account of the
principal of or interest on the Securities are prohibited.
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The Company shall, so long as any of the Securities are outstanding,
deliver to the Trustee, forthwith upon becoming aware of (i) any Default or
Event of Default or (ii) any default, event of default or other failure to
perform under any agreement, mortgage, indenture or instrument referred to in
clause (c) of Section 5.01, an Officers' Certificate specifying such Default,
Event of Default, default or event of default.
SECTION 3.04. Conduct of Business; Maintenance of Existence; Compliance with
Laws.
The Company covenants that the Company and its Subsidiaries shall (a)
continue to engage primarily in the material lines of business (as determined
by the Company in its reasonable discretion) which the Company and its
Subsidiaries operate, respectively, as of the Effective Date, (b) preserve,
renew and keep in full force and effect the corporate existence, and all
material rights, privileges, franchises, permits and licenses of the Company
and its Subsidiaries, respectively, provided, however, that (i) this clause (b)
shall not prohibit a merger otherwise permitted pursuant to the terms hereof
and (ii) neither the Company nor any of its Subsidiaries shall be required to
preserve any such right or franchise or its corporate existence if the loss
thereof is not and will not be adverse in any material respect to the Holders,
and (c) comply in all material respects with all applicable laws, ordinances,
rules, regulations and other requirements of governmental authorities
(including, without limitation, Environmental Laws and ERISA) except to the
extent that noncompliance could not reasonably be expected to have a Material
Adverse Effect.
SECTION 3.05. Guaranties.
The Company covenants that, effective upon any Person becoming a
Significant Domestic Subsidiary, the Company shall cause such Person to become
and continue as a party to the Guaranty Agreement and the Security Agreement
and to execute and deliver all such agreements, instruments, documents,
financing statements, mortgages, deeds of trust, leasehold mortgages and other
written matter, and take such further action, as the Collateral Agent or the
Required Holders may request in order to obtain a valid and perfected first
priority Lien on all (or all but a de minimis amount of) such Person's Property
(subject only to Permitted Liens).
SECTION 3.06. Maintenance of Property; Insurance.
(a) The Company shall, and shall cause each of its Subsidiaries to,
maintain its Property in good working order and condition (ordinary wear and
tear excepted) and make all necessary repairs, renewals, replacements,
additions, betterments and improvements thereto so that the business carried on
in connection therewith may be properly and advantageously conducted at all
times; provided,
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that nothing in this Section shall prevent the Company or any of its
Subsidiaries from discontinuing the operation and maintenance of any of its
Property if such discontinuance is desirable in the conduct of its business and
not disadvantageous in any material respect to the Holders; provided, further,
that nothing in this Section shall prevent the Company or any of its
Subsidiaries from discontinuing or disposing of any of its Property to the
extent otherwise permitted by Section 4.06 hereof.
(b) The Company shall insure and keep insured, and shall cause each
Subsidiary to insure and keep insured, with financially sound and reputable
insurers, so much of their respective Property and in such amounts as is
usually and customarily insured by companies engaged in similar businesses with
respect to Property of a similar character, and, in any event, as is required
under the Security Agreement with respect to maintenance of insurance.
SECTION 3.07. Taxes.
The Company shall, and shall cause each of its Subsidiaries to, pay or
cause to be paid all license fees, bonding premiums and related taxes and
charges, and shall pay or cause to be paid all of such Person's real and
personal property taxes, assessments and charges and all of such Person's
franchise, income, unemployment, use, excise, old age benefit, withholding,
sales and other taxes and other governmental charges assessed against such
Person, or payable by such Person, in each case when due and in such manner as
to prevent any penalty from accruing or any Lien from attaching to its property
(other than Liens for taxes not yet due and payable), provided that such Person
shall have the right to contest in good faith, by an appropriate proceeding
promptly initiated and diligently conducted, the validity, amount or imposition
of any such tax, assessment or charge, and during the pendency of such good
faith contest to delay or refuse payment thereof if such Person establishes
adequate reserves to cover such contested taxes, assessments or charges.
SECTION 3.08. Maintenance of Office or Agency.
The Company shall maintain in the Borough of Manhattan, City of New
York, an office or agency (which may be an office of the Trustee or an
affiliate of the Trustee, Registrar or co-Registrar) where Securities may be
surrendered for registration of transfer or exchange or for presentation for
payment. The Company shall give prompt notice to the Trustee of the location,
and any change in the location, of such office or agency. If at any time the
Company fails to maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address of the Trustee as set
forth in Section 12.02 of this Indenture.
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The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations;
provided, however, that no such designation or rescission shall in any manner
relieve the Company of its obligations to maintain an office or agency in the
Borough of Manhattan, City of New York, for such purposes. The Company shall
give prompt 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 initially designates Shawmut Trust Company of New
York, c/o First Chicago Trust Company of New York, 14 Wall Street, 8th Floor,
Window No. 2, New York, NY 10005 as the office of the Company to be maintained
in accordance with this Section 3.08 of this Indenture.
SECTION 3.09. Offers to Purchase Following Change of Control and Excess Cash
Flow.
(a) Upon the occurrence of a Change of Control, each Holder of a
Security shall have the right to have such Security repurchased by the Company
on the terms and conditions precedent set forth in this Section 3.09. The
Company shall, within 25 days following the date of the consummation of a
transaction resulting in a Change of Control, mail an Offer with respect to an
Offer to Purchase all outstanding Securities at a purchase price equal to 100%
of the outstanding principal amount thereof together with interest thereon to
the date of purchase and the Yield-Maintenance Amount with respect thereto;
provided, however, that installments of interest whose Stated Maturity is on or
prior to the Purchase Date shall be payable to the Holders of such Securities,
registered as such at the close of business on the relevant record dates
according to the terms of the Securities. Each Holder shall be entitled to
tender all or any portion of the Securities owned by such Holder pursuant to
the Offer to Purchase. The Company shall cause the Purchase Date to be not
less than five (5) Business Days prior to the "Purchase Date" (as such term is
defined in the 10.25% Notes Indenture) and any other purchase date that may
arise with respect to the repurchase or repayment of any debt instruments
following a Change of Control or other change in control, other than debt
instruments constituting Consolidated Senior Debt.
(b) In the event that the Company has Excess Cash Flow in excess of
$5,000,000 in any fiscal year of the Company, beginning with the fiscal year of
the Company ending in December 1995, the Company shall make an Offer to
Purchase Securities having an aggregate outstanding principal amount equal to
the Excess CF Amount relating to such Excess Cash Flow in such fiscal year,
and, no later than April 15 of the year immediately following such fiscal year
of the Company in which Excess Cash Flow exceeds $5,000,000, mail an Offer to
each Holder to purchase such outstand-
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ing principal amount of Securities at a purchase price equal to 100% of the
outstanding principal amount thereof together with interest accrued thereon to
the Purchase Date therefor; provided, however, that installments of interest
whose Stated Maturity is on or prior to such Purchase Date shall be payable to
the Holders of such Securities, registered as such at the close of business on
the relevant record dates according to the terms of the Securities; provided,
further, that no such Offer shall be made if, at the time of mailing such
Offer, a Default or an Event of Default exists or would exist after giving
effect to the transactions contemplated by such Offer (assuming such Offer were
fully subscribed); provided, still further, that the Company, at its option,
may reduce the principal amount of Securities it must purchase pursuant to this
Section 3.09(b) by the principal amount of Securities acquired by the Company
in the open market prior to the Purchase Date applicable to such purchase if
(i) such previously acquired Securities are retired prior to such Purchase
Date, (ii) no such previously acquired Security has theretofore been used as a
credit by the Company or otherwise to satisfy any obligations of the Company
(including, without limitation, the obligation of the Company under this
Section 3.09(b)), and (iii) the Company delivers an Officers' Certificate to
the Trustee and each Holder to the effect set forth in clauses (i) and (ii)
above not less than ten (10) Business Days prior to the applicable Purchase
Date. To the extent that an Offer to Purchase pursuant to this Section is not
fully subscribed, the Company may retain the unutilized amount of such Excess
CF Amount for general corporate purposes in accordance with the terms of this
Indenture. To the extent that an Offer to Purchase pursuant to this Section
3.09(b) is over-subscribed, the principal amount of the Securities to be
purchased shall be allocated on a pro rata basis in proportion to the relative
principal amounts as to which the Offer was accepted, and in connection with
such proration the Company shall, in good faith, make such adjustments,
reallocations and eliminations as shall be necessary to maintain the Securities
in integral multiples of $1,000.
(c) The Company shall perform its obligations specified in each
Offer for each Offer to Purchase. On the Purchase Date in each such Offer, the
Company shall (i) accept for payment Securities or portions thereof tendered
pursuant to the Offer, (ii) deposit with the Paying Agent (or, if the Company
is acting as its own Paying Agent, segregate and hold in trust as provided in
Section 3.10) money sufficient to pay the Purchase Price of all Securities or
portions thereof so accepted and (iii) deliver or cause to be delivered to the
Trustee all Securities so accepted together with an Officers' Certificate
stating the Securities or portions thereof accepted for payment by the Company.
The Paying Agent shall promptly mail or deliver to Holders of Securities so
accepted payment in an amount equal to the purchase price, and the Trustee
shall promptly authenticate and mail or deliver to such Holders a new Security
or Securities equal in principal amount to any unpurchased portion of the
Security surrendered as requested by
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the Holder. Notwithstanding the foregoing terms of this clause (c), payments
to be made with respect to Securities issued pursuant to the Note Agreement
shall be made in accordance with paragraph 7A of the Note Agreement. Any
Security not accepted for payment shall be promptly mailed or delivered by the
Company to the Holder thereof. The Company will publicly announce the results
of the Offer to Purchase on or as soon as practicable after the Purchase Date.
(d) Prior to the time required for the mailing of an Offer with
respect to an Offer to Purchase pursuant to clause (a) and (b) above, the
Company will in good faith (i) seek to obtain any required consent under the
GECC Lease Documents so as to permit the making of the Offer to Purchase and
the purchase of Securities pursuant to this section, or (ii) repay all or a
portion of the Indebtedness under the GECC Lease Documents to the extent
necessary (including, if necessary payment in full of such Indebtedness and
payment of any prepayment premiums, fees, expenses or penalties) to permit the
making of the Offer to Purchase and the purchase of Securities pursuant to
clause (a) or (b) of this Section without such consent. Following compliance
by the Company with the requirements of the foregoing sentence, the Company
shall, within the time required for the mailing of an Offer with respect to an
Offer to Purchase pursuant to clause (a), mail such Offer.
(e) If any Offer to Purchase is made pursuant to this Section, the
Company covenants that it shall (and if applicable shall cause its Subsidiaries
to) comply with all applicable tender offer rules and regulations under all
state and Federal securities laws, including, but not limited to, Section 14(e)
under the Exchange Act and Rule 14e-1 thereunder.
SECTION 3.10. Money for Security Payments to be Held in Trust.
If the Company, any Subsidiary of the Company or any of their respective
Affiliates shall at any time act as its own Paying Agent, such Paying Agent
shall, on or before each due date of the principal of, interest on or
Yield-Maintenance Amount with respect to the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal or interest so becoming due until such sum shall be paid to such
Persons or otherwise disposed of as herein provided, and shall promptly notify
the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it shall, on
or prior to each date for the payment of the principal of or interest on the
Securities, deposit with a Paying Agent in immediately available funds a sum
sufficient to pay the principal or interest so becoming due, such sum to be
held in trust for the benefit of the Persons entitled to such payments; and,
unless such Paying Agent is the Trustee, the Company shall promptly notify the
Trustee of its action or failure so to act.
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For the purpose of obtaining the satisfaction and discharge of this
Indenture or for any other purpose, the Company may at any time pay, or direct
any Paying Agent to pay, to the Trustee all sums held in trust by the Company
or such Paying Agent, such sums to be held by the Trustee upon the same terms
as those upon which such sums were held by the Company or such Paying Agent;
and, upon such payment by the Company or any Paying Agent to the Trustee, the
Company or such Paying Agent, as the case may be, shall be released from all
further liability with respect to such money.
SECTION 3.11 GECC Closing Documents.
The Company shall take such actions as may be reasonably necessary or
appropriate to satisfy promptly the conditions precedent set forth in the GECC
Intercreditor Agreement.
SECTION 3.12. Further Actions -- Collateral.
The Company shall, and shall cause each of its Subsidiaries that are a
party to any Collateral Document to, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such lists, descriptions and designations of its Property, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and
take such further steps relating to such Property, which the Required Holders
or the Collateral Agent reasonably deems appropriate or advisable to perfect,
preserve, protect or enforce the Lien of the Collateral Agent in such Property
(and, to the extent so deemed to be appropriate or advisable, to create such a
Lien with respect to Property acquired by the Company or any such Subsidiary
after the Effective Date). Without limiting the foregoing, the Company and
each such Subsidiary shall, at its own expense with respect to any real estate
acquired by it after the Effective Date, concurrently with such acquisition
execute, deliver and provide to the Collateral Agent such Mortgages and other
documents as the Required Holders or the Collateral Agent may reasonably deem
appropriate or advisable to create a first priority (subject to Permitted
Liens) valid and perfected Lien in such Property in favor of the Collateral
Agent.
ARTICLE 4
NEGATIVE COVENANTS
SECTION 4.01. Certain Financial Covenants.
(a) Consolidated Tangible Net Worth. The Company covenants that it
will not cause or permit Consolidated Tangible Net Worth, at any time:
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(i) During each "Clause (i) Test Period" (as defined below)
occurring during the period commencing on the Effective Date and ending
on December 28, 1995, to be less than an amount (the "Clause (i)
Amount") equal to (1) negative $37,000,000, plus (2) 50% of Consolidated
Net Income for such Clause (i) Test Period (or zero in the case of a
deficit), plus (3) the amount of any net gain realized by the Company or
any of its Subsidiaries on the exchange, redemption, purchase or other
acquisition of any of its debt securities (including, without
limitation, the 10.25% Notes) during such Clause (i) Test Period; where
"Clause (i) Test Period" means, at any time, the period (taken as one
accounting period) commencing on March 31, 1995 and ending on the then
most recently ended fiscal quarter of the Company;
(ii) During each "Clause (ii) Test Period" (as defined
below) occurring during the period commencing on December 29, 1995 and
ending on December 26, 1996, to be less than an amount (the "Clause (ii)
Amount") equal to (1) the greater of (X) the Clause (i) Amount at
December 28, 1995, and (Y) negative $37,000,000, plus (2) 50% of
Consolidated Net Income for such Clause (ii) Test Period (or zero in the
case of a deficit), plus (3) the amount of any net gain realized by the
Company or any of its Subsidiaries on the exchange, redemption, purchase
or other acquisition of any of its debt securities (including, without
limitation, the 10.25% Notes) during such Clause (ii) Test Period; where
"Clause (ii) Test Period" means, at any time, the period (taken as one
accounting period) commencing on December 29, 1995 and ending on the
then most recently ended fiscal quarter of the Company;
(iii) During each "Clause (iii) Test Period" (as defined below)
occurring during the period commencing on December 27, 1996 and ending
on December 25, 1997, to be less than an amount (the "Clause (iii)
Amount") equal to (1) the greater of (X) the Clause (ii) Amount at
December 26, 1996, and (Y) negative $37,000,000, plus (2) the greater
of (X) 50% of Consolidated Net Income for such Clause (iii) Test Period
(or zero in the case of a deficit), and (Y) $1,250,000 multiplied by the
number of the Company's fiscal quarters that have ended during such
Clause (iii) Test Period, plus (3) the amount of any net gain realized
by the Company or any of its Subsidiaries on the exchange, redemption,
purchase or other acquisition of any of its debt securities (including,
without limitation, the 10.25% Notes) during such Clause (iii) Test
Period; where "Clause (iii) Test Period" means, at any time, the period
(taken as a one accounting period) commencing on December 27, 1996 and
ending on the then most recently ended fiscal quarter of the Company;
(iv) During each "Clause (iv) Test Period" (as defined
below) occurring during the period commencing on December 26,
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1997 and ending on December 31, 1998, to be less than an amount (the
"Clause (iv) Amount") equal to (1) the greater of (X) the Clause (iii)
Amount at December 25, 1997, and (Y) negative $37,000,000, plus (2) the
greater of (X) 50% of Consolidated Net Income for such Clause (iv) Test
Period (or zero in the case of a deficit), and (Y) $2,500,000 multiplied
by the number of the Company's fiscal quarters, at the time of
determination, that have ended during such Clause (iv) Test Period, plus
(3) the amount of any net gain realized by the Company or any of its
Subsidiaries on the exchange, redemption, purchase or other acquisition
of any of its debt securities (including, without limitation, the 10.25%
Notes) during such Clause (iv) Test Period; where "Clause (iv) Test
Period" means, at any time, the period (taken as one accounting period)
commencing on December 26, 1997 and ending on the then most recently
ended fiscal quarter of the Company; and
(v) During each "Clause (v) Test Period" (as defined below)
occurring after January 1, 1999 and thereafter, to be less than an
amount equal to (1) the greater of (X) the Clause (iv) Amount at
December 31, 1998, and (Y) negative $37,000,000, plus (2) 50% of
Consolidated Net Income for such Clause (v) Test Period (or zero in the
case of a deficit), plus (3) the amount of any net gain realized by the
Company or any of its Subsidiaries on the exchange, redemption, purchase
or other acquisition of any of its debt securities (including, without
limitation, the 10.25% Notes) during such Clause (v) Test Period; where
"Clause (v) Test Period" means, at any time, the period (taken as one
accounting period) commencing on January 1, 1999 and ending on the then
most recently ended fiscal quarter of the Company.
(b) Fixed Charge Coverage Ratio. The Company covenants that it will
not cause or permit the ratio of (i) Consolidated Cash Flow for the twelve
month period ending at the end of any fiscal quarter of the Company to (ii)
Consolidated Fixed Charges for each such twelve month period to be less than
the ratio set forth below for the period set forth below in which such fiscal
quarter ends:
Ratio Period
1.45:1 Effective Date through December 28, 1995
1.50:1 December 29, 1995 through December 26, 1996
1.55:1 December 27, 1996 and thereafter.
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SECTION 4.02. Limitation on Restricted Payments and Restricted Investments.
(a) The Company covenants that it shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other distribution or payment on or in respect of Capital
Stock of the Company or its Subsidiaries or make any payment to the direct or
indirect holders (in their capacities as such) of Capital Stock of the Company
or its Subsidiaries, other than dividends, distributions or payments payable or
made solely in shares of Capital Stock in the Company of the same class held by
such holders (other than Redeemable Stock) or in options, warrants or other
rights to purchase such shares; (ii) purchase, redeem, defease or otherwise
acquire or retire for value any Capital Stock of the Company or any Subsidiary;
(iii) make any principal payment on, or purchase, redeem, repurchase, defease
(including, but not limited to, in-substance or legal defeasance) or otherwise
acquire or retire for value, prior to any stated or scheduled maturity,
scheduled repayment or scheduled sinking fund or mandatory redemption payment,
any Restricted Debt (the foregoing actions, set forth in clauses (i) through
(iii) being referred to as "Restricted Payments"); or (iv) make any Investment
(the foregoing action being referred to as a "Restricted Investment"); unless
at the time of, and immediately after giving effect to (determined on a pro
forma basis), such proposed Restricted Payment or proposed Restricted
Investment::
(1) no Default or Event of Default exists or would
exist; and
(2) (i) the aggregate amount expended for all
Restricted Payments subsequent to March 30, 1995, plus (ii) the
aggregate amount expended for all Restricted Investments made
subsequent to March 30, 1995, does not exceed the sum of:
(A) 50% (or minus 100% in the event of a
deficit) of Consolidated Net Income calculated on a
cumulative basis for the period commencing on March 31,
1995 and continuing through the last day of the
Company's fiscal quarter immediately preceding the
Company's fiscal quarter in which the Restricted
Payment or Restricted Investment, as the case may be,
is proposed to be made; plus
(B) the aggregate net cash proceeds
received by the Company (i) from the issuance or sale
(other than to a Subsidiary of the Company), after the
Effective Date, of Capital Stock in the Company (other
than Redeemable Stock), (ii) upon conversion after the
Effective Date of any Debt of the Company that is, by
its original terms, convertible into
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Capital Stock (other than Redeemable Stock) in
the Company (with the aggregate net cash proceeds being
deemed to be the principal amount of the Debt so
converted), or (iii) from the exercise for cash after
the Effective Date of any options, warrants or other
rights to acquire Capital Stock (other than Redeemable
Stock) in the Company; plus
(C) $10,000,000;
provided, however, that in no event may Restricted Payments made
subsequent to March 30, 1995 exceed the sum of the amounts described in
clause (A) and (B) above plus $5,000,000.
(b) Notwithstanding clause (a) above, the provisions of this Section
shall not prohibit:
(i) (A) the payment by any Subsidiary of the Company of
dividends or other distributions to the Company or a Wholly Owned
Subsidiary of the Company or the redemption or repurchase by any such
Subsidiary of any Capital Stock in such Subsidiary owned by the Company
or a Wholly Owned Subsidiary of the Company, or (B) the payment of pro
rata dividends to holders of minority interests in the Capital Stock in
a Subsidiary of the Company; provided, however, that, in the case of
clause (B) no Default or Event or Default has occurred and is continuing
or would occur as a result thereof;
(ii) (a) consummation of the 10.25% Notes Exchange, so long
as no Default or Event of Default has occurred and is continuing or
would occur as a result thereof; and (b) consummation of the exchange of
Series B Securities for Series A Securities, and Series D Securities for
Series C Securities, as contemplated by the Registration Rights
Agreement and (c) consummation of an exchange of Subsequent Second
Priority Notes solely for Second Priority Notes;
(iii) Investments in the amounts existing on the date hereof
and specifically described on Schedule 4.02 attached hereto;
(iv) Investments (subject to Section 3.05) by the Company in
Wholly Owned Subsidiaries of the Company having lines of business that
are substantially similar or materially related to the Company's lines
of business existing on the Effective Date, so long as no Default or
Event of Default has occurred and is continuing or would occur as a
result thereof;
(v) Investments in Cash Equivalents;
(vi) the acquisition, redemption or retirement of Capital Stock
in the Company solely in exchange for (A) Capital Stock
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in the Company of the same class as the Capital Stock that is being
acquired, redeemed or retired or (B) Common Stock of the Company; and
(vii) the acquisition, redemption or retirement of Debt of the
Company or its Subsidiaries (A) which is subordinated in right of
payment to the Securities solely in exchange for Common Stock in the
Company, or (B) as part of a refinancing thereof permitted by Section
4.03(a)(xi).
(c) Notwithstanding clause (b) above, the payments described in
clause (b) (i) (B) above shall be included in any calculation of the sum of the
amount of Restricted Payments.
SECTION 4.03. Limitation on Indebtedness.
(a) The Company covenants that it shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly permit to exist, create,
incur, issue, assume, guaranty or otherwise become liable with respect to,
extend the maturity of or become responsible for the payment of, any Debt
(including, without limitation, any Acquired Debt) other than:
(i) Debt of the Company evidenced by the Securities;
(ii) Debt of the Company evidenced by the 10.25% Notes;
(iii) Debt of the Company evidenced by the Second Priority Notes
and the Subsequent Second Priority Notes, provided, however, that: (1)
the aggregate principal amount of the Second Priority Notes and the
Subsequent Second Priority Notes do not at any time exceed $50,000,000,
(2) such Second Priority Notes and Subsequent Second Priority Notes have
terms substantially identical to the 10.25% Notes and in any event no
less favorable to the Company than those set forth in the 10.25% Notes
and the 10.25% Notes Indenture (provided, however, that the Second
Priority Notes and Subsequent Second Priority Notes may be secured by
Liens that are Permitted Liens described in clause (xi) of the
definition of Permitted Liens and the final maturity thereof may be
prior to the final maturity of the 10.25% Notes, subject to clause (3)
below), (3) the final maturity of such Second Priority Notes and
Subsequent Second Priority Notes is not prior to June 15, 2000, and (4)
without limiting the foregoing clause (3), such Second Priority Notes
and Subsequent Second Priority Notes shall not have any scheduled
principal installment or other principal payments due until after the
final maturity of the Securities;
(iv) Debt of the Company under the Revolving Credit
Agreement (including any refinancings thereof), provided, that the
aggregate principal amount of such Debt does not at any time exceed
$35,000,000;
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(v) Debt of the Company or any of its Subsidiaries under
the Letter of Credit Agreement (and any refinancing thereof), provided
the aggregate amount of such Debt does not exceed $28,000,000 at any
time;
(vi) Debt of the Company and certain Subsidiaries of the
Company under the GECC Lease Documents (including any refinancings
thereof) in an aggregate principal amount not to exceed the principal
amount thereof outstanding as of the Effective Date less any scheduled
amortization after the Effective Date of such Indebtedness when actually
paid by the Company or its Subsidiaries; provided, however, that no
refinancing of such Debt under the GECC Lease Documents shall be
permitted unless: (1) such refinancing Debt shall have an Average Life
at the time such refinancing is incurred that is equal to or greater
than the Average Life of the Debt to be refinanced, (2) such refinancing
Debt shall be in a principal amount not in excess of the principal
amount of the Debt to be refinanced (including the amount (if any), up
to $10,000,000, by which the Stipulated Loss Value exceeds the then
outstanding principal amount of the Debt to be refinanced);
(vii) Debt evidenced by guaranties made by the Company's
Subsidiaries of the Debt described in clauses (i), (iii), (iv) and (v)
of this Section;
(viii) Debt of the Company or any of its Subsidiaries under
Currency Agreements and Interest Rate Agreements; provided, that such
Currency Agreements and Interest Rate Agreements do not increase the
outstanding Debt of the Company other than as a result of fluctuations
in foreign currency exchange rates or by reason of fees, indemnities and
compensation payable thereunder;
(ix) Debt of a Wholly Owned Subsidiary of the Company to the
Company or another Wholly Owned Subsidiary of the Company;
(x) Debt of the Company's Subsidiaries existing on the Effective
Date and described on Schedule 4.03 hereto;
(xi) other Debt of a Subsidiary of the Company that directly
refinances any Debt of such Subsidiary described in the immediately
foregoing clause (x); provided, however, that (1) the principal amount
of such refinancing Debt does not exceed the principal amount of the
Debt to be refinanced, (2) the terms of such refinancing Debt are, in
all material respects, no less favorable to such Subsidiary than the
terms of the Debt to be refinanced and (3) without limiting the
foregoing clause (2) no refinancing Debt may be secured to any greater
extent than is the Debt to be refinanced; provided, further, that
notwithstanding clause (1) above, the aggregate principal amount of Debt
refinancing existing lines of credit
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of the Company's Subsidiaries may equal up to $10,000,000 (or the
applicable foreign currency equivalent thereof reasonably determined by
the Company at the time any such refinancing Debt is incurred).
(xii) Debt of the Company or any of its Subsidiaries (A)
resulting from the endorsement of negotiable instruments for collection
in the ordinary course of business, or (B) arising under guarantees
incurred in the ordinary course of business (and not in connection with
the borrowing of money) with respect to suppliers, licensees,
franchisees or customers of the Company or such Subsidiary;
(xiii) other Debt of the Company and the Company's Subsidiaries
(including, without limitation, Purchase Money Indebtedness and Acquired
Debt); provided, however, that the aggregate outstanding principal
amount thereof shall at no time exceed $15,000,000 (or the applicable
foreign currency equivalent thereof reasonably determined by the Company
at the time such Debt is incurred); provided, further, that the
aggregate outstanding amount of Purchase Money Indebtedness to be
incurred in connection with the purchase of any Property shall not
exceed 90% of the cash purchase price to be paid for such Property; and
(xiv) other Debt of the Company (not secured by any Lien);
provided, however, that at no time shall (1) Consolidated Senior Debt be more
than 52.5% of Consolidated Total Capitalization, or (2) Consolidated Debt be
more than 85% of Consolidated Total Capitalization.
(b) For purposes of determining any particular amount of Debt under
this Section, Guarantees of (or obligations with respect to letters of credit
supporting) Debt otherwise included in the determination of such amount shall
not also be included.
SECTION 4.04. Limitation on Liens.
The Company covenants that it shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create, incur or permit to exist any
Lien of any nature whatsoever on any of its properties (including, without
limitation, Capital Stock), whether owned on the Effective Date or thereafter
acquired, other than Permitted Liens.
SECTION 4.05. Limitation on Company Mergers, Consolidations, and Sales.
(a) The Company covenants that it shall not merge or consolidate
with any other Person or, directly or indirectly, Transfer,
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all or substantially all of its Property in a single transaction or series of
related transactions, unless in any such case:
(i) at the time of, and immediately after giving effect to
(determined on a pro forma basis), such proposed merger, consolidation
or Transfer, no Default or Event of Default exists or would exist after
giving effect thereto;
(ii) in the event that the Company is to consolidate with or
merge into another Person, or to Transfer all or substantially all of
its Property to another Person, such Person shall be a corporation
organized and validly existing under the laws of a State of the United
States of America or the District of Columbia and shall expressly assume
in writing all obligations of the Company under all Credit Documents to
which the Company is a party pursuant to such written agreements and
instruments as the Trustee may request (which shall include an indenture
supplemental to this Indenture) and which in each case shall be in form
and substance satisfactory to the Trustee; and
(iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or Transfer (and if a supplemental indenture is
required, such supplemental indenture) complies with this Section and
that all conditions precedent herein provided for with respect thereto
have been completely satisfied.
(b) Upon any consolidation of the Company with, or merger of the
Company with or into, any other Person or any Transfer of all or substantially
all of the Property of the Company in accordance with this Section, the entity
formed by or surviving such transaction shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Indenture with the same effect as if such successor Person had been named as
the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Indenture and the Securities.
SECTION 4.06. Limitation on Certain Asset Sales and Subsidiary Mergers.
Without limiting Section 4.05 above, the Company covenants that (i) it
shall not, and shall not permit any of its Subsidiaries to, directly or
indirectly Transfer any of its Property, and (ii) the Company shall not permit
any of its Subsidiaries to merge or consolidate with any other Person except:
(a) any Wholly Owned Subsidiary of the Company may merge
with, or sell all or substantially all of its Property to, the Company
or another Wholly Owned Subsidiary of the Company if at
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the time of and immediately after giving effect to (determined on a pro
forma basis) such proposed transaction no Default or Event of Default
exists or would exist after giving effect thereto;
(b) the Company may Transfer assets (excluding Capital
Stock of a Material Subsidiary) to the extent permitted under Section
4.05 and may issue and sell its Capital Stock subject to Section
3.09(a);
(c) the Company or any such Subsidiary may sell inventory in
the ordinary course of business and equipment that is determined to be
obsolete in accordance with GAAP or concurrently replaced by equipment
(not subject to any Lien other than Permitted Liens) of the same type
having a fair market value at least equal to the fair market value of
the equipment so replaced;
(d) the Company or any such Subsidiary (subject to clause (f)
below) may otherwise Transfer Property (excluding Capital Stock of a
Material Subsidiary), and any such Subsidiary (subject to clause (f)
below) may consummate a Transfer by Merger; provided that after giving
effect thereto (1) the Percentage of Total Assets Transferred in any
fiscal year of the Company (excluding assets described in clauses (a)
and (c) above) shall not exceed 10%; and (2) the Percentage of Total
Assets Transferred (excluding assets described in clauses (a) and (c)
above) at any time after the Effective Date on a cumulative basis shall
not exceed 15%; and
(e) the Company or any Subsidiary of the Company (subject to
clause (f) below) may Transfer other Property (not constituting Capital
Stock of any Material Subsidiary), and any Subsidiary of the Company
(subject to clause (f) below) may consummate other Transfers by Merger
if:
(1) at the time of and immediately after giving effect to
(determined on a pro forma basis) such proposed Transfer of Property or
Transfer by Merger (as the case may be) no Default or Event of Default
exists or would exist;
(2) the consideration to be paid to the Company or such
Subsidiary (as the case may be) is at least equal to the fair market
value of the assets to be Transferred (or, in the case of a Transfer by
Merger, the fair market value of the Subsidiary subject thereto), in
each case as reasonably determined by the Board of Directors; and
(3) the proceeds from such Transfer of Property or Transfer by
Merger (net of (X) reasonable expenses incurred by the Company or the
Subsidiary (as the case may be) incidental thereto, (Y) the amount of
any taxes (reasonably determined by
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the Company in good faith) owing by the Company or such Subsidiary (as
the case may be) as a result thereof, and (Z) any mandatory repayment of
permitted Debt (if any) secured by a Permitted Lien on the Property
being Transferred that is prior to the Lien securing the Consolidated
Secured Debt) are immediately applied to redeem the Securities and
otherwise repay the other Consolidated Secured Debt outstanding at such
time, such application of proceeds to be made pro rata to the holders of
the Consolidated Secured Debt based on the then outstanding principal
amount of each such holder's holding of Consolidated Secured Debt (or,
in the case of the Lender, the Revolving Loan Commitment) in proportion
to the aggregate amount of Consolidated Secured Debt then outstanding
(or, in the case of the Lender, the Revolving Loan Commitment);
provided, however, that such redemption or repayment pursuant to this
clause (3) shall be deferred until the amount of proceeds to be so
redeemed and otherwise repaid equals or exceeds $5,000,000, with any
such lesser amounts not used for redemption or repayment to be
aggregated with proceeds subsequently received from Transfers to be
utilized for redemption or repayment at such point as such aggregate
amount equals or exceeds $5,000,000.
The Company shall make each redemption required under Section 4.06(e)(3)
on a date (the "Transfer Redemption Date") which is the first Business Day next
following the 30th day after the date of the Transfer or Transfer by Merger
giving rise thereto (such date of Transfer or Merger by Transfer, the "Transfer
Date"). If less than all of the outstanding Securities are to be redeemed
under Section 4.06(e)(3), the principal amount so redeemed shall be allocated
to all Securities at the time outstanding in proportion to the respective
outstanding principal amounts thereof. The redemption price for each Security
(or portion thereof) redeemed under Section 4.06(e)(3) (the "Transfer
Redemption Price") shall equal 100% of the principal amount thereof plus the
Yield-Maintenance Amount, if any, with respect thereto. The Company shall give
written notice on the Transfer Date of such redemption to the Trustee and all
Holders. Such notice shall include all of the information specified in Section
9.03(1) through (8) and a description of the material terms of the Transfer or
Transfer by Merger giving rise to such redemption notice. Redemption under
Section 4.06(e)(3) shall be subject to the provisions of Sections 9.04, 9.05,
9.06 and 9.07; provided, however, that the Company shall, on the Transfer Date,
irrevocably deposit with the Paying Agent for the benefit of the Holders the
amount of the proceeds to be applied to redeem Securities pursuant to Section
4.06(e)(3).
(f) Notwithstanding anything to the contrary in this
Section 4.06, the Company shall not permit any Material Subsidiary,
directly or indirectly, to Transfer all or substan-
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tially all of its assets in a single transaction or series of related
transactions or merge or consolidate with any Person other than as
permitted under Section 4.06(a).
SECTION 4.07. Limitation on Payment Restrictions Affecting Subsidiaries.
The Company covenants that it shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction which by its terms
expressly restricts the ability of any Subsidiary of the Company to: (a) pay
dividends or make any other distributions on the Capital Stock in such
Subsidiary or any other interest or participation in, or measured by, its
profits owned by, or pay any Debt owed to, the Company or any such Subsidiary,
(b) make any loans or advances to the Company or any such Subsidiary or (c)
transfer any of its Property to the Company or to any such Subsidiary, except
for (i) such encumbrances or restrictions existing under or by reason of any
encumbrance or restriction existing by reason of applicable law; (ii) such
encumbrances or restrictions existing on the Effective Date and described in
reasonable detail on Schedule 4.07 hereto, including, without limitation, any
encumbrances or restrictions under Debt of the Company or any of its
Subsidiaries listed on Schedule 4.03; (iii) such encumbrances or restrictions
as may exist under refinancing Debt permitted under Section 4.03(xi); provided,
however, that any such encumbrances or restrictions are, in no material
respect, any more onerous to the Company or such Subsidiary than the
encumbrances or restrictions included in the Debt to be refinanced; (iv) such
encumbrances or restrictions as may exist under any Acquired Debt at the time
incurred by the Company or such Subsidiary; provided, however, that such
encumbrances or restrictions are, in no material respect, any more onerous to
the Company or such Subsidiary as the then existing most onerous such
encumbrances and restrictions applicable to the Company or such Subsidiary; (v)
the provisions of any lease governing a leasehold interest or of any supply,
license or other agreement entered into in the ordinary course of business of
the Company or any Subsidiary that restrict in a customary manner transfer,
subleasing or assignment; and (vi) any restrictions with respect to a
Subsidiary imposed pursuant to an agreement entered into for the sale or
disposition of Capital Stock or assets of such Subsidiary pending the closing
of such sale or disposition.
SECTION 4.08. Transactions with Affiliates.
(a) The Company covenants that it shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, without
limitation, any purchase, sale or exchange of Property, the making of any
Investment, the giving of any guarantee or the rendering of any service), with
any Affiliate
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of the Company or of any Subsidiary of the Company unless the terms of such
transaction or series of related transactions are no less favorable to the
Company or such Subsidiary, as the case may be, than those that might be
obtained at the time of such transaction from a Person who is not such an
Affiliate; provided, however, that in addition to the foregoing, any such
transaction (or series of related transactions), other than Exempted
Transactions, that has a fair market value to the Company or such Subsidiary of
$10,000,000 or more shall be deemed to be on terms no less favorable to the
Company or such Subsidiary than those obtainable at the time of the transaction
from a Person who is not such an Affiliate only if the Board of Directors of
the Company receives and delivers to the Trustee, prior to such transaction, a
written opinion of a nationally recognized investment banking firm stating that
the transaction is fair to the Company or such Subsidiary from a financial
point of view.
(b) The provisions set forth in clause (a) above shall not apply to
(i) the payment of fees, salaries or other amounts to DPK in accordance with
the express terms of the Management Agreement, provided, however, that the
aggregate amount of all such fees, salaries and other amounts shall not exceed
$5,000,000 (determined without regard to the value of options to purchase the
Company's Common Stock) in the aggregate in any consecutive twelve month period,
(ii) any transaction between the Company and any of its Wholly Owned
Subsidiaries, (iii) the payment of reasonable and customary fees (including
options to purchase the Company's Common Stock) to directors of the Company or
any of the Subsidiaries of the Company who are not employees of the Company or
any Subsidiary of the Company as the same may be deemed advisable or
appropriate by the Board of Directors, or (iv) loans or advances to officers,
members of the Board of Directors and employees of the Company or any of its
Subsidiaries for travel, entertainment or moving and other relocation expenses
made in the ordinary course of business of the Company and its Subsidiaries as
the same may be deemed advisable or appropriate by the Board of Directors.
SECTION 4.09. Limitations on the Sale of Stock and Debt of Subsidiaries.
The Company covenants that it shall not, and shall not permit any of its
Subsidiaries to, sell or otherwise dispose of, or part with control of, any
Capital Stock (other than directors' qualifying shares or nominee shares) or
Indebtedness of any Subsidiary of the Company, except to the Company or a
Wholly Owned Subsidiary of the Company, and except that all Capital Stock and
Indebtedness of any such Subsidiary may be sold as an entirety provided that
(a) at the time of such sale, such Subsidiary shall not own, directly or
indirectly, any Capital Stock or Indebtedness of any other Subsidiary (unless
all of the Capital Stock and Indebtedness of such other Subsidiary are
simultaneously being sold), and (b) such sale would be permitted by Section
4.05 and 4.06.
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SECTION 4.10. Sale and Lease-Back Transactions.
The Company covenants that it shall not, and shall not permit any of its
Subsidiaries to, enter into any arrangement with any Person providing for the
leasing by the Company or such Subsidiary of real or personal property which
has been or is to be sold or transferred by the Company or such Subsidiary to
such Person or to any Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of the
Company or such Subsidiary.
SECTION 4.11. Sale or Discount of Receivables.
The Company covenants that it shall not, and shall not permit any of its
Subsidiaries to, sell with recourse, or discount or otherwise sell for less
than the face value thereof, any of its notes or accounts receivable.
SECTION 4.12. Pension Plan Funding Deficiency.
The Company covenants that it shall not, and shall not permit any member
of the Control Group to, on and after the Effective Date (a) incur or permit to
exist any accumulated funding deficiency within the meaning of Section
302(a)(2) of ERISA or Section 412(a) of the Code, or (b) incur any liability
(other than for premiums due but not yet paid) to the Pension Benefit Guaranty
Corporation, in either case in connection with any Title IV Plan to which
contributions are made by the Company or any member of the Control Group after
the Effective Date and which, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
SECTION 4.13. Limitation on Issuance and Sale of Capital Stock of
Subsidiaries.
The Company covenants that it shall not (a) permit any Subsidiary of the
Company to issue or sell any Capital Stock in such Subsidiary other than to the
Company or a Wholly Owned Subsidiary of the Company or (b) permit any Person
other than the Company or a Wholly Owned Subsidiary of the Company to hold any
Capital Stock issued after the Effective Date in any Subsidiary of the Company;
provided, however, that the Company or any Subsidiary of the Company may sell
Common Stock to the extent permitted under Section 4.06; provided, further,
that this Section 4.13 shall not be deemed to prohibit the Company or any
Subsidiary of the Company from making any Investment (including, without
limitation, Investments in a Person such that after giving effect thereto such
Person may be a less than wholly owned Subsidiary of the Company) permitted by
Section 4.02.
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SECTION 4.14. Limitation on Fiscal Year Changes.
The Company covenants that it shall not change its fiscal year end from
the last Thursday in each December of each year nor shall it make any change to
its corresponding fiscal quarter end; provided, however, that the Company may
make a one time change in its fiscal year end to December 31 of each year (a
"Fiscal Year Change") so long as (i) its fiscal quarter end is concurrently
changed to the last day of each calendar quarter and (ii) the Company gives not
less than 5 Business Days prior notice thereof to the Trustee, each Holder and
the Collateral Agent. Upon and after the effectiveness of the Fiscal Year
Change (if any) and as to all periods after (but not before) such Fiscal Year
Change: (a) the references in Section 4.01(a) to "December 25," "December 26,"
"December 27," "December 28" and "December 29" shall automatically be deemed to
be a reference to "December 31;" and (b) the references in Section 4.01(b) to
"December 27," "December 28" and "December 29" shall automatically be deemed to
be a reference to "December 31."
ARTICLE 5
DEFAULTS AND REMEDIES
SECTION 5.01. Acceleration.
If any of the following events shall occur and be continuing for any
reason whatsoever (and whether such occurrence shall be voluntary or
involuntary or come about or be effected by operation of law or otherwise):
(a) the Company defaults in the payment of any principal
of, or Yield-Maintenance Amount with respect to, any Security when the
same shall become due, either by the terms thereof or otherwise as
provided in this Indenture (pursuant to Sections 3.09(a), 3.09(b),
4.06(e)(3), 9.01(a), 9.01(b) or otherwise) or any note purchase
agreement relating thereto; or
(b) the Company defaults in the payment of any interest on
any Security (including, without limitation, payment of any increase in
interest pursuant to Section 2.01(c)) for more than 5 Business Days
after the date due; or
(c) the Company or any Subsidiary of the Company defaults
(whether as primary obligor or as guarantor or other surety) in any
payment of principal of or interest on the 10.25% Notes, the Second
Priority Notes (if any), the Subsequent Second Priority Notes (if any),
any loan under the Revolving Credit Agreement, any reimbursement
obligations under the Letter of Credit Agreement, any Capital Lease
Obligation under the GECC Lease Documents or any other obligation for
money borrowed (or
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any Capital Lease Obligation, any obligation under a conditional sale or
other title retention agreement, any obligation issued or assumed as
full or partial payment for property whether or not secured by a
purchase money mortgage or any obligation under notes payable or drafts
accepted representing extensions of credit or any obligation to pay or
reimburse any Person for any amount paid under any letter of credit, any
proposal, bid, performance or other bond, or under any indemnity
agreement) beyond any period of grace provided with respect thereto, or
the Company or any such Subsidiary fails to perform or observe any other
agreement, term or condition contained in any agreement under which any
such obligation is created (or if any other event thereunder or under
any such agreement shall occur and be continuing) and the effect of such
failure or other event is to cause, or to permit the holder or holders
of such obligation (or a trustee on behalf of such holder or holders) to
cause, such obligation to become due (or to be repurchased by the
Company or any such Subsidiary) prior to any stated maturity, provided
that, except in respect of the Revolving Credit Agreement, the Letter of
Credit Agreement and the GECC Lease Documents, the aggregate amount of
all obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur
and be continuing exceeds $5,000,000; or
(d) any representation or warranty made by the Company or
any Subsidiary of the Company or any Responsible Officer thereof in any
writing or statement furnished in connection with or pursuant to this
Indenture, the Securities or any other Credit Document shall be false in
any material respect on the date as of which made; or
(e) the Company fails to observe or perform any covenant,
condition or agreement contained in Article 4 or Sections 3.09 or 3.10;
or
(f) the Company fails to observe or perform any covenant,
condition or agreement on the part of the Company to be observed or
performed pursuant to the terms of this Indenture or the Securities
(other than a covenant, condition or agreement which is specifically
dealt with elsewhere in this Section), and such failure continues for 30
days after any Responsible Officer of the Company learns thereof; or
(g) the Company or any Material Subsidiary makes an
assignment for the benefit of creditors or is generally not paying its
debts as such debts become due; or
(h) any decree or order for relief in respect of the
Company or any Material Subsidiary is entered under any bankruptcy,
reorganization, compromise, arrangement, insolven-
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cy, readjustment of debt, dissolution or liquidation or similar law,
whether now or hereafter in effect (herein called the "Bankruptcy Law"),
of any jurisdiction; or
(i) the Company or any Material Subsidiary petitions or
applies to any tribunal for, or consents to the appointment of, or
taking possession by, a trustee, receiver, custodian, liquidator or
similar official of the Company or any Material Subsidiary, or of any
substantial part of its assets or commences a voluntary case under the
Bankruptcy Law of any jurisdiction or any proceedings relating to the
Company or any such Material Subsidiary under the Bankruptcy Law of any
jurisdiction; or
(j) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Material
Subsidiary and the Company or such Material Subsidiary by any act
indicates its approval thereof, consent thereto or acquiescence therein,
or an order, judgment or decree is entered appointing any such trustee,
receiver, custodian, liquidator or similar official, or approving the
petition in any such proceedings, and such order, judgment or decree
remains unstayed and in effect for more than 60 days; or
(k) any order, judgment or decree is entered in any
proceedings against the Company or any Material Subsidiary decreeing the
dissolution of the Company or any such Material Subsidiary and such
order, judgment or decree remains unstayed and in effect for more than
60 days; or
(l) any order, judgment or decree is entered in any
proceedings against the Company or any Material Subsidiary of the
Company decreeing a split-up of the Company or such Material Subsidiary,
and such order, judgment or decree remains unstayed and in effect for
more than 60 days; or
(m) one or more judgments or orders in an aggregate amount
in excess of $5,000,000 (net of cash proceeds actually received by, or
paid on behalf of, the Company with respect to such judgments or orders)
are rendered against the Company or any Subsidiary of the Company and,
within 60 days after entry thereof, such judgment is not discharged or
execution thereof stayed pending appeal, or within 60 days after the
expiration of any such stay, such judgment is not discharged; or
(n) the occurrence of any "Event of Default" (as defined in
any Credit Document other than this Indenture) or the breach of any
covenant, warranty or agreement set forth in any Credit Document (other
than this Indenture or the Securities), which Event of Default or breach
continues beyond any period of grace therein provided; or
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(o) the Guaranty Agreement shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert
the invalidity or unenforceability or the Guaranty Agreement, or any
guarantor thereunder shall fail to comply with any of the terms or
provisions of the Guaranty Agreement or denies that it has any further
liability under the Guaranty Agreement, or gives notice to such effect;
or
(p) the Collateral Agent shall cease to possess at any time
a valid, first priority (subject to Permitted Liens) perfected Lien in
and on any of the Collateral (other than Collateral having a de minimis
value); or
(q) any Termination Event occurs;
then (1) if such event is an Event of Default specified in clause (h), (i) or
(j) of this Section with respect to the Company, all of the Securities at the
time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and together with the Yield-Maintenance
Amount, if any, with respect to such Security, without presentment, demand,
protest or notice of any kind, all of which are hereby waived by the Company,
(2) if such event is an Event of Default specified in clause (a) or clause (b)
of this Section, any Holder of a Security at any time such Event of Default is
continuing, at its option, by notice in writing to the Company, may declare all
or any part of the Securities owned by such Holder to be, and all such
Securities shall thereupon be and become, forthwith due and payable at par
together with interest accrued thereon, without presentment, demand, protest or
notice of any kind, all of which are hereby waived by the Company, and (3) if
such event is an Event of Default other than an Event of Default specified in
clause (h), (i) or (j) of this Section with respect to the Company, the
Required Holders may at their option, or the Trustee shall upon the written
request of the Required Holders, by notice in writing to the Company, declare
all of the Securities to be, and all of the Securities shall thereupon be and
become, immediately due and payable together with interest accrued thereon and
together with the Yield-Maintenance Amount, if any, with respect to each
Security, without presentment, demand, protest or other notice of any kind, all
of which are hereby waived by the Company.
SECTION 5.02. Other Remedies.
Notwithstanding any other provision in this Indenture, if an Event of
Default occurs and is continuing, the Trustee may pursue any available remedy
by an action at law, suit in equity or other appropriate proceeding to collect
the payment of principal of and/or interest and the Yield-Maintenance Amount on
the Securities or to enforce the performance of any provision of the Securities
or this Indenture.
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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 Holder in exercising any right or remedy
accruing upon an Event of Default or a Default shall not impair the right or
remedy or constitute a waiver of or acquiescence in such Event of Default or
Default. All available remedies are cumulative to the extent permitted by law.
SECTION 5.03. Rescission of Acceleration.
At any time after any or all of the Securities shall have been declared
immediately due and payable pursuant to Section 5.01, the Required Holders may,
by notice in writing to the Company and the Trustee, rescind and annul such
declaration and its consequences (including without limitation, consequences
arising pursuant to the Collateral Documents) if (i) the Company shall have
paid all overdue interest on the Securities, the principal of and
Yield-Maintenance Amount, if any, payable with respect to any Securities which
have become due otherwise than by reason of such declaration, and interest on
such overdue interest and overdue principal and Yield-Maintenance Amount at the
rate specified in the Securities, (ii) the Company shall not have paid any
amounts which have become due solely by reason of such declaration, (iii) all
Events of Default and Defaults, other than non-payment of amounts which have
become due solely by reason of such declaration, shall have been cured or
waived pursuant to Section 5.05, and (iv) no judgment or decree shall have been
entered for the payment of any amounts due pursuant to the Securities or this
Indenture. No such rescission or annulment shall extend to or affect any
subsequent Event of Default or Default or impair any right arising therefrom.
SECTION 5.04. Notice of Acceleration or Rescission.
Whenever any Security shall be declared immediately due and payable
pursuant to Section 5.01 or any such declaration shall be rescinded and
annulled pursuant to Section 5.03, the Company shall forthwith give written
notice thereof to the Trustee and to each Holder of each Security at the time
outstanding.
SECTION 5.05. Waiver of Defaults.
Subject to Section 5.08 and Section 8.02, holders of not less than a
majority in aggregate principal amount of the then outstanding Securities by
notice to the Trustee may waive any existing Default or Event of Default and
its consequences except a continuing Default or Event of Default in the payment
of principal or interest and Yield-Maintenance Amount (if any) on any Security;
provided, however, that if under the terms of the Intercreditor Agreement the
Trustee has agreed that it will not waive any provision of this Indenture
without the consent of the "Requisite Working Capital Lenders" (as defined in
the Intercreditor Agreement), no such waiver shall be effective unless and
until such
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consent has been given. When a Default or Event of Default is so waived, it is
deemed cured and it ceases to exist, but no such waiver shall extend to any
subsequent Default or Event of Default or impair any right consequent thereon.
SECTION 5.06. Control by Majority.
Holders of a majority in aggregate principal amount of the then
outstanding Securities, by notice given to the Trustee, 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 (including, without
limitation, taking any action or omitting to take any action under or pursuant
to the Intercreditor Agreement or any other Collateral Document). However, the
Trustee may refuse to follow any direction that conflicts with law or this
Indenture or that the Trustee determines is unduly prejudicial to the rights of
other Holders or would subject the Trustee to personal liability, unless the
Trustee is indemnified to its satisfaction against such liability as further
provided in Section 6.01(e). The Trustee may take any other action deemed
proper by the Trustee and that is not inconsistent with such direction.
SECTION 5.07 Limitation on Suits.
Except as provided in Section 5.08 and Section 5.01, no Holder (other
than a "Significant Holder" (as defined in the Note Agreement)) may pursue any
remedy with respect to this Indenture or the Securities unless:
(1) such Holder gives to the Trustee written notice of a
continuing Event of Default;
(2) Holders of not less than a majority in aggregate
principal amount of the then outstanding 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;
(4) the Trustee does not comply with the request within 60
days after the receipt of such request and offer of indemnity; and
(5) prior to or during such 60-day period, the Holders of a
majority in aggregate principal amount of the then outstanding
Securities do not give the Trustee a direction inconsistent with the
request.
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A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over another Holder.
SECTION 5.08. Rights of Holders to Receive Payment.
Subject to the provisions of Section 5.01, and notwithstanding any other
provision of this Indenture, the right of any Holder to receive payment of
principal of, interest on and the Yield-Maintenance Amount (if any) with
respect to any Security, on or after the respective due dates expressed in such
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
such Holder.
SECTION 5.09. Collection Suit by Trustee.
If an Event of Default specified in clause (a)(1) or (a)(2) of Section
5.01 occurs and is continuing, the Company will, upon demand of the Trustee,
pay to the Trustee for the benefit of the Holders, the whole amount then due
and payable on the Securities for principal and interest and Yield-Maintenance
Amount (if any), and interest on any overdue principal and, to the extent that
payment of such interest shall be legally enforceable, upon any overdue
installment of interest and any Yield-Maintenance Amount, at the Default Rate,
and in addition thereto, 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.
If the Company fails to pay such amounts forthwith upon such demand, in
accordance with the preceding paragraph, the Trustee may recover judgment in
its own name and as trustee of an express trust against the Company or any
other obligor on the Securities for the whole amount of principal and accrued
interest and Yield-Maintenance Amount (if any) remaining unpaid on the
Securities, together with, to the extent that payment of such interest is
lawful, interest on overdue principal and interest on overdue installments of
interest and Yield-Maintenance Amount (if any), in each case at the Default
Rate, and such further amount as shall be sufficient to cover the costs and
expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
SECTION 5.10. Trustee May File Proofs of Claim.
In the case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company (or any other obligor upon
the Securities), the Securities or the Property of the Company, the Trustee
(irrespective of whether the principal of the Securities shall then be due and
payable as
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therein expressed or by acceleration or otherwise, and irrespective of whether
the Trustee shall have made any demand on the Company or any other obligor on
the Securities for the payment of overdue principal or interest) shall be
entitled and empowered, by intervention in such proceeding or otherwise, to
file and prove a claim for the whole amount of principal and interest and
Yield-Maintenance Amount (if any) owing and unpaid in respect of the
Securities, to file such other papers or documents and to participate as a
member, voting or otherwise, of any committee of creditors, as may be necessary
or advisable in order to have the claims of the Trustee (including any claim
for the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding.
The Trustee is entitled and empowered to collect and receive any moneys
or other property payable or deliverable on any such claims and to distribute
the same, and any receiver, assignee, trustee, liquidator, sequestrator (or
other similar official) in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee, and, in the event that the
Trustee shall consent to the making of such payments, directly to the Holders
and to pay to the Trustee any amount due to it for reasonable compensation,
expenses, disbursements, advances and other amounts due the Trustee under
Section 6.07.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding, except that the
Trustee shall be permitted to participate as a member of any committee of
creditors (as set forth in the first paragraph of this Section 5.10).
SECTION 5.11. Priorities.
If the Trustee collects any money pursuant to this Article 5, it shall
pay out the money in the following order:
(1) First, to the Trustee for amounts due to it for
reasonable compensation, expenses, disbursements, advances and other
amounts due to it under Section 6.07;
(2) Second, to Holders for amounts due and unpaid on the
Securities for principal and interest and Yield-Maintenance Amount (if
any), ratably, without preference or priority of any kind, according to
the amounts due and payable on the Securities for principal and
interest, respectively; and
(3) Third, to the Persons entitled thereto.
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The Trustee may fix a record date and payment date for any payment to
Holders pursuant to this Section 5.11.
SECTION 5.12. 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 to
be taken 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 and disbursements, 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 5.12 does not apply to a suit by the
Trustee, a suit by a Holder pursuant to Section 5.01 or Section 5.08, or a suit
by Holders of more than 10% in aggregate principal amount of the then
outstanding Securities.
ARTICLE 6
TRUSTEE
SECTION 6.01. 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 and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(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. The Trustee, however, shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture but need not verify the accuracy of the contents thereof.
(c) The Trustee shall not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
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(1) this paragraph shall not limit the effect of paragraph (b) of
this Section nor of TIA Section 315(a);
(2) the Trustee shall not be liable for any error of judgment made
by it in good faith, unless it is proved that the Trustee was negligent
in ascertaining the pertinent facts; and
(3) the Trustee shall not be liable with respect to any action it takes
or omits to take in good faith in accordance with a direction received
by it pursuant to the terms of this Indenture.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to the provisions of this Section.
(e) 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. Notwithstanding anything to the contrary contained
elsewhere in this Indenture, the Intercreditor Agreement or any of the
Collateral Documents, in the event the Trustee is entitled or required to
direct the Collateral Agent to commence an action to foreclose any Mortgage or
otherwise exercise its remedies to acquire control or possession of any
mortgaged property, the Trustee shall not be required to direct the Collateral
Agent to commence any such action or exercise any such remedy if the Trustee
has determined in good faith that the Trustee may incur liability under the
Environmental Laws as the result of the presence at, or release on or from, the
mortgaged property of any toxic or hazardous waste, substance or chemical or
any pollutant, contaminant or other substance regulated by any Environmental
Law (collectively, "Hazardous Materials") unless the Trustee has received
security or indemnity in an amount and in a form all satisfactory to the
Trustee in its sole discretion, protecting the Trustee from all such liability.
(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.
(g) No provision of this Indenture shall require the Trustee to
expend or risk any of its own funds or incur any liability other than as
expressly assumed by the Trustee hereunder unless it receives indemnity
satisfactory to it against loss, liability, cost or expense.
(h) Except as otherwise set forth in Article 7, the Trustee or a
Paying Agent shall, after deduction of amounts due to it, promptly pay any
money received by it to the Holders of the Securities pursuant to the terms of
this Indenture.
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(i) In no event shall the Trustee be required to take any action to
preserve or realize on the Collateral unless the Trustee receives indemnity
satisfactory to it against costs, expenses and liabilities related thereto. In
no event shall the institution serving as Trustee be required to provide any
indemnity to the Collateral Agent payable personally by such institution.
SECTION 6.02. Rights of Trustee.
(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. The Trustee
may conclusively rely as to the identity and addresses of Holders and other
matters contained therein on the register of the Securities maintained by the
Registrar pursuant to Section 2.03 and shall not be affected by notice to the
contrary.
(b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate and an Opinion of Counsel and may make such other
investigation as it deems appropriate. The Trustee shall not be liable for any
action it takes or omits to take in good faith in reliance on any Officers'
Certificate or Opinion of Counsel. The Trustee may consult with counsel of its
own choosing and the written 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 to be taken by it hereunder in good faith and
in accordance with the advice or opinion of such counsel.
(c) The Trustee may act through Trust Officers and other agents or
attorneys and shall not be responsible for the misconduct or negligence of any
Trust Officer or other agent or attorney 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, provided that the Trustee's conduct does not constitute negligence
or bad faith.
(e) Unless otherwise specifically provided in this Indenture, any
demand, request, direction or notice from the Company shall be sufficient if
signed by a Responsible Officer of the Company.
SECTION 6.03. 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 any
Affiliate of the Company with the same rights it would have if it were not the
Trustee. Any Agent may do the same with like rights. The Trustee, however, is
subject to Sections 6.10 and 6.11.
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SECTION 6.04. Trustee's Disclaimer.
The Trustee makes no representation as to the legality, 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, or any money paid to the
Company or upon the Company's direction under any provision hereof, it shall
not be responsible for the use or application of any money received by any
Paying Agent other than the Trustee, and it shall not be responsible for any
statement in the Securities other than its authentication or for any statement
of the Company in this Indenture. Without limiting the foregoing, the Trustee
makes no representation as to the legality, validity or adequacy of any
Collateral Documents or as to the creation, perfection or priority of any Lien
purported to be granted thereunder. The Trustee shall have no obligation to
review the content of any financial statements filed by the Company with the
Trustee, including, without limitation, for the purpose of monitoring
compliance by the Company with its financial covenants, as to which the Trustee
shall have no responsibility.
SECTION 6.05. Notice of Defaults.
If a Default or Event of Default occurs and is continuing and if it is
known to the Trustee, the Trustee shall give each Holder notice of the Default
or Event of Default within 90 days after it occurs, unless such Default or
Event of Default shall have been cured or waived. Except in the case of a
Default or Event of Default in payment on any Security, the Trustee may
withhold notice if and for so long as its Board of Directors, executive
committee or a trust committee of its directors and/or Trust Officers in good
faith determines that withholding the notice is in the interests of Holders.
The notices provided for in this Section 6.05 shall be given in the manner and
to the extent provided in TIA Section 313(c).
SECTION 6.06. Reports by Trustee to Holders.
This Section 6.06 shall not be operative as a part of this Indenture
until this Indenture is qualified under the TIA and, until such qualification,
this Indenture shall be construed as if this Section 6.06 were not contained
therein. Within 60 days after each May 15 following the date of this
Indenture, the Trustee shall mail to Holders and the Company a brief report
dated as of such date that complies with TIA Section 313 (a); provided,
however, that if no event described in TIA Section 313 (a) has occurred within
the previous twelve (12) months then no report need be transmitted. The
Trustee shall also comply with TIA Section 313(c) and transmit all reports
required by TIA Section 313(b).
A copy of each such report shall be filed, at the time of its mailing to
Holders, with the SEC and each stock exchange, if any,
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on which the Securities are listed. The Company shall notify the Trustee when
the Securities are listed on any stock exchange or any delisting thereof.
SECTION 6.07. 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 relating to the trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses, disbursements and advances incurred or made by it in
the performance of its rights and obligations hereunder. Such expenses shall
include the reasonable compensation, disbursements and out-of-pocket expenses
of the Trustee's Trust Officers, other agents, accountants, experts and
counsel. Such expenses shall also include any taxes or other reasonable costs
incurred by any trust created under Section 7.01.
The Company shall indemnify the Trustee for, and hold it harmless
against, any loss or liability or expense incurred by it in connection with the
administration of this trust (including any duties pursuant to Section 7.01
hereof) and its duties hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder and any liability, costs
or expenses of indemnifying the Collateral Agent pursuant to the Intercreditor
Agreement. 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
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 6.07, the
Trustee shall have a Lien prior to the Securities on all money or Property held
or collected by the Trustee (including any amounts held pursuant to Section
7.01 hereof), except money or Property held in trust to pay principal of or
interest on particular Securities. Such Lien shall survive the satisfaction
and discharge of this Indenture.
The Company's obligations under this Section 6.07 and any Lien arising
hereunder shall survive the resignation or removal of any Trustee, the
discharge of the Company's obligations pursuant to Article 7 and/or the
termination of this Indenture.
When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Sections 5.01(h), (i) or (j), such expenses
and the compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
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Without limiting the foregoing in any way, the Company shall also
indemnify the Trustee for, and hold it harmless against, any loss or liability
incurred by the Trustee (including reasonable attorneys' and consultants' fees
and court costs) arising from or relating to any Environmental Laws or
Hazardous Materials concerning any mortgaged property or any breach or alleged
breach by the Company of any representation, warranty or covenant in this
Indenture or any Collateral Document relating to environmental matters.
SECTION 6.08. 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 6.08. The Trustee may resign at any
time. The Holders of a majority in aggregate principal amount of the then
outstanding Securities may remove the Trustee by so notifying the Trustee and
the Company. If:
(1) the Trustee fails or ceases to comply with Section 6.10
after written request by the Company or any Holder who has been a bona
fide holder of a Security for at least six months;
(2) 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;
(3) a Custodian or public officer takes charge of the
Trustee or its Property; or
(4) the Trustee becomes incapable of acting,
then, in any such case, (i) the Company, by resolution of the Board of
Directors, may remove the Trustee, or (ii) subject to TIA Section 315(e), a
Holder who has been a bona fide Holder of a Security for at least six months
may, on behalf of such Holder and all others similarly situated, petition any
court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor Trustee.
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 aggregate principal amount of the then outstanding
Securities may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.
If a successor Trustee does not take office within 30 days after the
retiring Trustee resigns or is removed, the retiring
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Trustee, the Company or the Holders of at least 10% in aggregate principal
amount of the then outstanding Securities may petition any court of competent
jurisdiction for the appointment of a successor Trustee.
The Company shall give notice to the Holders of each removal or
resignation of a Trustee and appointment of a successor Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately
thereafter, subject to the Lien provided in Section 6.07, the retiring Trustee
shall transfer all Property held by it as Trustee to the successor Trustee, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all of the rights, powers and duties of the
Trustee under this Indenture. The successor Trustee shall give a notice of its
succession to each Holder.
Notwithstanding the replacement of the Trustee pursuant to this Section
6.08, the Company's obligations under Section 6.07 hereof shall continue for
the benefit of the retiring Trustee in connection with its rights and duties
hereunder prior to such replacement.
No successor Trustee shall accept its appointment unless it shall be
qualified and eligible under this Article.
SECTION 6.09. 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 if such successor corporation complies with Section 6.10.
SECTION 6.10. 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. The Trustee is subject
to TIA Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which
other securities, or certificates of interest or participation in other
securities, of the Company are outstanding if the requirements for such
exclusion set forth in TIA Section 310(b)(1) are met. Neither the Company nor
any Person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as Trustee.
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SECTION 6.11. Preferential Collection of Claims Against Company.
This Indenture and Trustee are subject to, and the Trustee shall at all
times comply with, TIA Section 311(a), excluding any creditor relationship
listed in TIA Section 311(b). A Trustee who has resigned or has been removed
shall be subject to TIA Section 311(a) to the extent indicated therein.
ARTICLE 7
DISCHARGE OF INDENTURE
SECTION 7.01. Termination of Company's Obligations.
The Company may terminate, and shall be discharged from, all its
obligations under the Securities and this Indenture (except those obligations
of the Company referred to in Sections 6.07, 7.03 and 7.04, which shall
survive) when all Securities previously authenticated and delivered (other than
mutilated, destroyed, lost or stolen Securities which have been replaced or
paid or Securities for whose payment money or securities have theretofore been
held in trust and thereafter repaid to the Company, as provided in Section
7.03) have been delivered to the Trustee for cancellation and the Company has
paid to all Holders all sums payable by it hereunder and under the Securities.
SECTION 7.02. Application of Trust Money.
The Paying Agent shall hold in trust all money deposited with it for
payment to Holders, and shall apply the deposited money in accordance with this
Indenture to the payment of principal of and interest and Yield-Maintenance
Amount (if any) on the Securities.
SECTION 7.03. Repayment to Company.
Subject to applicable laws relating to the escheat of deposits, the
Trustee and the Paying Agent shall promptly pay to the Company upon written
request any excess money held by them at any time.
Subject to applicable laws relating to the escheat of deposits, the
Trustee and the Paying Agent shall pay to the Company upon written request any
money held by them for the payment of principal or interest on Securities that
remains unclaimed for two years after the date upon which such payment shall
have come due; provided, however, that the Trustee or such Paying Agent shall,
upon the written request and at the expense of the Company, cause to be
published once in a newspaper of general circulation in The City of New York or
mailed to each Holder entitled to such money, notice that such money remains
unclaimed and that, after a date specified therein, which date shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
balance of such money then remaining will be repaid to the Company. After
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payment to the Company, Holders entitled to such money must look to the Company
for payment as general creditors unless an applicable abandoned property law
designates another Person.
SECTION 7.04. Reinstatement.
If the Paying Agent is unable to apply any money in accordance with
Sections 7.01 and 7.02 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 Securities shall be revived and reinstated as though no
deposit had occurred pursuant to Section 7.01 until such time as the Paying
Agent is permitted to apply all such money in accordance with Section 7.01;
provided, however, that if the Company has made any payment of interest on or
principal of any Securities because of the reinstatement of its obligations,
the Company shall be subrogated to the rights of the Holders of such Securities
to receive such payment from the money held by the Paying Agent.
ARTICLE 8
AMENDMENTS, SUPPLEMENTS AND WAIVERS
SECTION 8.01. Without Consent of Holders.
The Company, when duly authorized by a resolution of its Board of
Directors, and the Trustee may amend or supplement this Indenture or the
Securities for the benefit of the Holders without notice to or consent of any
Holder:
(1) to cure any ambiguity, defect or inconsistency;
(2) to comply with Section 4.05;
(3) to comply with the requirements of the SEC in order to
effect or maintain the qualification of this Indenture under the TIA, as
contemplated by Section 12.01 or otherwise; or
(4) to evidence the acceptance of appointment by a successor
Trustee.
Notwithstanding the foregoing, the Company and the Trustee may not amend
or supplement this Indenture in any manner that adversely affects the rights of
any Holder. After an amendment under this Section becomes effective, the
Company shall give Holders a notice briefly describing the amendment.
SECTION 8.02. With Consent of Holders.
Subject to Section 5.08, the Company, when duly authorized by a
resolution of its Board of Directors, and the Trustee may amend
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this Indenture or the Securities with the written consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding
Securities; provided, however, that if under the terms of the Intercreditor
Agreement the Trustee has agreed that it will not amend this Indenture without
the consent of the "Requisite Working Capital Lenders" (as defined in the
Intercreditor Agreement), no such amendment shall be effective unless and until
such consent has been given. Subject to Sections 5.05 and 5.08, the Holders of
a majority in aggregate principal amount of the Securities then outstanding by
notice to the Trustee may waive future compliance in a particular instance by
the Company with any provision of this Indenture or the Securities.
Notwithstanding the provisions of this Section 8.02, without the written
consent of each Holder affected thereby, an amendment or waiver, including a
waiver pursuant to Section 5.05, may not:
(1) reduce the amount of Securities whose Holders must
consent to an amendment or waiver of any provision of this Indenture;
(2) reduce the rate of or change the method of calculation,
the time for payment or the manner of payment of interest or
Yield-Maintenance Amount on any Security;
(3) reduce the principal of or change the Stated Maturity
of any Security, or change the date on which any Security may be subject
to redemption or reduce the Redemption Price therefor;
(4) make any Security payable in money other than that
stated in the Security;
(5) make any change in Sections 3.09(a), 3.09(b), 5.01(2),
5.05 or 5.08 or in this Section 8.02 or the definitions of "Change of
Control" or "Excess Cash Flow";
(6) waive a Default in the payment of the principal of,
interest on or redemption payment under any Security;
or
(7) affect the rankings or with respect to the Collateral,
the priority of the Securities, in each case in a manner adverse to the
Holders.
To secure a consent of the Holders under this Section, it shall not be
necessary for the Holders to approve the particular form of any proposed
amendment, supplement or waiver, but it shall be sufficient if such consent
approves the substance thereof.
After an amendment or waiver under this Section 8.02 becomes effective,
the Company shall give to all Holders affected thereby and to the Trustee a
notice briefly describing the amendment or
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waiver. Any failure by the Company to give such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture. Upon the request of the Company accompanied by a copy
of a resolution of the Board of Directors of the Company authorizing the
execution of any such supplemental indenture and upon the filing with the
Trustee of evidence of the consent of the Holders as aforesaid, the Trustee
shall join with the Company in the execution of such supplemental indenture.
SECTION 8.03. 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.
SECTION 8.04. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated and delivered
hereunder shall be bound thereby.
SECTION 8.05. Notation on or Exchange of Securities.
Upon the Company's request, the Trustee shall place an appropriate
notation (to be provided by the Company) about an amendment or waiver on any
Security thereafter authenticated. The Company in exchange for all Securities
may execute and issue and the Trustee shall authenticate new Securities that
reflect the amendment or waiver.
SECTION 8.06. Trustee Protected.
The Trustee shall sign all amendments, supplemental indentures and
waivers, except that the Trustee need not sign any supplemental indenture that
adversely affects its rights. In signing or refusing to sign such amendment,
supplemental indenture or waiver, the Trustee shall be entitled to receive and,
subject to Section 6.01, shall be fully protected in relying upon an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such
amendment, supplemental indenture or waiver is authorized or permitted by this
Indenture, that it is not inconsistent herewith, that all conditions precedent
to the execution thereof have been met, that it will be valid and binding upon
the Company in accordance with its terms and that, after the execution thereof,
the Company will not be in Default and no Event of Default will have occurred
and be continuing.
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SECTION 8.07. Record Date.
The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any supplemental
indenture, agreement or instrument or any waiver or any other action by vote or
consent authorized or permitted under this Indenture, and shall promptly notify
the Trustee of any such record date. If a record date is fixed, those Persons
who were Holders at such record date (or their duly designated proxies), and
only those Persons, shall be entitled to vote or consent to such supplemental
indenture, agreement or instrument or waiver or such other action or to revoke
any vote or consent previously given, whether or not such Persons continue to
be Holders after such record date. No such vote or consent shall be valid or
effective for more than 90 days after such record date.
ARTICLE 9
REDEMPTIONS
SECTION 9.01. Mandatory and Optional Redemptions; Notice to Trustee.
(a) The Company shall redeem, on June 15, 1999 (the "Mandatory
Redemption Date"), Securities in the principal amount of $80,000,000 (or, if
less, the aggregate principal amount of all Securities then outstanding) at a
price (the "Mandatory Redemption Price") equal to 100% of the principal amount
thereof plus accrued and unpaid interest to June 15, 1999. The Mandatory
Redemption Price shall be due and payable on June 15, 1999. Except to the
extent otherwise provided in paragraph 7A of the Note Agreement, upon surrender
to the Paying Agent of the Securities to be so redeemed, the Paying Agent shall
pay the Holder thereof the Mandatory Redemption Price.
(b) (i) The Company may redeem (an "Optional Redemption") all or
any portion of the Securities at any time after the Effective Date at a
price (the "Optional Redemption Price") equal to 100% of the principal
amount thereof, plus accrued and unpaid interest to the Optional
Redemption Date and plus the Yield-Maintenance Amount, if any, with
respect to the Securities to be so redeemed. Except to the extent
otherwise provided in paragraph 7A of the Note Agreement, upon surrender
to the Paying Agent of the Securities to be so redeemed, the Paying
Agent shall pay the Holder thereof the Optional Redemption Price.
(ii) If the Company elects to redeem Securities pursuant to
the immediately foregoing paragraph (b) of this Section 9.01, it shall
give the Trustee written notice, as set forth below,
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of the date fixed by the Company for such redemption (the "Optional
Redemption Date") and the principal amount of Securities to be redeemed.
(iii) The Company shall give notice to the Trustee by an
Officers' Certificate certifying resolutions of its Board of Directors
authorizing the Optional Redemption and that such redemption is being
made in accordance with this Indenture and the Securities. The Company
shall give such notice at least 45 days but not more than 60 days before
the Optional Redemption Date (unless a shorter notice shall be
satisfactory to the Trustee).
SECTION 9.02. Pro Rata Allocation of the Securities to be Redeemed.
If less than all of the outstanding Securities are to be redeemed under
Section 9.01(a) or 9.01(b), the principal amount so redeemed shall be allocated
to all Securities at the time outstanding (including, for the purpose of this
Section 9.02 only, all Securities purchased on the open market or otherwise
purchased, redeemed, acquired or retired by the Company or any of its
Subsidiaries or Affiliates other than by redemption pursuant to Sections 4.06,
9.01(a) or (b)) in proportion to the respective outstanding principal amounts
thereof. In any proration pursuant to this Section, the Company shall, in good
faith, make such adjustments, reallocations and eliminations as shall be
necessary to the end that the principal amount of Securities so prorated shall
be $1,000 or a multiple thereof, by increasing or decreasing or eliminating the
amount which would be allocable to any Holder on the basis of exact proportion
by an amount not exceeding $1,000. Provisions of this Indenture that apply to
Securities called for redemption shall also apply to portions of Securities
called for redemption.
SECTION 9.03. Notice of Redemption.
At least 30 but not more than 60 days before a Redemption Date, the
Company shall give a notice of redemption to each Holder whose Securities are
to be redeemed.
The notice shall identify the Securities to be redeemed and shall state:
(1) the Section of this Indenture pursuant to which such
redemption is to be made;
(2) the Redemption Date;
(3) the aggregate principal amount to be redeemed, the
amount of accrued interest, if any, thereon to be paid and whether a
Yield-Maintenance Amount is to be paid;
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(4) the name and address of the Paying Agent;
(5) that the Securities called for redemption must be
surrendered to the Paying Agent to collect the Redemption Price, except
to the extent otherwise provided in paragraph 7A of the Note Agreement;
(6) that, unless the Company defaults in making the
redemption payment, interest on the Securities called for redemption
ceases to accrue on and after the specified Redemption Date and the only
remaining right of the Holders is to receive payment of the Redemption
Price upon surrender (except to the extent otherwise provided in
paragraph 7A of the Note Agreement to the Trustee or the Paying Agent of
the Securities;
(7) if any Security is being redeemed in part, the portion
of the principal amount (equal to $1,000 or any integral multiple
thereof) of such Security to be redeemed and that, on or after the
Redemption Date, upon surrender of such Security, a new Security or
Securities in principal amount equal to the unredeemed portion thereof
will be issued; and
(8) the CUSIP number of the Securities, if any, pursuant to
Section 2.13.
At the Company's request, the Trustee shall give the notice of
redemption in the Company's name and at its expense. In such event, the
Company shall provide the Trustee with the information required by clauses (1),
(2), (3), (6), (7) and (8) above.
SECTION 9.04. Effect of Notice of Redemption.
Once notice of redemption is mailed (after the Trustee has received the
notice provided for in Section 9.01(d)), the Securities or portion thereof
called for redemption become due and payable on the Redemption Date and at the
Redemption Price and shall cease to bear interest from and after the Redemption
Date (unless the Company shall fail to make payment of the Redemption Price on
the Redemption Date). Except to the extent otherwise provided in paragraph 7A
of the Note Agreement, upon surrender to the Paying Agent such Securities or
portion thereof shall be paid at the Redemption Price to the Redemption Date
but interest installments whose maturity is on or prior to the Redemption Date
will be payable to the Holder of record at the close of business on the
relevant record dates referred to in the Securities.
SECTION 9.05. Deposit of Redemption Price.
Except to the extent otherwise provided in paragraph 7A of the Note
Agreement, on or prior to 10:00 a.m. New York City time, on each Redemption
Date, the Company shall deposit with the Trustee or Paying Agent (or if the
Company, or a Subsidiary or an Affiliate of
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the Company, acts as Paying Agent, such Paying Agent shall segregate and hold
in a separate trust fund for the sole benefit of the Holders) money, in federal
or other immediately available funds, sufficient to pay the Redemption Price of
all Securities to be redeemed on that date other than Securities or portions
thereof called for redemption on that date which have been delivered by the
Company to the Trustee for cancellation.
So long as the Company complies with the preceding paragraph, (or,
paragraph 7A of the Note Agreement, as applicable) interest on the Securities
or portion thereof to be redeemed on the applicable Redemption Date shall cease
to accrue and such Securities or portions thereof shall be deemed not to be
entitled to any benefit under this Indenture except to receive payment of the
Redemption Price. If any Security called for redemption shall not be so paid
upon surrender for redemption because of failure of the Company to comply with
the preceding paragraph (or, as applicable, a failure to comply with paragraph
7A of the Note Agreement), interest will be paid from the Redemption Date until
such principal is paid on the unpaid principal and, to the extent permitted by
law, any unpaid Yield-Maintenance Amount and unpaid interest, in each case at
the Default Rate. The Paying Agent shall return to the Company any money not
required for making payments required hereunder.
SECTION 9.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company shall
execute and issue and the Trustee shall authenticate a new Security equal in
principal amount to the unredeemed portion of the Security surrendered.
SECTION 9.07. Partial Redemptions.
Redemptions made by the Company pursuant to the terms of this Indenture,
other than Section 9.01(a), shall not in any way reduce or otherwise limit the
aggregate principal amount of the Securities to be redeemed on June 15, 1999
pursuant to Section 9.01(a). The Company may not credit previously acquired
Securities to satisfy any of its obligations under Section 9.01(a).
ARTICLE 10
MEETINGS OF HOLDERS
SECTION 10.01. Purposes for Which Meetings May Be Called.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article 10 for any of the following
purposes:
(a) to give any notice to the Company or to the Trustee, or
to give any directions to the Trustee (including, without
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limitation, in connection with the Intercreditor Agreement), or to waive
or to consent to the waiving of any Default or Event of Default
hereunder and its consequences, or to take any other action authorized
to be taken by Holders pursuant to any of the provisions of Article 5;
(b) to remove the Trustee or appoint a successor Trustee
pursuant to the provisions of Article 6;
(c) to consent to an amendment, supplement or waiver
pursuant to the provisions of Section 8.02; or
(d) to take any other action (i) authorized to be taken by
or on behalf of the Holders of any specified aggregate principal amount
of the Securities under any other provision of this Indenture, or
authorized or permitted by law or (ii) which the Trustee deems necessary
or appropriate in connection with the administration of this Indenture.
SECTION 10.02. Manner of Calling Meetings.
The Trustee may at any time call a meeting of Holders to take any action
specified in Section 10.01, to be held at such time and at such place in The
City of New York, New York or elsewhere as the Trustee shall determine. Notice
of every meeting of Holders, setting forth the time and place of such meeting
and in general terms the action proposed to be taken at such meeting, shall be
mailed by the Trustee, first-class postage prepaid, to the Company and to the
Holders at their last addresses as they shall appear on the registration books
of the Registrar not less than 10 nor more than 60 days prior to the date fixed
for a meeting.
Any meeting of Holders shall be valid without notice if the Holders of
all Securities then outstanding are present in person or by proxy, or if notice
is waived before or after the meeting by the Holders of all Securities
outstanding, and if the Company and the Trustee are either present by duly
authorized representatives or have, before or after the meeting, waived notice.
SECTION 10.03. Call of Meetings by Company or Holders.
In case at any time the Company, pursuant to a resolution of its Board
of Directors, or the Holders of not less than 10% in aggregate principal amount
of the Securities then outstanding shall have requested the Trustee to call a
meeting of Holders to take any action specified in Section 10.01, by written
request setting forth in reasonable detail the action proposed to be taken at
the meeting, and the Trustee shall not have mailed the notice of such meeting
within 20 days after receipt of such request, then the Company or the Holders
of Securities in the amount above specified may determine the time and place in
The City of New York, New York or elsewhere for such meeting and may call such
meeting for the
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purpose of taking such action, by mailing or causing to be mailed notice
thereof as provided in Section 10.02, or by causing notice thereof to be
published at least once in each of two successive calendar weeks (on any
Business Day during such week) in a newspaper or newspapers printed in the
English language, customarily published at least five days a week of a general
circulation in The City of New York, New York, the first such publication to be
not less than 10 nor more than 60 days prior to the date fixed for the meeting.
SECTION 10.04. Who May Attend and Vote at Meetings.
To be entitled to vote at any meeting of Holders, a person shall (a) be
a registered Holder of one or more Securities, or (b) be a person appointed by
an instrument in writing as proxy for the registered Holder or Holders of
Securities. The only persons who shall be entitled to be present or to speak
at any meeting of Holders shall be the persons entitled to vote at such meeting
and their counsel and any representatives of the Trustee and its counsel and
any representatives of the Company and its respective counsel.
SECTION 10.05. Regulations May Be Made by Trustee; Conduct of the Meeting;
Voting Rights; Adjournment.
Notwithstanding any other provision of this Indenture, the Trustee may
make such reasonable regulations as it may deem advisable for any action by or
any meeting of Holders, in regard to proof of the holding of Securities and of
the appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, aid submission and examination of proxies, certificates
and other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think appropriate. Such regulations may fix
a record date and time for determining the Holders of record of Securities
entitled to vote at such meeting, in which case those and only those persons
who are Holders of Securities at the record date and time so fixed, or their
proxies, shall be entitled to vote at such meeting whether or not they shall be
such Holders at the time of the meeting.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Holders as provided in Section 10.03, in which case the Company
or the Holders calling the meeting, as the case may be, shall in like manner
appoint a temporary chairman. A permanent chairman and a permanent secretary
of the meeting shall be elected by vote of the Holders of a majority in
principal amount of the Securities represented at the meeting and entitled to
vote.
At any meeting each Holder or proxy shall be entitled to one vote for
each $1,000 principal amount of Securities held or
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represented by him; provided, however, that no vote shall be cast or counted at
any meeting in respect of any Securities challenged as not outstanding and
ruled by the chairman of the meeting to be not outstanding. The chairman may
adjourn any such meeting if he is unable to determine whether any Holder or
proxy shall be entitled to vote at such meeting. The chairman of the meeting
shall have no right to vote other than by virtue of Securities held by him or
instruments in writing as aforesaid duly designating him as the proxy to vote
on behalf of other Holders. Any meeting of Holders duly called pursuant to the
provisions of Section 10.02 or Section 10.03 may be adjourned from time to time
by vote of the Holders of a majority in aggregate principal amount of the
Securities represented at the meeting and entitled to vote, and the meeting may
be held as so adjourned without further notice.
SECTION 10.06. Voting at the Meeting and Record to Be Kept.
The vote upon any resolution submitted to any meeting of Holders shall
be by written ballots on which shall be subscribed the signatures of the
Holders of Securities or of their representatives by proxy and the principal
amount of the Securities voted by the ballot. The permanent chairman of the
meeting shall appoint two inspectors of votes, who shall count all votes cast
at the meeting for or against any resolution and who shall make and file with
the secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be attached to such record the original reports of the inspectors of
votes on any vote by ballot taken thereat and affidavits by one or more persons
having knowledge of the facts, setting forth a copy of the notice of the
meeting and showing that such notice was mailed as provided in Section 10.02 or
published as provided in Section 10.03. The record shall be signed and
verified by the affidavits of the permanent chairman and the secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have
attached thereto the ballots voted at the meeting.
Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
SECTION 10.07. Exercise of Rights of Trustee or
Holders May Not Be Hindered or Delayed by Call of Meeting.
Nothing contained in this Article 10 shall be deemed or construed to
authorize or permit, by reason of any call of a meeting of Holders or any
rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture or of the Securities.
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ARTICLE 11
CERTAIN COLLATERAL MATTERS
SECTION 11.01. Collateral Documents.
In order to secure the due and punctual payment of the principal of,
interest on and Yield-Maintenance Amount (if any) with respect to the
Securities when and as the same shall be due and payable, whether on an
interest payment date, at maturity, by acceleration, repurchase, redemption or
otherwise, and interest on the overdue principal of and interest (to the extent
permitted by law), if any, on the Securities and performance of all other
obligations of the Company to the Holders or the Trustee under this Indenture
and the Securities and of the Subsidiary Guarantors under the Guaranty
Agreement, according to the terms hereunder or thereunder, the Company and the
Subsidiary Guarantors have entered into the Collateral Documents and have made
an assignment and pledge of their respective rights, title and interests in and
to the Collateral to the Collateral Agent pursuant to the Collateral Documents
and provided for the benefit and security of the parties secured under the
Collateral Documents to the extent therein provided. Each Holder of a
Security, by its acceptance thereof, consents and agrees to the terms of the
Collateral Documents and the Intercreditor Agreement (including, without
limitation, the provisions providing for foreclosure and release of Collateral
and indemnification of the Collateral Agent) as the same may be in effect or
may be amended from time to time in accordance with their terms and authorizes
and directs the Trustee to enter into, and perform its obligations under, the
Intercreditor Agreement. The Company will deliver to the Trustee copies of all
documents delivered to the Collateral Agent pursuant to the Collateral
Documents, and will do or cause to be done all such acts and things as may be
necessary or proper, or as may be required by the provisions of the Collateral
Documents and the Collateral Agent to assure and confirm to the Trustee and the
Collateral Agent the security interest in the Collateral contemplated hereby,
by the Collateral Documents or any part thereof, as from time to time
constituted, so as to render the same available for the security and benefit of
this Indenture and of the Securities secured hereby, according to the intent
and purposes herein expressed. The Trustee shall promptly (and in any event
within one (1) Business Day) foreward to the Collateral Agent any and all
instructions received by the Trustee from any Holder for the purpose of being
forwarded to the Collateral Agent in connection with the Intercreditor
Agreement and matters contemplated thereby (such instructions to be provided to
the Collateral Agent in the same manner received by the Trustee (e.g., by
facsimile transmission)).
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SECTION 11.02. Recording and Opinions.
With respect to (a) below, promptly after the Effective Date and, with
respect to (b) below, upon qualification of this Indenture under the TIA, the
Company shall furnish to the Trustee and the Collateral Agent:
(a) promptly after the execution and delivery of this
Indenture an Opinion of Counsel either (i) stating that in the opinion
of such counsel all action has been taken with respect to the recording,
registering and filing of this Indenture, the Collateral Documents, the
financing statements or other instruments necessary to make effective
the lien intended to be created by the Collateral Documents, and
reciting with respect to the security interests in the Collateral, the
details of such action, or (ii) stating that, in the opinion of such
counsel, no such action is necessary to make such lien effective; and
(b) within 30 days after June 1 in each year beginning June
1, 1996, an Opinion of Counsel, dated as of such date, either (i) (1)
stating that, in the opinion of such counsel, action has been taken with
respect to the recording, registering, filing, re- recording,
re-registering and refiling of all supplemental indentures, financing
statements, continuation statements or other instruments of further
assurance as is necessary to maintain the lien of the Collateral
Documents and reciting with respect to the security interests in the
Collateral the details of such action or referring to prior Opinions of
Counsel in which such details are given and (2) stating that, based on
relevant laws as in effect on the date of such Opinion of Counsel, all
financing statements and continuation statements have been executed and
filed that are necessary as of such date fully to preserve and protect
the rights of the Holders, the Collateral Agent and the Trustee
hereunder and under the Collateral Documents with respect to the
security interests in the Collateral, or (ii) stating that, in the
opinion of such Counsel, no such action is necessary to maintain such
lien and assignment.
SECTION 11.03. Certificates of the Company.
At all times after qualification of this Indenture under the TIA, the
Company will furnish to the Trustee:
(a) within 15 days after the end of each year ended on
December 31, and each calendar quarter ended June 30 in each year
beginning with the calendar quarter ending June 30, 1995, a certificate
from an officer stating that all dispositions of inventory (as defined
in the New York Uniform Commercial Code) and all collections of accounts
receivable during such period (other than any such transaction as to
which subclauses (i) and
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(ii) of clause (b) below were complied with) were made in the ordinary
course of business or as otherwise permitted herein and that all
proceeds therefrom were used by the Company and its Subsidiaries in the
ordinary course of its business or otherwise as permitted herein; and
(b) prior to each proposed release of Collateral pursuant
to the Collateral Documents other than by reason of transactions
referred to in the preceding clause (a), (i) all documents required by
TIA Section 314(d) and an Opinion of Counsel to the effect that such
accompanying documents constitute all documents required by TIA Section
314(d) or (ii) an Opinion of Counsel to the effect that TIA Section
314(d) does not apply to such proposed release of Collateral and no
delivery of documents thereunder is required. In connection with clause
(i) above, the Trustee may, to the extent permitted by Sections 6.01 and
6.02 hereof, accept as conclusive evidence of compliance with the
foregoing provisions the appropriate statements contained in such
instruments.
SECTION 11.04. Authorization of Receipt of Funds by the Trustee Under the
Collateral Documents.
The Trustee is authorized to receive any funds for the benefit of
Holders distributed under the Intercreditor Agreement, and to make further
distributions of such funds to the Holders according to the provisions of this
Indenture.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies, or conflicts with
another provision that is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 12.02. Notices.
All notices and communications to the Company or the Trustee shall be in
writing and shall be duly given if delivered in Person or mailed by first class
mail, postage prepaid, to the following addresses or transmitted by the
telecopier and confirmed by overnight courier guaranteeing next day delivery:
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The Company's address is:
Envirodyne Industries, Inc.
701 Harger Road, Suite 190
Oak Brook, Illinois 60521
Telephone: (708) 575-2400
Telecopier: (708) 571-0959
Attention: President
The Trustee's address is:
Shawmut Bank Connecticut, National Association,
as Trustee
777 Main Street - MSN 238
Hartford, Connecticut 06115
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 to a Holder shall be in writing and shall
be mailed by first class mail, postage prepaid, to the Holder's address shown
on the register kept by the Registrar; provided, that items required under the
TIA to be sent to Holders in compliance with TIA Section 313(c) shall be mailed
to Holders in compliance with such section. Failure to mail a notice or a
communication to a Holder or any defect in any notice given to a Holder shall
not affect the sufficiency of such notice with respect to other Holders.
If a notice or communication is delivered or mailed to a Holder in the
manner provided above within the time prescribed, it is duly given, whether or
not the Holder 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 TIA Section 312(b) with other
Holders with respect to their rights under this Indenture or the Securities.
The Trustee shall comply with the provisions of TIA Section 312(b). The
Company, any other obligor on the Securities, the Trustee, the Registrar and
any agent of any of them shall have the protection of TIA Section 312(c).
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SECTION 12.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company or other obligor on the
Securities to the Trustee to take any action under this Indenture, the Company
or such other obligor shall furnish to the Trustee:
(a) an Officers' Certificate reasonably satisfactory to the Trustee
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;
(b) an Opinion of Counsel reasonably satisfactory to the Trustee
stating that, in the opinion of such counsel, all such conditions precedent
have been complied with and that such action or inaction is in compliance with
applicable law; and
(c) other than for the initial request by the Company to the Trustee
to authenticate and issue the Securities, an Accountants' Certificate stating
that, in the opinion of such accountant, such action may be taken under this
Indenture without the occurrence of a Default or Event of Default pursuant to
Sections 4.01, 4.02, 4.03, 4.05, and 4.06.
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 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 or not, in the opinion of
such Person, such condition or covenant has been complied with;
provided, however, that with respect to matters of fact an opinion of
counsel may rely on Officers' Certificates, Accountants' Certificates or
certificates of public officials unless such counsel knows, or in the
exercise of reasonable care should know, that the Officers' Certificate,
Accountants' Certificate or certificate of public official with respect
to such matters is erroneous.
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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.
A "Legal Holiday" is a Saturday, a Sunday or any day on which banking
institutions in the Borough of Manhattan, City of New York, or Hartford,
Connecticut, are not required to be open. If a payment date is a Legal Holiday
at the 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 12.08. No Recourse Against Others.
The Securities and the obligations of the Company under this Indenture
are solely obligations of the Company and no past, present or future officer,
director, employee or stockholder, as such, of the Company or any Surviving
Corporation shall be liable for any failure by the Company to perform any of
its obligations hereunder or pursuant to the Securities.
SECTION 12.09. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 12.10. Duplicate Originals.
The parties may sign any number of copies of this Indenture. one signed
copy is sufficient to prove this Indenture.
SECTION 12.11. Governing Law.
The internal laws of the State of New York shall govern this Indenture
and the Securities without regard to principles of conflicts of law.
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 Subsidiary of the Company. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
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SECTION 12.13. Successors.
All agreements of the Company in this Indenture and the Securities shall
bind its successor. All agreements of the Trustee in this Indenture shall bind
its successor.
SECTION 12.14. Severability.
In case any provision in this Indenture or in the Securities 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. Table of Contents, Headings, etc.
The Table of Contents, Cross-Reference Table, and headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part hereof, and shall in no way
modify or restrict any of the terms or provisions hereof.
SECTION 12.16. Independence of Covenants.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is prohibited by any one of such covenants, the
fact that it would be permitted by an exception to, or otherwise be in
compliance within the limitations of, another covenant shall not (i) avoid the
occurrence of a Default or an Event of Default if such action is taken or such
condition exists or (ii) in any way prejudice an attempt by the Trustee or a
Holder to prohibit (through equitable action or otherwise) the taking of any
action by the Company or a Subsidiary of the Company which would result in any
Event of Default or Default.
SECTION 12.17. Notice of Note Agreement Amendment, Etc.
The Company shall promptly notify the Trustee in writing of any
amendment, supplement or other modification to the Note Agreement affecting the
rights or obligations of the Trustee under this Indenture and provide to the
Trustee, upon its request, a copy of any such amendment, supplement or
modification certified in an Officers' Certificate as being a true and complete
copy. Without limiting Section 6.02(b), the Company further agrees (i) to
provide to the Trustee such information as the Trustee may reasonably request
with respect to payments on the Securities to be made directly by the Company
pursuant to paragraph 7A of the Note Agreement, and (ii) not to amend,
supplement or modify paragraph 7A or paragraph 7F of the Note Agreement to
impose obligations upon the Trustee without the Trustee's prior written
consent.
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SIGNATURES
ENVIRODYNE INDUSTRIES, INC.
Dated: June 20, 1995
By: __________________________
Name: Stephen M. Schuster
Title: Vice President
Attest:
_________________________
Name: Gordon S. Donovan
Title: Assistant Secretary
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION,
as Trustee
Dated: June 20, 1995
By: __________________________
Name: Vito J. Iacovazzi
Title: Vice President
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Exhibit A-1
No. __________ $___________
(Face of Security)
[FORM OF SERIES A SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1993, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO ENVIRODYNE INDUSTRIES, INC. (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS
SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND 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 IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-1-1
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ENVIRODYNE INDUSTRIES, INC.
Incorporated under the laws of the State
of Delaware
12% First Priority Senior Secured Note Due 2000, Series A
ENVIRODYNE INDUSTRIES, INC. promises to pay to _____________ or
registered assigns the principal sum of ___________________ Dollars on June 15,
2000 and to pay interest thereon semi-annually in arrears at the rate of 12%
per annum on December 15 and June 15 of each year until the principal hereof is
paid or made available for payment. Payment of principal and interest shall be
made in the manner and subject to the terms set forth in provisions appearing
on the reverse hereof, which provisions, in their entirety, shall for all
purposes have the same effect as if set forth at this place.
Pursuant to the Guaranty Agreement, the payment of principal of and
interest hereon is unconditionally guaranteed by each of the Subsidiary
Guarantors.
To the extent set forth in the Collateral Documents, payment hereon is
secured, on an equal and ratable basis with all other Securities by a valid,
perfected security interest in the Collateral, the terms of which security
interests are more fully set forth in the Collateral Documents.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereof shall have been signed by or on
behalf of the Trustee under the Indenture referred to on the reverse side
hereof.
IN WITNESS WHEREOF, ENVIRODYNE INDUSTRIES, INC. has caused this
instrument to be executed in its corporate name by the manual or facsimile
signature of its President or a Vice President and attested by its Secretary or
an Assistant Secretary.
ENVIRODYNE INDUSTRIES, INC.
By ____________________________________
Attest: ___________________________
[SEAL]
A-1-2
<PAGE> 104
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the First Priority Senior Secured Notes Due 2000 issued
under the Indenture mentioned in this Note.
Dated: __________________________
_____________________________
as Trustee
By __________________________
Authorized Signatory
A-1-3
<PAGE> 105
(Back of Security)
ENVIRODYNE INDUSTRIES, INC.
12% First Priority Senior Secured Note Due 2000, Series A
1. Interest and Principal Payments. ENVIRODYNE INDUSTRIES, INC., a
Delaware corporation (the "Company", which term shall include its permitted
successors and assigns), promises to pay interest on the principal amount of
this Security at the rate per annum shown above. The Company shall pay
interest semi-annually in arrears on December 15 and June 15 of each year,
commencing December 15, 1995. Interest on the Securities shall accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from June 20, 1995. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay the principal amount of this Security on June 15,
2000. The Company shall pay interest on overdue principal at the Default Rate
per annum and interest on overdue installments of interest and
Yield-Maintenance Amount, to the extent lawful, at the same rate.
Interest on the Securities shall automatically be increased (and, if
applicable, thereafter automatically decreased but in any event not below the
original rate of interest) as and to the extent required pursuant to the terms
of Section 6 of the Registration Rights Agreement.
2. Method of Payment. The Company shall pay interest on the
Securities (except interest on overdue interest) to the Persons who are
registered Holders of Securities at the close of business on the regular record
date, which shall be the December 1 and June 1, as the case may be, next
preceding the interest payment date even though Securities are cancelled after
the record date and on or before the interest payment date. Any such interest
not so punctually paid or duly provided for, and any interest payable on such
overdue interest (to the extent lawful), shall forthwith cease to be payable to
the Holder on such regular record date and shall be payable to the Person in
whose name this Security is registered at the close of business on a special
record date for the payment of such interest on overdue interest to be fixed by
the Company, notice of which shall be given to Holders not less than 15 days
prior to such special record date. The Company shall pay principal,
Yield-Maintenance Amount (if any), 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 Company may pay principal, interest and any
Yield-Maintenance Amount by check payable in such money. Payment of principal,
interest and any Yield-Maintenance Amount shall be made at the office of the
Paying Agent. Holders must surrender Securities to a Paying Agent to
A-1-4
<PAGE> 106
collect principal payments. However, the Company may mail an interest check to
a Holder's address then appearing in the register of Securities maintained by
the Registrar pursuant to the Indenture. Notwithstanding the foregoing, (a) the
Company shall pay or cause to be paid all amounts payable with respect to
Restricted Securities or non-DTC eligible Securities by wire transfer of
immediately available federal funds to the account of the Holders of the
Securities and (b) the Company shall pay or cause to be paid all amounts
payable with respect to Securities issued pursuant to the Note Agreement as
provided in the Note Agreement with respect thereto.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to any Holder. The Company or a Subsidiary of
the Company or any Affiliate of any of them may act in any such capacity.
4. Indenture. The Company has issued the Securities under an
Indenture dated as of June 20, 1995 (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 ("TIA") as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA and thereafter as in effect on the date
the Indenture is qualified under the TIA. The Securities are subject to all
such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. Unless otherwise defined herein, all capitalized
terms shall have the meanings assigned to them in the Indenture.
5. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. A Holder may register, transfer or exchange Securities as
provided in 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. The
Registrar need not exchange or 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.
6. Mandatory and Optional Redemption.
(a) The Company may optionally redeem the Securities as a
whole or in part from time to time at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest to the
Redemption Date and plus an amount equal to the Yield-Maintenance
Amount, if any, with respect to the Securities to be so redeemed.
A-1-5
<PAGE> 107
Notice of such redemption will be mailed by first class
mail 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 as it shall appear upon the register of Securities maintained by
the Registrar. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. On and after
the Redemption Date interest ceases to accrue on Securities or portions
thereof called for redemption.
If less than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed as set
forth in the Indenture.
(b) The Securities shall be subject to mandatory
redemption as set forth in Section 4.06 and Section 9.01(a) of the
Indenture.
7. Persons Deemed Owners. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name the Security
is registered with the Registrar as its owner for all purposes.
8. Amendments, Supplements and Waivers. Subject to certain
exceptions requiring the consent of each Holder affected, the Indenture or the
Securities may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding
Securities and any existing Default may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Securities. Without notice to or the consent of any Holder, the Indenture or
the Securities may be amended to cure any ambiguity, defect or inconsistency,
to comply with Section 4.05 of the Indenture, to maintain qualification of the
Indenture under the TIA and to evidence the acceptance of appointment by a
successor trustee.
9. Defaults and Remedies. The Securities have the Events of
Default set forth in Section 5.01 of the Indenture, which include, among
others, default for 5 Business Days or more in payment of interest on the
Securities and default in payment of principal when due on the Securities.
Subject to certain limitations in the Indenture, if an Event of Default occurs
and is continuing, the Trustee or the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities may declare all
the Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization, all outstanding Securities shall become due and payable
immediately without further action or notice. Holders of a majority in
aggregate principal amount of the then outstanding Securities by notice to the
Trustee may rescind an acceleration and its consequences provided that all
A-1-6
<PAGE> 108
existing Events of Default have been cured or waived to the extent required in
the Indenture and certain other conditions specified in the Indenture are
satisfied. Holders 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 aggregate principal amount of the then
outstanding Securities may direct the Trustee in its exercise of any trust or
power. The Trustee may withhold from Holders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interest.
10. Offers to Purchase. The Company shall be required to make an
Offer to Purchase Securities as, and to the extent, set forth in the Indenture.
11. 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, its Subsidiaries or their
Affiliates, and may otherwise deal with the Company, its Subsidiaries or their
Affiliates, as if it were not Trustee.
12. No Recourse Against Others. A director, officer, employee or
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 Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the Issue
of the Securities.
13. Unclaimed Money. If money for the payment of principal of or
interest on any Security remains unclaimed for two years after the date on
which such payment shall have come due, the Trustee or Paying Agent will pay
the money back to the Company at the Company's written request. After that,
Holders entitled to this money must look to the Company for payment, unless a
law governing abandoned property designates another Person.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, make Restricted Payments or Restricted Investments, create, incur or
permit to exist Debt, enter into or permit certain transactions with
Affiliates, issue or sell any Capital Stock in a Subsidiary of the Company or
make distributions on the Capital Stock of any such Subsidiary to Persons other
than the Company or a Wholly Owned Subsidiary of the Company, incur Liens or
create encumbrances restricting the ability of Subsidiaries of the Company to
distribute, loan or transfer Property to the Company.
A-1-7
<PAGE> 109
15. Discharge. Subject to the terms of the Indenture, the Indenture
will be discharged and cancelled upon the payment of all Securities. In
addition, at the option of the Company and upon satisfaction of certain
conditions specified in the Indenture, either (a) the Company shall be deemed
to have paid and discharged its obligations with respect to the Securities or
(b) the Company shall not be required to comply with certain covenants
contained in the Indenture or otherwise applicable to the Securities, in each
case upon the deposit by the Company with the Trustee in trust for the Holders
of the Securities of an amount of funds or obligations issued or guaranteed by
the United States of America sufficient to pay and discharge upon the stated
maturity thereof the entire Indebtedness evidenced by the Securities, all as
provided in the Indenture.
16. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and UNIF GIFT MIN ACT (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder 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 Envirodyne Industries, Inc., 701 Harger
Road, Oak Brook, Illinois 60521 Attention: Corporate Secretary.
A-1-8
<PAGE> 110
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint ___________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) June 20, 1998, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided by
Rule 144A thereunder.
or
[ ] (b) this Security is being transferred other than in accordance with
(a) above or (c) below and documents are being furnished which
comply with the conditions of transfer set forth in this
Security and the Indenture.
or
[ ] (c) this Security is being transferred to the Company.
<PAGE> 111
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Dated:______________________ Signed:_______________________________________
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security 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
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:______________________ _______________________________________________
NOTICE: To be executed by an executive officer
-2-
<PAGE> 112
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.09 of the Indenture, check the box below:
Section 3.09 [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 3.09 of the Indenture, state the amount: $
Dated:___________________ Your Signature:________________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 113
Exhibit A-2
(Face of Security)
FORM OF SERIES B SECURITY
ENVIRODYNE INDUSTRIES, INC.
Incorporated under the laws of the State
of Delaware
12% First Priority Senior Secured Note Due 2000, Series B
ENVIRODYNE INDUSTRIES, INC. promises to pay to _____________ or
registered assigns the principal sum of ___________________ Dollars on June 15,
2000 and to pay interest thereon semi-annually in arrears at the rate of 12%
per annum on December 15 and June 15 of each year until the principal hereof is
paid or made available for payment. Payment of principal and interest shall be
made in the manner and subject to the terms set forth in provisions appearing
on the reverse hereof, which provisions, in their entirety, shall for all
purposes have the same effect as if set forth at this place.
Pursuant to the Guaranty Agreement, the payment of principal of and
interest hereon is unconditionally guaranteed by each of the Subsidiary
Guarantors.
To the extent set forth in the Collateral Documents, payment hereon is
secured, on an equal and ratable basis with all other Securities by a valid,
perfected security interest in the Collateral, the terms of which security
interests are more fully set forth in the Collateral Documents.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereof shall have been signed by or on
behalf of the Trustee under the Indenture referred to on the reverse side
hereof.
IN WITNESS WHEREOF, ENVIRODYNE INDUSTRIES, INC. has caused this
instrument to be executed in its corporate name by the manual or facsimile
signature of its President or a Vice President and attested by its Secretary or
an Assistant Secretary.
ENVIRODYNE INDUSTRIES, INC.
By ____________________________________
Attest: ________________________
[SEAL]
A-2-1
<PAGE> 114
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the First Priority Senior Secured Notes Due 2000 issued
under the Indenture mentioned in this Note.
Dated: ___________________
_____________________________
as Trustee
By __________________________
Authorized Signatory
A-2-2
<PAGE> 115
(Back of Security)
ENVIRODYNE INDUSTRIES, INC.
12% First Priority Senior Secured Note Due 2000, Series B
1. Interest and Principal Payments. ENVIRODYNE INDUSTRIES, INC., a
Delaware corporation (the "Company", which term shall include its permitted
successors and assigns), promises to pay interest on the principal amount of
this Security at the rate per annum shown above. The Company shall pay
interest semi-annually in arrears on December 15 and June 15 of each year,
commencing December 15, 1995. Interest on the Securities shall accrue from the
most recent date on which interest has been paid or, if no interest has been
paid, from June 20, 1995. Interest shall be computed on the basis of a 360-day
year of twelve 30-day months.
The Company shall pay the principal amount of this Security on June 15,
2000. The Company shall pay interest on overdue principal at the Default Rate
per annum and interest on overdue installments of interest and
Yield-Maintenance Amount, to the extent lawful, at the same rate.
2. Method of Payment. The Company shall pay interest on the
Securities (except interest on overdue interest) to the Persons who are
registered Holders of Securities at the close of business on the regular record
date, which shall be the December 1 and June 1, as the case may be, next
preceding the interest payment date even though Securities are cancelled after
the record date and on or before the interest payment date. Any such interest
not so punctually paid or duly provided for, and any interest payable on such
overdue interest (to the extent lawful), shall forthwith cease to be payable to
the Holder on such regular record date and shall be payable to the Person in
whose name this Security is registered at the close of business on a special
record date for the payment of such interest on overdue interest to be fixed by
the Company, notice of which shall be given to Holders not less than 15 days
prior to such special record date. The Company shall pay principal,
Yield-Maintenance Amount (if any), 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 Company may pay principal, interest and any
Yield-Maintenance Amount by check payable in such money. Payment of principal,
interest and any Yield-Maintenance Amount shall be made at the office of the
Paying Agent. Holders must surrender Securities to a Paying Agent to collect
principal payments. However, the Company may mail an interest check to a
Holder's address then appearing in the register of Securities maintained by the
Registrar pursuant to the Indenture. Notwithstanding the foregoing, (a) the
Company shall pay or cause to be paid all amounts payable with respect to
Restricted Securities or non-DTC eligible Securities by wire transfer of
A-2-3
<PAGE> 116
immediately available federal funds to the account of the Holders of the
Securities and (b) the Company shall pay or cause to be paid all amounts
payable with respect to Securities issued pursuant to the Note Agreement as
provided in the Note Agreement with respect thereto.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to any Holder. The Company or a Subsidiary of
the Company or any Affiliate of any of them may act in any such capacity.
4. Indenture. The Company has issued the Securities under an
Indenture dated as of June 20, 1995 (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 ("TIA") as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA and thereafter as in effect on the date
the Indenture is qualified under the TIA. The Securities are subject to all
such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. Unless otherwise defined herein, all capitalized
terms shall have the meanings assigned to them in the Indenture.
5. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. A Holder may register, transfer or exchange Securities as
provided in 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. The
Registrar need not exchange or 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.
6. Mandatory and Optional Redemption.
(a) The Company may optionally redeem the Securities as a
whole or in part from time to time at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest to the
Redemption Date and plus an amount equal to the Yield-Maintenance
Amount, if any, with respect to the Securities to be so redeemed.
Notice of such redemption will be mailed by first class
mail 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 as it shall appear upon the register of Securities maintained by
the Registrar. Securities in denominations larger than $1,000 may be
redeemed in part but
A-2-4
<PAGE> 117
only in whole multiples of $1,000. On and after the Redemption Date
interest ceases to accrue on Securities or portions thereof called for
redemption.
If less than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed as set
forth in the Indenture.
(b) The Securities shall be subject to mandatory
redemption as set forth in Section 4.06 and Section 9.01(a) of the
Indenture.
7. Persons Deemed Owners. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name the Security
is registered with the Registrar as its owner for all purposes.
8. Amendments, Supplements and Waivers. Subject to certain
exceptions requiring the consent of each Holder affected, the Indenture or the
Securities may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding
Securities and any existing Default may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Securities. Without notice to or the consent of any Holder, the Indenture or
the Securities may be amended to cure any ambiguity, defect or inconsistency,
to comply with Section 4.05 of the Indenture, to maintain qualification of the
Indenture under the TIA and to evidence the acceptance of appointment by a
successor trustee.
9. Defaults and Remedies. The Securities have the Events of
Default set forth in Section 5.01 of the Indenture, which include, among
others, default for 5 Business Days or more in payment of interest on the
Securities and default in payment of principal when due on the Securities.
Subject to certain limitations in the Indenture, if an Event of Default occurs
and is continuing, the Trustee or the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities may declare all
the Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization, all outstanding Securities shall become due and payable
immediately without further action or notice. Holders of a majority in
aggregate principal amount of the then outstanding Securities by notice to the
Trustee may rescind an acceleration and its consequences provided that all
existing Events of Default have been cured or waived to the extent required in
the Indenture and certain other conditions specified in the Indenture are
satisfied. Holders 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,
A-2-5
<PAGE> 118
Holders of a majority in aggregate principal amount of the then outstanding
Securities may direct the Trustee in its exercise of any trust or power. The
Trustee may withhold from Holders notice of any continuing default (except a
default in payment of principal or interest) if it determines that withholding
notice is in their interest.
10. Offers to Purchase. The Company shall be required to make an
Offer to Purchase Securities as, and to the extent, set forth in the Indenture.
11. 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, its Subsidiaries or their
Affiliates, and may otherwise deal with the Company, its Subsidiaries or their
Affiliates, as if it were not Trustee.
12. No Recourse Against Others. A director, officer, employee or
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 Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the Issue
of the Securities.
13. Unclaimed Money. If money for the payment of principal of or
interest on any Security remains unclaimed for two years after the date on
which such payment shall have come due, the Trustee or Paying Agent will pay
the money back to the Company at the Company's written request. After that,
Holders entitled to this money must look to the Company for payment, unless a
law governing abandoned property designates another Person.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, make Restricted Payments or Restricted Investments, create, incur or
permit to exist Debt, enter into or permit certain transactions with
Affiliates, issue or sell any Capital Stock in a Subsidiary of the Company or
make distributions on the Capital Stock of any such Subsidiary to Persons other
than the Company or a Wholly Owned Subsidiary of the Company, incur Liens or
create encumbrances restricting the ability of Subsidiaries of the Company to
distribute, loan or transfer Property to the Company.
15. Discharge. Subject to the terms of the Indenture, the Indenture
will be discharged and cancelled upon the payment of all Securities. In
addition, at the option of the Company and upon satisfaction of certain
conditions specified in the Indenture, either (a) the Company shall be deemed
to have paid and discharged
A-2-6
<PAGE> 119
its obligations with respect to the Securities or (b) the Company shall not be
required to comply with certain covenants contained in the Indenture or
otherwise applicable to the Securities, in each case upon the deposit by the
Company with the Trustee in trust for the Holders of the Securities of an
amount of funds or obligations issued or guaranteed by the United States of
America sufficient to pay and discharge upon the stated maturity thereof the
entire Indebtedness evidenced by the Securities, all as provided in the
Indenture.
16. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and UNIF GIFT MIN ACT (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder 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 Envirodyne Industries, Inc., 701 Harger
Road, Oak Brook, Illinois 60521 Attention: Corporate Secretary.
A-2-7
<PAGE> 120
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint ___________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:_______________________ Signed:___________________________________
(Sign exactly as name appears on
the other side of this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 121
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.09 of the Indenture, check the box below:
Section 3.09 [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 3.09 of the Indenture, state the amount: $
Dated:_________________ Your Signature:__________________________________
(Sign exactly as your name
appears on the other side of
this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 122
Exhibit A-3
No. __________ $___________
(Face of Security)
[FORM OF SERIES C SECURITY]
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF 1993, AS
AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED
INVESTOR" (AS DEFINED IN RULE 501(A)(1), (2), (3) OR (7) UNDER THE SECURITIES
ACT) (AN "ACCREDITED INVESTOR") OR (C) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS SECURITY IN AN OFFSHORE TRANSACTION, (2) AGREES THAT IT WILL NOT WITHIN
THREE YEARS AFTER THE ORIGINAL ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE
TRANSFER THIS SECURITY EXCEPT (A) TO ENVIRODYNE INDUSTRIES, INC. (THE
"COMPANY") OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED STATES TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES
ACT, (C) INSIDE THE UNITED STATES TO AN INSTITUTIONAL ACCREDITED INVESTOR THAT,
PRIOR TO SUCH TRANSFER, FURNISHES (OR HAS FURNISHED ON ITS BEHALF BY A U.S.
BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING CERTAIN
REPRESENTATIONS AND AGREEMENTS RELATING TO THE RESTRICTIONS ON TRANSFER OF THIS
SECURITY (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM THE TRUSTEE FOR THIS
SECURITY), (D) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT, (E) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF
AVAILABLE), OR (F) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT AND (3) AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS
SECURITY IS TRANSFERRED A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
IN CONNECTION WITH ANY TRANSFER OF THIS SECURITY WITHIN THREE YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY, IF THE PROPOSED TRANSFEREE IS AN
INSTITUTIONAL ACCREDITED INVESTOR, THE HOLDER MUST, PRIOR TO SUCH TRANSFER,
FURNISH TO THE TRUSTEE AND 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 IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED
HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON"
HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
A-3-1
<PAGE> 123
ENVIRODYNE INDUSTRIES, INC.
Incorporated under the laws of the State
of Delaware
Floating Rate First Priority Senior Secured Note Due 2000,
Series C
ENVIRODYNE INDUSTRIES, INC. promises to pay to _____________ or
registered assigns the principal sum of ___________________ Dollars on June 15,
2000 and to pay interest thereon semi-annually in arrears at the LIBOR Rate per
annum on December 15 and June 15 of each year until the principal hereof is
paid or made available for payment. Payment of principal and interest shall be
made in the manner and subject to the terms set forth in provisions appearing
on the reverse hereof, which provisions, in their entirety, shall for all
purposes have the same effect as if set forth at this place.
Pursuant to the Guaranty Agreement, the payment of principal of and
interest hereon is unconditionally guaranteed by each of the Subsidiary
Guarantors.
To the extent set forth in the Collateral Documents, payment hereon is
secured, on an equal and ratable basis with all other Securities by a valid,
perfected security interest in the Collateral, the terms of which security
interests are more fully set forth in the Collateral Documents.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereof shall have been signed by or on
behalf of the Trustee under the Indenture referred to on the reverse side
hereof.
IN WITNESS WHEREOF, ENVIRODYNE INDUSTRIES, INC. has caused this
instrument to be executed in its corporate name by the manual or facsimile
signature of its President or a Vice President and attested by its Secretary or
an Assistant Secretary.
ENVIRODYNE INDUSTRIES, INC.
By ___________________________________
Attest: _______________________
[SEAL]
A-3-2
<PAGE> 124
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the First Priority Senior Secured Notes Due 2000 issued
under the Indenture mentioned in this Note.
Dated: ______________________
_____________________________
as Trustee
By __________________________
Authorized Signatory
A-3-3
<PAGE> 125
(Back of Security)
ENVIRODYNE INDUSTRIES, INC.
Floating Rate First Priority Senior Secured Note Due 2000,
Series C
1. Interest and Principal Payments. ENVIRODYNE INDUSTRIES, INC., a
Delaware corporation (the "Company", which term shall include its permitted
successors and assigns), promises to pay interest on the principal amount of
this Security at the LIBOR Rate per annum. The Company shall pay interest
semi-annually in arrears on December 15 and June 15 of each year, commencing
December 15, 1995. Interest on the Securities shall accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from June 20, 1995. Interest shall be computed based on the actual days
elapsed and a 360-day year.
The Company shall pay the principal amount of this Security on June 15,
2000. The Company shall pay interest on overdue principal at the Default Rate
per annum and interest on overdue installments of interest and
Yield-Maintenance Amount, to the extent lawful, at the same rate.
Interest on the Securities shall automatically be increased (and, if
applicable, thereafter automatically decreased but in any event not below the
rate of interest which would be in effect without regard to the Registration
Rights Agreement referred to below) as and to the extent required pursuant to
the terms of Section 6 of the Registration Rights Agreement.
2. Method of Payment. The Company shall pay interest on the
Securities (except interest on overdue interest) to the Persons who are
registered Holders of Securities at the close of business on the regular record
date, which shall be the December 1 and June 1, as the case may be, next
preceding the interest payment date even though Securities are cancelled after
the record date and on or before the interest payment date. Any such interest
not so punctually paid or duly provided for, and any interest payable on such
overdue interest (to the extent lawful), shall forthwith cease to be payable to
the Holder on such regular record date and shall be payable to the Person in
whose name this Security is registered at the close of business on a special
record date for the payment of such interest on overdue interest to be fixed by
the Company, notice of which shall be given to Holders not less than 15 days
prior to such special record date. The Company shall pay principal,
Yield-Maintenance Amount (if any), 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 Company may pay principal, interest and any
Yield-Maintenance Amount by check payable in such money. Payment of principal,
interest and any
A-3-4
<PAGE> 126
Yield-Maintenance Amount shall be made at the office of the Paying Agent.
Holders must surrender Securities to a Paying Agent to collect principal
payments. However, the Company may mail an interest check to a Holder's
address then appearing in the register of Securities maintained by the
Registrar pursuant to the Indenture. Notwithstanding the foregoing, (a) the
Company shall pay or cause to be paid all amounts payable with respect to
Restricted Securities or non-DTC eligible Securities by wire transfer of
immediately available federal funds to the account of the Holders of the
Securities and (b) the Company shall pay or cause to be paid all amounts
payable with respect to Securities issued pursuant to the Note Agreement as
provided in the Note Agreement with respect thereto.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to any Holder. The Company or a Subsidiary of
the Company or any Affiliate of any of them may act in any such capacity.
4. Indenture. The Company has issued the Securities under an
Indenture dated as of June 20, 1995 (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 ("TIA") as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA and thereafter as in effect on the date
the Indenture is qualified under the TIA. The Securities are subject to all
such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. Unless otherwise defined herein, all capitalized
terms shall have the meanings assigned to them in the Indenture.
5. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. A Holder may register, transfer or exchange Securities as
provided in 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. The
Registrar need not exchange or 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.
6. Mandatory and Optional Redemption.
(a) The Company may optionally redeem the Securities as a
whole or in part from time to time at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid
A-3-5
<PAGE> 127
interest to the Redemption Date and plus an amount equal to the
Yield-Maintenance Amount, if any, with respect to the Securities to be
so redeemed.
Notice of such redemption will be mailed by first class
mail 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 as it shall appear upon the register of Securities maintained by
the Registrar. Securities in denominations larger than $1,000 may be
redeemed in part but only in whole multiples of $1,000. On and after
the Redemption Date interest ceases to accrue on Securities or portions
thereof called for redemption.
If less than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed as set
forth in the Indenture.
(b) The Securities shall be subject to mandatory
redemption as set forth in Section 4.06 and Section 9.01(a) of the
Indenture.
7. Persons Deemed Owners. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name the Security
is registered with the Registrar as its owner for all purposes.
8. Amendments, Supplements and Waivers. Subject to certain
exceptions requiring the consent of each Holder affected, the Indenture or the
Securities may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding
Securities and any existing Default may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Securities. Without notice to or the consent of any Holder, the Indenture or
the Securities may be amended to cure any ambiguity, defect or inconsistency,
to comply with Section 4.05 of the Indenture, to maintain qualification of the
Indenture under the TIA and to evidence the acceptance of appointment by a
successor trustee.
9. Defaults and Remedies. The Securities have the Events of
Default set forth in Section 5.01 of the Indenture, which include, among
others, default for 5 Business Days or more in payment of interest on the
Securities and default in payment of principal when due on the Securities.
Subject to certain limitations in the Indenture, if an Event of Default occurs
and is continuing, the Trustee or the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities may declare all
the Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization, all outstanding Securi-
A-3-6
<PAGE> 128
ties shall become due and payable immediately without further action or
notice. Holders of a majority in aggregate principal amount of the then
outstanding Securities by notice to the Trustee may rescind an acceleration and
its consequences provided that all existing Events of Default have been cured or
waived to the extent required in the Indenture and certain other conditions
specified in the Indenture are satisfied. Holders 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 aggregate
principal amount of the then outstanding Securities may direct the Trustee in
its exercise of any trust or power. The Trustee may withhold from Holders
notice of any continuing default (except a default in payment of principal or
interest) if it determines that withholding notice is in their interest.
10. Offers to Purchase. The Company shall be required to make an
Offer to Purchase Securities as, and to the extent, set forth in the Indenture.
11. 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, its Subsidiaries or their
Affiliates, and may otherwise deal with the Company, its Subsidiaries or their
Affiliates, as if it were not Trustee.
12. No Recourse Against Others. A director, officer, employee or
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 Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the Issue
of the Securities.
13. Unclaimed Money. If money for the payment of principal of or
interest on any Security remains unclaimed for two years after the date on
which such payment shall have come due, the Trustee or Paying Agent will pay
the money back to the Company at the Company's written request. After that,
Holders entitled to this money must look to the Company for payment, unless a
law governing abandoned property designates another Person.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, make Restricted Payments or Restricted Investments, create, incur or
permit to exist Debt, enter into or permit certain transactions with
Affiliates, issue or sell any Capital Stock in a Subsidiary of the Company or
make distributions on the Capital Stock of any such Subsidiary to Persons other
than
A-3-7
<PAGE> 129
the Company or a Wholly Owned Subsidiary of the Company, incur Liens or create
encumbrances restricting the ability of Subsidiaries of the Company to
distribute, loan or transfer Property to the Company.
15. Discharge. Subject to the terms of the Indenture, the Indenture
will be discharged and cancelled upon the payment of all Securities. In
addition, at the option of the Company and upon satisfaction of certain
conditions specified in the Indenture, either (a) the Company shall be deemed
to have paid and discharged its obligations with respect to the Securities or
(b) the Company shall not be required to comply with certain covenants
contained in the Indenture or otherwise applicable to the Securities, in each
case upon the deposit by the Company with the Trustee in trust for the Holders
of the Securities of an amount of funds or obligations issued or guaranteed by
the United States of America sufficient to pay and discharge upon the stated
maturity thereof the entire Indebtedness evidenced by the Securities, all as
provided in the Indenture.
16. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and UNIF GIFT MIN ACT (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder 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 Envirodyne Industries, Inc., 701 Harger
Road, Oak Brook, Illinois 60521 Attention: Corporate Secretary.
A-3-8
<PAGE> 130
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint ___________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
In connection with any transfer of this Security occurring prior to the
date which is the earlier of (i) the date of the declaration by the SEC of the
effectiveness of a registration statement under the Securities Act of 1933, as
amended (the "Securities Act") covering resales of this Security (which
effectiveness shall not have been suspended or terminated at the date of the
transfer) and (ii) June 20, 1998, the undersigned confirms that it has not
utilized any general solicitation or general advertising in connection with the
transfer and that:
[Check One]
[ ] (a) this Security is being transferred in compliance with the
exemption from registration under the Securities Act provided by
Rule 144A thereunder.
or
[ ] (b) this Security 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 Security and the
Indenture.
or
[ ] (c) this Security is being transferred to the Company.
<PAGE> 131
If none of the foregoing boxes is checked, the Trustee or Registrar shall not
be obligated to register this Security in the name of any person other than the
Holder hereof unless and until the conditions to any such transfer of
registration set forth herein and in Section 2.15 of the Indenture shall have
been satisfied.
Dated:_____________________ Signed:_______________________________________
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee:__________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED
The undersigned represents and warrants that it is purchasing this
Security 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
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:_____________________ _______________________________________________
NOTICE: To be executed by an executive officer
-2-
<PAGE> 132
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.09 of the Indenture, check the box below:
Section 3.09 [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 3.09 of the Indenture, state the amount: $
Dated:________________________ Your Signature:______________________________
(Sign exactly as your
name appears on the other
side of this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 133
Exhibit A-4
(Face of Security)
FORM OF SERIES D SECURITY
ENVIRODYNE INDUSTRIES, INC.
Incorporated under the laws of the State
of Delaware
Floating Rate First Priority Senior Secured Note Due 2000,
Series D
ENVIRODYNE INDUSTRIES, INC. promises to pay to _____________ or
registered assigns the principal sum of ___________________ Dollars on June 15,
2000 and to pay interest thereon semi-annually in arrears at the LIBOR Rate per
annum on December 15 and June 15 of each year until the principal hereof is
paid or made available for payment. Payment of principal and interest shall be
made in the manner and subject to the terms set forth in provisions appearing
on the reverse hereof, which provisions, in their entirety, shall for all
purposes have the same effect as if set forth at this place.
Pursuant to the Guaranty Agreement, the payment of principal of and
interest hereon is unconditionally guaranteed by each of the Subsidiary
Guarantors.
To the extent set forth in the Collateral Documents, payment hereon is
secured, on an equal and ratable basis with all other Securities by a valid,
perfected security interest in the Collateral, the terms of which security
interests are more fully set forth in the Collateral Documents.
This Security shall not be valid or become obligatory for any purpose
until the certificate of authentication hereof shall have been signed by or on
behalf of the Trustee under the Indenture referred to on the reverse side
hereof.
IN WITNESS WHEREOF, ENVIRODYNE INDUSTRIES, INC. has caused this
instrument to be executed in its corporate name by the manual or facsimile
signature of its President or a Vice President and attested by its Secretary or
an Assistant Secretary.
ENVIRODYNE INDUSTRIES, INC.
By ____________________________________
Attest: ________________________
[SEAL]
A-4-1
<PAGE> 134
[FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION]
This is one of the First Priority Senior Secured Notes Due 2000 issued
under the Indenture mentioned in this Note.
Dated: __________________
_____________________________
as Trustee
By __________________________
Authorized Signatory
A-4-2
<PAGE> 135
(Back of Security)
ENVIRODYNE INDUSTRIES, INC.
Floating Rate First Priority Senior Secured Note Due 2000,
Series D
1. Interest and Principal Payments. ENVIRODYNE INDUSTRIES, INC., a
Delaware corporation (the "Company", which term shall include its permitted
successors and assigns), promises to pay interest on the principal amount of
this Security at the LIBOR Rate per annum. The Company shall pay interest
semi-annually in arrears on December 15 and June 15 of each year, commencing
December 15, 1995. Interest on the Securities shall accrue from the most
recent date on which interest has been paid or, if no interest has been paid,
from June 20, 1995. Interest shall be computed based on the actual days
elapsed and a 360-day year.
The Company shall pay the principal amount of this Security on June 15,
2000. The Company shall pay interest on overdue principal at the Default Rate
per annum and interest on overdue installments of interest and
Yield-Maintenance Amount, to the extent lawful, at the same rate.
2. Method of Payment. The Company shall pay interest on the
Securities (except interest on overdue interest) to the Persons who are
registered Holders of Securities at the close of business on the regular record
date, which shall be the December 1 and June 1, as the case may be, next
preceding the interest payment date even though Securities are cancelled after
the record date and on or before the interest payment date. Any such interest
not so punctually paid or duly provided for, and any interest payable on such
overdue interest (to the extent lawful), shall forthwith cease to be payable to
the Holder on such regular record date and shall be payable to the Person in
whose name this Security is registered at the close of business on a special
record date for the payment of such interest on overdue interest to be fixed by
the Company, notice of which shall be given to Holders not less than 15 days
prior to such special record date. The Company shall pay principal,
Yield-Maintenance Amount (if any), 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 Company may pay principal, interest and any
Yield-Maintenance Amount by check payable in such money. Payment of principal,
interest and any Yield-Maintenance Amount shall be made at the office of the
Paying Agent. Holders must surrender Securities to a Paying Agent to collect
principal payments. However, the Company may mail an interest check to a
Holder's address then appearing in the register of Securities maintained by the
Registrar pursuant to the Indenture. Notwithstanding the foregoing, (a) the
Company shall pay or cause to be paid all amounts payable with respect to
Restricted
A-4-3
<PAGE> 136
Securities or non-DTC eligible Securities by wire transfer of immediately
available federal funds to the account of the Holders of the Securities and (b)
the Company shall pay or cause to be paid all amounts payable with respect to
Securities issued pursuant to the Note Agreement as provided in the Note
Agreement with respect thereto.
3. Paying Agent and Registrar. Initially, the Trustee will act as
Paying Agent and Registrar. The Company may change any Paying Agent, Registrar
or co-Registrar without notice to any Holder. The Company or a Subsidiary of
the Company or any Affiliate of any of them may act in any such capacity.
4. Indenture. The Company has issued the Securities under an
Indenture dated as of June 20, 1995 (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 ("TIA") as in effect on the date of the Indenture until such time as the
Indenture is qualified under the TIA and thereafter as in effect on the date
the Indenture is qualified under the TIA. The Securities are subject to all
such terms, and Holders are referred to the Indenture and the TIA for a
statement of such terms. Unless otherwise defined herein, all capitalized
terms shall have the meanings assigned to them in the Indenture.
5. Denominations, Transfer, Exchange. The Securities are in
registered form without coupons in denominations of $1,000 and integral
multiples thereof. A Holder may register, transfer or exchange Securities as
provided in 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. The
Registrar need not exchange or 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.
6. Mandatory and Optional Redemption.
(a) The Company may optionally redeem the Securities as a
whole or in part from time to time at a price equal to 100% of the
principal amount thereof, plus accrued and unpaid interest to the
Redemption Date and plus an amount equal to the Yield-Maintenance
Amount, if any, with respect to the Securities to be so redeemed.
Notice of such redemption will be mailed by first class
mail 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 as it shall appear upon the register of Securities maintained by
the Registrar. Securities
A-4-4
<PAGE> 137
in denominations larger than $1,000 may be redeemed in part but only in
whole multiples of $1,000. On and after the Redemption Date interest
ceases to accrue on Securities or portions thereof called for
redemption.
If less than all the Securities are to be redeemed, the
Trustee shall select the particular Securities to be redeemed as set
forth in the Indenture.
(b) The Securities shall be subject to mandatory
redemption as set forth in Section 4.06 and Section 9.01(a) of the
Indenture.
7. Persons Deemed Owners. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name the Security
is registered with the Registrar as its owner for all purposes.
8. Amendments, Supplements and Waivers. Subject to certain
exceptions requiring the consent of each Holder affected, the Indenture or the
Securities may be amended or supplemented with the consent of the Holders of at
least a majority in aggregate principal amount of the then outstanding
Securities and any existing Default may be waived with the consent of the
Holders of a majority in aggregate principal amount of the then outstanding
Securities. Without notice to or the consent of any Holder, the Indenture or
the Securities may be amended to cure any ambiguity, defect or inconsistency,
to comply with Section 4.05 of the Indenture, to maintain qualification of the
Indenture under the TIA and to evidence the acceptance of appointment by a
successor trustee.
9. Defaults and Remedies. The Securities have the Events of
Default set forth in Section 5.01 of the Indenture, which include, among
others, default for 5 Business Days or more in payment of interest on the
Securities and default in payment of principal when due on the Securities.
Subject to certain limitations in the Indenture, if an Event of Default occurs
and is continuing, the Trustee or the Holders of at least a majority in
aggregate principal amount of the then outstanding Securities may declare all
the Securities to be due and payable immediately, except that in the case of an
Event of Default arising from certain events of bankruptcy, insolvency or
reorganization, all outstanding Securities shall become due and payable
immediately without further action or notice. Holders of a majority in
aggregate principal amount of the then outstanding Securities by notice to the
Trustee may rescind an acceleration and its consequences provided that all
existing Events of Default have been cured or waived to the extent required in
the Indenture and certain other conditions specified in the Indenture are
satisfied. Holders 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
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<PAGE> 138
Indenture or the Securities. Subject to certain limitations, Holders of a
majority in aggregate principal amount of the then outstanding Securities may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders notice of any continuing default (except a default in
payment of principal or interest) if it determines that withholding notice is
in their interest.
10. Offers to Purchase. The Company shall be required to make an
Offer to Purchase Securities as, and to the extent, set forth in the Indenture.
11. 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, its Subsidiaries or their
Affiliates, and may otherwise deal with the Company, its Subsidiaries or their
Affiliates, as if it were not Trustee.
12. No Recourse Against Others. A director, officer, employee or
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 Holder by accepting a Security waives and releases all such
liability. The waiver and release are part of the consideration for the Issue
of the Securities.
13. Unclaimed Money. If money for the payment of principal of or
interest on any Security remains unclaimed for two years after the date on
which such payment shall have come due, the Trustee or Paying Agent will pay
the money back to the Company at the Company's written request. After that,
Holders entitled to this money must look to the Company for payment, unless a
law governing abandoned property designates another Person.
14. Restrictive Covenants. The Indenture imposes certain
limitations on the ability of the Company and its Subsidiaries to, among other
things, make Restricted Payments or Restricted Investments, create, incur or
permit to exist Debt, enter into or permit certain transactions with
Affiliates, issue or sell any Capital Stock in a Subsidiary of the Company or
make distributions on the Capital Stock of any such Subsidiary to Persons other
than the Company or a Wholly Owned Subsidiary of the Company, incur Liens or
create encumbrances restricting the ability of Subsidiaries of the Company to
distribute, loan or transfer Property to the Company.
15. Discharge. Subject to the terms of the Indenture, the Indenture
will be discharged and cancelled upon the payment of all Securities. In
addition, at the option of the Company and upon satisfaction of certain
conditions specified in the Indenture,
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<PAGE> 139
either (a) the Company shall be deemed to have paid and discharged its
obligations with respect to the Securities or (b) the Company shall not be
required to comply with certain covenants contained in the Indenture or
otherwise applicable to the Securities, in each case upon the deposit by the
Company with the Trustee in trust for the Holders of the Securities of an
amount of funds or obligations issued or guaranteed by the United States of
America sufficient to pay and discharge upon the stated maturity thereof the
entire Indebtedness evidenced by the Securities, all as provided in the
Indenture.
16. Authentication. This Security shall not be valid until
authenticated by the manual signature of the Trustee or an authenticating
agent.
17. Abbreviations. Customary abbreviations may be used in the name
of a Holder or an assignee, such as TEN COM (= tenants in common), TEN ENT (=
tenants by the entireties), JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian), and UNIF GIFT MIN ACT (=
Uniform Gifts to Minors Act).
The Company will furnish to any Holder 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 Envirodyne Industries, Inc., 701 Harger
Road, Oak Brook, Illinois 60521 Attention: Corporate Secretary.
A-4-7
<PAGE> 140
ASSIGNMENT FORM
I or we assign and transfer this Security to
________________________________________________________________________________
________________________________________________________________________________
(Print or type name, address and zip code of assignee)
________________________________________________________________________________
(Insert Social Security or other identifying number of assignee)
and irrevocably appoint ___________________________________________________
agent to transfer this Security on the books of the Company. The agent may
substitute another to act for him.
Dated:__________________ Signed:________________________________________
(Sign exactly as name appears on the
other side of this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 141
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have this Security purchased by the Company
pursuant to Section 3.09 of the Indenture, check the box below:
Section 3.09 [ ]
If you want to elect to have only part of this Security purchased by the
Company pursuant to Section 3.09 of the Indenture, state the amount: $
Dated:_________________ Your Signature:___________________________________
(Sign exactly as your name appears
on the other side of this Security)
Signature Guarantee:___________________________________________________________
Participant in a recognized Signature Guarantee Medallion
Program (or other signature guarantor program reasonably
acceptable to the Trustee)
<PAGE> 142
Exhibit B
FORM OF LEGEND FOR BOOK-ENTRY SECURITIES
Any Global Security authenticated and delivered hereunder shall
bear a legend (which would be in addition to any other legends required in the
case of a Restricted Security) in substantially the following form:
THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A
DEPOSITORY OR A NOMINEE OF A DEPOSITORY OR A SUCCESSOR DEPOSITORY. THIS
SECURITY IS NOT EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A
PERSON OTHER THAN THE DEPOSITORY OR ITS NOMINEE EXCEPT IN THE LIMITED
CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF THIS
SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITORY TO A NOMINEE OF THE DEPOSITORY OR BY A NOMINEE OF THE
DEPOSITORY TO THE DEPOSITORY OR ANOTHER NOMINEE OF THE DEPOSITORY) MAY
BE REGISTERED EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO ISSUER 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 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.
<PAGE> 143
Exhibit C
Form of Certificate To Be
Delivered in Connection with
Transfers to Non-QIB Accredited Investors
[Trustee] __________, ____
Attention: Corporate Trust Department
Re: Envirodyne Industries, Inc. (the
"Company") First Priority Senior
Secured Notes due 2000 (the "Securities")
Dear Sirs:
In connection with our proposed purchase of $__________
aggregate principal amount of the Securities, we confirm that:
1. We understand that any subsequent transfer of the
Securities is subject to certain restrictions and conditions set forth
in the Indenture dated as of June 20, 1995 relating to the Securities
(the "Indenture") and the undersigned agrees to be bound by, and not to
resell, pledge or otherwise transfer the Securities except in compliance
with, such restrictions and conditions and the Securities Act of 1933,
as amended (the "Securities Act").
2. We understand that the Securities have not been
registered under the Securities Act, and that the Securities may not be
offered or sold except as permitted in the following sentence. We
agree, on our own behalf and on behalf of any accounts for which we are
acting as hereinafter stated, that if we should sell any Securities
within three years after the original issuance of the Securities, we
will do so only (A) to the Company or any subsidiary thereof, (B) inside
the United States to a "qualified institutional buyer" in compliance
with Rule 144A under the Securities Act, (C) inside the United States to
an "institutional accredited investor" (as defined below) that, prior to
such transfer, furnishes to you a signed letter substantially in the
form of this letter, (D) outside the United States to a foreign person
in compliance with Rule 904 of Regulation S under the Securities Act,
(E) pursuant to the exemption from registration provided by Rule 144
under the Securities Act (if available), or (F) pursuant to an effective
registration statement under the Securities Act, and we further agree to
provide to any person purchasing any of the Securities from us a notice
advising such purchaser that resales of the Securities are restricted as
stated herein.
C-1
<PAGE> 144
3. We understand that, on any proposed resale of any
Securities, we will be required to furnish to you and the Issuer such
certifications, legal opinions and other information as you and the
Issuer may reasonably require to confirm that the proposed sale complies
with the foregoing restrictions. We further understand that the
Securities purchased by us will bear a legend to the foregoing effect.
4. We are an institutional "accredited investor" (as
defined in Rule 501(a)(1), (2), (3) or (7) under the Securities Act) and
have such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of our investment in
the Securities, and we and any accounts for which we are acting are each
able to bear the economic risk of our or its investment.
5. We are acquiring the Securities purchased by us for our
own account or for one or more accounts (each of which is an
institutional "accredited investor") as to each of which we exercise
sole investment discretion.
You and the Company are entitled to rely upon this letter and
are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceedings or official inquiry
with respect to the matters covered hereby.
Very truly yours,
[Name of Transferee]
By:_____________________________________________
Authorized Signature
C-2
<PAGE> 145
Exhibit D
Form of Certificate To Be Delivered
in Connection with Transfers
Pursuant to Regulation S
_________, ___
[Trustee]
Attention: Corporate Trust Department
Re: Envirodyne Industries, Inc. (the
"Company") First Priority Senior
Secured Notes due 2000 (the "Securities")
Dear Sirs:
In connection with our proposed sale of $__________ aggregate
principal amount of the Securities, we confirm that such sale has been effected
pursuant to and in accordance with Regulation S under the U.S. Securities Act
of 1933, as amended (the "Securities Act"), and accordingly, we represent that:
(1) the offer of the Securities was not made to a person in
the United States;
(2) either (a) at the time the buy offer 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, or (b) the transaction was executed in, on or through the
facilities of a designated off-shore securities market and neither we
nor any person acting on our behalf knows that the transaction has been
pre-arranged with a buyer in the United States;
(3) no directed selling efforts have been made in the
United States in contravention of the requirements of Rule 903(b) or
Rule 904(b) of Regulation S, as applicable;
(4) the transaction is not part of a plan or scheme to
evade the registration requirements of the Securities Act: and
(5) we have advised the transferee of the transfer
restrictions applicable to the Securities.
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
D-1
<PAGE> 146
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 Signature
D-2
<PAGE> 147
EXHIBIT E
FORM OF SUBORDINATION PROVISIONS
The indebtedness evidenced by this instrument (including, without
limitation, all principal hereof and premium (if any) and interest hereon and
all other amounts payable and other liabilities under or in connection with
this instrument, collectively, the "Subordinated Debt") is subordinated and
subject in right of payment to the prior payment in full of all Senior Debt (as
defined below). Each holder of this instrument ("Subordinated Debt Holder") by
its acceptance hereof, agrees to and shall be bound by all of the provisions
hereof.
The subordination provisions set forth herein shall constitute a
continuing offer to all persons who become holders of, or continue to hold,
Senior Debt, and such provisions are made for the benefit of the holders of
Senior Debt, and such holders are hereby obligees hereunder to the same extent
as if their names were written herein as such, and they and/or their agent may
proceed to enforce such provisions.
As used herein, the term "Senior Debt" shall mean all indebtedness,
obligations and liabilities of Envirodyne Industries, Inc. (the "Company")
arising out of or in connection with (a) the Indenture dated as of June 20,
1995 between the Company and Shawmut Bank Connecticut, National Association, as
Trustee (as amended, supplemented or otherwise modified from time to time, the
"Indenture") and all "Securities" (as defined in the Indenture), (b) all Credit
Documents (as defined in the Indenture), (c) the Letter of Credit Agreement (as
defined in the Indenture) and (d) the Revolving Credit Agreement (as defined in
the Indenture), and further including, without limitation, all principal,
reimbursement obligations, Yield-Maintenance Amount (as defined in the
Indenture) and interest on all loans, advances, investments and other
extensions of credit made to (or incurred by) the Company under or in
connection with any of the agreements, instruments or documents referenced in
the foregoing clauses (a) through (d) (collectively, the "Senior Debt
Agreements") and any and all renewals, extensions and refinancings thereof (and
including any interest accruing subsequent to the commencement of any
bankruptcy, insolvency or similar proceedings with respect to the Company
("Post-Petition Interest").
No payment on account of Subordinated Debt shall be made: (i) unless
full payment of all amounts then due on all Senior Debt has been indefeasibly
made, (ii) if, at the time of such payment or immediately after giving effect
thereto, there shall exist any "Event of Default" (as hereafter defined) or
(iii) any provision of the Senior Debt Agreements prohibit any such payment for
any reason. As used herein, the term "Event of Default" shall mean any "Event
of Default" or "Default" as defined in any Senior Debt
<PAGE> 148
Agreement or any other default thereunder the occurrence of which would permit
the acceleration of the maturity of any Senior Debt thereunder.
No Subordinated Debt Holder (or agent or trustee on its behalf) will
accelerate the maturity of, or commence any action or proceeding against the
Company to recover, all or any part of the Subordinated Debt or join with any
creditor, unless the holders of all Senior Debt shall also join, in bringing
any proceedings against the Company under any bankruptcy, reorganization,
readjustment of debt, arrangement of debt, receivership, liquidation or
insolvency law or statute of the Federal or any State government unless and
until all Senior Debt shall be paid in full.
In the event of any liquidation, dissolution or other winding up of the
Company, or in the event of any receivership, insolvency, bankruptcy,
assignment for the benefit of creditors, reorganization or arrangement with
creditors, whether or not pursuant to bankruptcy laws, sale of all or
substantially all of the assets or any other marshalling of the assets and
liabilities of the Company, (i) all Senior Debt shall first be paid in full
before any Subordinated Debt Holder shall be entitled to receive any moneys,
dividends or other assets in any such proceeding, and (ii) each Subordinated
Debt Holder will at the request of the Collateral Agent (as defined in the
Indenture) file any claim, proof of claim or other instrument of similar
character necessary to enforce the obligations of the Company in respect of
Subordinated Debt and will hold in trust for the Collateral Agent and pay over
to the Collateral Agent, in the form received, to be applied on Senior Debt,
any and all moneys, dividends or other assets received in any such proceeding
on account of Subordinated Debt, unless and until all Senior Debt (including
Post-Petition Interest) shall be paid in full. In the event that a
Subordinated Debt Holder shall fail to take such action requested by the
Collateral Agent, the Collateral Agent may, as attorney-in-fact for such
Subordinated Debt Holder, take such action on behalf of such Subordinated Debt
Holder to demand, sue for, collect and receive any and all such moneys,
dividends or other assets and give acquittance therefor and to file any claim,
proof of claim or other instrument of similar character and to take such other
action (including acceptance or rejection of any plan of reorganization or
arrangement) in the name of the Collateral Agent or in the name of such
Subordinated Debt Holder as the Collateral Agent may deem necessary or
advisable; and each Subordinated Debt Holder will execute and deliver to the
Collateral Agent such other and further powers of attorney or other instruments
as the Collateral Agent may request in order to accomplish the foregoing.
The holders of Senior Debt (and any person or entity acting on their
behalf (including, without limitation, the Collateral Agent)) may, at any time
and from time to time, without the consent of or notice to any Subordinated
Debt Holder, without incurring responsi-
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<PAGE> 149
bility to any Subordinated Debt Holder, and without impairing or releasing any
of the rights of any holder of Senior Debt or any of the obligations of any
Subordinated Debt Holder:
(a) Change the amount, manner, place or terms of payment or
change or extend the time of payment of or renew or alter any Senior
Debt (or any part thereof including any principal, interest or
Yield-Maintenance Amount) or amend, supplement or otherwise modify any
Senior Debt Agreement in any manner or enter into or amend, supplement
or modify in any manner any other agreement relating to Senior Debt
(including provisions restricting or further restricting payments of
Subordinated Debt);
(b) Sell, exchange, release or otherwise deal with any
property at any time pledged or mortgaged to secure, or howsoever
securing, any Senior Debt;
(c) Release anyone liable in any manner for the payment or
collection of any Senior Debt;
(d) Exercise or refrain from exercising any rights against
the Company and others (including, without limitation, any guarantor and
any Subordinated Debt Holder);
(e) Apply any sums by whomsoever paid or however realized
to any Senior Debt; and
(f) Waive, consent to, release, grant any indulgence for,
extend, renew, refinance, alter, delay or take (or refrain from taking)
any other action with respect to any Senior Debt or any term or
condition relating to any Senior Debt Agreement.
In the event that a Subordinated Debt Holder shall receive any payment
of Subordinated Debt which it is not entitled to receive under the provisions
hereof, such holder will hold any amount so received in trust for the benefit
of the holders of the Senior Debt and will forthwith turn over such payment to
the Collateral Agent for the benefit of the holders of the Senior Debt and for
application to the payment of Senior Debt.
The subordination provisions contained herein shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Senior Debt is rescinded or must otherwise be returned by any holder
of any Senior Debt upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, all as though such payment had not been made.
Each Subordinated Debt Holder by its acceptance hereof authorizes and
directs the Company on its behalf to take such further action as may be
necessary or appropriate to effectuate the
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<PAGE> 150
subordination provided herein and appoints the Collateral Agent its
attorney-in-fact for any and all such purposes.
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<PAGE> 1
EXHIBIT 4.5
EXCHANGE AND REGISTRATION RIGHTS AGREEMENT
Envirodyne Industries, Inc.
701 Harger Road, Suite 190
Oak Brook, Illinois 60521
June 20, 1995
To Each of the Purchasers
Named in the Purchaser Schedule
Attached Hereto (the "Purchasers")
Ladies and Gentlemen:
Envirodyne Industries, Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the Purchasers, upon the terms set
forth in a Note Agreement of even date herewith (the "Note Agreement"),
$160,000,000 aggregate principal amount of its 12% First Priority Senior
Secured Notes due 2000, Series A, and Floating Rate First Priority Senior
Secured Notes due 2000, Series C (the "Notes"). The Notes will be issued
pursuant to an indenture (the "Indenture") between the Company and Shawmut Bank
Connecticut, N.A., as trustee (the "Trustee"), substantially in the form
attached as Exhibit A to the Note Agreement. Capitalized terms used but not
specifically defined herein that are defined in the Note Agreement are used
herein as so defined. As an inducement to the Purchasers to enter into the
Note Agreement and in satisfaction of one of the conditions to the Purchasers'
obligations thereunder, the Company agrees with the Purchasers, for the benefit
of the Holders of the Notes (including the Purchasers), as follows:
1. Registered Exchange Offer.
(a) The Company shall (i) prepare and, as soon as
practicable, but in any event within 30 days after the Closing Date, file with
the Securities and Exchange Commission (the "Commission") a registration
statement of the Company and the Guarantors (the "Exchange Offer Registration
Statement") on an appropriate form under the Securities Act with respect to a
proposed offer (the "Registered Exchange Offer") to the Holders of the Notes to
issue and deliver to such Holders, in exchange for the Notes, a like principal
amount of 12% First Priority Senior Secured Notes due 2000, Series B, and
Floating Rate First Priority Senior Secured Notes due 2000, Series D of the
Company (the "Exchange Notes") issued under the Indenture, having such terms
and provisions provided for in the Indenture and being in substantially the
form set forth therefor in the Indenture, (ii)
<PAGE> 2
use its best efforts to cause the Exchange Offer Registration Statement to
become effective under the Securities Act no later than 120 days after the
Closing Date and (iii) upon the effectiveness of the Exchange Offer
Registration Statement, commence the Registered Exchange Offer and cause the
same to remain open for such period of time (but not less than 30 days after
the date notice of the Registered Exchange Offer is first mailed to the Holders
of the Notes), and to be conducted in accordance with such procedures, as may
be required by the applicable provisions of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). The objective of such Registered
Exchange Offer shall be to enable each Holder of Notes electing to exchange
Notes for Exchange Notes (assuming that such Holder is not an affiliate of the
Company within the meaning of the Securities Act, acquires the Exchange Notes
in the ordinary course of such Holder's business and has no arrangements with
any person to participate in the distribution of the Exchange Notes) to trade
such Exchange Notes from and after their receipt without any limitations or
restrictions under the Securities Act or the Exchange Act as a result of the
registration requirements thereof and without material restrictions under the
securities laws of a substantial proportion of the several states of the United
States as a result of the registration requirements thereof.
(b) The Company shall indicate in a "Plan of
Distribution" section contained in the final prospectus constituting a part of
the registration statement relating to the Registered Exchange Offer that any
broker or dealer registered under the Exchange Act (each a "Broker-Dealer") who
holds Notes that were acquired for its own account as a result of market-making
activities or other trading activities (other than Notes acquired directly from
the Company), may exchange such Notes for Exchange Notes pursuant to the
Registered Exchange Offer; however, such Broker-Dealer may be deemed an
"underwriter" within the meaning of the Securities Act and, therefore, must
deliver a prospectus meeting the requirements of the Act in connection with any
resales of the Exchange Notes received by it in the Registered Exchange Offer,
which prospectus delivery requirement may be satisfied by the delivery by such
Broker-Dealer of the final prospectus contained in the registered statement
relating to the Registration Exchange Offer. Such "Plan of Distribution"
section also shall state that the delivery by a Broker-Dealer of the final
prospectus relating to the Registered Exchange Offer in connection with resales
of Exchange Notes shall not be deemed to be an admission by such Broker-Dealer
that is an "underwriter" within the meaning of the Act, and shall contain all
other information with respect to resales of the Exchange Notes by
Broker-Dealers that the Commission may require in connection therewith, but
such "Plan of Distribution" shall not name any such Broker-Dealer or disclose
the amount of Exchange Notes held by any such Broker-Dealer except to the
extent required by the
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<PAGE> 3
Commission as a result of a change in policy after the date of this Agreement.
(c) In connection with such Registered Exchange Offer and
the offer and sale of Exchange Notes by Broker-Dealers as contemplated above,
the Company shall take such other and further action, including making
appropriate filings under state securities laws and delivering such number of
final prospectuses relating to the Registered Exchange Offer as any
Broker-Dealer proposing to deliver the same in connection with its resales of
Exchange Notes may reasonably request, as may be necessary to realize the
foregoing objectives. The Company shall cause the Exchange Offer Registration
Statement to remain continuously effective for a period of 180 days after the
date on which such registration statement is first declared effective, and
shall supplement or amend the prospectus contained therein to the extent
necessary to permit such prospectus (as supplemented or amended) to be
delivered by Broker-Dealers in connection with their resales of Exchange Notes
as aforesaid.
2. Senior Notes Shelf Registration. If, (i) the
applicable interpretations of the Commission's staff do not permit the Company
to effect the Registered Exchange Offer, as contemplated by Section 1 hereof,
or (ii) for any reason the Registered Exchange Offer is not consummated within
180 days after the filing of the Exchange Offer Registration Statement, the
following provisions shall apply:
(a) The Company shall promptly file with the Commission
and thereafter shall use its best efforts to cause to be declared effective a
registration statement (the "Notes Shelf Registration Statement") on an
appropriate form under the Securities Act relating to the offer and sale of the
Notes by the Holders thereof from time to time in accordance with the methods
of distribution set forth in the Notes Shelf Registration Statement and Rule
415 under the Securities Act (hereafter, a "First Priority Notes Shelf
Registration").
(b) The Company agrees to use its best efforts to keep
the Notes Shelf Registration Statement continuously effective in order to
permit the prospectus included therein to be usable by the Holders of the Notes
for a period of three years from the date the Notes Shelf Registration
Statement is declared effective by the Commission or such shorter period that
will terminate when all the Notes covered by the Notes Shelf Registration
Statement have been sold pursuant to the Notes Shelf Registration Statement;
provided that the Company shall be deemed not to have used its best efforts to
keep the Notes Shelf Registration Statement effective during such period if it
voluntarily takes any action that would result in Holders of the Notes covered
thereby not being able to offer and sell such Notes during such period, unless
such action is required by applicable law, and
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<PAGE> 4
provided, further, that the Company shall be entitled to postpone for a
reasonable period of time the filing or effectiveness of, or suspend the rights
of the Holder to make sales pursuant to, the Notes Shelf Registration
Statement, if the Company determines in good faith (not including avoidance of
the Company's obligations hereunder) that the filing or effectiveness of, or
sales pursuant to, the Notes Shelf Registration Statement would impede, delay
or interfere with any financing, offer or sale of securities, acquisition,
corporate reorganization or other significant transaction involving the Company
or require disclosure of material information which the Company has a bona fide
business purpose for preserving as confidential, so long as the Company
promptly thereafter complies with the requirements of Section 3(h) hereof, if
applicable. Any such period during which the Company fails to keep the Notes
Shelf Registration Statement effective and usable for offers and sales of Notes
is referred to as a "Suspension Period". A Suspension Period shall commence on
and include the date that the Company gives notice to the Holders that the
Notes Shelf Registration Statement is no longer usable for offers and sales of
Notes and shall end on the date when each seller of Notes covered by the Notes
Shelf Registration Statement either receives the copies of the supplemented or
amended prospectus contemplated by Section 3(h) hereof or is advised in writing
by the Company that use of the prospectus may be resumed. Upon notice by the
Company to the Holders of a Suspension Period, which notice shall specify the
date on which the prohibition, suspension or delay shall end, the Holders
covenant to (i) keep the fact of any such notice strictly confidential, (ii)
promptly halt any offer, sale, trading or transfer by them or any of their
affiliates of any of the Notes pursuant to such Notes Shelf Registration
Statement for the duration of the period specified in such notice and (iii)
promptly halt any use, publication, dissemination or distribution of the Notes
Shelf Registration Statement, each prospectus included therein, and any
amendment or supplement thereto by it and any of its affiliates for the
duration of the period specified in such notice. If one or more Suspension
Periods occur, the three-year time period referenced above shall be extended by
the number of days included in each such Suspension Period.
(c) Notwithstanding any other provisions of this
Agreement to the contrary, the Company will cause the Notes Shelf Registration
Statement and the related prospectus and any amendment or supplement thereto,
as of the effective date of the Notes Shelf Registration Statement, amendment
or supplement, (i) to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission and (ii) not to contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading.
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<PAGE> 5
3. Registration Procedures. In connection with any
Notes Shelf Registration pursuant to Section 2 hereof, and, to the extent
applicable, any Registered Exchange Offer pursuant to Section 1 hereof, the
following provisions shall apply:
(a) The Company shall furnish to the Holders of the
Notes, prior to the filing thereof with the Commission, a copy of the Exchange
Offer Registration Statement or the Notes Shelf Registration Statement, as the
case may be, and each amendment thereof and each supplement, if any, to the
prospectus included therein and shall use its best efforts to reflect in each
such document, when so filed with the Commission, such comments as any Holder
of the Notes reasonably may propose.
(b) The Company shall advise the Holders of the Notes or
the Exchange Notes, and, if requested by any such Holder, confirm such advice
in writing --
(i) when the Exchange Offer Registration Statement or
the Notes Shelf Registration Statement, as the case may be,
and any amendment thereto has been filed with the Commission
and when the Exchange Offer Registration Statement or the
Notes Shelf Registration Statement, as the case may be, or any
post-effective amendment thereto has become effective;
(ii) of any request by the Commission for amendments
or supplements to the Exchange Offer Registration Statement or
the Notes Shelf Registration Statement, as the case may be, or
the prospectus included therein or for additional information;
(iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Exchange Offer
Registration Statement or the Notes Shelf Registration
Statement, as the case may be, or the initiation of any
proceedings for that purpose;
(iv) of the receipt by the Company of any
notification with respect to the suspension of the
qualification of the Notes or the Exchange Notes for sale in
any jurisdiction or the initiation or threatening of any
proceeding for such purpose; and
(v) of the happening of any event that requires the
making of any changes in the Exchange Offer Registration
Statement or the Notes Shelf Registration Statement, as the
case may be, or the prospectus in order to make the statements
therein not misleading (which advice shall be accompanied by
an instruction to suspend the use of the prospectus until the
requisite changes have been made).
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<PAGE> 6
Each Holder agrees that, upon receipt of any notice from the
Company of the occurrence of any event of the kind described in clause (v) of
this Section 3(b), such Holder will forthwith discontinue such Holder's
disposition of the Notes pursuant to the Notes Shelf Registration Statement
until such Holder's receipt of the copies of a supplemented or amended
prospectus contemplated by Section 3(h) and, if so directed by the Company,
will deliver to the Company all copies, other than permanent file copies, then
in such Holder's possession of the prospectus relating to the Notes current at
the time of receipt of such notice.
(c) The Company will make every reasonable effort to
obtain the withdrawal of any order suspending the effectiveness of the Exchange
Offer Registration Statement or the Notes Shelf Registration Statement, as the
case may be, at the earliest possible time.
(d) The Company will furnish to each Holder of the Notes
or the Exchange Notes included within the coverage of the Registered Exchange
Offer or the Notes Shelf Registration, as appropriate, without charge, at least
one copy of the Exchange Offer Registration Statement or the Notes Shelf
Registration Statement, as the case may be, and any post-effective amendment
thereto, including financial statements and schedules, and, if any such Holder
so requests in writing, all exhibits (including those incorporated by
reference).
(e) The Company will deliver to each Holder of Notes or
Exchange Notes included within the coverage of the Registered Exchange Offer or
the Notes Shelf Registration, as appropriate, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the Exchange
Offer Registration Statement or the Notes Shelf Registration Statement, as the
case may be, and any amendment or supplement thereto as such persons may
reasonably request; the Company consents to the use of the prospectus or any
amendment or supplement thereto by each of the selling Holders of the Notes or
the Exchange Notes covered by the prospectus or any amendment or supplement
thereto.
(f) Prior to any public offering of the Notes or the
Exchange Notes pursuant to the Registered Exchange Offer or the Notes Shelf
Registration, as the case may be, the Company will register or qualify and
cooperate with the Holders of the Notes or the Exchange Notes included therein
and their respective counsel in connection with the registration or
qualification of such Notes or Exchange Notes for offer and sale under the
securities or blue sky laws of such jurisdiction as any Holder reasonably
requests in writing and do any and all other acts or things necessary or
advisable to enable the offer and sale in such jurisdictions of the Notes or
the Exchange Notes covered by the Registered Exchange Offer or the Notes Shelf
Registration, as
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<PAGE> 7
the case may be; provided that the Company will not be required to qualify
generally to do business in any jurisdiction where it is not then so qualified
or to take any action which would subject it to general service of process or
to taxation in any such jurisdiction where it is not then so subject.
(g) The Company will cooperate with the Holders of the
Notes or the Exchange Notes to facilitate the timely preparation and delivery
of certificates representing the Notes or the Exchange Notes to be sold in the
Registered Exchange Offer or the Notes Shelf Registration, as the case may be,
free of any restrictive legends and in such denominations and registered in
such names as the Holders may request prior to sales of the Notes or the
Exchange Notes pursuant to the Registered Exchange Offer or the Notes Shelf
Registration, as the case may be.
(h) Upon the occurrence of any event contemplated by
paragraph (b)(v) above, the Company will prepare a post-effective amendment to
the Exchange Offer Registration Statement or the Notes Shelf Registration
Statement, as the case may be, or a supplement to the related prospectus or
file any other required document so that, as thereafter delivered to purchasers
of the Notes or the Exchange Notes, the prospectus will not contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading.
(i) Not later than the effective date of the Exchange
Offer Registration Statement or the Notes Shelf Registration Statement, as the
case may be, the Company will provide a CUSIP number for the Notes or the
Exchange Notes, as the case may be, and provide the Trustee with printed
certificates for the Notes or Exchange Notes, as the case may be, in a form
eligible for deposit with Depositary Trust Company.
(j) The Company will use its best efforts to comply with
all applicable rules and regulations of the Commission and will make generally
available to its security Holders an earnings statement satisfying the
provisions of Section 11(a) of the Securities Act, no later than 45 days after
the end of a 12-month period (or 90 days, if such period is a fiscal year)
beginning with the first month of the Company's first fiscal quarter commencing
after the effective date of each of the Registered Exchange Offer or the Notes
Shelf Registration, which statements shall cover such 12-month period.
(k) The Company will cause the Indenture to be qualified
under the Trust Indenture Act.
(l) The Company may require each Holder of Notes to be
sold pursuant to the Notes Shelf Registration to furnish to the Company such
information regarding such Holder and the
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<PAGE> 8
distribution of such Notes as the Company may from time to time reasonably
require for inclusion in the registration statement.
4. Registration Expenses. The Company will bear all
expenses incurred in connection with the performance of its obligations under
Sections 1 through 3 hereof and, in the event of a Notes Shelf Registration,
will bear or reimburse the Holders of the Notes for the reasonable fees and
disbursements of one firm of counsel designated by the Holders of a majority in
principal amount of the Notes to act as counsel for the Holders of the Notes in
connection therewith.
5. Indemnification.
(a) Indemnification by Company. In the event of (i) a
Notes Shelf Registration, the Company shall indemnify and hold harmless each
Holder of Notes and (ii) the Registered Exchange Offer, each Broker-Dealer who
holds Exchange Notes acquired for its own account pursuant to the Exchange
Offer, and, in any such case, such Holder's officers, directors, employees and
Agents and each person who controls such Holder within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act (each such
person being sometimes hereinafter referred to as an "Indemnified Holder") from
and against any and all losses, claims, damages, liabilities and judgments
caused by any untrue statement or alleged untrue statement of a material fact
contained in the Exchange Offer Registration Statement or the Notes Shelf
Registration Statement or in any prospectus included therein or in any
amendment or supplement thereto or in any preliminary prospectus relating to
the Notes Shelf Registration, the Registered Exchange Offer or the delivery by
Broker-Dealers who are required to do so of the final prospectus contained in
the registration statement relating to the Registered Exchange Offer in
connection with their resales of the Exchange Notes, as the case may be, or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, except
insofar as such losses, claims, damages, liabilities or judgments are caused by
any such untrue statement or omission or allegation thereof based upon
information relating to such Holder furnished in writing to the Company by such
Holder expressly for use therein; provided, however, that the Company shall not
be liable in any such case to the extent that such loss, claim, damage,
liability or expense arises out of or is caused by an untrue statement or
alleged untrue statement or omission or alleged omission made in any
preliminary prospectus if such Holder failed to send or deliver a copy of the
final prospectus with or prior to the delivery of written confirmation of the
sale of Notes or the Exchange Notes, as the case may be, by such Holder to the
person asserting such loss, claim, damage, liability or judgment who purchased
Notes or Exchange Notes, as the case may be, that
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<PAGE> 9
are the subject thereof from such Holder. This indemnity will be in addition
to any liability which the Company may otherwise have. The Company will also
indemnify underwriters, selling brokers, dealer managers and similar securities
industry professionals participating in the distribution, their officers and
directors and each person who controls such persons (within the meaning of
Section 15 of the Securities Act of Section 20 of the Exchange Act) to the same
extent as provided above with respect to the indemnification of the Holders of
the Notes or the Exchange Notes, as the case may be, if requested.
If any action or proceeding (including any governmental
investigation or inquiry) shall be brought or asserted against an Indemnified
Holder in respect of which indemnity may be sought from the Company, such
Indemnified Holder shall promptly notify the Company in writing, and the
Company shall assume the defense thereof, including the employment of counsel
reasonably satisfactory to such Indemnified Holder and the payment of all
reasonable expenses. Such Indemnified Holder shall have the right to employ
separate counsel in any such action and to participate in the defense thereof,
but the fees and expenses of such counsel shall be the expense of such
Indemnified Holder unless (a) the Company has agreed to pay such fees and
expenses or (b) the Company shall have failed to assume the defense of such
action or proceeding and to employ counsel reasonably satisfactory to such
Indemnified Holder in any such action or proceeding within a reasonable time
after notice of commencement of such action or proceeding or (c) the named
parties to any such action or proceeding (including any impleaded parties)
include both such Indemnified Holder and the Company, and such Indemnified
Holder shall have been advised in writing by counsel that there may be one or
more legal defenses available to such Indemnified Holder which are different
from or additional to those available to the Company (in which case, if such
Indemnified Holder notifies the Company in writing that it elects to employ
separate counsel at the expense of the Company, the Company shall not have the
right to assume the defense of such action or proceeding on behalf of such
Indemnified Holder it being understood, however, that the Company shall not, in
substantially similar or related actions or proceedings in the same
jurisdiction arising out of the same general allegations or circumstances, be
liable for the reasonable fees and expenses of more than one separate firm of
attorneys (in addition to local counsel) at any time for such Indemnified
Holder and any other Indemnified Holders, which firm shall be designated in
writing by such Indemnified Holders and that all such fees and expenses shall
be reimbursed as they are incurred). The Company shall not be liable for any
settlement of any such action or proceeding effected without its written
consent, but if settled with its written consent, or if there be a final,
unappealable judgment for the plaintiff in any such action or proceeding, the
Company agrees to indemnify and hold harmless such Indemnified Holders
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<PAGE> 10
from and against any loss or liability by reason of such settlement or
judgment. The Company shall not, without the prior written consent of the
Indemnified Holder, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Holder is a party and indemnity
been sought hereunder by such Indemnified Holder, unless such settlement
includes an unconditional release of such Indemnified Holder from all liability
on claims that are the subject matter of such proceeding.
(b) Indemnification by Holders. In the event of a Notes
Shelf Registration, each Holder of Notes selling Notes in the Notes Shelf
Registration agrees to indemnify and hold harmless the Company, its directors
and officers, employees and agents and each person, if any, who controls the
Company within the meaning of either Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the foregoing indemnity
from the Company to such Holder, but only with respect to information relating
to such Holder or the distribution furnished in writing by such Holder
expressly for use in the Notes Shelf Registration Statement or in any
prospectus included therein or any amendment or supplement thereto or any
preliminary prospectus relating to the Notes Shelf Registration; provided,
however, that no such Holder shall be liable for any indemnity claims hereunder
in excess of the amount of net proceeds received by such Holder from the sale
of Notes pursuant to the Notes Shelf Registration. If any action or proceeding
shall be brought against the Company or its directors, officers, employees or
agents or any such controlling person, in respect of which indemnity may be
sought against a Holder of Notes, such Holder shall have the rights and duties
given the Company and the Company or its directors, officers, employees or
agents or such controlling person shall have the rights and duties given to
each Holder by Section 5(a) hereof. The Company shall be entitled to receive
indemnities from underwriters, selling brokers, dealer managers and similar
securities industry professionals participating in the distribution, to the
same extent as provided above with respect to information so furnished in
writing by such persons specifically for inclusion in any prospectus or
registration statement or any amendment or supplement thereto or any
preliminary prospectus.
(c) Contribution. If the indemnification provided for in
this Section 5 is unavailable to an indemnified party under Section 5(a) or
Section 5(b) hereof (other than by reason of exceptions provided in those
Sections) in respect of any losses, claims, damages, liabilities or judgments
referred to therein, then each applicable indemnifying party, in lieu of
indemnifying such indemnified party, shall contribute to the amount paid or
payable by such indemnified party as a result of such losses, claims, damages,
liabilities or judgments in such proportion as is appropriate to reflect not
only the relative benefits but also
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<PAGE> 11
the relative fault of the Company on the one hand and of the Indemnified Holder
on the other in connection with the statements or omissions which resulted in
such losses, claims, damages, liabilities or judgments, as well as any other
relevant equitable considerations. The relative fault of the Company on the
one hand and of the Indemnified Holder on the other shall be determined by
reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Company or by the
Indemnified Holder and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
The amount paid or payable by a party as a result of the losses, claims,
damages, liabilities and expenses referred to above shall be deemed to include,
subject to the limitations set forth in the second paragraph of Section 5(a),
any legal or other fees or expenses reasonably incurred by such party in
connection with investigating or defending any action or claim.
The Company and the Holders of the Notes and the Exchange
Notes agree that it would not be just and equitable if contribution pursuant to
this Section 5(c) were determined by pro rata allocation or by any other method
of allocation which does not take account of the equitable considerations
referred to in the immediately preceding paragraph. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation.
6. Additional Interest Under Certain Circumstances;
Remedies. If any one of the following shall occur for any reason: (i) neither
the Exchange Offer Registration Statement nor the Notes Shelf Registration
Statement has been filed with the Commission on or prior to 30 days after the
Closing Date, (ii) neither the Exchange Offer Registration Statement nor the
Notes Shelf Registration Statement has been declared effective under the
Securities Act on or prior to 120 days after the Closing Date, (iii) the
Company has not exchanged Exchange Notes for all Notes validly tendered in
accordance with the terms of the Registered Exchange Offer on or prior to 60
days after the date upon which the Exchange Offer Registration Statement was
declared effective under the Securities Act, (iv) the Exchange Offer
Registration Statement was declared effective under the Securities Act but
ceases to be effective under the Securities Act at any time prior to the time
the Exchange Offer is consummated, or (v) the Notes Shelf Registration
Statement was declared effective under the Securities Act but ceases to be
effective under the Securities Act at any time prior to the third anniversary
of the date that the Notes Shelf Registration Statement was declared effective
under the Securities Act (any such event described in (i) through (v) being
herein called a "Registered Default"), then, as liquidated damages and not as a
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<PAGE> 12
penalty, the per annum interest rate on the Notes shall be increased as
follows. Effective on the date upon which a Registered Default occurs, the per
annum interest rate on the Notes shall increase to a rate that is fifty (50)
basis points above the interest rate on the Notes in effect immediately prior
to such date. In addition, effective on the first day after the end of each
90-day period after the date upon which a Registration Default occurs, the per
annum interest rate on the Notes will further increase over the rate then in
effect by an additional twenty-five (25) basis points. Notwithstanding the
foregoing, at no time shall the maximum aggregate interest rate borne by the
Notes exceed the lesser of (i) the interest rate set forth on the face of the
Notes plus two hundred (200) basis points per annum or (ii) the maximum lawful
rate permitted under applicable usury laws. Effective upon the date upon which
such Registration Default is cured, the interest rate on the Notes will revert
to the interest rate set forth on the face of the Notes.
7. Miscellaneous.
(a) Amendments and Waivers. The provisions of this
Agreement may not be amended, modified or supplemented, and waivers or consents
to departures from the provisions hereof may not be given, unless the Company
has obtained the written consent of Holders of a majority in aggregate
principal amount of the Notes (insofar as such matters relate to the Notes) or
the Exchange Notes (insofar as such matters relate to the Exchange Notes).
(b) Notices. All notices and other communications
provided for or permitted hereunder shall be made in writing by hand-delivery,
first-class mail, telex, telecopier, or air courier guaranteeing overnight
delivery:
(1) if to a Holder of Notes or Exchange Notes, at the
most current address given by such Holder to the Company in
accordance with the provisions of this Section 7(b), which
address initially is, with respect to each Purchaser, the
address of such Purchaser as set forth in the Note Agreement;
and
(2) if to the Company, initially at its address set
forth in the Note Agreement.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt acknowledged by recipient's
telecopy operator, if telecopied; and on the day delivered, if sent by
overnight air courier guaranteeing next day delivery.
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<PAGE> 13
(c) Successors and Assigns. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of each of the
parties, including without limitation and without the need for an express
assignment, subsequent Holders of the Notes.
(d) Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.
(e) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(f) 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 conflicts of laws provisions thereof).
(g) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you.
Very truly yours,
ENVIRODYNE INDUSTRIES, INC.
By: _________________________
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<PAGE> 14
ACCEPTED:
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: __________________________
Title:____________________
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<PAGE> 1
EXHIBIT 4.6
GUARANTY AGREEMENT
This Guaranty Agreement (the "Guaranty"), dated as of June 20, 1995, is made
by Clear Shield National, Inc., a California corporation, Sandusky Plastics,
Inc., a Delaware corporation, Sandusky Plastics of Delaware, Inc., a Delaware
corporation, Viskase Holding Corporation, a Delaware corporation, Viskase Sales
Corporation, a Delaware corporation, and Viskase Corporation, a Pennsylvania
corporation, (each such corporation, together with any other Person becoming a
party to this Guaranty pursuant to paragraph 4M, is referred to herein,
individually, as a "Guarantor" and, collectively, as the "Guarantors"), in
favor of the Collateral Agent on behalf and for the benefit of the Guarantied
Parties.
RECITALS:
WHEREAS, the Guarantors are wholly-owned Subsidiaries of Envirodyne
Industries, Inc., a Delaware corporation (the "Company"); and
WHEREAS, pursuant to the Revolving Credit Agreement The Prudential Insurance
Company of America (in its capacity as revolving credit lender, "Prudential")
may from time to time hereafter make Revolving Loans to the Company and as a
condition precedent to its willingness to enter into the Revolving Credit
Agreement and to extend Revolving Loans, Prudential has requested, among other
things, that the Guarantors execute this Guaranty for its benefit and for the
benefit of the holders of the Revolving Notes; and
WHEREAS, pursuant to the First Priority Note Agreement the Company is
issuing the First Priority Notes under the First Priority Notes Indenture and
as a condition precedent to their willingness to purchase the First Priority
Notes, the purchasers of the First Priority Notes specified in the Purchaser
Schedule attached to the First Priority Note Agreement have requested, among
other things, that the Guarantors execute this Guaranty for their benefit and
for the benefit of other holders of First Priority Notes; and
WHEREAS, pursuant to the Letter of Credit Facility Agreement the LC Lenders
are issuing or causing to be issued on the date hereof Letters of Credit for
the account of the Company and may from time to time hereafter issue or cause
to be issued Letters of Credit for the account of the Company and make loans to
the Company to fund the Company's reimbursement obligations to the LC Lenders
with respect to draws upon such Letters of Credit; and
WHEREAS, the Company may issue the Second Priority Notes under the Second
Priority Notes Indenture; and
<PAGE> 2
WHEREAS, the Company has agreed to offer to exchange the First Priority
Exchange Notes issued under the First Priority Notes Indenture for the First
Priority Notes and the Company may, if the Second Priority Notes are issued,
offer to exchange the Second Priority Exchange Notes, if any, issued under the
Second Priority Notes Indenture for the Second Priority Notes; and
WHEREAS, pursuant to the Collateral Documents the Loan Parties are granting
to the Collateral Agent on behalf and for the benefit of the Secured Parties
liens upon and security interests in the Collateral to secure the Guarantied
Obligations; and
WHEREAS, pursuant to the Intercreditor Agreement the LC Agent, Prudential
and the First Priority Indenture Trustee have appointed the Collateral Agent as
their agent with respect to the Collateral and this Guaranty; and
WHEREAS, the Company has advanced funds to certain of the Guarantors prior
to the date hereof and it is contemplated that the Company will be advancing
additional funds to the Guarantors, including proceeds received by the Company
from the Financing Agreements, and entering into other transactions with the
Guarantors; and
WHEREAS, all parties acknowledge that the indebtedness and obligations
contemplated by the Financing Agreements are being incurred for and will inure
to the benefit of the Guarantors; and
WHEREAS, in order to induce the Credit Parties to enter into the above
contemplated financing arrangements with the Company, the Guarantors have
agreed to execute this Guaranty.
NOW THEREFORE, for value received, to satisfy one of the conditions
precedent to the execution of the Financing Agreements by parties other than
the Company, to induce the initial purchasers to purchase the First Priority
Notes, Prudential to make any Revolving Loan, the LC Lenders to issue any
Letter of Credit, the holders of the Company's 10.25% Notes due 2001 to
exchange such notes for the Second Priority Notes, if issued, the holders of
the First Priority Notes to exchange such Notes for First Priority Exchange
Notes and the holders of the Second Priority Notes, if any, to exchange such
Notes for Second Priority Exchange Notes and to induce any other Person to
accept the transfer of all or any part of any First Priority Note, First
Priority Exchange Note, Revolving Note, Second Priority Note and Second
Priority Exchange Note and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, each of the Guarantors
jointly and severally agrees as follows:
2
<PAGE> 3
1. DEFINITIONS.
1A. TERMS DEFINED IN THIS GUARANTY. As used in this Guaranty, the following
terms shall have the following meanings. Any plural term that is used herein in
the singular shall be taken to mean each entity or item of the defined class
and any singular term that is used herein in the plural shall be taken to mean
all of the entities or items of the defined class, collectively.
"BTCC" shall mean BT Commercial Corporation, a Delaware corporation.
"BANKRUPTCY CODE" shall have the meaning ascribed to such term in paragraph
2B.
"CAPITAL LEASE OBLIGATION" shall mean, at any time, the amount of the
liability with respect to a lease that would be required at such time to be
capitalized on a balance sheet of such Person prepared in accordance with
generally accepted accounting principles.
"CLOSING DAY" shall mean June 20, 1995.
"COLLATERAL" shall have the meaning ascribed to such term in the
Intercreditor Agreement.
"COLLATERAL AGENT" shall mean BTCC, in its capacity as agent for the
Guarantied Parties pursuant to the Intercreditor Agreement, together with any
successor or replacement agent.
"COLLATERAL DOCUMENTS" shall have the meaning ascribed to such term in the
Intercreditor Agreement.
"CONTROL" shall mean (except as otherwise specifically provided herein) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Securities, by agreement or otherwise; and the terms
"Controlling" and "Controlled" have meanings correlative to the foregoing.
"CREDIT PARTIES" shall mean Prudential, the holders of the Revolving Notes,
the LC Agent, the LC Lenders, the First Priority Indenture Trustee, the holders
of the First Priority Notes, the holders of the First Priority Exchange Notes,
the Second Priority Indenture Trustee, the holders of the Second Priority
Notes, the holders of the Second Priority Exchange Notes and the Collateral
Agent.
"EVENT OF DEFAULT" shall have the meaning ascribed to such term in any
Financing Agreement.
3
<PAGE> 4
"FINANCING AGREEMENT" shall mean any of the Revolving Credit Agreement, the
Letter of Credit Facility Agreement, the First Priority Note Agreement, the
First Priority Notes Indenture, the First Priority Registration Rights
Agreement, the Second Priority Notes Indenture, the Second Priority Exchange
Notes Indenture and the Guarantied Notes.
"FIRST PRIORITY EXCHANGE NOTES" shall mean any of the Company's 12% First
Priority Senior Secured Exchange Notes due 2000, Series C, or Floating Rate
First Priority Senior Secured Exchange Notes due 2000, Series D issued under
the First Priority Notes Indenture.
"FIRST PRIORITY INDENTURE TRUSTEE" shall mean Shawmut Bank Connecticut,
National Association, as trustee under the First Priority Notes Indenture and
any successor thereunder.
"FIRST PRIORITY NOTES" shall mean the Company's 12% First Priority Senior
Secured Notes due 2000, Series A, or Floating Rate First Priority Senior
Secured Notes due 2000, Series B issued under the First Priority Notes
Indenture.
"FIRST PRIORITY NOTE AGREEMENT" shall mean the Note Agreement, dated as of
the Closing Day, between the Company and the purchasers identified therein
pursuant to which such purchasers are purchasing the First Priority Notes, as
amended, restated, supplemented or otherwise modified from time to time.
"FIRST PRIORITY NOTES INDENTURE" shall mean the Indenture, dated as of the
Closing Day, between the Company and the First Priority Indenture Trustee under
which the First Priority Notes and First Priority Exchange Notes are being
issued, as amended, restated, supplemented or otherwise modified from time to
time.
"FIRST PRIORITY REGISTRATION RIGHTS AGREEMENT" shall mean the Exchange and
Registration Rights Agreement, dated as of the Closing Day, made by the Company
in favor of the purchasers of the First Priority Notes.
"GECC INTERCREDITOR AGREEMENT" shall mean the GECC Intercreditor Agreement,
dated as of Closing Day, between the Collateral Agent, on behalf of and for the
benefit of the Guarantied Parties, and General Electric Credit Corporation, as
amended, restated, supplemented or otherwise modified from time to time.
"GUARANTIED NOTES" shall mean the Revolving Notes, the First Priority Notes,
the First Priority Exchange Notes, the Second Priority Notes, the Second
Priority Exchange Notes and any promissory notes evidencing all or any part of
the Letter of Credit Obligations (as defined in the Intercreditor Agreement).
4
<PAGE> 5
"GUARANTIED OBLIGATIONS" shall mean all indebtedness, obligations (including
any obligation to perform) and liabilities existing on the date hereof or
arising from time to time hereafter, whether direct or indirect, joint, several
or joint and several, actual, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise, of the Company and each other Loan Party to any
Credit Party evidenced by or arising under, by virtue of or pursuant to the
Transaction Documents, including, without limitation:
(i) all obligations of any and each Loan Party to pay, reimburse or
indemnify the Collateral Agent for all costs and expenses incurred by the
Collateral Agent when acting with a good faith belief that its actions are not
contrary to the provisions of the Intercreditor Agreement, including in
connection with the realization upon or protection of the Collateral or
enforcing or defending any lien upon or security interest in the Collateral or
any other action taken under or in connection with the Intercreditor Agreement,
expenses incurred for legal counsel in connection with the foregoing, and any
other costs, expenses or liabilities incurred by the Collateral Agent for which
the Collateral Agent is entitled to be reimbursed or indemnified pursuant to
the Intercreditor Agreement or any Collateral Document;
(ii) all obligations of the Company to reimburse the LC Agent or LC Lenders
with respect to any drawing under a Letter of Credit, all loans made by the LC
Lenders under the Letter of Credit Facility Agreement to fund the Company's
reimbursement obligations with respect to draws under Letters of Credit, all
obligations of the Company under Section 9.2(c) of the Letter of Credit
Facility Agreement to deposit from time to time cash with the Collateral Agent
with respect to the undrawn face amount of all outstanding Letters of Credit,
and all of the other present or future indebtedness, liabilities and
obligations of the Company now or hereafter owed to the LC Agent or any LC
Lender evidenced by or arising under, by virtue of or pursuant to the Letter of
Credit Facility Agreement or any Letter of Credit, and all renewals and
extensions thereof;
(iii) the outstanding principal amount of the Revolving Loans, the
outstanding principal amount of the First Priority Notes, the outstanding
principal amount of the First Priority Exchange Notes, and all of the other
present or future indebtedness, liabilities and obligations of the Company now
or hereafter owed to Prudential, the holders of the Revolving Notes, the
holders of the First Priority Notes, the holders of the First Priority Exchange
Notes or the First Priority Indenture Trustee evidenced by or arising under, by
virtue of or pursuant to the Revolving Credit Agreement, the First Priority
Note Agreement, the First Priority Notes Indenture, the Revolving Notes, the
First Priority Exchange Notes or the First Priority Registration Rights
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Agreement and all renewals and extensions thereof, including, without
limitation, all obligations for compensation, reimbursement, indemnity and
other amounts payable to the First Priority Indenture Trustee and all interest
on the Revolving Loans, the First Priority Notes and the First Priority
Exchange Notes and any Yield-Maintenance Amounts;
(iv) the outstanding principal amount of the Second Priority Notes, the
outstanding principal amount of the Second Priority Exchange Notes, and all of
the other future indebtedness, liabilities and obligations of the Company
hereafter owed, if any, to the holders of the Second Priority Notes, the
holders of the Second Priority Exchange Notes or the Second Priority Indenture
Trustee evidenced by or arising under, by virtue of or pursuant to the Second
Priority Notes Indenture, the Second Priority Notes or the Second Priority
Exchange Notes, and all renewals and extensions thereof, including, without
limitation, all obligations for compensation, reimbursement, indemnity and
other amounts payable to the Second Priority Indenture Trustee and all
interest on the Second Priority Notes and the Second Priority Exchange Notes
and any prepayment premiums due with respect to the Second Priority Notes or
the Second Priority Exchange Notes;
(v) interest on the Guarantied Notes and on all obligations of the Company
to reimburse the LC Lenders with respect to any drawing under a Letter of
Credit accruing before, during or after any bankruptcy, insolvency
reorganization, arrangement, readjustment of debt, liquidation or dissolution
proceeding, and, if interest ceases to accrue by operation of law by reason of
any such proceeding, interest which otherwise would have accrued in the absence
of such proceeding; and
(vi) all present or future indebtedness, liabilities and obligations of any
and each Loan Party now or hereafter owed to any Credit Party arising under, by
virtue of or pursuant to the Collateral Documents.
"GUARANTIED PARTIES" shall mean Prudential, the LC Agent, the LC Lenders,
the First Priority Indenture Trustee, for itself and on behalf of the holders
of the First Priority Notes and the First Priority Exchange Notes, the Second
Priority Indenture Trustee, if any, for itself and on behalf of the holders of
the Second Priority Notes and the Second Priority Exchange Notes, and the
Collateral Agent.
"GUARANTY" shall have the meaning ascribed to such term in the introductory
paragraph hereof.
"INTERCREDITOR AGREEMENT" shall mean the Intercreditor and Collateral Agency
Agreement, dated as of the Closing Day, between the LC Agent, the Collateral
Agent, Prudential and the
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First Priority Indenture Trustee, as amended, restated, supplemented or
otherwise modified from time to time.
"LC AGENT" shall mean BTCC, in its capacity as agent for itself and the
other Lenders from time to time under the Letter of Credit Facility Agreement.
"LETTERS OF CREDIT" shall mean the letters of credit issued under the Letter
of Credit Facility Agreement.
"LETTER OF CREDIT FACILITY AGREEMENT" shall mean the Credit Agreement, dated
as of the Closing Day, between the Company, the LC Agent and the LC Lenders, as
amended, restated, supplemented or otherwise modified from time to time.
"LIEN" shall mean any mortgage, pledge, lien, charge, security interest,
conditional sale or other title retention agreement (including, without
limitation, Capital Lease Obligations in the nature thereof) or other
encumbrance of any kind or description, including, without limitation, any
agreement to give or grant a Lien.
"LOAN PARTIES" shall mean the Company and the Guarantors.
"PERSON" shall mean and include an individual, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a
government or any department or agency thereof.
"REVOLVING CREDIT AGREEMENT" shall mean the Revolving Credit Agreement,
dated as of the Closing Day, between the Company and Prudential, as amended,
restated, supplemented or otherwise modified from time to time.
"REVOLVING LOAN" shall have the meaning ascribed to such term in the
Revolving Credit Agreement.
"REVOLVING NOTE" shall have the meaning ascribed to such term in the
Revolving Credit Agreement.
"SECOND PRIORITY EXCHANGE NOTES" shall have the meaning ascribed to such
term in the Intercreditor Agreement.
"SECOND PRIORITY INDENTURE TRUSTEE" shall have the meaning ascribed to such
term in the Intercreditor Agreement.
"SECOND PRIORITY NOTES" shall have the meaning ascribed to such term in the
Intercreditor Agreement.
"SECOND PRIORITY NOTES INDENTURE" shall have the meaning ascribed to such
term in the Intercreditor Agreement.
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"SIGNIFICANT HOLDER" shall mean (i) each purchaser of the First Priority
Notes identified in the Purchaser Schedule to the First Priority Note
Agreement, so long as such purchaser shall hold (or be committed under the
First Priority Note Agreement to purchase) any First Priority Note or First
Priority Exchange Note or (ii) any "qualified institutional buyer" (as such
term is defined in Rule 144A under the Securities Act of 1933, as amended)
which is a holder of at least 5% of the aggregate principal amount of the First
Priority Notes, the First Priority Exchange Notes, the Second Priority Notes
and the Second Priority Exchange Notes from time to time outstanding and which
has notified the Company that it is such a holder.
"SUBSIDIARY" shall mean, with respect to any Person, (i) a corporation a
majority of whose Voting Securities is at the time directly or indirectly owned
or Controlled by such Person, by one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries thereof, or (ii) any other Person
(other than a corporation) in which such Person, one or more Subsidiaries
thereof or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest with respect to voting in the election of directors or
trustees thereof (or such other Persons performing similar functions). For
purposes of this definition, any directors' qualifying shares shall be
disregarded in determining the ownership of a Subsidiary.
"TRANSACTION DOCUMENTS" shall mean the Collateral Documents, the Financing
Agreements, the Intercreditor Agreement and all other agreements, instruments
and documents relating to the aforementioned agreements, instruments and
documents.
"VOTING SECURITIES" means, with respect to any Person, securities of any
class or classes of capital stock in such Person entitling the holders thereof,
under ordinary circumstances and in the absence of contingencies, to vote for
members of the Board of Directors of such Person (or Persons performing
functions equivalent to those of such members).
"YIELD-MAINTENANCE AMOUNT" shall have the meaning ascribed to such term in
the First Priority Notes Indenture.
1B. LEGAL PRINCIPLES, TERMS AND DETERMINATIONS. Any reference herein to any
specific citation, section or form of law, statute, rule or regulation shall
refer to such new, replacement or analogous citation, section or form should
such citation, section or form be modified, amended or replaced.
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2. THE GUARANTY.
2A. GUARANTY OF PAYMENT AND PERFORMANCE OF OBLIGATIONS. Each Guarantor,
jointly and severally, hereby absolutely, unconditionally and irrevocably
guaranties the full and prompt payment in United States currency when due
(whether at maturity, a stated prepayment date or earlier by reason of
acceleration or otherwise) and at all times thereafter, and the due and
punctual performance, of all Guarantied Obligations. Each Guarantor hereby
agrees to pay and to indemnify and save each of the Collateral Agent, the First
Priority Indenture Trustee, the Second Priority Indenture Trustee, Prudential,
the LC Agent, each LC Lender and any Significant Holder harmless from and
against any damage, loss, cost or expense (including attorneys' fees) which
such Person may incur or be subject to as a consequence, direct or indirect, of
endeavoring to enforce this Guaranty or to collect all or any part of the
Guarantied Obligations from, or in pursuing any action against, the Company or
any Guarantor or enforcing any rights of any Credit Party in the security for
the Guarantied Obligations or the liabilities of any Guarantor hereunder,
including, without limitation, the Collateral, and any taxes, fees or penalties
which may be paid or payable in connection therewith. This is a continuing
guaranty of payment and performance and not of collection. Notwithstanding
any provision of this Guaranty, all covenants, obligations, waivers and
agreements of the Guarantors under this Guaranty shall be joint and several.
Upon an Event of Default, the Collateral Agent may, at its sole election and
without notice, proceed directly and at once against any Guarantor to seek and
enforce performance of, and to collect and recover, the Guarantied Obligations,
or any portion thereof, without first proceeding against the Company, any other
Guarantor or any other Person or the Collateral, or any other security for the
Guarantied Obligations or for the liability of any such other Person or any
Guarantor hereunder. The Credit Parties shall have the exclusive right to
determine the application of payments and credits, if any, from any Guarantor,
the Company, or from any other Person on account of the Guarantied Obligations
or otherwise. This Guaranty and all covenants and agreements of each Guarantor
contained herein shall continue in full force and effect and shall not be
discharged until such a time as all of the Guarantied Obligations shall be paid
or otherwise performed in full and no Credit Party shall have any commitment
under any Transaction Document.
Notwithstanding anything contained in this paragraph 2A to the contrary, at
all times, if any, during which any Guarantor is the obligor hereunder, each
Guarantor and by its acceptance hereof the Collateral Agent hereby confirms
that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to this Guaranty not constitute a fraudulent transfer or
conveyance for purposes of any bankruptcy law, the Uniform
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Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar
Federal or state law. To effectuate the foregoing intention, the obligations
of each Guarantor under this Guaranty shall be limited to the maximum amount as
will result in the obligations of such Guarantor under this Guaranty not
constituting such fraudulent transfer or conveyance.
2B. OBLIGATIONS UNCONDITIONAL. The obligations of each Guarantor under this
Guaranty shall be continuing, absolute and unconditional, irrespective of (i)
the invalidity or unenforceability of any Transaction Document or any provision
of any thereof; (ii) the absence of any attempt by any Credit Party to collect
the Guarantied Obligations or any portion thereof from the Company, any other
guarantor of all or any portion of the Guarantied Obligations or any other
Person or other action to enforce the same; (iii) any action taken by any
Credit Party whether or not authorized by this Guaranty; (iv) any failure by
any Credit Party to acquire, perfect or maintain any security interest or lien
in, or take any steps to preserve its rights to, the Collateral or any other
security for the Guarantied Obligations or any portion thereof or for the
liability of any Guarantor hereunder or the liability of any other guarantor of
any or all of the Guarantied Obligations; (v) any defense arising by reason of
any disability or other defense (other than a defense of payment, unless the
payment on which such defense is based was or is subsequently invalidated,
declared to be fraudulent or preferential, otherwise avoided and/or required to
be repaid to the Company or any Guarantor, as the case may be, or the estate of
any such party, a trustee, receiver or any other Person under any bankruptcy
law, state or federal law, common law or equitable cause, in which case there
shall be no defense of payment with respect to such payment) of the Company or
any other Person liable on the Guarantied Obligations or any portion thereof;
(vi) a Credit Party's election, in any proceeding instituted under Chapter 11
of Title 11 of the Federal Bankruptcy Code (11 U.S.C. Section 101 et seq.) (the
"Bankruptcy Code"), of the application of Section 1111(b)(2) of the Bankruptcy
Code; (vii) any borrowing or grant of a security interest to any Credit Party
by the Company, as debtor-in-possession, or extension of credit, under Section
364 of the Bankruptcy Code; (viii) the disallowance or avoidance of all or any
portion of any Credit Party's claim(s) for repayment of the Guarantied
Obligations under the Bankruptcy Code or any similar state law or the
avoidance, invalidity or unenforceability of any Lien securing the Guarantied
Obligations or the liability of any Guarantor hereunder or of any other
guarantor of all or any part of the Guarantied Obligations; (ix) any amendment
to, waiver or modification of, or consent, extension, indulgence or other
action or inaction under or in respect of any Transaction Document, including,
without limitation, any increase in the interest rate on any Guarantied
Obligations; (x) any change in any provision of any applicable law or
regulation; (xi) any order, judgment, writ, award or decree of any court,
arbitrator or governmental authority, domestic or foreign, binding on or
affecting any Guarantor or the
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Company or any of their assets; (xii) the charter or by-laws of any Guarantor
or the Company; (xiii) any mortgage, indenture, lease, contract, or other
agreement (including without limitation any agreement with stockholders),
instrument or undertaking to which any Guarantor or the Company is a party or
which purports to be binding on or affect such Person or any of its assets;
(xiv) any bankruptcy, insolvency, readjustment, composition, liquidation or
similar proceeding with respect to the Company, any other Guarantor or any
other guarantor o all or any portion of any Guarantied Obligations or such
Persons's propertyand any failure by any Credit Party to file or enforce a
claim against the Company or such other Person in any such proceeding; (xv) any
failure on the part of the Company for any reason to comply with or perform any
of the terms of any other agreement with any Guarantor; or (xvi) any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a guarantor or surety.
2C. OBLIGATIONS UNIMPAIRED. Each Credit Party is authorized, without demand
or notice, which demand and notice are hereby waived, and without discharging
or otherwise affecting the obligations of any Guarantor hereunder (which shall
remain absolute and unconditional notwithstanding any such action or omission
to act), from time to time to (i) renew, extend, accelerate or otherwise change
the time for payment of, or other terms relating to, the Guarantied Obligations
or any portion thereof, including, without limitation, increasing the interest
rate on any Guarantied Obligations, or otherwise modify, amend or change the
terms of the Transaction Documents; (ii) accept partial payments on the
Guarantied Obligations; (iii) take and hold security for the Guarantied
Obligations or any portion thereof or any other liabilities of the Company, the
obligations of any Guarantor under this Guaranty and the obligations under any
other guaranties and sureties of all or any of the Guarantied Obligations, and
exchange, enforce, waive, release, sell, transfer, assign, abandon, fail to
perfect, subordinate or otherwise deal with any such security (including,
without limitation, the Collateral); (iv) apply such security and direct the
order or manner of sale thereof as such Credit Party may determine in its sole
discretion; (v) settle, release, compromise, collect or otherwise liquidate the
Guarantied Obligations or any portion thereof and any security therefor or
guaranty thereof in any manner; (vi) extend additional loans, credit and
financial accommodations to the Company or any Guarantor and otherwise create
additional Guarantied Obligations; (vii) waive strict compliance with the terms
of any Transaction Document and otherwise forbear from asserting such Credit
Party's rights and remedies thereunder; (viii) take and hold additional
guaranties or sureties and enforce or forbear from enforcing any guaranty or
surety of any other guarantor or surety of the Guarantied Obligations, any
portion thereof or release or otherwise take any action with respect to any
such guarantor or surety; (ix) assign this Guaranty in part or in whole in
connection with any assignment of the Guarantied Obligations or any portion
thereof; (x) exercise
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or refrain from exercising any rights against the Company or any Guarantor; and
(xi) apply any sums, by whomsoever paid or however realized, to the payment of
the Guarantied Obligations as such Credit Party in its sole discretion may
determine.
2D. WAIVERS OF GUARANTOR. Each Guarantor waives for the benefit of each
Credit Party:
(i) any right to require any Credit Party, as a condition of payment or
performance by such Guarantor or otherwise, to (a) proceed against the Company,
any other Guarantor or other guarantor of the Guarantied Obligations or any
other Person, (b) proceed against or exhaust the Collateral or any other
security given to or held by any Credit Party in connection with the Guarantied
Obligations or any other guaranty, or (c) pursue any other remedy available to
any Credit Party whatsoever;
(ii) any defense arising by reason of (a) the incapacity, lack of authority
or any disability or other defense of the Company, including, without
limitation, any defense based on or arising out of the lack of validity or the
unenforceability of the Guarantied Obligations or any agreement or instrument
relating thereto, (b) the cessation of the liability of the Company from any
cause other than indefeasible payment in full of the Guarantied Obligations, or
(c) any act or omission of any Credit Party or any other Person which directly
or indirectly, by operation of law or otherwise, results in or aids the
discharge or release of the Company or the Collateral or any other security
given to or held by any Credit Party in connection with the Guarantied
Obligations or any other guaranty;
(iii) any defense based upon any statute or rule of law which provides that
the obligation of a surety must be neither larger in amount nor in other
respects more burdensome than that of the principal;
(iv) any defense based upon any Credit Party's errors or omissions in the
administration of the Guarantied Obligations;
(v) (a) any principles or provisions of law, statutory or otherwise, which
are or might be in conflict with the terms of this Guaranty and any legal or
equitable discharge of such Guarantor's or any other Guarantor's obligations
hereunder, (b) the benefit of any statute of limitations affecting the
Guarantied Obligations or such Guarantor's or any other Guarantor's liability
hereunder or the enforcement hereof, (c) any rights to set-offs, recoupments
and counterclaims, and (d) promptness, diligence and any requirement that any
Credit Party protect, maintain, secure, perfect or insure any Lien or any
property subject thereto;
(vi) notices (a) of nonperformance or dishonor, (b) of acceptance of this
Guaranty by such Guarantor or any other
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Guarantor, (c) of default under this Guaranty by any other Guarantor or in
respect of the Guarantied Obligations or any other guaranty, (d) of the
existence, creation or incurrence of new or additional indebtedness, arising
either from additional loans extended to the Company or otherwise, (e) that the
principal amount, or any portion thereof, and/or any interest or Yield
Maintenance Amount on any document or instrument evidencing all or any part of
the Guarantied Obligations is due, (f) of any and all proceedings to collect
from the Company, any Guarantor or any other guarantor of all or any part of
the Guarantied Obligations, or from any other Person, (g) of exchange, sale,
surrender or other handling of the Collateral or any other security or
collateral given to any Credit Party to secure payment of the Guarantied
Obligations or any guaranty therefor, (h) of renewal, extension or modification
of any of the Guarantied Obligations, (i) of assignment, sale or other transfer
of any Guarantied Note to another Person, or (j) of any of the matters referred
to in paragraph 2B and any right to consent to any thereof;
(vii) presentment, demand for payment or performance and protest and notice
of protest with respect to the Guarantied Obligations or any guaranty with
respect thereto; and
(viii) any defenses or benefits that may be derived from or afforded by law
which limit the liability of or exonerate guarantors or sureties, or which may
conflict with the terms of this Guaranty.
Each Guarantor agrees that no Credit Party shall be under any obligation
to marshall any assets in favor of any Guarantor or against or in payment of
any or all of the Guarantied Obligations.
No Guarantor will exercise any rights which it may have acquired by way of
subrogation under this Guaranty, by any payment made hereunder or otherwise, or
accept any payment on account of such subrogation rights, or any rights of
contribution, reimbursement, indemnity, exoneration or any rights or recourse
to any security for the Guarantied Obligations or this Guaranty unless at the
time of a Guarantor's exercise of any such right there shall have been
performed and indefeasibly paid in full all of the Guarantied Obligations and
no Credit Party shall have any commitment under any Transaction Document.
2E. REVIVAL. Each Guarantor agrees that, if any payment made by the Company
or any other Person is applied to the Guarantied Obligations and is at any time
annulled, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
Collateral or any other security are required to be returned by any Credit
Party to the Company or its estate, trustee, receiver or any other Person,
including, without limitation, any Guarantor, under any bankruptcy law, state
or federal law, common law or equitable
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cause, then, to the extent of such payment or repayment, each Guarantor's
liability hereunder (and any Lien or other collateral securing such liability)
shall be and remain in full force and effect, as fully as if such payment had
never been made, or, if prior thereto this Guaranty shall have been canceled or
surrendered (and if any Lien or other collateral securing such Guarantor's
liability hereunder shall have been released or terminated by virtue of such
cancellation or surrender), this Guaranty (and such Lien or other collateral)
shall be reinstated and returned in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect the obligations of any Guarantor in respect of the amount of
such payment (or any Lien or other collateral securing such obligation).
2F. OBLIGATION TO KEEP INFORMED. Each Guarantor shall be responsible for
keeping itself informed of the financial condition of the Company and any other
Persons primarily or secondarily liable on the Guarantied Obligations or any
portion thereof, and of all other circumstances bearing upon the risk of
nonpayment of the Guarantied Obligations or any portion thereof, and each
Guarantor agrees that no Credit Party shall have a duty to advise such
Guarantor of information known to such Credit Party regarding such condition or
any such circumstance. If any Credit Party, in its discretion, undertakes at
any time or from time to time to provide any such information to any Guarantor,
such Credit Party shall not be under any obligation (i) to undertake any
investigation, whether or not a part of its regular business routine, (ii) to
disclose any information which such Credit Party wishes to maintain
confidential, or (iii) to make any other or future disclosures of such
information or any other information to such or any other Guarantor.
2G. BANKRUPTCY. Upon the commencement by, against or with respect to any
Loan Party of any proceeding under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law or for the appointment of a receiver for any Loan Party or its
assets, any and all obligations of each Guarantor hereunder shall forthwith
become due and payable without notice.
2H. CONTRIBUTION. In order to provide for just and equitable contribution
among the Guarantors, the Guarantors agree, inter se, that in the event any
payment or distribution is made by any Guarantor (a "Funding Guarantor") under
this Guaranty, such Funding Guarantor shall be entitled to a contribution from
all other Guarantors in a pro rata amount based on the Adjusted Net Assets of
each Guarantor (including the Funding Guarantor) for all payments, damages and
expenses incurred by that Funding Guarantor in discharging the Company's
obligations with respect to the Guarantied Obligations or any other Guarantor's
obligations with respect to this Guaranty. "Adjusted Net Assets" of each
Guarantor at any date shall mean the lesser of the amount by which (x) the
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fair value of the property of such Guarantor exceeds the total amount of
liabilities, including, without limitation, contingent liabilities, but
excluding liabilities under this Guaranty, of such Guarantor at such date and
(y) the present fair salable value of the assets of such Guarantor at such date
exceeds the amount that will be required to pay the probable liability of such
Guarantor on its debts (after giving effect to all other fixed and contingent
liabilities), excluding debt in respect of this Guaranty, as they become
absolute and matured. All rights for contribution of any Guarantor shall be
subordinated to the prior payment in full of the Guarantied Obligations.
3. REPRESENTATIONS, WARRANTIES AND COVENANTS. Each Guarantor represents,
covenants and warrants as follows:
3A. ORGANIZATION, POWER AND AUTHORITY.
3A(1). ORGANIZATION. Such Guarantor is a corporation duly organized and
existing in good standing under the laws of the State set forth opposite its
name on Schedule 3A(1) and is qualified to do business and in good standing in
every jurisdiction where the ownership of its property or the nature of the
business conducted by it makes such qualification necessary except where the
failure to be qualified or in good standing would not have a material adverse
effect on the properties or assets, business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
3A(2). POWER AND AUTHORITY. Such Guarantor and each Subsidiary of such
Guarantor has all requisite power to conduct its business as currently
conducted and as currently proposed to be conducted. Such Guarantor has all
requisite power to execute, deliver and perform its obligations under this
Guaranty and the other Transaction Documents to which it is a party. The
execution, delivery and performance of this Guaranty and the other Transaction
Documents to which such Guarantor is a party have been duly authorized by all
requisite action and this Guaranty and the other Transaction Documents to which
such Guarantor is a party have been duly executed and delivered by authorized
officers of such Guarantor and are valid obligations of such Guarantor, legally
binding upon and enforceable against such Guarantor in accordance with their
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization or other similar laws affecting the enforcement of
creditors' rights generally and (ii) general principles of equity (regardless
of whether such enforceability is considered in a proceeding in equity or at
law).
3B. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither such Guarantor nor
any of its Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate restriction which materially and adversely
affects or impairs the ability of the Company or its Subsidiaries to maintain
the operations of the
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Company and its Subsidiaries taken as a whole. Neither the execution nor
delivery of this Guaranty or the other Transaction Documents, nor fulfillment
of nor compliance with the terms and provisions hereof and of the other
Transaction Documents will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien (other than Liens in favor
of the Collateral Agent) upon any of the properties or assets of such Guarantor
or any of its Subsidiaries pursuant to, the charter or by-laws of such
Guarantor or any of its Subsidiaries, any award of any arbitrator or any
agreement (including any agreement with stockholders of such Guarantor),
instrument, order, judgment, decree, statute, law, rule or regulation to which
such Guarantor or any of its Subsidiaries is subject. Neither such Guarantor
nor any of its Subsidiaries is a party to, or otherwise subject to any
provision contained in, any instrument evidencing any indebtedness of such
Guarantor or such Subsidiary, any agreement relating thereto or any other
contract or agreement (including its charter) which limits the amount of, or
otherwise imposes restrictions on the incurring of, obligations of such
Guarantor of the type to be evidenced by this Guaranty except as set forth in
the agreements listed on Schedule 3B hereto.
3C. GOVERNMENTAL CONSENT. Neither the nature of such Guarantor or of any
Subsidiary of such Guarantor nor any of their respective businesses or
properties, nor any relationship between such Guarantor or any Subsidiary of
such Guarantor and any other Person, nor any circumstance in connection with
the execution, delivery and performance of this Guaranty is such as to require
any authorization, consent, approval, exemption or other action by or notice to
or filing with any court or administrative or governmental body (including,
without limitation, notifications required by the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, but excluding routine filings after the date of
closing with the Securities and Exchange Commission and/or state Blue Sky
authorities) in connection with the execution and delivery of this Guaranty and
the other Transaction Documents to which any Guarantor is a party, or
fulfillment of or compliance with this Guaranty and the other Transaction
Documents other than filings and recordings necessary to perfect the security
interests granted the Collateral Agent under the Collateral Documents, all of
which have been made.
4. MISCELLANEOUS
4A. SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Guaranty contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto whether so expressed or not. This Guaranty shall be for the benefit of
the Guarantied Parties and their successors, assigns and participants, and any
such successors, assigns and participants shall have the same benefits under
this Guaranty as the Guarantied Parties.
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4B. CONSENT TO AMENDMENTS. This Guaranty may be amended, and a Guarantor
may take any action herein prohibited, or omit to perform any act herein
required to be performed by it, if such Guarantor shall obtain the written
consent to such amendment, action or omission to act, of the Collateral Agent.
No course of dealing between any Guarantor and the Collateral Agent or any
other Credit Party nor any delay in exercising any rights hereunder shall
operate as a waiver of any rights of the Collateral Agent. As used herein, the
term "this Guaranty" and references thereto shall mean this Guaranty as it may
from time to time be amended or supplemented.
4C. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or made in writing by or on
behalf of each Guarantor in connection herewith shall survive the execution and
delivery of this Guaranty, the transfer of any Guarantied Note or portion
thereof or interest therein and the payment of any Guarantied Note or
Guarantied Obligation, and may be relied upon by any Person to whom a
Guarantied Note or all or any part of any other Guarantied Obligation is
transferred, regardless of any investigation made at any time by or on behalf
of any Credit Party. Subject to the preceding sentence, this Guaranty and the
other Transaction Documents embody the entire agreement and understanding
between the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and understandings relating to the subject
matter hereof.
4D. NOTICES. All written communications provided for hereunder shall be
sent by first class mail, nationwide overnight delivery service (with charges
prepaid) or facsimile transmission (confirmed by first class mail or nationwide
overnight delivery services) and (i) if to the Collateral Agent, addressed to
it at 233 South Wacker Drive, Chicago, Illinois 60606, or at such other address
as the Collateral Agent shall have specified for it to the Guarantors and (ii)
if to the Guarantors, addressed to each of them at 701 Harger Road, Suite 190,
Oak Brook, Illinois 60521, Attention: General Counsel, or, if applicable, to
the facsimile number (708) 575-2401 or, in each case, at such other address or
facsimile number as the Guarantor or the Collateral Agent, as the case may be,
shall have specified for it to the other party hereto.
4E. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Guaranty are inserted for convenience only and do not
constitute a part of this Guaranty.
4F. SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Guaranty
required to be satisfactory to the Collateral Agent, the determination of such
satisfaction shall be
17
<PAGE> 18
made by the Collateral Agent, in its sole and exclusive judgment (exercised in
good faith).
4G. GOVERNING LAW. THIS GUARANTY SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW.
4H. COUNTERPARTS. This Guaranty may be executed in any number of
counterparts, each of which shall be an original but all of which shall
constitute one instrument. It shall not be necessary in making proof of this
Guaranty to produce or account for more than one such counterpart.
4I. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is prohibited by
any one of such covenants, the fact that it would be permitted by an exception
to, or otherwise be in compliance within the limitations of, another covenant
shall not (i) avoid the occurrence of an Event of Default or an event which
with the passage of time, notice or both would become an Event of Default if
such action is taken or such condition exists or (ii) in any way prejudice an
attempt by the Collateral Agent to prohibit (through equitable action or
otherwise) the taking of any action by a Guarantor which would result in any
Event of Default or an event which with the passage of time, notice or both
would become an Event of Default.
4J. BINDING GUARANTY. When this Guaranty is executed and delivered by a
Guarantor and acknowledged and accepted by the Collateral Agent, it shall
become a binding agreement by such Guarantor in favor of the Collateral Agent
on behalf and for the benefit of the Guarantied Parties.
4K. SEVERABILITY. Any provision of this Guaranty which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
4L. COUNSEL'S OPINION. Each Guarantor hereby directs the Company's counsel
referred to in any Transaction Document to deliver the opinions referred to
therein, and agrees that the execution of such Transaction Documents will
constitute a reconfirmation of such direction.
4M. ADDITIONAL GUARANTORS. Each of the parties hereto agrees that if a
Subsidiary of the Company is required to become a party to this Guaranty
pursuant to any Transaction Document, such Subsidiary may become a party hereto
by delivering to the
18
<PAGE> 19
Collateral Agent a Guaranty Amendment, in substantially the form of Annex I
hereto, duly executed by such Subsidiary. Each of the parties hereto
authorizes the Collateral Agent to attach each such Guaranty Amendment to this
Guaranty and agrees that such Subsidiary becoming a party hereto shall not
affect any other Guarantor's obligations hereunder. Upon the execution and
delivery of such Guaranty Amendment by such Subsidiary, such Subsidiary shall
become a "Guarantor" hereunder and all references to "Guarantors" hereunder
shall mean and include such Subsidiary.
4N. JURISDICTION, SERVICE OF PROCESS. Each Guarantor irrevocably agrees
that any suit, action or proceeding against it with respect to this Guaranty or
any Transaction Document may be brought in the courts of New York County in the
State of New York or in the U.S. District Court for the Southern District of
New York, and each Guarantor accepts for itself, generally and unconditionally,
and hereby submits to the non- exclusive jurisdiction of each such court for
the purpose of any such suit, action or proceeding. Each Guarantor hereby
waives personal service of any and all process upon it and irrevocably agrees
that service of all writs, process and summonses in any such suit, action or
proceeding brought in any such court may be made upon the Person to whom
notices to the Guarantors may be sent under paragraph 4D hereof, and hereby
irrevocably appoints such Person as its agent in its name, place and stead to
accept on its behalf such service of any and all such writs, process and
summonses and each Guarantor hereby irrevocably authorizes and directs such
Person to accept such service on its behalf, and agrees that the failure of the
such Person to give any notice of any such services of process to any Guarantor
shall not impair or affect the validity of such service or of any judgment
based upon same. Each Guarantor further irrevocably consents to the service of
process in any suit, action or proceeding in said courts by the mailing thereof
by the Collateral Agent by registered or certified mail, postage prepaid, to
such Guarantor at its address given in paragraph 4D hereof. The foregoing
shall not, however, limit the right of the Collateral Agent to serve process in
any other manner permitted by law or to commence any suit, action or proceeding
or to obtain execution of judgment in any appropriate jurisdiction. Without
limiting the foregoing, each Guarantor further agrees that the Collateral Agent
may at its option submit any dispute which may arise in connection with this
Guaranty or any Transaction Document to any other court having jurisdiction
over any Guarantor's property. Each Guarantor irrevocably waives and releases
any defense or objection which it may now or hereafter have relating to the
institution of any suit, action or proceeding arising out of or relating to
this Guaranty or of any Transaction Document brought in the courts of New York
County in the State of New York or the U.S. District Court for the Southern
District of New York, including without limitation, all defenses or objections
relating to service of process, personal jurisdiction and the laying of venue,
and each Guarantor further irrevocably waives any defense, objection or claim
that any such
19
<PAGE> 20
suit, action or proceeding brought in any such court has been brought in an
inconvenient forum.
4O. WAIVER OF JURY TRIAL. Each Guarantor and the Collateral Agent waive any
right they may have to trial by jury in any action or proceeding to enforce or
defend any rights or remedies hereunder or under any of the other Collateral
documents.
4P. RELEASE. Upon the sale or other disposition of the assets of a
Guarantor, or of all of the capital stock of any Guarantor by any Loan Party,
as permitted in accordance with the terms of the Financing Agreements (as
amended from time to time) prior to the occurrence of an Event of Default or an
event which with the passage of time or giving of notice or both would
constitute an Event of Default, (i) the Lien of the Collateral Agent in any
such assets sold or otherwise disposed of by a Guarantor shall be automatically
released upon such sale and (ii) with respect to any sale or other disposition
of all of the capital stock of any Guarantor by a Loan Party, the obligations
of such Guarantor under this Agreement shall automatically terminate on the
date of such sale or disposition.
[signature pages to follow]
20
<PAGE> 21
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed as of the date first above written.
CLEAR SHIELD NATIONAL, INC.
By:____________________________________
Title:_________________________________
SANDUSKY PLASTICS, INC.
By:____________________________________
Title:_________________________________
SANDUSKY PLASTICS OF DELAWARE, INC.
By:_____________________________________
Title:__________________________________
VISKASE HOLDING CORPORATION
By:_____________________________________
Title:__________________________________
VISKASE SALES CORPORATION
By:_____________________________________
Title:__________________________________
VISKASE CORPORATION
By:_____________________________________
Title:__________________________________
<PAGE> 22
Acknowledged and agreed to as of
the 20th day of June, 1995:
BT Commercial Corporation, in its
capacity as Collateral Agent
By: ______________________________
Title: ____________________________
<PAGE> 23
ANNEX I
GUARANTY AMENDMENT
This Guaranty Amendment dated as of _____________________, 199_ is delivered
pursuant to paragraph 4M of the Guaranty Agreement dated as of June __, 1995
(as amended, restated, modified or supplemented from time to time, the
"Guaranty Agreement"), made by Subsidiaries of Envirodyne Industries, Inc. from
time to time party thereto in favor of the Collateral Agent on behalf and for
the benefit of the Guarantied Parties. Capitalized terms that are used in this
Guaranty Amendment and not defined in this Guaranty Amendment shall have the
respective meanings ascribed to them in the Guaranty Agreement.
The undersigned hereby agrees that this Guaranty Amendment may be attached
to the Guaranty Agreement and that, upon the execution and delivery of this
Guaranty Amendment as contemplated in said paragraph 4M, the undersigned shall
(a) become a "Guarantor" as such term is used in the Guaranty Agreement and any
other Transaction Document, and references to "Guarantor" or "Guarantors" as
used in the Guaranty Agreement and the other Transaction Documents shall mean
and include the undersigned; (b) have all of the obligations and duties of a
"Guarantor" under the Guaranty Agreement; and (c) for the benefit of the
Collateral Agent and the Guarantied Parties referred to in the Guaranty
Agreement, be deemed to have made each of the representations and warranties in
paragraph 3 of the Guaranty Agreement with respect to itself and its
Subsidiaries.
The undersigned is a corporation organized under the law of the State of
________________.
IN WITNESS WHEREOF, the undersigned has caused this Guaranty Amendment to be
duly executed as of the day and year first above written.
[NAME OF NEW GUARANTOR]
By______________________________
Title:
<PAGE> 1
EXHIBIT 5.1
July 18, 1995
Envirodyne Industries, Inc.
701 Harger Road, Suite 190
Oak Brook, Illinois 60521
Re: 12% Series B Senior Secured Notes Due 2000,
Floating Rate Series D Senior Secured Notes Due 2000
and Related Guarantees
Ladies and Gentlemen:
I refer to the Registration Statement on Form S-4 (the "Registration
Statement") being filed by Envirodyne Industries, Inc., a Delaware corporation
(the "Company"), and by each of Clear Shield National, Inc., a California
corporation, Sandusky Plastics, Inc., a Delaware corporation, Sandusky Plastics
of Delaware, Inc., a Delaware corporation, Viskase Corporation, a Pennsylvania
corporation, Viskase Holding Corporation, a Delaware corporation, and Viskase
Sales Corporation, a Delaware corporation (collectively, the "Subsidiary
Guarantors"), with the Securities and Exchange Commission under the Securities
Act of 1933, as amended (the "Securities Act"), relating to the registration of
(i) $160,000,000 aggregate principal amount of the Company's 12% First Priority
Senior Secured Notes due 2000, Series B (the "New Series B Notes"), and its
Floating Rate First Priority Senior Secured Notes due 2000, Series D (the "New
Series D Notes" and collectively, with the New Series B Notes, the "Debt
Securities"), consisting of $151,500,000 of New Series B Notes and $8,500,000
of New Series D Notes, and (ii) the guarantees (the "Guarantees") made by each
of the Subsidiary Guarantors in favor of the holders of the Debt Securities.
The Debt Securities are to be issued under the Indenture dated as of June 20,
1995 (the "Indenture") between the Company and Shawmut Bank Connecticut,
National Association, as trustee (the "Trustee"). The Company intends to
offer, upon the terms and subject to the conditions set forth in the
Registration Statement, to exchange (1) $1,000 principal amount of New Series B
Notes for each $1,000 principal of its outstanding 12% First Priority Senior
Secured Notes due 2000, Series A (the "Old Series A Notes"), and (ii) $1,000
principal
<PAGE> 2
Envirodyne Industries, Inc.
July 18, 1995
Page 2
amount of New Series D Notes for each $1,000 principal amount of its
outstanding Floating Rate First Priority Senior Secured Notes due 2000, Series
C (the "Old Series C Notes" and collectively with the Old Series A Notes, the
"Old Notes"), of which $160,000,000 aggregate principal amount of Old Notes is
outstanding (the "Exchange Offer").
I am familiar with the proceedings to date with respect to the proposed
issuance and delivery of the Debt Securities and the Guarantees and have
examined such records, documents and questions of law, and satisfied myself as
to such matters of fact, as I have considered relevant and necessary as a basis
for my opinion.
Based on the foregoing, I am of the opinion that:
1. The Company is duly incorporated and validly existing under the laws of
the State of Delaware. Each Subsidiary Guarantor is duly incorporated and
validly existing under the respective laws of its state of incorporation.
2. All necessary action has been taken by the Company's Board of Directors
to authorize the issuance of the Debt Securities and no action by the
stockholders of the Company is required. All necessary action has been taken
by the Board of Directors of each Subsidiary Guarantor to authorize the
issuance of its Guarantee and no action by the stockholders of any Subsidiary
Guarantor is required.
3. The Debt Securities issued upon acceptance of the Exchange Offer will be
legally issued and binding obligations of the Company and the Guarantees will
be legally issued and binding obligations of each Subsidiary Guarantory
(except in each case to the extent enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer or other similar laws affecting the enforcement of creditors' rights
generally and by the effect of general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law)
when (i) the Registration Statement, as finally amended, shall have become
effective under the Securities Act and the Indenture shall have been
qualified under the Trust Indenture Act of 1939, as amended, and (ii) such
Debt Securities shall have been duly executed and authenticated as provided
in the Indenture and shall have been duly delivered to the holders of the Old
Notes in accordance with the terms and conditions of the Exchange Offer.
<PAGE> 3
Envirodyne Industries, Inc.
July 18, 1995
Page 3
I do not find it necessary for the purposes of this opinion to cover, and
accordingly I express no opinion as to, the application of the securities or
blue sky laws of the various states to the offer and exchange of the Debt
Securities or the execution and delivery of the Guarantees.
I hereby consent to the filing of this opinion as an Exhibit to the
Registration Statement and to all references to the opinion included in or made
a part of the Registration.
Very truly yours,
Stephen M. Schuster
Vice President, Secretary
and General Counsel
<PAGE> 1
EXHIBIT 8.1
July 19, 1995
Envirodyne Industries, Inc.
701 Harger Road
Suite 190
Oak Brook, Illinois 60521
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-4 being filed with
the Securities and Exchange Commission by Envirodyne Industries, Inc. (the
"Company") and certain of the Company's subsidiaries on July 19, 1995, and to
the prospectus (the "Prospectus") included in such Registration Statement,
relating to the exchange of (i) its outstanding 12% First Priority Senior
Secured Notes, Series A, for 12% First Priority Senior Secured Notes, Series B,
and (ii) its outstanding Floating Rate First Priority Senior Secured Notes,
Series C, for Floating Rate First Priority Senior Secured Notes, Series D.
We are counsel to the Company. The statements in the Prospectus under the
heading "Certain Federal Income Tax Consequences," to the extent they
constitute matters of federal income tax law or legal conclusions with respect
thereto, have been prepared or reviewed by us and, in our opinion, are correct
in all material respects. We hereby consent to the filing of this opinion as
an exhibit to the Registration Statement.
This opinion is rendered as of the date hereof based on the law and facts in
existence on the date hereof, and we do not undertake, and hereby disclaim, any
obligation to advise you of any changes in law or fact, whether or not
material, which may be brought to our attention at a later date.
Very truly yours,
Sidley & Austin
<PAGE> 1
EXHIBIT 10.10
================================================================================
ENVIRODYNE INDUSTRIES, INC.
$160,000,000
FIRST PRIORITY SENIOR SECURED
NOTES DUE 2000
______________
NOTE AGREEMENT
______________
DATED AS OF JUNE 20, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
(Not Part of Agreement)
<TABLE>
<CAPTION>
Page
----
<S> <C> <C> <C>
1. AUTHORIZATION OF ISSUE OF NOTES; INDENTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. PURCHASE AND SALE OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. CONDITIONS OF CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3A. Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3B. Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3D. Revolving Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3D. Letter of Credit Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3E. Opinion of Purchasers' Special Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3F. Opinions of Company's and Guarantors' Counsel . . . . . . . . . . . . . . . . . . . . . . . . . 4
3G. Representations and Warranties; No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3H. No Material Adverse Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3I. Structuring Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3J. Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3K. Purchase Permitted By Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3L. Consents and Persons . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3M. Payoff Letters; Disbursement Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3N. Certificates of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3P. Environmental Assessments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3Q. Sale of Notes to Other Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3R. Letter Agreement Regarding Financial Statements and
Certain Other Rights with Certain Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3S. Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4. REPRESENTATIONS, COVENANTS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4A. Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4B. Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4C. Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4D. Actions Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
4E. Outstanding Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4F. Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4G. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4H. Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4I. Offering of Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4J. Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4K. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4L. Governmental Consent and Other Third Party Consents . . . . . . . . . . . . . . . . . . . . . . 11
4M. Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4N. Rule 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4O. Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
4P. Regulatory Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4Q. Permits and Other Operating Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4R. Absence of Financing Statements, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
4S. Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
4T. Limitation on Responsibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5. REPRESENTATIONS OF EACH PURCHASER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5A. Nature of Purchase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5B. Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5C. Independent Credit Investigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6A. Accounting Principles, Terms and Determinations . . . . . . . . . . . . . . . . . . . . . . . . 21
7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7A. Direct Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7B. Issue Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7C. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7D. Consent to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
7E. Certain Indenture Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7F. Substitution and Replacement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7G. Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7H. Survival of Representations and Warranties; Entire Agreement . . . . . . . . . . . . . . . . . . 24
7I. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7J. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7K. Satisfaction Requirement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7L. Solicitation of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7M. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7N. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7O. Descriptive Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7P. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7Q. Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7R. Severalty of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7S. Jurisdiction, Service of Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
PURCHASER SCHEDULE
Exhibit A -- Form of Indenture
Exhibit B-1 -- Form of Intercreditor Agreement
Exhibit B-2 -- Form of GECC Intercreditor Agreement
Exhibit C-1 -- Form of Security Agreement
Exhibit C-2 -- Form of Intellectual Property Security Agreement
Exhibit D-1 -- Form of Mortgage
Exhibit D-2 -- Form of Leasehold Mortgage
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Guaranty Agreement
Exhibit G -- Exchange and Registration Rights Agreement
Exhibit H-1 -- Form of opinion of Purchaser's Special Counsel
Exhibit H-2 -- Form of opinion of Company's Special Counsel
Exhibit H-3 -- Form of opinion of Company's Assistant General Counsel
Schedule 4A -- Subsidiaries
Schedule 4H -- List of Agreements Restricting Indebtedness
ii
<PAGE> 4
ENVIRODYNE INDUSTRIES, INC.
701 HARGER ROAD, SUITE 121
OAK BROOK, ILLINOIS 60521
As of June 20, 1995
To Each of the Purchasers Named in the
Purchaser Schedule Attached Hereto
Ladies and Gentlemen:
The undersigned, Envirodyne Industries, Inc., a Delaware corporation
(herein called the "Company"), hereby agrees with the purchasers named in the
Purchaser Schedule attached hereto (herein called the "Purchasers") as follows:
1. AUTHORIZATION OF ISSUE OF NOTES; INDENTURE. The Company will
authorize the issue of the Fixed Rate Notes and the Floating Rate Notes (the
"Notes") in the aggregate principal amount of $160,000,000, to be dated the
date of issue thereof, to mature June 15, 2000, to bear interest on the unpaid
balance thereof from the date thereof until the principal thereof shall have
become due and payable (i) in the case of the Fixed Rate Notes, at the rate of
12% per annum and (ii) in the case of the Floating Rate Notes, at the rate
specified in the Indenture therefor. The Notes will be issued under an
Indenture, dated as of June 20, 1995, from the Company to Shawmut Bank
Connecticut, N.A., as Trustee (the "Trustee"), substantially in the form of
Exhibit A hereto (as amended, modified, supplemented or replaced from time to
time in accordance with the provisions thereof, the "Indenture"). The Notes
shall have such terms and provisions provided therefor in the Indenture and
shall be substantially in the form set forth therefor in the Indenture. The
Notes shall be secured by a valid first priority Lien (subject only to
Permitted Liens) in the Collateral and shall be guaranteed by the Guarantors
pursuant to the Guaranty Agreement.
2. PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell to
each Purchaser, and, subject to the terms and conditions herein set forth, each
Purchaser agrees to purchase from the Company, the aggregate principal amount
of Fixed Rate Notes or Floating Rate Notes, as the case may be, set forth
opposite such Purchaser's name in the Purchaser Schedule at 100% of such
aggregate principal amount. The Company will deliver to each Purchaser
designated in the Purchaser Schedule to receive Fixed Rate Notes or Floating
Rate Notes, as the case may be, in certificated form (the "Certificated Note
Purchasers"), one or more Fixed Rate Notes or Floating Rate Notes, as the case
may be, registered in such Certificated Note Purchaser's name (or in the name
of any nominee designated for such Certificated Note Purchaser
<PAGE> 5
in the Purchaser Schedule), evidencing the aggregate principal amount of Fixed
Rate Notes or Floating Rate Notes, as the case may be, to be purchased by such
Certificated Note Purchaser and in the denomination or denominations specified
with respect to such Certificated Note Purchaser in the Purchaser Schedule,
against payment of the purchase price thereof by transfer of immediately
available funds as required by paragraph 3M hereof or, if there are proceeds in
excess of the amounts to be applied as required by paragraph 3M hereof, for
credit to the Company's account #73-62560 at Bank of America Illinois, ABA No.
071-0000-39 (the "Company's Account") on the date of closing, which shall be
June 20, 1995, or on any other date upon which the Company and the Purchasers
may mutually agree (herein called the "Closing" or the "Closing Date"). The
Company will issue for the benefit of each Purchaser designated in the
Purchaser Schedule to purchase Fixed Rate Notes or Floating Rate Notes, as the
case may be, in book-entry form (the "Book-Entry Purchasers"), one fully
registered Fixed Rate Note or Floating Rate Note, as the case may be, in the
aggregate principal amount of the Fixed Rate Notes or Floating Rate Notes, as
the case may be, to be purchased by all of the Book-Entry Purchasers (the
"Global Notes"), which will be deposited with the Depository and registered in
the name of the Depository or the Depository's nominee. The Depository will
credit the account of its participant or persons who hold interests through
participants with the principal amount of such Fixed Rate Notes or Floating
Rate Notes, as the case may be, to be purchased by such Book-Entry Purchaser,
and such participant or person will credit the account of such Book-Entry
Purchaser with the principal amount of such Fixed Rate Notes or Floating Rate
Notes, as the case may be, to be purchased by such Book-Entry Purchaser against
payment of the purchase price thereof by transfer of immediately available
funds for credit to the Company's Account on the Closing Date.
3. CONDITIONS OF CLOSING. Each Purchaser's obligation to purchase
and pay for the Notes to be purchased by such Purchaser hereunder and under the
Indenture is subject to the satisfaction, on or before the Closing Date, of the
following conditions:
3A. NOTES. There shall have been delivered to each Certificated Note
Purchaser the appropriate Note or Notes, there shall have been delivered to the
Depository the Global Notes, each duly completed and executed by the Company,
and the credits to the accounts described in paragraph 2 hereof with respect to
the Book-Entry Purchasers shall have been made by the participants in the
Depository's book-entry system.
3B. DOCUMENTS. Such Purchaser shall have received original
counterparts or, if satisfactory to it, certified or other copies of all the
following, each duly executed and delivered by the party or parties thereto in
form and substance satisfactory to such Purchaser, and on the Closing Date in
full force and effect with no event having occurred and being then continuing
that would
2
<PAGE> 6
constitute a default thereunder or constitute or provide the basis for the
termination thereof:
(i) The Indenture;
(ii) The Intercreditor and Collateral Agency
Agreement, of even date herewith, in the form of Exhibit B-1 attached
hereto (as amended, modified, supplemented or replaced from time to
time in accordance with the provisions thereof, the "Intercreditor
Agreement") and the GECC Intercreditor Agreement, of even date
herewith, in the form of Exhibit B-2 attached hereto, including the
agreements which are exhibits thereto (such GECC Intercreditor
Agreement, together with such agreements, as amended, modified,
supplemented or replaced from time to time in accordance with the
provisions thereof, the "GECC Intercreditor Agreement");
(iii) A Security Agreement made by the Company
and by each Significant Domestic Subsidiary in favor of the Collateral
Agent in the form of Exhibit C-1 attached hereto, and an Intellectual
Property Security Agreement made by the Company and each Guarantor
owning any Trademarks, Copyrights, Licenses, Patents or Trade Secrets
(each as defined therein) in favor of the Collateral Agent in the form
of Exhibit C-2 attached hereto;
(iv) A Mortgage made by the Company and each
Significant Domestic Subsidiary owning any real estate in favor of the
Collateral Agent in the form of Exhibit D-1, attached hereto with
respect to each parcel of real estate owned by the Company or any such
Guarantor, and a Leasehold Mortgage in favor of the Collateral Agent
in the form of Exhibit D-2 attached hereto made by Viskase Corporation
with respect to the real estate located at Paul's Valley, Oklahoma;
(v) A Pledge Agreement made by the Company and
each Significant Domestic Subsidiary in favor of the Collateral Agent
in the form of Exhibit E attached hereto;
(vi) The Guaranty Agreement made by each
Significant Domestic Subsidiary in the form of Exhibit F attached
hereto;
(vii) Certificates evidencing all securities
pledged pursuant to the Pledge Agreement, together with related
transfer documents executed in blank, in each case received by the
Collateral Agent, all Uniform Commercial Code financing statements
perfecting the security interests and other Liens granted to the
Collateral Agent, duly filed in all offices that such Purchaser may
deem necessary or advisable, and all such other releases,
certificates, documents, agreements, recordings and filings as such
Purchaser may deem
3
<PAGE> 7
necessary or appropriate to establish a valid Lien in favor of the
Collateral Agent in the Collateral for the benefit of Secured Parties
in accordance with priorities established by the Intercreditor
Agreement and all requisite filing or recording fees shall have been
duly paid;
(viii) The Exchange and Registration Rights
Agreement, of even date herewith, made by the Company in favor of the
Purchasers in the form of Exhibit G hereto (as the same may be
amended, modified, supplemented or replaced from time to time in
accordance with the provisions thereof, the "Exchange and Registration
Rights Agreement"); and
(ix) Such other certificates, documents,
agreements, instruments, opinions, filings and other items as such
Purchaser may reasonably request.
3D. REVOLVING CREDIT FACILITY. The Revolving Credit Agreement and
all certificates, documents and other agreements delivered in connection
therewith shall have been duly executed and delivered by the parties thereto,
in each case (including without limitation all schedule and exhibits thereto)
in form and substance satisfactory to each Purchaser, and on the Closing Date
the Revolving Credit Agreement and all such other certificates, documents and
agreements shall be in full force and effect, no default or event of default
shall exist thereunder, and all conditions to the initial advance of revolving
loans shall be satisfied.
3D. LETTER OF CREDIT FACILITY. The Letter of Credit Facility
Agreement and all certificates, documents and other agreements delivered in
connection therewith shall have been duly executed and delivered by the parties
thereto in each case (including without limitation all schedules and exhibits
thereto) in form and substance satisfactory to each Purchaser, and on the
Closing Date the Letter of Credit Facility Agreement and all such other
certificates, documents and agreements shall be in full force and effect, no
default of event of default shall exist thereunder, and all conditions to the
issuance of letters of credit thereunder shall be satisfied.
3E. OPINION OF PURCHASERS' SPECIAL COUNSEL. Such Purchaser shall
have received from Schiff Hardin & Waite, who are acting as special counsel for
the Purchasers in connection with the sale of the Notes to the Purchasers
hereunder, a favorable opinion satisfactory to such Purchaser in the form of
Exhibit H-1 attached hereto.
3F. OPINIONS OF COMPANY'S AND GUARANTORS' COUNSEL. Such Purchaser
shall have received from Sidley & Austin, counsel for the Company and the
Guarantors, and Thomas A. Monson, Associate General Counsel of the Company, a
favorable opinion satisfactory to such Purchaser and substantially in the form
of Exhibits H-2 and H-3
4
<PAGE> 8
attached hereto, and such Purchaser shall have received from Baker & McKenzie,
who are acting as special French counsel for the Company and the Guarantors in
connection with this transaction, a favorable opinion satisfactory to such
Purchaser as to such matters incident to the matters herein contemplated as
such Purchaser may reasonably request. The Company hereby directs such counsel
to render such opinions and agrees that the first issuance of any Notes will
constitute a reconfirmation of such direction.
3G. REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties contained in paragraph 4 shall be true on and as
of the Closing Date; the representations and warranties contained in each of
the Transaction Documents shall be true and correct on and as of the Closing
Date; there shall exist on the Closing Date no Event of Default or Default;
and the Company shall have delivered to such Purchaser an Officer's Certificate
of the Company and each Guarantor, dated the Closing Date, to each such effect.
3H. NO MATERIAL ADVERSE CHANGE. There shall not have occurred or
be threatened (i) any condition, event or act which would materially and
adversely affect the property or assets, business, condition (financial or
otherwise) or the operations of the Company and its Subsidiaries, taken as a
whole, or the ability of the Company to repay the Notes or to perform under the
Transaction Documents to which it is a party, or the ability of any Guarantor
to perform under the Transaction Documents to which it is a party, or (ii)
since December 29, 1994, a material adverse change to the property or assets,
business, condition (financial or otherwise) or the operations of the Company
and its Subsidiaries, taken as a whole, in each case as determined by such
Purchaser in its reasonable judgment.
3I. STRUCTURING FEE. On the Closing Date, the Company shall have
paid to Prudential the remaining balance of the structuring and processing fee
owed to it pursuant to the letter agreement between them dated May 16, 1995.
3J. FEES AND EXPENSES. The Company shall have paid such fees and
expenses of the Purchasers' special counsel (including White & Case, who are
acting as special French counsel to the Purchasers in connection with this
transaction, and Cahill Gordon & Reindel, who are acting as special counsel to
the Purchasers other than Prudential in connection with the Intercreditor
Agreement and other intercreditor issues) and other consultants as the
Purchasers shall have required to be paid on or before the Closing Date.
3K. PURCHASE PERMITTED BY APPLICABLE LAWS. The purchase of and
payment for the Notes to be purchased by such Purchaser on the Closing Date on
the terms and conditions herein provided (including the use of the proceeds of
such Notes by the Company) shall not violate any applicable law or governmental
regulation (including,
5
<PAGE> 9
without limitation, Section 5 of the Securities Act or Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System) and shall not subject
such Purchaser to any tax, penalty, liability or other onerous condition under
or pursuant to any applicable law or governmental regulation, and such
Purchaser shall have received such certificates or other evidence as it may
request to establish compliance with this condition.
3L. CONSENTS AND PERSONS. The Company and each Guarantor shall
have delivered to such Purchaser on the Closing Date all authorizations,
consents or approvals by or notices to or filings with any court or
administrative or governmental body or other Person that are required in
connection with the execution and delivery of the Transaction Documents, the
offering, issuance, sale or delivery of the Notes or fulfillment of or
compliance with the terms and provisions hereof or thereof, certified as true
and correct and in full force and effect as of the Closing Date by a duly
authorized officer of the Company or the Guarantors, as the case may be, or, if
no such authorization, consent, approval, notice or filing is required (other
than of the Boards of Directors of the Company and the Guarantors), a statement
of such officer to such effect.
3M. PAYOFF LETTERS; DISBURSEMENT INSTRUCTIONS. On or before the
Closing Date, such Purchaser shall have received (i) a payoff letter
satisfactory to such Purchaser indicating the amount of the Indebtedness of the
Company or its Subsidiaries owed to the Banks on the Closing Date (or, in the
case of the Indebtedness owed by Viskase, S.A., on the date after the Closing
Date), specifying wire transfer instructions for the repayment of such
Indebtedness and acknowledging that upon the Banks' receipt of funds in the
amount set forth in the pay- off letter such Indebtedness will be deemed
discharged and fully satisfied, and all security for such Indebtedness shall be
released; and (ii) disbursement instructions from the Company, directing that
the proceeds of the Notes at least equal to the aggregate amount of Such
Indebtedness are to be paid directly to the Banks.
3N. CERTIFICATES OF INSURANCE. The Collateral Agent shall have
received (a) a certificate of insurance from an independent insurance broker
dated as of the Closing Date, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise confirming that insurance has
been obtained in accordance with the provisions of the Transaction Documents
and (b) certified copies of all policies evidencing such insurance, or
certificates therefor signed by the insurer or an agent authorized to bind the
insurer.
3P. ENVIRONMENTAL ASSESSMENTS. Roy F. Weston, Inc. shall have
prepared phase 1 environmental assessments for such Purchaser's benefit with
respect to all of the real estate securing the Notes and such assessments shall
be in the form and content
6
<PAGE> 10
satisfactory to such Purchaser. Further, such Purchaser shall be satisfied
with the environmental condition of all of the real property owned or leased by
the Company and its Subsidiaries.
3Q. SALE OF NOTES TO OTHER PURCHASERS. The Company shall have
sold to the other Purchasers the Notes to be purchased by them at the Closing
and shall have received payment in full therefor.
3R. LETTER AGREEMENT REGARDING FINANCIAL STATEMENTS AND CERTAIN
OTHER RIGHTS WITH CERTAIN PURCHASERS. The Company shall have executed and
delivered to each Purchaser which is an insurance company a letter agreement
regarding the delivery of financial statements and other reports, access to
information and provision of certain other rights in form satisfactory to such
Purchaser.
3S. PROCEEDINGS. All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to such
Purchaser, and such Purchaser shall have received all such counterpart
originals or certified or other copies of such documents as it may reasonably
request.
4. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants as follows:
4A. ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware and each
Subsidiary is duly organized and existing in good standing under the laws of
the jurisdiction in which it is incorporated. The Company and each Subsidiary
is qualified to do business and in good standing in every jurisdiction where
the ownership of their respective properties or the nature of their respective
businesses makes such qualification necessary except where the failure to be
qualified or in good standing in the aggregate would not reasonably be expected
to result in any material adverse effect on the properties or assets, business,
condition (financial or otherwise) of the Company and its Subsidiaries taken as
a whole. As of the Closing Date, the names of the Subsidiaries of the Company,
the jurisdiction in which each such Subsidiary is organized, the number of
outstanding shares of each class of capital stock of such Subsidiary, the
number of shares of each such class owned by the Company, or any Subsidiary of
the Company (identified by stock certificate number) and the number of shares
of each such class owned by any other Person (identified by stock certificate
number), are as set forth in Schedule 4A hereto.
4B. POWER AND AUTHORITY. The Company and each Subsidiary has all
requisite corporate power to own its property and to carry on its business as
now being conducted and as proposed to be conducted. The Company and each
Guarantor has the legal capacity and authority to execute, deliver, and perform
its obligations
7
<PAGE> 11
under the Transaction Documents to which it is a party and the Company has the
legal capacity and authority to issue the Notes. All action on the part of the
Company and each Guarantor necessary for the authorization, execution, delivery
and performance of all obligations of the Company and such Guarantor under the
Transaction Documents to which it is a party and the issuance of the Notes by
the Company has been taken. The Transaction Documents to which the Company or
any Guarantor is a party have been duly executed and delivered by, and are the
legal, valid and binding obligations of the Company or such Guarantor, and each
such document is enforceable against the Company or such Guarantor in
accordance with its terms, except as may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors rights in general and by
general principles of equity, and each is in full force and effect.
4C. FINANCIAL STATEMENTS. The Company has furnished each
Purchaser with the following financial statements, identified by a principal
financial officer of the Company: (i) consolidating and consolidated balance
sheets of the Company and its Subsidiaries as at the last day in each fiscal
year in each of the years 1992 to 1994, inclusive, and consolidating and
consolidated statements of operations and cash flows and a consolidated
statement of stockholders' equity of the Company and its Subsidiaries for each
such year, all certified by Coopers & Lybrand (with respect to the consolidated
statements) or prepared by the Company (with respect to the consolidating
statements); and (ii) a consolidated balance sheet of the Company and its
Subsidiaries as at March 30, 1995 and March 31, 1994 and consolidated
statements of operations, stockholders' equity and cash flows for the
three-month period ended on each such date, prepared by the Company. Such
financial statements (including any related schedules and/or notes) are true
and correct in all material respects (subject, as to interim statements, to
changes resulting from audits and year-end adjustments), have been prepared in
accordance with generally accepted accounting principles consistently followed
throughout the periods involved and show all liabilities, direct and
contingent, of the Company and its Subsidiaries required to be shown in
accordance with such principles. The balance sheets fairly present the
condition of the Company and its Subsidiaries as at the dates thereof, and the
statements of income, stockholders' equity and cash flows fairly present the
results of the operations of the Company and its Subsidiaries and their cash
flows for the periods indicated. There has been no material adverse change in
the properties or assets, business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole since December
29, 1994.
4D. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by
8
<PAGE> 12
or before any court, arbitrator or administrative or governmental body which
could reasonably be expected to result in any material adverse effect on the
properties or assets, business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole.
4E. OUTSTANDING DEBT. Neither the Company nor any of its
Subsidiaries has outstanding any Debt except as permitted by Section 3.03 of
the Indenture. There exists no default (nor any event which with the passage
of time, the giving of notice or both would constitute a default) and, after
giving effect to the transaction contemplated by this Agreement, there will
exist no default (nor any event which with the passage of time, the giving of
notice or both would constitute a default) under the provisions of any
instrument evidencing Debt of the Company or any Subsidiary or of any agreement
relating thereto.
4F. TITLE TO PROPERTIES. The Company has, and each of its
Subsidiaries has, good and indefeasible title to its respective real properties
(other than properties which it leases) and good title to all of its other
respective properties and assets, including the properties and assets reflected
in the balance sheet as at December 29, 1994 referred to in paragraph 4C (other
than properties and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Permitted Liens and except the Liens in
favor of the Banks securing the Indebtedness to be paid from the proceeds of
the Notes as contemplated by paragraph 3M hereof. All leases necessary in any
material respect for the conduct of the respective businesses of the Company
and its Subsidiaries are valid and subsisting and are in full force and effect.
The Company and its Subsidiaries enjoy peaceful and undisturbed possession of
all leases necessary in any material respect for the operation of its business,
none of which contains any unusual or burdensome provisions which might
materially affect or impair the ability of the Company or its Subsidiaries to
maintain the operations of the Company and its Subsidiaries (taken as a whole).
4G. TAXES. The Company has and each of its Subsidiaries has filed
all federal, state and other income tax returns which are required to be filed
(other than such tax returns where the consequence of a failure to file is
immaterial), and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due,
except such taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with generally accepted accounting principles.
4H. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company
nor any of its Subsidiaries is a party to any contract or agreement or subject
to any charter or other corporate restriction which materially and adversely
affects or impairs the ability of
9
<PAGE> 13
the Company or its Subsidiaries to maintain the operations of the Company and
its Subsidiaries (taken as a whole). Neither the execution nor delivery of any
of the Transaction Documents, nor the offering, issuance and sale of the Notes,
nor fulfillment of nor compliance with the terms and provisions hereof and
thereof will conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien (other than Liens in favor of the Collateral
Agent) upon any of the properties or assets of the Company or any of its
Subsidiaries pursuant to, the charter or by-laws of the Company or any of its
Subsidiaries, any award of any arbitrator or any agreement (including any
agreement with stockholders), instrument, order, judgment, decree, statute,
law, rule or regulation to which the Company or any of its Subsidiaries is
subject. Neither the Company nor any of its Subsidiaries is a party to, or
otherwise subject to any provision contained in, any instrument evidencing Debt
of the Company or such Subsidiary, any agreement relating thereto or any other
contract or agreement (including its charter) which limits the amount of, or
otherwise imposes restrictions on the incurring of, Debt of the Company or any
Subsidiary of the type to be evidenced by the Notes and the Guaranty Agreements
except as set forth in Schedule 4H attached hereto.
4I. OFFERING OF NOTES. Neither the Company nor any agent acting
on its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes
or any similar security of the Company from, or otherwise approached or
negotiated with respect thereto with, any Person other than institutional
investors, and neither the Company nor any agent acting on its behalf has taken
or will take any action which would subject the issuance or sale of the Notes
to the provisions of section 5 of the Securities Act or to the registration
provisions of any securities or Blue Sky law of any applicable jurisdiction.
4J. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns
or has any present intention of acquiring any "margin stock" as defined in
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System (herein called "margin stock"). The proceeds of sale of the Notes will
be used to refinance the Indebtedness of the Company and its Subsidiaries owed
to the Banks as contemplated by paragraph 3M hereof and for other purposes
permitted by or not in contravention of any of the provisions of this Agreement
and the Indenture. None of such proceeds will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
any stock that is currently a margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of such
Regulations G, T, U or X. Neither the Company
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<PAGE> 14
nor any agent acting on its behalf has taken or will take any action which
might cause this Agreement or the Notes to violate Regulations G, T, U or X or
any other regulation of the Board of Governors of the Federal Reserve System or
to violate the Exchange Act, in each case as in effect now or as the same may
hereafter be in effect.
4K. ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived,
exists with respect to any Plan (other than a Multiemployer Plan). No
liability to the Pension Benefit Guaranty Corporation has been or is expected
by the Company or any ERISA Affiliate to be incurred with respect to any Plan
(other than a Multiemployer Plan) by the Company , any Subsidiary or any ERISA
Affiliate which is or would be materially adverse to the properties or assets,
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries taken as a whole. Neither the Company, any Subsidiary nor any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be materially adverse to the business, condition (financial or
otherwise) or operations of the Company and its Subsidiaries taken as a whole.
The execution and delivery of the Transaction Documents and the issuance and
sale of the Notes by the Company to the Purchasers hereunder will be exempt
from, or will not involve any transaction which is subject to, the prohibitions
of section 406 of ERISA and will not involve any transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could
be imposed pursuant to section 4975 of the Code. The representation by the
Company in the next preceding sentence is made in reliance upon and subject to
(1) the accuracy of each Purchaser's representation in paragraph 5B and (2) the
assumption, made solely for the purpose of making such representation, that
Department of Labor Interpretive Bulletin 75-2 with respect to prohibited
transactions remains valid in the circumstances of the transactions
contemplated herein.
4L. GOVERNMENTAL CONSENT AND OTHER THIRD PARTY CONSENTS. Neither
the nature of the Company or of any Subsidiary, nor any of their respective
businesses or properties, nor any relationship between the Company or any
Subsidiary and any other Person, nor any circumstance in connection with the
offering, issuance, sale or delivery of the Notes is such as to require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental body or other Person
(other than routine filings after the Closing Date with the Securities and
Exchange Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of any of the Transaction Documents, the offering,
issuance, sale or delivery of the Notes or fulfillment of or compliance with
the terms and provisions hereof or thereof, other than (1) filings and
recordings necessary to perfect the security interests granted the
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<PAGE> 15
Collateral Agent under the Collateral Documents, all of which have been made,
and (2) the filing of a registration statement with the Securities and Exchange
Commission under the Securities Act pursuant to the Exchange and Registration
Rights Agreement and any filing pursuant to the provisions of any securities or
Blue Sky laws of any applicable jurisdiction with respect to the offering of
the First Priority Exchange Notes.
4M. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries
and all of their respective properties and facilities have complied at all
times and in all respects with all foreign, federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations relating to protection of the environment except, in
any such case, where failure to comply could not reasonably be expected to
result in a material adverse effect on the properties or assets, business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole.
4N. RULE 144A. The Notes are not of the same class as securities,
if any, of the Company listed on a national securities exchange under Section 6
of the Securities Exchange Act of 1934 or quoted in a U.S. automated
inter-dealer quotation system.
4O. DISCLOSURE. Neither this Agreement, any Transaction Document,
nor any other document, certificate or statement furnished to any Purchaser by
or on behalf of the Company or any Subsidiary in connection herewith
(including, without limitation, the Memorandum) contains any untrue statement
of a material fact or omits to state a material fact necessary in order to make
the statements contained herein and therein not misleading. To the knowledge
of the Company there is no fact peculiar to the Company or any of its
Subsidiaries which materially adversely affects or in the future may (so far as
the Company can now foresee) materially adversely affect the properties or
assets, business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries, taken as a whole, and which has not been set
forth in this Agreement or in the other documents, certificates and statements
furnished to each Purchaser by or on behalf of the Company prior to the date
hereof in connection with the transactions contemplated hereby. The financial
projections contained in the Memorandum are reasonable based on the assumptions
stated therein and the best information available to the officers of the
Company (provided that this representation shall not constitute a
representation by the Company that any of such projections will be attained).
The parties hereto acknowledge that the description of the terms of the
financings described in the Memorandum will be superseded by the actual terms
therefor as contained in the Transaction Documents and the other documents
delivered at the closing hereunder.
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4P. REGULATORY STATUS. Neither the Company nor any Subsidiary is
(i) an "investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
(ii) a "holding company" or a "subsidiary company" or an "affiliate" of a
"holding company" or a "subsidiary company" of a "holding company", within the
meaning of Public Utility Act of 1935, as amended, or (iii) a "public utility"
within the meaning of the Federal Power Act, as amended.
4Q. PERMITS AND OTHER OPERATING RIGHTS. The Company and each
Subsidiary has all such valid and sufficient certificates of convenience and
necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other
local regulatory bodies or administrative agencies or other governmental bodies
having jurisdiction over such Company or such Subsidiary or any of its
respective properties, as are necessary for the ownership, operation and
maintenance of its businesses and properties, subject to exceptions and
deficiencies which do not materially affect the properties or assets, business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries taken as a whole, and such certificates of convenience and
necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other
local regulatory bodies or administrative agencies or other governmental bodies
having jurisdiction over any such Company or Subsidiary or any of its
properties are free from burdensome restrictions or conditions of an unusual
character or restrictions or conditions materially adverse to the properties or
assets, business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries taken as a whole, and neither the Company nor any
Subsidiary is in violation of any thereof in any material respect.
4R. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens and the Liens in favor of the Banks securing the Indebtedness
to be paid from the proceeds of the Notes as contemplated by paragraph 3M
hereof, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry or other public office, that purports to cover, affect or
give notice of any present or possible future Lien on any assets or property of
the Company or any of the Subsidiaries or any rights relating thereto.
4S. SECURITY INTEREST. As of the Closing Date, all filings,
assignments, pledges and deposits of documents or instruments have been made
and all other actions have been taken, that are necessary or advisable under
applicable law and are required to be made or taken on or prior to the Closing
Date under the provisions of this Agreement and the other Collateral Documents
to establish the Collateral Agent's security interest in the Collateral. As of
the Closing Date, the Collateral and the Collateral Agent's rights with
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respect to the Collateral are not subject to any setoff, claims, withholdings
or other defenses (except any such setoff, claim or defense which could not,
individually or in the aggregate, materially impair the rights of the
Collateral Agent with respect to the Collateral). The Company and each
Subsidiary party to any Collateral Document is the owner of the Collateral
described therein free from any Lien, except for Permitted Liens and the Liens
in favor of the Banks securing the Indebtedness to be paid from the proceeds of
the Notes as contemplated by paragraph 3M hereof.
4T. LIMITATION ON RESPONSIBILITY. Neither the Collateral Agent,
any Holder of any Note or First Priority Exchange Note nor any other Person for
whom the Collateral Agent is acting as agent shall be responsible for: (i) the
safekeeping of any Collateral; (ii) any loss or damage to any Collateral; (iii)
any diminution in the value of any Collateral; or (iv) any act or default of
any carrier, warehouseman, bailee or any other Person. All risk of loss,
damage, destruction or diminution in value of the Collateral shall be borne by
the Company and its Subsidiaries. The powers conferred on the Collateral
Agent, the Holders of the Notes and the First Priority Exchange Notes and such
other Persons with respect to the Collateral are solely to protect the
interests of the Collateral Agent, the Holders of the Notes and the First
Priority Exchange Notes and such other Persons in the Collateral and shall not
impose any duty upon the Collateral Agent, the Holders of the Notes and the
First Priority Exchange Notes or any such other Person to exercise any such
powers. Neither the Collateral Agent, any Holder of any Note or First Priority
Exchange Note nor any other such Person have any duty to protect, ensure,
collect or realize upon any Collateral or preserve rights in any Collateral
against any other Person. The Company releases the Collateral Agent, such
other Persons, the Holders of the Notes and the First Priority Exchange Notes
from any liability for any act or omission relating to this Agreement or the
Collateral Documents other than as a result of gross negligence or willful
misconduct.
4U. LOCATIONS OF COLLATERAL. The address of the principal place
of business and the chief executive office of the Company and each of the
Significant Domestic Subsidiaries is set forth on Schedule II to the Security
Agreement executed by such Person. The books and records of the Company and
each of the Significant Domestic Subsidiaries and all of their chattel paper
and records of Accounts, are maintained exclusively at such locations. There
is no location at which the Company or any of the Significant Domestic
Subsidiaries has any Collateral other than those locations identified on
Schedule II to the Security Agreement executed by such Person. All real
property owned or leased by the Company and the Significant Domestic
Subsidiaries is described in Exhibit A to the Mortgages executed by such
Person, which Schedule sets forth, for each such location, a legal description,
common address and, for leased property, the name and mailing address of the
record
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owner of such leased property. All of the "Trademarks," "Copyrights,"
"Licenses" and "Patents" (as each such term is defined in the Intellectual
Property Security Agreements) owned or licensed by the Company and each of the
Significant Domestic Subsidiaries is set forth on Schedules A, B, C and D,
respectively, of the Intellectual Property Security Agreement executed by such
Person.
5. REPRESENTATIONS OF EACH PURCHASER. Each Purchaser severally
and not jointly represents to the Company and the other Purchasers as follows:
5A. NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes
to be purchased by it hereunder with a view to or for sale in connection with
any distribution thereof within the meaning of the Securities Act, provided
that the disposition of such Purchaser's property shall at all times be and
remain within its control. Such Purchaser confirms the representations and
agreements concerning transfer restrictions, non-registration of the Notes, and
related matters deemed to have been made by such Purchaser's acceptance of the
Notes as set forth in the Memorandum.
5B. SOURCE OF FUNDS. At least one of the following statements is
an accurate representation as to the source of funds (a "Source") to be used by
it to pay the purchase price of the Notes to be purchased by it hereunder:
(1) if such Purchaser is an insurance company, the Source
does not include assets allocated to any separate account maintained
by such Purchaser in which any employee benefit plan (or its related
trust) has any interest, other than a separate account that is
maintained solely in connection with such Purchaser's fixed
contractual obligations under which the amounts payable, or credited,
to such plan and to any participant or beneficiary of such plan
(including any annuitant) are not affected in any manner by the
investment performance of the separate account; or
(2) the Source is either (i) an insurance company pooled
separate account, within the meaning of Prohibited Transaction
Exemption ("PTE") 90-1 (issued January 29, 1990), or (ii) a bank
collective investment fund, within the meaning of the PTE 91-38
(issued July 12, 1991) and, except as such Purchaser has disclosed to
the Company in writing pursuant to this paragraph (2), no employee
benefit plan or group of plans maintained by the same employer or
employee organization beneficially owns more than 10% of all assets
allocated to such pooled separate account or collective investment
fund; or
(3) the Source constitutes assets of an "investment fund"
(within the meaning of Part V of the QPAM Exemption) managed by a
"qualified professional asset manager" or "QPAM"
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(within the meaning of Part V of the QPAM Exemption), no employee
benefit plan's assets that are included in such investment fund, when
combined with the assets of all other employee benefit plans
established or maintained by the same employer or by an affiliate
(within the meaning of Section V(c)(1) of the QPAM Exemption) of such
employer or by the same employee organization and managed by such
QPAM, exceed 20% of the total client assets managed by such QPAM, the
conditions of Part I(c) and (g) of the QPAM Exemption are satisfied,
neither the QPAM nor a person controlling or controlled by the QPAM
(applying the definition of "control" in Section V(e) of the QPAM
Exemption) owns a 5% or more interest in the Company and (a) the
identity of such QPAM and (b) the names of all employee benefit plans
whose assets are included in such investment fund have been disclosed
to the Company in writing pursuant to this paragraph (3); or
(4) the Source is a governmental plan; or
(5) the Source is one or more employee benefit plans, or
a separate account or trust fund comprised of one or more employee
benefit plans, each of which has been identified to the Company in
writing pursuant to this paragraph (5); or
(6) the Source does not include assets of any employee
benefit plan, other than a plan exempt from the coverage of ERISA.
As used in this paragraph 5B, the terms "employee benefit plan," "governmental
plan," "party in interest" and "separate account" shall have the respective
meanings assigned to such terms in Section 3 of ERISA and the "QPAM Exemption"
means Prohibited Transaction Class Exemption 84-14 issued by the United States
Department of Labor.
5C. INDEPENDENT CREDIT INVESTIGATION. No Purchaser, nor any of
its directors, officers, agents or employees, shall be responsible to any of
the other Purchasers for the solvency or financial condition of the Company or
any Guarantor, the ability of the Company to repay any of the Notes or the
First Priority Exchange Notes or the ability of the Company or any Guarantor to
perform its obligations under any Transaction Document, or for the value,
sufficiency, existence or ownership of any of the Collateral, the perfection or
vesting of any lien or security interest, or the statements of the Company or
any Guarantor, oral or written, or for the validity, sufficiency or
enforceability of any of the Notes, the First Priority Exchange Notes, this
Agreement, any other Transaction Document or any document or agreement executed
or delivered in connection with or pursuant to any of the foregoing, or the
liens or security interests granted by the Company or any Guarantor to the
Collateral Agent in connection therewith. Each Purchaser has entered into this
Agreement or its
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respective financial agreements with the Company and the Guarantors based upon
its own independent investigation, and makes no warranty or representation to
the other Purchasers, nor does it rely upon any representation by any of the
other Purchasers, with respect to the matters identified or referred to in this
paragraph.
6. DEFINITIONS. For the purpose of this Agreement, the terms
defined in the introductory sentence and in paragraphs 1 and 2 shall have
the respective meanings specified therein, and the following terms shall have
the meanings specified with respect thereto below:
"AFFILIATE" shall have the meaning ascribed to such term in
the Indenture.
"BANKS" shall mean collectively and "Bank" shall mean
individually, Bank of America Illinois, Citibank International PLC and CitiCorp
North America, Inc., as agents under the Credit Agreement dated December 31,
1993.
"BOOK-ENTRY PURCHASERS" shall have the meaning ascribed to
such term in paragraph 2 hereof.
"CERTIFICATED NOTE PURCHASER" shall have the meaning ascribed
to such term in paragraph 2 hereof.
"CODE" shall mean the Internal Revenue Code of 1986, as
amended.
"COLLATERAL" shall have the meaning ascribed to such term in
the Intercreditor Agreement.
"COLLATERAL AGENT" shall have the meaning ascribed to such
term in the Intercreditor Agreement.
"COLLATERAL DOCUMENTS" shall have the meaning ascribed to such
term in the Intercreditor Agreement.
"COMPANY" shall mean Envirodyne Industries, Inc., a Delaware
corporation.
"DEBT" shall have the meaning ascribed to such term in the
Indenture.
"DEPOSITORY" shall mean Depository Trust Corporation.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
"ERISA AFFILIATE" shall mean any corporation which is a member
of the same controlled group of corporations as the Company within the meaning
of section 414(b) of the Code, or any trade or
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business which is under common control with the Company within the meaning of
section 414(c) of the Code.
"EVENT OF DEFAULT" shall mean any of the events specified in
Section 4.01 of the Indenture, provided that there has been satisfied any
requirement in connection with such event for the giving of notice, or the
lapse of time, or the happening of any further condition, event or act, and
"DEFAULT" shall mean any of such events, whether or not any such requirement
has been satisfied.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
"EXCHANGE AND REGISTRATION RIGHTS AGREEMENT" shall have the
meaning ascribed to such term in paragraph 3B hereof.
"FIRST PRIORITY EXCHANGE NOTES" shall have the meaning
ascribed to such term in the Intercreditor Agreement.
"FIXED RATE NOTES" shall mean the Company's 12% First Priority
Senior Secured Notes due 2000, Series A, issued pursuant to the Indenture.
"FLOATING RATE NOTES" shall mean the Company's Floating Rate
First Priority Senior Secured Notes due 2000, Series C, issued pursuant to the
Indenture.
"GECC INTERCREDITOR AGREEMENT" shall have the meaning ascribed
to such term in paragraph 3B hereof.
"GLOBAL NOTES" shall have the meaning ascribed to such term in
paragraph 2 hereof.
"GUARANTY AGREEMENT" shall have the meaning ascribed to such
term in the Indenture.
"GUARANTORS" shall mean any other Person who shall enter into
a Guaranty Agreement from time to time.
"HOLDER" shall mean (a) any Person in whose name a Note or a
First Priority Exchange Note is registered on the Registrar's books (other than
the Depository or the Depository's nominee), or (b) any Person for which a
book-entry has been made with respect to any Note or First Priority Exchange
Note for such Person's account with the Depository or with a participant of the
Depositary or Persons holding interests through such participants (other than
any Person who has made such a book-entry with respect to such Note or First
Priority Exchange Note for the account of any other Person).
"INDEBTEDNESS" shall have the meaning ascribed to such term in
the Indenture.
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"INDENTURE" shall have the meaning ascribed to such term in
paragraph 1 hereof.
"INTERCREDITOR AGREEMENT" shall have the meaning ascribed to
such term in paragraph 3B hereof.
"LETTER OF CREDIT FACILITY AGREEMENT" shall mean the Credit
Agreement dated as of June 20, 1995, among the Company, BT Commercial
Corporation, as Agent, and the financial institutions signatory thereto, as the
same may be amended, supplemented, modified or replaced from time to time in
accordance with the provisions thereof.
"LIEN" shall mean any mortgage, pledge, security interest,
encumbrance, lien (statutory or otherwise) or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement under the Uniform Commercial Code of
any jurisdiction) or any other type of preferential arrangement for the
purpose, or having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
"MEMORANDUM" shall mean the Private Placement Memorandum,
dated February, 1995, as supplemented by the Supplement to Private Placement
Memorandum, dated May 16, 1995, and the Final Supplement to Private Placement
Memorandum, dated June 5, 1995, taken as a whole.
"MORTGAGES" shall have the meaning ascribed to such term in
the Intercreditor Agreement.
"MULTIEMPLOYER PLAN" shall mean any Plan which is a
"multiemployer plan" (as such term is defined in section 4001(a)(3) of ERISA).
"NOTES" shall have the meaning ascribed to such term in
paragraph 1 hereof.
"OFFICER'S CERTIFICATE" shall mean, with respect to any
corporation, a certificate signed in the name of such corporation by its
President, one of its Vice Presidents or its Treasurer.
"PERMITTED LIENS" shall have the meaning ascribed to such term
in the Indenture.
"PERSON" shall have the meaning ascribed to that term in the
Indenture.
"PLAN" shall mean any "employee pension benefit plan" (as such
term is defined in section 3(2) of ERISA) which is or has been
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established or maintained, or to which contributions are or have been made, by
the Company or any ERISA Affiliate.
"PLEDGE AGREEMENTS" shall have the meaning ascribed to such
term in the Intercreditor Agreement.
"PRUDENTIAL" shall mean The Prudential Insurance Company of
America.
"PURCHASERS" shall have the meaning ascribed to such term in
the introductory sentence hereof.
"REGISTRAR" shall have the meaning ascribed to such term in
the Indenture.
"RESPONSIBLE OFFICER" shall mean, with respect to any
corporation, the chief executive officer, chief operating officer, chief
financial officer or chief accounting officer of such corporation or any other
officer of such corporation involved principally in its financial
administration or its controllership function.
"REQUIRED HOLDER(S)" shall mean the Holder or Holders of a
majority of the aggregate principal amount of the Notes and the First Priority
Exchange Notes from time to time outstanding.
"REVOLVING CREDIT AGREEMENT" shall mean the Revolving Credit
Agreement, dated as of June 20, 1995, between the Company and Prudential, as
the same may be amended, supplemented, modified or replaced from time to time
in accordance with the provisions thereof.
"SECURED PARTIES" shall have the meaning ascribed to such term
in the Intercreditor Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as
amended.
"SECURITY AGREEMENTS" shall have the meaning ascribed to such
term in the Intercreditor Agreement.
"SIGNIFICANT DOMESTIC SUBSIDIARY" shall have the meaning
ascribed to that term in the Indenture.
"SIGNIFICANT HOLDER" shall mean (i) each Purchaser, so long as
such Purchaser shall hold (or be committed under this Agreement to purchase)
any Note or First Priority Exchange Note, or (ii) any "qualified institutional
buyer" (as such term is defined in Rule 144A under the Securities Act) which is
a Holder of at least 5% of the aggregate principal amount of the Notes and the
First Priority Exchange Notes from time to time outstanding and which has
notified the Company that it is such a Holder.
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"SUBSIDIARY" shall have the meaning ascribed to that term in
the Indenture.
"TRANSACTION DOCUMENTS" shall mean, collectively, this
Agreement, the Notes, the First Priority Exchange Notes, the Indenture, the
Guaranty Agreement, Collateral Documents, the Intercreditor Agreement, the GECC
Intercreditor Agreement, the Exchange and Registration Rights Agreement and all
other agreements, instruments and documents relating in any way to the
aforementioned agreements, instruments and documents.
"TRANSFEREE" shall mean any direct or indirect transferee of
all or any part of any Note or First Priority Exchange Note.
"TRUSTEE" shall have the meaning ascribed to such term in
paragraph 1 hereof.
"VISKASE, S.A." shall mean Viskase, S.A., a French corporation.
"YIELD MAINTENANCE AMOUNT" shall have the meaning ascribed to
such term in the Indenture.
6A. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All
references in this Agreement to "generally accepted accounting principles"
shall be deemed to refer to generally accepted accounting principles in effect
in the United States at the time of application thereof. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance
with generally accepted accounting principles, applied on a basis consistent
with the most recent audited consolidated financial statements of the Company
and its Subsidiaries delivered to the Purchasers. If subsequent to the date
hereof there should be any change in generally accepted accounting principles
which materially affects the financial covenants contained in the Indenture,
then, at the request of either any Significant Holder or the Company, the
Significant Holders and the Company will negotiate in good faith to cause the
Indenture to be amended to revise such covenants so as equitably to reflect
such changes to the end that the criteria for evaluating the Company's
financial condition and performance will be the same after such changes as they
were before such changes.
7. MISCELLANEOUS.
7A. DIRECT PAYMENT. Notwithstanding any provision to the contrary
in this Agreement, the Notes, the First Priority Exchange Notes or the
Indenture, so long as any Significant Holder, any Affiliate of any Significant
Holder or any nominee of any
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Significant Holder or any such Affiliate shall be the Holder of any Note or any
First Priority Exchange Note, the Company will pay or cause to be paid all
principal, interest, Yield Maintenance Amount or other amounts payable to such
Significant Holder, such Affiliate, or such nominee, as the case may be, with
respect to any Notes or First Priority Exchange Notes of which such Significant
Holder, such Affiliate or such nominee is the Holder, including any amounts
payable upon any redemption or purchase thereof pursuant to the Indenture
(without any presentment of such Notes or First Priority Exchange Notes and
without any notice of such payment being made thereon, except that any Notes or
First Priority Exchange Notes registered in the name of any such Holder, such
Affiliate or such nominee paid or prepaid in full shall, promptly following
receipt of such payment, be surrendered to the Trustee and promptly after such
surrender and payment shall be canceled by the Trustee), by 11:30 A.M., New
York time, on the date of payment in the manner specified in the Purchaser
Schedule attached hereto, or in such other manner or to such other address in
the United States of America as may be designated by such Significant Holder,
such Affiliate or such nominee in writing to the Company and the Trustee. Each
such Significant Holder, Affiliate or nominee agrees that, before disposing of
any Notes or First Priority Exchange Notes registered in the name of such
Significant Holder, Affiliate or nominee, it will make a notation thereon (or
on a schedule attached thereto) of all principal payments previously made
thereon and of the date to which interest thereon has been paid. The Company
agrees to afford the rights to direct payment under this paragraph 7A to each
other Significant Holder which shall deliver to the Company and the Trustee a
written request directing that payment with respect thereto be made in the
manner specified in such request and which shall have made the same agreement
as each Significant Holder has made in this paragraph 7A.
7B. ISSUE TAXES. The Company will pay any and all taxes in
connection with the issuance and sale of the Notes or the First Priority
Exchange Notes and in connection with any modification of the Notes or the
First Priority Exchange Notes, and will save the Purchasers harmless, without
limitation as to time, against any and all liability with respect to such
taxes. The obligations of the Company under this paragraph 7B shall survive
the payment of the Notes and the First Priority Exchange Notes by the Company
and the termination of this Agreement.
7C. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser and
any Significant Holder harmless against liability for the payment of, all
out-of-pocket expenses arising in connection with such transactions, including
(i) all document production and duplication charges and the fees and expenses
of Purchasers' special counsel referred to in paragraph 3E and 3J hereof in
connection with the negotiation, execution and delivery of the Transaction
Documents and the consummation of the
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transactions contemplated hereby and thereby and all document production and
duplication charges and fees of any special counsel engaged by such Purchaser
or such Significant Holder in connection any subsequent proposed modification
of, or proposed consent under, whether or not such proposed modification shall
be effected or proposed consent granted, (ii) the costs and expenses, including
attorneys' fees, incurred by such Purchaser or such Significant Holder in
enforcing (or determining whether or how to enforce or to direct the Collateral
Agent to enforce) any rights under any of the Transaction Documents or in
responding to any subpoena or other legal process or informal investigative
demand issued in connection with any of the Transaction Documents or the
transactions contemplated hereby or thereby or by reason of such Purchaser's or
such Significant Holder's having acquired any Note or First Priority Exchange
Note, including without limitation costs and expenses incurred in any
bankruptcy case, but excluding any subpoena, legal process or informal
investigation demand issued in connection with an investigation of the
practices of such Purchaser or Significant Holder in general, (iii) the costs
and expenses, including attorney's fees, of preparing, recording and filing all
financing statements, instruments or other documents to create, perfect and
totally preserved and protect the Liens granted in the Collateral Documents,
(iv) all costs relating to obtaining a private placement number for the Notes
and the First Priority Exchange Notes from Standard & Poor's Corporation, and
(v) the fees and expenses of the Trustee and its counsel. The obligations of
the Company under this paragraph 7C shall survive the transfer of any Note or
First Priority Exchange Note or portion thereof or interest therein by any
Purchaser or any Transferee and the payment of any Note or First Priority
Exchange Note.
7D. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the Required Holder(s)
except that, without the written consent of the Holder or Holders of all Notes
or First Priority Exchange Notes at the time outstanding, no amendment to this
Agreement shall change the proportion of the principal amount of the Notes or
First Priority Exchange Notes required with respect to any consent, amendment,
waiver or declaration. Each Holder of any Note or First Priority Exchange Note
at the time or thereafter outstanding shall be bound by any consent authorized
by this paragraph 7D, whether or not such Note or First Priority Exchange Note
shall have been marked to indicate such consent, but any Notes or First
Priority Exchange Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and the Holder of any
Note or First Priority Exchange Note nor any delay in exercising any rights
hereunder or under any Note or First Priority Exchange Note shall operate as a
waiver of any rights of any Holder of such Note or First Priority Exchange
Note. As used herein and in the Notes or First Priority
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Exchange Notes, the term "this Agreement" and references thereto shall mean
this Agreement as it may from time to time be amended or supplemented.
7E. CERTAIN INDENTURE AMENDMENTS. The Company agrees that,
notwithstanding the provisions of Section 8.01(1) of the Indenture, it will not
amend or supplement the Indenture pursuant to such Section 8.01(1) unless such
amendment or supplement has been approved by Significant Holders holding at
least a majority of the aggregate principal amount of the Notes and the First
Priority Exchange Notes then held by all Significant Holders.
7F. SUBSTITUTION AND REPLACEMENT. Reference is made to Section
2.07 of the Indenture, which provides for the exchange and substitution of any
Note or First Priority Exchange Note which has been mutilated, destroyed, lost
or wrongfully taken. Notwithstanding the provisions of the Indenture, the
Company agrees that if the mutilated, destroyed, lost or wrongfully taken Note
or First Priority Exchange Note was held by any Purchaser, any Affiliate of any
Purchaser or any Significant Holder or by any nominee for any Purchaser, any
such Affiliate or such Significant Holder, then (a) an affidavit of an officer
of such Purchaser, such Affiliate or such Significant Holder, as the case may
be, certifying as to the ownership of such mutilated, destroyed, lost or
wrongfully taken Note or First Priority Exchange Note at the time of such
mutilation, destruction, loss or wrongful taking, together with an unsecured
indemnity agreement from such Purchaser, Affiliate or Significant Holder,
reasonably satisfactory to the Company, shall be accepted by the Company for
the purposes of the Indenture and (b) the Company will make no charge for such
substitution or for any expenses incurred for any investigation or otherwise
and will pay or reimburse the Trustee for expenses incurred in connection
therewith.
7G. PARTICIPATIONS. The Holder of any Note or First Priority
Exchange Note may from time to time grant participations in such Note or First
Priority Exchange Note to any Person on such terms and conditions as may be
determined by such Holder in its sole and absolute discretion, provided that
any such participation shall be in a principal amount of at least $100,000 and
that such Holder retains the right, in its discretion, to give consents
hereunder and under the Indenture (except with respect to matters referred to
in Section 8.02(1)-(7) of the Indenture). The Company agrees that each such
participant and each Holder of any Note or First Priority Exchange Note may
exercise any and all rights of setoff and counterclaim to the fullest extent
permitted by law with respect to its interests in the Notes or the First
Priority Exchange Notes as fully as if such participant or Holder were a direct
lender to the Company.
7H. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties of the Company or
24
<PAGE> 28
the Purchasers contained herein or made in writing by or on behalf of the
Company in connection herewith shall survive the execution and delivery of the
Transaction Documents and the exhibits hereto, the transfer by any Purchaser of
any Note or First Priority Exchange Note or portion thereof or interest therein
and the payment of any Note or First Priority Exchange Note, and may be relied
upon by any Transferee, regardless of any investigation made at any time by or
on behalf of any Purchaser or any Transferee. Subject to the preceding
sentence, the Transaction Documents embody the entire agreement and
understanding between the Purchasers and the Company and supersede all prior
agreements and understandings relating to the subject matter hereof.
7I. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement contained by or on behalf of any of the parties hereto shall
bind and inure to the benefit of the respective successors and assigns of the
parties hereto (including, without limitation, any Transferee) whether so
expressed or not.
7J. NOTICES. All written communications provided for hereunder
shall be sent by first class mail, nationwide overnight delivery service (with
charges prepaid) or facsimile transmission (confirmed by first class mail or
nationwide overnight delivery service) and (i) if to any Purchaser, addressed
to such Purchaser at the address, facsimile number or telephone number, if
applicable, specified for such communications in the Purchaser Schedule
attached hereto, or at such other address, facsimile number or telephone number
as such Purchaser shall have specified to the Company in writing, (ii) if to
any other Holder of any Note or First Priority Exchange Note, addressed to such
other Holder at such address or facsimile number, if applicable, as such other
Holder shall have specified to the Company in writing or, if any such other
Holder shall not have so specified an address or facsimile number to the
Company, then addressed to such other Holder in care of the last Holder of such
Note or First Priority Exchange Note which shall have so specified an address
to the Company, and (iii) if to the Company, addressed to it at 701 Harger
Road, Suite 190, Oak Brook, Illinois 60521, Attention: General Counsel, or, if
applicable, to the facsimile number (708) 575-2401 or at such other address or
facsimile number as the Company shall have specified to the Holder of each Note
and First Priority Exchange Note in writing.
7K. SATISFACTION REQUIREMENT. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to any Purchaser, the Significant Holders
or to the Required Holder(s), the determination of such satisfaction shall be
made by such Purchaser or the Required Holder(s), as the case may be, in the
sole and exclusive judgment (exercised in good faith) of the Person or Persons
making such determination.
25
<PAGE> 29
7L. SOLICITATION OF HOLDERS. So long as any of the Notes or the
First Priority Exchange Notes are owned by any Significant Holder, the Company
will not solicit, request or negotiate for or with respect to any proposed
amendment or waiver of any of the provisions of this Agreement, the Indenture,
the Notes, the First Priority Exchange Notes or any other Transaction Document
unless each Holder of the Notes or First Priority Exchange Notes (irrespective
of the principal amount of the Notes or First Priority Exchange Notes then
owned by it) shall be informed thereof by the Company and shall be afforded the
opportunity of considering the same and shall be supplied by the Company with
sufficient information as it may reasonably request to enable it to make an
informed decision with respect thereto. Executed or true and correct copies of
any amendment or waiver shall be delivered by the Company to each Significant
Holder of outstanding Notes or First Priority Exchange Notes forthwith
following the date on which the same shall have been executed and delivered by
the Holder or Holders of the requisite percentage of outstanding Notes or First
Priority Exchange Notes.
7M. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF
LAW.
7N. SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7O. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
7P. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one instrument. It shall not be necessary in making proof of
this Agreement to produce or account for more than one such counterpart.
7Q. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is
prohibited by any one of such covenants, the fact that it would be permitted by
an exception to, or otherwise be in compliance within the limitations of,
another covenant shall not (i) avoid the occurrence of an Event of Default of
Default if such action is taken or such condition exists or (ii) in any way
prejudice an attempt by a Holder or the Holders of the Notes or First Priority
Exchange Notes to prohibit (through equitable action
26
<PAGE> 30
or otherwise) the taking of any action by the Company or a Subsidiary which
would result in the Event of Default or Default.
7R. SEVERALTY OF OBLIGATIONS. The sales of Notes to the
Purchasers are to be several sales, and the obligations of the Purchasers under
this Agreement are several obligations. Except as provided in paragraph 3Q, no
failure by any Purchaser to perform its obligations under this Agreement shall
relieve any other Purchaser or the Company of any of its obligations hereunder,
and no Purchaser shall be responsible for the obligations of, or any action
taken or omitted by, any other Purchaser hereunder.
7S. JURISDICTION, SERVICE OF PROCESS. The Company irrevocably
agrees that any suit, action or proceeding against the Company with respect to
this Agreement or any Transaction Document may be brought in the courts of New
York County in the State of New York or in the U.S. District Court for the
Southern District of New York, and the Company accepts for itself, generally
and unconditionally, and hereby submits to the non-exclusive jurisdiction of
each such court for the purpose of any such suit, action or proceeding. The
Company hereby waives personal service of any and all process upon it and
irrevocably agrees that service of all writs, process and summonses in any such
suit, action or proceeding brought in any such court may be made upon the
Person to whom notices to the Company may be sent under paragraph 7J hereof,
and hereby irrevocably appoints such Person as its agent in its name, place and
stead to accept on the Company's behalf such service of any and all such writs,
process and summonses and the Company hereby irrevocably authorizes and directs
such Person to accept such service on its behalf, and agrees that the failure
of such Person to give any notice of any such services of process to the
Company shall not impair or affect the validity of such service or of any
judgment based upon same. The Company further irrevocably consents to the
service of process in any suit, action or proceeding in said courts by the
mailing thereof by any Holder of any Note or First Priority Exchange Note by
registered or certified mail, postage prepaid, to the Company at its address
given in paragraph 7J hereof. The foregoing shall not, however, limit the
right of any Holder of any Note or First Priority Exchange Note to serve
process in any other manner permitted by law or to commence any suit, action or
proceeding or to obtain execution of judgment in any appropriate jurisdiction.
Without limiting the foregoing, the Company further agrees that any Holder of
any Note or First Priority Exchange Note may at its option submit any dispute
which may arise in connection with this Agreement or any Transaction Document
to any other court having jurisdiction over the Company's property. The
Company irrevocably waives any objection which it may now or hereafter have to
the laying of venue of any suit, action or proceeding arising out of or
relating to this Agreement or of any Transaction Document brought in the courts
of New York County in the State of New York or the U.S. District Court for the
Southern District of New York, and
27
<PAGE> 31
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
[Balance Of Page Intentionally Left Blank]
28
<PAGE> 32
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement among the
Company and the Purchasers.
Very truly yours,
ENVIRODYNE INDUSTRIES, INC.
By: ________________________________
Title:__________________________
29
<PAGE> 33
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: ________________________________
Title:__________________________
30
<PAGE> 1
EXHIBIT 10.11
Envirodyne Industries, Inc.
701 Harger Road, Suite 190
Oak Brook, Illinois 60521
As of June 20, 1995
To Each of the Insurance Company
Purchasers Accepting this
Letter Agreement
Ladies and Gentlemen:
Reference is made to the Note Agreement (the "Note Agreement"), dated as of
the date hereof, relating to $160,000,000 principal amount of the First
Priority Senior Secured Notes due 2000 of Envirodyne Industries, Inc. (the
"Company"). All terms used herein which are defined in the Note Agreement
shall have the meanings given in the Note Agreement.
Each of you (herein called the "Insurance Company Purchasers") have
expressed a willingness to enter into the Note Agreement provided that the
Company agrees to provide the Insurance Company Purchasers with certain
financial statements and other reports and information, access to information
and other rights as the Insurance Company Purchasers believe is customary in a
private placement of indebtedness with insurance company investors.
Accordingly, to induce the Insurance Company Purchasers to execute the Note
Agreement, the Company agrees with the Insurance Company Purchasers as follows:
1. FINANCIAL STATEMENTS AND OTHER REPORTS. The Company covenants that it
shall deliver to each Insurance Company Purchaser in duplicate:
(a) as soon as practicable and in any event within 45 days after the end
of each quarterly period (other than the last quarterly period) in each
fiscal year of the Company, an unaudited consolidated statement of operations
and statement of cash flows and stockholders' equity of the Company and its
Subsidiaries for such quarterly period and for the period from the beginning
of the current fiscal year to the end of such quarterly period, and a
consolidated balance sheet of the Company and its Subsidiaries as at the end
of such quarterly period, setting forth in each case in
<PAGE> 2
As of June 20, 1995
Page 2
comparative form figures for the corresponding period in the preceding fiscal
year, all in reasonable detail and satisfactory in form to the Insurance
Company Purchasers and certified as accurate by an authorized financial
officer of the Company, subject to changes resulting from normal year-end
adjustments;
(b) as soon as practicable and in any event within 90 days after the end
of each fiscal year of the Company, a consolidating and consolidated
statement of operations of the Company and its Subsidiaries for such fiscal
year, a consolidated statement of cash flows and stockholders' equity of the
Company and its Subsidiaries for such fiscal year, and a consolidating and
consolidated balance sheet of the Company and its Subsidiaries as at the end
of such fiscal year, setting forth in each case in comparative form
corresponding consolidated figures from the preceding annual audit, all in
reasonable detail and satisfactory in form to the Insurance Company
Purchasers and, as to the consolidated statements, reported on by Coopers &
Lybrand, or other independent public accountants of recognized international
standing selected by the Company and reasonably acceptable to the Insurance
Company Purchasers, whose opinion shall be without limitation as to the scope
of the audit and shall state that such financial statements present fairly,
in all material respects, the financial position of the Company and its
Subsidiaries and their results of operations and cash flows and have been
prepared in conformity with generally accepted accounting principles, that
the examination of such accountants in connection with such financial
statements has been made in accordance with generally accepted auditing
standards, and that such audit provides a reasonable basis for such opinion
in the circumstances, and, as to the consolidating statements, certified as
accurate by an authorized financial officer of the Company;
(c) not later than 45 days after each fiscal year end, beginning with the
fiscal year ended December 28, 1995, monthly projections of the financial
condition and results of operations of the Company and its Subsidiaries for
the next succeeding year and annual projections for the next two (2)
succeeding fiscal years thereafter, in each case containing projected
consolidated balance sheets, statements of operations, statements of cash
flows and statements of changes in shareholders equity.
(d) promptly upon transmission thereof, copies of all such financial
statements, proxy statements, notices and reports as it shall send to its
public securities holders
<PAGE> 3
As of June 20, 1995
Page 3
and copies of all registration statements (without exhibits) and all reports
which it files with the Securities and Exchange Commission (or any
governmental body or agency succeeding to the functions of the Securities and
Exchange Commission);
(e) promptly upon receipt thereof, a copy of each report submitted to the
Company or any of its Subsidiaries by independent accountants in connection
with any annual, interim or special audit made by them of the books of the
Company or any such Subsidiary; and
(f) with reasonable promptness, such other business or financial data as
any Insurance Company Purchaser may reasonably request.
Together with each delivery of financial statements required by clauses (a)
and (b) above, the Company will deliver to each Insurance Company Purchaser an
Officer's Certificate duly signed by an authorized financial officer of the
Company demonstrating (with computations in reasonable detail) compliance by
the Company and its Subsidiaries with the provisions of Sections 4.01, 4.02,
4.03 and 4.06 of the Indenture and stating that there exists no Event of
Default or Default, or, if any Event of Default or Default exists, specifying
the nature and period of existence thereof and what action the Company proposes
to take with respect thereto. Together with each delivery of financial
statements required by clause (b) above, the Company will deliver to each
Insurance Company Purchaser a certificate of the public accountants referred to
therein stating that, in making the audit necessary to such public accountants'
opinion on such financial statements, they have obtained no knowledge of any
Event of Default or Default, or, if they have obtained knowledge of any Event
of Default or Default, specifying the nature and period of existence thereof.
Such accountants, however, shall not be liable to anyone by reason of their
failure to obtain knowledge of any Event of Default or Default which would not
be disclosed in the course of an audit conducted in accordance with generally
accepted auditing standards. The Company further covenants that immediately
after any Responsible Officer of the Company obtains knowledge of an Event of
Default or Default, it will deliver to each Insurance Company Purchaser an
Officer's Certificate specifying the nature and period of existence thereof and
what action the Company proposes to take with respect thereto.
2. INSPECTION OF PROPERTY. The Company covenants that it will permit each
Insurance Company Purchaser and its representatives, at its expense as to any
period when no Default or Event of Default has occurred and is continuing but
at the Company's
<PAGE> 4
As of June 20, 1995
Page 4
expense as to any period when a Default or an Event of Default has occurred and
is continuing, upon reasonable notice, to visit and inspect any of the
properties of the Company and its Subsidiaries, to examine the corporate books
and financial records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of the Company and its Subsidiaries with their respective principal officers
and, in the presence of a Responsible Officer of the Company, independent
public accountants, all at such reasonable times and as often as such Insurance
Company Purchaser may reasonably request.
3. NOTICE OF SUITS, ADVERSE CHANGE IN BUSINESS, ETC. The Company shall, and
shall cause each of its Subsidiaries to, as soon as possible, and in any event
within five (5) Business Days after any Responsible Officer of such Person
learns of the following, give written notice to the Insurance Company
Purchasers: (a) of any material proceeding(s) (including, without limitation,
litigation, investigations, arbitration or governmental proceedings) being
instituted by or against such Person in any federal, state, local or foreign
court or before any commission or other regulatory body (federal, state, local
or foreign), (b) that such Person's operations are not in full compliance with
all requirements of applicable federal, state, local or foreign law, ordinance,
rule, regulation or other governmental requirement, except for notices as to
matters which either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect (as defined in the Indenture), (c)
that, without limiting the foregoing clause (b), such Person is subject to a
material federal, state, local or foreign investigation evaluating whether any
remedial action is needed to respond to the release of any hazardous or toxic
waste, substance or constituent, or other substance into the environment and
(d) of any material adverse change in the business, operations, condition
(financial or otherwise), properties or prospects of the Company and its
Subsidiaries, taken as a whole.
4. DISCLOSURE TO OTHER PERSONS. Each Insurance Company Purchaser agrees to
use its best efforts to hold in confidence and not disclose any Confidential
Information; provided that nothing herein shall prevent any Insurance Company
Purchaser from delivering or disclosing (and the Company acknowledges that each
Insurance Company Purchaser may deliver or disclose) any financial statements
and other documents delivered to it, and any other information disclosed to it
(including, but not limited to, Confidential Information), by or on behalf of
the Company or any Subsidiary in connection with or pursuant to this agreement
or any other Transaction Document to (i) its directors, officers, employees,
agents and professional consultants, (ii) any other holder of any Note, (iii)
any Person to which it offers to sell
<PAGE> 5
As of June 20, 1995
Page 5
any Note or any part thereof, (iv) any Person to which it sells or offers to
sell a participation in all or any part of any Note, (v) any Person from which
it offers to purchase any security of the Company, (vi) any federal or state
regulatory authority having jurisdiction over it, (vii) the National
Association of Insurance Commissioners or any similar organization or (viii)
any other Person to which such delivery or disclosure may be necessary or
appropriate (a) to effect compliance with any law, rule, regulation or order
applicable to such Insurance Company Purchaser, (b) in response to any subpoena
or other legal process, (c) in connection with any litigation to which it is a
party or (d) in order to protect its investment in any Note; provided, however,
that no Confidential Information shall be disclosed to any Person described in
clause (ii), (iii), (iv) or (v) unless such Person has agreed to the provisions
of this paragraph 4. "CONFIDENTIAL INFORMATION" shall mean, with respect to
any Person, any written information delivered or made available by or on behalf
of the Company or any Subsidiary to such Person pursuant to this agreement or
any Collateral Document which is clearly marked or labeled as being
confidential information, but in no event shall include information (i) which
was publicly known or otherwise known to such Person at the time of disclosure,
(ii) which subsequently becomes publicly known through no act or omission by
such Person, or (iii) which other wise becomes known to such Person, other than
through disclosure by or on behalf of the Company or any Subsidiary.
5. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references in this
agreement to "generally accepted accounting principles" shall be deemed to
refer to generally accepted accounting principles in effect in the United
States at the time of application thereof. Unless otherwise specified herein,
all accounting terms used herein shall be interpreted, all determinations with
respect to accounting matters hereunder shall be made, and all unaudited
financial statements and certificates and reports as to financial matters
required to be furnished hereunder shall be prepared, in accordance with
generally accepted accounting principles, applied on a basis consistent with
the most recent audited consolidated financial statements of the Company and
its Subsidiaries delivered to the Insurance Company Purchasers.
6. RETIREMENT OF NOTES. The Company shall not, and shall not permit any of
its Subsidiaries or Affiliates to, prepay, otherwise retire, redeem, purchase,
or otherwise acquire, directly or indirectly, in whole or in part prior to
their stated final maturity (other than by redemption pursuant to Section 4.06
or 9.01 of the Indenture, offer to purchase pursuant to Section 3.09 of the
Indenture or upon acceleration of such final maturity pursuant to Article 5 of
the Indenture), Notes or First Priority
<PAGE> 6
As of June 20, 1995
Page 6
Notes held by any holder of Notes or First Priority Notes unless the Company or
such Subsidiary or Affiliate shall have offered to prepay or otherwise retire
or purchase or otherwise acquire, as the case may be, the same proportion of
the aggregate principal amount of Notes and First Priority Notes held by each
Insurance Company Purchaser upon the same terms and conditions.
7. CREDIT DOCUMENT. The Company acknowledges that this agreement constitutes
a "Credit Document", as defined in the Indenture.
8. SUCCESSORS AND ASSIGNS. This agreement shall inure to the benefit of the
successors and assigns of the Insurance Company Purchasers, provided that (i)
any such assignee (together with its Affiliates) shall hold at least 5% of the
outstanding principal amount of the Notes, and (ii) such assignee delivers to
the Company an agreement to be bound by the provisions of paragraph 4 hereof.
This agreement shall bind and inure to the benefit of the successors and
assigns of the Company.
9. NOTICES. All written communications provided for hereunder shall be sent
in the manner specified in the Note Agreement.
10. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
11. SEVERABILITY. Any provision of this agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
12. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this agreement are inserted for convenience only and do not
constitute a part of this agreement.
13. COUNTERPARTS. This agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together
shall constitute one instrument. It shall not be necessary in making proof of
this agreement to produce or account for more than one such counterpart.
<PAGE> 7
As of June 20, 1995
Page 7
If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement among the
Company and the Insurance Company Purchasers.
Very truly yours,
ENVIRODYNE INDUSTRIES, INC.
By:__________________________________________
Title:____________________________________
<PAGE> 8
As of June 20, 1995
Page 8
The foregoing Agreement is
hereby accepted as of the
date first above written.
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
By: _________________________________
Title:______________________________
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES
By: _________________________________
Title:______________________________
THE EQUITABLE LIFE ASSURANCE SOCIETY
OF THE UNITED STATES (for the account
of Nutmeg)
By: _________________________________
Title:______________________________
<PAGE> 1
EXHIBIT 10.12
________________________________________________________________________________
________________________________________________________________________________
ENVIRODYNE INDUSTRIES, INC.
REVOLVING CREDIT AGREEMENT
$20,000,000
SENIOR SECURED REVOLVING CREDIT FACILITY
Dated as of June 20, 1995
________________________________________________________________________________
________________________________________________________________________________
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. REVOLVING CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1A. REVOLVING LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1B. THE REVOLVING NOTE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1C. PREPAYMENT AT THE COMPANY'S OPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1D. REQUIRED PREPAYMENTS; REDUCTION OF REVOLVING LOAN COMMITMENT . . . . . . . . . . . . . . . . . 2
2. CONDITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2A. CONDITIONS OF CLOSING. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2A(1). REVOLVING NOTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2A(2). DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2A(3). NOTE AGREEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2A(4). LETTER OF CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2A(5). OPINION OF PRUDENTIAL'S SPECIAL COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2A(6). OPINION OF COMPANY'S AND GUARANTORS' COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . 7
2A(7). REPRESENTATIONS AND WARRANTIES; NO DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2A(9). NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2A(10). FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2A(11). EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2A(12). REVOLVING LOANS PERMITTED BY APPLICABLE LAWS . . . . . . . . . . . . . . . . . . . . . . . . . 8
2A(13). CONSENTS AND PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2A(14). PAYOFF LETTERS; DISBURSEMENT INSTRUCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2A(15). CERTIFICATES OF INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2A(16). ENVIRONMENTAL ASSESSMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2A(17). PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2B. CONDITIONS PRECEDENT TO EACH REVOLVING LOAN. . . . . . . . . . . . . . . . . . . . . . . . . . 9
2B(1). REVOLVING LOAN REQUEST. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2B(2). REPRESENTATIONS AND WARRANTIES; NO DEFAULT; BORROWING BASE . . . . . . . . . . . . . . . . . . 10
2B(3). REVOLVING LOAN PERMITTED BY APPLICABLE LAWS . . . . . . . . . . . . . . . . . . . . . . . . . 10
2B(4). NO MATERIAL ADVERSE CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2B(5). LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
3. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3A. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3B. INSPECTION OF PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3C. CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE; COMPLIANCE WITH LAWS . . . . . . . . . . . . . 13
3D. GUARANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3E. MAINTENANCE OF PROPERTY; INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3F. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
3G. NOTICE OF SUITS, ADVERSE CHANGE IN BUSINESS, ETC. . . . . . . . . . . . . . . . . . . . . . . 15
3H. INFORMATION REQUIRED BY RULE 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3I. CHANGE OF CONTROL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
3J. ENVIRONMENTAL INVESTIGATION AND REMEDIATION . . . . . . . . . . . . . . . . . . . . . . . . . 16
3K. GECC CLOSING DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3L. FURTHER ACTIONS -- COLLATERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
</TABLE>
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<TABLE>
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4. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4A. CERTAIN FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4B. LIMITATION ON RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS . . . . . . . . . . . . . . . . . 20
4C. LIMITATION ON INDEBTEDNESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
4D. LIMITATION ON LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4E. LIMITATION ON COMPANY MERGERS, CONSOLIDATIONS, AND SALES . . . . . . . . . . . . . . . . . . . 25
4F. LIMITATION ON CERTAIN ASSET SALES AND SUBSIDIARY MERGERS . . . . . . . . . . . . . . . . . . . 26
4G. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES . . . . . . . . . . . . . . . . . . 28
4H. TRANSACTIONS WITH AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
4I. LIMITATIONS ON THE SALE OF STOCK AND DEBT OF SUBSIDIARIES . . . . . . . . . . . . . . . . . . 30
4J. SALE AND LEASE-BACK TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4K. SALE OR DISCOUNT OF RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4L. PENSION PLAN FUNDING DEFICIENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4M. LIMITATION ON ISSUANCE AND SALE OF CAPITAL STOCK OF SUBSIDIARIES . . . . . . . . . . . . . . . 30
4N. LIMITATION ON FISCAL YEAR CHANGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4O. HOSTILE TENDER OFFERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5A. ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5B. RESCISSION OF ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5C. NOTICE OF ACCELERATION OR RESCISSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
5D. OTHER REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6. REPRESENTATIONS, COVENANTS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6A. ORGANIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
6B. POWER AND AUTHORITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6C. FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
6D. ACTIONS PENDING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6E. OUTSTANDING DEBT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6F. TITLE TO PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
6G. TAXES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6H. CONFLICTING AGREEMENTS AND OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
6I. OFFERING OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6J. USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6K. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
6L. GOVERNMENTAL CONSENT AND OTHER THIRD PARTY CONSENTS . . . . . . . . . . . . . . . . . . . . . 40
6M. ENVIRONMENTAL COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6N. RULE 144A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
6O. DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6P. REGULATORY STATUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6Q. PERMITS AND OTHER OPERATING RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
6R. ABSENCE OF FINANCING STATEMENTS, ETC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6S. SECURITY INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6T. LIMITATION ON PRUDENTIAL'S RESPONSIBILITY . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6U. LOCATIONS OF COLLATERAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
</TABLE>
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<TABLE>
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7. REPRESENTATIONS OF PRUDENTIAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7A. NATURE OF PURCHASE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
7B. SOURCE OF FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
8A. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS . . . . . . . . . . . . . . . . . . . . . . 70
9. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9A. NOTE PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9B. EXPENSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9C. CONSENT TO AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF REVOLVING NOTES; LOST NOTES . . . . . . . . . . 72
9E. PERSONS DEEMED OWNERS; PARTICIPATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT . . . . . . . . . . . . . . . . 73
9G. SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9H. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
9I. SATISFACTION REQUIREMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9J. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9K. INDEPENDENCE OF COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9L. BINDING AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9M. SEVERABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9N. DESCRIPTIVE HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9O. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9P. DISCLOSURE TO OTHER PERSONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
9Q. JURISDICTION, SERVICE OF PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
</TABLE>
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<PAGE> 5
LIST OF ATTACHMENTS
LENDER SCHEDULE
INFORMATION SCHEDULE
<TABLE>
<S> <C>
Exhibit A -- Form of Revolving Agreement
Exhibit B-1 -- Form of Intercreditor Agreement
Exhibit B-2 -- Form of GECC Intercreditor Agreement
Exhibit C-1 -- Form of Security Agreement
Exhibit C-2 -- Form of Intellectual Property Security Agreement
Exhibit D-1 -- Form of Mortgage
Exhibit D-2 -- Form of Leasehold Mortgage
Exhibit E -- Form of Pledge Agreement
Exhibit F -- Guaranty Agreement
Exhibit G -- Exchange and Registration Rights Agreement
Exhibit H-1 -- Form of opinion of Purchaser's Special Counsel
Exhibit H-2 -- Form of opinion of Company's Special Counsel
Exhibit I -- Form of Borrowing Base Certificate
Exhibit J -- Form of Revolving Loan Request
Exhibit K -- Form of Subordination Terms
Exhibit L -- Form of Collateral Access Agreement
Schedule 3J -- Remedial Actions
Schedule 4B -- Schedule of Investments
Schedule 4C -- Schedule of Subsidiary Debt
Schedule 4D -- Schedule of Liens
Schedule 4G -- Schedule of Certain Restrictions
Schedule 6A -- Subsidiaries
Schedule 6H -- List of Agreements restricting Debt
Schedule 8A -- Schedule of Account Debtors
</TABLE>
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<PAGE> 6
ENVIRODYNE INDUSTRIES, INC.
701 Harger Road
Suite 190
Oak Brook, Illinois 60521
As of June 20, 1995
The Prudential Insurance Company
of America ("Prudential" or the
"Lender")
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Gentlemen:
The undersigned, Envirodyne Industries, Inc. (herein called the
"Company"), hereby agrees with you as set forth below. Reference is made to
paragraph 8 hereof for definitions of capitalized terms used herein.
1. REVOLVING CREDIT FACILITY.
1A. REVOLVING LOANS. Subject to and upon the terms and conditions
set forth in this Agreement, Prudential shall lend to the Company from time to
time on any LIBOR Business Day during the period (the "Commitment Period") from
the Closing Day to the Revolving Loans Termination Date sums (each a "Revolving
Loan" and collectively the "Revolving Loans") which in the aggregate principal
amount outstanding shall not exceed at any one time the lesser of (a)
$20,000,000 (such maximum aggregate amount, as reduced pursuant to paragraph
1D(3) or 4F(e)(3), being herein referred to as the "Revolving Commitment") and
(b) the Borrowing Base. Within the limits set forth in the preceding sentence
and subject to the terms and conditions herein set forth, the Company may
borrow, prepay pursuant to paragraph 1C and reborrow under paragraph 1E. On
the Revolving Loans Termination Date no further Revolving Loans shall be made
pursuant to this Agreement. The principal amount of each Revolving Loan shall
be $500,000 or an integral multiple thereof.
1B. THE REVOLVING NOTE. The Revolving Loans shall be evidenced by
a single revolving senior secured promissory note issued by the Company to
Prudential in the principal face amount of $20,000,000, to be dated the Closing
Day, to mature on or before the Revolving Loans Termination Date, to bear
interest on the principal amount from time to time outstanding (a) from the
date thereof until the principal thereof shall have become due and payable
(whether by acceleration or otherwise) at the LIBOR Rate
<PAGE> 7
calculated as provided in paragraph 1H, and (b) after such date until paid at a
rate per annum which shall be 2.00% per annum in excess of the LIBOR Rate,
calculated as provided in paragraph 1H, and to be substantially in the form of
Exhibit A hereto. The terms "Revolving Note" and "Revolving Notes" as used
herein shall refer to each Revolving Note delivered pursuant to any provision
of this Agreement and each Revolving Note delivered in substitution or exchange
therefor. If necessary to evidence any change in the provisions of this
Agreement relating to the Revolving Note and agreed to in writing by Prudential
and the Company, the Company shall furnish a replacement Revolving Note to
Prudential in substitution for, but not in discharge of the liability evidenced
by, the prior Revolving Note. Upon issuance of such replacement Revolving Note
by the Company, Prudential shall return the previously outstanding Revolving
Note to the Company.
1C. PREPAYMENT AT THE COMPANY'S OPTION. The Company shall have
the right, upon at least one Business Day's prior written notice, to prepay in
whole or in part, in amounts of $100,000 or integral multiples thereof, without
premium, prior to the express maturity date thereof, any Revolving Loan on any
Business Day. Each notice of a prepayment under this paragraph 1C shall
specify the date and the principal amount of the prepayment.
1D. REQUIRED PREPAYMENTS; REDUCTION OF REVOLVING LOAN COMMITMENT.
1D(1). REVOLVING LOANS TERMINATION DATE. The entire outstanding
principal amount of, and all accrued and unpaid interest on, the Revolving
Loans shall be paid by the Company on the Revolving Loans Termination Date.
1D(2). BORROWING BASE. If at any time the outstanding principal
amount of all Revolving Loans exceeds the Borrowing Base at such time, the
Company shall forthwith prepay the Revolving Loans then outstanding in an
amount equal to such excess, together with accrued but unpaid interest on such
excess.
1D(3). EXCESS CASH FLOW. In the event that the Company has Excess
Cash Flow in excess of $5,000,000 in any fiscal year of the Company (the
"Specified Year"), beginning with the fiscal year of the Company ending in
December 1995, the Company covenants that no later than April 15 of the year
immediately following the Specified Year it will provide each holder of a
Revolving Note and Prudential written notice thereof. The Company shall also
deliver to each holder of a Revolving Note and Prudential at the same time as
delivered to holders of the First Priority Notes a copy of the Offer to
Purchase (as defined in the First Priority Notes Indenture) distributed in
accordance with the First Priority Notes Indenture with respect to the Excess
Cash Flow in such Specified Year. If at any time (i) prior to five (5)
Business Days prior to the Purchase Date (as defined in such Offer to
Purchase), or (ii)
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<PAGE> 8
prior to May 1 of the year immediately following the Specified Year if no Offer
to Purchase has been made by April 15 of such year, the Required Holders of the
Revolving Notes (a) request in writing that the Company prepay the Revolving
Loans in an amount equal to the Revolver Pro Rata Amount (as defined below) the
Company shall, not later than the Purchase Date, or if no Offer to Purchase has
been made with respect to such Specified Year, not later than May 5 of the year
immediately following the Specified Year, prepay the Revolving Loans in an
amount equal to the lesser of (1) the Revolver Pro Rata Amount and (2) the
outstanding amount of the Revolving Loans on the date of such prepayment,
together with interest on the amount prepaid to the date of prepayment, and on
the date of any such prepayment the Revolving Loan Commitment in effect on such
date shall, at the option of Prudential, automatically be reduced permanently by
the Revolver Pro Rata Amount, or (b) provide written notice to the Company that
the Revolving Loan Commitment is to be reduced by the Revolver Pro Rata Amount,
the Revolving Loan Commitment shall automatically on the first Business Day
after such notice be reduced permanently by the Revolver Pro Rata Amount, and if
the outstanding principal amount of the Revolving Loans exceeds the Revolving
Loan Commitment as so reduced, the Company shall immediately pay to the holders
of the Revolving Notes an amount equal to such excess; provided, however, that
no payment shall be made under this paragraph 1D(3) if an Event of Default or
Default exists or would exist after giving effect to such payment. For purposes
hereof, the term "Revolver Pro Rata Amount" shall mean the product of (i) Excess
Cash Flow for the Specified Year and (ii) the amount obtained by dividing (a)
the amount of the Revolving Loan Commitment in effect on the date the Company
first sends the Offer to Purchase relating to such Specified Year, or if no such
Offer to Purchase is made by April 15 of the year immediately following the
Specified Year, on April 15 of such year by (b) the sum of (1) the amount of the
Revolving Loan Commitment in effect on such date, and (2) the aggregate
principal amount of the First Priority Notes and First Priority Exchange Notes
outstanding on such date.
1E. MANNER OF BORROWINGS. Unless otherwise specifically provided
in this Agreement, Prudential shall receive from the Company a Revolving Loan
Request at least two Business Day's prior to the date on which the Company
proposes to borrow (which shall be a LIBOR Business Day). The principal amount
of the proposed Revolving Loan shall be $500,000 or integral multiples thereof.
No later than 12:00 P.M. (New York City local time) on the Business Day prior
to the date of the proposed Revolving Loan, the Company will deliver to
Prudential such documents and papers, if any, as are required under paragraph
2B(5) of this Agreement, which materials shall be delivered to the address set
forth on the Information Schedule attached hereto (or to such other place or in
such other manner as Prudential may by written notice to the Company designate
from time to time). Upon receipt of the notice provided for hereinabove and
such other documentation as may be
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<PAGE> 9
required, in form and substance satisfactory to Prudential, Prudential shall
make the proceeds of such Revolving Loan available to the Company on the date
of the proposed Revolving Loan designated in said notice by wire transfer for
credit to the Company's account #73-62560 at Bank of America, Illinois, ABA
#071000039, or to such other account or place as the Company may hereafter
designate by written notice to Prudential. No Revolving Loans shall be made
after the Revolving Loans Termination Date.
1F. CLOSING AND FACILITY FEES. The Company shall pay to
Prudential on the Closing Day a closing fee of $100,000. After the date hereof
and prior to the Revolving Loans Termination Date, the Company shall pay to
Prudential a facility fee of $50,000 on each annual anniversary date of the
Closing Day (the "Facility Fee"), provided, that if such anniversary date is
not a Business Day, then the Facility Fee shall be paid on the first Business
Day after such anniversary date.
1G. CANCELLATION OF COMMITMENT. The Company shall have the right,
upon at least thirty (30) days' prior written notice to Prudential, to cancel
in whole the Revolving Commitment (the date specified in such notice for
cancellation is referred to herein as the "Revolver Cancellation Date"). Upon
cancellation, the outstanding principal amount of all Revolving Loans and all
accrued but unpaid interest thereon shall be paid in full and no further
Revolving Loans shall be made.
1H. INTEREST PAYMENTS. Interest on the Revolving Loans for any Rate
Period shall be payable in arrears by wire transfer on the first Business Day
of the following Rate Period and shall be calculated on the basis of actual
days outstanding during the Rate Period and on the basis of a year of 360 days.
If any interest on any Revolving Loan or any Facility Fee is not paid when due,
interest thereon at the default rate applicable to such Revolving Loan
specified in paragraph 1B shall be payable from and including the due date
until paid.
1I. ILLEGALITY. If it shall become unlawful for United States banks
to obtain funds in the London interbank market, or if Prudential is otherwise
unable to make or maintain Revolving Loans hereunder utilizing the LIBOR Rate,
upon notice by Prudential to the Company the rate of interest per annum on all
Revolving Loans shall be the Commercial Paper Rate.
2. CONDITIONS.
2A. CONDITIONS OF CLOSING. Prudential's obligation to make
Revolving Loans available to the Company pursuant to paragraph 1A is subject in
each case to the satisfaction, on or before the Closing Day, of the following
conditions:
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<PAGE> 10
2A(1). REVOLVING NOTE. There shall have been delivered to Prudential
a Revolving Note duly completed and executed by the Company.
2A(2). DOCUMENTS. Prudential shall have received original
counterparts or, if satisfactory to it, certified or other copies of all the
following, each duly executed and delivered by the party or parties thereto in
form and substance satisfactory to Prudential and on the Closing Day in full
force and effect with no event having occurred and being then continuing that
would constitute a default thereunder or constitute or provide the basis for
the termination thereof:
(i) The First Priority Notes Indenture;
(ii) The Intercreditor and Collateral Agency
Agreement, of even date herewith, in the form of Exhibit B-1 attached
hereto (as amended, modified, supplemented or replaced from time to
time in accordance with the provisions thereof, the "Intercreditor
Agreement") and the GECC Intercreditor Agreement, of even date
herewith, in the form of Exhibit B-2 attached hereto, including the
agreements which are exhibits thereto (such GECC Intercreditor
Agreement, together with such agreements, as amended, modified,
supplemented or replaced from time to time in accordance with the
provisions thereof, the "GECC Intercreditor Agreement");
(iii) A Security Agreement made by the Company
and by each Significant Domestic Subsidiary in favor of the Collateral
Agent in the form of Exhibit C-1 attached hereto, and an Intellectual
Property Security Agreement made by the Company and each Guarantor
owning any Trademarks, Copyrights, Licenses, Patents or Trade Secrets
(each as defined therein) in favor of the Collateral Agent in the form
of Exhibit C-2 attached hereto (together with any other security
agreements pursuant to which the Revolving Notes and related
obligations are secured and which are entered into as contemplated
hereby or by the Intercreditor Agreement, as the same may be amended,
modified, supplemented or replaced from time to time in accordance
with the provisions thereof, collectively called the "Security
Agreements" and individually called a "Security Agreement");
(iv) A Mortgage made by the Company and each
Significant Domestic Subsidiary owning any real estate in favor of the
Collateral Agent in the form of Exhibit D-1 attached hereto with
respect to each parcel of real estate owned by the Company or any such
Significant Domestic Subsidiary and a Leasehold Mortgage in favor of
the Collateral Agent in the form of Exhibit D-2 attached hereto made
by Viskase Corporation with respect to the real estate located at
Paul's Valley, Oklahoma (together with any other mortgage
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<PAGE> 11
pursuant to which the Revolving Notes and related obligations are
secured and which are entered into as contemplated hereby or by the
Intercreditor Agreement, as the same may be amended, modified or
supplemented from time to time in accordance with the provisions
thereof, collectively called the "Mortgages" and individually called a
"Mortgage");
(v) A Pledge Agreement made by the Company and each
Significant Domestic Subsidiary in favor of the Collateral Agent in
the form of Exhibit E attached hereto (together with any other pledge
agreements pursuant to which the Revolving Notes and related
obligations are secured and which are entered into as contemplated
hereby or by the Intercreditor Agreement, as the same may be amended,
modified or supplemented from time to time in accordance with the
provisions thereof, collectively called the "Pledge Agreements" and
individually called a "Pledge Agreement");
(vi) The Guaranty Agreement made by each Significant
Domestic Subsidiary in the form of Exhibit F attached hereto (together
with any other guaranty agreements entered into as contemplated hereby
or by the Intercreditor Agreement as the same may be amended, modified
or supplemented from time to time in accordance with the provisions
thereof, collectively called the "Guaranty Agreements" and
individually called a "Guaranty Agreement");
(vii) Certificates evidencing all securities pledged
pursuant to the Pledge Agreement, together with related transfer
documents executed in blank, in each case received by the Collateral
Agent, all Uniform Commercial Code financing statements perfecting the
security interests and other Liens granted to the Collateral Agent,
duly filed in all offices that Prudential may deem necessary or
advisable, and all such other releases, certificates, documents,
agreements, recordings and filings as Prudential may deem necessary or
appropriate to establish a valid Lien in favor of the Collateral Agent
in the Collateral for the benefit of the Secured Parties in accordance
with priorities established by the Intercreditor Agreement and all
requisite filing or recording fees shall have been duly paid;
(viii) The Exchange and Registration Rights
Agreement, of even date herewith, made by the Company in favor of the
purchasers of the First Priority Notes in the form of Exhibit H hereto
(as the same may be amended, modified, supplemented or replaced from
time to time in accordance with the provisions thereof, the "Exchange
and Registration Rights Agreement"); and
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(ix) Such other certificates, documents, agreements,
instruments, opinions, filings and other items as Prudential may
reasonably request.
2A(3). NOTE AGREEMENT. The Note Agreement and all certificates,
documents and other agreements delivered in connection therewith shall have
been duly executed and delivered by the parties thereto, in each case
(including without limitation all schedules and exhibits thereto) in form and
substance satisfactory to Prudential, and on the Closing Day the Note Agreement
and all such other certificates, documents and agreements shall be in full
force and effect, no default or event of default shall exist thereunder, and
the First Priority Notes shall have been issued thereunder.
2A(4). LETTER OF CREDIT FACILITY. The Letter of Credit Facility
Agreement and all certificates, documents and other agreements delivered in
connection therewith shall have been duly executed and delivered by the parties
thereto in each case (including without limitation all schedules and exhibits
thereto) in form and substance satisfactory to Prudential, and on the Closing
Day, the Letter of Credit Facility Agreement and all such other certificates,
documents and agreements shall be in full force and effect, no default of event
of default shall exist thereunder, and all conditions to the issuance of
letters of credit thereunder shall be satisfied.
2A(5). OPINION OF PRUDENTIAL'S SPECIAL COUNSEL. Prudential shall
have received from Schiff Hardin & Waite, who are acting as special counsel for
Prudential in connection with this Agreement, a favorable opinion satisfactory
to Prudential in the form of Exhibit H-1 attached hereto.
2A(6). OPINION OF COMPANY'S AND GUARANTORS' COUNSEL. Prudential
shall have received from Sidley & Austin, counsel for the Company and the
Guarantors, and Thomas A. Monson, Associate General Counsel of the Company, a
favorable opinion satisfactory to Prudential and substantially in the form of
Exhibit H-2 attached hereto and Prudential shall have received from Baker &
McKenzie, who are acting as special French Counsel for the Company and the
Guarantors in connection with this transaction, a favorable opinion
satisfactory to Prudential as to such matters incident to the matters herein
contemplated as Prudential may reasonably request. The Company hereby directs
such counsel to render such opinion and agrees that the making of the initial
Revolving Loan will constitute a reconfirmation of such direction.
2A(7). REPRESENTATIONS AND WARRANTIES; NO DEFAULT. The
representations and warranties contained in paragraph 6 shall be true on and as
of the Closing Day; the representations and warranties contained in each of the
Transaction Documents shall be true and correct on and as of the Closing Day;
there shall exist
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on the Closing Day no Event of Default or Default; and the Company shall have
delivered to Prudential an Officer's Certificate, dated the Closing Day, to
each such effect.
2A(8). BORROWING BASE CERTIFICATE. There shall have been delivered
to Prudential a completed Borrowing Base Certificate, executed by an Authorized
Officer of the Company.
2A(9). NO MATERIAL ADVERSE CHANGE. There shall not have occurred or
be threatened (i) any condition, event or act which would materially and
adversely affect the property or assets, business, condition (financial or
otherwise) or the operations of the Company and its Subsidiaries, taken as a
whole, or the ability of the Company to repay the Revolving Loans or to perform
under the Transaction Documents to which it is a party, or the ability of any
Guarantor to perform under the Transaction Documents to which it is a party, or
(ii) since December 29, 1994, a material adverse change to the property or
assets, business, condition (financial or otherwise) or the operations of the
Company and its Subsidiaries, taken as a whole, in each case as determined by
Prudential in its reasonable judgment.
2A(10). FEES. On or before the Closing Day, the Company shall have
paid to Prudential a closing fee of $100,000.
2A(11). EXPENSES. The Company shall have paid such fees and expenses
of Prudential's special counsel (including White & Case, who are acting as
special French counsel to Prudential in connection with this transaction) and
other consultants as Prudential shall have required to be paid on or before the
Closing Day.
2A(12). REVOLVING LOANS PERMITTED BY APPLICABLE LAWS. The making of
Revolving Loans on the terms and conditions herein provided (including the use
of the proceeds of such Revolving Loans by the Company) shall not violate any
applicable law or governmental regulation (including, without limitation,
Section 5 of the Securities Act or Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System) and shall not subject Prudential to
any tax, penalty, liability or other onerous condition under or pursuant to any
applicable law or governmental regulation, and Prudential shall have received
such certificates or other evidence as it may request to establish compliance
with this condition.
2A(13). CONSENTS AND PERSONS. The Company and each Guarantor shall
have delivered to Prudential on the Closing Day all authorizations, consents or
approvals by or notices to or filings with any court or administrative or
governmental body or other Person that are required in connection with the
execution and delivery of the Transaction Documents, the offering, issuance,
sale or delivery of the Revolving Notes, the making of any Revolving Loan or
fulfillment of or compliance with the terms and provisions
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<PAGE> 14
hereof or thereof, certified as true and correct and in full force and effect
as of the Closing Day by a duly authorized officer of the Company or the
Guarantors, as the case may be, or, if no such authorization, consent,
approval, notice or filing is required (other than of the Boards of Directors
of the Company and the Guarantors), a statement of such officer to such effect.
2A(14). PAYOFF LETTERS; DISBURSEMENT INSTRUCTIONS. On or before the
Closing Day, Prudential shall have received (i) a payoff letter satisfactory to
Prudential and the Company indicating the amount of the Indebtedness of the
Company and its Subsidiaries owed to the Banks on the Closing Day (or, in the
case of the Indebtedness owed by Viskase, S.A., on the date after the Closing
Day), specifying wire transfer instructions for the repayment of such
Indebtedness and acknowledging that upon the Banks' receipt of funds in the
amount set forth in the pay-off letter such Indebtedness will be deemed
discharged and fully satisfied, and all security for such Indebtedness shall be
released; and (ii) disbursement instructions from the Company, directing that
the proceeds of any Revolving Loans are to be paid directly to the Banks.
2A(15). CERTIFICATES OF INSURANCE. The Collateral Agent shall have
received (a) a certificate of insurance from an independent insurance broker
dated as of the Closing Day, identifying insurers, types of insurance,
insurance limits, and policy terms, and otherwise confirming that insurance has
been obtained in accordance with the provisions of the First Priority Notes
Indenture and the Collateral Documents and (b) certified copies of all policies
evidencing such insurance, or certificates therefor signed by the insurer or an
agent authorized to bind the insurer.
2A(16). ENVIRONMENTAL ASSESSMENTS. Roy F. Weston, Inc. shall have
prepared phase 1 environmental assessments for Prudential's benefit with
respect to all of the mortgaged real estate securing the Revolving Notes and
such assessments shall be in the form and content satisfactory to Prudential.
Further, Prudential shall be satisfied with the environmental condition of all
of the real property owned or leased by the Company and its Subsidiaries.
2A(17). PROCEEDINGS. All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to
Prudential, and Prudential shall have received all such counterpart originals
or certified or other copies of such documents as it may reasonably request.
2B. CONDITIONS PRECEDENT TO EACH REVOLVING LOAN. Prudential's
obligation to make each Revolving Loan to the Company is also subject to the
satisfaction of the following conditions:
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<PAGE> 15
2B(1). REVOLVING LOAN REQUEST. The Company shall have delivered to
Prudential a Revolving Loan Request in accordance with paragraph 1E.
2B(2). REPRESENTATIONS AND WARRANTIES; NO DEFAULT; BORROWING BASE.
The representations and warranties contained in paragraph 6 hereof shall be
true and correct on and as of the date of such Revolving Loan; the
representations and warranties contained in each of the Transaction Documents
shall be true and correct on and as of the date of such Revolving Loan; there
shall exist on the date of such Revolving Loan no Default or Event of Default;
after giving effect to such Revolving Loan, the aggregate outstanding principal
amount of the Revolving Loans shall not exceed the Borrowing Base specified in
the certificate most recently delivered pursuant to paragraph 2A(8) or 3A, as
the case may be. Each of the giving of the applicable Revolving Loan Request
pursuant to paragraph 1E and the acceptance by the Company of the proceeds of
such Revolving Loan shall constitute a representation and warranty by the
Company to the effect that the conditions set forth in the first sentence of
this paragraph have been satisfied on the date of such Revolving Loan.
2B(3). REVOLVING LOAN PERMITTED BY APPLICABLE LAWS. The Revolving
Loan (including the use of the proceeds of such Revolving Loan by the Company)
shall not violate any applicable law or governmental regulation (including,
without limitation, section 5 of the Securities Act or Regulation G, T, U or X
of the Board of Governors of the Federal Reserve System) and shall not subject
Prudential to any tax, penalty, liability or other onerous condition under or
pursuant to any applicable law or governmental regulation, and Prudential shall
have received such certificates or other evidence as it may request to
establish compliance with this condition.
2B(4). NO MATERIAL ADVERSE CHANGE. There shall not have occurred or
exist any condition, event or act which could reasonably be expected to result
in a material adverse effect on the property or assets, business, condition
(financial or otherwise) or the operations of the Company and its Subsidiaries,
taken as a whole, or the ability of the Company to repay the Revolving Loans or
to perform under the Transaction Documents to which it is a party, or the
ability of any Guarantor to perform under the Transaction Documents to which it
is a party.
2B(5). LEGAL MATTERS. Prior to such Revolving Loan, Prudential's
counsel shall be satisfied as to all legal matters relating thereto.
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<PAGE> 16
3. AFFIRMATIVE COVENANTS.
3A. FINANCIAL STATEMENTS. The Company covenants that it will
deliver to Prudential:
(a) as soon as practicable and in any event
within 45 days after the end of each quarterly period (other than the
last quarterly period) in each fiscal year of the Company, an
unaudited consolidated statement of operations and statement of cash
flows and stockholders' equity of the Company and its Subsidiaries for
such quarterly period and for the period from the beginning of the
current fiscal year to the end of such quarterly period, and a
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such quarterly period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year, all in reasonable detail and satisfactory in form to
Prudential and certified as accurate by an authorized financial
officer of the Company, subject to changes resulting from normal
year-end adjustments;
(b) as soon as practicable and in any event
within 90 days after the end of each fiscal year of the Company, a
consolidating and consolidated statement of operations and statement
of cash flows and stockholders' equity of the Company and its
Subsidiaries for such fiscal year, and a consolidating and
consolidated balance sheet of the Company and its Subsidiaries as at
the end of such fiscal year, setting forth in each case in comparative
form corresponding consolidated figures from the preceding annual
audit, all in reasonable detail and satisfactory in form to Prudential
and, as to the consolidated statements, audited by Coopers & Lybrand,
or other independent public accountants of recognized international
standing reasonably selected by the Company and reasonably acceptable
to Prudential, whose opinion shall be without limitation as to the
scope of the audit and shall state that such financial statements
present fairly, in all material respects, the financial position of
the Company and its Subsidiaries and their results of operations and
cash flows and have been prepared in conformity with generally
accepted accounting principles, that the examination of such
accountants in connection with such financial statements has been made
in accordance with generally accepted auditing standards, and that
such audit provides a reasonable basis for such opinion in the
circumstances and, as to the consolidating statements, certified as
accurate by an authorized financial officer of the Company;
(c) not later than 45 days after each fiscal
year end, beginning with the fiscal year ended December 28, 1995,
monthly projections of the financial condition and results of
operations of the Company and its Subsidiaries for the next
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<PAGE> 17
succeeding year and annual projections for the next two (2) succeeding
fiscal years thereafter, in each case containing projected
consolidated balance sheets, statements of operations, statements of
cash flows and statements of changes in shareholders equity;
(d) promptly upon transmission thereof, copies of all
such financial statements, proxy statements, notices and reports as it
shall send to its public securities holders and copies of all
registration statements (without exhibits) and all reports which it
files with the Securities and Exchange Commission (or any governmental
body or agency succeeding to the functions of the Securities and
Exchange Commission);
(e) promptly upon receipt thereof, a copy of
each report submitted to the Company or any of its Subsidiaries by
independent accountants in connection with any annual, interim or
special audit made by them of the books of the Company or any such
Subsidiary; and
(f) monthly, within thirty-five (35) days
after the last Business Day of each month, and at any other time
requested by Prudential, a borrowing base certificate (the "Borrowing
Base Certificate"), which shall be: (i) substantially in the form of
Exhibit I, detailing the Company's Eligible Accounts Receivable and
Eligible Inventory as of the last day of each month, or as of such
other date as Prudential may request; and (ii) prepared by or under
the supervision of the Company's chief executive officer or chief
financial officer and certified by such officer subject only to
adjustment upon completion of the normal year-end audit of physical
inventory; and each Borrowing Base Certificate shall have attached to
it such additional schedules and other information as Prudential may
reasonably request, including, without limitation, an aging of
Accounts;
(g) with reasonable promptness, such other
business or financial data as Prudential may reasonably request.
Together with each delivery of financial statements required
by clauses (a) and (b) above, the Company will deliver to Prudential an
Officer's Certificate duly signed by an authorized financial officer of the
Company demonstrating (with computations in reasonable detail) compliance by
the Company and its Subsidiaries with the provisions of paragraphs 4A, 4B, 4C
and 4F hereof and stating that there exists no Event of Default or Default, or,
if any Event of Default or Default exists, specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto. Together with each delivery of financial statements required by
clause (b) above, the Company will deliver to Prudential a certificate of the
public
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<PAGE> 18
accountants referred to therein stating that, in making the audit necessary to
such public accountants' opinion on such financial statements, they have
obtained no knowledge of any Event of Default or Default, or, if they have
obtained knowledge of any Event of Default or Default, specifying the nature
and period of existence thereof. Such accountants, however, shall not be
liable to anyone by reason of their failure to obtain knowledge of any Event of
Default or Default which would not be disclosed in the course of an audit
conducted in accordance with generally accepted auditing standards. The
Company further covenants that forthwith upon any Responsible Officer of the
Company obtaining knowledge of an Event of Default or Default, it will deliver
to Prudential an Officer's Certificate specifying the nature and period of
existence thereof and what action the Company proposes to take with respect
thereto.
3B. INSPECTION OF PROPERTY. The Company covenants that it will
permit Prudential and its representatives, at its expense as to any period when
no Default or Event of Default has occurred and is continuing but at the
Company's expense as to any other period when a Default or an Event of Default
has occurred and is continuing, upon reasonable notice, to visit and inspect
any of the properties of the Company and its Subsidiaries, to examine the
corporate books and financial records of the Company and its Subsidiaries and
make copies thereof or extracts therefrom and to discuss the affairs, finances
and accounts of the Company and its Subsidiaries with their respective
principal officers and, in the presence of a Responsible Officer, independent
public accountants, all at such reasonable times and as often as Prudential may
reasonably request.
3C. CONDUCT OF BUSINESS; MAINTENANCE OF EXISTENCE; COMPLIANCE WITH
LAWS. The Company covenants that the Company and its Subsidiaries shall (a)
continue to engage primarily in the material lines of business (as determined
by the Company in its reasonable discretion) which the Company and its
Subsidiaries operate, respectively, as of the Closing Day, (b) preserve, renew
and keep in full force and effect the corporate existence, and all material
rights, privileges, franchises, permits and licenses of the Company and its
Subsidiaries, respectively, provided, however, that (i) this clause (b) shall
not prohibit a merger otherwise permitted pursuant to the terms hereof and (ii)
neither the Company nor any of its Subsidiaries shall be required to preserve
any such right or franchise or its existence if the loss thereof is not and
will not be adverse in any material respect to Prudential, and (c) comply in
all material respects with all applicable laws, ordinances, rules, regulations
and other requirements of governmental authorities (including, without
limitation, Environmental Laws and ERISA) except where the failure to comply
would not result in any material adverse effect on the property or assets,
business, condition (financial or otherwise) or operations of the Company and
its Subsidiaries, taken as a whole.
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3D. GUARANTIES. The Company covenants that, effective upon any
Person becoming a Significant Domestic Subsidiary, the Company shall cause such
Person to become and continue as a party to the Guaranty Agreement and the
Security Agreement and to execute and deliver all such agreements, instruments,
documents, financing statements, mortgages, deeds of trust, leasehold mortgages
and other written matter, and take such further action, as the Collateral Agent
or Prudential may request in order to obtain a valid and perfected first
priority Lien on all (or all but a de minimis amount of) such Person's Property
(subject only to Permitted Liens).
3E. MAINTENANCE OF PROPERTY; INSURANCE.
(a) The Company shall, and shall cause each of its
Subsidiaries to, maintain its Property in good working order and condition
(ordinary wear and tear excepted) and make all necessary repairs, renewals,
replacements, additions, betterments and improvements thereto so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this paragraph 3E
shall prevent the Company or any of its Subsidiaries from discontinuing the
operation and maintenance of any of its Property if such discontinuance is
desirable in the conduct of its business and not disadvantageous in any
material respect to Prudential, and provided, further that nothing in this
paragraph shall prevent the Company or any of its Subsidiaries from
discontinuing or disposing of any of its Property to the extent otherwise
permitted by paragraph 4F hereof.
(b) The Company shall insure and keep insured, and shall
cause each Subsidiary to insure and keep insured, with financially sound and
reputable insurers, so much of their respective Property and in such amounts as
is usually and customarily insured by companies engaged in similar businesses
with respect to Property of a similar character.
3F. TAXES. The Company shall, and shall cause each of its
Subsidiaries to, pay or cause to be paid all license fees, bonding premiums and
related taxes and charges, and shall pay or cause to be paid all of such
Person's real and personal property taxes, assessments and charges and all of
such Person's franchise, income, unemployment, use, excise, old age benefit,
withholding, sales and other taxes and other governmental charges assessed
against such Person, or payable by such Person, in each case when due and in
such manner as to prevent any penalty from accruing or any Lien from attaching
to its property (other than Liens for taxes not yet due and payable), provided
that such Person shall have the right to contest in good faith, by an
appropriate proceeding promptly initiated and diligently conducted, the
validity, amount or imposition of any such tax, assessment or charge, and
during the pendency of such good faith contest to delay or refuse payment
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<PAGE> 20
thereof if (i) such Person establishes adequate reserves to cover such
contested taxes, assessments or charges, and (ii) such contest could not
reasonably be expected to have a material adverse effect on the property or
assets, business, condition (financial or otherwise) or operations of the
Company and its Subsidiaries, taken as a whole.
3G. NOTICE OF SUITS, ADVERSE CHANGE IN BUSINESS, ETC. The Company
shall, and shall cause each of its Subsidiaries to, as soon as possible, and in
any event within five (5) Business Days after any Responsible Officer of such
Person learns of the following, give written notice to Prudential: (a) of any
material proceeding(s) (including, without limitation, litigation,
investigations, arbitration or governmental proceedings) being instituted or
threatened to be instituted by or against such Person in any federal, state,
local or foreign court or before any commission or other regulatory body
(federal, state, local or foreign), (b) that such Person's operations are not
in full compliance with all requirements of applicable federal, state, local or
foreign law, ordinance, rule, regulation or other governmental requirement,
except for notices as to matters which, either individually or in the
aggregate, could not reasonably be expected to have a material adverse effect
on the property or assets, business, condition (financial or otherwise) or the
operations of the Company and its Subsidiaries, taken as a whole, (c) that,
without limiting the foregoing clause (b), such Person is subject to a material
federal, state, local or foreign investigation evaluating whether any remedial
action is needed to respond to the release of any hazardous or toxic waste,
substance or constituent, or other substance into the environment and (d) of
any material adverse change in the property or assets, business, condition
(financial or otherwise), operations or prospects of the Company and its
Subsidiaries taken as a whole.
3H. INFORMATION REQUIRED BY RULE 144A. The Company covenants that
it will, upon the request of the holder of any Revolving Note, provide such
holder, and any qualified institutional buyer designated by such holder, such
financial and other information as such holder may reasonably determine to be
necessary in order to permit compliance with the information requirements of
Rule 144A under the Securities Act in connection with the resale of Revolving
Notes, except at such times as the Company is subject to the reporting
requirements of section 13 or 15(d) of the Exchange Act. For the purpose of
this paragraph 3H, the term "qualified institutional buyer" shall have the
meaning specified in Rule 144A under the Securities Act.
3I. CHANGE OF CONTROL. The Company covenants that within three
Business Days after any Responsible Officer of the Company shall obtain
knowledge of the occurrence of an event constituting a Change in Control, the
Company shall provide each holder of a Revolving Note and Prudential written
notice thereof, describing in
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reasonable detail the facts and circumstances constituting such Change in
Control. The Company shall also deliver to each holder of a Revolving Note and
Prudential at the same time as delivered to holders of the First Priority Notes
a copy of the Offer to Purchase (as defined in the First Priority Notes
Indenture) distributed in accordance with the First Priority Notes Indenture
with respect to such Change of Control. If at any time (i) prior to five (5)
Business Days prior to the Purchase Date (as defined in such Offer to Purchase)
with respect to such Change of Control or (ii) prior to sixty (60) days after
the date of any Change of Control if no Offer to Purchase has been made within
twenty-five (25) days of any such Change of Control, the Required Holders of
the Revolving Notes request in writing that the Company purchase such Revolving
Notes the Company shall, not later than the Purchase Date, or if no Offer to
Purchase has been made with respect to any such Change of Control, not later
than the date specified in such notice by the Required Holders, purchase (and
each holder thereof shall sell) such Revolving Notes at a purchase price equal
to the aggregate outstanding principal amount thereof, together with interest
thereon to the date of purchase. No holder of any such Revolving Note shall be
required to make any representation or warranty in connection with such sale,
other than with respect to its ownership of its Revolving Note.
3J. ENVIRONMENTAL INVESTIGATION AND REMEDIATION.
The Company shall, and as necessary shall cause each of its
Subsidiaries to, perform the environmental investigation and remediation
activities, including preparation of any associated reports (collectively,
"Response Activities"), as described in this paragraph. The Response
Activities shall be performed in accordance with generally accepted
environmental practices, under the direction and supervision of a qualified
environmental professional ("QEP").
(a) Within 90 days after the Closing Day, the Company shall, and
as necessary shall cause each of its Subsidiaries to, (i) perform the Response
Activities described in Schedule 3J hereto with respect to the facilities
listed therein, and (ii) provide the Collateral Agent with a written report or
reports concerning the Response Activities. The written report(s) shall
include the results of any sampling and analytical testing performed as part of
the Response Activities, as well as appropriate recommendations by the QEP with
respect to further Response Activities, if any, which should be undertaken at
each facility listed in Schedule 3J in order to satisfy the requirements of
clause (d) of this Section.
(b) Within 60 days after completion of the written report(s)
described in clause (a) of this Section, the Company shall, and as necessary
shall cause each of its Subsidiaries to, prepare and submit to the Collateral
Agent a work plan or work plans by which the Company and, as necessary, its
Subsidiaries shall implement the
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<PAGE> 22
recommendations in such report(s) pertaining to further Response Activities.
(c) Within 30 days after completion of the work plan(s) described
in clause (b) of this Section, the Company shall, and as necessary shall cause
each of its Subsidiaries to, commence implementation of the Response Activities
provided in the work plan(s) in accordance with the schedule(s) set forth
therein. The Company shall, and as necessary shall cause its Subsidiaries to,
notify the Collateral Agent in writing no later than five business days after
any event which may cause an exceedance of a deadline set forth in any
schedule(s) set forth in the work plan(s). Such notification shall describe
the anticipated length of the delay, the cause or causes of the delay, the
measures taken and to be taken to minimize the delay, and the timetable by
which these measures will be implemented.
(d) The Company shall, and as necessary shall cause each of its
Subsidiaries to, continue to diligently and promptly implement the Response
Activities provided in the work plan(s) and any other appropriate remediation
activities for as long as is required, consistent with generally accepted
environmental practices, to reduce environmental contamination identified as a
result of the Response Activities described in Schedule 3J to "Acceptable
Levels," as that term is defined herein. For purposes of this paragraph,
Acceptable Levels shall mean levels of environmental contamination, remaining
at a facility after completion of Response Activities, which: (i) comply with
all applicable Environmental Laws; (ii) are otherwise deemed acceptable by the
governmental agencies responsible for enforcing such Environmental Laws; or
(iii) if subclauses (i) and (ii) do not apply, will not materially impair the
value of the facility. The Company shall, and as necessary shall cause each of
its Subsidiaries to, implement Response Activities so as to reduce the
environmental contamination to Acceptable Levels within the shortest reasonable
period of time consistent with generally accepted environmental practices.
Upon reducing environmental contamination to Acceptable Levels, the Company
shall, and as necessary shall cause its Subsidiaries to, provide the Collateral
Agent with a written report or reports setting forth the analytical data or
other information demonstrating that Acceptable Levels have been achieved.
3K. GECC CLOSING DOCUMENTS.
The Company shall take such actions as may be reasonably necessary or
appropriate to satisfy promptly the conditions precedent set forth in the GECC
Intercreditor Agreement.
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<PAGE> 23
3L. FURTHER ACTIONS -- COLLATERAL.
The Company shall, and shall cause each of its Subsidiaries that are a
party to any Collateral Document to, at its own expense, make, execute,
endorse, acknowledge, file and/or deliver to the Collateral Agent from time to
time such lists, descriptions and designations of its Property, schedules,
confirmatory assignments, conveyances, financing statements, transfer
endorsements, certificates, reports and other assurances or instruments and
take such further steps relating to such Property, which Prudential or the
Collateral Agent reasonably deems appropriate or advisable to perfect,
preserve, protect or enforce the Lien of the Collateral Agent in such Property
(and, to the extent so deemed to be appropriate or advisable, to create such a
Lien with respect to Property acquired by the Company or any such Subsidiary
after the Closing Day). Without limiting the foregoing the Company and each
such Subsidiary shall, at its own expense with respect to any real estate
acquired by it after the Closing Day, concurrently with such acquisition
execute, deliver and provide to the Collateral Agent such Mortgages and other
documents as Prudential or the Collateral Agent may reasonably deem appropriate
or advisable to create a first priority (subject to Permitted Liens) valid and
perfected Lien in such Property in favor of the Collateral Agent.
4. NEGATIVE COVENANTS. So long as the Revolving Note or amount owing
under this Agreement shall remain unpaid or Prudential shall have any commitment
hereunder:
4A. CERTAIN FINANCIAL COVENANTS.
(a) CONSOLIDATED TANGIBLE NET WORTH. The Company covenants that it
will not cause or permit Consolidated Tangible Net Worth, at any time:
(i) During each "Clause (i) Test Period" (as defined below)
occurring during the period commencing on the Closing Day and ending on
December 28, 1995, to be less than an amount (the "Clause (i) Amount")
equal to (1) negative $37,000,000, plus (2) 50% of Consolidated Net
Income for such Clause (i) Test Period (or zero in the case of a deficit),
plus (3) the amount of any net gain realized by the Company or any of its
Subsidiaries on the exchange, redemption, purchase or other acquisition of
any of its debt securities (including, without limitation, the 10.25%
Notes) during such Clause (i) Test Period; where "Clause (i) Test Period"
means, at any time, the period (taken as one accounting period)
commencing on March 31, 1995 and ending on the then most recently ended
fiscal quarter of the Company;
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(ii) During each "Clause (ii) Test Period" (as defined below)
occurring during the period commencing on December 29, 1995 and ending on
December 26, 1996, to be less than an amount (the "Clause (ii) Amount")
equal to (1) the greater of (X) the Clause (i) Amount at December 28,
1995, and (Y) negative $37,000,000, plus (2) 50% of Consolidated Net
Income for such Clause (ii) Test Period (or zero in the case of a
deficit), plus (3) the amount of any net gain realized by the Company or
any of its Subsidiaries on the exchange, redemption, purchase or other
acquisition of any of its debt securities (including, without limitation,
the 10.25% Notes) during such Clause (ii) Test Period; where "Clause (ii)
Test Period" means, at any time, the period (taken as one accounting
period) commencing on December 29, 1995 and ending on the then most
recently ended fiscal quarter of the Company;
(iii) During each "Clause (iii) Test Period" (as defined below)
occurring during the period commencing on December 27, 1996 and ending on
December 25, 1997, to be less than an amount (the "Clause (iii) Amount")
equal to (1) the greater of (X) the Clause (ii) Amount at December 26,
1996, and (Y) negative $37,000,000, plus (2) the greater of (X) 50% of
Consolidated Net Income for such Clause (iii) Test Period (or zero in the
case of a deficit), and (Y) $1,250,000 multiplied by the number of the
Company's fiscal quarters that have ended during such Clause (iii) Test
Period, plus (3) the amount of any net gain realized by the Company or any
of its Subsidiaries on the exchange, redemption, purchase or other
acquisition of any of its debt securities (including, without limitation,
the 10.25% Notes) during such Clause (iii) Test Period; where "Clause
(iii) Test Period" means, at any time, the period (taken as a one
accounting period) commencing on December 27, 1996 and ending on the then
most recently ended fiscal quarter of the Company;
(iv) During each "Clause (iv) Test Period" (as defined below)
occurring during the period commencing on December 26, 1997 and ending on
December 31, 1998, to be less than an amount (the "Clause (iv) Amount")
equal to (1) the greater of (X) the Clause (iii) Amount at December 25,
1997, and (Y) negative $37,000,000, plus (2) the greater of (X) 50% of
Consolidated Net Income for such Clause (iv) Test Period (or zero in the
case of a deficit), and (Y) $2,500,000 multiplied by the number of the
Company's fiscal quarters, at the time of determination, that have ended
during such Clause (iv) Test Period, plus (3) the amount of any net gain
realized by the Company or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt securities
(including, without limitation, the 10.25% Notes) during such Clause (iv)
Test Period; where "Clause (iv) Test Period" means, at any time, the
period (taken as one accounting period) commencing on December 26, 1997
and ending
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on the then most recently ended fiscal quarter of the Company; and
(v) During each "Clause (v) Test Period" (as defined below)
occurring after January 1, 1999 and thereafter, to be less than an amount
equal to (1) the greater of (X) the Clause (iv) Amount at December 31,
1998, and (Y) negative $37,000,000, plus (2) 50% of Consolidated Net
Income for such Clause (v) Test Period (or zero in the case of a deficit),
plus (3) the amount of any net gain realized by the Company or any of its
Subsidiaries on the exchange, redemption, purchase or other acquisition of
any of its debt securities (including, without limitation, the 10.25%
Notes) during such Clause (v) Test Period; where "Clause (v) Test Period"
means, at any time, the period (taken as one accounting period)
commencing on January 1, 1999 and ending on the then most recently ended
fiscal quarter of the Company.
(b) FIXED CHARGE COVERAGE RATIO. The Company covenants that it will
not cause or permit the ratio of (i) Consolidated Cash Flow for the twelve
month period ending at the end of any fiscal quarter of the Company to (ii)
Consolidated Fixed Charges for each such twelve month period to be less than
the ratio set forth below for the period set forth below in which such fiscal
quarter ends:
Ratio Period
----- ------
1.45:1 Closing Day through December 28, 1995
1.50:1 December 29, 1995 through December 26, 1996
1.55:1 December 27, 1996 and thereafter.
4B. LIMITATION ON RESTRICTED PAYMENTS AND RESTRICTED INVESTMENTS.
(a) The Company covenants that it shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other distribution or payment on or in respect of Capital
Stock of the Company or its Subsidiaries or make any payment to the direct or
indirect holders (in their capacities as such) of Capital Stock of the Company
or its Subsidiaries, other than dividends, distributions or payments payable or
made solely in shares of Capital Stock in the Company of the same class held by
such holders (other than Redeemable Stock) or in options, warrants or other
rights to purchase such shares; (ii) purchase, redeem, defease or otherwise
acquire or retire for value any Capital Stock of the Company or any Subsidiary;
(iii) make any principal payment on, or purchase, redeem, repurchase, defease
(including, but not limited to, in-substance or legal defeasance) or otherwise
acquire or retire for value, prior to any
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stated or scheduled maturity, scheduled repayment or scheduled sinking fund or
mandatory redemption payment, any Restricted Debt (the foregoing actions, set
forth in clauses (i) through (iii) being referred to as "Restricted Payments");
or (iv) make any Investment (the foregoing action being referred to as a
"Restricted Investment"); unless at the time of, and immediately after giving
effect to (determined on a pro forma basis), such proposed Restricted Payment
or proposed Restricted Investment:
(1) no Default or Event of Default exists or would exist; and
(2) (i) the aggregate amount expended for all Restricted Payments
subsequent to March 30, 1995, plus (ii) the aggregate amount expended
for all Restricted Investments made subsequent to March 30, 1995, does
not exceed the sum of:
(A) 50% (or minus 100% in the event of a deficit) of
Consolidated Net Income calculated on a cumulative basis for the
period commencing on March 31, 1995 and continuing through the
last day of the Company's fiscal quarter immediately preceding
the Company's fiscal quarter in which the Restricted Payment or
Restricted Investment, as the case may be, is proposed to be
made; plus
(B) the aggregate net cash proceeds received by the Company
(i) from the issuance or sale (other than to a Subsidiary of the
Company), after the Closing Day, of Capital Stock in the Company
(other than Redeemable Stock), (ii) upon conversion after the
Closing Day of any Debt of the Company that is, by its original
terms, convertible into Capital Stock (other than Redeemable
Stock) in the Company (with the aggregate net cash proceeds being
deemed to be the principal amount of the Debt so converted), or
(iii) from the exercise for cash after the Closing Day of any
options, warrants or other rights to acquire Capital Stock (other
than Redeemable Stock) in the Company; plus
(C) $10,000,000;
provided, however, that in no event may Restricted Payments made
subsequent to March 30, 1995 exceed the sum of the amounts described in
clause (A) and (B) above plus $5,000,000.
(b) Notwithstanding clause (a) above, the provisions of this paragraph
shall not prohibit:
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(i) (A) the payment by any Subsidiary of the Company of dividends or
other distributions to the Company or a Wholly Owned Subsidiary of the
Company or the redemption or repurchase by any such Subsidiary of any
Capital Stock in such Subsidiary owned by the Company or a Wholly Owned
Subsidiary of the Company, or (B) the payment of pro rata dividends to
holders of minority interests in the Capital Stock in a Subsidiary of the
Company; provided, however, that, in the case of clause (B) no Default or
Event or Default has occurred and is continuing or would occur as a result
thereof;
(ii) (a) consummation of the 10.25% Notes Exchange, so long as no
Default or Event of Default has occurred and is continuing or would occur
as a result thereof; and (b) consummation of the exchange of First
Priority Exchange Notes for First Priority Notes, as contemplated by the
Registration Rights Agreement and (c) consummation of an exchange of
Subsequent Second Priority Notes solely for Second Priority Notes;
(iii) Investments in the amounts existing on the date hereof and
specifically described on Schedule 4B attached hereto;
(iv) Investments (subject to paragraph 3D) by the Company in Wholly
Owned Subsidiaries of the Company having lines of business that are
substantially similar or materially related to the Company's lines of
business existing on the Closing Day, so long as no Default or Event of
Default has occurred and is continuing or would occur as a result thereof;
(v) Investments in Cash Equivalents;
(vi) the acquisition, redemption or retirement of Capital Stock in the
Company solely in exchange for (A) Capital Stock in the Company of the
same class as the Capital Stock that is being acquired, redeemed or
retired or (B) Common Stock of the Company; and
(vii) the acquisition, redemption or retirement of Debt of the Company
or its Subsidiaries (A) which is subordinated in right of payment to the
Revolving Notes solely in exchange for Common Stock in the Company, or
(B) as part of a refinancing thereof permitted by paragraph 4C(a)(xi).
(c) Notwithstanding clause (b) above, the payments described in clause
(b) (i) (B) above shall be included in any calculation of the sum of the amount
of Restricted Payments.
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<PAGE> 28
4C. LIMITATION ON INDEBTEDNESS.
(a) The Company covenants that it shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly permit to exist, create, incur,
issue, assume, guaranty or otherwise become liable with respect to, extend the
maturity of or become responsible for the payment of, any Debt (including,
without limitation, any Acquired Debt) other than:
(i) Debt of the Company evidenced by the First Priority Notes and
First Priority Exchange Notes;
(ii) Debt of the Company evidenced by the 10.25% Notes;
(iii) Debt of the Company evidenced by the Second Priority Notes and
the Subsequent Second Priority Notes, provided, however, that: (1) the
aggregate principal amount of the Second Priority Notes and the Subsequent
Second Priority Notes do not at any time exceed $50,000,000, (2) such
Second Priority Notes and Subsequent Second Priority Notes have terms
substantially identical to the 10.25% Notes and in any event no less
favorable to the Company than those set forth in the 10.25% Notes and the
10.25% Notes Indenture (provided, however, that the Second Priority Notes
and Subsequent Second Priority Notes may be secured by Liens that are
Permitted Liens described in clause (xi) of the definition of Permitted
Liens and the final maturity thereof may be prior to the final maturity of
the 10.25% Notes, subject to clause (3) below), (3) the final maturity of
such Second Priority Notes and Subsequent Second Priority Notes is not
prior to June 15, 2000, and (4) without limiting the foregoing clause (3),
such Second Priority Notes and Subsequent Second Priority Notes shall not
have any scheduled principal installment or other principal payments due
until after the final maturity of the First Priority Notes and First
Priority Exchange Notes;
(iv) Debt of the Company under this Agreement (including any
refinancings hereof), provided, that the aggregate principal amount of
such Debt does not at any time exceed $35,000,000;
(v) Debt of the Company or its Subsidiaries under the Letter of
Credit Facility Agreement (and any refinancing thereof), provided the
aggregate amount of such Debt does not exceed $28,000,000 at any time;
(vi) Debt of the Company and certain Subsidiaries of the Company
under the GECC Lease Documents (including any refinancings thereof) in an
aggregate principal amount not to exceed the principal amount thereof
outstanding as of the Closing Day less any scheduled amortization after
the Closing Day of such Indebtedness when actually paid by the Company or
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its Subsidiaries; provided, however, that no refinancing of such Debt
under the GECC Lease Documents shall be permitted unless: (1) such
refinancing Debt shall have an Average Life at the time such refinancing
is incurred that is equal to or greater than the Average Life of the Debt
to be refinanced, (2) such refinancing Debt shall be in a principal amount
not in excess of the principal amount of the Debt to be refinanced
(including the amount (if any), up to $10,000,000, by which the Stipulated
Loss Value exceeds the then outstanding principal amount of the Debt to be
refinanced);
(vii) Debt evidenced by guaranties made by the Company's Subsidiaries
of the Debt described in clauses (i), (iii), (iv) and (v) of this
paragraph;
(viii) Debt of the Company or any of its Subsidiaries under Currency
Agreements and Interest Rate Agreements; provided, that such Currency
Agreements and Interest Rate Agreements do not increase the outstanding
Debt of the Company other than as a result of fluctuations in foreign
currency exchange rates or by reason of fees, indemnities and compensation
payable thereunder;
(ix) Debt of a Wholly Owned Subsidiary of the Company to the Company
or another Wholly Owned Subsidiary of the Company; (x) Debt of the
Company's Subsidiaries existing on the Closing Day and described on
Schedule 4C hereto;
(xi) other Debt of any Subsidiary of the Company that directly
refinances any Debt of such Subsidiary described in the immediately
foregoing clause (x); provided, however, that (1) the principal amount of
such refinancing Debt does not exceed the principal amount of the Debt to
be refinanced, (2) the terms of such refinancing Debt are, in all material
respects, no less favorable to such Subsidiary than the terms of the Debt
to be refinanced and (3) without limiting the foregoing clause (2) no
refinancing Debt may be secured to any greater extent than is the Debt to
be refinanced; provided, further, that notwithstanding clause (1) above,
the aggregate principal amount of Debt refinancing existing lines of
credit of the Company's Subsidiaries may equal up to $10,000,000 (or the
applicable foreign currency equivalent thereof reasonably determined by
the Company at the time any such refinancing Debt is incurred).
(xii) Debt of the Company or any of its Subsidiaries (A) resulting
from the endorsement of negotiable instruments for collection in the
ordinary course of business, or (B) arising under guarantees incurred in
the ordinary course of business (and not in connection with the borrowing
of money) with
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<PAGE> 30
respect to suppliers, licensees, franchisees or customers of the
Company or such Subsidiary;
(xiii) other Debt of the Company and the Company's Subsidiaries
(including, without limitations, Purchase Money Indebtedness and Acquired
Debt); provided, however, that the aggregate outstanding principal amount
thereof shall at no time exceed $15,000,000 (or the applicable foreign
currency equivalent thereof reasonably determined by the Company at the
time such Debt is incurred); provided, further, that the aggregate
outstanding amount of Purchase Money Indebtedness to be incurred in
connection with the purchase of any Property shall not exceed 90% of the
cash purchase price to be paid for such Property; and
(xiv) other Debt of the Company (not secured by any Lien);
provided, however, that at no time shall (1) Consolidated Senior Debt be more
than 52.5% of Consolidated Total Capitalization, or (2) Consolidated Debt be
more than 85% of Consolidated Total Capitalization.
(b) For purposes of determining any particular amount of Debt under
this Section, Guarantees of (or obligations with respect to letters of credit
supporting) Debt otherwise included in the determination of such amount shall
not also be included.
4D. LIMITATION ON LIENS. The Company covenants that it shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly, create,
incur or permit to exist any Lien of any nature whatsoever on any of its
properties (including, without limitation, Capital Stock), whether owned on the
Closing Day or thereafter acquired, other than Permitted Liens.
4E. LIMITATION ON COMPANY MERGERS, CONSOLIDATIONS, AND SALES.
(a) The Company covenants that it shall not merge or consolidate with
any other Person or, directly or indirectly, Transfer, all or substantially
all of its Property in a single transaction or series of related transactions,
unless in any such case:
(i) at the time of, and immediately after giving effect to
(determined on a pro forma basis), such proposed merger, consolidation or
Transfer, no Default or Event of Default exists or would exist after
giving effect thereto;
(ii) in the event that the Company is to consolidate with or merge
into another Person, or to Transfer all or substantially all of its
Property to another Person, such Person shall be a corporation organized
and validly existing under the laws of a State of the United States of
America or
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<PAGE> 31
the District of Columbia and shall expressly assume in writing all
obligations of the Company under all Transaction Documents to which the
Company is a party pursuant to such written agreements and instruments as
Prudential may request and which in each case shall be in form and
substance satisfactory to Prudential; and
(iii) the Company has delivered to Prudential an Officers' Certificate
and an opinion of counsel satisfactory in form and substance to
Prudential, each stating that such consolidation, merger or Transfer (and
if a supplemental indenture is required, such supplemental indenture)
complies with this paragraph and that all conditions precedent herein
provided for with respect thereto have been completely satisfied.
(b) Upon any consolidation of the Company with, or merger of the
Company with or into, any other Person or any Transfer of all or substantially
all of the Property of the Company in accordance with this Section, the entity
formed by or surviving such transaction shall succeed to, and be substituted
for, and may exercise every right and power of, the Company under this
Agreement with the same effect as if such successor Person had been named as
the Company herein, and thereafter, except in the case of a lease, the
predecessor Person shall be relieved of all obligations and covenants under
this Agreement and the Revolving Notes.
4F. LIMITATION ON CERTAIN ASSET SALES AND SUBSIDIARY MERGERS. Without
limiting paragraph 4E above, the Company covenants that (i) it shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly Transfer
any of its Property, and (ii) the Company shall not permit any of its
Subsidiaries to merge or consolidate with any other Person except:
(a) any Wholly Owned Subsidiary of the Company may merge with, or sell
all or substantially all of its Property to, the Company or another Wholly
Owned Subsidiary of the Company if at the time of and immediately after giving
effect to (determined on a pro forma basis) such proposed transaction no
Default or Event of Default exists or would exist after giving effect thereto;
(b) the Company may Transfer (excluding Capital Stock of Material
Subsidiaries) assets to the extent permitted under paragraph 4E and may issue
and sell its Capital Stock subject to paragraph 3I;
(c) the Company or any such Subsidiary may sell inventory in the
ordinary course of business and equipment that is determined to be obsolete in
accordance with GAAP or concurrently replaced by equipment (not subject to any
lien other than Permitted Liens of the same type having a fair market value at
least equal to the fair market value of the equipment so replaced;
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<PAGE> 32
(d) the Company or any such Subsidiary (subject to clause (f) below)
may otherwise Transfer Property (excluding Capital Stock of a Material
Subsidiary), and any such Subsidiary (subject to clause (f) below) may
consummate a Transfer by Merger; provided that after giving effect thereto (1)
the Percentage of Total Assets Transferred in any fiscal year of the Company
(excluding assets described in clauses (a) and (c) above shall not exceed 10%;
and (2) the Percentage of Total Assets Transferred (excluding assets described
in clauses (a) and (c) above) at any time after the Closing Day on a cumulative
basis shall not exceed 15%; and
(e) the Company or any Subsidiary of the Company (subject to clause
(f) below) may Transfer other Property (not constituting Capital Stock of any
Material Subsidiary), and any Subsidiary of the Company (subject to clause (f)
below) may consummate other Transfers by Merger if:
(1) at the time of and immediately after giving effect to
(determined on a pro forma basis) such proposed Transfer of Property or
Transfer by Merger (as the case may be) no Default or Event of Default
exists or would exist;
(2) the consideration to be paid to the Company or such Subsidiary
(as the case may be) is at least equal to the fair market value of the
assets to be Transferred (or, in the case of a Transfer by Merger, the
fair market value of the Subsidiary subject thereto), in each case as
reasonably determined by the Board of Directors; and
(3) the proceeds from such Transfer of Property or Transfer by Merger
(net of (X) reasonable expenses incurred by the Company or the Subsidiary
(as the case may be) incidental thereto (Y) the amount of any taxes
(reasonably determined by the Company in good faith) owing by the Company
or such Subsidiary (as the case may be) as a result thereof, and (Z) any
mandatory repayment of permitted Debt (if any) secured by a Permitted
Lien on the Property being Transferred that is prior to the Lien securing
the Consolidated Secured Debt) are immediately applied to redeem the First
Priority Notes and First Priority Exchange Notes and otherwise repay the
other Consolidated Secured Debt outstanding at such time and with respect
to the Revolving Loans the Revolving Loan Commitment shall, at the option
of Prudential, automatically be reduced, such application of proceeds and
reduction in the Revolving Loan Commitment to be made pro rata to the
holders of the Consolidated Secured Debt based on the then outstanding
principal amount of each such holder's holding of Consolidated Secured
Debt or, in the case of Prudential, the Revolving Loan Commitment, in
proportion to the aggregate amount of Consolidated Secured Debt then
outstanding or, in the case of Prudential, the Revolving Loan Commitment;
provided, however, that no such redemption or repayment pursuant to this
clause
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<PAGE> 33
(3) shall be made unless the amount of proceeds to be so redeemed and
otherwise repaid equals or exceeds $5,000,000, with any such lesser
amounts not used for redemption or repayment to be aggregated with
proceeds subsequently received from Transfers to be utilized for
redemption or repayment at such point as such aggregate amount equals or
exceeds $5,000,000.
The Company shall make each repayment of the Revolving Loans required
under paragraph 4F(e)(3) on a date which is the first Business Day next
following the 30th day after the date of Transfer or Transfer by Merger giving
rise thereto. The Company shall give written notice of such repayment to
Prudential.
(f) Notwithstanding anything to the contrary in this paragraph 4F, the
Company shall not permit any Material Subsidiary, directly or indirectly, to
Transfer all or substantially all of its assets in a single transaction or
series of related transactions or merge or consolidate with any Person other
than as permitted under paragraph 4F(a).
4G. LIMITATION ON PAYMENT RESTRICTIONS AFFECTING SUBSIDIARIES. The
Company covenants that it shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction which by its terms
expressly restricts the ability of any Subsidiary of the Company to: (a) pay
dividends or make any other distributions on the Capital Stock in such
Subsidiary or any other interest or participation in, or measured by, its
profits owned by, or pay any Debt owed to, the Company or any such Subsidiary,
(b) make any loans or advances to the Company or any such Subsidiary or (c)
transfer any of its Property to the Company or to any such Subsidiary, except
for (i) such encumbrances or restrictions existing under or by reason of any
encumbrance or restriction existing by reason of applicable law; (ii) such
encumbrances or restrictions existing on the Closing Day and described in
reasonable detail on Schedule 4G hereto, including, without limitation, any
encumbrances or restrictions under Debt of the Company or any of its
Subsidiaries listed on Schedule 4C; (iii) such encumbrances or restrictions as
may exist under refinancing Debt permitted under paragraph 4C(xi); provided,
however, that any such encumbrances or restrictions are, in no material
respect, any more onerous to the Company or such Subsidiary than the
encumbrances or restrictions included in the Debt to be refinanced; (iv) such
encumbrances or restrictions as may exist under any Acquired Debt at the time
incurred by the Company or such Subsidiary; provided, however, that such
encumbrances or restrictions are, in no material respect, any more onerous to
the Company or such Subsidiary as the then existing most onerous such
encumbrances and restrictions applicable to the Company or such Subsidiary; (v)
the provisions of any lease governing a leasehold interest or of any supply,
license or other agreement entered into
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<PAGE> 34
in the ordinary course of business of the Company or any Restricted Subsidiary
that restrict in a customary manner transfer, subleasing or assignment; and
(vi) any restrictions with respect to a Subsidiary imposed pursuant to an
agreement entered into for the sale or disposition of Capital Stock or assets
of such Subsidiary pending the closing of such sale or disposition.
4H. TRANSACTIONS WITH AFFILIATES.
(a) The Company covenants that it shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, enter into or permit to exist
any transaction or series of related transactions (including, without
limitation, any purchase, sale or exchange of Property, the making of any
Investment, the giving of any guarantee or the rendering of any service), with
any Affiliate of the Company or of any Subsidiary of the Company unless the
terms of such transaction or series of related transactions are no less
favorable to the Company or such Subsidiary, as the case may be, than those
that might be obtained at the time of such transaction from a Person who is not
such an Affiliate; provided, however, that in addition to the foregoing, any
such transaction (or series of related transactions), other than "Exempted
Transactions," that has a fair market value to the Company or such Subsidiary
of $10,000,000 or more shall be deemed to be on terms no less favorable to the
Company or such Subsidiary than those obtainable at the time of the transaction
from a Person who is not such an Affiliate only if the Board of Directors of
the Company receives and delivers to Prudential, prior to such transaction, a
written opinion of a nationally recognized investment banking firm stating that
the transaction is fair to the Company or such Subsidiary from a financial
point of view.
(b) The provisions set forth in clause (a) above shall not apply to
(i) the payment of fees, salaries or other amounts to DPK in accordance with
the express terms of the Management Agreement, provided, however, that the
aggregate amount of all such fees, salaries and other amounts shall not exceed
$5,000,000 (determined without regard to the value of options to purchase the
Company's Common Stock)in the aggregate in any consecutive twelve month period,
(ii) any transaction between the Company and any of its Wholly Owned
Subsidiaries, (iii) the payment of reasonable and customary fees (including
options to purchase the Company's Common Stock) to directors of the Company or
any of the Subsidiaries of the Company who are not employees of the Company or
any Subsidiary of the Company as the same may be deemed advisable or
appropriate by the Board of Directors, or (iv) loans or advances to officers,
members of the Board of Directors and employees of the Company or any of its
Subsidiaries for travel, entertainment or moving and other relocation expenses
made in the ordinary course of business of the Company and its Subsidiaries as
the same may be deemed advisable or appropriate by the Board of Directors.
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4I. LIMITATIONS ON THE SALE OF STOCK AND DEBT OF SUBSIDIARIES. The
Company covenants that it shall not, and shall not permit any of its
Subsidiaries to, sell or otherwise dispose of, or part with control of, any
Capital Stock (other than directors' qualifying shares or nominee shares) or
Indebtedness of any Subsidiary of the Company, except to the Company or a
Wholly Owned Subsidiary of the Company, and except that all Capital Stock and
Indebtedness of any such Subsidiary may be sold as an entirety provided that
(a) at the time of such sale, such Subsidiary shall not own, directly or
indirectly, any Capital Stock or Indebtedness of any other Subsidiary (unless
all of the Capital Stock and Indebtedness of such other Subsidiary are
simultaneously being sold and (b) such sale would be permitted by paragraphs 4E
and 4F.
4J. SALE AND LEASE-BACK TRANSACTIONS. The Company covenants that it
shall not, and shall not permit any of its Subsidiaries to, enter into any
arrangement with any Person providing for the leasing by the Company or such
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any Person
to whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of the Company or such Subsidiary.
4K. SALE OR DISCOUNT OF RECEIVABLES. The Company covenants that it
shall not, and shall not permit any of its Subsidiaries to, sell with recourse,
or discount or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable.
4L. PENSION PLAN FUNDING DEFICIENCY. The Company covenants that it
shall not, and shall not permit any member of the Control Group to, on or after
the Closing Day (a) incur or permit to exist any accumulated funding deficiency
within the meaning of Section 302(a)(2) of ERISA or Section 412(a) of the Code,
or (b) incur any liability (other than for premiums due but not yet paid) to
the Pension Benefit Guaranty Corporation, in either case, in connection with
any Title IV Plan which, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect.
4M. LIMITATION ON ISSUANCE AND SALE OF CAPITAL STOCK OF SUBSIDIARIES.
The Company covenants that it shall not (a) permit any Subsidiary of the
Company to issue or sell any Capital Stock in such Subsidiary other than to the
Company or a Wholly Owned Subsidiary of the Company or (b) permit any Person
other than the Company or a Wholly Owned Subsidiary of the Company to hold any
Capital Stock issued after the Closing Day in any Subsidiary of the Company;
provided, however, that the Company or any Subsidiary of the Company may sell
Common Stock to the extent permitted under paragraph 4F; provided, further,
that this paragraph 4M shall not be deemed to prohibit the Company or any
Subsidiary of the Company from making any Investment (including, without
limitation, Investments in a Person such that after giving effect thereto such
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Person may be a less than wholly owned Subsidiary of the Company) permitted by
paragraph 4B.
4N. LIMITATION ON FISCAL YEAR CHANGES. The Company covenants that it
shall not change its fiscal year end from the last Thursday in each December of
each year nor shall it make any change to its corresponding fiscal quarter end;
provided, however, that the Company may make a one time change in its fiscal
year end to December 31 of each year (a "Fiscal Year Change") so long as (i)
its fiscal quarter end is concurrently changed to the last day of each calendar
quarter and (ii) the Company gives not less than 5 Business Days prior notice
thereof to Prudential and the Collateral Agent. Upon and after the
effectiveness of the Fiscal Year Change (if any) and as to all periods after
(but not before) such Fiscal Year Change: (a) the references in paragraph
4A(a) to "December 25," "December 26," "December 27," "December 28" and
"December 29" shall automatically be deemed to be a reference to "December 31;"
and (b) the references in paragraph 4A(b) to "December 27," "December 28" and
"December 29" shall automatically be deemed to be a reference to "December 31."
4O. HOSTILE TENDER OFFERS. The Company covenants that none of the
proceeds of any Revolving Loan will be used to finance directly or indirectly a
Hostile Tender Offer.
5. EVENTS OF DEFAULT.
5A. ACCELERATION. If any of the following events shall occur and be
continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):
(a) the Company defaults in the payment of any principal of any
Revolving Note when the same shall become due, either by the terms thereof
or otherwise as provided in this Agreement; or
(b) the Company defaults in the payment of any interest on any
Revolving Note or any Facility Fee for more than 5 Business Days after the
date due; or
(c) the Company or any Subsidiary of the Company defaults (whether
as primary obligor or as guarantor or other surety) in any payment of
principal of or interest on the 10.25% Notes, the First Priority Notes,
the First Priority Exchange Notes (if any), the Second Priority Notes (if
any), the Subsequent Second Priority Notes (if any), any reimbursement
obligations under the Letter of Credit Facility Agreement, any Capital
Lease Obligation under the GECC Lease Documents or any other obligation
for money borrowed (or any Capital Lease Obligation, any obligation under
a conditional sale or other title retention agreement, any obligation
issued
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or assumed as full or partial payment for property whether or not
secured by a purchase money mortgage or any obligation under notes payable
or drafts accepted representing extensions of credit or any obligation to
pay or reimburse any Person for any amount paid under any letter of
credit, any proposal, bid, performance or other bond, or under any
indemnity agreement) beyond any period of grace provided with respect
thereto, or the Company or any such Subsidiary fails to perform or observe
any other agreement, term or condition contained in any agreement under
which any such obligation is created (or if any other event thereunder or
under any such agreement shall occur and be continuing) and the effect of
such failure or other event is to cause, or to permit the holder or
holders of such obligation (or a trustee on behalf of such holder or
holders) to cause, such obligation to become due (or to be repurchased by
the Company or any such Subsidiary) prior to any stated maturity, provided
that, except in respect of the 10.25% Notes, the First Priority Notes, the
First Priority Exchange Notes (if any), the Second Priority Notes (if
any), the Subsequent Second Priority Notes (if any), the reimbursement
obligations under the Letter of Credit Facility Agreement and the Capital
Lease Obligation under the GECC Lease Document, the aggregate amount of
all obligations as to which such a payment default shall occur and be
continuing or such a failure or other event causing or permitting
acceleration (or resale to the Company or any Subsidiary) shall occur and
be continuing exceeds $5,000,000; or
(d) any representation or warranty made by the Company or any
Subsidiary of the Company or any Responsible Officer thereof in any
writing or statement furnished in connection with or pursuant to this
Agreement, the Revolving Notes or any other Transaction Document shall be
false in any material respect on the date as of which made; or
(e) the Company fails to observe or perform any covenant, condition
or agreement contained in paragraph 4 or paragraphs 3I or 1D; or
(f) any covenant, condition or agreement on the part of the Company
to be observed or performed pursuant to the terms of this Agreement or the
Revolving Notes (other than a default in the performance, or breach of a
covenant, warranty or agreement which is specifically dealt with elsewhere
in this Section), and such failure continues for 30 days after any
Responsible Officer of the Company learns thereof; or
(g) the Company or any Material Subsidiary makes an assignment for
the benefit of creditors or is generally not paying its debts as such
debts become due; or
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(h) any decree or order for relief in respect of the Company or any
Material Subsidiary is entered under any bankruptcy, reorganization,
compromise, arrangement, insolvency, readjustment of debt, dissolution or
liquidation or similar law, whether now or hereafter in effect (herein
called the "Bankruptcy Law"), of any jurisdiction; or
(i) the Company or any Material Subsidiary petitions or applies to
any tribunal for, or consents to the appointment of, or taking possession
by, a trustee, receiver, custodian, liquidator or similar official of the
Company or any Material Subsidiary, or of any substantial part of its
assets or commences a voluntary case under the Bankruptcy Law of any
jurisdiction or any proceedings relating to the Company or any such
Material Subsidiary under the Bankruptcy Law of any jurisdiction; or
(j) any such petition or application is filed, or any such
proceedings are commenced, against the Company or any Material Subsidiary
and the Company or such Material Subsidiary by any act indicates its
approval thereof, consents thereto or acquiescence therein, or an order,
judgment or decree is entered appointing any such trustee, receiver,
custodian, liquidator or similar official, or approving the petition in
any such proceedings, and such order, judgment or decree remains unstayed
and in effect for more than 60 days; or
(k) any order, judgment or decree is entered in any proceedings
against the Company or any Material Subsidiary decreeing the dissolution
of the Company or any such Material Subsidiary and such order, judgment or
decree remains unstayed and in effect for more than 60 days; or
(l) any order, judgment or decree is entered in any proceedings
against the Company or any Material Subsidiary of the Company decreeing a
split-up of the Company or such Material Subsidiary, and such order,
judgment or decree remains unstayed and in effect for more than 60 days;
or
(m) one or more judgments or orders in an aggregate amount in excess
of $5,000,000 (net of cash proceeds actually received by, or paid on
behalf of, the Company with respect to such judgments or orders) are
rendered against the Company or any Subsidiary of the Company and, within
60 days after entry thereof, such judgment is not discharged or execution
thereof stayed pending appeal, or within 60 days after the expiration of
any such stay, such judgment is not discharged; or
(n) the occurrence of any "Event of Default" (as defined in any
Transaction Document other than this Agreement) or the breach of any
covenant, warranty or agreement set forth in any
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Transaction Document (other than this Agreement or the Revolving
Notes), which Event of Default or breach continues beyond any period of
grace therein provided; or
(o) the Guaranty Agreement shall fail to remain in full force or
effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability or the Guaranty Agreement, or any guarantor
thereunder shall fail to comply with any of the terms or provisions of the
Guaranty Agreement or denies that it has any further liability under the
Guaranty Agreement, or gives notice to such effect; or
(p) the Collateral Agent shall cease to possess at any time a valid,
first priority (subject to Permitted Liens) perfected Lien in and on any
of the Collateral (other than Collateral having a de minimis value); or
(q) any Termination Event occurs;
then (i) if such event is an Event of Default specified in clause (a) or (b) of
this paragraph 5A, the holder of any Revolving Note (other than the Company or
any of its Subsidiaries or Affiliates) may at its option, by notice in writing
to the Company, declare such Revolving Note to be, and such Revolving Note
shall thereupon be and become, immediately due and payable at par together with
interest accrued thereon, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company provided, that on
the date such Revolving Note is declared due and payable hereunder such holder
would have had but for such Event of Default a commitment hereunder to make
Revolving Loans of not less than 12.5% of the aggregate Revolving Loan
Commitment, (ii) if such event is an Event of Default specified in clauses (h),
(i) or (j) of this paragraph 5A with respect to the Company, all of the
Revolving Notes at the time outstanding shall automatically become immediately
due and payable together with interest accrued thereon, without presentment,
demand, protest or notice of any kind, all of which are hereby waived by the
Company, and the obligations of Prudential hereunder to make any Revolving
Loans to the Company shall automatically terminate and (iii) with respect to
any event constituting an Event of Default hereunder other than an Event of
Default specified in clauses (h), (i) or (j) of this paragraph 5A, Prudential
may at its option, by notice in writing to the Company terminate all
obligations of Prudential hereunder to make any Revolving Loan to the Company
and the Required Holders may at their option, by notice in writing to the
Company, declare all of the Revolving Notes to be, and all of the Revolving
Notes shall thereupon be and become, immediately due and payable together with
interest accrued thereon, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company.
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5B. RESCISSION OF ACCELERATION. At any time after any or all of the
Revolving Notes shall have been declared immediately due and payable pursuant
to paragraph 5A, the Required Holder(s) may, by notice in writing to the
Company, rescind and annul such declaration and its consequences if (i) the
Company shall have paid all overdue interest on the Revolving Notes, the
principal of and Facility Fees, if any, payable with respect to Revolving Notes
which have become due otherwise than by reason of such declaration, and
interest on such overdue interest and overdue principal or Facility Fees at the
rate specified herein or in Revolving Notes, (ii) the Company shall not have
paid any amounts which have become due solely by reason of such declaration,
(iii) all Events of Default and Defaults, other than non-payment of amounts
which have become due solely by reason of such declaration, shall have been
cured or waived pursuant to paragraph 9C, and (iv) no judgment or decree shall
have been entered for the payment of any amounts due pursuant to the Revolving
Notes, this Agreement or the other Transaction Documents. No such rescission
or annulment shall extend to or affect any subsequent Event of Default or
Default or impair any right arising therefrom.
5C. NOTICE OF ACCELERATION OR RESCISSION. Whenever any Revolving Note
shall be declared immediately due and payable pursuant to paragraph 5A or any
such declaration shall be rescinded and annulled pursuant to paragraph 5B, the
Company shall forthwith give written notice thereof to the holder of each
Revolving Note at the time outstanding.
5D. OTHER REMEDIES. If any Event of Default or Default shall occur
and be continuing, the holder of any Revolving Note may proceed to protect and
enforce its rights under this Agreement, such Revolving Note or any other
Transaction Document by exercising such remedies as are available to such
holder in respect thereof hereunder, thereunder and under applicable law,
either by suit in equity or by action at law, or both, whether for specific
performance of any covenant or other agreement contained in this Agreement or
any other Transaction Document or in aid of the exercise of any power granted
in this Agreement or any other Transaction Document. No remedy conferred in
this Agreement or any other Transaction Document upon the holder of any
Revolving Note is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or therein or now or hereafter existing at law or in
equity or by statute or otherwise.
6. REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company represents,
covenants and warrants as follows:
6A. ORGANIZATION. The Company is a corporation duly organized and
existing in good standing under the laws of the State of Delaware and each
Subsidiary is duly organized and existing in good standing under the laws of
the jurisdiction in which it is
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incorporated. The Company and each Subsidiary is qualified to do business and
in good standing in every jurisdiction where the ownership of their respective
properties or the nature of their respective businesses makes such
qualification necessary except where the failure to be qualified or in good
standing in the aggregate would not reasonably be expected to result in any
material adverse effect on the properties or assets, business, condition
(financial or otherwise) of the Company and its Subsidiaries taken as a whole.
As of the Closing Day, the names of the Subsidiaries of the Company, the
jurisdiction in which each such Subsidiary is organized, the number of
outstanding shares of each class of capital stock of such Subsidiary, the
number of shares of each such class owned by the Company or a Subsidiary of the
Company (identified by stock certificate number) and the number of shares of
each such class owned by any other Person (identified by stock certificate
number) are as set forth in Schedule 6A hereto.
6B. POWER AND AUTHORITY. The Company and each Subsidiary has all
requisite corporate power to own its property and to carry on its business as
now being conducted and as proposed to be conducted. The Company and each
Guarantor has the legal capacity and authority to execute, deliver, and perform
its obligations under the Transaction Documents to which it is a party. All
action on the part of the Company and each Guarantor necessary for the
authorization, execution, delivery and performance of all obligations of the
Company and such Guarantor under the Transaction Documents to which it is a
party has been taken. The Transaction Documents to which the Company or any
Guarantor is a party have been duly executed and delivered by, and are the
legal, valid and binding obligations of, the Company or such Guarantor, and
each such document is enforceable against the Company or such Guarantor in
accordance with its terms, except as may be limited by bankruptcy, insolvency
or similar laws affecting the enforcement of creditors rights in general and by
general principles of equity, and each is in full force and effect.
6C. FINANCIAL STATEMENTS. The Company has furnished Prudential with
the following financial statements, identified by a principal financial officer
of the Company: (i) consolidating and consolidated balance sheets of the
Company and its Subsidiaries as at the last day of the Company's fiscal year in
each of the three fiscal years of the Company most recently completed prior to
the date as of which this representation is made or repeated to Prudential
(other than fiscal years completed within 90 days prior to such date for which
financial statements have not been released) and consolidating and consolidated
statements of operations and cash flows and a consolidated statement of
stockholders' equity of the Company and its Subsidiaries for each such year,
all certified by Coopers & Lybrand, other than any consolidating financial
statement, which has been certified by an authorized financial officer of the
Company; and (ii) a consolidated balance sheet of
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the Company and its Subsidiaries as at the end of the quarterly period (if any)
most recently completed prior to such date (other than the last quarterly
period and quarterly periods completed within 45 days prior to such date for
which financial statements have not been released) and the comparable quarterly
period in the preceding fiscal year and consolidated statements of operations,
stockholders equity and cash flows for the periods from the beginning of the
fiscal years in which such quarterly periods are included to the end of such
quarterly periods, prepared by the Company. Such financial statements
(including any related schedules and/or notes) are true and correct in all
material respects (subject, as to interim statements, to changes resulting from
audits and year-end adjustments), have been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the
Company and its Subsidiaries required to be shown in accordance with such
principles. The balance sheets fairly present the condition of the Company and
its Subsidiaries as at the dates thereof, and the statements of operations,
stockholders' equity and cash flows fairly present the results of the
operations of the Company and its Subsidiaries and their cash flows for the
periods indicated. There has been no material adverse change in the property
or assets, business, condition (financial or otherwise) or the operations of
the Company and its Subsidiaries, taken as a whole, since the end of the most
recent fiscal year for which audited financial statements have been furnished.
6D. ACTIONS PENDING. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Company, threatened against the
Company or any of its Subsidiaries, or any properties or rights of the Company
or any of its Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which might or could reasonably be expected
to result in any material adverse effect on the properties or assets, business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries, taken as a whole.
6E. OUTSTANDING DEBT. Neither the Company nor any of its Subsidiaries
has outstanding any Debt except as permitted by paragraph 4C. There exists no
default (nor any event which with the passage of time, the giving of notice or
both would constitute a default) and, after giving effect to the transaction
contemplated by this Agreement, there will exist no default (nor any event
which with the passage of time, the giving of notice or both would constitute a
default) under the provisions of any instrument evidencing Debt of the Company
or any Subsidiary or of any agreement relating thereto.
6F. TITLE TO PROPERTIES. The Company has, and each of its
Subsidiaries has, good and indefeasible title to its respective real properties
(other than properties which it leases) and good
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title to all of its other respective properties and assets, including the
properties and assets reflected in the most recent audited balance sheet
delivered pursuant to paragraph 3A (or, if no audited balance sheet has been
delivered, the most recent audited balance sheet referred to in paragraph 6C)
(other than properties and assets disposed of in the ordinary course of
business), subject to no Lien of any kind except Permitted Liens and except the
Liens in favor of the Banks securing the Indebtedness to be paid from the
proceeds of the First Priority Notes. All leases necessary in any material
respect for the conduct of the respective businesses of the Company and its
Subsidiaries are valid and subsisting and are in full force and effect. The
Company and its Subsidiaries enjoy peaceful and undisturbed possession of all
leases necessary in any material respect for the operation of its business,
none of which contains any unusual or burdensome provisions which might
materially affect or impair the ability of the Company or its Subsidiaries to
maintain the operations of the Company and its Subsidiaries (taken as a whole).
6G. TAXES. The Company has and each of its Subsidiaries has filed all
federal, state and other income tax returns which are required to be filed
(other than such tax returns where the consequence of a failure to file is
immaterial), and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due,
except such taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with generally accepted accounting principles.
6H. CONFLICTING AGREEMENTS AND OTHER MATTERS. Neither the Company nor
any of its Subsidiaries is a party to any contract or agreement or subject to
any charter or other corporate restriction which materially and adversely
affects or impairs the ability of the Company or its Subsidiaries to maintain
the operations of the Company and its Subsidiaries (taken as a whole). Neither
the execution nor delivery of any of the Transaction Documents, nor the
offering, issuance and sale of the Revolving Notes, nor the making of any
Revolving Loan, nor fulfillment of nor compliance with the terms and provisions
hereof and thereof will conflict with, or result in a breach of the terms,
conditions or provisions of, or constitute a default under, or result in any
violation of, or result in the creation of any Lien (other than Liens in favor
of the Collateral Agent) upon any of the properties or assets of the Company or
any of its Subsidiaries pursuant to, the charter or by-laws of the Company or
any of its Subsidiaries, any award of any arbitrator or any agreement
(including any agreement with stockholders), instrument, order, judgment,
decree, statute, law, rule or regulation to which the Company or any of its
Subsidiaries is subject. Neither the Company nor any of its Subsidiaries is a
party to, or otherwise subject to any provision contained in, any instrument
evidencing Debt of the Company or such Subsidiary, any agreement relating
thereto or any other contract or agreement
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(including its charter) which limits the amount of, or otherwise imposes
restrictions on the incurring of, Debt of the Company or any of its
Subsidiaries of the type to be evidenced by the Revolving Notes and the
Guaranty Agreements except as set forth in Schedule 6H attached hereto.
6I. OFFERING OF NOTES. Neither the Company nor any agent acting on
its behalf has, directly or indirectly, offered the Revolving Notes or any
similar security of the Company for sale to, or solicited any offers to buy the
Revolving Notes or any similar security of the Company from, or otherwise
approached or negotiated with respect thereto with, any Person other than
institutional investors, and neither the Company nor any agent acting on its
behalf has taken or will take any action which would subject the issuance or
sale of the Revolving Notes to the provisions of section 5 of the Securities
Act or to the registration provisions of any securities or Blue Sky law of any
applicable jurisdiction.
6J. USE OF PROCEEDS. Neither the Company nor any Subsidiary owns or
has any present intention of acquiring any "margin stock" as defined in
Regulations G, T, U or X of the Board of Governors of the Federal Reserve
System (herein called "margin stock"). The proceeds of all Revolving Loans
will be used for purposes permitted by or not in contravention of any of the
provisions of this Agreement. None of such proceeds will be used, directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any margin stock or for the purpose of maintaining,
reducing or retiring any Debt which was originally incurred to purchase or
carry any stock that is currently a margin stock or for any other purpose which
might constitute this transaction a "purpose credit" within the meaning of such
Regulations G, T, U or X. Neither the Company nor any agent acting on its
behalf has taken or will take any action which might cause this Agreement or
the Revolving Notes to violate Regulations G, T, U or X or any other regulation
of the Board of Governors of the Federal Reserve System or to violate the
Exchange Act, in each case as in effect now or as the same may hereafter be in
effect.
6K. ERISA. No accumulated funding deficiency (as defined in section
302 of ERISA and section 412 of the Code), whether or not waived, exists with
respect to any Plan (other than a Multiemployer Plan). No liability to the
Pension Benefit Guaranty Corporation has been or is expected by the Company or
any ERISA Affiliate to be incurred with respect to any Plan (other than a
Multiemployer Plan) by the Company, any Subsidiary or any ERISA Affiliate which
is or would be materially adverse to the properties or assets, business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries, taken as a whole. Neither the Company, any Subsidiary nor any
ERISA Affiliate has incurred or presently expects to incur any withdrawal
liability under Title IV of ERISA with respect to any Multiemployer Plan which
is or would be
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materially adverse to the business, condition (financial or otherwise) or
operations of the Company and its Subsidiaries, taken as a whole. The
execution and delivery of the Transaction Documents and the issuance and sale
of the Revolving Notes by the Company to Prudential hereunder will be exempt
from, or will not involve any transaction which is subject to, the prohibitions
of section 406 of ERISA and will not involve any transaction in connection with
which a penalty could be imposed under section 502(i) of ERISA or a tax could
be imposed pursuant to section 4975 of the Code. The representation by the
Company in the next preceding sentence is made in reliance upon and subject to
(1) the accuracy of Prudential's representation in paragraph 7B and (2) the
assumption made solely for the purpose of making such representation that
Department of Labor Interpretive Bulletin 75-2 with respect to prohibited
transactions remains valid in the circumstances of the transactions
contemplated herein.
6L. GOVERNMENTAL CONSENT AND OTHER THIRD PARTY CONSENTS. Neither the
nature of the Company or of any Subsidiary, nor any of their respective
businesses or properties, nor any relationship between the Company or any
Subsidiary and any other Person, nor any circumstance in connection with the
offering, issuance, sale or delivery of the Revolving Notes, the making of any
Revolving Loan or the use of proceeds thereof is such as to require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental body or other Person
(other than routine filings after the Closing Day with the Securities and
Exchange Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of any of the Transaction Documents, the offering,
issuance, sale or delivery of the Revolving Notes, the making of any Revolving
Loan or fulfillment of or compliance with the terms and provisions hereof or
thereof, other than filings and recordings necessary to perfect the security
interests granted the Collateral Agent under the Collateral Documents, all of
which have been made.
6M. ENVIRONMENTAL COMPLIANCE. The Company and its Subsidiaries and
all of their respective properties and facilities have complied at all times
and in all respects with all foreign, federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations relating to protection of the environment except, in
any such case, where failure to comply could not reasonably be expected to
result in a material adverse effect on the properties or assets, business,
condition (financial or otherwise) or operations of the Company and its
Subsidiaries, taken as a whole.
6N. RULE 144A. The Revolving Notes are not of the same class as
securities, if any, of the Company listed on a national securities exchange
under Section 6 of the Exchange Act or quoted in a U.S. automated inter-dealer
quotation system.
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6O. DISCLOSURE. Neither this Agreement, any Transaction Document nor
any other document, certificate or statement furnished to Prudential by or on
behalf of the Company or any Subsidiary in connection herewith (including,
without limitation, the Memorandum) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the
statements contained herein and therein not misleading. To the knowledge of
the Company, there is no fact peculiar to the Company or any of its
Subsidiaries which materially adversely affects or in the future may (so far as
the Company can now foresee) materially adversely affect the property or
assets, business, condition (financial or otherwise) or the operations of the
Company and its Subsidiaries, taken as a whole, and which has not been set
forth in this Agreement or in the other documents, certificates and statements
furnished to Prudential by or on behalf of the Company prior to the date hereof
in connection with the transactions contemplated hereby. The financial
projections contained in the Memorandum are reasonable based on the assumptions
stated therein and the best information available to the officers of the
Company (provided that this representation shall not constitute a
representation by the Company that any of such projections will be attained).
The parties hereto acknowledge that the description of the terms of the
financing described in the Memorandum will be superseded by the actual terms
therefor as contained in the Transaction Documents and the other documents
delivered at the closing hereunder.
6P. REGULATORY STATUS. Neither the Company nor any Subsidiary is (i)
an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended, (ii) a
"holding company" or a "subsidiary company" or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning
of Public Utility Act of 1935, as amended, or (iii) a "public utility" within
the meaning of the Federal Power Act, as amended.
6Q. PERMITS AND OTHER OPERATING RIGHTS. The Company and each
Subsidiary has all such valid and sufficient certificates of convenience and
necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other
local regulatory bodies or administrative agencies or other governmental bodies
having jurisdiction over such Company or such Subsidiary or any of its
respective properties, as are necessary for the ownership, operation and
maintenance of its businesses and properties, subject to exceptions and
deficiencies which do not materially affect the property or assets, business,
condition (financial or otherwise) or the operations of the Company and its
Subsidiaries, taken as a whole, and such certificates of convenience and
necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other
local regulatory bodies or administrative agencies or other governmental bodies
having jurisdiction over the Company or
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such Subsidiary or any of its properties are free from burdensome restrictions
or conditions of an unusual character or restrictions or conditions materially
adverse to the property or assets, business, condition (financial or otherwise)
or the operations of the Company and its Subsidiaries, taken as a whole, and
neither the Company nor any Subsidiary is in violation of any thereof in any
material respect.
6R. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens and the Liens in favor of the Banks securing the Indebtedness
to be paid from the proceeds of the First Priority Notes as contemplated by
paragraph 2A(14) hereof, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry or other public office, that purports to cover,
affect or give notice of any present or possible future Lien on any assets or
property of the Company or any of the Subsidiaries or any rights relating
thereto.
6S. SECURITY INTEREST. All filings, assignments, pledges and deposits
of documents or instruments have been made and all other actions have been
taken, that are necessary or advisable under applicable law and are required to
be made or taken on or prior to the Closing Day under the provisions of this
Agreement and the other Collateral Documents to establish the Collateral
Agent's security interest in the Collateral. The Collateral and the Collateral
Agent's rights with respect to the Collateral are not subject to any setoff,
claims, withholdings or other defenses (except any such setoff, claim or
defense which could not, individually or in the aggregate, materially impair
the rights of the Collateral Agent with respect to the Collateral). The
Company and each Subsidiary party to any Collateral Document is the owner of
the Collateral described therein free from any Lien, except for Permitted Liens
and the Liens in favor of the Banks securing the Indebtedness to be paid from
the proceeds of the First Priority Notes as contemplated by paragraph 2A(14)
hereof.
6T. LIMITATION ON PRUDENTIAL'S RESPONSIBILITY. Neither Prudential,
the Collateral Agent nor any other Person for whom the Collateral Agent is
acting as agent shall be responsible for: (i) the safekeeping of any
Collateral; (ii) any loss or damage to any Collateral; (iii) any diminution in
the value of any Collateral; or (iv) any act or default of any carrier,
warehouseman, bailee or any other Person. All risk of loss, damage,
destruction or diminution in value of the Collateral shall be borne by the
Company and its Subsidiaries. The powers conferred on Prudential, the
Collateral Agent and such other Persons with respect to the Collateral are
solely to protect the interests of Prudential, the Collateral Agent and such
other Persons in the Collateral and shall not impose any duty upon Prudential,
the Collateral Agent or such other Person to exercise any such powers. Neither
Prudential, the Collateral Agent nor such other Person has any duty to protect,
ensure, collect or
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realize upon any Collateral or preserve rights in any Collateral against any
other Person. The Company releases Prudential, the Collateral Agent and such
other Persons from any liability for any act or omission relating to this
Agreement or the Collateral Documents other than as a result of gross
negligence or willful misconduct.
6U. LOCATIONS OF COLLATERAL. The address of the principal place of
business and the chief executive office of the Company and each of the
Significant Domestic Subsidiaries is set forth on Schedule II to the Security
Agreement executed by such Person. The books and records of the Company and
each of the Significant Domestic Subsidiaries and all of their chattel paper
and records of Accounts, are maintained exclusively at such locations. There
is no location at which the Company or any of the Significant Domestic
Subsidiaries has any Collateral other than those locations identified on
Schedule II to the Security Agreement executed by such Person. All real
property owned or leased by the Company and the Significant Domestic
Subsidiaries is described in Exhibit A to the Mortgages executed by such
Person, which Schedule sets forth, for each such location, a legal description,
common address and, for leased property, the name and mailing address of the
record owner of such leased property. All of the "Trademarks," "Copyrights,"
"Licenses" and "Patents" (as each such term is defined in the Intellectual
Property Security Agreements) owned or licensed by the Company and each of the
Significant Domestic Subsidiaries is set forth on Schedules A, B, C and D,
respectively, of the Intellectual Property Security Agreement executed by such
Person.
7. REPRESENTATIONS OF PRUDENTIAL. Prudential represents as follows:
7A. NATURE OF PURCHASE. Prudential is not acquiring the Revolving
Notes to be purchased by it hereunder with a view to or for sale in connection
with any distribution thereof within the meaning of the Securities Act,
provided that the disposition of Prudential's property shall at all times be
and remain within its control.
7B. SOURCE OF FUNDS. No part of the funds being used by Prudential to
make any Revolving Loan hereunder constitutes assets allocated to any separate
account maintained by Prudential in which any employee benefit plan, other than
employee benefit plans identified on a list which has been furnished by
Prudential to the Company, participates to the extent of 10% or more. For the
purpose of this paragraph 7B, the terms "separate account" and "employee
benefit plan" shall have the respective meanings specified in section 3 of
ERISA.
8. DEFINITIONS. For the purpose of this Agreement, the terms defined
in the text of any provision hereof shall have the
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respective meanings specified therein, and the following terms shall have the
meanings specified with respect thereto below:
"ACCOUNTS" means "Accounts" as defined in the Security Agreements.
"ACQUIRED DEBT" means Debt of a Person existing on or prior to the time at
which such Person became a Subsidiary and not incurred in connection with, or
in contemplation of, such Person becoming a Subsidiary.
"AFFILIATE" of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with such specified Person, (ii)
which beneficially owns or holds 10% or more of any class of the Voting
Securities of such specified Person, or (iii) of which 10% or more of the
Voting Securities is beneficially owned or held by such specified Person or by
a Subsidiary of such specified Person.
"AUTHORIZED OFFICER" shall mean in the case of the Company, its chief
executive officer, its chief financial officer, any other officer of the
Company designated as an "AUTHORIZED OFFICER" of the Company in the Information
Schedule attached hereto or any other officer of the Company designated as an
"AUTHORIZED OFFICER" of the Company for the purpose of this Agreement in an
Officer's Certificate executed by the Company's chief executive officer or
chief financial officer and delivered to Prudential. Any action taken under
this Agreement or any other Transaction Document on behalf of the Company by
any individual who on or after the date of this Agreement shall have been an
Authorized Officer of the Company and whom Prudential in good faith believes to
be an Authorized Officer of the Company at the time of such action shall be
binding on the Company even though such individual shall have ceased to be an
Authorized Officer of the Company.
"AVERAGE LIFE" means, as of any date, with respect to any debt
security, the quotient obtained by dividing (i) the sum of the products of (x)
the numbers of years from such date to the dates of each successive scheduled
principal payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
"BTCC" means BT Commercial Corporation, a Delaware corporation, and its
successors and permitted assigns.
"BANKRUPTCY LAW" has the meaning given to such term in paragraph 5A.
"BANKS" shall mean collectively and "BANK" shall mean individually, Bank of
America Illinois, Citibank International PLC
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and Citicorp North America, Inc., as agents under the Credit Agreement dated
December 31, 1993.
"BOARD OF DIRECTORS" of any corporation means the board of directors of
such corporation or any duly authorized committee of the board of directors of
such corporation.
"BORROWING BASE" means the sum of:
(A) ninety percent (90%) of Eligible Accounts Receivable, plus
(B) sixty-five percent (65%) of Eligible Inventory, plus
(C) cash held by the Collateral Agent in the Cash Collateral
Account, minus
(D) the undrawn amount of all letters of credit issued under the
Letter of Credit Facility Agreement, all reimbursement obligations with
respect to any drawing under a letter of credit under such Agreement and
all loans made by any Lender (as defined in the Letter of Credit Facility
Agreement) to fund the Company's reimbursement obligations with respect to
draws under any letters of credit, minus
(E) the aggregate amount of reserves, if any, established by
Prudential.
Prudential, in the exercise of its Permitted Discretion, may (i) establish and
increase or decrease reserves against Eligible Accounts Receivable and Eligible
Inventory and (ii) impose additional restrictions (or eliminate the same) to
the standards of eligibility set forth in the definitions of "Eligible Accounts
Receivable" and "Eligible Inventory."
"BORROWING BASE CERTIFICATE" has the meaning given such term in paragraph
3A(e).
"BROAD AFFILIATE" of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with such specified Person, (ii)
which beneficially owns or holds 25% or more of any class of the Voting
Securities of such specified Person, or (iii) of which 25% or more of the
Voting Securities is beneficially owned or held by such specified Person or by
a Subsidiary of such specified Person.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a day on
which commercial banks in New York City are required or authorized to be
closed.
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"CAPITAL LEASE OBLIGATION" means, at any time, the amount of the liability
with respect to a lease that would be required at such time to be capitalized
on a balance sheet of such Person prepared in accordance with GAAP.
"CAPITAL STOCK" in any Person means any and all shares, interests,
participations or other equivalents in the equity interest (however designated)
in such Person and any rights (other than debt securities convertible into an
equity interest), warrants or options to acquire an equity interest in such
Person.
"CASH EQUIVALENTS" means: (i) debt instruments, with maturities of one
year or less from the date of acquisition, issued by the government of the
United States of America or any agency thereof (if fully guaranteed or insured
by the government of the United States of America), (ii) certificates of
deposit, with maturities of one year or less from the date of acquisition, of
any commercial bank incorporated under the laws of the United States of America
having a combined capital, surplus and undivided profits of not less than
$100,000,000, (iii) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc., and
(iv) tax exempt floating rate tender bonds, as to which payments of principal,
interest and other charges may be made at the option of the holder upon not
more than one week's notice which are payable upon tender or any default from
the proceeds of an unconditional and irrevocable letter of credit issued by a
United States office of any commercial bank all of whose long-term debt
securities are rated at least AA by Standard & Poor's Corporation or Aa by
Moody's Investor Service.
"CHANGE OF CONTROL" means the occurrence of any of the following
events (whether or not approved by the Board of Directors of the Company or
otherwise permitted by the terms of this Agreement): (i) any person (as such
term is used in Sections 13(d) and 14(d) of the Exchange Act), or any Affiliate
of any such person, is or becomes a "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all shares that any such person has the right to
acquire whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the Common Stock of the
Company or such other amount of Voting Securities to provide the ability to
elect, directly or indirectly, a majority of the members of the Board of
Directors of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new or replacement directors whose
election by such Board or whose nomination for election by the shareholders of
the Company was approved by a vote of a majority of the directors of the
Company 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)
cease for any reason to
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constitute a majority of the Board of Directors of the Company then in office;
(iii) any direct or indirect Transfer (in one transaction or a series of
related transactions) of all or substantially all of the consolidated assets of
the Company and its Subsidiaries to any person (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act) or any Affiliate of any such
person; (iv) the approval by the Company or its shareholders of any plan of
liquidation; or (v) any event constituting a "Change of Control" in respect of
the 10.25% Notes, the Second Priority Notes or the Subsequent Second Priority
Notes.
"CLAUSE (i) AMOUNT" shall have the meaning given to such term in
paragraph 4A(a)(i).
"CLAUSE (i) TEST PERIOD" shall have the meaning given to such term in
paragraph 4A(a)(i).
"CLAUSE (ii) AMOUNT" shall have the meaning given to such term in
paragraph 4A(a)(ii).
"CLAUSE (ii) TEST PERIOD" shall have the meaning given to such term in
paragraph 4A(a)(ii).
"CLAUSE (iii) AMOUNT" shall have the meaning given to such term in
paragraph 4A(a)(iii).
"CLAUSE (iii) TEST PERIOD" shall have the meaning given to such term
in paragraph 4A(a)(iii).
"CLAUSE (iv) AMOUNT" shall have the meaning given to such term in
paragraph 4A(a)(iv).
"CLAUSE (iv) TEST PERIOD" shall have the meaning given to such term in
paragraph 4A(a)(iv).
"CLAUSE (v) TEST PERIOD" shall have the meaning given to such term in
paragraph 4A(a)(v).
"CLOSING DAY" shall mean June 15, 1995.
"CODE" means the Internal Revenue Code of 1986 as amended from time to
time, and the rules and regulations promulgated thereunder.
"COLLATERAL" means all the real, personal and mixed property made, or
intended or purported to be made, subject to a Lien pursuant to the Collateral
Documents.
"COLLATERAL ACCESS AGREEMENT" means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement agreement of any
warehouseman or processor in possession of Inventory, substantially in the form
of Exhibit L.
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"COLLATERAL AGENT" means BTCC, in its capacity as collateral agent
under the Intercreditor Agreement and the other Collateral Documents, and any
successor thereto.
"COLLATERAL DOCUMENTS" shall have the meaning ascribed to such term in
the Intercreditor Agreement.
"COMMERCIAL PAPER RATE" shall mean a rate per annum equal to the sum
of (a) 3% plus (b) the yield-adjusted rate ( i.e., the nominal rate
increased by the cost of any discount) charged or quoted to Prudential Funding
Corporation for dealer-placed, 30-day promissory notes issued by Prudential
Funding Corporation on the Rate Day.
"COMMITMENT PERIOD" shall have the meaning specified in paragraph 1A
hereof.
"COMMON STOCK" means, with respect to any Person, any and all shares,
interests, participations or other equivalent (however designated) of Capital
Stock in such Person which is not preferred as to the payment of dividends or
the distribution of assets on any voluntary or involuntary liquidation over
shares of any other class of Capital Stock in such Person.
"COMPANY" shall have the meaning specified in the introductory
paragraph of this Agreement.
"CONSOLIDATED CASH FLOW" means, for any period, Consolidated Net
Income for such period, (A) increased by the sum of (i) Consolidated Fixed
Charges for such period, other than interest capitalized by the Company and its
Subsidiaries during such period, (ii) income tax expense of the Company and its
Subsidiaries, on a consolidated basis, for such period (other than income tax
expense attributable to sales or other dispositions of assets (other than sales
of inventory in the ordinary course of business)), (iii) depreciation expense
of the Company and its Subsidiaries, on a consolidated basis, for such period,
(iv) amortization expense of the Company and its Subsidiaries, on a
consolidated basis, for such period, and (v) other non-cash items reducing
Consolidated Net Income minus non-cash items increasing Consolidated Net Income
for such period, and (B) decreased by any revenues received or accrued by the
Company or any of its Subsidiaries from any other Person (other than the
Company or any of its Subsidiaries) in respect of any Investment for such
period, all as determined in accordance with GAAP.
"CONSOLIDATED DEBT" means the aggregate amount of Debt of the Company
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
"CONSOLIDATED FIXED CHARGES" means, for any period, (A) the sum of,
without duplication, (i) the aggregate amount of interest
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expense of the Company and its Subsidiaries during such period (including,
without limitation, all commissions, discounts and other fees and charges owed
by the Company and its Subsidiaries with respect to letters of credit and
bankers' acceptances or similar financing facilities and the net costs
associated with Interest Rate Agreements and Currency Agreements of the Company
and its Subsidiaries) paid, accrued or scheduled to be paid or accrued during
such period, including interest expense not required to be paid in cash
(including any amortization of original issue debt discount), all determined in
accordance with GAAP, plus all interest capitalized by the Company and its
Subsidiaries during such period, (ii) the aggregate amount of the interest
expense component of rentals in respect of Capital Lease Obligations paid or
accrued by the Company and its Subsidiaries during such period, determined in
accordance with GAAP, (iii) the aggregate amount of all operating lease expense
of the Company and its Subsidiaries during such period, determined in
accordance with GAAP, and (iv) to the extent any interest payment obligation of
any other Person is guaranteed by the Company or any of its Subsidiaries (other
than guarantees relating to obligations of customers of the Company or any of
its Subsidiaries that are made in the ordinary course of business consistent
with past practices of the Company or its Subsidiaries), the aggregate amount
of interest paid or accrued by such Person in accordance with GAAP during such
period attributable to any such interest payment obligation, less (B) to the
extent included in (A) above, amortization or write-off of deferred financing
costs by the Company and its Subsidiaries during such period; in each case
after elimination of intercompany accounts among the Company and its
Subsidiaries and as determined in accordance with GAAP.
"CONSOLIDATED INTANGIBLE ASSETS" means, as at any date, (i) the amount
of all write-ups in the book value of any asset resulting from the revaluation
thereof and all write-ups in excess of the cost of assets acquired, plus (ii)
the amount of all unamortized original issue discount, unamortized debt
expense, goodwill, patents, trademarks, service marks, trade names, copyrights,
organization and development expense and other intangible assets, in each case
as would be taken into account in preparing a consolidated balance sheet of the
Company and its Subsidiaries on a consolidated basis as at such date in
accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, the aggregate net
income (or net loss, as the case may be) of the Company and its Subsidiaries
for such period on a consolidated basis, determined in accordance with GAAP;
provided, that there shall be excluded therefrom, without duplication, (i)
gains and losses from the sale or other disposition of assets (other than sales
of inventory in the ordinary course) or reserves relating thereto, (ii) items
classified as extraordinary or nonrecurring (including, without limitation, any
gains from any exchange of debt securities) and
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gains (but not losses) from discontinued operations, (iii) the income (or loss)
of any Joint Venture, except to the extent of the amount of cash dividends or
other distributions in respect of Capital Stock therein actually paid during
such period to the Company or any of its Subsidiaries by such Joint Venture out
of funds legally available therefor (or, in the case of a loss, to the extent
such loss is funded by the Company or any such Subsidiary during such period),
(iv) except to the extent includable pursuant to clause (iii), the income (or
loss) of any other Person accrued or attributable to any period prior to the
date it becomes a Subsidiary of such Person or is merged into or consolidated
with such Person or any of its Subsidiaries or such other Person's Property (or
a portion thereof) is acquired by such Person or any of its Restricted
Subsidiaries, and (v) non-cash items decreasing or increasing Consolidated Net
Income arising out of currency translation effects.
"CONSOLIDATED NET WORTH" means Net Worth without giving effect to any
purchase accounting adjustments if Consolidated Net Worth is being determined
in connection with any merger, consolidation or other acquisition of, or by,
the Company or any of its Subsidiaries.
"CONSOLIDATED SECURED DEBT" means, collectively, the outstanding
principal balance of the Debt described in paragraphs 4C(a)(i) and, (a)(iv) and
the outstanding amount of unpaid reimbursement obligations for drawn letters of
credit with respect to the Debt described in paragraph 4C(a)(v).
"CONSOLIDATED SENIOR DEBT" means, at any time, all Consolidated Debt
at such time, other than the then outstanding principal amount of: (i) the
10.25% Notes, (ii) the Second Priority Notes, (iii) the Subsequent Second
Priority Notes, (iv) Debt of any Subsidiary of the Company payable to the
Company or any Wholly Owned Subsidiary of the Company, and (v) Debt of the
Company that is not secured by a Lien or that is junior in right of payment,
and subordinate to, the Revolving Notes pursuant to subordination terms in the
form of Exhibit K hereto, which Debt matures after the third annual anniversary
date of the Closing Day, and has no principal payments scheduled until, a date
which is at least six (6) months after the third annual anniversary date of the
Closing Day.
"CONSOLIDATED TANGIBLE NET WORTH" means, at any time, Consolidated Net
Worth at such time, less Consolidated Intangible Assets at such time.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the sum of:
(i) Consolidated Net Worth at such time, plus (ii) Consolidated Debt.
"CONTROL" means (except as otherwise specifically provided herein) the
possession, directly or indirectly, of the power to
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direct or cause the direction of the management and policies of a Person,
whether through the ownership of Voting Securities, by agreement or otherwise;
and the terms "Controlling" and "Controlled" have meanings correlative to the
foregoing.
"CONTROL GROUP" means a controlled group of corporations within the
meaning of Section 414(b) of the Code of which the Company is a member, any
group of corporations or entities under common control with the Company
within the meaning of Section 414(c) of the Code of which the Company is a
member or any affiliated service group within the meaning of Section 414(m) of
the Code of which the Company is a member.
"CURRENCY AGREEMENT" of any Person means any foreign exchange
contract, currency swap agreement, option or futures contract or other similar
agreement or arrangement designed to protect such Person or any of its
Subsidiaries against fluctuations in currency values (as opposed to being used
in any way for speculative trading purposes).
"CURRENT DEBT" means, with respect to any Person, all Indebtedness of
such Person for borrowed money which by its terms or by the terms of any
instrument or agreement relating thereto matures on demand or within one year
from the date of the creation thereof and is not directly or indirectly
renewable or extendible at the option of the debtor to a date more than one
year from the date of the creation thereof, provided that Indebtedness for
borrowed money outstanding under a revolving credit or similar agreement which
obligates the lender or lenders to extend credit over a period of more than one
year shall constitute Funded Debt and not Current Debt, even though such
Indebtedness by its terms matures on demand or within one year from the date of
the creation thereof.
"DEBT" shall mean Current Debt and Funded Debt.
"DEFAULT" means any event which through the passage of time, the
giving of notice or both would mature into an Event of Default.
"DOMESTIC SUBSIDIARY" means any Subsidiary of the Company organized
under the laws of any state of the United States of America or the District of
Columbia.
"DPK" means D.P. Kelly & Associates, L.P., a Delaware limited
partnership, and its successors and assigns.
"ELIGIBLE ACCOUNTS RECEIVABLE" means Accounts of the Company and its
Significant Domestic Subsidiaries deemed by Prudential in the exercise of its
commercially reasonable judgment to be eligible for inclusion in the
calculation of the Borrowing Base. In determining the amount to be so
included, the face amount of such Accounts shall be reduced by the amount of
all returns, discounts,
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deductions, claims, credits, charges, or other allowances. Unless otherwise
approved in writing by Prudential, no Account shall be deemed to be an Eligible
Account Receivable if:
(a) it arises out of a sale made by the Company or any of
its Significant Domestic Subsidiaries to an Affiliate; or
(b) it is unpaid more than 60 days after the original
payment due date specified in the related invoice or it is unpaid more
than 120 days after the initial date of such invoice, based on the
Company's reasonable estimate thereof; or
(c) it is from the same account debtor or its Affiliate
and fifty percent (50%) or more of all Accounts from that account
debtor (and its Affiliates) are ineligible under (b) above; or
(d) when aggregated with all other Accounts of an account
debtor, the Account exceeds fifteen percent (15%) in face value of all
Accounts of the Company and its Significant Domestic Subsidiaries on
a consolidated basis then outstanding, to the extent of such excess,
unless supported by an irrevocable letter of credit satisfactory to
Prudential (as to form, substance and issuer) and assigned to and
directly drawable by the Collateral Agent excluding, for purposes of
the limitation imposed by this paragraph (d), Accounts of the Account
Debtors listed on Schedule 8A; or
(e) the account debtor for the Account is a creditor of
the Company or any of its Significant Domestic Subsidiaries, has or
has asserted a right of setoff, has disputed its liability or made any
claim with respect to the Account or any other Account which has not
been resolved, to the extent of the amount owed by the Company or any
of its Significant Domestic Subsidiaries to the account debtor, the
amount of such actual or asserted right of setoff, or the amount of
such dispute or claim, as the case may be, unless a reduction has
already been made to the amount of the Account as a result of the
dispute, claim or assertion of set-off rights pursuant to the first
sentence of this definition; or
(f) the account debtor is (or its assets are) the subject
of an Insolvency Event; or
(g) the Account is not payable in Dollars or the account
debtor for the Account is located outside the continental United
States, unless the Account is supported by an irrevocable letter of
credit satisfactory to Prudential (as to form, substance and issuer)
or the Account is insured as to collectibility and political risk
pursuant to a commercial
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risk insurance policy acceptable to Prudential (as to form, substance
and issuer); or
(h) the sale to the account debtor is on a bill-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return; or
(i) Prudential determines by its own credit analysis that
collection of the Account is uncertain or the Account may not be paid;
or
(j) the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless the Company
or any of its Significant Domestic Subsidiaries duly assigns its
rights to payment of such Account to the Collateral Agent pursuant to
the Assignment of Claims Act of 1940, as amended (31 U.S.C. Section
3727 et seq.); or
(k) the goods giving rise to such Account have not been
shipped and delivered to, or have been rejected by, the account
debtor, or the services giving rise to such Account have not been
performed and accepted; or
(l) the Account does not comply with all laws, rules and
regulations of an arbitrator, court or other governmental authority,
including without limitation the Federal Consumer Credit Protection
Act, the Federal Truth in Lending Act and Regulation Z of the Board of
Governors of the Federal Reserve System; or
(m) the Account is subject to any adverse security
deposit, progress payment or other similar advance made by or for the
benefit of the applicable account debtor; or
(n) it is not subject to a valid and perfected first
priority Lien in favor of the Collateral Agent or does not otherwise
conform to the representations and warranties contained in the
Transaction Documents.
In addition to the foregoing, Eligible Accounts Receivable
shall include such Accounts for which the Company shall request approval and
that Prudential approves in advance, in writing, and in its Permitted
Discretion, which approval shall not prevent Prudential from time to time from
revoking such approval in the exercise of its Permitted Discretion.
"ELIGIBLE INVENTORY" means the aggregate amount of Inventory of the
Company and its Significant Domestic Subsidiaries deemed by Prudential in the
exercise of its commercially reasonable judgement to be eligible for inclusion
in the calculation of the Borrowing Base. In determining the amount to be so
included, Inventory shall
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be valued at the lower of cost or market on a basis consistent with the
Company's or the Significant Domestic Subsidiary's current and historical
accounting practice. Unless otherwise approved in writing by Prudential, no
Inventory shall not be deemed Eligible Inventory if:
(a) it is not owned solely by the Company or any of its
Significant Domestic Subsidiaries or the Company or any of its Significant
Domestic Subsidiaries does not have good, valid and marketable title thereto;
or
(b) it is not located in the United States; or
(c) it is not located on property owned by the Company or
any of its Significant Domestic Subsidiaries (all such Inventory, the "Off-Site
Inventory") and the aggregate value of the Off-Site Inventory exceeds five
percent (5%) of the aggregate value of all of the Inventory of the Company and
the Significant Domestic Subsidiaries, unless the lessor or the contract
warehouseman or other Person that owns the premises, as the case may be, has
executed and delivered to Prudential a Collateral Access Agreement in form and
substance acceptable to Prudential and such Inventory is segregated or
otherwise separately identifiable from goods of others, if any, stored on such
premises; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of the Collateral Agent, except with respect to
Inventory stored at sites described in clause (c) above, for Liens for unpaid
rent or normal and customary warehousing charges; or
(e) it consists of goods returned or rejected by the
Company's or any of the Significant Domestic Subsidiaries' customers or goods
in transit to third parties (other than to warehouse sites covered by a
Collateral Access Agreement); or
(f) it is not first-quality finished goods,
work-in-process or raw materials, or it is obsolete or slow moving (unless a
reserve has been established with respect to obsolete and slow moving equipment
that is satisfactory to Prudential), or does not otherwise conform to the
representations and warranties contained in the Transaction Documents.
In addition to the foregoing, Eligible Inventory shall include
such items of the Company's Inventory for which the Company shall request
approval and that Prudential approves in advance, in writing, and in its
Permitted Discretion, which approval shall not prevent Prudential from time to
time from revoking such approval in the exercise of its Permitted Discretion.
"ENVIRONMENTAL LAWS" means any and all federal, state, local and
foreign statutes, laws, regulations, ordinances, rules,
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judgments, orders, decrees, permits, concessions, grants, franchises, licenses,
agreements or other governmental restrictions relating to the environment or to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or hazardous substances or wastes
into the environment, including, without limitation, ambient air, surface
water, ground water or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport or
handling of pollutants, contaminants, chemicals or industrial, toxic or
hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated
thereunder.
"ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.
"EVENT OF DEFAULT" means the occurrence of any event described in
paragraph 5A.
"EXCESS CASH FLOW" means, for any period, the Company's Consolidated
Cash Flow, less the sum of (i) consolidated cash interest expense (including
the interest portion of any payments associated with Capital Lease Obligations)
of the Company during such period, (ii) consolidated capital expenditures of
the Company during such period, (iii) principal payments on indebtedness
(including the principal portion of any Capital Lease Obligations) of the
Company made or paid during such period, (iv) additions (reductions) to Working
Capital of the Company during such period, (v) consolidated income tax expense
of the Company that is actually paid during such period, and (vi) $15,000,000,
all determined on a consolidated basis in accordance with GAAP.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
"EXCHANGE AND REGISTRATION RIGHTS AGREEMENT" shall have the meaning
specified in paragraph 2A(2)(viii).
"EXEMPTED TRANSACTIONS" means (i) transactions with Cargill Financial
Services and its Affiliates (collectively, "Cargill") so long as Cargill is not
a Broad Affiliate of the Company; (ii) transactions with Reliance Insurance Co.
and its Affiliates (collectively, "Reliance") so long as Reliance is not a
Broad Affiliate of the Company; (iii) purchases of turkey timers from Volk
Enterprises, Inc. and (iv) purchases of chemicals from Weskem-Hall, Inc.
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"FACILITY FEE" shall have the meaning specified in paragraph 1F.
"FIRST PRIORITY EXCHANGE NOTES" shall mean any of the Company's 12%
First Priority Senior Secured Exchange Notes due 2000, Series B, and Floating
Rate First Priority Senior Secured Notes due 2000, Series D issued under the
First Priority Notes Indenture.
"FIRST PRIORITY NOTES" shall mean any of the Company's 12% First
Priority Senior Secured Notes of the Company due 2000, Series A, and Floating
Rate First Priority Senior Secured Notes due 2000, Series C, issued under the
First Priority Notes Indenture.
"FIRST PRIORITY NOTES INDENTURE" shall mean the Indenture, dated as
of the Closing Day, between the Company and Shawmut Bank Connecticut, N.A.
under which the First Priority Notes and the First Priority Exchange Notes are
being issued, as amended, restated, supplemented or otherwise modified from
time to time.
"FISCAL YEAR CHANGE" shall have the meaning given to such term in
paragraph 4N.
"FOREIGN SUBSIDIARY" means any Subsidiary that is not a Domestic
Subsidiary.
"FUNDED DEBT" means, with respect to any Person, all Indebtedness of
such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, more than
one year from, or is directly or indirectly renewable or extendable at the
option of the debtor to a date more than one year (including an option of the
debtor under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year) from, the date of
the creation thereof.
"GAAP" means, at any date, United States 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 applicable to the circumstances as of the date of determination.
"GECC" means General Electric Capital Corporation, a New York
corporation, and its successors and assigns.
"GECC INTERCREDITOR AGREEMENT" shall have the meaning specified in
paragraph 2A(2)(ii).
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"GECC LEASE DOCUMENTS" means (i) the Lease Agreement dated as of
December 18, 1990 between The Connecticut National Bank (now known as Shawmut
Bank Connecticut, National Association) ("TCNB"), Owner Trustee, as lessor and
Viskase Corporation, as lessee, (ii) the Participation Agreement dated as of
December 18, 1990 among Viskase Corporation, the Company, GECC and TCNB and
(iii) the related instruments and agreements with respect thereto, in each case
as the same may have heretofore been or may hereinafter be amended, modified,
restated, renewed or extended or refinanced from time to time.
"GUARANTEE" shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including,
without limitation, any such obligation directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business) or discounted or sold with recourse by such Person, or in respect of
which such Person is otherwise directly or indirectly liable, including,
without limitation, any such obligation in effect guaranteed by such Person
through any agreement (contingent or otherwise) to purchase, repurchase or
otherwise acquire such obligation or any security therefor, or to provide funds
for the payment or discharge of such obligation (whether in the form of loans,
advances, stock purchases, capital contributions or otherwise), or to maintain
the solvency or any balance sheet or other financial condition of the obligor
of such obligation, or to make payment for any products, materials or supplies
or for any transportation or services regardless of the non-delivery or
non-furnishing thereof, in any such case if the purpose or intent of such
agreement is to provide assurance that such obligation will be paid or
discharged, or that any agreements relating thereto will be complied with, or
that the holders of such obligation will be protected against loss in respect
thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
"GUARANTY AGREEMENT" and "GUARANTY AGREEMENTS" shall have the meanings
specified in paragraph 2A(2)(vi).
"HOSTILE TENDER OFFER" shall mean, with respect to the use of proceeds
of any Revolving Loan, any offer to purchase, or any purchase of, shares of
Capital Stock of any corporation or equity interests in any other entity, or
securities convertible into or representing the beneficial ownership of, or
rights to acquire, any such shares or equity interests, if such shares, equity
interests, securities or rights are of a class which is publicly traded on any
securities exchange or in any over-the-counter market, other than purchases of
such shares, equity interests, securities or rights representing less than 5%
of the equity interests or beneficial ownership of such corporation or other
entity for portfolio
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investment purposes, and such offer or purchase has not been duly approved by
the board of directors of such corporation or the equivalent governing body of
such other entity prior to the date on which the Company requests such
Revolving Loan.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(i) all items (excluding items of contingency reserves or of reserves for
deferred income taxes) which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as of the date on which Indebtedness is to be determined, (ii)
all indebtedness secured by any Lien on any property or asset owned or held by
such Person subject thereto, whether or not the indebtedness secured thereby
shall have been assumed, (iii) all indebtedness of others with respect to which
such Person has become liable by way of a Guarantee (including, without
limitation, all obligations of such Person with respect to surety bonds, bank
acceptances, and letters of credit and other similar obligations), (iv) all
obligations of such Person in respect of Currency Agreements or Interest Rate
Agreements, and (v) the maximum fixed repurchase price of any Redeemable Stock.
For purposes of the preceding sentence, the maximum fixed repurchase price of
any Redeemable Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined pursuant to this Agreement; provided, that if such
Redeemable Stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Redeemable Stock.
"INSOLVENCY EVENT" means, with respect to any Person, the occurrence
of any of the following: (a) such Person shall be adjudicated insolvent or
bankrupt, or generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, (b) the voluntary commencement of any proceeding
or the filing of any petition under any bankruptcy, insolvency or similar law,
(c) the seeking of dissolution or reorganization or the appointment of a
receiver, trustee, custodian or liquidator for it or a substantial portion of
its property, assets or business or to effect a plan or other arrangement with
its creditors, (d) the filing of any answer admitting the jurisdiction of the
court and the material allegations of an involuntary petition filed against it
in any bankruptcy, insolvency or similar proceeding, (e) such Person shall make
a general assignment for the benefit of its creditors, or shall consent to, or
acquiesce in the appointment of, a receiver, trustee, custodian or liquidator
for a substantial portion of its property, assets or business. Insolvency
Event shall also mean, with respect to any Person, the occurrence of any of the
following: an involuntary proceeding or involuntary petition shall be
commenced or filed against such Person under any bankruptcy, insolvency or
similar law seeking the dissolution or reorganization of it or the appointment
of a receiver, trustee,
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custodian or liquidator for it or of a substantial part of its property, assets
or business, or any writ, judgment, warrant of attachment, execution or similar
process shall be issued or levied against a substantial part of its property,
assets or business, and such proceedings or petitions shall not be dismissed,
or such writ, judgment, warrant of attachment, execution or similar process
shall not be released, vacated or fully bonded, within 60 days after
commencement, filing, or levy, as the case may be, or any order for relief
shall be entered in any such proceeding.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" means, collectively, each
Intellectual Property Security Agreement, made at any time by the Company or
any Subsidiary of the Company, respectively, in favor of the Collateral Agent,
as amended, supplemented or modified from time to time.
"INTERCREDITOR AGREEMENT" shall have the meaning specified in
paragraph 2A(2)(ii).
"INTEREST RATE AGREEMENT" of any Person means any arrangement with any
other Person whereby, directly or indirectly, such Person is entitled to
receive from time to time periodic payments calculated by applying either a
floating or fixed rate of interest on a notional amount in exchange for
periodic payments made by such Person calculated by applying a fixed or
floating rate of interest on the same notional amount and shall include,
without limitation, any interest rate swap agreement, interest rate cap, floor
or collar agreement, option or futures contract or other similar agreements or
arrangements, designed to protect such Persons or any of its Subsidiaries from
fluctuations in interest rates (as opposed to being used in any way for
speculative trading purposes).
"INVENTORY" shall mean "Inventory" as defined in the Security
Agreements.
"INVESTMENT" means, as to any investing Person, any direct or indirect
advance, loan (other than extensions of trade credit on commercially reasonable
terms in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of such Person or any of its Subsidiaries in
accordance with GAAP) or other extension of credit, guarantee or capital
contribution to, or any acquisition by, such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by any other Person. In determining the amount of any Investment
involving a transfer of Property, such Property shall be valued at its fair
market value at the time of such transfer, and such fair market value shall be
determined in good faith by the Board of Directors of the investing Person,
whose determination in such regard shall be conclusive.
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"JOINT VENTURE" of a Person means any Person in which the investing
Person has a joint or shared equity interest but which is not a Subsidiary of
such investing Person.
"LETTER OF CREDIT FACILITY AGREEMENT" shall mean the Credit Agreement,
dated as of the Closing Day, among the Company, BTCC, as agent for those
certain financial institutions party to the Letter of Credit Facility Agreement
as "Lenders" from time to time and such "Lenders."
"LIBOR BUSINESS DAY" shall mean a day of the year on which dealings
are carried on in the London interbank market and banks are open for business
in London and not required or authorized to close in New York City.
"LIBOR RATE" shall mean, for any Rate Period and for any Revolving
Loan outstanding during such Rate Period, the sum of 3.00% plus the Three Month
London Interbank Offered Rate at 11:00 A.M. (London time) two LIBOR Business
Days prior to Rate Day, for U.S. dollar deposits in the London interbank market
as such rate is reported on page 3750 by Telerate - The Financial Information
Network published by Telerate Systems Incorporated (Telerate), or its successor
company. If Telerate shall cease to report such rates on a regular basis, the
LIBOR Rate shall mean, for any Rate Period, the sum of 3.00% plus the rate
determined by Prudential to be the arithmetic average (rounded upwards, if
necessary, to the nearest 1/16 of 1%) of the rates quoted to Prudential by the
Reference Banks two LIBOR Business Days prior to Rate Day, for U.S. Dollar
deposits in the London interbank market.
"LIEN" means any mortgage, pledge, lien, charge, security interest,
conditional sale or other title retention agreement (including, without
limitation, any Capital Lease Obligations in the nature thereof) or other
encumbrance of any kind or description, including, without limitation, any
agreement to give or grant a Lien.
"MANAGEMENT AGREEMENT" means the Management Services Agreement dated
as of December 4, 1991 between the Company and DPK, as the same was amended and
restated by the Amended and Restated Management Services Agreement dated as of
December 31, 1993 between the Company and DPK and as the same may from time to
time, hereafter be amended, modified or restated upon the good faith approval,
pursuant to duly adopted resolutions, of a majority of members of the Company's
Board of Directors of the Company who are not Affiliates of DPK.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
consolidated financial condition, operations, business or prospects of the
Company and its Subsidiaries (taken as a whole), (ii) the ability of the
Company or any of its Subsidiaries to perform its obligations under any of the
Transaction Documents, or
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(iii) the validity or enforceability of any of the Transaction Documents.
"MATERIAL SUBSIDIARY" means (a) any Subsidiary of the Company if (i)
the total assets of such Subsidiary (and its Subsidiaries) exceed 10% of the
total assets of the Company and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP, or (ii) the revenues (or losses, as the case may
be) of such Subsidiary (and its Subsidiaries) for the four consecutive fiscal
quarters of such Subsidiary most recently ended (determined on a consolidated
basis in accordance with GAAP and whether or not such Person was a Subsidiary
of the Company during all or any part of the fiscal period of the Company
referred to below) exceed an amount equal to 10% of the revenues (or losses, as
the case may be) of the Company and its Subsidiaries for the four consecutive
fiscal quarters of the Company most recently ended (determined on a
consolidated basis in accordance with GAAP), and (b) in any event each of (i)
Sandusky Plastics of Delaware, Inc., a Delaware corporation; (ii) Sandusky
Plastics, Inc., a Delaware corporation; (iii) Viskase Corporation, a
Pennsylvania corporation; (iv) Clear Shield National, Inc., a California
corporation; (v) Viskase Holding Corporation, a Delaware corporation; and (vi)
Viskase Sales Corporation, a Delaware corporation and (vii) Viskase S.A.
"MEMORANDUM" shall mean the Private Placement Memorandum, dated
February, 1995, as supplemented by the Supplement to Private Placement
Memorandum, dated May 16, 1995, and the Final Supplement to Private Placement
Memorandum, dated June 5, 1995, taken as a whole.
"MORTGAGE" and "MORTGAGES" shall have the meanings specified in
paragraph 2A(2)(iv).
"MULTIEMPLOYER PLAN" means any Plan which is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA).
"NET WORTH" means as of any date the aggregate amount of the capital,
surplus and retained earnings of the Company and its Subsidiaries as would be
shown on a consolidated balance sheet of the Company and its Subsidiaries
prepared as of such date in accordance with GAAP (and excluding minority
interests); provided that capital and surplus attributable to Redeemable Stock
and accumulated translation adjustments shall be excluded.
"NOTE AGREEMENT" shall mean that certain Note Agreement, of even date
herewith, among the Company and the purchasers named therein, under which
$160,000,000 of First Priority Notes are issued, as amended, restated,
supplemented or otherwise modified from time to time.
"OFFICER'S CERTIFICATE" shall mean, with respect to any corporation, a
certificate signed in the name of such corporation
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by an Authorized Officer of such corporation that complies with paragraph 9R.
"OPINION OF COUNSEL" means a written opinion that complies with
paragraph 9R of this Agreement from legal counsel who is reasonably acceptable
to Prudential. Such legal counsel may be an employee of or counsel to the
Company.
"PENSION BENEFIT GUARANTY CORPORATION" means The Pension Benefit
Guaranty Corporation under ERISA (or any successor thereto).
"PERCENTAGE OF TOTAL ASSETS TRANSFERRED" means, with respect to each
asset Transferred pursuant to clause (d) of paragraph 4F (including assets
transferred pursuant to a Transfer by Merger), the ratio (expressed as a
percentage) of (i) the greater of such asset's fair market value or the net
book value of such assets on the date of Transfer to (ii) the book value of its
consolidated assets as of the last day of the fiscal quarter of the Company
immediately preceding the day of Transfer.
"PERMITTED DISCRETION" means Prudential's good faith judgment
concerning the risks of lending to the Company, taking into account (i) the
liquidation value of Collateral, the priority of the Collateral Agent's Liens
therein, and the time and cost of enforcement of such Liens, and (ii) the
perceived accuracy of the Company's financial and Collateral reporting. The
burden of establishing lack of good faith shall be on the Company.
"PERMITTED LIENS" in respect of any Person shall mean (i) pledges or
deposits made by such Person under workers' compensation, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than contracts for the payment of money)
or operating leases to which such Person is a party, or deposits to secure
statutory or regulatory obligations of such Person or deposits of cash or U.S.
Government Obligations to secure surety or appeal bonds to which such Person is
a party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case incurred in the ordinary course of business;
(ii) Liens arising by operation of law such as carriers', warehousemen's and
mechanics' Liens, in each case arising in the ordinary course of business and
with respect to amounts not yet due or being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made; (iii) Liens for taxes
not yet subject to penalties for non-payment or which are being contested in
good faith and by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made; (iv)
Liens evidenced by the Capital Lease Obligations under GECC Lease Documents and
Liens securing Debt of the Company
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or its Subsidiaries permitted under paragraph 4C(a)(vi) for refinancing the
Debt under the GECC Lease Documents; provided, however, that in connection with
any such refinancing any such new Lien shall be limited to all or part of the
same Property to which the original Lien applied; (v) minor survey exceptions,
minor encumbrances, easements or reservations of, or rights of others for,
rights of way, sewers, electric lines, telegraph and telephone lines and other
similar purposes, or zoning or other restrictions as to the use of real
property or Liens incidental to the conduct of the business of such Person or
to the ownership of its Property which were not incurred in connection with
Debt or other extensions of credit and which do not in the aggregate materially
adversely affect the value of said Property or materially impair the use of
such Property in the operation of the business of such Person; (vi) Liens in
favor of the Collateral Agent to secure Debt permitted under paragraphs
4C(a)(i), (iv), (v), and (vii); (vii) Liens existing on the Closing Day and
described on Schedule 4D hereto; (viii) Liens arising out of judgments or
awards against such Person not giving rise to an Event of Default under
paragraph 5A(m) (but without limiting paragraph 5A(p)) with respect to which
such Person is diligently prosecuting an appeal or other proceedings for
review; (ix) Liens to secure Debt permitted under paragraph 4C(a)(xi);
provided, however, that any such new Lien shall be limited to all or part of
the same Property to which the original Lien applied; (x) Liens to secure Debt
permitted under paragraph 4C(a)(xiii) (to the extent such Liens attach prior to
or at the time of incurrence of such Debt); (xi) Liens to secure the Debt (if
any) permitted under paragraph 4C(a)(iii); provided, however, that (a) the Lien
securing such Debt is granted only to the Collateral Agent and made subject to
the terms of the Intercreditor Agreement, and (b) the Intercreditor Agreement
is amended to the reasonable satisfaction of the Collateral Agent to add the
Second Priority Notes Trustee as a party thereto and to provide for such
matters incidental thereto as the Collateral Agent may reasonably require; and
(xii) Liens securing Debt of Wholly Owned Subsidiaries of the Company to the
Company or another such Wholly Owned Subsidiary permitted under paragraph
4C(a)(ix).
"PERSON" means any individual, partnership, corporation, limited
liability company, venture, joint venture, unincorporated organization,
joint-stock company, trust or any government or agency or political subdivision
thereof or other entity of any kind.
"PLAN" means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Company or
any member of the Control Group.
"PLEDGE AGREEMENT" and "PLEDGE AGREEMENTS" shall have the meanings
specified in paragraph 2A(2)(v).
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"PROPERTY" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in any
other Person.
"PRUDENTIAL" shall have the meaning specified in the address block on
page one.
"PRUDENTIAL AFFILIATE" shall mean any corporation or other entity all
of the Voting Stock (or equivalent voting securities or interests) of which is
owned by Prudential either directly or through Prudential Affiliates.
"PURCHASE MONEY INDEBTEDNESS" means, as to any Person, the Debt of
such Person incurred and owing in respect of all or part of the purchase price
of Property purchased where such Debt is fully secured by the Property
purchased.
"QUALIFIED PLAN" means any Plan, other than a Multiemployer Plan,
which is intended to meet the qualification requirements of Section 401(a) of
the Code.
"RATE DAY" shall mean for each Rate Period the first day of such Rate
Period; provided, however, that if such day is not a LIBOR Business Day, then
the next LIBOR Business Day succeeding the first day of such Rate Period.
"RATE PERIOD" shall mean the period during which the LIBOR Rate
remains in effect and unchanged. For purposes of this Agreement, the Rate
Period shall begin on the first day of each calendar quarter (i.e., January 1,
April 1, July 1 and October 1 of each year) and shall end on the last day of
each such calendar quarter (i.e., March 31, June 30, September 30 and December
31 of each year); provided, however, that if the first day of any calendar
quarter is not a Business Day then the Rate Period otherwise beginning on the
first day of such calendar quarter (the "Specified Rate Period") shall begin on
the first Business Day of such calendar quarter and the Rate Period immediately
preceding the Specified Rate Period shall end on the day immediately preceding
such first Business Day.
"REDEEMABLE STOCK" means, with respect to any Person, any class or
series of Capital Stock that, either by its terms, by the terms of any security
into which it is convertible or exchangeable by contract or otherwise, is or
upon the happening of an event or the passage of time would be, required to be
redeemed or is redeemable at the option of the holder thereof at any time prior
to the Stated Maturity of the principal of the First Priority Notes or First
Priority Exchange Notes, or, at the option of the holder thereof, is
convertible into or exchangeable for debt securities maturing at any time prior
to the Stated Maturity of the principal of such Notes.
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"REFERENCE BANKS" shall mean Morgan Guaranty Trust Company of New
York, Citibank, N.A. and Chase Manhattan Bank, N.A.
"REGISTRATION RIGHTS AGREEMENT" means the Exchange and Registration
Rights Agreement by and between the Company and the Persons party thereto,
relating to the First Priority Notes and the First Priority Exchange Notes and
dated the Closing Day, as amended, supplemented or otherwise modified from time
to time.
"REGULATION S" means Regulation S under the Securities Act.
"REQUIRED HOLDER(S)" shall mean the holder or holders of at least 51%
of the aggregate principal amount of the Revolving Notes from time to time
outstanding.
"RESPONSIBLE OFFICER" shall mean, with respect to any corporation, the
chief executive officer, chief operating officer, chief financial officer,
treasurer or chief accounting officer of such corporation or any other officer
of the corporation involved principally in its financial administration or its
controllership function.
"RESTRICTED DEBT" means all Consolidated Debt other than Consolidated
Senior Debt.
"RESTRICTED INVESTMENT" shall have the meaning given to such term in
paragraph 4B(a).
"RESTRICTED PAYMENTS" shall have the meaning given to such term in
paragraph 4B(a).
"REVOLVER CANCELLATION DATE" shall have the meaning specified in
paragraph 1G.
"REVOLVING COMMITMENT" shall have the meaning specified in paragraph
1A.
"REVOLVING LOAN" and "REVOLVING LOANS" shall have the meanings
specified in paragraph 1A.
"REVOLVING LOAN REQUEST" shall mean the Revolving Loan Request in the
form of Exhibit J.
"REVOLVING LOANS TERMINATION DATE" shall mean the earlier to occur of
(i) the date on which all First Priority Notes and First Priority Exchange
Notes held by Prudential and any Prudential Affiliate are redeemed, purchased
by the Company or any Affiliate, defeased or prepaid in their entirety or
required to be so redeemed, purchased, defeased or prepaid, including, without
limitation, by automatic acceleration or demand for payment, (ii) the third
anniversary of the Closing Day, (iii) the Revolver Cancellation Date and (iv)
the date on which the Required Holders
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require the repurchase of the Revolving Notes pursuant to paragraph 3I.
"REVOLVING NOTE" and "REVOLVING NOTES" shall have the meanings
specified in paragraph 1B.
"RULE 144" means Rule 144 promulgated by the SEC under the Securities
Act and as in effect from time to time.
"RULE 144A" means Rule 144A promulgated by the SEC under the
Securities Act and as in effect from time to time.
"SALE AND LEASEBACK TRANSACTION" means, with respect to any Person,
any direct or indirect arrangement pursuant to which Property is sold by such
Person or a Subsidiary of such Person and thereafter leased back from the
purchaser thereof by such Person or one of the Subsidiaries of such Person.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted, or any similar agency then having jurisdiction to enforce the
Securities Act.
"SECOND PRIORITY NOTES" means the debt securities which may be issued
by the Company under an indenture (the "Second Priority Notes Indenture")
pursuant to the 10.25% Note Exchange.
"SECOND PRIORITY NOTES INDENTURE" has the meaning given to such term
in the definition of Second Priority Notes.
"SECOND PRIORITY NOTES TRUSTEE" means the trustee under the Second
Priority Notes Indenture and Subsequent Second Priority Notes, respectively (in
such capacity) and each successor thereto in such capacity.
"SECURED PARTIES" shall have the meaning ascribed to such term in the
Intercreditor Agreement.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, and the rules and regulations of the SEC promulgated thereunder.
"SECURITY AGREEMENT" and "SECURITY AGREEMENTS" shall have the meanings
specified in paragraph 2A(2)(iii).
"SIGNIFICANT DOMESTIC SUBSIDIARY" means each Domestic Subsidiary that,
at any time, is a Material Subsidiary.
"STATED MATURITY" when used with respect to any First Priority Note or
First Priority Exchange Note or any installment of interest thereon, means the
date specified in such Note as the fixed date on which the principal of such
Note or such installment of interest is due and payable.
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"STIPULATED LOSS VALUE" means the Stipulated Loss Value, as defined in
the GECC Lease Documents (as such GECC Lease Documents are in effect on the
Closing Day.)
"SUBSEQUENT SECOND PRIORITY NOTES" means any and all debt securities
issued by the Company under an indenture in exchange for Second Priority Notes
and having terms identical to the Second Priority Notes and otherwise being the
same as the Second Priority Notes except that such debt securities are
registered under the Securities Act.
"SUBSIDIARY" means, with respect to any Person, (i) a corporation a
majority of whose Voting Securities is at the time directly or indirectly owned
or Controlled by such Person, by one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries thereof, or (ii) any other Person
(other than a corporation) in which such Person, one or more Subsidiaries
thereof or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest with respect to voting in the election of directors or
trustees thereof (or such other Persons performing similar functions). For
purposes of this definition, any directors' qualifying shares shall be
disregarded in determining the ownership of a Subsidiary.
"10.25% NOTE EXCHANGE" means an exchange by the Company pursuant to
which the Company issues Second Priority Notes in an aggregate face amount of
not more than $50,000,000 in exchange for 10.25% Notes pursuant to an exchange
ratio (based on aggregate face amount) of no greater than 1:1.
"10.25% NOTES" means, collectively, the 10.25% Senior Notes due 2001
issued by the Company pursuant to the 10.25% Notes Indenture.
"10.25% NOTES INDENTURE" means that certain Indenture, dated as of
December 31, 1993, between the Company and Bankers Trust Company, as trustee,
as amended, supplemented or otherwise modified from time to time.
"TERMINATION EVENT" means any one or more of the following event or
events which, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect:
(i) A reportable event as defined in Section 4043 of
ERISA and regulations issued thereunder for which the 30 day notice
requirement has not been waived occurs with respect to any Title IV
Plan other than those described in Sections 4043(c)(9) and (11) of
ERISA (or Pension Benefit Guaranty Corporation Regulations Section
2615.22 or 2615.23);
(ii) There occurs (a) the complete or partial withdrawal
(as defined in Sections 4203 and 4205 of ERISA) by the Company
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or any member of the Control Group from any Multiemployer Plan, or (b)
the receipt by the Company or any member of the Control Group of a
demand from any Multiemployer Plan for withdrawal liability (as
defined in Section 4201 of ERISA);
(iii) The Company or any member of the Control Group files, or
is reasonably expected to file, a notice of intent to terminate any
Title IV Plan or adopts a plan amendment that constitutes a
termination of any Title IV Plan, under Section 4041 of ERISA;
(iv) There occurs any action causing the termination of
any Multiemployer Plan under Section 4041A of ERISA;
(v) Any other event or condition occurs that is
reasonably expected to constitute grounds under Sections 4041A or 4042
of ERISA for the termination of, or the appointment of a trustee to
administer, any Title IV Plan or any Multiemployer Plan;
(vi) The Pension Benefit Guaranty Corporation shall have
notified the Company or any member of the Control Group that a Plan
may become a subject of any proceedings under Section 4042 of ERISA to
terminate or appoint a trustee to administer the Plan, or any such
proceedings are instituted;
(vii) An accumulated funding deficiency (as defined in Section
302 of ERISA or Section 412 of the Code) exists with respect to any
Title IV Plan on the last day of any plan year;
(viii) A waiver of the minimum funding standards of ERISA or
the Code, or any extension of any amortization period related to such
waiver, is sought by or granted to, the Company or any member of the
Control Group, under Section 412 of the Code;
(ix) The Company or any member of the Control Group shall
have incurred, or is reasonably expected to incur, any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Code relating to employee benefit plans;
(x) As of the last day of any plan year, there exists
unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) of any Title IV Plan, as determined by such
Plan's independent actuaries.
(xi) As of the last day of any plan year, there exists
unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) of all Title IV Plans, as determined by such
Plan's independent actuaries; or
(xii) The Company or any member of the Control Group
establishes or amends any employee welfare benefit plan (as
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defined in Section 3(1) of ERISA) that provides post-employment
welfare benefits in a manner that would increase the liability of the
Company or any member of the Control Group.
"TITLE IV PLAN" means any Qualified Plan that is a defined benefit
plan (as defined in Section 3(35) of ERISA) and is subject to Title IV of ERISA.
"TRANSACTION DOCUMENTS" shall mean, collectively, this Agreement, the
Revolving Notes, the Guaranty Agreements, the Security Agreements, the Pledge
Agreements, the Mortgages, the Intercreditor Agreement, the GECC Intercreditor
Agreement and all other agreements, instruments and documents relating in any
way to the aforementioned agreements, instruments and documents.
"TRANSFER" means any sale, exchange, conveyance, lease, transfer or
other disposition.
"TRANSFER BY MERGER" means, with respect to any Subsidiary of the
Company, a merger or consolidation of such Subsidiary with another Person such
that after giving effect thereto the surviving entity is no longer a
Subsidiary.
"TRANSFEREE" shall mean any direct or indirect transferee of all or
any part of any Revolving Note.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of Illinois.
"U.S. GOVERNMENT OBLIGATIONS" means (i) any direct non-callable
obligation of, or obligation guaranteed by, the United States of America for
the payment of which the full faith and credit of the United States of America
is pledged and which is not callable at the issuer's option, and (ii) any
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided, that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
"VISKASE, S.A." shall mean Viskase, S.A., a French corporation.
"VOTING SECURITIES" means, with respect to any Person, securities of
any class or classes of Capital Stock in such Person entitling the holders
thereof, under ordinary circumstances and in the absence of contingencies, to
vote for members of the Board of Directors of such Person (or Persons
performing functions equivalent to those of such members).
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"WHOLLY OWNED SUBSIDIARY" of a Person means any Subsidiary of such
Person 100% of the total Capital Stock of which, other than directors'
qualifying shares, is at the time owned by such Person and/or one or more
Wholly Owned Subsidiaries of such Person.
"WORKING CAPITAL" means, current assets less current liabilities where
current assets equals accounts receivable, inventory and other current assets
(excluding cash and cash equivalents) and current liabilities equals accounts
payable and accrued liabilities (both excluding accrued interest payable,
accrued income taxes payable and any payables related to capital expenditures),
all as reflected on the Company's consolidated financial statements prepared in
accordance with GAAP.
8A. ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All
references in this Agreement to "generally accepted accounting principles"
shall be deemed to refer to generally accepted accounting principles in effect
in the United States at the time of application thereof. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all unaudited financial statements and certificates and reports as to financial
matters required to be furnished hereunder shall be prepared, in accordance
with generally accepted accounting principles, applied on a basis consistent
with the most recent audited consolidated financial statements of the Company
and its Subsidiaries delivered to Prudential. If subsequent to the date hereof
there should be any change in generally accepted accounting principles which
materially affects the financial covenants contained in this Agreement, then,
at the request of Prudential or the Company, Prudential and the Company will
negotiate in good faith to cause this Agreement to be amended to revise such
covenants so as equitably to reflect such changes to the end that the criteria
for evaluating the Company's financial condition and performance will be the
same after such changes as they were before such changes.
9. MISCELLANEOUS.
9A. NOTE PAYMENTS. The Company agrees that, so long as Prudential
shall hold any Revolving Note, it will make payments of principal thereof and
interest thereon, and Facility Fees which comply with the terms of this
Agreement, by wire transfer of immediately available funds for credit to (i)
the account or accounts as specified in the Lender Schedule attached hereto or
(ii) such other account or accounts in the United States as Prudential may
designate in writing, notwithstanding any contrary provision herein or in any
Revolving Note with respect to the place of payment. Each holder of a
Revolving Note agrees that, before disposing of any Revolving Note, it will
make a notation thereon (or on a schedule attached thereto) of the date to
which interest thereon has been paid. The Company agrees to afford the
benefits of this paragraph 9A to any Transferee which shall have made the same
agreement as you have made in this paragraph 9A.
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9B. EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save Prudential and any
Transferee harmless against liability for the payment of, all out-of-pocket
expenses arising in connection with such transactions, including (i) all
document production and duplication charges and the fees and expenses of
Prudential's special counsel referred to in paragraph 2A(5) hereof in
connection with the negotiation, execution and delivery of the Transaction
Documents and the consummation of the transactions contemplated hereby and
thereby and all document production and duplication charges and fees of any
special counsel engaged by Prudential or any Transferee in connection with any
subsequent proposed modification of, or proposed consent under, this Agreement
and the other Transaction Documents, whether or not such proposed modification
shall be effected or proposed consent granted, (ii) the costs and expenses,
including attorneys' fees, incurred by Prudential or any Transferee in
enforcing (or determining whether or how to enforce or in directing the
Collateral Agent whether or how to enforce) any rights under this Agreement or
the other Transaction Documents (including without limitation to protect,
collect, lease, sell, take possession of, release or liquidate any of the
Collateral) or in responding to any subpoena or other legal process or informal
investigative demand issued in connection with this Agreement, the other
Transaction Documents or the transactions contemplated hereby, thereby or by
reason of Prudential's or any Transferee's having acquired any Revolving Note,
including, without limitation, costs and expenses incurred in any bankruptcy
case, but excluding any subpoena, legal process or informal investigation
demand issued in connection with an investigation of the practices of
Prudential or such Transferee in general, (iii) the costs and expenses,
including attorney's fees, of preparing, recording and filing all financing
statements, instruments or other documents to create, perfect and totally
preserve and protect the Liens granted in the Collateral Documents, and (iv)
the fees and expenses of the Collateral Agent and its counsel. The obligations
of the Company under this paragraph 9B shall survive the transfer of any
Revolving Note or portion thereof or interest therein by Prudential or any
Transferee and the payment of any Revolving Note.
9C. CONSENT TO AMENDMENTS. This Agreement may be amended, and the
Company may take any action herein prohibited, or omit to perform any act
herein required to be performed by it, if the Company shall obtain the written
consent to such amendment, action or omission to act, of the Required Holder(s)
of the Revolving Notes except that, without the written consent of the holders
of all of the Revolving Notes at the time outstanding (i) the Revolving Notes
may not be amended or the provisions thereof waived to change the maturity
thereof, to change or affect the principal thereof, or to change or affect the
rate or time of payment of interest, fees or other amounts payable with respect
to the Revolving Notes, (ii) no amendment to or waiver of the provisions of
this Agreement shall change or affect the provisions of paragraph 5A or this
paragraph 9C insofar as such provisions relate to proportions of the principal
amount of the Revolving Notes, or
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the rights of any individual holder of Revolving Notes, required with respect
to any declaration of Revolving Notes to be due and payable or with respect to
any consent, and (iii) the provisions of paragraph 1 and 2B may not be amended
or waived. Each holder of any Revolving Note at the time or thereafter
outstanding shall be bound by any consent authorized by this paragraph 9C,
whether or not such Revolving Note shall have been marked to indicate such
consent, but any Revolving Notes issued thereafter may bear a notation
referring to any such consent. No course of dealing between the Company and
the holder of any Revolving Note nor any delay in exercising any rights
hereunder or under any Revolving Note shall operate as a waiver of any rights
of any holder of such Revolving Note. As used herein and in the Revolving
Notes, the term "this Agreement" and references thereto shall mean this
Agreement as it may from time to time be amended or supplemented.
9D. FORM, REGISTRATION, TRANSFER AND EXCHANGE OF REVOLVING NOTES;
LOST NOTES. The Revolving Notes are issuable as registered notes without
coupons in denominations of at least $100,000, except as may be necessary to
reflect any principal amount not evenly divisible by $100,000. The Company
shall keep at its principal office a register in which the Company shall
provide for the registration of Revolving Notes and of transfers of Revolving
Notes. Upon surrender for registration of transfer of any Revolving Note at
the principal office of the Company, the Company shall, at its expense, execute
and deliver one or more new Revolving Notes of like tenor and of a like
aggregate principal amount, registered in the name of such transferee or
transferees. At the option of the holder of any Revolving Note, such Revolving
Note may be exchanged for other Revolving Notes of like tenor and of any
authorized denominations, of a like aggregate principal amount, upon surrender
of the Revolving Note to be exchanged at the principal office of the Company.
Whenever any Revolving Notes are so surrendered for registration or transfer or
exchange, the Company shall, at its expense, execute and deliver the Revolving
Notes which the holder making the exchange is entitled to receive. Every
Revolving Note surrendered for exchange shall be duly endorsed, or be
accompanied by a written instrument of transfer duly executed, by the holder of
such Revolving Note or such holder's attorney duly authorized in writing. Any
Revolving Note or Revolving Notes issued in exchange for any Revolving Note or
upon transfer thereof shall carry the rights to unpaid interest and interest to
accrue which were carried by the Revolving Note so exchanged or transferred, so
that neither gain nor loss of interest shall result from any such transfer or
exchange. Upon receipt of written notice from the holder of any Revolving Note
of the loss, theft, destruction or mutilation of such Revolving Note and, in
the case of any such loss, theft or destruction, upon receipt of such holder's
unsecured indemnity agreement, or in the case of any such mutilation upon
surrender and cancellation of such Revolving Note, the Company will make and
deliver a new Revolving Note, of like tenor, in lieu of the lost, stolen,
destroyed or mutilated Revolving Note.
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<PAGE> 78
9E. PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due
presentment for registration of transfer, the Company may treat the Person in
whose name any Revolving Note is registered as the owner and holder of such
Revolving Note for the purpose of receiving payment of principal of and
interest on such Revolving Note and for all other purposes whatsoever, whether
or not such Revolving Note shall be overdue, and the Company shall not be
affected by notice to the contrary. The holder of any Revolving Note may from
time to time grant participations in all or any part of such Revolving Note to
any Person on such terms and conditions as may be determined by such holder in
its sole and absolute discretion, provided that any such participation shall be
in a principal amount of at least $100,000 and that such holder retains the
right, in its discretion, to give consents hereunder (except with respect to
matters referred to in clauses (i), (ii) and (iii) of paragraph 9C).
9F. SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties of the Company or Prudential contained
herein or made in writing by or on behalf of the Company in connection herewith
shall survive the execution and delivery of this Agreement and the Revolving
Notes, the transfer by Prudential of any Revolving Note or portion thereof or
interest therein and the payment of any Revolving Note, and may be relied upon
by any Transferee, regardless of any investigation made at any time by or on
behalf of Prudential or any Transferee. Subject to the preceding sentence,
this Agreement, the Revolving Notes and the other Transaction Documents embody
the entire agreement and understanding between the parties hereto with respect
to the subject matter hereof and supersede all prior agreements and
understandings relating to the subject matter hereof.
9G. SUCCESSORS AND ASSIGNS. All covenants and other agreements in
this Agreement and the other Transaction Documents contained by or on behalf of
any of the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto (including, without limitation,
any Transferee) whether so expressed or not; provided, however, that the
Company may not assign its rights or obligations hereunder to any Person.
9H. NOTICES. All written communications provided for hereunder
shall be sent by first class mail or telegraphic notice or nationwide overnight
delivery service (with charges prepaid) or by hand delivery or telecopy and (i)
if to Prudential, addressed as specified for such communications in the Lender
Schedule attached hereto or at such other address as Prudential shall have
specified to the Company in writing, (ii) if to any other holder of any
Revolving Note, addressed to such other holder at such address as such other
holder shall have specified to the Company in writing or, if any such other
holder shall not have so specified an address to the Company, then addressed to
such other holder in care of the last holder of such Revolving Note which shall
have so specified an address to the Company, and (iii) if to the Company,
addressed to it at 701 Harger Road, Suite 190, Oak Brook, Illinois 60521,
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<PAGE> 79
Attention: General Counsel, or if applicable to the facsimile number (708)
575-2401 or at such other address or facsimile number as the Company shall have
specified to the holder of each Revolving Note in writing.
9I. SATISFACTION REQUIREMENT. If any agreement, certificate or
other writing, or any action taken or to be taken, is by the terms of this
Agreement required to be satisfactory to Prudential or to the Required
Holder(s), the determination of such satisfaction shall be made by Prudential
or the Required Holder(s), as the case may be, in the sole and exclusive
judgment (exercised in good faith) of the Person or Persons making such
determination.
9J. GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE
INTERNAL LAW OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO PRINCIPLES OF
CONFLICTS OF LAW.
9K. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is
prohibited by any one of such covenants, the fact that it would be permitted by
an exception to, or otherwise be in compliance within the limitations of,
another covenant shall not (i) avoid the occurrence of a Default or an Event of
Default if such action is taken or such condition exists or (ii) in any way
prejudice an attempt by a holder or the holders of the Revolving Notes to
prohibit (through equitable action or otherwise) the taking of any action by
the Company or a Subsidiary of the Company which would result in any Event of
Default or Default.
9L. BINDING AGREEMENT. When this Agreement is executed and
delivered by the Company and Prudential, it shall become a binding agreement
between the Company and Prudential.
9M. SEVERABILITY. Any provision of this Agreement or the
Revolving Notes which is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
9N. DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.
9O. COUNTERPARTS. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be an original and constitute
one and the same agreement. It shall not be necessary in making proof of this
Agreement to produce or account for more than one such counterpart.
9P. DISCLOSURE TO OTHER PERSONS. Prudential agrees to use its
best efforts to hold in confidence and not disclose any
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Confidential Information; provided that nothing herein shall prevent Prudential
from delivering or disclosing (and the Company acknowledges that Prudential may
deliver or disclose) any financial statements and other documents delivered to
it, and any other information disclosed to it (including, but not limited to,
Confidential Information), by or on behalf of the Company or any Subsidiary in
connection with or pursuant to this Agreement or any other Transaction Document
to (i) its directors, officers, employees, agents and professional consultants,
(ii) any other holder of any Revolving Note, (iii) any Person to which it
offers to sell any Revolving Note or any part thereof, (iv) any Person to which
it sells or offers to sell a participation in all or any part of any Revolving
Note, (v) any Person from which it offers to purchase any security of the
Company, (vi) any federal or state regulatory authority having jurisdiction
over it, (vii) the National Association of Insurance Commissioners or any
similar organization or (viii) any other Person to which such delivery or
disclosure may be necessary or appropriate (a) to effect compliance with any
law, rule, regulation or order applicable to Prudential, (b) in response to any
subpoena or other legal process, (c) in connection with any litigation to which
it is a party or (d) in order to protect its investment in any Revolving Note;
provided, however, that no Confidential Information shall be disclosed to any
Person described in clause (ii), (iii), (iv) or (v) unless such Person has
agreed to the provisions of this paragraph 9P. "CONFIDENTIAL INFORMATION"
shall mean, with respect to Prudential, any written information delivered or
made available by or on behalf of the Company or any Subsidiary to Prudential
pursuant to this Agreement or any Collateral Document which is clearly marked
or labeled as being confidential information, but in no event shall include
information (i) which was publicly known or otherwise known to Prudential at
the time of disclosure, (ii) which subsequently becomes publicly known through
no act or omission by Prudential, or (iii) which otherwise becomes known to
Prudential, other than through disclosure by or on behalf of the Company or any
Subsidiary.
9Q. JURISDICTION, SERVICE OF PROCESS. The Company irrevocably
agrees that any suit, action or proceeding against the Company with respect to
this Agreement or any Transaction Document may be brought in the courts of New
York County in the State of New York or in the U.S. District Court for the
Southern District of New York, and the Company accepts for itself, generally
and unconditionally, and hereby submits to the non-exclusive jurisdiction of
each such court for the purpose of any such suit, action or proceeding. The
Company hereby waives personal service of any and all process upon it and
irrevocably agrees that service of all writs, process and summonses in any such
suit, action or proceeding brought in any such court may be made upon the
Person to whom notices to the Company may be sent under paragraph 9H hereof,
and hereby irrevocably appoints such Person as its agent in its name, place and
stead to accept on the Company's behalf such service of any and all such writs,
process and summonses and the Company hereby irrevocably authorizes and directs
such Person to
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accept such service on its behalf, and agrees that the failure of such Person
to give any notice of any such services of process to the Company shall not
impair or affect the validity of such service or of any judgment based upon
same. The Company further irrevocably consents to the service of process in
any suit, action or proceeding in said courts by the mailing thereof by
Prudential or any holder of any Revolving Note by registered or certified mail,
postage prepaid, to the Company at its address given in paragraph 9H hereof.
The foregoing shall not, however, limit the right of Prudential or any holder
of any Revolving Note to serve process in any other manner permitted by law or
to commence any suit, action or proceeding or to obtain execution of judgment
in any appropriate jurisdiction. Without limiting the foregoing, the Company
further agrees that Prudential or any holder of any Revolving Note may at its
option submit any dispute which may arise in connection with this Agreement or
any Transaction Document to any other court having jurisdiction over the
Company's property. The Company irrevocably waives and releases any defense or
objection which it may now or hereafter have relating to the institution of any
suit, action or proceeding arising out of or relating to this Agreement or of
any Transaction Document brought in the courts of New York County in the State
of New York or the U.S. District Court for the Southern District of New York,
including, without limitation, all defenses or objections relating to service
of process, personal jurisdiction and the laying of venue, and the Company
further irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in an inconvenient forum.
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Very Truly Yours,
ENVIRODYNE INDUSTRIES, INC.
By: ______________________________
Its: _____________________________
The foregoing Agreement is hereby accepted
as of the date first above written.
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: _________________________
Title: _____________________
<PAGE> 83
LENDER SCHEDULE
ENVIRODYNE INDUSTRIES, INC.
<TABLE>
<CAPTION>
Aggregate
Face
Amount of
Revolving Note
Notes Denominations
---------- -------------
<S> <C> <C>
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA $20,000,000 $20,000,000
</TABLE>
(1) All payments on account of Revolving
Notes held by such lender shall be
made by wire transfer of immediately
available funds for credit to:
Account No. 050-54-526
Morgan Guaranty Trust Company
of New York
23 Wall Street
New York, New York 10015
(ABA No.: 021-000-238)
Each such wire transfer shall set
forth the name of the Company, a
reference to "Senior Secured Revolving
Note due June 20, 1998, Security No.
!INV5116!", and the due date and
application (as among principal,
interest and facility fees) of the
payment being made.
(2) Address for all notices relating to payments:
The Prudential Insurance Company
of America
c/o Prudential Capital Group
Four Gateway Center
100 Mulberry Street
Newark, New Jersey 07102
Attention: Investment Administration
Unit
Telecopy: (201) 802-7551
<PAGE> 84
(3) Address for all other communications
and notices (exclusive of requests for
Revolving Loans, the address for which
appears on the Information Schedule):
The Prudential Insurance Company
of America
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Attention: Managing Director
Telecopy: (312) 540-4222
(4) Recipient of telephonic prepayment notices:
Manager, Asset Management Unit
Telephone: (201) 802-6429
Telecopy: (201) 802-7551
(5) Tax Identification No.: 22-1211670
<PAGE> 85
INFORMATION SCHEDULE
Address for The Prudential Insurance Company of America
The Prudential Insurance Company of America
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Authorized Officers of the Company
Name Title
---- -----
Gordon S. Donovan Treasurer
J.S. Corcoran Executive Vice President and
Chief Financial Officer
Stephen M. Schuster Vice President
<PAGE> 86
EXHIBIT A
[FORM OF REVOLVING NOTE]
ENVIRODYNE INDUSTRIES, INC.
SENIOR SECURED REVOLVING NOTE
No. _____ [Date]
$________
FOR VALUE RECEIVED, the undersigned, Envirodyne Industries, Inc.
(herein called the "Company"), a corporation organized and existing under the
laws of the State of Delaware, hereby promises to pay to The Prudential
Insurance Company of America (the "Lender"), or registered assigns, the
principal sum TWENTY MILLION DOLLARS ($20,000,000), or, if less, the aggregate
principal amount of all Revolving Loans made by Lender to the Company pursuant
to the Agreement referred to below, on or before the Revolving Loans
Termination Date.
The Company also promises to pay to Lender interest for any Rate
Period, computed on the basis of actual days outstanding during such Rate
Period and on the basis of a year of 360 days, on the first Business Day of the
following Rate Period, on the unpaid principal balance outstanding hereunder,
(i) from the date hereof until the principal hereof shall have become due and
payable (whether by acceleration or otherwise) at the rate per annum specified
in the Agreement, such interest rate to change when and as provided therein,
and (ii) after such date until paid at a rate per annum which shall be 2.00%
per annum in excess of the rate per annum specified in the foregoing clause
(i).
Payments of principal of, interest on and any fees payable with
respect to this Note are to be made at the main office of Morgan Guaranty Trust
Company of New York in New York City or at such other place as the holder
hereof shall designate to the Company in writing, in lawful money of the United
States of America.
This Note is the Revolving Note (herein called the "Note") issued
pursuant to a Revolving Credit Agreement, dated as of June __, 1995 (as such
Revolving Credit Agreement is amended, supplemented or otherwise modified, the
"Agreement"), between the Company and The Prudential Insurance Company of
America and is entitled to the benefits thereof. Capitalized terms used and
not otherwise defined herein shall have the meanings provided in the Agreement.
This Note is a registered Note and, as provided in the Agreement, upon
surrender of this Note for registration of transfer, duly endorsed, or
accompanied by a written instrument of transfer duly executed, by the
registered holder hereof or such holder's attorney duly authorized in writing,
a new Note for a like principal amount will be issued to, and registered in the
name of, the transferee. Prior to due presentment for
<PAGE> 87
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company shall not be affected by any notice to
the contrary.
This Note is secured by certain properties and assets of the Company
and its Subsidiaries as set forth in the Collateral Documents and is guaranteed
by the Guaranty Agreement.
As provided in the Agreement, this Note is subject to mandatory and
optional prepayment, in whole or from time to time in part, on the terms
specified in the Agreement.
In case an Event of Default shall occur and be continuing, the
principal of this Note may be declared or otherwise become due and payable in
the manner and with the effect provided in the Agreement.
THIS NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE
WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
ENVIRODYNE INDUSTRIES, INC.
By:______________________________
Title:
<PAGE> 88
EXHIBIT J
[FORM OF REVOLVING LOAN REQUEST]
[Date]
Manager, Investment Operations Group
The Prudential Insurance Company of America
12 Gateway Center 3
Newark, New Jersey 07102
Dear Sir or Madam:
The undersigned, Envirodyne Industries, Inc., a Delaware
corporation (the "Company"), refers to the Revolving Credit Agreement, dated as
of June __, 1995 (as amended, restated, modified or supplemented from time to
time, the "Agreement", the terms defined therein being used herein as therein
defined), between you and the Company, and hereby requests pursuant to
paragraph 1E of the Agreement a Revolving Loan as follows:
(i) The LIBOR Business Day of the proposed Revolving Loan
is _________________, 19____.
(ii) The aggregate amount of the proposed Revolving Loan
is $________________.
The undersigned hereby certifies that the following statements
are true and correct on the date hereof, and will be true and correct on the
date of the proposed Revolving Loan and in connection therewith represents and
warrants to you as follows:
(A) the representations and warranties contained in paragraph
6 of the Agreement and in the other Transaction Documents are true and correct
on and as of the date hereof and will be true and correct upon giving effect to
the proposed Revolving Loan and the application of proceeds therefrom, in each
case as though made on and as of such date;
(B) no event has occurred and is continuing, or would
result from such proposed Revolving Loan or from the application of the
proceeds therefrom, which does or would constitute a Default or Event of
Default;
(C) upon giving effect to the Revolving Loan requested
herein, the aggregate amount of outstanding Revolving Loans will not exceed the
lesser of (i) the Revolving Commitment or (ii) the Borrowing Base specified in
the certificate most recently delivered pursuant to paragraph 2A(8) or 3A of
the Agreement, as the case may be; and
(D) none of the proceeds of the Revolving Loan requested
herein will be used to finance directly or indirectly a Hostile Tender Offer.
Very truly yours,
ENVIRODYNE INDUSTRIES, INC.
By:___________________________
Title:________________________
<PAGE> 1
EXHIBIT 10.13
================================================================================
CREDIT AGREEMENT
$28,000,000
among
ENVIRODYNE INDUSTRIES, INC.
as Borrower,
EACH OF THE FINANCIAL INSTITUTIONS
INITIALLY A SIGNATORY HERETO,
TOGETHER WITH THOSE ASSIGNEES
PURSUANT TO SECTION 11.8 HEREOF,
as Lenders,
and
BT COMMERCIAL CORPORATION,
as Agent
DATED AS OF JUNE 20, 1995
================================================================================
<PAGE> 2
TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 General Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Other Terms; Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 2. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.1 Issuance of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.2 Terms of Letters of Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.3 Notice of Issuance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.4 Lenders' Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.5 Payments of Amounts Drawn Under Letters of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.6 Payment by Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.7 Nature of Issuing Bank's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
2.8 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.9 Agent's Execution of Applications and Other
Issuing Bank Documentation; Reliance on Credit
Agreement by Issuing Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.10 Additional Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 3. REVOLVING LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.1 Revolving Credit Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2 Borrowing of Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.3 Notice of Request for Lender Advances . . . . . . . . . . . . . . . . . . . . . . . . 34
3.4 Periodic Settlement of Agent Advances;
Interest and Fees; Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.5 Sharing of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.6 Defaulting Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
ARTICLE 4. COMPENSATION, REPAYMENT AND REDUCTION OF
COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.1 Interest on Revolving Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.2 Unused Line Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.3 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.4 Interest After Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.5 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.6 Mandatory Payment; Reduction of Commitments . . . . . . . . . . . . . . . . . . . . . 38
4.7 Maintenance of Loan Account; Statements of
Account . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.8 Payment Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.9 Collection of Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.10 Distribution and Application of Collections
and other Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.11 Calculations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
ARTICLE 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.1 Conditions Precedent to Initial Letter of
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
5.2 Conditions Precedent to all Letters of
</TABLE>
i
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----
<S> <C> <C>
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 6. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.1 Organization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.2 Power and Authority; Enforceability . . . . . . . . . . . . . . . . . . . . . . . . 43
6.3 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.4 Actions Pending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.5 Outstanding Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.6 Title to Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
6.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.8 Conflicting Agreements and Other Matters . . . . . . . . . . . . . . . . . . . . . 45
6.9 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
6.10 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.11 Governmental Consent and Other Third Party
Consents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.12 Environmental Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.13 Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.14 Regulatory Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.15 Permits and Other Operating Rights . . . . . . . . . . . . . . . . . . . . . . . . 47
6.16 Absence of Other Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
6.17 Security Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 7. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.1 Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
7.2 Collateral Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.3 Notification Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
7.4 Corporate Existence; Conduct of Business . . . . . . . . . . . . . . . . . . . . . 52
7.5 Books and Records; Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.6 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.7 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.8 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.9 Maintenance of Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.10 Guaranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.11 Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
ARTICLE 8. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
8.1 Certain Financial Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
8.2 Limitation on Restricted Payments and
Restricted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
8.3 Limitation on Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
8.4 Limitation on Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
8.6 Limitation on Certain Asset Sales and
Subsidiary Mergers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
8.7 Limitation on Payment Restrictions Affecting
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8.8 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
8.9 Limitations on the Sale of Stock and Debt of
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.10 Sale and Lease-Back Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.11 Sale or Discount of Receivables . . . . . . . . . . . . . . . . . . . . . . . . . . 66
</TABLE>
ii
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8.12 Pension Plan Funding Deficiency . . . . . . . . . . . . . . . . . . . . . . . . . . 66
8.13 Limitation on Issuance and Sale of Capital
Stock of Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
8.14 Limitation on Fiscal Year Changes . . . . . . . . . . . . . . . . . . . . . . . . . 67
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.2 Acceleration, Termination of Commitments and
Cash Collateralization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
9.3 Rescission of Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.4 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.5 Right of Setoff . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.6 Application of Proceeds; Surplus;
Deficiencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
ARTICLE 10. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.1 Appointment of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.2 Nature of Duties of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.3 Lack of Reliance on Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
10.4 Certain Rights of the Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.5 Reliance by Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.6 Indemnification of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.7 BTCC in its Individual Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.8 Successor Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.9 Collateral Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.10 Actions with Respect to Defaults . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.11 Protection of Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
ARTICLE 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.1 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.2 SUBMISSION TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.3 SERVICE OF PROCESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.4 JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.5 LIMITATION OF LIABILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
11.6 Delays . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.7 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.8 Assignments and Participation . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.9 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.10 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
11.11 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
11.12 Counterparts and Effectiveness . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.14 Maximum Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
11.15 Entire Agreement; Successors and Assigns . . . . . . . . . . . . . . . . . . . . . 80
</TABLE>
iii
<PAGE> 5
ANNEXES
Annex I - List of Lenders and Commitment Amounts
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
Exhibit A - Form of Borrowing Base Certificate
Exhibit B - Form of Collateral Access Agreement
Exhibit C - Form of Guaranty Agreement
Exhibit D - Form of Intellectual Property Security Agreement
Exhibit E - Form of Mortgage
Exhibit F - Form of Pledge Agreement
Exhibit G - Form of Revolving Note
Exhibit H - Form of Security Agreement
Exhibit I - Form of Letter of Credit Request
Exhibit J - Form of Auditors' Privity Letter
Exhibit K - Form of Compliance Certificate
Exhibit L - Form of Assignment and Assumption Agreement
<CAPTION>
SCHEDULES
<S> <C>
Schedule A - Closing Document List
Schedule B - Disclosure Schedule
Schedule C - Permitted Account Concentrations
Schedule 8.2 - Permitted Investments
Schedule 8.3 - Permitted Debt
Schedule 8.4 - Permitted Liens
Schedule 8.7 - Permitted Payment Restrictions
</TABLE>
iv
<PAGE> 6
THIS CREDIT AGREEMENT is entered into as of June 20, 1995, among
Envirodyne Industries, Inc., a Delaware corporation (the "Borrower"), each
financial institution identified on Annex I (together with its successors and
assigns, a "Lender"), and BT COMMERCIAL CORPORATION ("BTCC"), acting in its
capacity as agent for the Lenders (the "Agent").
ARTICLE 1. DEFINITIONS.
1.1 General Definitions.
Accounts means "Accounts" as defined in the Security Agreements.
Acquired Debt means Debt of a Person existing on or prior to the time
at which such Person became a Subsidiary and not incurred in connection with,
or in contemplation of, such Person becoming a Subsidiary.
Affiliate of any specified Person means any other Person (i) which
directly or indirectly through one or more intermediaries Controls, or is
Controlled by, or is under common Control with such specified Person, (ii) which
beneficially owns or holds 10% or more of any class of the Voting Securities of
such specified Person, or (iii) of which 10% or more of the Voting Securities is
beneficially owned or held by such specified Person or by a Subsidiary of such
specified Person.
Agent Advances has the meaning set forth in Section 3.2.
Assignment and Assumption Agreement has the meaning set forth in
Section 11.8.
Auditors means a nationally recognized firm of independent public
accountants selected by the Borrower and satisfactory to the Agent in its sole
discretion. For purposes of this Credit Agreement, the firm of Coopers &
Lybrand shall be deemed to be satisfactory to the Agent.
Average Life means, as of any date, with respect to any debt security,
the quotient obtained by dividing (i) the sum of the products of (x) the numbers
of years from such date to the dates of each successive scheduled principal
payment (including any sinking fund or mandatory redemption payment
requirements) of such debt security multiplied by (y) the amount of such
principal payment by (ii) the sum of all such principal payments.
Banks means, collectively, Bank of America Illinois, Citibank
International PLC and Citicorp North America, Inc., as agents under the Credit
Agreement dated December 31, 1993.
Borrower means Envirodyne Industries, Inc.
<PAGE> 7
Borrowing Base means the sum of:
(A) ninety percent (90%) of Eligible Accounts Receivable,
plus
(B) sixty-five percent (65%) of Eligible Inventory, plus
(C) cash held by the Collateral Agent in the Cash
Collateral Account, minus
(D) the aggregate amount of reserves, if any, established
by the Agent.
The Agent, in the exercise of its Permitted Discretion, may (i) establish and
increase or decrease reserves against Eligible Accounts Receivable and Eligible
Inventory and (ii) impose additional restrictions (or eliminate the same) to
the standards of eligibility set forth in the definitions of "Eligible Accounts
Receivable" and "Eligible Inventory."
Borrowing Base Certificate means the certificate of the Borrower
concerning the Borrowing Base to be provided under Section 7.2, substantially in
the form of Exhibit A.
Broad Affiliate of any specified Person means any other Person (i)
which directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with such specified Person, (ii)
which beneficially owns or holds 25% or more of any class of the Voting
Securities of such specified Person, or (iii) of which 25% or more of the
Voting Securities is beneficially owned or held by such specified Person or by
a Subsidiary of such specified Person.
Business Day means any day that is not a Saturday, Sunday or a day on
which commercial banks in Chicago, Illinois or New York, New York are required
or permitted by law to be closed. Capital Lease Obligation means, at any time,
the amount of the liability with respect to a lease that would be required at
such time to be capitalized on a balance sheet of such Person prepared in
accordance with GAAP. Capital Stock in any Person means any and all shares,
interests, participations or other equivalents in the equity interest (however
designated) in such Person and any rights (other than debt securities
convertible into an equity interest), warrants or options to acquire an equity
interest in such Person.
Cash Collateral Account means the "Special Cash Collateral Account"
created pursuant to Section 5(b) of the Collateral Agency Agreement.
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Cash Equivalents means: (i) debt instruments, with maturities of one
year or less from the date of acquisition, issued by the government of the
United States of America or any agency thereof (if fully guaranteed or insured
by the government of the United States of America), (ii) certificates of
deposit, with maturities of one year or less from the date of acquisition, of
any commercial bank incorporated under the laws of the United States of America
having a combined capital, surplus and undivided profits of not less than
$100,000,000, (iii) commercial paper of an issuer rated at least A-1 by
Standard & Poor's Corporation or P-1 by Moody's Investors Service, Inc., and
(iv) tax exempt floating rate tender bonds, as to which payments of principal,
interest and other charges may be made at the option of the holder upon not
more than one week's notice which are payable upon tender or any default from
the proceeds of an unconditional and irrevocable letter of credit issued by a
United States office of any commercial bank all of whose long-term debt
securities are rated at least AA by Standard & Poor's Corporation or Aa by
Moody's Investors Service, Inc.
Change of Control means the occurrence of any of the following events
(whether or not approved by the Board of Directors of the Borrower or otherwise
permitted by the terms of this Credit Agreement): (i) any person (as such term
is used in Sections 13(d) and 14(d) of the Exchange Act), or any Affiliate of
any such person who is or becomes a "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all shares that any such person has the right to
acquire whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the Common Stock of the
Borrower or such other amount of Voting Securities to provide the ability to
elect, directly or indirectly, a majority of the members of the Board of
Directors of the Borrower; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Borrower (together with any new or replacement directors whose
election by such Board or whose nomination for election by the shareholders of
the Borrower was approved by a vote of a majority of the directors of the
Borrower 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) cease for any reason to constitute a majority of the Board of
Directors of the Borrower then in office; (iii) any direct or indirect Transfer
(in one transaction or a series of related transactions) of all or
substantially all of the consolidated assets of the Borrower and its
Subsidiaries to any person (as such term is used in Sections 13(d) and 14(d) of
the Exchange Act) or any Affiliate of any such person; (iv) the approval by the
Borrower or its shareholders of any plan of liquidation; or (v) any other event
constituting a "change of control" in respect of the 10.25% Notes, the
Prudential Revolving Credit Agreement, the First Priority Notes, the
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Subsequent First Priority Notes, the Second Priority Notes or the Subsequent
Second Priority Notes.
Closing Date means the date of execution and delivery of this Credit
Agreement.
Closing Document List has the meaning set forth in Section 5.1.
Code has the meaning set forth in Section 1.3.
Collateral means the Accounts, Inventory and other Property identified
as security for the Obligations under the Collateral Documents.
Collateral Access Agreement means any landlord waiver, mortgagee
waiver, bailee letter or any similar acknowledgement agreement of any
warehouseman or processor in possession of Inventory, substantially in the form
of Exhibit B.
Collateral Agency Agreement means the Intercreditor and Collateral
Agency Agreement of even date herewith among the Agent, BTCC, Prudential and
the First Priority Notes Indenture Trustee, as modified, amended, extended,
restated or supplemented from time to time.
Collateral Documents means the Security Agreements, the Intellectual
Property Security Agreements, the Pledge Agreements, the Mortgages and all
other contracts, instruments and other documents pursuant to which Liens are
now or hereafter granted (or purported to be granted) to the Collateral Agent,
for the benefit of the "Secured Parties" (as defined in the Collateral Agency
Agreement), as any of the foregoing are modified, amended, extended, restated
or supplemented from time to time.
Collection Account has the meaning set forth in Section 4.9.
Collections means all cash, funds, checks, notes, instruments and any
other form of remittance tendered by account debtors in payment of Accounts.
Commitment of a Lender means its commitment to make Revolving Loans
and to participate in Letters of Credit, up to the amount set forth opposite
its name on Annex I, as such amount may be reduced from time to time.
Common Stock means, with respect to any Person, any and all shares,
interests, participation or other equivalent (however designated) of Capital
Stock in such Person which is not preferred as to the payment of dividends or
the distribution of assets on any voluntary or involuntary liquidation over
shares of any other class of Capital Stock in such Person.
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Consolidated Cash Flow means, for any period, Consolidated Net Income
for such period, (A) increased by the sum of (i) Consolidated Fixed Charges for
such period, other than interest capitalized by the Borrower and its
Subsidiaries during such period, (ii) income tax expense of the Borrower and
its Subsidiaries, on a consolidated basis, for such period (other than income
tax expense attributable to sales or other dispositions of assets (other than
sales of inventory in the ordinary course of business)), (iii) depreciation
expense of the Borrower and its Subsidiaries, on a consolidated basis, for such
period, (iv) amortization expense of the Borrower and its Subsidiaries, on a
consolidated basis, for such period, and (v) other non-cash items reducing
Consolidated Net Income minus non-cash items increasing Consolidated Net Income
for such period, and (B) decreased by any revenues received or accrued by the
Borrower or any of its Subsidiaries from any other Person (other than the
Borrower or any of its Subsidiaries) in respect of any Investment for such
period, all as determined in accordance with GAAP.
Consolidated Debt means the aggregate amount of Debt of the Borrower
and its Subsidiaries, on a consolidated basis, determined in accordance with
GAAP.
Consolidated Entity means the Borrower and those of its Subsidiaries
consolidated with it for purposes of financial reporting.
Consolidated Fixed Charges means, for any period, (A) the sum of,
without duplication, (i) the aggregate amount of interest expense of the
Borrower and its Subsidiaries during such period (including, without limitation,
all commissions, discounts and other fees and charges owed by the Borrower and
its Subsidiaries with respect to letters of credit and bankers' acceptances or
similar financing facilities and the net costs associated with Interest Rate
Agreements and Currency Agreements of the Borrower and its Subsidiaries) paid,
accrued or scheduled to be paid or accrued during such period, including
interest expense not required to be paid in cash (including any amortization of
original issue debt discount), all determined in accordance with GAAP, plus all
interest capitalized by the Borrower and its Subsidiaries during such period,
(ii) the aggregate amount of the interest expense component of rentals in
respect of Capital Lease Obligations paid or accrued by the Borrower and its
Subsidiaries during such period, determined in accordance with GAAP, (iii) the
aggregate amount of all operating lease expense of the Borrower and its
Subsidiaries during such period, determined in accordance with GAAP, and (iv) to
the extent any interest payment obligation of any other Person is guaranteed by
the Borrower or any of its Subsidiaries (other than guarantees relating to
obligations of customers of the Borrower or any of its Subsidiaries that are
made in the ordinary course of business consistent with past practices of the
Borrower or its
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<PAGE> 11
Subsidiaries), the aggregate amount of interest paid or accrued by such Person
in accordance with GAAP during such period attributable to any such interest
payment obligation, less (B) to the extent included in (A) above, amortization
or write-off of deferred financing costs by the Borrower and its Subsidiaries
during such period; in each case after elimination of intercompany accounts
among the Borrower and its Subsidiaries and as determined in accordance with
GAAP.
Consolidated Intangible Assets means, as at any date, (i) the amount of
all write-ups in the book value of any asset resulting from the revaluation
thereof and all write-ups in excess of the cost of assets acquired, plus (ii)
the amount of all unamortized original issue discount, unamortized debt expense,
goodwill, patents, trademarks, service marks, trade names, copyrights,
organization and development expense and other intangible assets, in each case
as would be taken into account in preparing a consolidated balance sheet of the
Borrower and its Subsidiaries on a consolidated basis as at such date in
accordance with GAAP. Consolidated Net Income means, for any period, the
aggregate net income (or net loss, as the case may be) of the Borrower and its
Subsidiaries for such period on a consolidated basis, determined in accordance
with GAAP; provided, that there shall be excluded therefrom, without
duplication, (i) gains and losses from the sale or other disposition of assets
(other than sales of inventory in the ordinary course) or reserves relating
thereto, (ii) items classified as extraordinary or nonrecurring (including,
without limitation, any gains from any exchange of debt securities) and gains
(but not losses) from discontinued operations, (iii) the income (or loss) of any
Joint Venture, except to the extent of the amount of cash dividends or other
distributions in respect of Capital Stock therein actually paid during such
period to the Borrower or any of its Subsidiaries by such Joint Venture out of
funds legally available therefor (or, in the case of a loss, to the extent the
Borrower or any such Subsidiary funds such loss during such period), (iv) except
to the extent it may be included pursuant to clause (iii), the income (or loss)
of any other Person accrued or attributable to any period prior to the date it
becomes a Subsidiary of such Person or is merged into or consolidated with such
Person or any of its Subsidiaries or such other Person's Property (or a portion
thereof) is acquired by such Person or any of its Restricted Subsidiaries, and
(v) non-cash items decreasing or increasing Consolidated Net Income arising out
of currency translation effects.
Consolidated Net Worth means Net Worth without giving effect to any
purchase accounting adjustments if Consolidated Net Worth is being determined
in connection with any merger, consolidation or other acquisition of, or by,
the Borrower or any of its Subsidiaries.
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Consolidated Secured Debt means, collectively, the outstanding
principal balance of the Debt described in Sections 8.3(a)(i) and (a)(iv) and
the unpaid principal amount of the Revolving Loans and that portion of the
Letter of Credit Obligations constituting unreimbursed draws under Letters of
Credit for which a Revolving Loan has not yet been funded.
Consolidated Senior Debt means, at any time, all Consolidated Debt at
such time, other than the then outstanding principal amount of: (i) the 10.25%
Notes, (ii) the Second Priority Notes, (iii) the Subsequent Second Priority
Notes, (iv) Debt of any Subsidiary of the Borrower payable to the Borrower or
any Wholly Owned Subsidiary of the Borrower, and (v) Debt of the Borrower that
is not secured by a Lien or that is junior in right of payment, and subordinate
to, the Obligations pursuant to subordination terms in form and substance
acceptable to the Agent and Lenders, which Debt matures after the maturity date
of the First Priority Notes, and has no principal payments scheduled until, a
date which is at least six (6) months after the maturity date of the First
Priority Notes.
Consolidated Tangible Net Worth means, at any time, Consolidated Net
Worth at such time, less Consolidated Intangible Assets at such time.
Consolidated Total Capitalization means, at any time, the sum of: (i)
Consolidated Net Worth at such time, plus (ii) Consolidated Debt.
Control means (except as otherwise specifically provided herein) the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Securities, by agreement or otherwise; and the terms
"Controlling" and "Controlled" have meanings correlative to the foregoing.
Control Group means a controlled group of corporations within the
meaning of Section 414(b) of the Internal Revenue Code of which the Borrower is
a member, any group of corporations or entities under common control with the
Borrower within the meaning of Section 414(c) of the Internal Revenue Code of
which the Borrower is a member or any affiliated service group within the
meaning of Section 414(m) of the Internal Revenue Code of which the Borrower is
a member.
Credit Documents means, collectively, this Credit Agreement, the
Revolving Notes, each of the Collateral Documents, the Guaranty Agreement and
all other documents, agreements, instruments, opinions and certificates now or
hereafter executed by the Borrower, a Significant Domestic Subsidiary or any
other Credit Party and delivered to the Agent or any Lender in connection
herewith or therewith, as modified, amended, extended, restated or supplemented
from time to time.
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Credit Parties means, collectively, the Borrower and any other parties
to the Credit Documents (except the Lenders, the Agent, the Issuing Bank, the
Collateral Agent and issuers of opinions).
Currency Agreement of any Person means any foreign exchange contract,
currency swap agreement, option or futures contract or other similar agreement
or arrangement designed to protect such Person or any of its Subsidiaries
against fluctuations in currency values (as opposed to being used in any way
for speculative trading purposes).
Current Debt means, with respect to any Person, all Indebtedness of
such Person for borrowed money which by its terms or by the terms of any
instrument or agreement relating thereto matures on demand or within one year
from the date of the creation thereof and is not directly or indirectly
renewable or extendible at the option of the debtor to a date more than one year
from the date of the creation thereof, provided that Indebtedness for borrowed
money outstanding under a revolving credit or similar agreement which obligates
the lender or lenders to extend credit over a period of more than one year shall
constitute Funded Debt and not Current Debt, even though such Indebtedness by
its terms matures on demand or within one year from the date of the creation
thereof.
Debt shall mean Current Debt and Funded Debt.
Default means an event, condition or default which with the giving of
notice, the passage of time or both would be an Event of Default.
Defaulting Lender has the meaning set forth in Section 3.6.
Domestic Subsidiary means any Subsidiary of the Borrower organized
under the laws of any state of the United States of America or the District of
Columbia.
DPK means D.P. Kelly & Associates, L.P., a Delaware limited
partnership, and its successors and assigns.
Eligible Accounts Receivable means Accounts of the Borrower and its
Significant Domestic Subsidiaries deemed by the Agent in the exercise of its
commercially reasonable judgement to be eligible for inclusion in the
calculation of the Borrowing Base. In determining the amount to be so included,
the face amount of such Accounts shall be reduced by the amount of all returns,
discounts, deductions, claims, credits, charges, or other allowances. Unless
otherwise approved in writing by the Agent, no Account shall be deemed to be an
Eligible Account Receivable if:
(a) it arises out of a sale made by the Borrower or any
of its Significant Domestic Subsidiaries to an Affiliate; or
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<PAGE> 14
(b) it is unpaid more than 60 days after the original
payment due date specified in the related invoice or it is unpaid more
than 120 days after the initial date of such invoice, based on the
Borrower's reasonable estimate thereof; or
(c) it is from the same account debtor or its Affiliate
and fifty percent (50%) or more of all Accounts from that account
debtor (and its Affiliates) are ineligible under (b) above; or
(d) when aggregated with all other Accounts of an account
debtor, the Account exceeds fifteen percent (15%) in face value of all
Accounts of the Borrower and its Significant Domestic Subsidiaries on
a consolidated basis then outstanding, to the extent of such excess,
unless supported by an irrevocable letter of credit satisfactory to
the Agent (as to form, substance and issuer) and assigned to and
directly drawable by the Collateral Agent excluding, for purposes of
the limitation imposed by this paragraph (e), Accounts of the account
debtors listed on Schedule C; or
(e) the account debtor for the Account is a creditor of
the Borrower or any of its Significant Domestic Subsidiaries, has or
has asserted a right of setoff, has disputed its liability or made any
claim with respect to the Account or any other Account which has not
been resolved, to the extent of the amount owed by the Borrower or any
of its Significant Domestic Subsidiaries to the account debtor, the
amount of such actual or asserted right of setoff, or the amount of
such dispute or claim, as the case may be, unless a reduction has
already been made to the amount of the Account as a result of the
dispute, claim or assertion of set-off rights pursuant to the first
sentence of this definition; or
(f) the account debtor is (or its assets are) the subject
of an Insolvency Event; or
(g) the Account is not payable in Dollars or the account
debtor for the Account is located outside the continental United
States, unless the Account is supported by an irrevocable letter of
credit satisfactory to the Agent (as to form, substance and issuer) or
the Account is insured as to collectibility and political risk
pursuant to a commercial risk insurance policy acceptable to the Agent
(as to form, substance and issuer); or
(h) the sale to the account debtor is on a bill-and-hold,
guarantied sale, sale-and-return, sale on approval or consignment
basis or made pursuant to any other written agreement providing for
repurchase or return; or
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<PAGE> 15
(i) the Agent determines by its own credit analysis that
collection of the Account is uncertain or the Account may not be paid;
or
(j) the account debtor is the United States of America or
any department, agency or instrumentality thereof, unless the Borrower
or any of its Significant Domestic Subsidiaries duly assigns its
rights to payment of such Account to the Collateral Agent pursuant to
the Assignment of Claims Act of 1940, as amended (31 U.S.C. Section
Section 3727 et seq.); or
(k) the goods giving rise to such Account have not been
shipped and delivered to, or have been rejected by, the account
debtor, or the services giving rise to such Account have not been
performed and accepted; or
(l) the Account does not comply with all Requirements of
Law, including without limitation the Federal Consumer Credit
Protection Act, the Federal Truth in Lending Act and Regulation Z of
the Board of Governors of the Federal Reserve System; or
(m) the Account is subject to any adverse security
deposit, progress payment or other similar advance made by or for the
benefit of the applicable account debtor; or
(n) it is not subject to a valid and perfected first
priority Lien in favor of the Collateral Agent or does not otherwise
conform to the representations and warranties contained in the Credit
Documents.
In addition to the foregoing, Eligible Accounts Receivable shall
include such Accounts for which the Borrower shall request approval and that
the Agent approves in advance, in writing, and in its Permitted Discretion,
which approval shall not prevent the Agent from time to time from revoking such
approval in the exercise of its Permitted Discretion.
Eligible Inventory means the aggregate amount of Inventory of the
Borrower and its Significant Domestic Subsidiaries deemed by the Agent in the
exercise of its commercially reasonable judgement to be eligible for inclusion
in the calculation of the Borrowing Base. In determining the amount to be so
included, Inventory shall be valued at the lower of cost or market on a basis
consistent with the Borrower's or the Significant Domestic Subsidiary's current
and historical accounting practice. Unless otherwise approved in writing by
the Agent, Inventory shall not be deemed Eligible Inventory if:
(a) it is not owned solely by the Borrower or any of its
Significant Domestic Subsidiaries or the Borrower or any of
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its Significant Domestic Subsidiaries does not have good, valid and
marketable title thereto; or
(b) it is not located in the United States; or
(c) it is not located on property owned by the Borrower
or any of its Significant Domestic Subsidiaries (all such Inventory,
the "Off-Site Inventory") and the aggregate value of the Off Site
Inventory exceeds five percent (5%) of the aggregate value of all of
the Inventory of the Borrower and the Significant Domestic
Subsidiaries, unless the lessor or the contract warehouseman or other
Person that owns the premises, as the case may be, has executed and
delivered to the Agent a Collateral Access Agreement in form and
substance acceptable to the Agent and such Inventory is segregated or
otherwise separately identifiable from goods of others, if any, stored
on such premises; or
(d) it is not subject to a valid and perfected first
priority Lien in favor of the Collateral Agent, except with respect to
Inventory stored at sites described in clause (c) above, for Liens for
unpaid rent or normal and customary warehousing charges; or
(e) it consists of goods returned or rejected by the
Borrower's or any of the Significant Domestic Subsidiaries' customers
or goods in transit to third parties (other than to warehouse sites
covered by a Collateral Access Agreement); or
(f) it is not first-quality finished goods,
work-in-process or raw materials, or it is obsolete or slow moving
(unless a reserve has been established with respect to obsolete and
slow moving inventory that is satisfactory to the Agent), or does not
otherwise conform to the representations and warranties contained in
the Credit Documents.
In addition to the foregoing, Eligible Inventory shall include such
items of the Borrower's Inventory for which the Borrower shall request approval
and that the Agent approves in advance, in writing, and in its Permitted
Discretion, which approval shall not prevent the Agent from time to time from
revoking such approval in the exercise of its Permitted Discretion.
ERISA means the Employee Retirement Income Security Act of 1974, 29
U.S.C. Section Section 1000 et seq., amendments thereto, successor statutes,
and regulations or guidance promulgated thereunder.
Event(s) of Default has the meaning set forth in Article 9.
Exchange Act means the Securities Exchange Act of 1934, as amended
from time to time, and the rules and regulations of the SEC promulgated
thereunder.
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Exempted Transactions means (i) transactions with Cargill Financial
Services and its Affiliates (collectively, "Cargill") so long as Cargill is not
a Broad Affiliate of the Borrower; (ii) transactions with Reliance Insurance
Co. and its Affiliates (collectively, "Reliance") so long as Reliance is not a
Broad Affiliate of the Borrower; (iii) purchases of turkey timers from Volk
Enterprises, Inc. and (iv) purchasers of chemicals from Weskem-Hall, Inc.
Expenses means all reasonable costs and expenses of the Agent incurred
in connection with the Credit Documents and the transactions contemplated
therein, including, without limitation, (i) the costs of conducting record
searches, examining Collateral, opening bank accounts and lockboxes, depositing
checks, and receiving and transferring funds (including charges for checks for
which there are insufficient funds), (ii) the reasonable fees and expenses of
legal counsel and paralegals (including the allocated cost of internal counsel
and paralegals), accountants, appraisers and other consultants, experts or
advisors retained by the Agent, (iii) the cost of title insurance premiums,
real estate survey costs, and fees and taxes in connection with the filing of
financing statements, (iv) the costs of preparing and recording Collateral
Documents, releases of Collateral, and waivers, amendments, and terminations of
any of the Credit Documents, and (v) expenses incurred in order to maintain and
protect any of the Collateral in accordance with Sections 7.6 or 10.11.
Expenses also means all reasonable costs and expenses (including the reasonable
fees and expenses of legal counsel and other professionals) paid or incurred by
the Agent and any Lender (i) during the continuance of an Event of Default,
(ii) in enforcing or defending its rights under or in respect of this Credit
Agreement, the other Credit Documents, the Collateral Agency Agreement or any
other document or instrument now or hereafter executed and delivered in
connection herewith, (iii) collecting the Loans, (iv) foreclosing or otherwise
collecting upon the Collateral or any part thereof and (v) in obtaining any
legal, accounting or other advice in connection with any of the foregoing.
Expiration Date means the earlier to occur of (a) June 20, 1998, (b)
the date on which the First Priority Notes or Subsequent First Priority Notes
are prepaid or required to be prepaid in their entirety including, without
limitation, by automatic acceleration or demand for repurchase or (c) the date
on which the Commitments are terminated pursuant to Section 9.2(b).
Federal Funds Rate means, for any period, a fluctuating interest rate
per annum for each day during such period equal 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
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<PAGE> 18
published for any day that 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.
Fees means, collectively, the Unused Line Fee, the Letter of Credit
Fees, the L/C Facing Fee, the Issuing Bank Fees and the fees provided for in
that certain letter dated June 5, 1995 between BTCC and the Borrower.
Financial Statements means the consolidated and/or consolidating
balance sheets, statements of operations, statements of cash flows and
statements of changes in shareholder's equity of the Consolidated Entity for
the period specified, prepared in accordance with GAAP and consistently with
prior practices.
First Priority Notes means any of the Series A First Priority Notes
and Series B First Priority Notes issued under the First Priority Notes
Indenture.
First Priority Note Documents means, collectively, the Note Agreement,
the First Priority Notes Indenture and all other documents, instruments,
agreements, opinions and certificates now or hereafter executed and/or delivered
pursuant thereto or in connection therewith or in connection with the sale or
exchange of the First Priority Notes, as modified, amended, extended, restated
or supplemented from time to time.
First Priority Notes Indenture means the Indenture, dated as of June
20, 1995, between the Borrower and the First Priority Notes Indenture Trustee
under which the First Priority Notes and the Subsequent First Priority Notes
are being issued, as modified, amended, extended, restated or supplemented from
time to time.
First Priority Notes Indenture Trustee means Shawmut Bank Connecticut,
National Association, and any successor or replacement appointed pursuant to the
terms of the First Priority Notes Indenture.
Fiscal Year Change has the meaning set forth in Section 8.14.
Funded Debt means, with respect to any Person, all Indebtedness of
such Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, more than
one year from, or is directly or indirectly renewable or extendable at the
option of the debtor to a date more than one year (including an option of the
debtor under a revolving credit or similar agreement obligating the lender or
lenders to extend credit over a period of more than one year) from, the date of
the creation thereof.
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GAAP means generally accepted accounting principles in the United
States as in effect from time to time.
GECC means General Electric Capital Corporation, a New York
corporation, and its successors and assigns.
GECC Intercreditor Agreements means the intercreditor and
subordination agreements among the Collateral Agent, GECC, Shawmut Bank
Connecticut, National Association, as Owner Trustee, and the Borrower dated as
of June 20, 1995, as amended, extended, restated or supplemented from time to
time.
GECC Lease Documents means (i) the Lease Agreement dated as of
December 18, 1990 between The Connecticut National Bank (now known as Shawmut
Bank Connecticut, National Association) ("TCNB"), Owner Trustee, as lessor and
Viskase Corporation, as lessee, (ii) the Participation Agreement dated as of
December 18, 1990 among Viskase Corporation, the Borrower, GECC and TCNB and
(iii) the related instruments and agreements with respect thereto, in each case
as the same may have heretofore been or may hereinafter be amended, modified,
restated, renewed or extended or refinanced from time to time.
Governing Documents means certificates or articles of incorporation,
by-laws and other organizational or governing documents.
Governmental Authority means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
Guarantee shall mean, with respect to any Person, any direct or
indirect liability, contingent or otherwise, of such Person with respect to any
indebtedness, lease, dividend or other obligation of another, including, without
limitation, any such obligation directly or indirectly guaranteed, endorsed
(otherwise than for collection or deposit in the ordinary course of business) or
discounted or sold with recourse by such Person, or in respect of which such
Person is otherwise directly or indirectly liable, including, without
limitation, any such obligation in effect guaranteed by such Person through any
agreement (contingent or otherwise) to purchase, repurchase or otherwise acquire
such obligation or any security therefor, or to provide funds for the payment or
discharge of such obligation (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain the solvency or
any balance sheet or other financial condition of the obligor of such
obligation, or to make payment for any products, materials or supplies or for
any transportation or services regardless of the non-delivery or non-furnishing
thereof, in any such case if the purpose or intent of such agreement is to
provide assurance that such obligation will be
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<PAGE> 20
paid or discharged, or that any agreements relating thereto will be complied
with, or that the holders of such obligation will be protected against loss in
respect thereof. The amount of any Guarantee shall be equal to the outstanding
principal amount of the obligation guaranteed or such lesser amount to which
the maximum exposure of the guarantor shall have been specifically limited.
Guaranty Agreement means the Guaranty Agreement executed in favor of
the Collateral Agent by each Significant Domestic Subsidiary, substantially in
the form of Exhibit C, pursuant to which each Significant Domestic Subsidiary
agrees to guaranty payment and performance of the Obligations, as amended,
restated, supplemented or otherwise modified from time to time.
Highest Lawful Rate means, at any given time during which any
Obligations shall be outstanding hereunder, the maximum non-usurious interest
rate that at any time or from time to time may be contracted for, taken,
reserved, charged or received on the Obligations, under the laws of the State of
Illinois (or the law of any other jurisdiction whose laws may be mandatorily
applicable notwithstanding other provisions of this Credit Agreement and the
other Credit Documents), or under applicable federal laws which may presently or
hereafter be in effect and which allow a higher maximum non-usurious interest
rate than under Illinois (or such other jurisdiction's) law, in any case after
taking into account, to the extent permitted by applicable law, any and all
relevant payments or charges under this Credit Agreement and any other Credit
Documents executed in connection herewith, and any available exemptions,
exceptions and exclusions.
Indebtedness means, with respect to any Person, without duplication,
(i) all items (excluding items of contingency reserves or of reserves for
deferred income taxes) which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as of the date on which Indebtedness is to be determined, (ii)
all indebtedness secured by any Lien on any property or asset owned or held by
such Person subject thereto, whether or not the indebtedness secured thereby
shall have been assumed, (iii) all indebtedness of others with respect to which
such Person has become liable by way of a Guarantee (including, without
limitation, all obligations of such Person with respect to surety bonds, bank
acceptances, and letters of credit and other similar obligations), (iv) all
obligations of such Person in respect of Currency Agreements or Interest Rate
Agreements, and (v) the maximum fixed repurchase price of any Redeemable Stock.
For purposes of the preceding sentence, the maximum fixed repurchase price of
any Redeemable Stock that does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Redeemable Stock as if such
Redeemable Stock were repurchased on any date on which Indebtedness shall be
required to be determined hereunder; provided, that if such
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Redeemable Stock is not then permitted to be repurchased, the repurchase price
shall be the book value of such Redeemable Stock.
Insolvency Event means, with respect to any Person, the occurrence of
any of the following: (a) such Person shall be adjudicated insolvent or
bankrupt, or generally fail to pay, or admit in writing its inability to pay,
its debts as they become due, (b) the voluntary commencement of any proceeding
or the filing of any petition under any bankruptcy, insolvency or similar law,
(c) the seeking of dissolution or reorganization or the appointment of a
receiver, trustee, custodian or liquidator for it or a substantial portion of
its property, assets or business or to effect a plan or other arrangement with
its creditors, (d) the filing of any answer admitting the jurisdiction of the
court and the material allegations of an involuntary petition filed against it
in any bankruptcy, insolvency or similar proceeding, (e) such Person shall make
a general assignment for the benefit of its creditors, or shall consent to, or
acquiesce in the appointment of, a receiver, trustee, custodian or liquidator
for a substantial portion of its property, assets or business. Insolvency
Event shall also mean, with respect to any Person, the occurrence of any of the
following: an involuntary proceeding or involuntary petition shall be commenced
or filed against such Person under any bankruptcy, insolvency or similar law
seeking the dissolution or reorganization of it or the appointment of a
receiver, trustee, custodian or liquidator for it or of a substantial part of
its property, assets or business, or any writ, judgment, warrant of attachment,
execution or similar process shall be issued or levied against a substantial
part of its property, assets or business, and such proceedings or petitions
shall not be dismissed, or such writ, judgment, warrant of attachment,
execution or similar process shall not be released, vacated or fully bonded,
within 60 days after commencement, filing, or levy, as the case may be, or any
order for relief shall be entered in any such proceeding.
Intellectual Property Security Agreements means, collectively, each
Intellectual Property Security Agreement executed at any time in favor of the
Collateral Agent by the Borrower or any of its Subsidiaries, substantially in
the form of Exhibit D, as modified, amended, extended, restated or supplemented
from time to time.
Interest Rate Agreement of any Person means any arrangement with any
other Person whereby, directly or indirectly, such Person is entitled to receive
from time to time periodic payments calculated by applying either a floating or
fixed rate of interest on a notional amount in exchange for periodic payments
made by such Person calculated by applying a fixed or floating rate of interest
on the same notional amount and shall include, without limitation, any interest
rate swap agreement, interest rate cap, floor or collar agreement, option or
futures contract or other similar agreements or arrangements, designed to
protect such Persons or any
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of its Subsidiaries from fluctuations in interest rates (as opposed to being
used in any way for speculative trading purposes).
Internal Revenue Code means the Internal Revenue Code of 1986,
amendments thereto, successor statutes, and regulations or guidance promulgated
thereunder.
Inventory means "Inventory" as defined in the Security Agreements.
Investment means, as to any investing Person, any direct or indirect
advance, loan (other than extensions of trade credit on commercially reasonable
terms in the ordinary course of business that are recorded as accounts
receivable on the balance sheet of such Person or any of its Subsidiaries in
accordance with GAAP) or other extension of credit, guarantee or capital
contribution to, or any acquisition by, such Person of any Capital Stock,
bonds, notes, debentures or other securities or evidences of Indebtedness
issued by any other Person. In determining the amount of any Investment
involving a transfer of Property, such Property shall be valued at its fair
market value at the time of such transfer, and such fair market value shall be
determined in good faith by the Board of Directors of the investing Person,
whose determination in such regard shall be conclusive.
Issuing Bank means Bankers Trust Company or any Lender or other
financial institution that is acceptable to the Agent which may at any time
issue or be requested to issue a Letter of Credit for the account of the
Borrower.
Issuing Bank Fees has the meaning set forth in Section 4.3.
Joint Venture of a Person means any Person in which the investing
Person has a joint or shared equity interest but which is not a Subsidiary of
such investing Person.
L/C Facing Fee has the meaning set forth in Section 4.3.
Lender Advances has the meaning set forth in Section 3.2.
Letter of Credit Fee has the meaning set forth in Section 4.3.
Letter of Credit Obligations means the sum of the aggregate undrawn
amount of all Letters of Credit outstanding, plus the aggregate amount of all
drawings under Letters of Credit for which the Borrower has not reimbursed the
Issuing Bank to the extent a Revolving Loan has not been advanced pursuant to
Section 3.2 to reimburse the Issuing Bank therefor.
Letter of Credit Request has the meaning set forth in Section 3.3.
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Letters of Credit means all letters of credit issued for the account
of the Borrower under Article 3 and all amendments, renewals, extensions or
replacements thereof.
Lien means any mortgage, pledge, lien, charge, security interest,
conditional sale or other title retention agreement (including, without
limitation, any Capital Lease Obligations in the nature thereof) or other
encumbrance of any kind or description, including, without limitation, any
agreement to give or grant a Lien.
Line of Credit means the aggregate revolving line of credit extended
pursuant to this Credit Agreement by the Lenders to the Borrower for Revolving
Loans and Letters of Credit, in an amount up to $28,000,000, as such amount may
be reduced from time to time.
Loan Account has the meaning set forth in Section 4.7.
Lockbox Agreements has the meaning set forth in Section 4.9.
Lockbox Bank has the meaning set forth in Section 4.9.
Lockboxes has the meaning set forth in Section 4.9.
Majority Lenders means those Lenders holding in the aggregate more
than fifty percent (50%) of the total Commitments, or if the Commitments are
terminated, those Lenders owed more than fifty percent (50%) of the Revolving
Loans and Letter of Credit Obligations then outstanding.
Management Agreement means the Management Services Agreement dated as
of December 4, 1991 between the Borrower and DPK, as the same was amended and
restated by the Amended and Restated Management Services Agreement dated as of
December 31, 1993 between the Borrower and DPK and as the same may from time to
time hereafter be amended, modified or restated upon the good faith approval,
pursuant to duly adopted resolutions, of a majority of members of the Board of
Directors of the Borrower who are not Affiliates of DPK.
Material Adverse Effect means a material adverse effect on (i) the
consolidated financial condition, operations, business or prospects of the
Borrower and its Subsidiaries (taken as a whole), (ii) any Credit Party's
ability to perform its obligations under the Credit Documents to which it is a
party, or (iii) the validity or enforceability of any of the Credit Documents.
Material Subsidiary means (a) any Subsidiary of the Borrower if (i)
the total assets of such Subsidiary (and its Subsidiaries) exceed 10% of the
total assets of the Borrower and its Subsidiaries, determined on a consolidated
basis in accordance with GAAP, or (ii) the revenues (or losses, as the case may
be) of such
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<PAGE> 24
Subsidiary (and its Subsidiaries) for the four consecutive fiscal quarters of
such Subsidiary most recently ended (determined on a consolidated basis in
accordance with GAAP and whether or not such Person was a Subsidiary of the
Borrower during all or any part of the fiscal period of the Borrower referred
to below) exceed an amount equal to 10% of the revenues (or losses, as the case
may be) of the Borrower and its Subsidiaries for the four consecutive fiscal
quarters of the Borrower most recently ended (determined on a consolidated
basis in accordance with GAAP), and (b) in any event each of (i) Sandusky
Plastics of Delaware, Inc., a Delaware corporation, (ii) Sandusky Plastics,
Inc., a Delaware corporation, (iii) Viskase Corporation, a Pennsylvania
corporation, (iv) Clear Shield National, Inc., a California corporation, (v)
Viskase Holding Corporation, a Delaware corporation, (vi) Viskase Sales
Corporation, a Delaware corporation, and (vii) Viskase, S.A., a French
corporation.
Mortgages means, collectively, each Mortgage, Deed of Trust, Leasehold
Mortgage and Leasehold Deed of Trust executed at any time in favor of the
Collateral Agent or in favor of a trustee for the benefit of the Collateral
Agent by the Borrower or any of its Subsidiaries, substantially in the form of
Exhibit E, as modified, amended, extended, restated or supplemented from time to
time.
Multiemployer Plan means any Plan which is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
Net Worth means as of any date the aggregate amount of the capital,
surplus and retained earnings of the Borrower and its Subsidiaries as would be
shown on a consolidated balance sheet of the Borrower and its Subsidiaries
prepared as of such date in accordance with GAAP (and excluding minority
interests); provided that capital and surplus attributable to Redeemable Stock
and accumulated translation adjustments shall be excluded.
Note Agreement means that certain Note Agreement, of even date
herewith, among the Borrower and the purchasers named therein, under which
$160,000,000 of First Priority Notes are issued, as modified, amended,
extended, restated or supplemented from time to time.
Obligations means the unpaid principal and interest hereunder
(including interest accruing on or after the occurrence of an Insolvency Event),
reimbursement obligations under Letters of Credit, Fees, Expenses and all other
obligations and liabilities of the Borrower to the Agent, the Issuing Bank or to
the Lenders under this Credit Agreement, the Revolving Notes, or any other
Credit Document.
Offering Memorandum means the Private Placement Memorandum for the
First Priority Notes dated February 7, 1995, as supplemented by a Supplement to
Private Placement Memorandum dated May 16, 1995,
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<PAGE> 25
and as further supplemented by a Final Supplement to Private Placement
Memorandum dated June 5, 1995, taken as a whole.
Pension Benefit Guaranty Corporation means the Pension Benefit
Guaranty Corporation under ERISA (or any successor thereto).
Percentage of Total Assets Transferred means, with respect to each
asset Transferred pursuant to clause (d) of Section 8.6 (including assets
Transferred pursuant to a Transfer by Merger), the ratio (expressed as a
percentage) of (a) the greater of such asset's fair market value or the net book
value of such assets on the date of Transfer to (b) the book value of the
consolidated assets of the Borrower and its Subsidiaries as of the last day of
the fiscal quarter of the Borrower immediately preceding the date of Transfer.
Permitted Discretion means the Agent's good faith judgment concerning
the risks of lending to the Borrower, taking into account (i) the liquidation
value of Collateral, the priority of the Collateral Agent's Liens therein, and
the time and cost of enforcement of such Liens and (ii) the perceived accuracy
of the Borrower's financial and Collateral reporting. The burden of
establishing lack of good faith shall be on the Borrower.
Permitted Liens in respect of any Person shall mean (i) pledges or
deposits made by such Person under workers' compensation, unemployment
insurance laws or similar legislation, or good faith deposits in connection
with bids, tenders, contracts (other than contracts for the payment of money)
or operating leases to which such Person is a party, or deposits to secure
statutory or regulatory obligations of such Person or deposits of cash or U.S.
Government Obligations to secure surety or appeal bonds to which such Person is
a party, or deposits as security for contested taxes or import duties or for
the payment of rent, in each case incurred in the ordinary course of business;
(ii) Liens arising by operation of law such as carriers', warehousemen's and
mechanics' Liens, in each case arising in the ordinary course of business and
with respect to amounts not yet due or being contested in good faith by
appropriate legal proceedings promptly instituted and diligently conducted and
for which a reserve or other appropriate provision, if any, as shall be
required in conformity with GAAP shall have been made; (iii) Liens for taxes
not yet subject to penalties for non-payment or which are being contested in
good faith and by appropriate legal proceedings promptly instituted and
diligently conducted and for which a reserve or other appropriate provision, if
any, as shall be required in conformity with GAAP shall have been made; (iv)
Liens evidenced by the Capital Lease Obligations under GECC Lease Documents and
Liens securing Debt of the Borrower or its Subsidiaries permitted under Section
8.3(a)(vi) for refinancing the Debt under the GECC Lease Documents; provided,
however, that in connection with any such refinancing any such new Lien shall
be limited to all or part of the same Property to which
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the original Lien applied; (v) minor survey exceptions, minor encumbrances,
easements or reservations of, or rights of others for, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real property or Liens incidental
to the conduct of the business of such Person or to the ownership of its
Property which were not incurred in connection with Debt or other extensions of
credit and which do not in the aggregate materially adversely affect the value
of said Property or materially impair the use of such Property in the operation
of the business of such Person; (vi) Liens in favor of the Collateral Agent to
secure Debt permitted under Sections 8.3(a)(i), (iv), (v) and (vii); (vii)
Liens existing on the Closing Date and described on Schedule 8.3 hereto; (viii)
Liens arising out of judgments or awards against such Person not giving rise to
an Event of Default under Section 9.1(i) (but without limiting Section 9.1(m))
with respect to which such Person is diligently prosecuting an appeal or other
proceedings for review; (ix) Liens to secure Debt permitted under Section
8.3(a)(xi); provided, however, that any such new Lien shall be limited to all
or part of the same Property to which the original Lien applied; (x) Liens to
secure Debt permitted under Section 8.3(a)(xiii) (to the extent such Liens
attach prior to or at the time of incurrence of such Debt); (xi) Liens to
secure Debt (if any) permitted under Section 8.3(a)(iii); provided, however,
that (a) the Lien securing such Debt is granted only to the Collateral Agent
and made subject to the Collateral Agency Agreement, and (b) the Collateral
Agency Agreement is amended to the reasonable satisfaction of the Collateral
Agent, the Agent and the Lenders to add the Second Priority Notes Indenture
Trustee as a party thereto, and to provide for such matters incidental thereto
as the Collateral Agent, the Agent and the Lenders may reasonably require; and
(xii) Liens securing Debt of Wholly-Owned Subsidiaries of the Borrower to the
Borrower or another such Wholly-Owned Subsidiary permitted under Section
8.3(a)(ix).
Person means any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation,
institution, entity, party or government (including any division, agency or
department thereof), and its successors, heirs and assigns.
Plan means any "employee pension benefit plan" (as such term is
defined in Section 3(2) of ERISA) which is or has been established or
maintained, or to which contributions are or have been made, by the Borrower
or any member of a Control Group.
Pledge Agreements means, collectively, each Pledge Agreement executed
at any time in favor of the Collateral Agent by the Borrower or any of its
Subsidiaries, substantially in the form of Exhibit F, as modified, amended,
extended, restated or supplemented from time to time.
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Prime Lending Rate means the rate which Bankers Trust Company
announces as its prime lending rate, from time to time. The Prime Lending Rate
is a reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. Bankers Trust Company and each of the Lenders
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate.
Property means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including, without limitation, Capital Stock in any
other Person.
Proportionate Share of a Lender means a fraction, expressed as a
percentage, obtained by dividing its Commitment by the Line of Credit or, if
the Commitments are terminated, by dividing its then outstanding Revolving
Loans and Letter of Credit participation by the then outstanding aggregate
Revolving Loans and Letter of Credit Obligations.
Prudential means The Prudential Insurance Company of America.
Prudential Revolving Credit Agreement means the Revolving Credit
Agreement of even date herewith between Prudential and the Borrower, as
modified, amended, extended, restated or supplemented from time to time.
Prudential Revolving Credit Documents means, collectively, the
Prudential Revolving Credit Agreement and all other documents, instruments,
agreements, opinions and certificates now or hereafter executed and/or
delivered pursuant thereto or in connection therewith, as modified, amended,
extended, restated or supplemented from time to time.
Purchase Money Indebtedness means, as to any Person, the Debt of such
Person incurred and owing in respect of all or part of the purchase price of
Property purchased where such Debt is fully secured by the Property purchased.
Qualified Plan means any Plan, other than a Multiemployer Plan, which
is intended to meet the qualification requirements of Section 4.01(a) the
Internal Revenue Code.
Redeemable Stock means, with respect to any Person, any class or
series of Capital Stock that, either by its terms, by the terms of any security
into which it is convertible or exchangeable by contract or otherwise, is or
upon the happening of an event or the passage of time would be, required to be
redeemed or is redeemable at the option of the holder thereof at any time prior
to the stated maturity of the principal of the First Priority Notes, or, at the
option of the holder thereof, is convertible into or exchangeable
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for debt securities maturing at any time prior to the stated maturity of the
principal of the First Priority Notes.
Register has the meaning set forth in Section 11.8.
Registered Exchange Offer means the offer to exchange the Series B
First Priority Notes for all of the outstanding Series A First Priority Notes
and the Series D First Priority Notes for all of the outstanding Series C First
Priority Notes, in each case in accordance with the Registration Rights
Agreement.
Registration Rights Agreement means the Exchange and Registration
Rights Agreement of even date herewith by and between the Borrower and the
holders of the First Priority Notes, as modified, amended, extended, restated or
supplemented from time to time.
Related Transaction Documents means the First Priority Notes
Documents, the Second Priority Notes Documents, the Prudential Revolving
Credit Facility Documents, the GECC Lease Documents, the Collateral Agency
Agreement and the GECC Intercreditor Agreements.
Requirement of Law means any law, treaty, rule or regulation or
determination of an arbitrator, court or other Governmental Authority.
Responsible Officer means, with respect to any corporation, the chief
executive officer, chief operating officer, chief financial officer, treasurer
or chief accounting officer of such corporation, or any other officer of the
corporation involved principally in its financial administration or its
controller function.
Restricted Debt means all Consolidated Debt other than Consolidated
Senior Debt.
Restricted Investment shall have the meaning given to such term in
Section 8.2.
Restricted Payments shall have the meaning given to such term in
Section 8.2.
Revolving Loans has the meaning set forth in Section 3.1.
Revolving Loan Request means each request for a Revolving Loan deemed
to be made by the Borrower pursuant to Section 3.3 to provide funds to
reimburse the Issuing Bank for a draw under a Letter of Credit.
Revolving Note means a promissory note of the Borrower payable to the
order of any Lender, substantially in the form of Exhibit G.
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Sale and Leaseback Transaction means, with respect to any Person, any
direct or indirect arrangement pursuant to which Property is sold by such
Person or a Subsidiary of such Person and thereafter leased back from the
purchaser thereof by such Person or one of the Subsidiaries of such Person.
SEC means the Securities and Exchange Commission, as from time to time
constituted, or any similar agency then having jurisdiction to enforce the
Securities Act.
Second Priority Notes means the debt securities which may be issued by
the Borrower pursuant to the Second Priority Notes Indenture pursuant to the
10.25% Note Exchange.
Second Priority Notes Documents means, collectively, the Second
Priority Notes Indenture and all other documents, instruments, agreements,
opinions and certificates now or hereafter executed and/or delivered
pursuant thereto or in connection therewith or in connection with the sale or
exchange of the Second Priority Notes, as modified, amended, extended, restated
or supplemented from time to time.
Second Priority Notes Indenture means the indenture between the
Borrower and the Second Priority Notes Indenture Trustee under which any
Second Priority Notes or Subsequent Second Priority Notes are issued, as
amended, supplemented or otherwise modified from time to time.
Second Priority Notes Indenture Trustee means the trustee for the
Second Priority Notes and the Subsequent Second Priority Notes (in such
capacity), and each successor thereto in such capacity.
Securities Act means the Securities Act of 1933, as amended from time
to time, and the rules and regulations of the SEC promulgated thereunder.
Security Agreements means, collectively, each Security Agreement
executed at any time in favor of the Collateral Agent by the Borrower or any of
its Subsidiaries, substantially in the form of Exhibit H, as modified, amended,
extended, restated or supplemented from time to time.
Series A First Priority Notes means the 12% First Priority Senior
Secured Notes due 2000, Series A, being issued pursuant to the First Priority
Notes Indenture.
Series B First Priority Notes means the 12% First Priority Senior
Secured Notes due 2000, Series B (the terms of which are identical to the
Series A First Priority Notes except that the Series B First Priority Notes
shall be registered under the Securities Act, and shall not contain the
restrictive legend appearing on the face of the form of the Series A First
Priority
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Notes), to be issued in exchange for the Series A First Priority Notes pursuant
to the Registered Exchange Offer and the First Priority Notes Indenture.
Series C First Priority Notes means the Floating Rate First Priority
Senior Secured Notes due 2000, Series C, being issued pursuant to the First
Priority Notes Indenture.
Series D First Priority Notes means the Floating Rate First Priority
Senior Secured Notes due 2000, Series D (the terms of which are identical to
the Series C First Priority Notes except that the Series D First Priority Notes
shall be registered under Securities Act and shall not contain the restrictive
legend appearing on the face of the form of the Series C First Priority Notes),
to be issued in exchange for the Series C First Priority Notes pursuant to the
Registered Exchange Offer and the First Priority Notes Indenture.
Settlement Date has the meaning set forth in Section 3.4.
Settlement Period has the meaning set forth in Section 3.4.
Significant Domestic Subsidiary means each Domestic Subsidiary that, at
any time, is a Material Subsidiary.
Stipulated Loss Value means the "Stipulated Loss Value," as defined
in the GECC Lease Documents as in effect on the Closing Date.
Subsequent First Priority Notes means any and all debt securities
issued by the Borrower in exchange for any First Priority Notes and having terms
identical to the First Priority Notes and otherwise being the same as the First
Priority Notes except that such debt securities are registered under the
Securities Act.
Subsequent Second Priority Notes means any and all debt securities
issued by the Borrower under an indenture in exchange for any Second Priority
Notes and having terms identical to the Second Priority Notes and otherwise
being the same as the Second Priority Notes except that such debt securities
are registered under the Securities Act.
Subsidiary means, with respect to any Person, (i) a corporation a
majority of whose Voting Securities is at the time directly or indirectly owned
or Controlled by such Person, by one or more Subsidiaries of such Person or by
such Person and one or more Subsidiaries thereof, or (ii) any other Person
(other than a corporation) in which such Person, one or more Subsidiaries
thereof or such Person and one or more Subsidiaries thereof, directly or
indirectly, at the date of determination thereof has at least a majority
ownership interest with respect to voting in the election
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of directors or trustees thereof (or such other Persons performing similar
functions). For purposes of this definition, any directors' qualifying shares
shall be disregarded in determining the ownership of a Subsidiary.
10.25% Note Exchange means an exchange by the Borrower pursuant to
which the Borrower issues Second Priority Notes in an aggregate face amount of
not more than $50,000,000 in exchange for 10.25% Notes pursuant to an exchange
ratio (based on aggregate face amount) of no greater than 1:1.
10.25% Notes means, collectively, the 10.25% Senior Notes due 2001
issued by the Borrower pursuant to the 10.25% Notes Indenture.
10.25% Notes Indenture means that certain Indenture, dated as of
December 31, 1993, between the Borrower and Bankers Trust Company, as trustee,
as amended, supplemented or otherwise modified from time to time.
Termination Event means any one or more of the following event of
events which, either individually or together with any other such event or
events, could reasonably be expected to have a Material Adverse Effect:
(i) A reportable event as defined in Section 4043 of
ERISA and regulations issued thereunder for which the 30 day notice
requirement has not been waived occurs with respect to any Title IV
Plan other than those described in Sections 4043(c)(9) and (11) of
ERISA (or Pension Benefit Guaranty Corporation Regulation Sections
2615.22 or 2615.23);
(ii) There occurs (a) the complete or partial withdrawal
(as defined in Sections 4203 and 4205 of ERISA) by the Borrower or any
member of the Control Group from any Multiemployer Plan, or (b) the
receipt by the Borrower or any member of the Control Group of a demand
from any Multiemployer Plan for withdrawal liability (as defined in
Section 4201 of ERISA);
(iii) The Borrower or any member of the Control Group
files, or is reasonably expected to file, a notice of intent to
terminate any Title IV Plan or adopts a plan amendment that
constitutes a termination of any Title IV Plan under Section 4041 of
ERISA;
(iv) There occurs any action causing the termination of
any Multiemployer Plan under Section 4041A of ERISA;
(v) Any other event or condition occurs that is
reasonably expected to constitute grounds under Sections 4041A or 4042
of ERISA for the termination of, or the appointment of
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a trustee to administer, any Title IV Plan or any Multiemployer Plan;
(vi) The Pension Benefit Guaranty Corporation shall have
notified the Borrower or any member of the Control Group that a Plan
may become a subject to any proceedings under Section 4042 of ERISA
to terminate or appoint a trustee to administer the Plan, or any such
proceedings are instituted;
(vii) An accumulated funding deficiency (as defined in
Section 302 of ERISA or Section 412 of the Internal Revenue Code)
exists with respect to any Title IV Plan on the last day of any plan
year;
(viii) A waiver of the minimum funding standards of ERISA or
the Internal Revenue Code, or any extension of any amortization period
related to such waiver, is sought by or granted to, the Borrower or
any member of the Control Group, under Section 412 of the Internal
Revenue Code;
(ix) The Borrower or any member of the Control Group shall
have incurred, or is reasonably expected to incur, any liability
pursuant to Title I or IV of ERISA or the penalty or excise tax
provisions of the Internal Revenue Code relating to employee benefit
plans;
(x) As of the last day of any plan year, there exists
unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) of any Title IV Plan, as determined by such
Plan's independent actuaries;
(xi) As of the last day of any plan year, there exists
unfunded benefit liabilities (within the meaning of Section
4001(a)(18) of ERISA) of all Title IV Plans, as determined by such
Plans' independent actuaries; or
(xii) The Borrower or any member of the Control Group
establishes or amends any employee welfare benefit plan (as defined in
Section 3(1) of ERISA) that provides post-employment welfare benefits
in a manner that would increase the liability of the Borrower or any
member of the Control Group.
Title IV Plan means any Qualified Plan that is a defined benefit plan
(as defined in Section 3(35) of ERISA) and is subject to Title IV of ERISA.
Transfer means any sale, exchange, conveyance, lease, transfer or
other disposition.
Transfer by Merger means, with respect to any Subsidiary of the
Borrower, a merger or consolidation of such Subsidiary with
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another Person such that after giving effect thereto the surviving entity is no
longer a Subsidiary of the Borrower.
Unused Line Fee has the meaning set forth in Section 4.2.
U.S. Government Obligations means (i) any direct non-callable
obligation of, or obligation guaranteed by, the United States of America for
the payment of which the full faith and credit of the United States of America
is pledged and which is not callable at the issuer's option, and (ii) any
depository receipt issued by a bank or trust company as custodian with respect
to any such U.S. Government Obligation or a specific payment of interest on or
principal of any such U.S. Government Obligation held by such custodian for the
account of the holder of a depository receipt; provided, that (except as
required by law) such custodian is not authorized to make any deduction from
the amount payable to the holder of such depository receipt from any amount
received by the custodian in respect of the U.S. Government Obligation or the
specific payment of interest on or principal of the U.S. Government Obligation
evidenced by such depository receipt.
Voting Securities means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof,
under ordinary circumstances and in the absence of contingencies, to vote for
members of the Board of Directors of such Person (or Persons performing
functions equivalent to those of such members).
Wholly Owned Subsidiary of a Person means any Subsidiary of such Person
100% of the total Capital Stock of which, other than directors' qualifying
shares, is at the time owned by such Person and/or one or more Wholly Owned
Subsidiaries of such Person.
1.2 Accounting Terms and Determinations. Unless otherwise defined
or specified herein, all accounting terms used in this Credit Agreement shall
be construed in accordance with GAAP, applied on a basis consistent in all
material respects with the Financial Statements delivered to the Agent on or
before the Closing Date. All accounting determinations for purposes of
determining compliance with the financial covenants contained in Article 8
shall be made in accordance with GAAP as in effect on the Closing Date and
applied on a basis consistent in all material respects with the audited
Financial Statements delivered to the Agent on or before the Closing Date. The
Financial Statements required to be delivered hereunder from and after the
Closing Date, and all financial records, shall be maintained in accordance with
GAAP. If GAAP shall change from the basis used in preparing the audited
Financial Statements delivered to the Agent on or before the Closing Date, the
certificates required to be delivered pursuant to Section 7.1 demonstrating
compliance with the covenants contained herein shall include, at the election
of the Borrower or upon the request of the Majority Lenders, calculations
setting
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forth the adjustments necessary to demonstrate how the Borrower is in
compliance with the financial covenants based upon GAAP as in effect on the
Closing Date.
1.3 Other Terms; Headings. Terms used herein that are defined in
the Uniform Commercial Code in effect in the State of Illinois (the "Code")
shall have the meanings given in the Code. Each of the words "hereof,"
"herein," and "hereunder" refer to this Credit Agreement as a whole. An Event
of Default shall "continue" or be "continuing" until such Event of Default has
been waived in accordance with Section 11.11 hereof. References to Articles,
Sections, Annexes, Schedules, and Exhibits are internal references to this
Credit Agreement, and to its attachments, unless otherwise specified. The
headings and the Table of Contents are for convenience only and shall not
affect the meaning or construction of any provision of this Credit Agreement.
ARTICLE 2. LETTERS OF CREDIT.
2.1 Issuance of Letters of Credit. Subject to the terms and
conditions hereunder and in reliance on the representations and warranties of
the Borrower set forth herein, the Agent shall cause the Issuing Bank to issue
Letters of Credit hereunder at the request of the Borrower and for its account
on behalf of it or any of the Significant Domestic Subsidiaries, as more
specifically described below. The Agent shall not be obligated to cause the
Issuing Bank to issue any Letter of Credit if:
(a) Issuance of the requested Letter of Credit would cause the sum
of the Revolving Loans plus the Letter of Credit Obligations then outstanding
to exceed the lesser of (x) the Line of Credit then in effect or (y) the
Borrowing Base then in effect; or
(b) Issuance of the Letter of Credit is enjoined, restrained or
prohibited by any Governmental Authority, any Requirement of Law or any request
or directive of any Governmental Authority (whether or not having the force of
law) or would impose upon the Agent, any of the Lenders or the Issuing Bank any
material restriction, reserve, capital requirement, loss, cost or expense (for
which the Agent, such Lender or the Issuing Bank is not otherwise compensated)
not in effect or known as of the Closing Date.
2.2 Terms of Letters of Credit. The proposed amount, terms and
conditions, and form of each Letter of Credit (and of any drafts or acceptances
thereunder) shall be subject to approval by the Issuing Bank. The term of each
standby Letter of Credit shall not exceed 360 days, but may be subject to
annual renewal. The term of each documentary Letter of Credit shall not exceed
120 days. No Letter of Credit shall have an expiry date later than June 15,
1998.
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2.3 Notice of Issuance. A request for issuance of a Letter of
Credit (a "Letter of Credit Request") must be delivered to the Agent in writing
in the form of Exhibit I. The Borrower shall specify in each Letter of Credit
Request whether the conditions for the issuance of a Letter of Credit specified
in Section 5.2 are satisfied. A Letter of Credit Request must be received by
the Agent no later than 1:00 P.M. Chicago time at least three (3) Business
Days (or such shorter period as may be agreed to by the Issuing Bank) in
advance of the proposed date of issuance. The Borrower shall provide to the
Agent a list, with specimen signatures, of officers authorized to request
Letters of Credit. The Agent is entitled to rely upon such list until it is
replaced by the Borrower.
2.4 Lenders' Participation. Immediately upon issuance or
amendment of any Letter of Credit, each Lender shall be deemed to have
irrevocably and unconditionally purchased and received from the Issuing Bank,
without recourse or warranty, an undivided interest and participation in all
rights and obligations under such Letter of Credit including, without
limitation, the Borrower's reimbursement obligation thereunder (other than fees
and other amounts owing to the Issuing Bank) in accordance with such Lender's
Proportionate Share.
2.5 Payments of Amounts Drawn Under Letters of Credit. The Agent
shall notify the Borrower of the receipt of notice from the Issuing Bank that
the Issuing Bank has received a draft or other presentation for payment or
drawing under a Letter of Credit not later than 11:00 a.m. (Chicago time) on
the Business Day immediately prior to the date on which the Issuing Bank
intends to honor such drawing. Unless the procedures set forth in Section
9.2(c) shall be applicable or the Borrower shall have reimbursed the Issuing
Bank in full for such drawing by 2:00 p.m. (Chicago time) on the Business Day
on which the Issuing Bank honors such draw, the Borrower shall be deemed to
have concurrently requested Lenders to make a Revolving Loan pursuant to
Section 3.1 in the amount of such drawing on the date on which the Issuing Bank
honors the drawing, the proceeds of which shall be applied directly by the
Agent to reimburse the Issuing Bank for the amount of such drawing.
2.6 Payment by Lenders. If a Revolving Loan is not made in an
amount sufficient to reimburse the Issuing Bank in full for the amount of any
draw, the Agent shall promptly notify each Lender of the unreimbursed amount of
such drawing and of such Lender's respective participation therein. Each
Lender shall make available to the Agent, for the account of the Issuing Bank,
the amount of its participation in immediately available funds not later than
1:00 P.M. Chicago time on the next Business Day after such Lender receives
notice from the Agent of the amount of such Lender's participation in such
unreimbursed amount. The obligation of each Lender to deliver to Agent an
amount equal to its respective participation shall be absolute and
unconditional and such
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remittance shall be made notwithstanding the occurrence or continuation of a
Default or an Event of Default or the failure to satisfy any of the conditions
set forth in Section 5.2. If any Lender fails to make available to the Agent
the amount of such Lender's participation, the Issuing Bank shall be entitled
to recover such amount on demand from such Lender together with interest at the
Federal Funds Rate for the first three Business Days and thereafter at the
Prime Lending Rate. For each Letter of Credit, the Agent shall promptly
distribute to each Lender which has funded the amount of its participation its
Proportionate Share of all payments subsequently received by the Agent from the
Borrower in reimbursement of honored drawings. All amount paid by the Issuing
Agent with respect to any Letter of Credit that are not immediately repaid with
the proceeds of a Revolving Loan or otherwise shall bear interest at the
interest rate applicable to Revolving Loans.
2.7 Nature of Issuing Bank's Duties. In determining whether to
pay under any Letter of Credit, the Issuing Bank shall be responsible only to
determine that the documents and certificates required to be delivered under
that Letter of Credit have been delivered and that they comply on their face
with the requirements of that Letter of Credit. As among the Borrower, the
Issuing Bank and each other Lender, and except to the extent provided in the
following sentence, the Borrower assumes all risks of the acts and omissions of
the Issuing Bank, or misuse of the Letters of Credit by the respective
beneficiaries of such Letters of Credit. Any action taken or omitted to be
taken by the Issuing Bank 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 Issuing Bank any liability to the Borrower, the Agent
or any Lender. In furtherance and not in limitation of the foregoing, neither
the Issuing Agent, the Agent nor any Lender shall be responsible: (i) for the
form, validity, sufficiency, accuracy, genuineness or legal effect of any
document by any party in connection with the application for and issuance of
any Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged; (ii) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit or the rights or benefits
thereunder or proceeds thereof, in whole or in part, which may prove to be
invalid or ineffective for any reason; (iii) for failure of the beneficiary of
any Letter of Credit to comply fully with conditions required in order to
demand payment under such Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any message, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) for
errors in interpretation of technical terms; (vi) for any loss or delay in the
transmission or otherwise of any document required in order to make a payment
under any Letter of Credit or of the proceeds thereof; (vii) for the credit of
the proceeds of any drawing under any Letter of Credit; and (viii) for
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any consequences arising from causes beyond the control of the Issuing Agent,
the Agent or any Lender.
2.8 Obligations Absolute. The obligations of the Borrower to
reimburse the Issuing Bank, the Agent and the Lenders for drawings honored
under the Letters of Credit and the obligations of the Lenders under Section
2.6 hereof shall be unconditional and irrevocable, without requirement of
presentment, demand, protest or other formalities of any kind, and shall be
paid strictly in accordance with the terms of this Credit Agreement under all
circumstances including the following circumstances:
(1) any lack of validity or enforceability of any Letter
of Credit or any other agreement;
(2) the existence of any claim, set-off, defense or other
right which the Borrower, any of its Subsidiaries, any of their Affiliates, the
Issuing Agent, the Agent or any Lender may at any time have against a
beneficiary or any transferee of any Letter of Credit (or any persons or
entities for whom any such transferee may be acting), the Issuing Agent, the
Agent, any Lender or any other Person, whether in connection with this Credit
Agreement, the transactions contemplated herein or any unrelated transaction
(including any underlying transaction between Borrower, any of its
Subsidiaries, any of their Affiliates and the beneficiary for which the Letter
of Credit was procured);
(3) any draft, demand, 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;
(4) payment by the Issuing Agent under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;
(5) any other circumstance or happening whatsoever, which
is similar to any of the foregoing; or
(6) the fact that a Default or an Event of Default shall
have occurred and be continuing.
2.9 Agent's Execution of Applications and Other Issuing Bank
Documentation; Reliance on Credit Agreement by Issuing Bank. The Agent shall be
authorized to execute, deliver and perform on behalf of the Lenders such letter
of credit applications, shipping indemnities, letter of credit modifications
and consents and other undertakings for the benefit of the Issuing Bank as may
be reasonably necessary or appropriate in connection with the issuance or
modification of Letters of Credit requested by the Borrower hereunder. The
Lenders, the Agent and the Borrower all expressly
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agree that the terms of this Article 3 and various other provisions of this
Credit Agreement identifying the Issuing Bank are also intended to benefit the
Issuing Bank and the Issuing Bank shall be entitled to enforce the provisions
hereof which are for its benefit.
2.10 Additional Payments. If by reason of (a) any change in any
Requirement of Law, or any change in the interpretation or application by any
Governmental Authority of any Requirement of Law, or (b) compliance by the
Issuing Bank or any Lender with any direction, request or requirement (whether
or not having the force of law) of any Governmental Authority (or monetary
authority) including, without limitation, Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect (and any
successor thereto):
(i) any reserve, deposit or similar requirement is or
shall be applicable, imposed or modified in respect of any Letters of
Credit issued by the Issuing Bank or participation therein purchased
by any Lender; or
(ii) there shall be imposed on the Issuing Bank or any
Lender any other condition regarding this subsection 2.10, any Letter
of Credit or any participation therein;
and the result of the foregoing is to directly or indirectly increase the cost
to the Issuing Bank or any Lender of issuing, making or maintaining any Letter
of Credit or of purchasing or maintaining any participation therein, or to
reduce the amount receivable in respect thereof by the Issuing Bank or any
Lender, then and in any such case the Agent or such Lender may, at any time
within a reasonable period after the additional cost is incurred or the amount
received is reduced, notify the Borrower, and the Borrower shall pay on demand
such amounts as the Agent or such Lender may specify to be necessary to
compensate the Issuing Bank or such Lender for such additional cost or reduced
receipt, together with interest on such amount from 10 days after the date of
such demand until payment in full thereof at a rate equal at all times to the
Prime Lending Rate per annum. The determination by the Issuing Bank or any
Lender, as the case may be, of any amount due pursuant to this Section, as set
forth in a certificate setting forth the calculation thereof in reasonable
detail, shall, in the absence of manifest or demonstrable error, be final and
conclusive and binding on all of the parties hereto.
ARTICLE 3. REVOLVING LOANS.
3.1 Revolving Credit Commitments. Subject to the terms and
conditions set forth in this Credit Agreement, on and after the Closing Date
and to and excluding the Expiration Date, each Lender severally agrees to make
loans and advances to the Borrower
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pursuant to Section 2.5 (the "Revolving Loans") in an amount not to exceed at
any time its Proportionate Share of the lesser of the Line of Credit then in
effect, and the Borrowing Base then in effect, minus, in each case, the sum of
the then outstanding Letter of Credit Obligations (excluding the portion of the
Letter of Credit Obligations to be repaid with the Revolving Loan being funded)
and the Revolving Loans, for the purpose of reimbursing the Issuing Bank for
drawings under Letters of Credit.
3.2 Borrowing of Revolving Loans. It is contemplated that
Revolving Loans will be funded directly by the Lenders ("Lender Advances") and,
in the circumstances described in Section 3.2(b), by the Agent acting on behalf
of the Lenders ("Agent Advances") on the date on which the Issuing Bank honors
a draw request under a Letter of Credit.
(a) Lender Advances of Revolving Loans. Lender Advances
of Revolving Loans shall be made to the extent of each Lender's
Proportionate Share of any borrowing deemed to have been requested by
the Borrower pursuant to Section 2.5.
(b) Agent Advances of Revolving Loans. The Agent is
authorized by the Lenders, but is not obligated, to make Agent
Advances for any borrowing deemed to have been requested by the
Borrower pursuant to Section 2.5 for administrative convenience.
Agent Advances shall be subject to periodic settlement with the
Lenders under Section 3.5. The Agent may make Agent Advances up to
the amount available for borrowing under Section 3.1.
(c) Disbursement of Revolving Loans. The proceeds of
Revolving Loans shall be transmitted by the Agent directly to the
Issuing Bank for reimbursement of draws under Letters of Credit.
3.3 Notice of Request for Lender Advances. Subject to the last
sentence of this Section 3.3, the Agent shall give each Lender prompt notice by
telephone or facsimile transmission of any borrowing deemed to be requested by
the Borrower pursuant to Section 2.5. No later than 3:00 p.m. Chicago time on
the date of such a Revolving Loan Request, each Lender shall make available to
the Agent at the Agent's address its Proportionate Share of the requested
Revolving Loan in immediately available funds. Unless the Agent receives
contrary written notice prior to the date of any such borrowing request, it is
entitled to assume that each Lender will make available its Proportionate Share
of the requested Revolving Loan and in reliance upon that assumption, but
without any obligation to do so, may advance such Proportionate Share on behalf
of Lenders, without the necessity of giving daily notice to each Lender of each
requested Revolving Loan.
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3.4 Periodic Settlement of Agent Advances; Interest and Fees;
Statements.
(a) The Settlement Date; Allocation of Interest and Fees.
The amount of each Lender's Proportionate Share of Revolving Loans
shall be computed weekly (or more frequently in the Agent's
discretion) and shall be adjusted upward or downward based on all
Revolving Loans (including Agent Advances) and repayments received by
the Agent as of 5:00 p.m. Chicago time on the last Business Day of the
period specified by the Agent (such date, the "Settlement Date").
Interest on the Revolving Loans (including Agent Advances) shall be
allocated by the Agent to each Lender in accordance with the
Proportionate Share of Revolving Loans actually funded by and repaid
to each Lender, and shall accrued from and including the date such
Revolving Loans are so advanced and to but excluding the date such
Revolving Loans are either repaid by the Borrower or actually settled
under this Section. Unused Line Fees shall be allocated by the Agent
to each Lender based on each Lender's Proportionate Share.
(b) Summary Statements; Settlements. The Agent shall
deliver to each of the Lenders promptly after the Settlement Date a
summary statement of the account of outstanding Revolving Loans
(including Agent Advances) for the period, the amount of repayments
received for the period, and the amount allocated to each Lender of
the interest and Unused Line Fee for the period. After application of
payments under Section 4.10, as reflected on the summary statement:
(i) the Agent shall transfer to each Lender its allocated share of
interest and Unused Line Fee, and its Proportionate Share of
repayments; and (ii) each Lender shall transfer to the Agent, or the
Agent shall transfer to each Lender, such amounts as are necessary to
insure that, after giving effect to all such transfers, the amount of
Revolving Loans made by each Lender shall be equal to such Lender's
Proportionate Share of the aggregate amount of Revolving Loans
outstanding as of such Settlement Date. If the summary statement
requires transfers to be made to the Agent by the Lenders and is
received prior to 12:00 noon Chicago time on a Business Day, such
transfers shall be made in immediately available funds no later than
3:00 p.m. Chicago time that day; and, if received after 12:00 noon
Chicago time, then no later than 3:00 p.m. Chicago time on the next
Business Day. The obligation of each Lender to transfer such funds is
irrevocable, unconditional and without recourse to or warranty by the
Agent.
3.5 Sharing of Payments. If any Lender shall obtain any payment
(whether made voluntarily or involuntarily, or through the exercise of any
right of set-off, or otherwise) on account of the Revolving Loans made by it or
its participation in the Letter of Credit Obligations in excess of its
Proportionate Share of payments
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on account of the Revolving Loans or Letter of Credit Obligations obtained by
all the Lenders, such Lender shall forthwith purchase from the other Lenders
such participation in the Revolving Loans made by them or in their
participation in Letters of Credit as shall be necessary to cause such
purchasing Lender to share the excess payment ratably with each of them;
provided, however, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each
Lender shall be rescinded and each such Lender shall repay to the purchasing
Lender the purchase price to the extent of such recovery, together with an
amount equal to such Lender's ratable share (according to the proportion of (i)
the amount of such Lender's required repayment to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect to the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 3.5, to the fullest extent permitted by law,
may exercise all of its rights of payment (including the right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation.
3.6 Defaulting Lenders.
(a) A Lender who fails to pay the Agent its Proportionate Share of
any Revolving Loans (including Agent Advances) made available by the Agent on
such Lender's behalf, or who fails to pay any other amounts owing by it to the
Agent, is a "Defaulting Lender." The Agent is entitled to recover from such
Defaulting Lender all such amounts owing by such Defaulting Lender on demand.
If the Defaulting Lender does not pay such amounts on the Agent's demand, the
Agent shall promptly notify the Borrower and the Borrower shall pay such
amounts within five Business Days of its receipt of such notice. In addition,
the Defaulting Lender or the Borrower shall pay to the Agent for its own
account interest on such amount for each day from the date it was made
available by the Agent to the Borrower to the date it is recovered by the Agent
at a rate per annum equal to (x) the overnight Federal Funds Rate, if paid by
the Defaulting Lender, or (y) the then applicable rate of interest calculated
under Section 4.1, if paid by the Borrower; plus, in each case, the Expenses
and losses, if any, incurred as a result of the Defaulting Lender's failure to
perform its obligations. Nothing herein shall be deemed to relieve any Lender
of 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, including, without limitation, the right of
the Borrower to seek reimbursement from any Defaulting Lender for any amounts
paid by the Borrower under clause (y) above on account of such Defaulting
Lender's default.
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(b) The failure of any Lender to fund its Proportionate Share of a
Revolving Loan shall not relieve any other Lender of its obligation to fund its
Proportionate Share of a Revolving Loan. Conversely, no Lender shall be
responsible for the failure of another Lender to fund its Proportionate Share
of a Revolving Loan.
(c) The Agent shall not be obligated to transfer to a Defaulting
Lender any payments made by the Borrower to the Agent for the Defaulting
Lender's benefit; nor shall a Defaulting Lender be entitled to the sharing of
any payments hereunder. Amounts payable to a Defaulting Lender shall instead be
paid to or retained by the Agent. The Agent may hold and, in its discretion,
re-lend to the Borrower the amount of all such payments received by it for the
account of such Lender. For purposes of voting or consenting to matters with
respect to the Credit Documents and the Collateral Agency Agreement and
determining Proportionate Shares, such Defaulting Lender shall be deemed not to
be a "Lender" and such Lender's Commitment shall be deemed to be zero (-0-).
This section shall remain effective with respect to such Lender until (x) the
Obligations under this Credit Agreement shall have been declared or shall have
become immediately due and payable or (y) the Majority Lenders, the Agent and
the Borrower shall have waived such Lender's default in writing. The operation
of this Section shall not be construed to increase or otherwise affect the
Commitment of any Lender, or relieve or excuse the performance by the Borrower
of its duties and obligations hereunder.
ARTICLE 4. COMPENSATION, REPAYMENT AND REDUCTION OF COMMITMENTS.
4.1 Interest on Revolving Loans. Interest on the Revolving Loans
shall be payable monthly in arrears, on the first Business Day of each month,
at an interest rate per annum equal to the Prime Lending Rate plus two and
one-half percent (2.5%) calculated on the net balances owing to the Agent and
the Lenders at the close of business each day during such month. The rate
hereunder shall change each day the Prime Lending Rate changes.
4.2 Unused Line Fee. The Borrower shall pay to the Agent, for the
ratable benefit of the Lenders, a non-refundable fee (the "Unused Line Fee")
equal to one-half percent (.5%) per annum of the unused portion of the Line of
Credit. The Unused Line Fee shall accrue daily from the Closing Date until the
Expiration Date, and shall be due and payable monthly in arrears, on the first
Business Day of each month commencing with the month ended July 31, 1995 and on
the Expiration Date.
4.3 Letter of Credit Fees.
(a) The Agent, for the ratable benefit of the Lenders, shall be
entitled to charge to the account of the Borrower on the first Business Day of
each month, a fee (the "Letter of Credit Fee"), in
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an amount equal to two percent (2%) per annum of the daily weighted average
undrawn amount of Letters of Credit outstanding during the immediately
preceding month. In addition, the Agent, for the benefit of the Issuing Bank,
shall be entitled to charge to the account of the Borrower on the date of
issuance of any standby Letter of Credit, a facing fee equal to one-half
percent (.5%) on the initial face amount of each such standby Letter of Credit
(the "L/C Facing Fee").
(b) The Agent shall also be entitled to charge to the account of
the Borrower, as and when incurred by the Agent or any Lender, the customary
charges, fees, costs and expenses charged to the Agent or any Lender for the
Borrower's account by the Issuing Bank (the "Issuing Bank Fees") in connection
with the issuance, transfer, drawing, amendment or negotiation of any Letters
of Credit by the Issuing Bank. Each determination by the Agent of Letter of
Credit Fees, L/C Facing Fees, Issuing Bank Fees and other fees, costs and
expenses charged under this Section shall be conclusive and binding for all
purposes, absent manifest error.
4.4 Interest After Event of Default. From the date of occurrence
of an Event of Default until the earlier of the date upon which (i) all
Obligations shall have been paid and satisfied in full or (ii) such Event of
Default shall have been waived, and upon notice from the Agent or the Lenders,
interest on the Revolving Loans shall be payable on demand at a rate per annum
equal to the rate then in effect under Section 4.1, plus two percent (2%).
4.5 Expenses. The Borrower shall reimburse the Expenses of the
Agent, or any Lender, as the case may be, promptly upon demand.
4.6 Mandatory Payment; Reduction of Commitments.
(a) Mandatory Payment. If the aggregate balance of the Revolving
Loans and all Letter of Credit Obligations outstanding at any time exceed the
Borrowing Base then in effect (such excess amount, the "Out of Formula
Amount"), then the Borrower shall, immediately and without the necessity of any
demand by the Agent or the Lenders, eliminate such Out of Formula Amount by (i)
making a payment to the Agent to reduce the outstanding principal balance of
any Revolving Loans in an amount equal to the Out of Formula Amount or (ii)
making a payment or otherwise causing to be delivered to the Collateral Agent
for deposit in the Cash Collateral Account, pursuant to the terms of the
Collateral Agency Agreement, an amount equal to the Out of Formula Amount. If
funds remain on deposit with the Collateral Agent after the Out of Formula
Amount has been reduced to zero and no Event of Default has occurred and is
continuing at such time, such funds shall be released to the Borrower in
accordance with the terms of the Collateral Agency Agreement.
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(b) Reduction of Commitments and Line of Credit. On the
Expiration Date, the Commitment of each Lender shall automatically reduce to
zero and may not be reinstated. The Borrower may reduce or terminate the Line
of Credit at any time and from time to time in whole or in part without premium
or penalty. Each such reduction must be in an amount not less than $5,000,000
(and in increments of $1,000,000 thereafter). Once reduced, no portion of the
Line of Credit may be reinstated. If the Borrower seeks to reduce the Line of
Credit to an amount less than $10,000,000, then the Line of Credit shall be
reduced to zero.
4.7 Maintenance of Loan Account; Statements of Account. The Agent
shall maintain an account on its books in the name of the Borrower (the "Loan
Account") in which the Borrower will be charged with all loans and advances
made by the Lenders to the Borrower or for the Borrower's account, including
the Revolving Loans, and all Letter of Credit Obligations, the Fees, the
Expenses and any other Obligations, as and when such payments become due. The
Loan Account will be credited with all payments received by the Agent from the
Borrower or for the Borrower's account, including all amounts received from the
Collateral Agent pursuant to the terms of the Collateral Agency Agreement.
After the end of each month, the Agent shall send the Borrower a monthly
statement accounting for the charges, loans, advances and other transactions
occurring among and between the Agent, the Lenders and the Borrower during that
month, provided, however, that the failure of the Agent to send such statement
to the Borrower shall not relieve the Borrower of any Obligations. All entries
on any such statement shall, thirty (30) days after the same is sent, be
presumed to be correct and shall constitute prima facie evidence of the
information contained in such statement. The Borrower shall have the express
right to rebut such presumption by conclusively demonstrating the existence of
an error on the part of the Agent.
4.8 Payment Procedures. Payments of principal, interest, Fees and
Expenses shall be made not later than 2:00 P.M. Chicago time on the day when
due, in immediately available dollars, to the offices of the Agent, at the
address set forth in Section 11.7, or as the Agent may otherwise direct the
Borrower. The Borrower hereby authorizes the Agent to charge the Loan Account
with the amount of all payments to be made hereunder and under the other Credit
Documents, including all Fees and Expenses, as and when such payments become
due. The Borrower's obligations to the Lenders with respect to such payments
shall be discharged by making such payments to the Agent pursuant to this
Section or by the charging of the Loan Account by the Agent.
4.9 Collection of Accounts. The Borrower shall, and shall cause
the Significant Domestic Subsidiaries to, at all times maintain lockboxes (the
"Lockboxes") and shall instruct all account debtors on the Accounts of the
Borrower and the Significant Domestic Subsidiaries to remit all Collections to
such Lockboxes.
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The Borrower, the Significant Domestic Subsidiaries, the Collateral Agent and
financial institutions selected by the Borrower and acceptable to the Agent
(the "Lockbox Banks") shall enter into agreements in form and substance
satisfactory to the Agent and the Lenders (the "Lockbox Agreements"), which
among other things shall provide for the opening of an account for the deposit
of Collections (a "Collection Account") at a Lockbox Bank. All Collections and
other amounts received by the Borrower and the Significant Domestic
Subsidiaries from any account debtor, in addition to all other cash received by
the Borrower and the Significant Domestic Subsidiaries from any other source,
shall upon receipt be deposited into a Collection Account. Termination of such
arrangements shall also be subject to approval by the Agent.
4.10 Distribution and Application of Collections and other Amounts.
All Collections received by the Agent in accordance with the terms of the
Lockbox Agreements and the Collateral Agency Agreement shall be credited to the
Loan Account, unless an Event of Default has occurred and is continuing, in
which case such Collections and other amounts shall be distributed and applied
in the following order: first, to the payment of any Fees, Expenses or other
Obligations due and payable to the Agent under any of the Credit Documents,
including Agent Advances and any other amounts advanced by the Agent on behalf
of the Lenders; second, to the payment of any Fees, Expenses or other
Obligations due and payable to the Issuing Bank under any of the Credit
Documents; third, to the ratable payment of any Fees, Expenses or other
Obligations due and payable to the Lenders under any of the Credit Documents
other than those Obligations specifically referred to in this Section 4.10;
fourth, to the ratable payment of interest due on the Revolving Loans; and
fifth, to the ratable payment of principal due on the Revolving Loans.
4.11 Calculations. All calculations of (i) interest hereunder and
(ii) Fees, including, without limitation, Unused Line Fees, Letter of Credit
Fees, L/C Facing Fees and Issuing Bank Fees, shall be made by the Agent, on the
basis of a year of 360 days, or, if such computation would cause the interest
and fees chargeable hereunder to exceed the Highest Lawful Rate, 365/366 days,
in each case for the actual number of days elapsed (including the first day but
excluding the last day) occurring in the period for which such interest or Fees
are payable. Each determination by the Agent of an interest rate, Fee or other
payment hereunder shall be conclusive and binding for all purposes, absent
manifest error.
ARTICLE 5. CONDITIONS PRECEDENT.
5.1 Conditions Precedent to Initial Letter of Credit. The
obligation of the Agent and the Lenders to cause the Issuing Bank to issue the
initial Letter of Credit is subject to the satisfaction or waiver of the
following conditions precedent:
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(a) Closing Document List. The Agent and the Lenders shall have
received each of the agreements, opinions, reports, approvals, consents,
certificates and other documents set forth on the closing document list
attached hereto as Schedule A (the "Closing Document List").
(b) Material Adverse Change. (i) No event shall have occurred
which has had or could reasonably be expected to have a Material Adverse
Effect, or (ii) there shall not have occurred a substantial impairment of the
financial markets generally that is reasonably likely to materially and
adversely affect the transactions contemplated hereby, in each case as
determined by the Agent and each Lender in its sole discretion.
(c) Fees and Expenses. The Agent and each of the Lenders shall
have received payment in full of all Fees and Expenses payable to them on or
before the Closing Date.
(d) Borrowing Base. The Borrowing Base shall be adequate, in the
Agent's sole discretion, for the Borrower's overall business and working
capital requirements.
(e) Additional Documents. The Credit Parties shall have executed
and delivered to the Agent and the Lenders all documents which the Agent
determines are reasonably necessary to consummate the transactions contemplated
hereby.
(f) First Priority Notes. The First Priority Notes shall have
been issued and sold pursuant to the First Priority Notes Documents, the
respective terms and provisions of which shall be in form and substance
satisfactory to the Agent and in any event consistent with the Offering
Memorandum and no default or event of default shall exist under the First
Priority Notes Indenture. The Borrower shall have received in immediately
available funds gross proceeds from the issuance of the First Priority Notes in
an aggregate amount not less than $160,000,000.
(g) Revolving Credit Facility. The Agent shall have received
evidence satisfactory to it that the Prudential Revolving Credit Documents are
in full force and effect, the respective terms of which shall be in form and
substance satisfactory to the Agent, that no default or event of default shall
exist thereunder and that there is available to the Borrower thereunder a
revolving line of credit in amount at least equal to $20,000,000.
(h) Collateral Agency Agreement. The Collateral Agent, the Agent,
BTCC, Prudential and the First Priority Notes Indenture Trustee shall have
executed and delivered the Collateral Agency Agreement, which shall be in form
and substance satisfactory to the Agent and the Lenders.
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(i) GECC Intercreditor Agreements. The Collateral Agent and GECC
shall have executed and delivered the GECC Intercreditor Agreements, which
shall be in form and substance satisfactory to the Agent and the Lenders.
(j) Certified Related Transaction Documents. The Agent shall have
received from the Borrower true, correct and complete copies of each of the
First Priority Note Documents, the Second Priority Notes Documents (if any),
the Prudential Revolving Credit Documents, the GECC Lease Documents and the DPK
Management Agreement.
5.2 Conditions Precedent to all Letters of Credit. The obligation
of the Agent and the Lenders to cause the Issuing Bank to issue any requested
Letter of Credit is subject to the satisfaction of the conditions precedent set
forth below. Each Letter of Credit Request shall constitute a representation
and warranty that such conditions are satisfied.
(a) All representations and warranties contained in this Credit
Agreement and the other Credit Documents shall be true and correct in all
material respects on and as of the date of such Letter of Credit Request, as if
then made, other than representations and warranties that relate solely to an
earlier date;
(b) No Default or Event of Default shall have occurred, or would
result from the issuance of the requested Letter of Credit, which has not been
waived; and
(c) No event has occurred which has had or could reasonably be
expected to have a Material Adverse Effect.
ARTICLE 6. REPRESENTATIONS AND WARRANTIES.
To induce the Agent and the Lenders to enter into this Credit
Agreement, to induce the Agent and the Lenders to cause the Issuing Bank to
issue Letters of Credit and to induce the Lenders to make the Revolving Loans
and other financial accommodations described herein, the Borrower hereby
represents and warrants to the Agent and the Lenders that the representations
and warranties contained in this Article 6 are true, correct and complete.
Such representations and warranties, and all other representations and
warranties made by the Borrower in any other Credit Documents, shall survive
the execution and delivery of this Credit Agreement and such other Credit
Documents.
6.1 Organization. The Borrower is a corporation duly organized
and existing in good standing under the laws of the State of Delaware and each
Subsidiary is duly organized and existing in good standing under the laws of
the jurisdiction in which it is
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incorporated. The Borrower and each Subsidiary is qualified to do business and
in good standing in every jurisdiction where the ownership of their respective
properties or the nature of their respective businesses makes such
qualification necessary except where the failure to be qualified or in good
standing in the aggregate could not reasonably be expected to have a Material
Adverse Effect. As of the Closing Date, the names of the Subsidiaries of the
Borrower, the jurisdiction in which each such Subsidiary is organized, the
number of outstanding shares of each class of capital stock of such Subsidiary,
the number of shares of each such class owned by the Borrower, or any
Subsidiary of the Borrower, and the number of shares of each such class owned
by any other Person, are as set forth in Schedule B, Part 6.1.
6.2 Power and Authority; Enforceability. The Borrower and each
Subsidiary has all requisite corporate power to own its property and to carry
on its business as now being conducted and as proposed to be conducted. The
Borrower and each Significant Domestic Subsidiary has the legal capacity and
authority to execute, deliver, and perform its obligations under the Credit
Documents to which it is a party. All action on the part of the Borrower and
each Significant Domestic Subsidiary necessary for the authorization,
execution, delivery and performance of all obligations of the Borrower and such
Significant Domestic Subsidiary under the Credit Documents to which it is a
party has been taken. The Credit Documents to which the Borrower or any
Significant Domestic Subsidiary is a party have been duly executed and
delivered by, and are the legal, valid and binding obligations of the Borrower
or such Significant Domestic Subsidiary, and each such document is enforceable
against the Borrower or such Significant Domestic Subsidiary in accordance with
its terms, except as may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors rights in general and by general
principles of equity, and each is in full force and effect.
6.3 Financial Statements. The Borrower has furnished the Agent
with the following financial statements, certified by the chief financial
officer of the Borrower: (i) consolidating and consolidated balance sheets of
the Borrower and its Subsidiaries as at the last day in each fiscal year in
each of the years 1992 to 1994, inclusive, and consolidating and consolidated
statements of income and cash flows and a consolidated statement of
stockholders' equity of the Borrower and its Subsidiaries for each such year,
all certified by Coopers & Lybrand (with respect to the consolidated
statements) or prepared by the Borrower (with respect to the consolidating
statements); and (ii) a consolidated balance sheet of the Borrower and its
Subsidiaries as at March 30, 1995 and March 31, 1994 and consolidated
statements of income, stockholders' equity and cash flows for the three-month
period ended on each such date, prepared by the Borrower. Such financial
statements (including any related schedules and/or notes) are true and correct
in all material respects (subject, as to interim statements, to
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changes resulting from audits and year-end adjustments), have been prepared in
accordance with GAAP consistently followed throughout the periods involved and
show all liabilities, direct and contingent, of the Borrower and its
Subsidiaries required to be shown in accordance with GAAP. The balance sheets
fairly present the condition of the Borrower and its Subsidiaries as at the
dates thereof, and the statements of income, stockholders' equity and cash
flows fairly present the results of the operations of the Borrower and its
Subsidiaries and their cash flows for the periods indicated. There has been no
material adverse change in the properties or assets, business, condition
(financial or otherwise) or operations of the Borrower and its Subsidiaries
taken as a whole since December 29, 1994.
6.4 Actions Pending. There is no action, suit, investigation or
proceeding pending or, to the knowledge of the Borrower, threatened against the
Borrower or any of its Subsidiaries, or any properties or rights of the
Borrower or any of its Subsidiaries, by or before any court, arbitrator or
Governmental Authority which could reasonably be expected have a Material
Adverse Effect.
6.5 Outstanding Debt. Neither the Borrower nor any of its
Subsidiaries has outstanding any Debt except as permitted by Section 8.3.
There exists no default (nor any event which with the passage of time, the
giving of notice or both would constitute a default) and, after giving effect
to the transaction contemplated by this Credit Agreement, the other Credit
Documents and each of the Related Transaction Documents, there will exist no
default (nor any event which with the passage of time, the giving of notice or
both would constitute a default) under the provisions of any instrument
evidencing Debt of the Borrower or any Subsidiary or of any agreement relating
thereto.
6.6 Title to Properties. The Borrower and each of its
Subsidiaries has good and indefeasible title to its respective real property
(other than leased real property) and good title to all of its other respective
Property, including the Property reflected in the balance sheet as at December
29, 1994 referred to in Section 6.3 (other than Property disposed of in the
ordinary course of business), subject to no Lien of any kind except Permitted
Liens and Liens in favor of the Banks which will be paid off on the Closing
Date. All leases necessary in any material respect for the conduct of the
respective businesses of the Borrower and its Subsidiaries are valid and
subsisting and are in full force and effect. The Borrower and its Subsidiaries
enjoy peaceful and undisturbed possession of all leased property necessary in
any material respect for the operation of its business, and none of the leases
with respect thereto contains any unusual or burdensome provisions which might
materially affect or impair the ability of the Borrower or its Subsidiaries to
maintain the operations of the Borrower and its Subsidiaries (taken as a
whole).
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6.7 Taxes. The Borrower and each of its Subsidiaries has filed
all federal, state and other income tax returns which are required to be filed,
(other than such tax returns where the consequence of a failure to file is
immaterial), and each has paid all taxes as shown on such returns and on all
assessments received by it to the extent that such taxes have become due,
except such taxes as are being contested in good faith by appropriate
proceedings for which adequate reserves have been established in accordance
with GAAP.
6.8 Conflicting Agreements and Other Matters. Neither the
Borrower nor any of its Subsidiaries is a party to any contract or agreement or
subject to any charter or other corporate restriction which materially and
adversely affects the ability of the Borrower or its Subsidiaries to maintain
the operations of the Borrower and its Subsidiaries (taken as a whole).
Neither the execution nor delivery of any of the Credit Documents or any of the
Related Transaction Documents, nor fulfillment of nor compliance with the terms
and provisions hereof and thereof will conflict with, or result in a breach of,
the terms, conditions or provisions of, or constitute a default under, or
result in any violation of, or result in the creation of any Lien (other than
Liens in favor of the Collateral Agent) upon any of the Property of the
Borrower or any of its Subsidiaries pursuant to, the articles of incorporation
or by-laws of the Borrower or any of its Subsidiaries, any award of any
arbitrator or any agreement (including any agreement with stockholders),
instrument, order, judgment, decree, statute, law, rule or regulation to which
the Borrower or any of its Subsidiaries is subject. Neither the Borrower nor
any of its Subsidiaries is a party to, or otherwise subject to any provision
contained in, any instrument evidencing Debt of the Borrower or such
Subsidiary, any agreement relating thereto or any other contract or agreement
(including its articles of incorporation or bylaws) which limits the amount of,
or otherwise imposes restrictions on the incurring of, Debt of the Borrower or
any Subsidiary including, without limitation, the Obligations and the
obligations of the Significant Domestic Subsidiaries under the Guaranty
Agreement, except as set forth in Schedule 8.7.
6.9 Use of Proceeds. Neither the Borrower nor any of its
Subsidiaries owns or has any present intention of acquiring any "margin stock"
as defined in Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System (herein called "margin stock"). None of the proceeds of the
Revolving Loans and no Letters of Credit will be used, directly or indirectly,
for the purpose, whether immediate, incidental or ultimate, of purchasing or
carrying any margin stock or for the purpose of maintaining, reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
any stock that is currently a margin stock or for any other purpose which might
constitute this transaction a "purpose credit" within the meaning of such
Regulations G, T, U or X. Neither the Borrower nor any agent acting on its
behalf has
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taken or will take any action which might cause this Credit Agreement to
violate Regulations G, T, U or X or any other regulation of the Board of
Governors of the Federal Reserve System or to violate the Exchange Act, in each
case as in effect now or as the same may hereafter be in effect.
6.10 ERISA. No accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Internal Revenue Code), whether or
not waived, exists with respect to any Plan (other than a Multiemployer Plan).
No liability to the Pension Benefit Guaranty Corporation has been or is
expected by the Borrower, any of its Subsidiaries or any member of the Control
Group to be incurred with respect to any Plan (other than a Multiemployer Plan)
by the Borrower, any of its Subsidiaries or any member of the Control Group
which is or could reasonably be expected to have a Material Adverse Effect.
Neither the Borrower, any of its Subsidiaries nor any member of the Control
Group has incurred or presently expects to incur any withdrawal liability under
Title IV of ERISA with respect to any Multiemployer Plan which is or could
reasonably be expected to have a Material Adverse Effect. The execution and
delivery of the Credit Documents by each of the Credit Parties will be exempt
from, or will not involve any transaction which is subject to, the prohibitions
of Section 406 of ERISA and will not involve any transaction in connection with
which a penalty could be imposed under Section 502(i) of ERISA or a tax could
be imposed pursuant to Section 4975 of the Internal Revenue Code.
6.11 Governmental Consent and Other Third Party Consents. Neither
the nature of the Borrower or of any of its Subsidiaries, nor any of their
respective businesses or properties, nor any relationship between the Borrower
or any of its Subsidiaries and any other Person, nor any circumstance in
connection with the financial accommodations contemplated by this Credit
Agreement is such as to require any authorization, consent, approval, exemption
or other action by or notice to or filing with any court or Governmental
Authority or other Person in connection with the execution and delivery of any
of the Credit Documents, or fulfillment of or compliance with the terms and
provisions hereof, other than filings and recordings necessary to perfect the
Liens granted to the Collateral Agent under the Collateral Documents, all of
which have been made.
6.12 Environmental Compliance. The Borrower and its Subsidiaries
and all of their respective properties and facilities have complied at all
times and in all respects with all foreign, federal, state, local and regional
statutes, laws, ordinances and judicial or administrative orders, judgments,
rulings and regulations relating to protection of the environment except, in
any such case, where failure to comply could not reasonably be expected to have
a Material Adverse Effect.
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6.13 Disclosure. Neither this Credit Agreement, any other of the
Credit Documents, any of the Related Transaction Documents, nor any other
document, certificate or statement furnished to the Agent or any of the Lenders
by or on behalf of the Borrower or any Subsidiary in connection herewith
(including, without limitation, the Offering Memorandum) contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements contained herein and therein not misleading. To
the knowledge of the Borrower there is no fact peculiar to the Borrower or any
of its Subsidiaries which materially adversely affects or in the future may (so
far as the Borrower can now foresee) materially adversely affect the properties
or assets, business, condition (financial or otherwise) or operations of the
Borrower and its Subsidiaries, taken as a whole, and which has not been set
forth in this Credit Agreement or in the other documents, certificates and
statements furnished to the Agent by or on behalf of the Borrower prior to the
date hereof in connection with the transactions contemplated hereby. The
financial projections contained in the Memorandum are reasonable based on the
assumptions stated therein and the best information available to the officers
of the Borrower (provided that this representation shall not constitute a
representation by the Borrower that any of such projections will be attained).
The parties hereto acknowledge that the description of the terms of the
financings described in the Offering Memorandum will be superseded by the
actual terms therefor as contained in this Credit Agreement and the Related
Transaction Documents.
6.14 Regulatory Status. Neither the Borrower nor any of its
Subsidiaries is (i) an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, (ii) a "holding company" or a "subsidiary company" or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company", within the meaning of Public Utility Act of 1935, as amended, or
(iii) a "public utility" within the meaning of the Federal Power Act, as
amended.
6.15 Permits and Other Operating Rights. The Borrower and each of
its Subsidiaries has all such valid and sufficient certificates of convenience
and necessity, franchises, licenses, permits, operating rights and other
authorizations from federal, state, foreign, regional, municipal and other
local regulatory bodies or administrative agencies or other Governmental
Authorities having jurisdiction over such Borrower or such Subsidiary or any of
its respective properties, as are necessary for the ownership, operation and
maintenance of its businesses and properties, subject to exceptions and
deficiencies which do not materially affect the properties or assets, business,
condition (financial or otherwise) or operations of the Borrower and its
Subsidiaries taken as a whole, and such certificates of convenience and
necessity, franchises, licenses, permits, operating rights and other
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authorizations from federal, state, foreign, regional, municipal and other
local regulatory bodies or administrative agencies or other Governmental
Authorities having jurisdiction over the Borrower, any such Subsidiary or any
of their Property are free from burdensome restrictions or conditions of an
unusual character or restrictions or conditions materially adverse to the
properties or assets, business, condition (financial or otherwise) or
operations of the Borrower and its Subsidiaries taken as a whole, and neither
the Borrower nor any Subsidiary is in violation of any thereof in any material
respect.
6.16 Absence of Other Liens. Except with respect to Permitted
Liens and Liens in favor of the Banks being paid off on the Closing Date, there
is no financing statement, security agreement, chattel mortgage, real estate
mortgage or other document filed or recorded with any filing records, registry
or other public office, that purports to cover, affect or give notice of any
present or possible future Lien on any Property of the Borrower or any of its
Subsidiaries or any rights relating thereto.
6.17 Security Interest. As of the Closing Date, all filings,
assignments, pledges and deposits of documents or instruments have been made
and all other actions have been taken, that are necessary or advisable under
applicable law and are required to be made or taken on or prior to the Closing
Date under the provisions of this Credit Agreement and the Collateral Documents
to establish the Collateral Agent's security interest in the Collateral. As of
the Closing Date, the Collateral and the Collateral Agent's rights with respect
to the Collateral are not subject to any setoff, claims, withholdings or other
defenses (except any such setoff, claim or defense which could not,
individually or in the aggregate, materially impair the rights of the
Collateral Agent with respect to the Collateral). The Borrower and each of the
Significant Domestic Subsidiaries party to any Collateral Document is the owner
of the Collateral described therein free from any Lien, except for Permitted
Liens and Liens in favor of the Banks being paid off on the Closing Date.
6.18 Locations of Collateral. The address of the principal place of
business and the chief executive office of the Borrower and each of the
Significant Domestic Subsidiaries is set forth on Schedule II to the Security
Agreement executed by such Person. The books and records of the Borrower and
each of the Significant Domestic Subsidiaries, and all of their chattel paper
and records of Accounts, are maintained exclusively at such locations. There
is no location at which the Borrower or any of the Significant Domestic
Subsidiaries has any Collateral other than those locations identified on
Schedule II to the Security Agreement executed by such Person. All real
property owned or leased by the Borrower and the Significant Domestic
Subsidiaries is described in Exhibit A to the Mortgages executed by such
Person, which Schedule sets forth, for each such location, a legal description,
common address and,
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for leased property, the name and mailing address of the record owner of such
leased property. All of the "Trademarks," "Copyrights," "Licenses" and
"Patents" (as each such term is defined in the Intellectual Property Security
Agreements) owned or licensed by the Borrower and each of the Significant
Domestic Subsidiaries is set forth on Schedules A, B, C and D, respectively, to
the Intellectual Property Security Agreement executed by such Person.
ARTICLE 7. AFFIRMATIVE COVENANTS.
Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder:
7.1 Financial Reporting. The Borrower shall timely deliver to the
Agent and each Lender the following information:
(a) Annual Financial Statements. As soon as available, but not
later than 90 days after each fiscal year end: (i) the annual audited
consolidated and unaudited consolidating Financial Statements of the
Consolidated Entity; (ii) a comparison in reasonable detail to the prior year
audited consolidated Financial Statements; (iii) the Auditors' opinion
concerning the audited consolidated Financial Statements of the Consolidated
Entity, which shall be reasonably acceptable to the Agent and the Lenders,
shall be without limitation as to the scope of the audit and shall state that
such financial statements present fairly, in all material respects, the
financial position of the Borrower and its Subsidiaries and their results of
operations and cash flows and have been prepared in conformity with GAAP, that
the examination of such Auditors in connection with such financial statements
has been made in accordance with generally accepted auditing standards, and
that such audit provides a reasonable basis for such opinion in the
circumstances; (iv) a certificate of the Auditors stating that in making the
audit necessary to the Auditors' opinion on the consolidated Financial
Statements, they have obtained no knowledge of any Event of Default or Default,
or if they have obtained knowledge of any Event of Default or Default,
specifying the nature and period of existence thereof; provided, however, that
the Auditors shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be disclosed in
the course of an audit conducted in accordance with generally accepted auditing
standards; (v) a narrative discussion of the consolidated financial condition
and results of operations and the consolidated liquidity and capital resources
of the Consolidated Entity for such fiscal year, prepared by the chief
financial officer of the Borrower (which requirement may be satisfied by
delivery of the annual report on Form 10-K filed by the Borrower with the SEC
and distributed to its stockholders and public debtholders); (vi) a letter
substantially in the form of Exhibit J hereto from the Auditors stating that
they have been informed that a primary intent of the Borrower was to have the
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professional services that the Auditors provided to the Borrower in preparing
their report with respect to the annual audited Financial Statements was to
benefit or influence the Lenders and identifying the Lenders as a party that
the Borrower has indicated intends to rely on such professional services
provided to the Borrower by the Auditors, and (vii) a compliance certificate
substantially in the form of Exhibit K with an attached schedule of
calculations demonstrating compliance with the financial covenants set forth in
Article 8.
(b) Monthly and Annual Projections. Not later than 45 days after
each fiscal year end, beginning with the fiscal year ended December 28, 1995,
monthly projections of the financial condition and results of operations of the
Consolidated Entity for the next succeeding year and annual projections for the
next two (2) succeeding fiscal years thereafter, in each case containing
projected consolidating balance sheets, statements of operations, statements of
cash flows and statements of changes in shareholders equity.
(c) Quarterly Financial Statements. As soon as available, but not
later than 45 days after each end of each of the first three fiscal quarters of
each fiscal year: (i) consolidated Financial Statements of the Consolidated
Entity as of the fiscal quarter then ended, and for the fiscal year to date;
(ii) a comparison in reasonable detail to the consolidated Financial Statements
for the corresponding periods of the prior fiscal year; (iii) the certification
of the chief executive officer or chief financial officer of the Borrower that
such consolidated Financial Statements have been prepared in accordance with
GAAP (subject to year-end audit adjustments); (iv) a narrative discussion of
the consolidated financial condition and results of operations and the
consolidated liquidity and capital resources of the Consolidated Entity for
such fiscal quarter and fiscal year to date, prepared by the chief financial
officer of the Borrower (which requirement may be satisfied be delivery of the
quarterly report on Form 10-Q filed by the Borrower with the SEC and
distributed to its stockholders and public debtholders); and (v) a compliance
certificate substantially in the form of Exhibit K with an attached schedule of
calculations demonstrating compliance with the financial covenants set forth in
Article 8.
(d) Special Reports. Promptly upon receipt thereof, a copy of
each report submitted to the Borrower or any of its Subsidiaries by the
Auditors in connection with any annual, interim or special audit made by the
Auditors of the books of the Borrower or any of its Subsidiaries.
(e) SEC Reports. The Borrower shall provide to the Agent and each
Lender 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
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SEC may by rules and regulations prescribe) which the Borrower files with the
SEC pursuant to Section 13 or 15(d) of the Exchange Act. If the Borrower is
not subject to Section 13 or 15(d) of the Exchange Act, the Borrower shall
continue to file with the SEC, the Agent and the Lenders on the same timely
basis such reports, information and other documents as the Borrower would file
if the Borrower were subject to the requirements of Section 13 or 15(d) of the
Exchange Act.
7.2 Collateral Reporting. The Borrower shall timely deliver to
the Agent the following certificates and reports:
(a) Monthly Borrowing Base Certificates. Monthly, within
thirty-five (35) days after the last Business Day of each month, and at any
other time requested by the Agent, a borrowing base certificate (the "Borrowing
Base Certificate"), which shall be: (i) substantially in the form of Exhibit A,
detailing the Borrower's Eligible Accounts Receivable and Eligible Inventory as
of the last day of each month, or as of such other date as the Agent may
request; and (ii) prepared by or under the supervision of the Borrower's chief
executive officer or chief financial officer and certified by such officer
subject only to adjustment upon completion of the normal year-end audit of
physical inventory. Each Borrowing Base Certificate shall have attached to it
such additional schedules and other information as the Agent may reasonably
request, including, without limitation, an aging of Accounts.
(b) Further Assurances. When requested by the Agent, any further
information regarding the Collateral, business affairs and financial condition
of the Borrower or any of its Subsidiaries.
7.3 Notification Requirements. The Borrower shall timely give the
Agent and each of the Lenders the following notices:
(a) Notice of Defaults. Promptly, and in any event within five
(5) Business Days after a Responsible Officer of the Borrower or any of its
Subsidiaries becomes aware of the occurrence of a Default or Event of Default,
a certificate of the chief executive officer or chief financial officer of the
Borrower specifying the nature thereof and the Borrower's proposed response
thereto, each in reasonable detail.
(b) Collateral Matters. At least thirty (30) Business Days prior
written notice to the Agent of any change in the location of any Collateral or
in the location of the chief executive office or place of business of the
Borrower or any of its Subsidiaries from the locations specified in the
Security Agreement to which it is a party. At least twenty (20) Business Days
prior to any such change, the Borrower shall cause to be executed and delivered
to the Collateral Agent any financing statements, Collateral Access
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Agreements or other documents required by the Agent, all in form and substance
satisfactory to the Agent.
(c) Notice of Suits, Adverse Change in Business, Etc. The
Borrower shall, and shall cause each of its Subsidiaries to, as soon as
possible, and in any event within five (5) Business Days after any Responsible
Officer of such Person learns of the following, give written notice to the
Agent: (a) of any material proceedings (including, without limitation,
litigation, investigations, arbitration or governmental proceedings) being
instituted by or against such Person in any federal, state, local or foreign
court or before any commission or other regulatory body (federal, state, local
or foreign), (b) that such Person's operations are not in full compliance with
all requirements of applicable federal, state, local or foreign law, ordinance,
rule, regulation or other governmental requirement, except for notices as to
matters which either individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (c) that, without limiting the
foregoing clause (b), such Person is subject to a material federal, state,
local or foreign investigation evaluating whether any remedial action is needed
to respond to the release of any hazardous or toxic waste, substance or
constituent, or other substance into the environment, and (d) of any material
adverse change in the business, operations, condition (financial or otherwise),
properties or prospects of the Borrower and its Subsidiaries, taken as a whole.
7.4 Corporate Existence; Conduct of Business. The Borrower shall,
and shall cause each of its Subsidiaries to, (a) continue to engage primarily
in the material lines of business (as determined by Borrower in reasonable
discretion) which the Borrower and Subsidiaries operate, respectively, as of
the Closing Date, (b) preserve, renew and keep in full force and effect the
corporate existence, and all material rights, privileges, franchises, permits
and licenses of the Borrower and its Subsidiaries, respectively; provided,
however, that (i) this clause (b) shall not prohibit a merger otherwise
permitted pursuant to Section 8.5 or Section 8.6 and (ii) neither the Borrower
nor any of its Subsidiaries shall be required to preserve any such right or
franchise or its corporate existence if the loss thereof could not reasonably
be expected to have a Material Adverse Effect.
7.5 Books and Records; Inspections. The Borrower agrees to
maintain, and to cause each of its Subsidiaries to maintain, books and records
pertaining to the Collateral in such detail, form and scope as is consistent
with good business practice. The Borrower agrees that the Agent or its agents
may enter upon the premises of the Borrower or any of its Subsidiaries at any
time and from time to time, during normal business hours and upon reasonable
notice under the circumstances, and at any time at all on and after the
occurrence of a Default which continues beyond the expiration of any grace or
cure period applicable thereto, and which has not
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otherwise been waived by the Agent, for the purposes of (i) inspecting and
verifying the Collateral, (ii) inspecting and/or copying (at the Borrower's
expense) any and all records pertaining thereto, and (iii) discussing the
affairs, finances and business of the Borrower with any officers, employees and
directors of the Borrower or, in the presence of a Responsible Officer of the
Borrower, with the Auditors. The Borrower agrees to pay the Expenses incurred
by the Agent and its agents in connection with inspections and audits once each
fiscal year of the Borrower prior to the occurrence of an Event of Default and
for each such inspection and audit occurring after the occurrence and during
the existence of an Event of Default.
7.6 Insurance. The Borrower shall insure and keep insured, and
shall cause each Subsidiary to insure and keep insured, with financially sound
and reputable insurers, so much of their respective Property and in such
amounts as is usually and customarily insured by companies engaged in similar
businesses with respect to Property of a similar character, and, in any event,
as is required under the Collateral Documents with respect to maintenance of
insurance. In the event the Borrower at any time or times hereafter shall fail
to obtain or maintain any of the policies of insurance required to be
maintained by any of the Collateral Documents or to pay any premium in whole or
in part relating thereto, then the Agent or the Lenders, without waiving any
Event of Default hereunder, may at any time (but shall be under no obligation
to) obtain and maintain such policies of insurance and pay such premiums
therefor and take any other action with respect thereto as the Agent or the
Lenders deem advisable.
7.7 Taxes. The Borrower shall, and shall cause each of its
Subsidiaries to, pay or cause to be paid all license fees, bonding premiums and
related taxes and charges, and shall pay or cause to be paid all of such
Person's real and personal property taxes, assessments and charges and all of
such Person's franchise, income, unemployment, use, excise, old age benefit,
withholding, sales and other taxes and other governmental charges assessed
against such Person, or payable by such Person, in each case when due and in
such manner as to prevent any penalty from accruing or any Lien from attaching
to its property (other than Liens for taxes not yet due and payable), provided
that such Person shall have the right to contest in good faith, by an
appropriate proceeding promptly initiated and diligently conducted, the
validity, amount or imposition of any such tax, assessment or charge, and
during the pendency of such good faith contest to delay or refuse payment
thereof if such Person establishes adequate reserves to cover such contested
taxes, assessments or charges.
7.8 Compliance with Laws. The Borrower agrees to comply, and to
cause each of its Subsidiaries to comply, in all material respects, with all
applicable laws, ordinances, rules, regulations and other requirements of
Governmental Authorities (including,
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without limitation, Environmental Laws and ERISA), except to the extent that
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
7.9 Maintenance of Property. The Borrower shall, and shall cause
each of its Subsidiaries to, maintain its Property in good working order and
condition (ordinary wear and tear excepted) and make all necessary repairs,
renewals, replacements, additions, betterments and improvements thereto so that
the business carried on in connection therewith may be properly and
advantageously conducted at all times, provided that nothing in this Section
7.9 shall prevent the Borrower of any of its Subsidiaries from discontinuing
the operation and maintenance of any of its Property if such discontinuance is
desirable in the conduct of its business and not disadvantageous in any
material respect to the Lenders; provided, further, that nothing in this
Section shall prevent the Borrower or any of its Subsidiaries from
discontinuing or disposing of any of its Property to the extent otherwise
permitted by Section 8.5 or Section 8.9 hereof.
7.10 Guaranties. The Borrower covenants that, effective upon any
Person becoming a Significant Domestic Subsidiary, the Borrower shall cause
such Person to become a party to the Guaranty Agreement and execute and deliver
a Security Agreement and all such agreements, instruments, documents, financing
statements, mortgages, deeds of trust, leasehold mortgages and other written
matter, and take such further action, as the Collateral Agent, the Agent or any
of the Lenders may request in order to obtain a valid and perfected first
priority Lien on all (or all but a de minimis amount of) such Person's Property
(subject only to Permitted Liens).
7.11 Further Assurances. The Borrower shall take, and shall cause
each of its Subsidiaries to take, all such further actions and execute all such
further documents and instruments as the Agent may at any time reasonably
determine in its sole discretion to be necessary or desirable to further carry
out and consummate the transactions contemplated by the Credit Documents, to
cause the execution, delivery and performance of the Credit Documents to be
duly authorized and to perfect or protect the Liens (and the priority status
thereof) of the Collateral Agent on the Collateral. Without limiting the
foregoing, the Borrower and each Subsidiary shall, at its own expense with
respect to any real propery acquired by it after the Closing Date, concurrently
with such acquisition, execute, deliver and provide to the Collateral Agent
such Mortgages and other documents as the Agent, the Lenders and the Collateral
Agent may reasonably deem appropriate or advisable to create a first priority
(subject to Permitted Liens) valid and perfected Lien in such Property in favor
of the Collateral Agent.
ARTICLE 8. NEGATIVE COVENANTS.
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Until termination of this Credit Agreement and payment and
satisfaction of all Obligations due hereunder, the Borrower shall comply with,
and, where required, shall cause each of its Subsidiaries to comply with, the
following covenants:
8.1 Certain Financial Covenants.
(a) Consolidated Tangible Net Worth. The Borrower covenants that
it will not cause or permit Consolidated Tangible Net Worth, at any time:
(i) During each "Clause (i) Test Period" (as defined
below) occurring during the period commencing on the Closing Date and
ending on December 28, 1995, to be less than an amount (the "Clause
(i) Amount") equal to (1) negative $37,000,000, plus (2) 50% of
Consolidated Net Income for such Clause (i) Test Period (or zero in
the case of a deficit), plus (3) the amount of any net gain realized
by the Borrower or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes) during
such Clause (i) Test Period; where "Clause (i) Test Period" means, at
any time, the period (taken as one accounting period) commencing on
March 30, 1995 and ending on the then most recently ended fiscal
quarter of the Borrower;
(ii) During each "Clause (ii) Test Period" (as
defined below) occurring during the period commencing on December 29,
1995 and ending on December 26, 1996, to be less than an amount (the
"Clause (ii) Amount") equal to (1) the greater of (X) the Clause (i)
Amount at December 28, 1995, and (Y) negative $37,000,000, plus (2)
50% of Consolidated Net Income for such Clause (ii) Test Period (or
zero in the case of a deficit), plus (3) the amount of any net gain
realized by the Borrower or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes) during
such Clause (ii) Test Period; where "Clause (ii) Test Period" means,
at any time, the period (taken as one accounting period) commencing on
December 29, 1995 and ending on the then most recently ended fiscal
quarter of the Borrower;
(iii) During each "Clause (iii) Test Period" (as defined
below) occurring during the period commencing on December 27, 1996 and
ending on December 25, 1997, to be less than an amount (the "Clause
(iii) Amount") equal to (1) the greater of (X) the Clause (ii) Amount
at December 26, 1996, and (Y) negative $37,000,000, plus (2) the
greater of (X) 50% of Consolidated Net Income for such Clause (iii)
Test Period (or zero in the case of a deficit), and (Y) $1,250,000
multiplied by the number of the Borrower's fiscal quarters that have
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ended during such Clause (iii) Test Period, plus (3) the amount of any
net gain realized by the Borrower or any of its Subsidiaries on the
exchange, redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes) during
such Clause (iii) Test Period; where "Clause (iii) Test Period" means,
at any time, the period (taken as a one accounting period) commencing
on December 27, 1996 and ending on the then most recently ended fiscal
quarter of the Borrower;
(iv) During each "Clause (iv) Test Period" (as defined
below) occurring during the period commencing on December 26, 1997 and
ending on December 31, 1998, to be less than an amount (the "Clause
(iv) Amount") equal to (1) the greater of (X) the Clause (iii) Amount
at December 25, 1997, and (Y) negative $37,000,000, plus (2) the
greater of (X) 50% of Consolidated Net Income for such Clause (iv)
Test Period (or zero in the case of a deficit), and (Y) $2,500,000
multiplied by the number of the Borrower's fiscal quarters, at the
time of determination, that have ended during such Clause (iv) Test
Period, plus (3) the amount of any net gain realized by the Borrower
or any of its Subsidiaries on the exchange, redemption, purchase or
other acquisition of any of its debt securities (including, without
limitation, the 10.25% Notes) during such Clause (iv) Test Period;
where "Clause (iv) Test Period" means, at any time, the period (taken
as one accounting period) commencing on December 26, 1997 and ending
on the then most recently ended fiscal quarter of the Borrower; and
(v) During each "Clause (v) Test Period" (as defined
below) occurring after January 1, 1999 and thereafter, to be less than
an amount equal to (1) the greater of (X) the Clause (iv) Amount at
December 31, 1998, and (Y) negative $37,000,000, plus (2) 50% of
Consolidated Net Income for such Clause (v) Test Period (or zero in
the case of a deficit), plus (3) the amount of any net gain realized
by the Borrower or any of its Subsidiaries on the exchange,
redemption, purchase or other acquisition of any of its debt
securities (including, without limitation, the 10.25% Notes) during
such Clause (v) Test Period; where "Clause (v) Test Period" means, at
any time, the period (taken as one accounting period) commencing on
January 1, 1999 and ending on the then most recently ended fiscal
quarter of the Borrower.
(b) Fixed Charge Coverage Ratio. The Borrower covenants that it
will not cause or permit the ratio of (i) Consolidated Cash Flow for the twelve
month period ending at the end of any fiscal quarter of the Borrower to (ii)
Consolidated Fixed Charges for each such twelve month period to be less than
the ratio set forth below for the period set forth below in which such fiscal
quarter ends:
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<TABLE>
<CAPTION>
Ratio Period
----- ------
<S> <C>
1.45:1 Closing Date through December 28, 1995
1.50:1 December 29, 1995 through December 26, 1996
1.55:1 December 27, 1996 and thereafter
</TABLE>
8.2 Limitation on Restricted Payments and Restricted Investments.
(a) The Borrower covenants that it shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly: (i) declare or pay any
dividend or make any other distribution or payment on or in respect of Capital
Stock of the Borrower or its Subsidiaries or make any payment to the direct or
indirect holders (in their capacities as such) of Capital Stock of the Borrower
or its Subsidiaries, other than dividends, distributions or payments payable or
made solely in shares of Capital Stock in the Borrower of the same class held
by such holders (other than Redeemable Stock) or in options, warrants or other
rights to purchase such shares; (ii) purchase, redeem, defease or otherwise
acquire or retire for value any Capital Stock of the Borrower or any
Subsidiary; (iii) make any principal payment on, or purchase, redeem,
repurchase, defease (including, but not limited to, in-substance or legal
defeasance) or otherwise acquire or retire for value, prior to any stated or
scheduled maturity, scheduled repayment or scheduled sinking fund or mandatory
redemption payment, any Restricted Debt (the foregoing actions, set forth in
clauses (i) through (iii) being referred to as "Restricted Payments"); or (iv)
make any Investment (the foregoing action being referred to as a "Restricted
Investment"); unless at the time of, and immediately after giving effect to
(determined on a pro forma basis), such proposed Restricted Payment or proposed
Restricted Investment:
(1) no Default or Event of Default exists or would exist;
and
(2) (i) the aggregate amount expended for all Restricted
Payments subsequent to March 30, 1995, plus (ii) the aggregate amount
expended for all Restricted Investments made subsequent to March 30,
1995, does not exceed the sum of:
(A) 50% (or minus 100% in the event of a deficit) of
Consolidated Net Income calculated on a cumulative basis for
the period commencing on March 31, 1995 and continuing
through the last day of the Borrower's fiscal quarter
immediately preceding the Borrower's fiscal quarter in which
the Restricted Payment or Restricted
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Investment, as the case may be, is proposed to be made; plus
(B) the aggregate net cash proceeds received by the
Borrower (i) from the issuance and sale (other than to a
Subsidiary of the Borrower), after the Closing Date, of
Capital Stock in the Borrower (other than Redeemable Stock),
(ii) upon conversion after the Closing Date of any Debt of the
Borrower that is, by its terms, convertible into Capital Stock
(other than Redeemable Stock) in the Borrower (with the
aggregate net cash proceeds being deemed to be the principal
amount of the Debt so converted), or (iii) from the exercise
for cash after the Closing Date of any options, warrants or
other rights to acquire Capital Stock (other than Redeemable
Stock) in the Borrower; plus
(C) $10,000,000;
provided, however, that in no event may Restricted Payments made subsequent to
March 30, 1995 exceed the sum of the amounts described in clause (A) and (B)
above plus $5,000,000.
(b) Notwithstanding clause (a) above, the provisions of this
Section shall not prohibit:
(i) (A) the payment by any Subsidiary of the Borrower of
dividends or other distributions to the Borrower or a Wholly Owned
Subsidiary of the Borrower or the redemption or repurchase by any such
Subsidiary of any Capital Stock in such Subsidiary owned by the
Borrower or a Wholly Owned Subsidiary of the Borrower, or (B) the
payment of pro rata dividends to holders of minority interests in the
Capital Stock in a Subsidiary of the Borrower; provided, however,
that, in the case of clause (B) no Default or Event or Default has
occurred and is continuing or would occur as a result thereof;
(ii) (A) consummation of the 10.25% Notes Exchange, so long as no
Default or Event of Default has occurred and is continuing or would
occur as a result thereof; (B) consummation of the exchange of Series
B Securities for Series A Securities, and Series D Securities for
Series C Securities, as contemplated by the Registration Rights
Agreement; and (C) consummation of an exchange of Subsequent Second
Priority Notes solely for Second Priority Notes;
(iii) Investments in the amounts existing on the date hereof and
specifically described on Schedule 8.2 attached hereto;
(iv) Investments (subject to Section 7.10) by the Borrower in
Wholly Owned Subsidiaries of the Borrower having
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lines of business that are substantially similar or materially related
to the Borrower's lines of business existing on the Closing Date, so
long as no Default or Event of Default has occurred and is continuing
or would occur as a result thereof; and
(v) Investments in Cash Equivalents;
(vi) the acquisition, redemption or retirement of Capital Stock of
the Borrower solely in exchange for (A) Capital Stock of the Borrower
of the same class as the Capital Stock that is being acquired,
redeemed or retired or (B) Common Stock of the Borrower; and
(vii) the acquisition, redemption or retirement of Debt of the
Borrower or its Subsidiaries (A) which is subordinated in right of
payment to the Obligations solely in exchange for Common Stock of the
Borrower, or (B) as part of a refinancing thereof permitted by Section
8.3(a)(xi).
(c) Notwithstanding clause (b) above, the payments described in
clause (b)(i)(B) above shall be included in any calculation of the sum of the
amount of Restricted Payments.
8.3 Limitation on Indebtedness.
(a) The Borrower covenants that it shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly permit to exist, create,
incur, issue, assume, guaranty or otherwise become liable with respect to,
extend the maturity of or become responsible for the payment of, any Debt
(including, without limitation, any Acquired Debt) other than:
(i) Debt of the Borrower evidenced by the First Priority Notes;
(ii) Debt of the Borrower evidenced by the 10.25% Notes;
(iii) Debt of the Borrower evidenced by the Second Priority Notes
and the Subsequent Second Priority Notes; provided, however, that:
(1) the aggregate principal amount of the Second Priority Notes and
the Subsequent Second Priority Notes do not at any time exceed
$50,000,000, (2) such Second Priority Notes and Subsequent Second
Priority Notes have terms substantially identical to the 10.25% Notes
and in any event no less favorable to the Borrower than those set
forth in the 10.25% Notes and the 10.25% Notes Indenture (provided,
however, that the Second Priority Notes and Subsequent Second Priority
Notes may be secured by Liens that are Permitted Liens described in
clause (xi) of the definition of Permitted Liens and the final
maturity thereof may be prior to the final maturity of the 10.25%
Notes, subject to clause
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(3) below), (3) the final maturity of such Second Priority Notes and
Subsequent Second Priority Notes is not prior to June 15, 2000, and
(4) without limiting the foregoing clause (3), such Second Priority
Notes and Subsequent Second Priority Notes shall not have any
scheduled principal installment or other principal payments due until
after the final maturity of the First Priority Notes;
(iv) Debt of the Borrower under the Prudential Revolving
Credit Agreement (including any refinancings thereof), provided, that
the aggregate principal amount of such Debt does not at any time
exceed $35,000,000;
(v) the Obligations of the Borrower under this Credit
Agreement;
(vi) Debt of the Borrower and certain Subsidiaries of the
Borrower under the GECC Lease Documents (including any refinancings
thereof) in an aggregate principal amount not to exceed the principal
amount thereof outstanding as of the Closing Date less any scheduled
amortization after the Closing Date of such Debt when actually paid by
the Borrower or its Subsidiaries; provided, however, that no
refinancing of such Debt under the GECC Lease Documents shall be
permitted unless: (1) such refinancing Debt shall have an Average Life
at the time such refinancing is incurred that is equal to or greater
than the Average Life of the Debt to be refinanced; and (2) such
refinancing Debt shall be in a principal amount not in excess of the
principal amount of the Debt to be refinanced (including the amount
(if any), up to $10,000,000, by which the Stipulated Loss Value
exceeds the then outstanding principal amount of the Debt to be
refinanced);
(vii) Debt evidenced by guaranties made by the Borrower's
Subsidiaries of the Debt described in clauses (i), (iii), (iv) and (v)
of this Section 8.3;
(viii) Debt of the Borrower or any of its Subsidiaries under
Currency Agreements and Interest Rate Agreements; provided, that such
Currency Agreements and Interest Rate Agreements do not increase the
outstanding Debt of the Borrower other than as a result of
fluctuations in foreign currency exchange rates or by reason of fees,
indemnities and compensation payable thereunder;
(ix) Debt of a Wholly Owned Subsidiary of the Borrower
to the Borrower or another Wholly Owned Subsidiary of the Borrower;
(x) Debt of any Subsidiary of the Borrower existing on
the Closing Date and described on Schedule 8.3 hereto;
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(xi) other Debt of any Subsidiary of the Borrower that
directly refinances any Debt of such Subsidiary described in the
immediately foregoing clause (x); provided, however, that (1) the
principal amount of such refinancing Debt does not exceed the
principal amount of the Debt to be refinanced, (2) the terms of such
refinancing Debt are, in all material respects, no less favorable to
such Subsidiary than the terms of the Debt to be refinanced, and (3)
without limiting the foregoing clause (2) no refinancing Debt may be
secured to any greater extent than is the Debt to be refinanced;
provided, further, that notwithstanding clause (1) above, the
aggregate principal amount of Debt refinancing existing lines of
credit of the Borrower's Subsidiaries may equal up to $10,000,000 (or
the applicable foreign currency equivalent thereof (reasonably
determined by the Borrower at the time any such refinancing Debt is
incurred);
(xii) Debt of the Borrower or any of its Subsidiaries (A)
resulting from the endorsement of negotiable instruments for
collection in the ordinary course of business, or (B) arising under
guarantees incurred in the ordinary course of business (and not in
connection with the borrowing of money) with respect to suppliers,
licensees, franchisees or customers of the Borrower or such
Subsidiary;
(xiii) other Debt of the Borrower and its Subsidiaries
(including, without limitations, Purchase Money Indebtedness and
Acquired Debt); provided, however, that the aggregate outstanding
principal amount thereof shall at no time exceed $15,000,000 (or the
applicable foreign currency equivalent thereof reasonably determined
by the Borrower at the time such Debt is incurred); provided, further,
that the aggregate outstanding amount of Purchase Money Indebtedness
to be incurred in connection with the purchase of any Property shall
not exceed 90% of the cash purchase price to be paid for such
Property; and
(xiv) other Debt of the Borrower (not secured by any Lien);
provided, however, that at no time shall (1) Consolidated Senior Debt be
more than 52.5% of Consolidated Total Capitalization, or (2) Consolidated Debt
be more than 85% of Consolidated Total Capitalization.
(b) For purposes of determining any particular amount of Debt
under this Section, Guarantees of (or obligations with respect to letters of
credit supporting) Debt otherwise included in the determination of such amount
shall not also be included.
8.4 Limitation on Liens. The Borrower covenants that it shall not,
and shall not permit any of its Subsidiaries to,
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directly or indirectly, create, incur or permit to exist any Lien of any nature
whatsoever on any of its Property (including, without limitation, Capital
Stock), whether owned on the Closing Date or thereafter acquired, other than
Permitted Liens.
8.5 Limitation on Borrower Transfers, Mergers and Consolidations.
The Borrower covenants that it shall not (a) directly or indirectly Transfer
all or substantially all of its Property in a single transaction or series of
transactions, or (b) merge or consolidate with any other Person unless, in the
case of a merger or consolidation:
(i) at the time of, and immediately after giving effect
to (determined on a pro forma basis), such proposed merger or
consolidation, no Default or Event of Default exists or would exist
after giving effect thereto (including, without limitation, any Event
of Default resulting from a Change of Control); and
(ii) the Borrower has delivered to the Agent a certificate of its
chief executive or chief financial officer and a legal opinion
acceptable to the Agent and Lenders, each stating that such
consolidation or merger complies with this Section 8.5 and that all
conditions precedent herein provided for with respect thereto have
been completely satisfied.
8.6 Limitation on Certain Asset Sales and Subsidiary Mergers.
Without limiting Section 8.5 above, the Borrower covenants that (i) it shall
not, and shall not permit any of its Subsidiaries to, directly or indirectly,
Transfer any of its Property, and (ii) the Borrower shall not permit any of its
Subsidiaries to merge or consolidate with any Person, except:
(a) any Wholly-Owned Subsidiary of the Borrower may merge
with, or sell all or substantially all of its Property to, the
Borrower or another Wholly-Owned Subsidiary of the Borrower if at the
time of and immediately after giving effect to (determined on a pro
forma basis) such proposed transaction no Default or Event of Default
exists or would exist after giving effect thereto;
(b) the Borrower may Transfer assets to the extent
permitted under Section 8.5 and may issue and sell its Capital Stock
subject to Section 9.1(f);
(c) the Borrower or any such Subsidiary may sell
inventory in the ordinary course of business and equipment that is
determined to be obsolete in accordance with GAAP or concurrently
replaced by equipment (not subject to any Lien other than Permitted
Liens) of the same type having a fair market value at least equal to
the fair market value of the equipment so replaced;
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(d) the Borrower or any such Subsidiary (subject to
clause (f) below) may otherwise Transfer Property (excluding Capital
Stock of Material Subsidiaries), and any such Subsidiary (subject to
clause (f) below) may consummate a Transfer by Merger; provided that
after giving effect thereto (1) the Percentage of Total Assets
Transferred in any fiscal year of the Borrower (excluding assets
described in clauses (a) and (c) above) shall not exceed 10%; and (2)
the Percentage of Total Assets Transferred (excluding assets described
in clauses (a) and (c) above) at any time after the Closing Date on a
cumulative basis shall not exceed 15%; and
(e) the Borrower or any Subsidiary of the Borrower
(subject to clause (f) below) may Transfer other Property (not
constituting Capital Stock of any Material Subsidiary), and any
Subsidiary of the Borrower (subject to clause (f) below) may
consummate other Transfers by Merger if:
(i) at the time of and immediately after giving
effect to (determined on a pro forma basis) such proposed
Transfer of Property or Transfer by Merger (as the case may
be) no Default or Event of Default exists or would exist;
(ii) the consideration to be paid to the Borrower
or such Subsidiary (as the case may be) is at least equal to
the fair market value of the assets to be Transferred (or in
the case of a Transfer by Merger, the fair market value of the
Subsidiary subject thereto), in each case as reasonably
determined by the Board of Directors; and
(iii) the proceeds from such Transfer of Property or
Transfer by Merger (net of (x) reasonable expenses incurred by
the Borrower or the Subsidiary (as the case may be) incidental
thereto, (y) the amount of any taxes (reasonably determined by
the Borrower in good faith) owing by the Borrower or such
Subsidiary (as the case may be) as a result thereof, and (z)
any mandatory repayment of permitted Debt (if any) secured by
a Permitted Lien on the Property being Transferred that is
prior to the Lien securing the Consolidated Secured Debt) are
immediately applied to redeem or otherwise repay the
Obligations and the other Consolidated Secured Debt
outstanding at such time, such application of proceeds to be
made pro rata to the holders of the Consolidated Secured Debt
based on the then outstanding principal amount or outstanding
amount of unpaid reimbursement obligations (with respect to
draws on the Letters of Credit) of each such holder's holding
of Consolidated Secured Debt (or, in the case of Prudential,
the "Revolving Commitment," as defined in the Collateral
Agency Agreement) in proportion to the aggregate amount of
Consolidated Secured Debt then
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outstanding (or, in the case of Prudential, the "Revolving
Commitment," as defined in the Collateral Agency Agreement);
provided, however , that such redemption or repayment
pursuant to this clause (3) shall be deferred until the amount
of proceeds to be so redeemed and otherwise repaid equals or
exceeds $5,000,000 with any such lesser amounts not used for
redemption or repayment to be aggregated with proceeds
subsequently received from Transfers to be utilized for
redemption or repayment at such point as such aggregate amount
equals or exceeds $5,000,000. The Borrower shall make each
redemption or other repayment required under Section
8.6(e)(iii) no later than the Business Day following the
Transfer of Property or Transfer by Merger giving rise
thereto.
(f) Notwithstanding anything to the contrary in this Section 8.6,
the Borrower shall not permit any Material Subsidiary, directly or indirectly,
to Transfer all or substantially all of its assets in a single transaction or
seies of related transactions or to merge or consolidate with any Person other
than as permitted under Section 8.6(a).
8.7 Limitation on Payment Restrictions Affecting Subsidiaries. The
Borrower covenants that it shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction which by its terms
expressly restricts the ability of any Subsidiary of the Borrower to: (a) pay
dividends or make any other distributions on the Capital Stock in such
Subsidiary or any other interest or participation in, or measured by, its
profits owned by, or pay any Debt owed to, the Borrower or any such Subsidiary,
(b) make any loans or advances to the Borrower or any such Subsidiary or (c)
transfer any of its Property to the Borrower or to any such Subsidiary, except
for (i) such encumbrances or restrictions existing under or by reason of any
encumbrance or restriction existing by reason of applicable law; (ii) such
encumbrances or restrictions existing on the Closing Date and described in
reasonable detail on Schedule 8.7 hereto, including, without limitation, any
encumbrances or restrictions under Debt of the Borrower or any of its
Subsidiaries listed on Schedule 8.3; (iii) such encumbrances or restrictions as
may exist under refinancing Debt permitted under Section 8.3(a)(xi); provided,
however, that any such encumbrances or restrictions are, in no material
respect, any more onerous to the Borrower or such Subsidiary than the
encumbrances or restrictions included in the Debt to be refinanced; (iv) such
encumbrances or restrictions as may exist under any Acquired Debt at the time
incurred by the Borrower or such Subsidiary; provided, however, that such
encumbrances or restrictions are, in no material respect, any more onerous to
the Borrower or such Subsidiary as the then existing most onerous such
encumbrances and restrictions applicable to the
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Borrower or such Subsidiary; (v) the provisions of any lease governing a
leasehold interest or of any supply, license or other agreement entered into in
the ordinary course of business of the Borrower or such Subsidiary that
restrict in a customary manner transfer, subleasing or assignment; and (vi) any
restrictions with respect to a Subsidiary imposed pursuant to an agreement
entered into for the sale or disposition of Capital Stock or assets of such
Subsidiary pending the closing of such sale or disposition.
8.8 Transactions with Affiliates.
(a) The Borrower covenants that it shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction or series of related transactions (including, without
limitation, any purchase, sale or exchange of Property, the making of any
Investment, the giving of any guarantee or the rendering of any service), with
any Affiliate of the Borrower or of any Subsidiary of the Borrower unless the
terms of such transaction or series of related transactions are no less
favorable to the Borrower or such Subsidiary, as the case may be, than those
that might be obtained at the time of such transaction from a Person who is not
such an Affiliate; provided, however, that in addition to the foregoing, any
such transaction (or series of related transactions), other than Exempted
Transactions, that has a fair market value to the Borrower or such Subsidiary
of $10,000,000 or more shall be deemed to be on terms no less favorable to the
Borrower or such Subsidiary than those obtainable at the time of the
transaction from a Person who is not such an Affiliate only if the Board of
Directors of the Borrower receives and delivers to the Agent, prior to such
transaction, a written opinion of a nationally recognized investment banking
firm stating that the transaction is fair to the Borrower or such Subsidiary
from a financial point of view.
(b) The provisions set forth in clause (a) above shall not apply to
(i) the payment of fees, salaries or other amounts to DPK in accordance with
the express terms of the Management Agreement; provided, however, that the
aggregate amount of all such fees, salaries and other amounts shall not exceed
$5,000,000 (determined without regard to the value of options to purchase the
Borrower's Common Stock) in the aggregate in any consecutive twelve month
period, (ii) any transaction between the Borrower and any of its Wholly Owned
Subsidiaries, (iii) the payment of reasonable and customary fees (including
options to purchase the Borrower's Common Stock) to directors of the Borrower
or any of the Subsidiaries of the Borrower who are not employees of the
Borrower or any Subsidiary of the Borrower as the same may be deemed advisable
or appropriate by the Board of Directors, or (iv) loans or advances to
officers, members of the Board of Directors and employees of the Borrower or
any of its Subsidiaries for travel, entertainment or moving and other
relocation expenses made in the ordinary course of
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business of the Borrower and its Subsidiaries as the same may be deemed
advisable or appropriate by the Board of Directors.
8.9 Limitations on the Sale of Stock and Debt of Subsidiaries.
The Borrower covenants that it shall not, and shall not permit any of its
Subsidiaries to, sell or otherwise dispose of, or part with control of, any
Capital Stock (other than directors' qualifying shares or nominee shares) or
Indebtedness of any Subsidiary of the Borrower, except to the Borrower or a
Wholly Owned Subsidiary of the Borrower, and except that all Capital Stock and
Indebtedness of any such Subsidiary may be sold as an entirety provided that
(a) at the time of such sale, such Subsidiary shall not own, directly or
indirectly, any Capital Stock or Indebtedness of any other Subsidiary (unless
all of the Capital Stock and Indebtedness of such other Subsidiary are
simultaneously being sold), and (b) such sale would be permitted by Section 8.5
and Section 8.6; provided, further, that this Section 8.9 shall not be deemed
to prohibit the Borrower or any Subsidiary of the Borrower from making any
Investment (including, without limitation, Investments in a Person such that
after giving effect thereto such Person may be less than a Wholly-Owned
Subsidiary of the Borrower) permitted by Section 8.2.
8.10 Sale and Lease-Back Transactions. The Borrower covenants that
it shall not, and shall not permit any of its Subsidiaries to, enter into any
arrangement with any Person providing for the leasing by the Borrower or such
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Borrower or such Subsidiary to such Person or to any Person
to whom funds have been or are to be advanced by such Person on the security of
such property or rental obligations of the Borrower or such Subsidiary.
8.11 Sale or Discount of Receivables. The Borrower covenants that
it shall not, and shall not permit any of its Subsidiaries to, sell with
recourse, or discount or otherwise sell for less than the face value thereof,
any of its notes or accounts receivable.
8.12 Pension Plan Funding Deficiency. The Borrower covenants that
it shall not, and shall not permit any member of the Control Group to, on or
after the Closing Date (a) incur or permit to exist any accumulated funding
deficiency within the meaning of Section 302(a)(2) of ERISA or Section 412(a)
of the Internal Revenue Code, or (b) incur any liability (other than for
premiums due but not yet paid) to the Pension Benefit Guaranty Corporation, in
either case in connection with any Title IV Plan which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect.
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8.13 Limitation on Issuance and Sale of Capital Stock of Subsidiaries.
The Borrower covenants that it shall not (a) permit any Subsidiary of the
Borrower to issue or sell any Capital Stock in such Subsidiary other than to
the Borrower or a Wholly Owned Subsidiary of the Borrower or (b) permit any
Person other than the Borrower or a Wholly Owned Subsidiary of the Borrower to
hold any Capital Stock issued after the Closing Date in any Subsidiary of the
Borrower; provided, however, that the Borrower or any Subsidiary of the
Borrower may sell Common Stock to the extent permitted under Section 8.6.
8.14 Limitation on Fiscal Year Changes. The Borrower covenants
that it shall not change its fiscal year end from the last Thursday in each
December of each year nor shall it make any change to its corresponding fiscal
quarter end; provided, however, that the Borrower may make a one time change in
its fiscal year end to December 31 of each year (a "Fiscal Year Change") so
long as (a) its fiscal quarter end is concurrently changed to the last day of
each calendar quarter and (ii) the Borrower gives not less than 5 Business Days
prior notice thereof to the Agent. Upon and after the effectiveness of the
Fiscal Year Change (if any) and as to all periods after (but not before) such
Fiscal Year Change: (a) the references in Section 8.1(a) to "December 25,"
"December 26," "December 27," "December 28" and "December 29" shall
automatically be deemed to be a reference to "December 31;" and (b) the
references in Section 8.1(b) to "December 27," "December 28" and "December 29"
shall automatically be deemed to be a reference to "December 31."
8.15 Limitation of Payments on First Priority Note and Subsequent
First Priority Notes. The Borrower covenants that it shall not, directly or
indirectly, make any principal payment on or purchase, redeem, repurchase,
defease (including but limited to, in-substance or legal defeasance) or
otherwise acquired or retire for value, prior to any stated or scheduled
maturity, scheduled repayment or scheduled sinking fund or mandatory redemption
payment, any First Priority Notes or Subsequent First Priority Notes other than
pursuant to Section 3.09 and 4.06(e)(3) of the First Priority Notes Indenture
(as in effect on the Closing Date).
ARTICLE 9. EVENTS OF DEFAULT AND REMEDIES.
9.1 Events of Default. The occurrence of any of the following
events shall constitute an Event of Default hereunder:
(a) Failure to Pay Principal. The Borrower shall fail to make any
principal payment when the same shall become payable hereunder.
(b) Failure to Pay Other Obligations. The Borrower shall fail to
pay any Obligation (other than principal payments) for more than five (5) days
after the same shall become payable hereunder.
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(c) Breach of Certain Covenants. The Borrower shall fail to
comply with any covenant contained in Article 8 hereof.
(d) Breach of Representation or Warranty. Any representation or
warranty made by any Credit Party or by any Responsible Officer thereof in this
Credit Agreement or in any other Credit Document (and in any statement or
certificate given under this Credit Agreement or any other Credit Document),
shall be false or misleading in any material respect when made or deemed to be
made.
(e) Breach of Other Covenants. Any Credit Party shall fail to
comply with any covenant, condition or agreement contained in this Credit
Agreement or any other Credit Document, other than as set forth in Sections
9.1(a), (b) or (c), and such failure shall continue for thirty (30) days after
any Responsible Officer of the Borrower learns thereof.
(f) Change of Control. A Change of Control shall occur.
(g) Cross Default. The Borrower or any Subsidiary of the Borrower
defaults (whether as primary obligor or as guarantor or other surety) in any
payment of principal of or interest on the 10.25% Notes, the First Priority
Notes, the Subsequent First Priority Notes (if any), the Second Priority Notes
(if any), the Subsequent Second Priority Notes (if any), any loan under the
Prudential Revolving Credit Agreement, any Capital Lease Obligation under the
GECC Lease Documents or any other obligation for money borrowed (or any Capital
Lease Obligation, any obligation under a conditional sale or other title
retention agreement, any obligation issued or assumed as full or partial
payment for property whether or not secured by a purchase money mortgage or any
obligation under notes payable or drafts accepted representing extensions of
credit or any obligation to pay or reimburse any Person for any amount paid
under any letter of credit, any proposal, bid, performance or other bond, or
under any indemnity agreement) beyond any period of grace provided with respect
thereto, or the Borrower or any such Subsidiary fails to perform or observe any
other agreement, term or condition contained in any agreement under which any
such obligation is created (or if any other event thereunder or under any such
agreement shall occur and be continuing) and the effect of such failure or
other event is to cause, or to permit the holder or holders of such obligation
(or a trustee on behalf of such holder or holders) to cause, such obligation to
become due (or to be repurchased by the Borrower or any such Subsidiary) prior
to any stated maturity, provided that, except in respect of the 10.25% Notes,
the First Priority Notes, the Subsequent First Priority Notes (if any), the
Second Priority Notes (if any), the Subsequent Second Priority Notes (if any),
the loans under the Prudential Revolving Credit Agreement and the Capital Lease
Obligation under the GECC Lease Documents, the aggregate amount of all
obligations as to which such a payment default shall occur and be continuing or
such a failure or other event causing or permitting acceleration
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(or resale to the Borrower or any Subsidiary) shall occur and be continuing
exceeds $5,000,000.
(h) Insolvency Event. The Borrower or any Material Subsidiary
shall become the subject of an Insolvency Event.
(i) Judgments. One or more judgments or orders in an aggregate
amount in excess of $5,000,000 (net of cash proceeds actually received by, or
paid on behalf of, the Borrower or any Material Subsidiary of the Borrower with
respect to such judgments or orders) are rendered against the Borrower or any
Material Subsidiary of the Borrower and, within 60 days after entry thereof,
such judgment is not discharged or execution thereof stayed pending appeal, or
within 60 days after the expiration of any such stay, such judgment is not
discharged.
(k) Defaults Under Other Credit Documents. The occurrence of any
"Event of Default" (as defined in any other Credit Document) or the breach of
any covenant, warranty or agreement set forth in any other Credit Document,
which Event of Default or breach continues beyond any period of grace therein
provided.
(l) Unenforceability of Guaranty. The Guaranty Agreement shall
fail to remain in full force or effect or any action shall be taken to
discontinue or to assert the invalidity or unenforceability of the Guaranty
Agreement, or any guarantor thereunder shall fail to comply with any of the
terms or provisions of the Guaranty Agreement or denies that it has any further
liability under the Guaranty Agreement, or gives notice to such effect.
(m) Collateral. The Collateral Agent shall cease to possess at
any time a valid, first priority (subject to Permitted Liens) perfected Lien in
and on any of the Collateral (other than Collateral having a de minimis value).
(n) Termination Event. Any Termination Event occurs.
9.2 Acceleration, Termination of Commitments and Cash
Collateralization. Upon the occurrence and during the continuance of any Event
of Default, without prejudice to the rights of the Agent or any Lender to
enforce its claims against the Borrower:
(a) Acceleration. Upon the written request of the Majority
Lenders, and by delivery of written notice to the Borrower from the Agent, all
Obligations shall be immediately due and payable (except with respect to any
Event of Default set forth in Section 9.1(h) hereof, in which case all
Obligations shall automatically become immediately due and payable without the
necessity of any request of the Majority Lenders or notice or other demand to
the Borrower) without presentment, demand, protest or any other action or
obligation of the Agent or any Lender.
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(b) Termination of Commitments. Upon the written request of the
Majority Lenders, and by delivery of written notice to the Borrower from the
Agent, the Commitments shall be immediately terminated and, at all times
thereafter, all Revolving Loans made by any Lender pursuant to this Credit
Agreement shall be at such Lender's sole discretion, unless such Event of
Default is waived in accordance with Section 11.11, in which case the
Commitments shall be automatically reinstated.
(c) Cash Collateralization. On demand of the Agent or the
Majority Lenders, and subject to the terms of the Collateral Agency Agreement,
the Borrower shall immediately deposit in the Cash Collateral Account
maintained by the Collateral Agent, for each Letter of Credit then outstanding,
cash or Cash Equivalents in an amount equal to 110% of the greatest amount
drawable thereunder. Such deposit shall be held by the Collateral Agent and
disbursed to the Agent in accordance with the terms of the Collateral Agency
Agreement to reimburse the Issuing Bank for the amount of each drawing made
under such Letters of Credit, as and when each such drawing is made.
9.3 Rescission of Acceleration. After acceleration of the
maturity of the Obligations, if the Borrower pays all accrued interest and all
principal due (other than by reason of the acceleration) and all Defaults and
Events of Default are otherwise remedied or waived in accordance with Section
11.11, the Majority Lenders may elect in their sole discretion, to rescind the
acceleration and direct the Collateral Agent to return any cash collateral
deposited with the Collateral Agent pursuant to Section 9.2(c). (This Section
is intended only to bind all of the Lenders to a decision of the Majority
Lenders and not to confer any right on the Borrower, even if the described
conditions for the Majority Lenders' election may be met.)
9.4 Remedies. Upon the occurrence and during the continuance of
an Event of Default, upon the written request and at the direction of the
Majority Lenders, the Agent may direct the Collateral Agent, in accordance with
the terms of the Collateral Agency Agreement, to exercise any rights and
remedies available to the Collateral Agent under applicable law (including
under the Code) and under the Collateral Documents. The foregoing rights and
remedies are not intended to be exhaustive and the full or partial exercise of
any right or remedy shall not preclude the full or partial exercise of any
other right or remedy available under this Credit Agreement, any other Credit
Document, or the Collateral Agency Agreement, at equity or at law.
9.5 Right of Setoff. In addition to and not in limitation of all
rights of offset that any Lender or the Issuing Bank may have under applicable
law, upon the occurrence of any Event of Default, and whether or not any Lender
or the Issuing Bank has made any demand or the Obligations of any Credit Party
have matured, each
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Lender and the Issuing Bank shall have the right, subject to the terms of the
Collateral Agency Agreement, to appropriate and apply to the payment of the
Obligations of such Credit Party all deposits and other obligations then or
thereafter owing by such Lender or the Issuing Bank to such Credit Party. Each
Lender exercising such rights shall notify the Agent thereof and any amount
received as a result of the exercise of such rights shall, subject to the terms
of the Collateral Agency Agreement, be shared by the Lenders in accordance with
Section 3.5.
9.6 Application of Proceeds; Surplus; Deficiencies. The net cash
proceeds resulting from the Collateral Agent's exercise of any of the foregoing
rights against any Collateral that are disbursed to the Agent pursuant to the
terms of the Collateral Agency Agreement (after deducting all of the Agent's
Expenses related thereto) shall be applied by the Agent to the payment of the
Obligations, whether due or to become due, in the order set forth in Section
4.10. The Borrower shall remain liable to the Agent and the Lenders for any
deficiencies, and the Agent and the Lenders in turn agree to remit to the
Borrower or its successors or assigns, any surplus resulting therefrom.
ARTICLE 10. THE AGENT.
10.1 Appointment of Agent.
(a) Each Lender and the Issuing Bank hereby designates BTCC as its
Agent and irrevocably authorizes the Agent to take action on its behalf under
the Credit Documents and the Collateral Agency Agreement, to exercise the
powers and perform the duties described therein, and to exercise such other
powers reasonably incidental thereto. The Agent may perform any of its duties
through its agents or employees.
(b) Other than the Borrower's rights under Section 10.8, this
Article 10 is for the benefit of the Agent and the Lenders only. The Agent
shall act only for the Lenders and assumes no obligation to or agency or trust
relationship with any Credit Party.
10.2 Nature of Duties of Agent. The Agent has no duties or
responsibilities except those expressly set forth in the Credit Documents.
Neither the Agent nor any of its officers, directors, employees or agents shall
be liable for any action taken or omitted hereunder or in connection herewith.
The duties of the Agent shall be mechanical and administrative in nature. The
Agent shall not have a fiduciary relationship to any Lender or any participant
of any Lender.
10.3 Lack of Reliance on Agent. Independently and without reliance
upon the Agent, each Lender has made and shall continue to make its own
independent investigation and analysis of the content
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and validity of the Credit Documents and the Collateral Agency Agreement or of
the performance and creditworthiness of the Credit Parties thereunder. The
Agent assumes no responsibility and undertakes no obligation to make inquiry
with respect to such matters, unless specifically requested to do so in writing
by a Lender.
10.4 Certain Rights of the Agent. The Agent may request
instructions from the Majority Lenders at any time. If the Agent requests
instructions from the Majority Lenders with respect to any action or inaction,
the Agent shall be entitled to await instructions from the Majority Lenders
before such action or inaction. No Lender shall have any right of action based
upon the Agent's action or inaction in response to instructions from the
Majority Lenders.
10.5 Reliance by Agent. The Agent may rely upon written or
telephonic communication it believes to be genuine and to have been signed,
sent or made by the proper person. The Agent may obtain the advice of legal
counsel (including, for matters concerning the Borrower, counsel for the
Borrower), independent public accountants and other experts selected by it and
shall have no liability for action or inaction in good faith based upon such
advice.
10.6 Indemnification of Agent. Each Lender agrees to reimburse and
indemnify the Agent, to the extent of its Proportionate Share, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever (including all Expenses) which
may be imposed on, incurred by or asserted against the Agent in performing its
duties hereunder or otherwise relating to the Credit Documents and the
Collateral Agency Agreement, unless resulting from the Agent's gross negligence
or willful misconduct.
10.7 BTCC in its Individual Capacity. In its individual capacity,
BTCC shall have the same rights and powers hereunder as any other Lender and
may exercise them as though it was not performing the duties specified herein
as Agent. The terms "Lenders," "Majority Lenders," or any similar terms shall,
unless the context clearly otherwise indicates, include BTCC in its individual
capacity. BTCC and its Affiliates may accept deposits from, lend money to,
acquire equity interests in, and generally engage in any kind of banking,
trust, financial advisory or other business with the Borrower or any Affiliate
of the Borrower as if it were not performing the duties specified herein as
Agent, and may accept fees and other consideration from the Borrower for
services in connection with this Credit Agreement and otherwise without having
to account for the same to the Lenders.
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10.8 Successor Agent.
(a) The Agent may, upon five Business Days' notice to the Lenders
and the Borrower, resign by giving written notice thereof to the Lenders and
the Borrower. The Agent's resignation shall be effective upon the appointment
of a successor Agent.
(b) Upon receipt of the Agent's resignation, the Majority Lenders
may appoint a successor Agent. Unless an Event of Default shall have occurred
and be continuing at the time of such appointment, the successor Agent shall be
subject to approval by the Borrower, which approval shall not to be
unreasonably withheld and shall be delivered to the Majority Lenders within
five Business Days after the Borrower's receipt of notice of a proposed
successor Agent. If a successor Agent has not accepted its appointment within
fifteen Business Days, then the retiring Agent may, on behalf of the Lenders,
appoint a successor Agent.
(c) Upon its acceptance of the agency hereunder, a successor Agent
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring Agent, and the retiring Agent shall be discharged from
its duties and obligations under this Credit Agreement. The retiring Agent
shall continue to have the benefit of this Article 10 for any action or
inaction while it was Agent.
10.9 Collateral Matters.
(a) Each Lender authorizes and directs the Agent to enter into the
Collateral Agency Agreement for the benefit of the Lenders. Except as
otherwise set forth herein, any action or exercise of powers by the Majority
Lenders under the Credit Documents and the Collateral Agency Agreement,
together with such other powers as are reasonably incidental thereto, shall be
authorized and binding upon all of the Lenders. Prior to an Event of Default,
without notice to or consent from any Lender, the Agent may direct the
Collateral Agent, in accordance with the terms of the Collateral Agency
Agreement and subject to the limitations set forth therein, to take any action
necessary or advisable to perfect and maintain the perfection of the Liens upon
the Collateral.
(b) The Agent is authorized to direct the Collateral Agent, in
accordance with the terms of the Collateral Agency Agreement and subject to the
limitations set forth therein, to release any Lien granted to or held by the
Collateral Agent upon any Collateral (i) upon termination of the Commitments
and indefeasible payment and satisfaction of all of the Obligations, (ii) upon
receipt of the proceeds of sales of the Collateral permitted hereunder or (iii)
if the release can be and is approved by the Majority Lenders. The Agent may
request and the Lenders will provide confirmation of the Agent's authority to
direct the Collateral Agent, in accordance with the terms of the Collateral
Agency Agreement and subject to
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the limitations set forth therein, to release particular types or items of
Collateral.
(c) The Agent shall have no obligation to assure that the
Collateral exists or is owned by the Borrower or any of its Subsidiaries, that
such Collateral is cared for, protected or insured, or that the Liens in the
Collateral have been created, perfected, or have any particular priority. With
respect to the Collateral, the Agent may act in any manner it may deem
appropriate, in its sole discretion, given the Agent's own interest in the
Collateral as one of the Lenders, and it shall have no duty or liability
whatsoever to the Lenders, except for its gross negligence or willful
misconduct.
10.10 Actions with Respect to Defaults. In addition to the Agent's
right to take actions on its own accord as permitted under this Credit
Agreement, the Agent shall take such action with respect to a Default or Event
of Default as shall be directed by the Majority Lenders. Until the Agent shall
have received such directions, the Agent may act (or not act) as it deems
advisable and in the best interests of the Lenders.
10.11 Protection of Collateral. If the Borrower fails to (a) maintain
in force and pay for any insurance policy or bond which the Borrower is
required to provide pursuant to any of the Credit Documents, (b) keep the
Collateral in good repair and operating condition in accordance with the
provisions of any of the Credit Documents, (c) keep the Collateral free from
any Liens other than Permitted Liens, (d) pay when due all taxes, levies and
assessments except as otherwise provided pursuant to the terms of any of the
Credit Documents, (e) make all payments and perform all acts on the part of the
Borrower to be paid or performed with respect to any of the Collateral,
including, without limitation, all expenses of protecting, storing,
warehousing, insuring, handling and maintaining the Collateral and (f) keep
fully and perform promptly any other of the obligations of the Borrower under
the Credit Documents, then the Agent or the Lenders, at its or their option,
may (but shall not be required to) procure and pay for such insurance policy or
bond, place such Collateral in good repair and operating condition, pay,
contest or settle such Liens or taxes or any judgements based thereon or
otherwise make good any other such failure of the Borrower. The Borrower shall
reimburse the Agent and the Lenders promptly upon demand for all sums paid or
advanced on behalf of the Borrower for any such purpose, together with
reasonable and/or necessary cost and expenses (including reasonable attorneys'
fees) paid or incurred by the Agent in connection therewith and interest on all
sums advanced from the date of advancement until repaid to the Agent at the
rate specified in Section 4.4. All such sums advanced by the Agent and the
Lenders, with interest thereon, immediately upon advancement thereon, shall be
deemed to be part of the Obligations.
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ARTICLE 11. MISCELLANEOUS.
11.1 GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT
OF THIS CREDIT AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND ANY DISPUTE ARISING
OUT OF OR IN CONNECTION WITH THIS CREDIT AGREEMENT OR ANY OF THE CREDIT
DOCUMENTS, WHETHER SOUNDING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE
GOVERNED BY THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS PROVISIONS)
AND DECISIONS OF THE STATE OF ILLINOIS.
11.2 SUBMISSION TO JURISDICTION. ALL DISPUTES AMONG THE BORROWER
AND THE LENDERS (OR THE AGENT ACTING ON THEIR BEHALF), WHETHER SOUNDING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE AND
FEDERAL COURTS LOCATED IN CHICAGO, ILLINOIS, AND THE COURTS TO WHICH AN APPEAL
THEREFROM MAY BE TAKEN; PROVIDED, HOWEVER, THAT THE AGENT, ON BEHALF OF THE
LENDERS, SHALL HAVE THE RIGHT, TO THE EXTENT PERMITTED BY APPLICABLE LAW, TO
PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN ANY LOCATION REASONABLY
SELECTED BY THE AGENT IN GOOD FAITH TO ENABLE THE AGENT TO REALIZE ON SUCH
PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE AGENT.
THE BORROWER AGREES THAT IT WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIMS,
SETOFFS OR CROSS-CLAIMS IN ANY PROCEEDING BROUGHT BY THE AGENT. THE BORROWER
WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION OF THE COURT IN WHICH THE
AGENT HAS COMMENCED A PROCEEDING, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION
TO THE LAYING OF VENUE OR BASED ON FORUM NON CONVENIENS.
11.3 SERVICE OF PROCESS. THE BORROWER HEREBY IRREVOCABLY AGREES
THAT SERVICE OF PROCESS IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
CREDIT AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE AFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER AT
ITS ADDRESS SET FORTH IN SECTION 11.7.
11.4 JURY TRIAL. THE BORROWER, THE AGENT AND THE LENDERS EACH
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY. INSTEAD, ANY DISPUTES WILL BE
RESOLVED IN A BENCH TRIAL.
11.5 LIMITATION OF LIABILITY. NEITHER THE AGENT NOR ANY LENDER
SHALL HAVE ANY LIABILITY TO THE BORROWER (WHETHER SOUNDING IN TORT, CONTRACT,
OR OTHERWISE) FOR LOSSES SUFFERED BY THE BORROWER IN CONNECTION WITH, ARISING
OUT OF, OR IN ANY WAY RELATED TO THE TRANSACTIONS OR RELATIONSHIPS CONTEMPLATED
BY THIS CREDIT AGREEMENT, OR ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION
THEREWITH, UNLESS IT IS DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OR
COURT ORDER BINDING ON THE AGENT OR ANY SUCH LENDER, THAT THE LOSSES WERE THE
RESULT OF ACTS OR OMISSIONS CONSTITUTING GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT.
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11.6 Delays. No delay or omission of the Agent or the Lenders to
exercise any right or remedy hereunder shall impair any such right or operate
as a waiver thereof.
11.7 Notices. Except as otherwise provided herein, all notices and
correspondences hereunder shall be in writing and sent by certified or
registered mail, return receipt requested, or by overnight delivery service,
with all charges prepaid, if to the Agent or any of the Lenders, then to BT
Commercial Corporation, 233 South Wacker Drive, Chicago, Illinois 60606,
Attention: Credit Department, if to the Borrower, then to Envirodyne
Industries, Inc., 701 Harger Road, Suite 190, Oak Brook, Illinois 60521,
Attention: General Counsel, or by facsimile transmission, promptly confirmed in
writing sent by first class mail, if to the Agent or any of the Lenders, at
(312) 993-8096, and if to the Borrower, at (708) 571-0959. All such notices
and correspondence shall be deemed given (i) if sent by certified or registered
mail, three Business Days after being postmarked, (ii) if sent by overnight
delivery service, when received at the above stated addresses or when delivery
is refused and (iii) if sent by telex or facsimile transmission, when receipt
of such transmission is acknowledged.
11.8 Assignments and Participation.
(a) Borrower Assignment. The Borrower shall not assign this
Credit Agreement, or any rights or obligations hereunder, without the prior
written consent of the Agent and the Lenders.
(b) Lender Assignments. Each Lender may assign to one or more
banks or other financial institutions all or a portion of its rights and
obligations under this Credit Agreement, the Revolving Notes and the other
Credit Documents, with the consent of the Agent and the consent of the Borrower
(which shall not be unreasonably withheld), and upon execution and delivery to
the Agent, for its acceptance and recording in the Register, of an agreement in
substantially the form of Exhibit L (an "Assignment and Assumption Agreement"),
together with surrender of any Revolving Note or Revolving Notes subject to
such assignment and a processing and recordation fee of $2,500. No such
assignment shall be for less than $5,000,000 of the Commitments unless it is to
another Lender. (This Section does not apply to branches and Affiliates of a
Lender, it being understood that a Lender may make, carry or transfer Revolving
Loans at or for the account of any of its branch offices or Affiliates without
consent of the Borrower, the Agent or any other Lender.)
(c) Agent's Register. The Agent shall maintain a register of the
names and addresses of the Lenders, their Commitments, and the principal amount
of their Revolving Loans (the "Register"). The Agent shall also maintain a
copy of each Assignment and Assumption Agreement delivered to and accepted by
it and modify the Register to give effect to each Assignment and Assumption
Agreement. Upon
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its receipt of each Assignment and Assumption Agreement and surrender of the
affected Revolving Note or Revolving Notes, the Agent will give prompt notice
thereof to the Borrower and deliver to the Borrower a copy of the Assignment
and Assumption Agreement and the surrendered Revolving Note or Revolving Notes.
Within five Business Days after its receipt of such notice, the Borrower shall
execute and deliver to the Agent a new Revolving Note or Revolving Notes to the
order of the assignee in the amount of the Commitment or Commitments assumed by
it and to the assignor in the amount of the Commitment or Commitments retained
by it, if any. Such new Revolving Note or Revolving Notes shall re-evidence
the Indebtedness outstanding under the surrendered Revolving Note or Revolving
Notes and shall be dated as of the Closing Date. The Agent shall be entitled
to rely upon the Register exclusively for purposes of identifying the Lenders
hereunder.
(d) Lender Participation. Each Lender may sell a participation
(without the consent of the Agent, the Borrower or any other Lender) to one or
more parties in or to all or a portion of its rights and obligations under this
Credit Agreement, the Revolving Notes and the other Credit Documents.
Notwithstanding a Lender's sale of a participation interest, its obligations
hereunder shall remain unchanged. The Borrower, the Agent and the other
Lenders shall continue to deal solely and directly with such Lender. No
participant shall have rights to approve any amendment or waiver of any
provision of this Credit Agreement or any of the other Credit Documents.
11.9 Confidentiality. Each Lender agrees that it will use its
reasonable best efforts not to disclose without the prior consent of the
Borrower any information with respect to the Borrower or any of its
Subsidiaries which is furnished or otherwise obtained by the Agent or any of
the Lenders pursuant to this Credit Agreement or any of the Collateral
Documents and which is clearly designated by the Borrower to the Lenders in
writing as confidential; provided, that any Lender may disclose any such
information (a) to its employees, auditors, or counsel, or to another Lender if
the disclosing Lender or such disclosing Lender's holding or parent company in
its sole discretion determines that any such party should have access to such
information, (b) as has become generally available to the public, (c) as may be
required or appropriate in any report, statement or testimony submitted to any
Governmental Authority having or claiming to have jurisdiction over such
Lender, (d) as may be required or appropriate in response to any summons or
subpoena or in connection with any litigation, (e) in order to comply with any
Requirement of Law, and (f) to any prospective or actual transferee or
participant in connection with any contemplated transfer or participation of
any of the Revolving Notes or Commitments or any interest therein by such
Lender.
11.10 Indemnification. The Borrower hereby indemnifies and agrees to
defend and hold harmless the Agent, the Issuing Bank and
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each of the Lenders and their respective directors, officers, agents, employees
and counsel from and against any and all losses, claims, damages, liabilities,
deficiencies, judgments or expenses incurred by any of them (except to the
extent that it is finally judicially determined to have resulted from their own
gross negligence or willful misconduct) arising out of or by reason of (a) any
litigation, investigation, claim or proceeding which arises out of or is in any
way related to (i) this Credit Agreement or the transactions contemplated
hereby, (ii) the issuance of the Letters of Credit, (iii) the failure of the
Issuing Bank to honor a drawing under any Letter of Credit, as a result of any
act or omission, whether rightful or wrongful, of any present or future de jure
or de facto government or Governmental Authority, (iv) any use of the proceeds
of the Revolving Loans or (v) the Agent's or the Lenders' entering into this
Credit Agreement, the other Credit Documents or any other agreements and
documents relating hereto, including, without limitation, amounts paid in
settlement, court costs and the fees and disbursements of counsel incurred in
connection with any such litigation, investigation, claim or proceeding or any
advice rendered in connection with any of the foregoing and (b) any remedial or
other action taken by the Borrower or any of the Lenders in connection with
compliance by the Borrower or any of its Subsidiaries, or any of their
respective properties, with any federal, state or local environmental laws,
acts, rules, regulations, orders, directions, ordinances, criteria or
guidelines.
11.11 Amendments and Waivers. No amendment or waiver of any provision
of this Credit Agreement or any other Credit Document shall be effective unless
in writing and signed by the Majority Lenders (or by the Agent on their
behalf), except that:
(a) the consent of all the Lenders is required to (i) increase the
Commitments, (ii) reduce the principal of, or interest on, the Revolving Notes,
any Letter of Credit reimbursement obligations or any Fees hereunder (other
than Fees that are exclusively for the account of the Agent or the Issuing
Bank), (iii) postpone any date fixed for any payment in respect of principal
of, or interest on, the Revolving Notes, any Letter of Credit reimbursement
obligations or any Fees hereunder, (iv) change the percentage of the
Commitments, or any minimum requirement necessary for the Lenders or the
Majority Lenders to take any action hereunder, (v) amend or waive this Section
11.11(a), or change the definition of Majority Lenders or (vi) except as
otherwise expressly provided in this Credit Agreement, and other than in
connection with the financing, refinancing, sale or other disposition of any
asset of the Borrower permitted under this Credit Agreement, direct the
Collateral Agent to release any Liens in favor of the Lenders on any of the
Collateral; and
(b) the consent of the Agent or the Issuing Bank, as the case may
be, shall be required for any amendment, waiver or consent
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affecting the rights or duties of the Agent or the Issuing Bank under any
Credit Document, in addition to the consent of the Lenders otherwise required
by this section.
The consent of the Borrower shall not be required for any amendment,
modification or waiver of the provisions of Article 10 (other than Section
10.8). The Borrower and the Lenders hereby authorize the Agent to modify this
Credit Agreement by unilaterally amending or supplementing Annex I to reflect
assignments of the Commitments.
11.12 Counterparts and Effectiveness. This Credit Agreement and any
waiver or amendment hereto may be executed in any number of counterparts and by
the different parties hereto in 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. This Credit Agreement shall become
effective on the date on which all of the parties hereto shall have signed a
copy hereof (whether the same or different copies) and shall have delivered the
same to the Agent pursuant to Section 11.7 or, in the case of the Lenders,
shall have given to the Agent written, telecopied or telex notice (actually
received) at such office that the same has been signed and mailed to it.
11.13 Severability. In case any provision in or obligation under this
Credit Agreement or the Revolving Notes or the other Credit Documents shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
11.14 Maximum Rate. Notwithstanding anything to the contrary contained
elsewhere in this Credit Agreement or in any other Credit Document, the
Borrower, the Agent and the Lenders hereby agree that all agreements among them
under this Credit Agreement and the other Credit Documents, whether now
existing or hereafter arising and whether written or oral, are expressly
limited so that in no contingency or event whatsoever shall the amount paid, or
agreed to be paid, to the Agent or any Lender for the use, forbearance, or
detention of the money loaned to the Borrower and evidenced hereby or thereby
or for the performance or payment of any covenant or obligation contained
herein or therein, exceed the Highest Lawful Rate. If due to any circumstance
whatsoever, fulfillment of any provisions of this Credit Agreement or any of
the other Credit Documents at the time performance of such provision shall be
due shall exceed the Highest Lawful Rate, then, automatically, the obligation
to be fulfilled shall be modified or reduced to the extent necessary to limit
such interest to the Highest Lawful Rate, and if from any such circumstance any
Lender should ever receive anything of value deemed interest by applicable law
which would exceed the Highest Lawful Rate, such excessive interest shall be
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applied to the reduction of the principal amount then outstanding hereunder or
on account of any other then outstanding Obligations and not to the payment of
interest, or if such excessive interest exceeds the principal unpaid balance
then outstanding hereunder and such other then outstanding Obligations, such
excess shall be refunded to the Borrower. All sums paid or agreed to be paid
to the Agent or any Lender for the use, forbearance, or detention of the
Obligations and other Indebtedness of the Borrower to the Agent or any Lender,
to the extent permitted by applicable law, shall be amortized, prorated,
allocated and spread throughout the full term of such Indebtedness, until
payment in full thereof, so that the actual rate of interest on account of all
such Indebtedness does not exceed the Highest Lawful Rate throughout the entire
term of such Indebtedness. The terms and provisions of this Section shall
control over every other provision of this Credit Agreement, the other Credit
Documents, and all agreements among the Borrower, the Agent and the Lenders.
11.15 Entire Agreement; Successors and Assigns. This Credit Agreement
and the other Credit Documents constitute the entire agreement among the
Borrower, the Agent and the Lenders, supersedes any prior agreements among
them, and shall bind and benefit the Borrower, the Agent and the Lenders and
their respective successors and permitted assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed in Chicago, Illinois, and delivered by their proper
and duly authorized officers as of the date set forth above.
BORROWER:
ENVIRODYNE INDUSTRIES, INC.,
a Delaware corporation
By:_________________________
Title:_____________________
AGENT:
BT COMMERCIAL CORPORATION,
as Agent
By:________________________
Senior Vice President
LENDERS:
BT COMMERCIAL CORPORATION
By:________________________
Senior Vice President
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EXHIBIT 10.14
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
This Intercreditor and Collateral Agency Agreement (this
"Agreement"), dated as of the 20th day of June, 1995, is by and among BT
Commercial Corporation, a Delaware corporation (in its individual capacity,
"BTCC"), in its capacity as agent (in such capacity, the "LC Agent") for itself
and the other lenders from time to time under the Letter of Credit Facility
Agreement (BTCC, in its capacity as such a lender, and such other lenders,
collectively, the "LC Lenders"), and in its capacity as a LC Lender, The
Prudential Insurance Company of America ("Prudential"), in its capacity as the
lender under the Revolving Credit Agreement (in such capacity, the "Revolving
Lender"), Shawmut Bank Connecticut, National Association, in its capacity as
trustee under the First Priority Notes Indenture (Shawmut Bank Connecticut,
National Association, in such capacity, or any successor thereto in such
capacity in accordance with the First Priority Notes Indenture, herein called
the "First Priority Notes Indenture Trustee"), any other LC Lender which
becomes a signatory to this Agreement as provided in Section 17(a) hereof, any
Refinancing Person who becomes a signatory to this Agreement as provided in
Section 17(b) hereof, any Second Priority Notes Indenture Trustee which becomes
a signatory to this Agreement as provided in Section 17(c) hereof, and BTCC, in
its capacity as Collateral Agent. All terms used herein which are defined in
Section 1 hereof or in the text of any other Section hereof shall have the
meanings given therein.
WITNESSETH:
WHEREAS, pursuant to the Revolving Credit Agreement the
Revolving Lender is making on the date hereof and may from time to time
hereafter make Revolving Loans to the Company; and
WHEREAS, pursuant to the First Priority Note Agreement the
Company is issuing the First Priority Notes under the First Priority Notes
Indenture; and
WHEREAS, the Company has agreed to offer to exchange the First
Priority Exchange Notes issued under the First Priority Notes Indenture for the
First Priority Notes; and
WHEREAS, pursuant to the Letter of Credit Facility Agreement
the LC Lenders are issuing or causing to be issued on the date hereof Letters
of Credit for the account of the Company and may from time to time hereafter
issue or cause to be issued Letters of Credit for the account of the Company
and make loans to the Company to fund the Company's reimbursement obligations
to the LC Lenders with respect to draws upon such Letters of Credit; and
<PAGE> 2
WHEREAS, the Company may hereafter issue the Second Priority
Notes under the Second Priority Notes Indenture in exchange for the Company's
10.25% Notes due 2001 and, if the Second Priority Notes are issued, the Company
may offer to exchange the Second Priority Exchange Notes under the Second
Priority Notes Indenture for the Second Priority Notes; and
WHEREAS, pursuant to the Guaranty Agreement the Guarantors
have guarantied the Secured Indebtedness; and
WHEREAS, pursuant to the Collateral Documents the Loan Parties
are granting to the Collateral Agent, for the benefit of the Secured Parties,
liens upon and security interests in the Collateral to secure the Secured
Indebtedness; and
WHEREAS, the LC Agent, the LC Lenders, Prudential, the First
Priority Notes Indenture Trustee, any Second Priority Notes Indenture Trustee
and any Refinancing Person desire to appoint BTCC as their agent with respect
to Collateral and the Guaranty Agreement; and
WHEREAS, the LC Agent, the LC Lenders, Prudential, the First
Priority Notes Indenture Trustee, any Second Priority Notes Indenture Trustee,
any Refinancing Person and the Collateral Agent desire to agree upon the
priorities for the application of any proceeds from the Collateral and the
Guaranty Agreement and to agree upon various other matters with respect to
their respective agreements with the Loan Parties and their rights thereunder.
NOW, THEREFORE, for the above reasons, in consideration of the
mutual covenants herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:
1. Definitions.
For the purposes of this Agreement, the following terms shall
have the meanings specified with respect thereto below. Any plural term that
is used herein in the singular shall be taken to mean each entity or item of
the defined class and any singular term that is used herein in the plural shall
be taken to mean all of the entities or items of the defined class,
collectively.
"AVOIDED PAYMENTS" shall mean any payment of any Secured
Indebtedness made to any Secured Party hereunder that is subsequently
invalidated, declared fraudulent or preferential, set aside or required to be
paid to a trustee, receiver, or any other party under any bankruptcy act, state
or federal law, common law or equitable cause.
"CAPITAL STOCK" in any Person shall mean any and all shares,
interests, participations or other equivalents in the
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equity interest (however designated) in such Person and any rights (other than
debt securities convertible into an equity interest), warrants or options to
acquire an equity interest in such Person.
"COLLATERAL" shall mean all property and assets, and interests
in property and assets, upon or in which any Loan Party has granted a lien or
security interest to the Collateral Agent to secure the Secured Indebtedness.
"COLLATERAL AGENT" shall mean BTCC, in its capacity as agent
for the Secured Parties pursuant to this Agreement, or any successor or
replacement agent which may be appointed pursuant to this Agreement.
"COLLATERAL AGENT EXPENSES" shall mean, without limitation,
all costs and expenses incurred by the Collateral Agent under this Agreement
when acting with a good faith belief that its actions are not contrary to the
provisions of this Agreement, including in connection with the realization upon
or protection of the Collateral or enforcing or defending any lien upon or
security interest in the Collateral or any other action taken under or in
connection with this Agreement, expenses incurred for legal counsel in
connection with the foregoing, and any other costs, expenses or liabilities
incurred by the Collateral Agent for which the Collateral Agent is entitled to
be reimbursed or indemnified pursuant to this Agreement, any Collateral
Document or the Guaranty Agreement.
"COLLATERAL AGENT OBLIGATIONS" shall mean, without
duplication, (a) all obligations of any and each Loan Party to pay, reimburse
or indemnify the Collateral Agent for any Collateral Agent Expenses and (b) all
obligations of the Guarantors to pay any amount described in clause (a) of this
definition pursuant to any Guaranty Agreement.
"COLLATERAL DOCUMENTS" shall mean the Security Agreements, the
Pledge Agreements, the Mortgages, the other agreements, documents and
instruments set forth on Annex 1 hereof, any other agreement, document or
instrument in effect on the date hereof or executed by any Loan Party with the
written consent of the Requisite First Priority Noteholders and the Requisite
Working Capital Lenders after the date hereof under which such Loan Party has
granted a lien upon or security interest in any property or assets to the
Collateral Agent to secure all or any part of the Secured Indebtedness, all
financing statements, certificates, documents and instruments relating thereto
or executed or provided in connection therewith, and the Guaranty Agreement,
each as amended, restated, supplemented or otherwise modified from time to
time.
"COMPANY" shall mean Envirodyne Industries, Inc., a Delaware
corporation.
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"CONTROL" shall mean (except as otherwise specifically
provided herein) the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of Voting Securities, by agreement or otherwise; and the
terms "Controlling" and "Controlled" have meanings correlative to the
foregoing.
"ENFORCEMENT" shall mean (a) for any Secured Party or any
holder of any Secured Note to make demand for payment of or accelerate the time
for payment prior to the scheduled payment date of any Secured Note or any
Letter of Credit Collateral Obligation, (b) for the Revolving Lender to
terminate its commitment to make Revolving Loans pursuant to the Revolving
Credit Agreement (but not including the expiration of such commitment on the
Revolving Loans Termination Date or termination of such commitment upon the
refinancing thereof), (c) for any LC Lender to terminate its respective
commitment to issue or cause the issuance of Letters of Credit pursuant to the
Letter of Credit Facility Agreement (but not including the expiration of such
commitment on the Letter of Credit Facility Expiration Date or termination of
such commitment upon the refinancing thereof), (d) for any Secured Party or any
holder of any Secured Note to commence the judicial enforcement of any rights
or remedies under or with respect to any Financing Agreement, any Secured Note
or any Secured Indebtedness, or to setoff or appropriate any balances held by
it for the account of any Loan Party or any other property at any time held or
owing by it to or for the credit or for the account of any Loan Party, (e) for
the Collateral Agent to commence the judicial enforcement of any rights or
remedies under any Collateral Document (other than an action solely for the
purpose of establishing or defending the lien or security interest intended to
be created by any Collateral Document upon or in any Collateral as against or
from claims of third parties on or in such Collateral), to setoff or
appropriate any balances held by it for the account of any Loan Party or any
other property at any time held or owing by it to or for the credit or for the
account of any Loan Party or to otherwise take any action to realize upon the
Collateral, or (f) the commencement by, against or with respect to any Loan
Party of any proceeding under any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law or for the appointment of a receiver for such Loan Party or its
assets.
"EVENT OF DEFAULT" shall mean an "Event of Default", as
defined in any Financing Agreement.
"FINANCING AGREEMENT" shall mean any of the Revolving Credit
Agreement, the Letter of Credit Facility Agreement, the First Priority Note
Agreement, the First Priority Notes Indenture, and any Second Priority Notes
Indenture.
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"FIRST PRIORITY EXCHANGE NOTES" shall mean any of the
Company's 12% First Priority Senior Secured Notes due 2000, Series B, or
Floating Rate First Priority Senior Secured Notes due 2000, Series D issued
under the First Priority Notes Indenture.
"FIRST PRIORITY INDEBTEDNESS" shall mean, without duplication,
(a) the outstanding principal amount of the Revolving Loans, the outstanding
principal amount of the First Priority Notes, the outstanding principal amount
of the First Priority Exchange Notes, and all of the other present or future
indebtedness, liabilities and obligations of the Company now or hereafter owed
to the Revolving Lender, the holders of the Revolving Notes, the holders of the
First Priority Notes, the holders of the First Priority Exchange Notes or the
First Priority Notes Indenture Trustee evidenced by or arising under, by virtue
or pursuant to the Revolving Credit Agreement, the First Priority Note
Agreement, the First Priority Notes Indenture, the Revolving Notes, the First
Priority Notes or the First Priority Exchange Notes, whether such indebtedness,
liabilities and obligations are direct or indirect, joint, several or joint and
several, now exist or hereafter arise, and all renewals and extensions thereof,
including, without limitation, all interest on the Revolving Loans, the First
Priority Notes and the First Priority Exchange Notes, any Yield-Maintenance
Amounts and any Trustee Expenses of the First Priority Notes Indenture Trustee,
and (b) all of the obligations of the Guarantors, and each of them, to pay any
amount described in clause (a) of this definition under any Guaranty Agreement.
"FIRST PRIORITY NOTES" shall mean the Company's 12% First
Priority Senior Secured Notes due 2000, Series A, and Floating Rate First
Priority Senior Secured Notes due 2000, Series C, issued under the First
Priority Notes Indenture.
"FIRST PRIORITY NOTE AGREEMENT" shall mean the Note Agreement,
dated as June 20, 1995, between the Company and the purchasers identified
therein pursuant to which such purchasers are purchasing the First Priority
Notes, as amended, restated, supplemented or otherwise modified from time to
time.
"FIRST PRIORITY NOTES INDENTURE" shall mean the Indenture,
dated as of June 20, 1995, between the Company and the First Priority Notes
Indenture Trustee under which the First Priority Notes and the First Priority
Exchange Notes are being issued, as amended, restated, supplemented or
otherwise modified from time to time.
"GECC INTERCREDITOR AGREEMENTS" shall mean the agreements set
forth on Annex 2 hereto, in each case, dated as of June 20, 1995, between the
Collateral Agent, on behalf of and for the benefit of the Secured Parties, and
General Electric Capital Corporation, a New York corporation, as amended,
restated, supplemented or otherwise modified from time to time.
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"GUARANTORS" shall mean each of the Persons described on Annex
3 hereto, and any other Subsidiary of the Company becoming a party to the
Guaranty Agreement.
"GUARANTY AGREEMENT" shall mean the Guaranty Agreement, dated
as of June 20, 1995, made by the Guarantors in favor of the Collateral Agent,
as amended, restated, supplemented or otherwise modified from time to time.
"LETTERS OF CREDIT" shall mean the letters of credit issued
under the Letter of Credit Facility Agreement.
"LETTER OF CREDIT COMMITMENT" shall mean the commitment of the
LC Lenders to issue or cause the issuance of Letters of Credit under the Letter
of Credit Facility Agreement.
"LETTER OF CREDIT COLLATERAL OBLIGATIONS" shall mean, without
duplication, (a) all of the obligations of the Company under Section 9.2(c) of
the Letter of Credit Facility Agreement to deposit cash with the Collateral
Agent with respect to Outstanding Letters of Credit Exposure, and (b) all of
the obligations of the Guarantors, and each of them, to pay any amount
described in clause (a) of this definition under any Guaranty Agreement.
"LETTER OF CREDIT FACILITY AGREEMENT" shall mean the Credit
Agreement, dated as of June 20, 1995, among the Company, the LC Agent and the
LC Lenders, as amended, restated, supplemented or otherwise modified from time
to time.
"LETTER OF CREDIT FACILITY EXPIRATION DATE" shall mean the
"Expiration Date", as defined in the Letter of Credit Facility Agreement.
"LETTER OF CREDIT OBLIGATIONS" shall mean, without
duplication, (a) the obligation of the Company to reimburse the LC Agent or the
LC Lenders with respect to any drawing under a Letter of Credit, all loans made
by the LC Lenders under the Letter of Credit Facility Agreement to fund the
Company's reimbursement obligations with respect to draws under Letters of
Credit, the Letter of Credit Collateral Obligations, and all of the other
present or future indebtedness, liabilities and obligations of the Company now
or hereafter owed to the LC Agent or the LC Lenders evidenced by or arising
under, by virtue of or pursuant to the Letter of Credit Facility Agreement or
any Letter of Credit, whether such indebtedness, liabilities and obligations
are direct or indirect, joint, several or joint and several, or now exist or
hereafter arise, and all renewals and extensions thereof, and (b) all of the
obligations of the Guarantors, and each of them, to pay any amount described in
clause (a) of this definition under any Guaranty Agreement.
"LOAN PARTIES" shall mean the Company and the Guarantors.
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"MORTGAGES" shall mean the Mortgages and Leasehold Mortgage
set forth on Annex 4 hereto, each as amended, restated, supplemented or
otherwise modified from time to time.
"OUTSTANDING LETTERS OF CREDIT EXPOSURE" at any time shall
mean the aggregate undrawn face amount of all outstanding Letters of Credit at
such time.
"PERSON" shall mean and include an individual, a partnership,
a joint venture, a corporation, a trust, an unincorporated organization, and a
government or any department or agency thereof.
"PLEDGE AGREEMENTS" shall mean the Pledge Agreements, set
forth on Annex 5 hereto, as amended, restated, supplemented or otherwise
modified from time to time.
"REFINANCED PERSON" shall have the meaning given in Section
17(b).
"REFINANCING PERSON" shall have the meaning given in Section
17(b).
"REQUIRED SECURED PARTIES" at any time shall mean both the
Requisite First Priority Noteholders and the Requisite Working Capital Lenders;
provided, however, that notwithstanding the foregoing, from and after the 90th
day following the date upon which a Requisite Working Capital Lenders' Notice
is given, the Required Secured Parties shall mean the Requisite Working Capital
Lenders.
"REQUISITE FIRST PRIORITY NOTEHOLDERS" at any time shall mean
holders of First Priority Notes (or, without duplication, the First Priority
Notes Indenture Trustee acting at the direction of holders of First Priority
Notes) and holders of First Priority Exchange Notes (or, without duplication,
the First Priority Notes Indenture Trustee acting at the direction of holders
of First Priority Exchange Notes), representing, in the aggregate, 35% or more
of the aggregate outstanding principal amount of all First Priority Notes and
First Priority Exchange Notes.
"REQUISITE WORKING CAPITAL LENDERS" shall mean (a) at any time
when any Letter of Credit Obligations are outstanding or the Letter of Credit
Commitment is in effect, the Person(s) having a majority of the aggregate of
the amount of the outstanding Letter of Credit Commitment and the outstanding
amount of the Letter of Credit Obligations, and (b) at any other time, the
holders of more than 50% of the aggregate outstanding amount of the Revolving
Loans.
"REQUISITE WORKING CAPITAL LENDERS' NOTICE" shall mean a
notice given hereunder, following the occurrence of a Serious Event
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of Default under the Letter of Credit Facility Agreement or the Revolving
Credit Agreement, as the case may be, by the Requisite Working Capital Lenders
to the other Secured Parties of the intention of the Requisite Working Capital
Lenders giving such notice to give a direction to the Collateral Agent
hereunder.
"REVOLVING COMMITMENT" shall mean the commitment of the
Revolving Lender to make Revolving Loans under the Revolving Credit Agreement.
"REVOLVING CREDIT AGREEMENT" shall mean the Revolving Credit
Agreement, dated as of June 20, 1995, between the Company and the Revolving
Lender, as amended, restated, supplemented or otherwise modified from time to
time.
"REVOLVING LOAN" shall mean a "Revolving Loan", as defined in
the Revolving Credit Agreement.
"REVOLVING LOANS TERMINATION DATE" shall mean the "Revolving
Loans Termination Date", as defined in the Revolving Credit Agreement.
"REVOLVING NOTE" shall mean a "REVOLVING NOTE", as defined in
the Revolving Credit Agreement.
"SECOND PRIORITY EXCHANGE NOTES" shall mean any of the
Company's promissory notes issued under the Second Priority Notes Indenture in
exchange for the Second Priority Notes as permitted by the Financing
Agreements.
"SECOND PRIORITY INDEBTEDNESS" shall mean, without
duplication, (a) the outstanding principal amount of the Second Priority Notes,
the outstanding principal amount of the Second Priority Exchange Notes, and all
of the other present or future indebtedness, liabilities and obligations of the
Company hereafter owed to the holders of the Second Priority Notes, the holders
of the Second Priority Exchange Notes or the Second Priority Notes Indenture
Trustee evidenced by or arising under, by virtue of or pursuant to the Second
Priority Exchange Notes Indenture, the Second Priority Notes or the Second
Priority Exchange Notes, whether such indebtedness, liabilities and obligations
are direct or indirect, joint, several or joint and several, or now exist or
hereafter arise, and all renewals and extensions thereof, including, without
limitation, all interest on the Second Priority Notes and the Second Priority
Exchange Notes, any prepayment premiums due with respect to the Second Priority
Notes or the Second Priority Exchange Notes and any Trustee Expenses of the
Second Priority Notes Indenture Trustee, if any, and (b) all of the obligations
of the Guarantor, and each of them, to pay any amount described in clause (a)
of this definition under any Guaranty Agreement.
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"SECOND PRIORITY NOTES" shall mean the Company promissory
notes issued under the Second Priority Notes Indenture in exchange for the
Company's 10.25% Notes due 2001 as permitted by the Financing Agreements if
issued.
"SECOND PRIORITY NOTES INDENTURE" shall mean the indenture,
between the Company and the Second Priority Notes Indenture Trustee, under
which any Second Priority Notes and any Second Priority Exchange Notes are
issued, as amended, restated, supplemented or otherwise modified from time to
time.
"SECOND PRIORITY NOTES INDENTURE TRUSTEE" shall mean the
trustee under the Second Priority Notes Indenture.
"SECURED NOTES" shall mean any of the Revolving Notes, the
First Priority Notes, the First Priority Exchange Notes, the Second Priority
Notes, the Second Priority Exchange Notes and any promissory notes evidencing
all or any part of the Letter of Credit Obligations.
"SECURED INDEBTEDNESS" shall mean the Collateral Agent
Obligations, the Letter of Credit Obligations, the First Priority Indebtedness,
the Second Priority Indebtedness, if any, and all of the other present or
future indebtedness, liabilities and obligations of all and each of the Loan
Parties now or hereafter owed to any Secured Party evidenced by or arising
under, by virtue of or pursuant to the Financing Agreements, the Secured Notes,
the Collateral Documents or the Guaranty Agreement, whether such indebtedness,
liabilities and obligations are direct or indirect, joint, several or joint and
several, or now exist or hereafter arise, and all renewals and extensions
thereof.
"SECURED PARTIES" shall mean the Revolving Lender, the LC
Agent, the LC Lenders, the First Priority Notes Indenture Trustee, for itself
and on behalf of the holders of the First Priority Notes and the First Priority
Exchange Notes, the Second Priority Notes Indenture Trustee, if any, for itself
and on behalf of the holders of the Second Priority Notes and the Second
Priority Exchange Notes, and the Collateral Agent.
"SECURITY AGREEMENTS" shall mean the Security Agreements and
the Intellectual Property Security Agreements listed on Annex 6 hereto, as
amended, restated, supplemented or otherwise modified from time to time.
"SERIOUS DEFAULT" shall mean an Event of Default under the
Letter of Credit Facility Agreement or the Revolving Credit Agreement as a
result of (a), a default in payment of any Secured Indebtedness under the
Revolving Credit Agreement or the Letter of Credit Facility Agreement, (b) a
violation by the Company of a Specified Provision in the Letter of Credit
Facility Agreement or the Revolving Credit Agreement, or (c) any proceeding
under any
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bankruptcy, reorganization, comprise of debt, arrangement, insolvency,
readjustment of debt, dissolution, liquidation or similar law.
"SPECIFIED PROVISIONS" shall mean (a) with respect to the
Letter of Credit Facility Agreement, the amount of the Letter of Credit
Commitment, the amount of the fees payable by the Company under the Letter of
Credit Facility Agreement, the Letter of Credit Facility Expiration Date, and
any of the following sections of the Letter of Credit Facility Agreement:
Article 8 or Article 9; (b) with respect to the Revolving Credit Agreement, the
amount of the Revolving Credit Commitment, the interest rate for the Revolving
Notes, the maturity date of the Revolving Notes, the amount of the non-usage
fees payable under the Revolving Credit Agreement, the expiration date of the
Revolving Commitment, and any of the following sections of the Revolving Credit
Agreement: paragraph 4 or paragraph 5; and (c) with respect to the First
Priority Notes, the First Priority Exchange Notes and the First Priority Notes
Indenture, the interest rate for the First Priority Notes or the First Priority
Exchange Notes, the maturity date of the First Priority Notes or the First
Priority Exchange Notes, the amount of the Yield- Maintenance Amount, and any
provision in any of the following Articles of the First Priority Notes
Indenture: Article 4 or Article 5.
"SUBSIDIARY" shall mean with respect to any Person, (i) a
corporation a majority of whose Voting Securities is at the time directly or
indirectly owned or Controlled by such Person, by one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries thereof, or (ii) any
other Person (other than a corporation) in which such Person, one or more
Subsidiaries thereof or such Person and one or more Subsidiaries thereof,
directly or indirectly, at the date of determination thereof has at least a
majority ownership interest with respect to voting in the election of directors
or trustees thereof (or such other Persons performing similar functions). For
purposes of this definition, any directors' qualifying shares shall be
disregarded in determining the ownership of a Subsidiary.
"TRUSTEE EXPENSES" shall mean all fees, charges, expenses,
indemnities and other amounts owing to the First Priority Notes Indenture
Trustee or the Second Priority Notes Indenture Trustee for its own account
under the First Priority Notes Indenture or the Second Priority Notes
Indenture, respectively.
"VOTING SECURITIES" shall mean, with respect to any Person,
securities of any class or classes of Capital Stock in such Person entitling
the holders thereof, under ordinary circumstances and in the absence of
contingencies, to vote for members of the Board of Directors of such Person (or
Persons performing functions equivalent to those of such members).
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"YIELD-MAINTENANCE AMOUNT" shall mean the "Yield-Maintenance
Amount" as defined in the First Priority Notes Indenture.
2. Appointment of BTCC as Collateral Agent for the
Secured Parties.
(a) Appointment of Collateral Agent. Subject in all
respects to the terms and provisions of this Agreement, the Secured Parties
hereby appoint BTCC to act as agent for the benefit of the Secured Parties with
respect to the liens upon and the security interests in the Collateral and the
rights and remedies granted under and pursuant to the Collateral Documents and
the GECC Intercreditor Agreements, and BTCC hereby accepts such appointment and
agrees to act as such agent. The appointment of the Collateral Agent pursuant
to this Agreement shall be effective with respect to all financing statements
filed in any UCC filing office with respect to the Loan Parties prior to the
date of this Agreement on and as of the date such financing statements were
signed. The agency created hereby shall in no way impair or affect any of the
rights and powers of, or impart any duties or obligations upon, BTCC in its
capacity as the LC Agent or in its individual capacity as a LC Lender. To the
extent necessary or desirable to enable the Collateral Agent to enforce or
otherwise foreclose and realize upon any of the liens or security interests in
the Collateral in any legal proceeding which the Collateral Agent either
commences or joins as a party in accordance with the terms hereof, each of the
Secured Parties agrees to join as a party in such proceeding and take such
action therein concurrently to enforce and obtain a judgment for the payment of
the Secured Indebtedness held by it or as to which it is the trustee subject,
in the case of the First Priority Notes Indenture Trustee and the Second
Priority Notes Indenture Trustee, to its right to prior indemnity under, and
other provisions granting it rights not to take action, under the First
Priority Notes Indenture or the Second Priority Notes Indenture, as the case
may be.
(b) Duties of Collateral Agent. Subject to the
Collateral Agent having been directed to take such action in accordance with
the terms of this Agreement, each other Secured Party hereby irrevocably
authorizes the Collateral Agent to take such action on its behalf under the
provisions of the Collateral Documents, the GECC Intercreditor Agreements and
any other instruments, documents and agreements referred to therein and to
exercise such powers thereunder as are specifically delegated to the Collateral
Agent by the terms thereof and such other powers as are reasonably incidental
thereto. Subject to the provisions of Section 11 hereof, the Collateral Agent
is hereby irrevocably authorized to take all actions on behalf of the Secured
Parties to enforce the rights and remedies of the Collateral Agent and the
Secured Parties provided for in the Collateral Documents or by applicable law
with respect to the liens upon and security
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interests in the Collateral granted to secure the Secured Indebtedness;
provided, however, that, notwithstanding any provision to the contrary herein
or in any Collateral Documents, (i) the Collateral Agent shall act at all times
solely at and in accordance with the written direction of the Required Secured
Parties, (ii) the Collateral Agent shall not, without the written consent of
the Requisite First Priority Noteholders and the Requisite Working Capital
Lenders, release or terminate by affirmative action or consent any lien upon or
security interest in any Collateral granted under any Collateral Documents or
any Guarantor's obligations under the Guaranty Agreement (except (x) upon
dispositions of Collateral or such Guarantor, as applicable, by the Loan
Parties as permitted in accordance with the terms of the Financing Agreements
prior to the occurrence of an Event of Default (and, for this purpose, the
Collateral Agent (1) shall not be deemed to have knowledge of an Event of
Default unless the Collateral Agent has received notice thereof, and (2) may
rely, as to whether a disposition of Collateral or a Guarantor is permitted by
the Financing Agreements, upon a certificate signed by the LC Agent as to the
Letter of Credit Facility Agreement, a certificate signed by the Revolving
Lender as to the Revolving Credit Agreement, a certificate signed by a majority
of the holders of the First Priority Notes and the First Priority Exchange
Notes as to the First Priority Notes Indenture, and a certificate signed by a
majority of the holders of the Second Priority Notes and the Second Priority
Exchange Notes as the Second Priority Notes Indenture, and any such certificate
shall be full warranty by the applicable Secured Party to the Collateral Agent
as to the truth of the matters certified to for any action taken by the
Collateral Agent in reliance thereon), (y) sales in the ordinary course of
business of a Loan Party of Collateral constituting inventory, and (z) upon
disposition of such Collateral after an Event of Default pursuant to direction
given under clause (i) hereof), and (iii) the Collateral Agent shall not accept
any Secured Indebtedness in whole or partial consideration for the disposition
of any Collateral. Notwithstanding the foregoing, the Collateral Agent shall
perform any of its obligations under the GECC Intercreditor Agreements without
any direction from any Secured Party. The Collateral Agent agrees to make such
demands and give such notices under the Collateral Documents and the GECC
Intercreditor Agreements as may be requested by, and to take such action to
enforce the Collateral Documents and to foreclose upon, collect and dispose of
the Collateral or any portion thereof as may be directed by, the Required
Secured Parties; provided, however, that the Collateral Agent shall not be
required to take any action (A) that is contrary to law or the terms of the
Collateral Documents, the GECC Intercreditor Agreements or this Agreement, or
(B) if the Collateral Agent determines, in good faith, that the potential
Collateral Agent Expenses resulting from such action are likely to exceed the
amounts available for distribution to the Collateral Agent pursuant to Section
5(a)(i) hereof, and so notifies the Secured Parties giving the Collateral Agent
the direction to take
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such action, unless the Collateral Agent is provided adequate security and
indemnity against the Collateral Agent Expenses which may be incurred by it in
taking such action and complying with any such request or direction, including
such reasonable advances as may be requested by the Collateral Agent.
Notwithstanding the provisions of the preceding sentence, any and all decisions
to settle, compromise or dismiss any legal proceeding, with or without
prejudice, which implements, approves or results in or has the effect of
causing any release, change or occurrence, where such release, change or
occurrence otherwise would require approval of the Requisite First Priority
Noteholders and the Requisite Working Capital Lenders pursuant to the terms of
this Agreement, also shall require the approval of the Requisite First Priority
Noteholders and the Requisite Working Capital Lenders.
(c) Requesting Instructions. The Collateral Agent may at
any time request directions from the Secured Parties as to any course of action
or other matter relating to the performance of its duties under this Agreement,
the Collateral Documents or the GECC Intercreditor Agreements and the Secured
Parties shall respond to such request in a reasonably prompt manner. The
Collateral Agent shall have the right at any time to seek instructions
concerning its obligations hereunder from any court of competent jurisdiction.
(d) Emergency Actions. If the Collateral Agent has asked
the Secured Parties for instructions following the receipt of any notice of an
Event of Default and if the Required Secured Parties have not responded to such
request within 30 days, the Collateral Agent may, but shall not be obligated
to, take such actions with regard to such Event of Default which the Collateral
Agent, in good faith, believes to be reasonably required to protect the
Collateral from damage or destruction; provided, however, that once
instructions have been received from the Required Secured Parties, the actions
of the Collateral Agent shall be governed thereby and the Collateral Agent
shall not take any further action which would be contrary thereto.
(e) Document Amendments. An amendment, supplement,
modification, restatement or waiver of any provision of any Collateral
Document or any GECC Intercreditor Agreement, any consent to any departure by
any Loan Party therefrom, or the execution or acceptance by the Collateral
Agent of any Collateral Document not in effect on the date hereof shall be
effective if, and only if, consented to in writing by the Requisite First
Priority Noteholders and the Requisite Working Capital Lenders, provided,
however, that, (i) no such amendment, supplement, modification, restatement,
waiver, consent or such Collateral Document not in effect on the date hereof
which could reasonably be expected to adversely affect any of the Collateral
Agent's rights, immunities or indemnities hereunder or thereunder or which
could reasonably be expected to impose any additional responsibilities upon the
Collateral Agent shall be effective without the written
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consent of the Collateral Agent, and (ii) no such amendment, supplement,
modification, waiver or consent shall release any Collateral from the lien or
security interest created by any Collateral Document not subject to the
exception in Section 2(b)(ii) hereof or narrow the scope of the property or
assets in which a lien or security interest is granted pursuant to any
Collateral Document without the written consent of the Requisite First Priority
Noteholders and the Requisite Working Capital Lenders.
(f) Administrative Actions. The Collateral Agent may,
but shall not be obligated to, take such actions hereunder and under the
Collateral Documents and the GECC Intercreditor Agreements, not inconsistent
with the instructions of the Required Secured Parties or the terms of the
Collateral Documents, the GECC Intercreditor Agreements and this Agreement, as
the Collateral Agent deems necessary or appropriate to perfect or continue the
perfection of the liens on the Collateral for the benefit of the Secured
Parties.
(g) Collateral Agent Acting Through Others. The
Collateral Agent may perform any of its duties under this Agreement, the
Collateral Documents and the GECC Intercreditor Agreements by or through
attorneys (which attorneys may be the same attorneys who represent the LC Agent
or any Secured Party), agents or other persons reasonably deemed appropriate by
the Collateral Agent. In addition, the Collateral Agent may act in good faith
reliance upon the opinion or advice of attorneys accountants and other experts
selected by the Collateral Agent, and any action so taken in such good faith
reliance shall be authorized and protected. In all cases the Collateral Agent
may pay customary and reasonable compensation to all such attorneys, agents or
other persons as may be employed in connection with the performance of its
duties under this Agreement, the Collateral Documents and the GECC
Intercreditor Agreements.
(h) Resignation of Collateral Agent.
(i) The Collateral Agent (A) may resign at any
time upon notice to the other Secured Parties, (B) may be removed at
any time upon the written request of the Required Secured Parties sent
to the Collateral Agent and the other Secured Parties and (C) shall
resign at any time when it may not legally act as agent for the other
Secured Parties hereunder.
(ii) If the Collateral Agent shall resign or be
removed, the Requisite First Priority Noteholders and the Requisite
Working Capital Lenders shall have the right to select and appoint a
replacement Collateral Agent by notice to the Collateral Agent and the
other Secured Parties.
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(iii) Upon any replacement of the Collateral Agent,
the Collateral Agent shall assign all of the liens upon and security
interests in all Collateral under the Collateral Documents, and all
right, title and interest of the Collateral Agent under all the
Collateral Documents and the GECC Intercreditor Agreement, to the
replacement Collateral Agent, without recourse to the Collateral Agent
or any Secured Party, and transfer and pay over to the replacement
Collateral Agent all moneys and other properties held by the
Collateral Agent hereunder, all at the expense of the Company.
(iv) No resignation or removal of the Collateral
Agent shall become effective until a replacement Collateral Agent
shall have been selected as provided herein and shall have assumed in
writing the obligations of the Collateral Agent hereunder and under
the Collateral Documents and the GECC Intercreditor Agreements. In
the event that a replacement Collateral Agent shall not have been
selected and appointed as provided in clause (h)(ii) and have assumed
such obligations within 30 days after the resignation or removal of
the Collateral Agent, then the Collateral Agent may select and appoint
for and on behalf of the other Secured Parties a replacement
Collateral Agent so long as such replacement Collateral Agent meets
the requirements of clause (h)(v) or in its sole discretion may apply
to any court of competent jurisdiction to select and appoint a
successor Collateral Agent to act until such time, if any, as a
successor Collateral Agent shall have been selected and appointed by
the Requisite First Priority Noteholders and the Requisite Working
Capital Lenders as provided in clause (h)(ii). Any successor
Collateral Agent appointed by the Collateral Agent or such court as
provided above shall immediately and without further act be superseded
by any successor Collateral Agent appointed by the Requisite First
Priority Noteholders and the Requisite Working Capital Lenders as
provided in clause (h)(ii).
(v) Any replacement Collateral Agent shall be a
bank, trust company, or insurance company having capital, surplus and
undivided profits of at least $100 million, or an affiliate thereof,
the replacement of the Collateral Agent by such replacement Collateral
Agent shall not violate any provision of any applicable law or create
a relationship which would be in violation thereof, and, if such
replacement Collateral Agent shall have been selected by the
Collateral Agent pursuant to clause (h)(iv), the fees charged by such
replacement Collateral Agent shall not be commercially unreasonable.
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(i) Indemnification of Collateral Agent. The Loan
Parties, by their consent hereto, hereby jointly and severally agree to
indemnify and hold the Collateral Agent, its officers, directors, employees and
agents (including, but not limited to, any attorneys acting at the direction or
on behalf of the Collateral Agent) harmless against any and all costs, claims,
damages, penalties, liabilities, losses and expenses (including, but not
limited to, court costs and attorneys' fees) which may be incurred by or
asserted against the Collateral Agent or any such officers, directors,
employees and agents by reason of its status as agent hereunder or which
pertain, whether directly or indirectly, to this Agreement, the Collateral
Documents, the GECC Intercreditor Agreements or to any action or failure to act
of the Collateral Agent as agent hereunder, except to the extent any such
action or failure to act by the Collateral Agent constitutes gross negligence
or willful misconduct. The obligations of the Loan Parties under this Section
2(i) shall survive the payment in full of the Secured Indebtedness and the
termination of this Agreement and shall not be affected by any obligation which
any Secured Party might have to provide indemnification under Section 15
hereof.
(j) Liability of Collateral Agent. In the absence of
gross negligence or willful misconduct, the Collateral Agent will not be liable
to any Secured Party for any action or failure to act or any error of judgment,
negligence, mistake or oversight on its part or on the part of any of its
officers, directors, employees or agents.
(k) No Reliance on Collateral Agent. Neither the
Collateral Agent nor any of its officers, directors, employees or agents
(including, but not limited to, any attorneys acting at the direction or on
behalf of the Collateral Agent) shall be deemed to have made any
representations or warranties, express or implied, with respect to, nor shall
the Collateral Agent or any such officer, director, employee or agent be liable
to any Secured Party or responsible for (i) any warranties or recitals made by
any of the Loan Parties in the Collateral Documents or any other agreement,
certificate, instrument or document executed by the Loan Parties in connection
therewith, (ii) the due or proper execution or authorization of this Agreement
or any Collateral Document by any party other than the Collateral Agent, or the
effectiveness, enforceability, validity, genuineness or collectibility as
against any Loan Party of any Collateral Document or any other agreement,
certificate, instrument or document executed by any of the Loan Parties in
connection therewith, (iii) the present or future solvency or financial worth
of any Loan Party, or (iv) the value, condition, existence or ownership of any
of the Collateral or the existence or perfection of any lien upon or security
interest in the Collateral (whether now or hereafter held or granted) or the
sufficiency of any action, filing, notice or other procedure taken or to be
taken to perfect, attach or vest any lien or security interest in the
Collateral. The Collateral Agent shall not be
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required, either initially or on a continuing basis, to (A) make any inquiry,
investigation, evaluation or appraisal respecting, or enforce performance by
any Loan Party of, any of the covenants, agreements or obligations of any Loan
Party under any Collateral Document, or (B) undertake any other actions (other
than actions expressly required to be taken by it under this Agreement).
Nothing in any of the Collateral Documents, expressed or implied, is intended
to or shall be so construed as to impose upon the Collateral Agent any
obligations, duties or responsibilities except as set forth in this Agreement
and therein. The Collateral Agent shall be protected in acting upon any
notice, request, consent, certificate, order, affidavit, letter, telegram,
telecopy or other paper or document given to it by any Person reasonably and in
good faith believed by it to be genuine and correct and to have been signed or
sent by such Person. The Collateral Agent shall have no duty to inquire as to
the performance or observance of any of the terms, covenants or conditions of
any Financing Agreement. The Collateral Agent will not be required to inspect
the properties or books and records of any Loan Party for any purpose,
including to determine compliance by the Loan Parties with their respective
covenants respecting the perfection of security interests.
3. Lien Priorities. The parties hereto expressly agree
that, notwithstanding the relative priority or the time of grant, creation,
attachment or perfection under applicable law of any security interests and
liens, if any, of any Secured Party upon or in any of the Collateral to secure
any Secured Indebtedness, whether such security interests and liens are now
existing or hereafter acquired or arising and whether such security interests
and liens are in or upon now existing or hereafter arising Collateral, such
security interests and liens shall be first and prior security interests and
liens in favor of the Collateral Agent to secure the Secured Indebtedness in
the priorities set forth in Section 5 hereof.
4. Certain Notices. The Collateral Agent and each other
Secured Party agrees to use its best efforts to give to the others (a) copies
of any notice of the occurrence or existence of an Event of Default sent to any
Loan Party, simultaneously with the sending of such notice to such Loan Party,
(b) notice of the occurrence or existence of an Event of Default of which such
party has knowledge, promptly after obtaining knowledge thereof, (c) notice of
the refusal by the Revolving Lender to make any Revolving Loan, promptly after
such refusal, (d) notice of any refusal by any LC Lender to issue or cause the
issuance of any Letter of Credit, promptly after such refusal, and (e) notice
of an Enforcement by such party, prior to commencing such Enforcement, but the
failure to give any of the foregoing notices shall not affect the validity of
such notice of an Event of Default given to a Loan Party or create a cause of
action against or cause a forfeiture of any rights of the party failing to give
such notice or create any claim or right on behalf of any third party. The
Collateral Agent agrees
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to deliver to each Secured Party a copy of each notice or other communication
received by it under any Collateral Document or the GECC Intercreditor
Agreements as soon as practicable after receipt thereof.
5. Distribution of Proceeds of Collateral After
Enforcement.
(a) On and after the occurrence of an Enforcement, all
proceeds of Collateral held or received by the Collateral Agent or any other
Secured Party (including, without limitation, any amount of any balances held
by the Collateral Agent or any Secured Party for the account of any Loan Party
or any other property held or owing by it to or for the credit or for the
account of any Loan Party setoff or appropriated by it, but excluding, except
as otherwise provided in paragraph (b) of this Section 5, amounts on deposit in
the Special Cash Collateral Account provided for therein) and any other
payments received, directly or indirectly, by the Collateral Agent or any
Secured Party on or with respect to any Secured Indebtedness (including,
without limitation, any payment under the Guaranty Agreement and the proceeds
from any sale of any Secured Indebtedness or any interest therein to any Loan
Party or any affiliate of any Loan Party but excluding, in the case of
Prudential, any payments of the principal of, interest on or other amounts due
with respect to the First Priority Notes or the First Priority Exchange Notes
to the extent the other holders of the First Priority Notes or the First
Priority Exchange Notes have received a proportional payment of such principal,
interest or other amount) shall be delivered to the Collateral Agent and
distributed as follows:
(i) First, to the Collateral Agent in the amount
of any unpaid Collateral Agent Obligations;
(ii) Next, to the extent proceeds remain, to the
LC Agent, for the account of the LC Agent and the LC Lenders, in the
amount of any Letter of Credit Obligations (and, for this purpose,
Letter of Credit Collateral Obligations shall be considered to have
been paid to the extent of any amount then on deposit in the Special
Cash Collateral Account provided for in paragraph (b) of this Section
5);
(iii) Next, to the extent proceeds remain, to the
First Priority Notes Indenture Trustee and the Second Priority Notes
Indenture Trustee, if any, in the amount of any unpaid Trustee
Expenses, pro rata in proportion to the respective amounts thereof;
(iv) Next, to the extent proceeds remain, to any
Secured Parties from which an Avoided Payment has been recovered but
has not been reimbursed pursuant to
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this clause (iv) in the amount of any such Avoided Payments which have
not been so reimbursed, pro rata in proportion to the respective
amounts thereof;
(v) Next, to the extent proceeds remain, to the
Revolving Lender and the First Priority Notes Indenture Trustee in the
amount of any unpaid interest accrued on or constituting a part of,
and any unpaid prepayment premiums (including, without limitation, any
Yield-Maintenance Amounts) due with respect to or constituting a part
of, the First Priority Indebtedness, pro rata in proportion to the
respective amounts thereof;
(vi) Next, to the extent proceeds remain, to the
Revolving Lender and the First Priority Notes Indenture Trustee in the
amount of any outstanding principal amount of the Revolving Loans, the
First Priority Notes, the First Priority Exchange Notes, pro rata in
proportion to the respective amounts thereof;
(vii) Next, to the extent proceeds remain, to the
Revolving Lender and the First Priority Notes Indenture Trustee in the
amount of any other unpaid First Priority Indebtedness, pro rata in
proportion to the respective amounts thereof;
(viii) Next, to the extent proceeds remain, to the
Second Priority Notes Indenture Trustee in the amount of any unpaid
interest accrued on or constituting a part of, any unpaid prepayment
premiums due with respect to or constituting a part of, the Second
Priority Indebtedness, pro rata in proportion to respective amounts
thereof;
(ix) Next, to the extent proceeds remain, to the
Second Priority Notes Indenture Trustee in the amount of any
outstanding principal amount of the Second Priority Notes and the
Second Priority Exchange Notes, pro rata in proportion to the
respective amounts thereof;
(x) Next, to the extent proceeds remain, to the
Second Priority Indenture Trustee in the amount of any other unpaid
second Priority Indebtedness, pro rata in proportion to the respective
amounts thereof; and
(xi) Next, to the extent proceeds remain, to the
Secured Parties in the amount of any other unpaid Secured
Indebtedness, pro rata in proportion to the respective amounts
thereof.
After the Secured Indebtedness has been finally paid in full
in cash, the balance of proceeds of the Collateral, if any,
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shall be paid to the Loan Parties, as applicable, or as otherwise required by
law.
(b) Any payment pursuant to clause (a)(ii) above with
respect to Letter of Credit Collateral Obligations shall be paid to the
Collateral Agent for deposit in an account (the "Special Cash Collateral
Account") to be held as Collateral for the Secured Indebtedness and disposed of
as provided herein. On each date after the occurrence of an Enforcement on
which a payment is made to a beneficiary pursuant to a draw on a Letter of
Credit, the Collateral Agent shall distribute to the Bank from the Special Cash
Collateral Account for application to the payment of the reimbursement
obligation due to the Bank with respect to such draw an amount equal to the
lesser of (i) the amount then on deposit in the Special Cash Collateral
Account, and (ii) the amount of such draw. At such time as the amount of the
Outstanding Letters of Credit Exposure is reduced to zero, any amount remaining
in the Special Cash Collateral Account, after the distribution therefrom as
provided above, shall be distributed as provided in clauses (a)(ii) through
(xi), above.
(c) If, at any time prior to an Enforcement, the Company
is required to make a payment pursuant to Section 4.6(a) of the Letter of
Credit Facility Agreement and fails to make such payment, the Collateral Agent,
upon the written request of the LC Agent, shall cause to be deposited into the
Special Collateral Account, pursuant to Section 3(b) of the Security
Agreements, an amount equal to such payment, provided, that the amount
deposited in the Special Cash Collateral Account at any time prior to an
Enforcement shall not exceed the Out of Formula Amount (as defined in the
Letter of Credit Facility Agreement) at such time, and no such action by the
Collateral Agent shall be considered to be an Enforcement for the purposes of
this Agreement. If at any time prior to an Enforcement the Out of Formula
Amount has been reduced to zero when no Event of Default is continuing, the
Collateral Agent will pay the amounts on deposit in the Special Cash Collateral
Account to the Borrower to the extent such payment does not cause an Out of
Formula Amount to be created.
(d) The distribution provisions of this Section 5 are for
the purpose of determining the relative amounts of proceeds and other payments
to be distributed to the Collateral Agent and the other Secured Parties and not
for the purpose of creating an agreement among the parties as to the manner in
which any proceeds or other payments distributed to them by the Collateral
Agent are actually to be applied to pay the Secured Indebtedness. The
Collateral Agent and each other Secured Party shall be free, each in its own
discretion and subject to the terms of any other agreement to which it may be a
party, to apply any proceeds or other payments distributed to it by the
Collateral Agent hereunder to the Secured Indebtedness held by each in such
order as it may determine. The Loan Parties, by their consent hereto, agrees
that
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in the event any payment is made with respect to any Secured Indebtedness under
this Section 5, as between the Loan Parties and each Secured Party the Secured
Indebtedness discharged by such payment shall be the amount or amounts of the
Secured Indebtedness to which such Secured Party applies the portion of such
payment distributed to it under this Section 5 as provided in the preceding
sentence. Notwithstanding the foregoing, for all purposes of this Agreement
the Secured Indebtedness shall be deemed paid to the same extent that proceeds
and other payments are distributed with respect to it pursuant to Section 5(a)
notwithstanding the actual application thereof.
(e) For the purposes hereof, the interest accrued on or
constituting a part of the First Priority Indebtedness or the Letter of Credit
Obligations shall include interest on the First Priority Notes, the First
Priority Exchange Notes and the Letter of Credit Obligations at the rate
specified therein from the date of filing of any proceeding under any
bankruptcy, reorganization, compromise, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar laws and all Yield-Maintenance
Amounts due under the provisions of the applicable Financing Agreements
irrespective of whether all or any portion of any such amounts are not an
allowed claim enforceable against the debtor in a case under any such law.
(f) Notwithstanding any other provision of this Section
5, in the event that it is held in any proceeding under any bankruptcy,
reorganization, compromise, insolvency, readjustment of debt, dissolution or
liquidation or similar law involving any Loan Party that the Yield-Maintenance
Amount on any of the Company's Floating Rate First Priority Senior Secured
Notes due 2000, Series C or Series D, is, in whole or in part, unenforceable or
otherwise not allowable as a claim against the debtor in such case, then no
amounts shall, to the extent of such unenforceability or disallowance, be
distributable with respect thereto under clauses (iv), (v), (vi) or (vii) of
paragraph (a) of this Section 5, but distributions shall be made with respect
to any such unenforceable or disallowed Yield-Maintenance Amount after all
amounts described in clauses (i) through (vii) of such paragraph (a) have been
paid in full and prior to any distributions being made pursuant to clause
(viii) through (xi) of such paragraph (a).
6. Certain Credit Extensions and Amendments to Agreements;
Actions Related to Collateral and Guaranty Agreement; Other Liens and Security
Interests.
(a) The LC Agent and each LC Lender agrees that, without
the consent in writing of the Requisite First Priority Noteholders and the
Revolving Lender, it will not (i) issue or cause to be issued any Letter of
Credit if, after giving effect to such issuance, the aggregate face amount of
all outstanding Letters of Credit, the aggregate amount of all unpaid
reimbursement
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obligations with respect to Letters of Credit and the aggregate amount of all
outstanding loans made under the Letter of Credit Facility Agreement would
exceed $28,000,000, (ii) amend, modify, supplement or restate, or waive any
provision of, any Specified Provision in the Letter of Credit Facility
Agreement as in effect on the date hereof (provided that the foregoing shall
not apply to any waiver of any non-payment Event of Default resulting from the
failure to comply with any covenant which covenant is not a Specified Provision
in the Letter of Credit Facility Agreement), (iii) except for the Guaranty
Agreement, retain or obtain the primary or secondary obligations of any other
obligor or obligors with respect to all or any part of the Secured
Indebtedness, or (iv) from and after the institution of any bankruptcy or
insolvency proceeding involving any Loan Party, as respects the Collateral
enter into any agreement with such Loan Party with respect to post-petition
usage of cash collateral, post-petition financing arrangements or adequate
protection.
(b) The Revolving Lender agrees that, without the consent
in writing of the Requisite First Priority Noteholders and the LC Agent, it
will not (i) make any Revolving Loan in excess of an aggregate of $35,000,000
at any time outstanding, (ii) amend, modify, supplement or restate, or waive
any provision of, any Specified Provision in the Revolving Credit Agreement
(provided that the foregoing shall not apply to any waiver of any non-payment
Event of Default resulting from the failure to comply with any covenant which
covenant is not a Specified Provision in the Revolving Credit Agreement), (iii)
except for the Guaranty Agreement, retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to all or any part of
the Secured Indebtedness, or (iv) from and after the institution of any
bankruptcy or insolvency proceeding involving any Loan Party, as respects the
Collateral enter into any agreement with such Loan Party with respect to
post-petition usage of cash collateral, post-petition financing arrangements or
adequate protection.
(c) The First Priority Notes Indenture Trustee agrees
that, without the consent in writing by the Requisite Working Capital Lenders,
it will not (i) amend, modify, supplement or restate, or waive any provision
of, any Specified Provision in the First Priority Notes Indenture (provided
that the foregoing shall not apply to any waiver of any non-payment Event of
Default resulting from the failure to comply with any covenant which covenant
is not a Specified Provision in the First Priority Notes Indenture), (ii)
except for the Guaranty Agreement, retain or obtain the primary or secondary
obligations of any other obligor or obligors with respect to all or any part of
the Secured Indebtedness, or (iii) from or after the institution of any
bankruptcy or insolvency proceeding, as respects the Collateral enter into any
agreement with such Loan Party with respect to post-petition usage of cash
collateral, post-petition financing arrangements or adequate protection.
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(d) The Second Priority Notes Indenture Trustee agrees
that, without the consent in writing of the Requisite Working Capital Lenders
and the Requisite First Priority Noteholders, it will not (i) amend, modify,
supplement or restate, or waive any provision of, the interest rate on, the
maturity date of or the amount of any premium payable with respect to the
Second Priority Notes or the Second Priority Exchange Notes or any event of
default or negative or financial covenant in the documentation relating to the
Second Priority Notes or the Second Priority Exchange Notes (provided that the
foregoing shall not apply to any waiver of any non-payment Event of Default
resulting from the failure to comply with any covenant which covenant is not a
negative or financial covenant), (ii) except for the Guaranty Agreements retain
or obtain the primary or secondary obligations of any other obligor or obligors
with respect to all or any part of the Secured Indebtedness, or (iii) from or
after the institution of any bankruptcy or insolvency proceeding, as respects
the Collateral enter into any agreement with such Loan Party with respect to
post-petition usage of cash collateral, post-petition financing arrangements or
adequate protection.
(e) Each Secured Party agrees that it will have recourse
to the Guaranty Agreement and the Collateral only through the Collateral Agent,
that it shall have no independent recourse thereto and that it shall refrain
from exercising any rights or remedies under the Collateral Documents which
have or may have arisen or which may arise as a result of an Event of Default
or an acceleration of the maturities of the Secured Indebtedness, except that,
upon the direction of the Required Secured Parties, any Secured Party may
appropriate any amount of any balances held by it for the account of any Loan
Party or any other property held or owing by it to or for the credit or for the
account of any Loan Party provided that the amount appropriated is delivered to
the Collateral Agent for application pursuant to Section 5 hereof. Without
such direction, no Secured Party shall set off or appropriate any such amount.
(f) Nothing contained in this Agreement shall (i) prevent
any Secured Party from imposing a default rate of interest in accordance with
the applicable Financing Agreement, or prevent a Secured Party from raising any
defenses in any action in which it has been made a party defendant or has been
joined as a third party, except that the Collateral Agent may direct and
control any defense directly relating to the Collateral or any one or more of
the Collateral Documents as directed by the Required Secured Parties, which
shall be governed by the provisions of this Agreement, or (ii) affect or impair
the right any Secured Party may have under the terms and conditions governing
the Secured Indebtedness to accelerate and demand repayment of such Secured
Indebtedness. Subject only to the express limitations set forth in this
Agreement, each Secured Party retains the right to freely exercise its rights
and remedies as a general creditor of the Loan
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Parties in accordance with applicable law and agreements with the Secured
Parties, including without limitation the right to file a lawsuit and obtain a
judgment therein against the Loan Parties and to enforce such judgment against
any assets of the Loan Parties other than the Collateral.
(g) Subject to the provisions set forth in this Agreement
and the Financing Agreements, each Secured Party and its affiliates may
(without having to account therefor to any Secured Party) own, sell, acquire
and hold equity and debt securities of the Loan Parties and lend money to and
generally engage in any kind of business with the Loan Parties (as if, in the
case of BTCC, it was not acting as Collateral Agent), and subject to the
provisions of this Agreement, the Secured Parties and their affiliates may
accept dividends, interest, principal payments, fees and other consideration
from the Loan Parties for services in connection with this Agreement or
otherwise without having to account of the same to the other Secured Parties,
provided that any such amounts which constitute Secured Indebtedness are
provided for in the Financing Agreements.
7. Accounting; Adjustments.
(a) The Collateral Agent and each other Secured Party
agrees to render an accounting to any of the others of the amounts of the
outstanding Secured Indebtedness, receipts of payments from the Loan Parties or
from the Collateral and of other items relevant to the provisions of this
Agreement upon the reasonable request from one of the others as soon as
reasonably practicable after such request, giving effect to the application of
payments and the proceeds of Collateral as hereinbefore provided in this
Agreement.
(b) Each party hereto agrees that to the extent any
payment of any Secured Indebtedness made to it hereunder is in excess of the
amount due to be paid to it hereunder, then it shall pay to the other parties
hereto such amounts so that, after giving effect thereto, the amount received
by such party is not in excess of the amount to be paid to it hereunder.
Notwithstanding the foregoing, neither the First Priority Notes Indenture
Trustee nor the Second Priority Notes Indenture Trustee shall be liable to
return any such excess amount paid to it if such excess amount has been
distributed by it to the holders of the First Priority Notes and the First
Priority Exchange Notes or the holders of the Second Priority Notes and the
Second Priority Exchange Notes, as the case may be, prior to the time the First
Priority Notes Indenture Trustee or the Second Priority Notes Indenture
Trustee, as the case may be, received notice of the payment of such excess
amount; provided, however, that, in such event, no further distributions shall
be made to the First Priority Notes Indenture Trustee or the Second Priority
Notes Indenture Trustee, as the case may be, pursuant to Section 5 hereof
(other than pursuant to clause (iii) thereof) until distributions shall
thereafter have been made to the
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other Secured Lenders pursuant to such Section 5 in an aggregate amount equal
to such excess amount.
8. Notices. Except as otherwise expressly provided
herein, any notice required or desired to be served, given or delivered
hereunder shall be in writing, and shall be deemed to have been validly served,
given or delivered three (3) business days after deposit in the United States
mails, with proper postage prepaid, one business day after delivery to a
courier for next day delivery, upon delivery by courier or upon transmission by
telex, telecopy or similar electronic medium (provided that a copy of any such
notice sent by such transmission is also sent by one of the other means
provided hereunder within one day after the date sent by such transmission) to
the addresses set forth below the signatures hereto, with a copy to any person
or persons set forth below such signature shown as to receive a copy, or to
such other address as any party designates to the others in the manner herein
prescribed; provided, that no notice to the Collateral Agent hereunder shall be
deemed to have been validly served, given or delivered until actually received
by the Collateral Agent. Any party giving notice to any other party hereunder
shall also give copies of such notice to all other parties.
9. Contesting Liens or Security Interests; No
Partitioning or Marshalling of Collateral; Contesting Secured Indebtedness.
(a) No Secured Party shall contest the validity,
perfection, priority or enforceability of or seek to avoid, have declared
fraudulent or have put aside any lien or security interest granted to the
Collateral Agent and each party hereby agrees to cooperate in the defense of
any action contesting the validity, perfection, priority or enforceability of
such liens or security interests. Each party shall also use its best efforts
to notify the other parties of any change in the location of any of the
Collateral or the business operations of any Loan Party or of any change in law
which would make it necessary or advisable to file additional financing
statements in another location as against any Loan Party with respect to the
liens and security interests intended to be created by the Collateral
Documents, but the failure to do so shall not create a cause of action against
the party failing to give such notice or create any claim or right on behalf of
any other party hereto and any third party.
(b) Notwithstanding anything to the contrary in this
Agreement or in any Collateral Document, no Secured Party shall have the right
to have any of the Collateral, or any security interest or other property being
held as security for all or any part of the Secured Indebtedness by the
Collateral Agent, partitioned, or to file a complaint or institute any
proceeding at law or in equity to have any of the Collateral or any such
security interest or other property partitioned, and each Secured Party
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hereby waives any such right. The Collateral Agent and each other Secured
Party hereby waive any and all rights to have the Collateral, or any part
thereof, marshalled upon any foreclosure of any of the liens or security
interests securing the Secured Indebtedness.
(c) Neither the Collateral Agent nor any other Secured
Party shall contest the validity or enforceability of or seek to avoid, have
declared fraudulent or have set aside any Secured Indebtedness. Except as
otherwise provided in Section 5(f), in the event any Secured Indebtedness is
invalidated, avoided, declared fraudulent or set aside for the benefit of any
Loan Party, the Secured Parties agree that such Secured Indebtedness shall
nevertheless be considered to be outstanding for all purposes of this
Agreement.
10. No Additional Rights for Loan Parties Hereunder.
Each Loan Party, by its consent hereto, acknowledges that it shall have no
rights under this Agreement. If the Collateral Agent or any other Secured
Party shall violate the terms of this Agreement, each Loan Party agrees, by its
consent hereto, that it shall not use such violation as a defense to any
enforcement by any such party of any obligations of any Loan Party nor assert
such violation as a counterclaim or basis for setoff or recoupment against any
such party.
11. Bankruptcy Proceedings. Nothing contained herein
shall limit or restrict the independent right of any Secured Party to initiate
an action or actions in any bankruptcy, reorganization, compromise,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar proceeding in its individual capacity and to appear or be heard on any
matter before the bankruptcy or other applicable court in any such proceeding,
including, without limitation, with respect to any question concerning the
post-petition usage of Collateral and post-petition financing arrangements.
The Collateral Agent, acting in such capacity, is not entitled to initiate such
actions on behalf of any Secured Party or to appear and be heard on any matter
before the bankruptcy or other applicable court in any such proceeding as the
representative of any Secured Party. The Collateral Agent is not authorized in
any such proceeding to enter into any agreement for, or give any authorization
or consent with respect to, the post-petition usage of Collateral, unless such
agreement, authorization or consent has been approved in writing by the
Required Secured Parties. This Agreement shall survive the commencement of any
such bankruptcy, reorganization, compromise, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar proceeding.
12. Independent Credit Investigation. No Secured Party,
including the Collateral Agent, nor any of its respective directors, officers,
agents or employees, shall be responsible to
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any of the others for the solvency or financial condition of any Loan Party or
the ability of any Loan Party to repay any of the Secured Indebtedness, or for
the value, sufficiency, existence or ownership of any of the Collateral, the
perfection or vesting of any lien or security interest, or the statements of
any Loan Party, oral or written, or for the validity, sufficiency or
enforceability of any of the Secured Indebtedness, any Financing Agreement, the
Guaranty Agreement, any Collateral Document, any document, instrument or
agreement executed or delivered in connection with or pursuant to any of the
foregoing, or the liens or security interests granted by the Loan Parties to
the Collateral Agent in connection therewith. Each Secured Party has entered
into its respective financial agreements with the Loan Parties based upon its
own independent investigation, and makes no warranty or representation to the
other, nor does it rely upon any representation by any of the others, with
respect to the matters identified or referred to in this Section.
13. Supervision of Obligations. Except to the extent
otherwise expressly provided herein, each Secured Party shall be entitled to
manage and supervise the obligations of the Loan Parties to it in accordance
with applicable law and such Secured Party's practices in effect from time to
time without regard to the existence of any other Secured Party.
14. Turnover of Collateral. If any Secured Party (other
than the Collateral Agent) acquires custody, control or possession of any
Collateral or any proceeds thereof other than pursuant to the terms of this
Agreement, such Secured Party shall promptly cause such Collateral or the
proceeds thereof to be delivered to or put in the custody, possession or
control of the Collateral Agent for disposition and distribution in accordance
with the provisions of Section 5 of this Agreement. Until such time as such
Secured Party shall have complied with the provisions of the immediately
preceding sentence, such Secured Party shall be deemed to hold such Collateral
and the proceeds thereof in trust for the parties entitled thereto under this
Agreement.
15. Special Indemnification by Working Capital Lenders.
In the event that the Collateral Agent takes any action at the direction of the
Requisite Working Capital Lenders which direction is given prior to the 180th
day after the date upon which the Working Capital Lenders' Notice is given,
then, to the extent such action is found by a court of competent jurisdiction
in a final non-appealable judgment to have breached contractual duties (express
or limited) or fiduciary duties owed to any Loan Party and results in any
costs, claims, damages, penalties, liabilities, losses or expenses (including,
but not limited to, court costs and attorneys' fees) being incurred by or
asserted against the Collateral Agent, any Secured Party or any holder of
Secured Indebtedness not joining in such direction or any officer, director,
employee or agent of any thereof ("Indemnified Parties"),
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(such costs, claim, damages, penalties, liabilities, losses or expenses, other
than such out-of-pocket expenses, called the "Indemnified Expenses"), the
Secured Parties joining in such direction (the "Indemnifying Secured Parties")
agree to indemnity and hold harmless the Indemnified Parties for all
Indemnified Expenses. If there is only one Indemnifying Secured Party, then
such Indemnifying Secured Party shall be liable for all of such
indemnification. If there is more than one Indemnifying Secured Party, then
the obligations of such of the Indemnifying Secured Parties with respect to
such indemnification shall be several, and each Indemnifying Secured Party
shall be liable for a pro rata share of any Indemnified Expense in the same
proportion as the aggregate amount of the original amount of the Letter of
Credit Commitment or the original amount of the Revolving Commitment of such
Indemnifying Secured Party (in each case whether or not either or both of such
commitments shall then be in effect) bears to the aggregate amount of the
original amount of the Letter of Credit Commitment and original amount of the
Revolving Commitment of all Indemnifying Secured Parties (whether or not then
in effect). Any such indemnification shall be paid to the Collateral Agent
notwithstanding that the Collateral Agent may have been reimbursed for any
amount of any Indemnified Expenses pursuant to Section 5(a)(i) hereof, in which
event such amount shall be distributed by the Collateral Agent pursuant to
Section 5(a) hereof as though it was proceeds of the Collateral.
16. Amendment. This Agreement and the provisions hereof
may be amended, modified or waived only by a writing signed by the Collateral
Agent and all of the other Secured Parties.
17. Successors and Assigns; Refinancings; Second Priority
Notes Indenture Trustee.
(a) This Agreement shall be binding upon and inure to the
benefit of the respective successors and assigns of each of the parties hereof,
including subsequent holders of the Secured Indebtedness and any Person
becoming an LC Lender after the date hereof, provided that (i) no Secured Party
shall assign or transfer any interest in any Secured Indebtedness, nor shall
the LC Agent permit any Person to become an LC Lender after the date hereof,
unless such transfer or assignment is made subject to this Agreement and the
applicable transferee or assignee, or such Person becoming an LC Lender, as the
case may be, becomes a signatory to this Agreement and assumes the obligations
of the transferor or assignor hereunder with respect to the Secured
Indebtedness so assigned or the obligations of a LC Lender, as the case may be,
from and after the time of such transfer or assignment, and (ii) the
appointment of any replacement Collateral Agent shall be subject to the
provisions of Section 2(h) hereof.
(b) In the event of any refinancing of the respective
extensions of credit provided by the Letter of Credit Facility
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Agreement, the Revolving Credit Agreement, the First Priority Notes and First
Priority Exchange Notes and the Second Priority Notes and the Second Priority
Exchange Notes, then the Person or Persons providing such refinancing or a
trustee therefor (the "Refinancing Person") may succeed to the rights hereunder
of the Person or Persons whose credit extension is being refinanced (the
"Refinanced Person") with respect to the Senior Indebtedness being refinanced,
and the indebtedness being provided by such refinancing may become Secured
Indebtedness entitled to the benefits of the liens and security interests in
the Collateral pursuant to the Collateral Documents, subject to the provisions
hereof, provided that (i) the Refinancing Person becomes a signatory to this
Agreement and assumes the obligations of the Refinanced Person with respect to
the Senior Indebtedness being refinanced by executing and delivering to the
Secured Parties a counterpart of this Agreement, (ii) in the case of a
refinancing of the extension of credit provided by the Letter of Credit
Facility Agreement, without the written consent of the Revolving Lender and the
Requisite First Priority Noteholders, the maximum commitment to extend credit
at any time under such refinancing shall not exceed $28,000,000, (iii) in the
case of a refinancing of the extension of credit provided by the Revolving
Credit Agreement, without the written consent of the LC Agent and the Requisite
First Priority Noteholders, the maximum commitment to extend credit at any time
under such refinancing shall not exceed $35,000,000, (iv) in the case of a
refinancing of the extension of credit provided by the First Priority Notes and
the First Priority Exchange Notes or the Second Priority Notes and the Second
Priority Exchange Notes, the principal amount of the credit available at any
time under such refinancing shall not exceed the principal amount of the First
Priority Notes and the First Priority Exchange Notes, or the Second Priority
Notes and the Second Priority Exchange Notes, as the case may be, outstanding
at the time of such refinancing, and (v) the events of default and negative and
financial covenants in the documentation applicable to such refinancing shall
be no more onerous than the Specified Provisions in the Secured Indebtedness
being refinanced (or, in the case of a refinancing of the Second Priority Notes
and the Second Priority Exchange Notes, no more onerous than the events of
default and negative and financial covenants in the Second Priority Notes
Indenture). In the case of any such refinancing, the parties hereto agree to
execute an amendment to this Agreement to appropriately amend the definitions,
sectional references and other provisions hereto so as to cause this Agreement
to accommodate the terms of the documents relating to such refinancing while
preserving the substance of the relationships between, and the relative
priorities of, the different types of Secured Parties and different types of
Secured Indebtedness established hereunder.
(c) In the event of the issuance of any Second Priority
Notes in a manner permitted by the Financing Agreements, the Second Priority
Notes Indenture Trustee can become a signatory to this Agreement and agree to
the obligations of the Second Priority Notes
29
<PAGE> 30
Indenture Trustee hereunder by executing and delivering to the Secured Parties
a counterpart of this Agreement.
18. Limitation Relative to Other Agreements. Nothing
contained in this Agreement is intended to impair, as between any Secured Party
and the Loan Parties, the rights of such Secured Party and the obligations of
the Loan Parties under the Financing Agreements between the respective Loan
Parties and such Secured Party.
19. Counterparts. This Agreement may be executed in
several counterparts and by each party on a separate counterpart, each of
which, when so executed and delivered, shall be an original, but all of which
together shall constitute but one and the same instrument. In proving this
Agreement, it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
20. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY
THE INTERNAL LAWS (AS OPPOSED TO CONFLICT OF LAWS PROVISIONS) OF THE STATE OF
ILLINOIS WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
21. Indenture Trustee. Each of the other parties to this
Agreement acknowledges that the First Priority Notes Indenture Trustee and the
Second Priority Notes Indenture Trustee each enters into this Agreement in its
capacity as Trustee under the First Priority Notes Indenture or the Second
Priority Notes Indenture, as the case may be, and not in its individual
capacity.
30
<PAGE> 31
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the day and year first written above.
BT Commercial Corporation, in its
separate capacities as LC Agent,
LC Lender and Collateral Agent
By:________________________________
Title:__________________________
Address for notices:
233 South Wacker Drive
Suite 8400
Chicago, Illinois 60606
Attn: Credit Department
Telecopier:(312) 993-8096
Telephone:__________________
The Prudential Insurance Company
of America
By:________________________________
Title:__________________________
Address for notices:
c/o Prudential Capital Group
Two Prudential Plaza
Suite 5600
Chicago, Illinois 60601
Attn: Managing Director
Telecopier: 312/540-4222
Telephone: 312/540-0931
Shawmut Bank Connecticut,
National Association,
as Trustee
By:________________________________
Title:__________________________
<PAGE> 32
Address for notices:
777 Main Street - MSN238
Hartford, Connecticut 66115
Attn: Corporate Trust Administration
Telecopier: 203/986-7920
Telephone: 203/986-4424
<PAGE> 33
ACKNOWLEDGEMENT OF AND CONSENT AND AGREEMENT
TO INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
The undersigned, the Loan Parties described in the
Intercreditor and Collateral Agency Agreement set forth above, acknowledge and
consent to the terms and conditions thereof. The undersigned Loan Parties do
hereby further acknowledge and agree to their joint and several agreements
under Sections 2(i), 5(d) and 10 of the Intercreditor and Collateral Agency
Agreement and acknowledge and agree that no Loan Party is a third-party
beneficiary of, or has any rights under, the Intercreditor and Collateral
Agency Agreement. The undersigned Loan Parties do hereby consent to any
amendment to the Intercreditor and Collateral Agency Agreement referred to in
Section 17(b) thereof.
In addition to all other amounts payable to BTCC, in its
individual capacity and in its respective capacities as LC Agent, LC Lender and
Collateral Agent, hereunder and under any of the Collateral Documents or
Financing Agreements, the Company agrees to pay to BTCC a non-refundable
(except as provided in the next sentence) fee for its own account, as
compensation for BTCC's services as Collateral Agent under the Intercreditor
and Collateral Agency Agreement and each of the Collateral Documents, at the
rate of $200,000 per year, payable in advance on the date hereof and on each
anniversary of the date hereof. In the event that the Collateral Agent resigns
or is removed as a result of its gross negligence or wilful misconduct, a pro
rata portion of such fee for the balance of the year will be refundable. The
Company also agrees to pay any successor Collateral Agent such amount and at
such times, or such other reasonable fee as may be charged by such successor
Collateral Agent.
This Acknowledgement of and Consent and Agreement to
Intercreditor and Collateral Agency Agreement and any amendment hereof may be
executed in several counterparts and by each party on a separate counterpart,
each of which, when so executed and delivered, shall be an original, but all of
which together shall constitute but one and the same instrument. In proving
this Acknowledgement of and Consent and Agreement to Intercreditor and
Collateral Agency Agreement it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom enforcement is
sought.
<PAGE> 34
IN WITNESS WHEREOF, the parties below have caused this
Acknowledgement of and Consent and Agreement to Intercreditor and Collateral
Agency Agreement to be executed by their respective duly authorized officers as
of June 20, 1995.
Envirodyne Industries, Inc.
By:___________________________________
Title:_____________________________
Sandusky Plastics, Inc.
By:___________________________________
Title:_____________________________
Clear Shield National, Inc.
By:___________________________________
Title:_____________________________
Sandusky Plastics of Delaware, Inc.
By:___________________________________
Title:_____________________________
Viskase Corporation
By:___________________________________
Title:_____________________________
Viskase Holding Corporation
By:___________________________________
Title:_____________________________
Viskase Sales Corporation
By:___________________________________
Title:_____________________________
<PAGE> 35
Annex 1 to
Intercreditor and
Collateral Agency
Agreement
Other Agreements, Documents and Instruments
Included as Collateral Documents
None
<PAGE> 36
Annex 2 to
Intercreditor and
Collateral Agency
Agreement
GECC Intercreditor Agreements
1. GECC Intercreditor Agreement, dated as of June 20, 1995, among the
Collateral Agent, General Electric Capital Corporation, as Owner
Participant under the Lease Documents referred to therein (the "Owner
Participant"), Shawmut Bank Connecticut, National Association, as
Owner Trustee under the Trust Agreement referred to therein (the
"Owner Trustee"), the Borrower and Viskase Corporation, a Pennsylvania
corporation ("Viskase").
2. Subordination Agreement (Mortgages), dated as of June 20, 1995, among
the Collateral Agent, the Borrower and the Owner Trustee.
3. Subordination Agreement (Intellectual Property), dated as of June 20,
1995, among the Collateral Agent, the Borrower, the Owner Trustee and
the Owner Participant.
4. Subordination Agreement (Certain Payments), dated as of June 20, 1995,
among the Collateral Agent, the Borrower, the Owner Trustee and the
Owner Participant.
<PAGE> 37
Annex 3 to
Intercreditor and
Collateral Agency
Agreement
Guarantors
1. Sandusky Plastics, Inc., a Delaware corporation.
2. Clear Shield National, Inc., a California corporation.
3. Sandusky Plastics of Delaware, Inc., a Delaware corporation.
4. Viskase Corporation, a Pennsylvania corporation.
5. Viskase Holding Corporation, a Delaware corporation.
6. Viskase Sales Corporation, a Delaware corporation.
<PAGE> 38
Annex 4 to
Intercreditor and
Collateral Agency
Agreement
Mortgages
1. Mortgage, Security Agreement and Assignment of Leases and Rents from
Viskase Sales Corporation to B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located at
3402 Stanwood Boulevard, Huntsville, Alabama.
2. Mortgage, Security Agreement and Assignment of Leases and Rents from
Viskase Sales Corporation to B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located at
2221 East State Highway 198, Osceola, Arkansas.
3. Deed of Trust, Security Agreement, Assignment of Lease and Rents in
Fixture Filing made by Viskase Sales Corporation in favor of Chicago
Title Company for the benefit of B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located at
1505 Spring Avenue, SanteFe Springs, California.
4. Revolving Credit Mortgage Security Agreement and Assignment of Leases
and Rents from Viskase Sales Corporation to B.T. Commercial
Corporation, as collateral agent dated as of June 20, 1995 for the
property located at 6855 and 6733 West 65th Street, Chicago, Illinois.
5. Revolving Credit Mortgage Security Agreement and Assignment of Leases
and Rents from Clear Shield National, Inc. to B.T. Commercial
Corporation, as collateral agent dated as of June 20, 1995 for the
property located at 1234 Peterson Drive, Wheeling, Illinois.
6. Revolving Credit Mortgage Security Agreement and Assignment of Leases
and Rents from First Chicago Trust Company of Illinois as trustee and
Clear Shield National, Inc., as beneficiary to B.T. Commercial
Corporation, as collateral agent dated as of June 20, 1995 for the
property located at 1175 South Wheeling Road, Wheeling Illinois.
7. Mortgage, Security Agreement and Assignment of Leases and Rents from
Viskase Sales Corporation to B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located
along Route 1, Kentland, Indiana.
8. Mortgage, Security Agreement and Assignment of Leases and Rents from
Viskase Sales Corporation to B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located at
24th and O'Neal, Centerville, Iowa.
<PAGE> 39
9. Act of Collateral Mortgage, Security Agreement and Assignment of
Leases and Rents from Clear Shield National, Inc. to B.T. Commercial
Corporation, as collateral agent dated as of June 20, 1995 for the
property located at 1214 Hawn Avenue, Shrieveport, Louisiana.
10. Mortgage, Security Agreement and Assignment of Leases and Rents from
Clear Shield National, Inc. to B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located at
177 Florence Street, Leominster, Massachusetts.
11. Open End Mortgage, Security Agreement and Assignment of Leases and
Rents from Viskase Sales Corporation to B.T. Commercial Corporation,
as collateral agent dated as of June 20, 1995 for the property located
at 1450 South Chillicothe Road, Aurora, Ohio.
12. Open End Mortgage, Security Agreement and Assignment of Leases and
Rents from Sandusky Plastics, Inc. to B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located at
400 Broadway, Sandusky, Ohio.
13. Leasehold Mortgage, Security Agreement and Assignment of Leases and
Rents from Viskase Sales Corporation to B.T. Commercial Corporation,
as collateral agent dated as of June 20, 1995 for the property located
at Route 3, Indian Meridian Road, Pauls Valley, Oklahoma.
14. Mortgage, Security Agreement and Assignment of Leases and Rents from
Viskase Sales Corporation to B.T. Commercial Corporation, as
collateral agent dated as of June 20, 1995 for the property located at
Route 3, Indian Meridian Road, Pauls Valley, Oklahoma.
15. Open End Mortgage, Security Agreement and Assignment of Leases and
Rents from Viskase Sales Corporation to B.T. Commercial Corporation,
as collateral agent dated as of June 20, 1995 for the property located
in Bensalem, Pennsylvania.
16. Deed of Trust, Security Agreement and Assignment of Leases and Rents
from Viskase Sales Corporation to __________________, Trustee for the
benefit of B.T. Commercial Corporation, as collateral agent,
beneficiary, dated as of June 20, 1995 for the property located along
U.S. Highway 11, Louden, Tennessee.
<PAGE> 40
Annex 5 to
Intercreditor and
Collateral Agency
Agreement
Pledge Agreements
1. Company Pledge Agreement, dated as of June 20, 1995, made by the
Borrower in favor of the Collateral Agent, together with the Stock
Powers and Pledge Acknowledgments relating thereto.
2. Subsidiary Pledge Agreement, dated as of June 20, 1995, made by Clear
Shield National, Inc. in favor of the Collateral Agent, together with
the Stock Powers and Pledge Acknowledgments relating thereto.
3. Subsidiary Pledge Agreement, dated as of June 20, 1995, made by
Sandusky Plastics, Inc. in favor of the Collateral Agent, together
with the Stock Powers and Pledge Acknowledgments relating thereto.
4. Subsidiary Pledge Agreement, dated as of June 20, 1995, made by
Viskase Corporation in favor of the Collateral Agent, together with
the Stock Powers and Pledge Acknowledgments relating thereto.
5. Subsidiary Pledge Agreement, dated as of June 20, 1995, made by
Viskase Holding Corporation in favor of the Collateral Agent, together
with the Stock Powers and Pledge Acknowledgments relating thereto.
6. Pledge of Shares Agreement, made by Viskase Holdings Corporation in
favor of the Collateral Agent, together with the Delegation and
Certificate of Creation of Pledge related thereto.
<PAGE> 41
Annex 6 to
Intercreditor and
Collateral Agency
Agreement
Security Agreements
1. Company Security Agreement, dated as of June 20, 1995, made by the
Borrower in favor of the Collateral Agreement, together with the
Blocked Account Letter in the form of Exhibit A thereto.
2. Subsidiary Security Agreement, dated as of June 20, 1995, made by
Clear Shield National, Inc. in favor of the Collateral Agent, together
with the Blocked Account Letter in the form of Exhibit A thereto.
3. Subsidiary Security Agreement, dated as of June 20, 1995, made by
Sandusky Plastics, Inc. in favor of the Collateral Agent, together
with the Blocked Account Letter in the form of Exhibit A thereto.
4. Subsidiary Security Agreement, dated as of June 20, 1995, made by
Sandusky Plastics of Delaware, Inc. in favor of the Collateral Agent,
together with the Blocked Account Letter in the form of Exhibit A
thereto.
5. Subsidiary Security Agreement, dated as of June 20, 1995, made by
Viskase Corporation in favor of the Collateral Agent, together with
the Blocked Account Letter in form of Exhibit A thereto.
6. Subsidiary Security Agreement, dated as of June 20, 1999, made by
Viskase Holding Corporation in favor of the Collateral Agent, together
with the Blocked Account Letter in the form of Exhibit A thereto.
7. Subsidiary Security Agreement, dated as of June 20, 1995, made by
Viskase Sales Corporation in favor of the Collateral Agent, together
with the Blocked Account Letter in the form of Exhibit A thereto.
8. Intellectual Property Security Agreement, dated as of June 20, 1995,
made by Clear Shield National, Inc. in favor of the Collateral Agent,
together with the Assignment of Intellectual Property related thereto.
9. Intellectual Property Security Agreement, made by Sandusky Plastics,
Inc. in favor of the Collateral Agent, together with the Assignment of
Intellectual Property related thereto.
10. Intellectual Property Security Agreement, made by Viskase Corporation
in favor of the Collateral Agent, together with the Assignment of
Intellectual Property related thereto.
<PAGE> 1
EXHIBIT 10.15
GECC INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT, dated as of June 20, 1995 (this
"Agreement"), is among BT Commercial Corporation, not in its individual capacity
but solely as Collateral Agent under the Collateral Agent's Intercreditor
Agreement described below (in such capacity, together with its successors and
assigns, the "Collateral Agent"), GENERAL ELECTRIC CAPITAL CORPORATION, as
Owner Participant under the Lease Documents referred to herein (in such
capacity, together with its successors and assigns, the "Owner Participant"),
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION (formerly, The Connecticut
National Bank), not in its individual capacity but solely as Owner Trustee
under the Trust Agreement referred to herein (in such capacity, together with
its successors and assigns, the "Owner Trustee"), ENVIRODYNE INDUSTRIES, INC.,
a Delaware corporation ("Envirodyne"), and VISKASE CORPORATION, a Pennsylvania
corporation ("Viskase").
RECITALS
A. Envirodyne has and may hereunder enter into certain Financing
Agreements (such term, and the other defined terms used in these Recitals
without definition, having the meanings assigned to such terms in Schedule I
hereto) under which loans, letters of credit and other financial accommodations
are being and may hereafter be made to or for the account of Envirodyne.
B. Certain of the subsidiaries of Envirodyne, including Viskase
(collectively with Envirodyne, the "Borrowers"), have guaranteed the
obligations of Envirodyne under the Financing Agreements.
C. Pursuant to the Financing Agreements, the Borrowers have
executed and delivered the Collateral Documents under which the Borrowers have
granted to the Collateral Agent, on behalf and for the benefit of the Secured
Parties under and as defined in that certain Intercreditor and Collateral
Agency Agreement, dated as of June 20, 1995 (the "Collateral Agent's
Intercreditor Agreement"), liens and security interests to secure their
obligations under the Financing Agreements, the Collateral Documents and the
guaranties thereof.
D. The Financing Agreements constitute a refinancing of the
Credit Agreement dated as of December 31, 1993 among Envirodyne, certain of
Envirodyne's subsidiaries and the lenders party thereto, as amended from time
to time (the "Exit Financing"); the Exit Financing constituted a refinancing of
the Postpetition Credit Agreement dated February 5, 1993 among Envirodyne,
certain of Envirodyne's subsidiaries and the lenders party thereto (the
"Postpetition Credit Agreement"); and the Postpetition Credit Agreement
constituted a refinancing of the
<PAGE> 2
Credit Agreement dated as of May 1, 1989 among Envirodyne and the lenders party
thereto, as amended from time to time.
E. Viskase has entered into a sale and leaseback transaction with
the Owner Participant and the Owner Trustee.
F. It is a condition precedent to the financial accommodations
being made under the Financing Agreements that the parties hereto enter into
this Agreement.
G. The parties hereto desire to execute and deliver this
Agreement to set forth certain agreements among them as provided below.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, receipt of which is hereby acknowledged, the
parties hereto hereby agree as follows:
1. Certain Definitions. Capitalized terms which are used herein,
shall, unless otherwise defined herein, have the meanings set forth in Schedule
I hereto.
2. Acknowledgment Of Certain Rights Of Parties. (a) Each of the
Collateral Agent and Envirodyne severally acknowledges that it does not have,
and in the case of the Collateral Agent, that neither it nor any of the other
Secured Parties has, pursuant to any Collateral Document, any mortgage, lien or
other security interest in any of the Sale-Leaseback Property to secure any
obligations of Envirodyne, Viskase or any other Person under the Financing
Agreements or any of the Collateral Documents which have been executed and
delivered in connection therewith. Notwithstanding anything herein to the
contrary, the provisions of this Section 2 shall not affect any mortgage, lien,
security interest or encumbrance which the Collateral Agent or Envirodyne may
have on any property of Envirodyne, Viskase or any of their respective
Subsidiaries other than the Sale-Leaseback Property.
(b) Each of the Owner Trustee and the Owner Participant hereby
acknowledges and confirms that it does not have any mortgage, lien, or security
interest on any property of Envirodyne, Viskase or any of their respective
Subsidiaries, to secure any obligations of any of such Persons under any of the
Lease Documents, other than the Owner Trustee Security Agreement and as set
forth in Articles XII, XIV, XVIII and XXI of the Lease.
(c) Nothing in this Section 2 shall be deemed to constitute a
representation or warranty by the Collateral Agent as to the validity of the
Owner Trustee's ownership interest in any of the Plants, or a representation or
warranty by either the Owner Trustee or the Owner Participant as to the
validity of any mortgage, lien, security interest or other encumbrance in favor
2
<PAGE> 3
of the Collateral Agent or any Secured Party under any of the Collateral
Documents.
(d) Notwithstanding the other provisions of this Agreement, upon
the acquisition by Viskase, or any other Subsidiary of Envirodyne that is a
party to any Collateral Document, of any Sale-Leaseback Property upon or after
any release, sale, abandonment or other disposition thereof by the Owner
Trustee or the Owner Participant, including, without limitation, the purchase
by Viskase of any of the Plants (or any part thereof) from the Owner Trustee
pursuant to Article VI of the Lease or the transfer by the Owner Trustee of any
of the Plants (or any part thereof) to Viskase pursuant to Section 10.05 or
14.01 of the Lease, the after-acquired property clauses of the Collateral
Documents shall thereupon, without further act or agreement of Viskase,
Envirodyne or such other Subsidiary, act to grant the Collateral Agent a
mortgage and lien on and security interest in such property.
(e) This Section 2 shall be applicable before and after the filing
of any petition by or against Envirodyne, Viskase or any Subsidiary Guarantor
under Title 11 of the United States Code or any similar law of any
jurisdiction.
3. Subordination Agreements. The Collateral Agent agrees to
execute and deliver to the Owner Trustee and the Owner Participant, on the date
hereof:
(a) subordination agreements, substantially in the form set forth
in Exhibit A-1 hereto, in respect of the rights of the Collateral Agent under
the Mortgages (as executed, such subordination agreements are collectively
referred to as the "Subordination Agreements (Mortgages)");
(b) a subordination agreement, substantially in the form set forth
in Exhibit A-2 hereto, in respect of the rights of the Collateral Agent under
the applicable Collateral Documents in the intellectual property covered by the
License Agreement (as executed, such subordination agreement is referred to as
the "Subordination Agreement (Intellectual Property)"); and
(c) a subordination agreement, substantially in the form set forth
in Exhibit A-3 hereto, in respect of the rights of the Collateral Agent under
the applicable Collateral Documents with respect to the collateral covered by
the Owner Trustee Security Agreement (as executed, such subordination
agreements are collectively referred to as the "Subordination Agreements
(Certain Payments)").
4. Collateral Agent's Right to Cure Defaults under Lease
Documents. The Owner Trustee and the Owner Participant each
3
<PAGE> 4
agree that the Collateral Agent shall have the right to cure certain Events of
Default as follows:
(a) Each of the Owner Trustee and the Owner Participant agrees to
notify the Collateral Agent in writing of the occurrence of any Event of
Default as promptly as practicable after an Authorized Officer of the Owner
Trustee or the Owner Participant has actual knowledge of such Event of Default;
the date of receipt by the Collateral Agent of any such notification from the
Owner Trustee or the Owner Participant shall herein be called the "Notification
Date".
(b) In the case of any default in payment of Basic Rent or
Stipulated Loss Value, unless the Collateral Agent has, either (i) within the
period of 14 months immediately preceding the Notification Date in respect of
such Event of Default (unless within such previous 14 month period the cure by
the Collateral Agent was made at a time when such Event of Default would not
have occurred if the Rent Letter of Credit had not been reduced and the
proceeds thereof had been used to pay the Basic Rent or Stipulated Loss Value,
in which case such 14 month restriction shall be extended to 26 months), or
(ii) on three or more previous occasions, exercised its right to cure a default
in payment of Basic Rent or Stipulated Loss Value under this Section 4(b) by
making a payment of such Basic Rent or Stipulated Loss Value, as the case may
be, to the Owner Trustee, the Collateral Agent, on behalf of any or all of the
other Secured Parties, shall have the right to cure such Event of Default, and
neither the Owner Trustee nor the Owner Participant will exercise any of its
rights or remedies under any of the Lease Documents in respect of such Event of
Default (including without limitation under the Guaranty) until at least 15
days after the Notification Date in respect of such Event of Default. At any
time during such 15-day period, the Collateral Agent may give notice (a "Cure
Notice") to the Owner Trustee and the Owner Participant that, based on the
information then available to it, the Collateral Agent believes in good faith
that there is a reasonable possibility that the Collateral Agent, on behalf of
any or all of the Secured Parties, will cure such Event of Default within a
period of 45 days following such Notification Date; provided, however, that,
after giving any Cure Notice, until the earlier of the date, if any, when such
Event of Default is cured and the expiration of such 45-day period, the
Collateral Agent will use its reasonable efforts from time to time to determine
whether such reasonable possibility still exists and, if the Collateral Agent
determines that such reasonable possibility no longer exists, it will promptly
so notify the Owner Trustee and the Owner Participant. If either the Owner
Trustee or the Owner Participant receives such a Cure Notice from the
Collateral Agent, it will not exercise any rights or remedies under any of the
Lease Documents in respect of such Event of Default (including without
limitation under the Guaranty) until the
4
<PAGE> 5
earlier of (x) the forty-fifth day following such Notification Date and (y) the
date upon which the Collateral Agent provides the Owner Trustee and the Owner
Participant with the notice referred to in the proviso to the next preceding
sentence.
(c) In the case of any Event of Default other than a default in
payment of Basic Rent or Stipulated Loss Value, and other than an Event of
Default under clause (f) or (g) of Article XVII of the Lease, unless the
Collateral Agent has on six or more previous occasions exercised its right to
cure such an Event of Default, the Collateral Agent, on behalf of any or all of
the Secured Parties, shall have the right to cure such Event of Default, and
neither the Owner Trustee nor the Owner Participant will exercise any of its
rights or remedies under any of the Lease Documents in respect of such Event of
Default (including without limitation under the Guaranty) until at least 15
days after the Notification Date in respect of such Event of Default. At any
time during such 15-day period, the Collateral Agent may give a Cure Notice to
the Owner Trustee and the Owner Participant to the effect that, based on the
information then available to it, it believes in good faith that there is a
reasonable possibility that the Collateral Agent, on behalf of any or all of
the Secured Parties, will cure such Event of Default within a period of 45 days
following such Notification Date; provided, however, that, after giving any
Cure Notice, until the earlier of the date, if any, when such Event of Default
is cured and the expiration of such 45-day period, the Collateral Agent will
use its reasonable efforts from time to time to determine whether such
reasonable possibility still exists and, if the Collateral Agent determines
that such reasonable possibility no longer exists, it will promptly so notify
the Owner Trustee and the Owner Participant. If either the Owner Trustee or
the Owner Participant receives such a Cure Notice from the Collateral Agent, it
will not exercise any rights or remedies under any of the Lease Documents in
respect of such Event of Default (including without limitation under the
Guaranty) until the earlier of (x) the forty-fifth day following such
Notification Date and (y) the date upon which the Collateral Agent provides the
Owner Trustee and the Owner Participant with the notice referred to in the
proviso to the next preceding sentence.
(d) In order for the Collateral Agent, on behalf of any or all of
the Secured Parties, to cure any Event of Default arising from a failure by
Viskase to pay money to the Owner Trustee or the Owner Participant, the
Collateral Agent shall pay to the Owner Trustee or the Owner Participant, as
the case may be, in immediately available funds at such Person's address set
forth on the signature pages hereof, the amount of such defaulted payment
together with interest thereon from the date on which such payment was due to
the Owner Trustee or Owner Participant, as the case may be, until the date of
payment by the Collateral Agent, at the Stipulated Rate.
5
<PAGE> 6
(e) Upon payment of the amounts specified in Section 4(d) above,
in the case of any Event of Default arising from the failure to pay money to
the Owner Trustee or the Owner Participant, or upon the curing of any other
Event of Default, such Event of Default shall cease to exist and neither the
Owner Trustee nor the Owner Participant shall have any rights under any of the
Lease Documents in respect thereof.
(f) No notice given pursuant to this Section 4 by the Collateral
Agent that it believes in good faith that there is a reasonable possibility it
or any of the Secured Parties will cure any Event of Default shall obligate the
Collateral Agent or any of the Secured Parties to cure such Event of Default,
and neither the Collateral Agent nor any of the Secured Parties shall be liable
to the Owner Trustee or the Owner Participant for any failure to cure such
Event of Default unless the Collateral Agent acted in bad faith in giving any
such notice. Nothing in this Agreement shall impose upon the Collateral Agent
or any of the Secured Parties any obligation to ensure the performance by any
Person of any of the Lease Documents or to cure any Event of Default under any
of the Lease Documents.
(g) Nothing in this Section 4 shall prohibit the Owner Trustee
from making a drawing under the Cure Rights Letter of Credit or the Rent Letter
of Credit in accordance with the terms thereof.
5. Use of Facilities to Complete Work in Process. If at any time
the Owner Trustee or Owner Participant has obtained possession and control of
any Plant pursuant to Article XVIII or any other provision of the Lease, it
will give prompt notice of such occurrence to the Collateral Agent, and, to the
extent permitted by applicable law, upon request by the Collateral Agent on
behalf of some or all of the Secured Parties at any time when the Owner Trustee
or the Owner Participant, or any other Person on its or their behalf, is
operating such Plant, the Owner Trustee or the Owner Participant, as the case
may be, shall utilize such Plant, or cause such Plant to be utilized, to finish
work on any of the Collateral Agent's Collateral which is located in the same
Facility as such Plant and which constitutes work in process. Neither the Owner
Trustee nor the Owner Participant shall be required to use any Plant to perform
any work on any part of the Collateral Agent's Collateral which constitutes raw
materials, but neither the Owner Trustee nor the Owner Participant shall,
without the Collateral Agent's consent, use any Collateral Agent's Collateral
for any purpose, except to process work in process. The Collateral Agent shall
compensate the Owner Trustee and Owner Participant for all the Owner Trustee's
and Owner Participant's reasonable direct and incremental costs related to use
of any Plant on behalf of the Collateral Agent, as instructed in writing by the
Collateral Agent, including but not limited to incremental wage,
6
<PAGE> 7
maintenance, utility, insurance and overhead expenses directly incident to such
use.
6. Collateral Agent's Right to Remove Collateral Agent's
Collateral from Facilities. If at any time the Owner Trustee or Owner
Participant has obtained possession and control of any Plant pursuant to
Article XVIII or any other provision of the Lease, the Owner Trustee and Owner
Participant shall, upon reasonable notice from the Collateral Agent, permit the
Collateral Agent to enter upon the Facility where such Plant is located, in
accordance with applicable law, solely for purposes of removing the Collateral
Agent's Collateral. The Collateral Agent shall compensate the Owner Trustee
and the Owner Participant for any damage to such Plant caused by such removal,
and shall pay the Owner Trustee and the Owner Participant for the Owner
Trustee's and Owner Participant's reasonable direct and incremental costs
related to the provision and supervision of such access to such Plant.
7. Insurance. Viskase has agreed to insure the Owner Trustee's
interest in the Plants pursuant to the Lease, and Envirodyne and Viskase have
agreed to insure the Collateral Agent's and the Secured Parties' interest in
the Collateral Agent's Collateral pursuant to the Collateral Documents. To the
extent that the insurance which Viskase is obligated to carry is carried under
a blanket policy which insures both the Plants and the Collateral Agent's
Collateral, the parties hereto agree that (i) the insurance proceeds of any
loss solely involving the Collateral Agent's Collateral shall be paid directly
to the Collateral Agent to the extent required to be so paid at such time
pursuant to the Collateral Documents, (ii) the insurance proceeds of any loss
solely involving any Plant shall be paid directly to the Owner Trustee and
(iii) the insurance proceeds of any loss involving both Collateral Agent's
Collateral and any Plant (a "Combined Loss") shall be paid to a mutually
acceptable third party to be invested in Permitted Investments for payment to
the Collateral Agent, on the one hand, and the Owner Trustee and Owner
Participant on the other, pro rata according to the respective proportions
which the losses to the Collateral Agent's Collateral and the Plant bear to the
total of such losses, with interest earned on such invested proceeds to be
allocated in the same manner as principal. The amount of such relative losses
shall be determined as the Collateral Agent and the Owner Participant shall
mutually agree, or, if they do not so agree, shall be determined according to
the Appraisal Procedure, except that all actions which are provided in the
definition of Appraisal Procedure to be taken by the Lessee shall, for purposes
of this Section, be taken by the Collateral Agent. If either the Collateral
Agent or the Owner Trustee or the Owner Participant pays any insurance premiums
on behalf of Envirodyne or Viskase in respect of any period of time, and a
Combined Loss occurs during such period under a policy for which such premiums
were paid by
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<PAGE> 8
any of such parties, the party that paid such insurance premiums shall be
reimbursed for the payment of such premiums from the insurance proceeds prior
to the distribution of the balance of such proceeds pursuant to the provisions
of this Section 7.
8. Notice of Termination of Guaranty. The Owner Trustee and
Owner Participant hereby agree for the benefit of the Collateral Agent and the
other Secured Parties that they will, upon termination of the Guaranty with
respect to any Subsidiary Guarantor, or upon release of such Subsidiary
Guarantor from its obligations under the Guaranty, execute and deliver such
notices and releases as the Collateral Agent may reasonably request in order to
confirm such release and termination.
9. Notices and Acknowledgements of Assignments. (a) Viskase and
Envirodyne hereby notify the Owner Participant and the Owner Trustee that
Viskase has mortgaged, assigned, transferred and conveyed to the Collateral
Agent, and granted to the Collateral Agent a security interest in, all of
Viskase's right, title and interest in, to and under each of the Lease
Documents, including, without limitation, the Lease, the Ground Lease, the
Ground Sublease and the License Agreement (subject, in the case of the Ground
Lease and the License Agreement, to the extent provided in the subordination
agreement referred to in Section 3(c) hereof, to the rights of the Owner
Trustee under the Owner Trustee Security Agreement), pursuant to the Collateral
Documents.
The Owner Trustee and the Owner Participant hereby acknowledge receipt
of notice of such assignments, security interests, mortgages, transfers and
conveyances, and of copies of the Collateral Documents, and hereby confirm to
Envirodyne, Viskase and the Collateral Agent that they consent to such
assignments, security interests, mortgages, transfers and conveyances subject,
to the extent provided in the aforesaid subordination agreement, to the rights
of the Owner Trustee under the Owner Trustee Security Agreement (it being
understood that the Collateral Agent may not transfer the interest of Viskase
as lessee under the Lease, upon the enforcement of any such assignment,
security interest, mortgage, transfer or conveyance, without the consent of the
Owner Trustee, which consent shall not be unreasonably withheld).
Notwithstanding the foregoing, the Owner Participant and the Owner Trustee
agree that neither the Collateral Agent nor any of the other Secured Parties
shall in any way be responsible solely by reason of such assignments, security
interest, mortgages, transfer and conveyance for the performance of any of the
obligations of Envirodyne, Viskase, any Subsidiary Guarantor or any other party
to any of the Lease Documents.
(b) Viskase and Envirodyne hereby notify the Collateral Agent that
Viskase has granted to the Owner Trustee a security
8
<PAGE> 9
interest in, all of Viskase's right, title and interest in, to and under each
of the Ground Lease and the License Agreement (subject, except to the extent
provided in the subordination agreement referred to in Section 3(c) hereof, to
the rights of the Collateral Agent, for the benefit of the Collateral Agent and
the other Secured Parties, under the applicable Collateral Documents) pursuant
to the Owner Trustee Security Agreement.
The Collateral Agent, on its own behalf and on behalf of the other
Secured Parties, hereby acknowledges receipt of notice of such pledge,
assignment and security interest, and of a copy of the Owner Trustee Security
Agreement, and hereby confirms to Envirodyne, Viskase, the Owner Participant
and the Owner Trustee that the Collateral Agent and the other Secured Parties
consent to such pledge, assignment and security interest, subject, except to
the extent provided in the aforesaid subordination agreement, to the security
interests of the Collateral Agent as referred to above.
10. Payment of Rents, License Fees, etc. The Owner Participant
and the Owner Trustee hereby acknowledge that all rents, license fees and other
amounts payable to Viskase in respect of the Ground Lease and the License
Agreement have been assigned as security to the Collateral Agent (subject, to
the extent provided in the subordination agreement referred to in Section 3(c)
hereof, to the rights of the Owner Trustee under the Owner Trustee Security
Agreement) pursuant to the applicable Collateral Documents. The Owner Trustee
and the Owner Participant agree that, until they have received notice from the
Collateral Agent that all obligations of Envirodyne and Viskase under the
Financing Agreements and the other Loan Documents have been paid and satisfied
in full, all commitments to extend credit or other financial accommodations
thereunder shall have terminated and such assignment has been terminated, they
will upon the request of the Collateral Agent, make all payments of rents,
license fees and other amounts which are payable to Viskase under the Ground
Lease and the License Agreement directly to the Collateral Agent, without
setoff or counterclaim or other deduction of any kind, except for those rights
of setoff, counterclaim and deduction which are expressly provided in the Owner
Trustee Security Agreement, the Ground Lease or the License Agreement, in each
case as in effect on the date hereof or as otherwise consented to in writing by
the Collateral Agent, as the case may be, with respect to such rents or such
license fees. The Collateral Agent agrees that, when it has been notified in
writing by all of the Secured Parties that all obligations of Envirodyne and
Viskase under the Financing Agreements and the Loan Documents have been paid
and satisfied in full, all commitments to extend credit or other financial
accommodations thereunder shall have terminated and the aforesaid assignment
has been terminated, it will so notify the owner Participant and the Owner
Trustee.
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<PAGE> 10
11. Restriction on Modification of Certain Provisions of Lease
Documents. Each of the Owner Trustee and the Owner Participant hereby agrees
that it will not, without the prior written consent of the Collateral Agent,
make any amendment in violation of Paragraph 3(a) of the Subordination
Agreements (Mortgages), Paragraph 3 of the Subordination Agreement
(Intellectual Property) or Section 3.02 of the Subordination Agreements
(Certain Payments) or agree to any amendment or modification of any provision
of the Guaranty.
12. Notice of Enforcement by Collateral Agent. If at any time the
Collateral Agent shall commence the exercise of remedies under the Collateral
Documents as a result of an "Event of Default", as such term is defined in the
Collateral Agent's Intercreditor Agreement, the Collateral Agent shall promptly
so notify the Owner Trustee and the Owner Participant.
13. Representations and Warranties. (a) Envirodyne and Viskase
hereby represent and warrant that all filings, recordations or other actions
necessary or advisable (i) in connection with the execution, delivery and
performance of the Subordination Agreements (Mortgages) and the Subordination
Agreements (Certain Payments) (collectively, the "Subordination Agreements") or
(ii) in order to further effectuate and give notice to third parties of the
subordinations provided for thereunder, have been made or taken in each of the
States of Indiana, Illinois, Arkansas and Tennessee and each of such filings,
recordations and other actions is in full force and effect.
(b) Each of the parties hereto hereby represent and warrant that
this Agreement and each of the Subordination Agreements have been duly
authorized, executed and delivered and they are the legal, valid and binding
obligation of each of them, enforceable against them in accordance with their
terms.
14. Conditions to Effectiveness. The provisions of the
Subordination Agreements and this Agreement (together with the Subordination
Agreements, the "Intercreditor Documents") shall become effective upon the
satisfaction of the following conditions:
(a) the closings under the Financing Agreements shall have
occurred and Envirodyne shall have provided the Owner Participant with written
notice of such occurrence;
(b) each of the Owner Participant and the Owner Trustee shall have
received counterparts of the Intercreditor Documents duly executed or
acknowledged, as the case may be, by each of the parties thereto;
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<PAGE> 11
(c) each of the Liens granted by Envirodyne or Viskase (other than
any of such liens in favor of the Owner Participant or the Owner Trustee)
pursuant to mortgages, assignments, security agreements, pledge agreements,
financing statements or other agreements or instruments (each of such
agreements or instruments being referred to collectively as the "Old Bank
Security Documents") referred to in, or contemplated by (i) the GECC
Intercreditor Agreement, dated as of December 31, 1993, among Citicorp North
America, Inc., Continental Bank N.A., General Electric Capital Corporation,
Shawmut Bank Connecticut, National Association, Envirodyne and Viskase (the
"1993 Intercreditor Agreement"), (ii) the Subordination Agreement (Certain
Payments), the Subordination Agreement (Intellectual Property) and the
Subordination Agreement (Mortgages), each dated as of December 31, 1993 (the
"1993 Subordination Agreements") and (iii) the Credit Agreement, dated December
31, 1993, among Envirodyne, certain of its subsidiaries, Continental Bank N.A.,
Citibank International PLC, Citibank North America, Inc. and certain lenders
party thereto (the "1993 Credit Agreement" and, together with the 1993
Intercreditor Agreement and the 1993 Subordination Agreements, the "1993
Intercreditor Documents") shall have been fully discharged, the Old Bank
Security Documents shall have been terminated and the Owner Participant shall
have received evidence of the foregoing satisfactory to it;
(d) the 1993 Credit Agreement and the commitment to extend credit
thereunder shall have been terminated and no longer be in effect and the Owner
Participant shall have received evidence of the foregoing satisfactory to it;
(e) all filings, recordations or other actions necessary or
advisable in connection with the execution, delivery and performance of the
Subordination Agreements shall have been made, taken and shall be in full force
and effect in each of the States of Indiana, Illinois, Arkansas and Tennessee
and the Owner Participant shall have received evidence of the foregoing
satisfactory to it;
(f) the Owner Participant shall have received copies of the
Financing Agreements and the Collateral Documents duly executed by the parties
thereto and each other document related thereto as may be requested by it; and
(g) the Owner Participant and the Owner Trustee shall have
received a legal opinion in form and substance satisfactory to them relating to
the condition specified in clause (e) above from each of the local counsel to
Viskase and Envirodyne in the States of Arkansas, Indiana, Tennessee and
Illinois.
15. No Implied Waivers, etc. Except as expressly provided herein,
nothing in this Agreement shall be deemed to constitute a waiver of or shall
otherwise affect any of the interests, rights
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<PAGE> 12
or remedies which either the Collateral Agent or the Secured Parties, on the
one hand, or the Owner Trustee and the Owner Participant, on the other hand,
may have under the respective Financing Agreements, Collateral Documents or
Lease Documents or under applicable law.
16. Amendments. This Agreement cannot be amended or modified
without the written consent of the Collateral Agent, the Owner Trustee and the
Owner Participant.
17. Benefit of Agreement. This Agreement is intended solely for
the benefit of the Collateral Agent, the Secured Parties, the Owner Trustee and
the Owner Participant and their respective successors and permitted assigns and
no other Person (including, without limitation, Envirodyne, Viskase and their
respective Subsidiaries) shall have any right, power, benefit, privilege,
priority or interest under or through this Agreement.
18. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction the substantive laws of which
are held to be applicable hereto shall not invalidate the remaining provisions
hereof, and any such prohibition or unenforceability in any such jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
19. Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute a single agreement.
20. Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York.
21. Undertaking of Owner Participant. The Owner Participant shall
use its best efforts to cause the Owner Trustee and any successor to the Owner
Trustee to comply with the obligations of the Owner Trustee hereunder.
22. Notices. All notices and other communications provided to any
party hereto under this Agreement shall be in writing or by facsimile and
addressed, delivered or transmitted to such party at its address or facsimile
number set forth on the signature pages hereof or at such other address or
facsimile number as may be designated by such party from time to time in a
notice complying as to delivery with the terms of this section to the other
parties. Any notice, if mailed or sent by courier or hand delivery, shall be
deemed given when received; any notice, if transmitted by facsimile, shall be
deemed given when such notice is transmitted and receipt is confirmed by
telephone or electronic means.
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<PAGE> 13
23. Headings. The various headings of this Agreement are inserted
for convenience only and shall not affect the meaning or interpretation of this
Agreement or any provisions hereof.
24. Successors and Assigns. (a) This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, the Secured Parties,
and their respective successors and assigns. The Owner Trustee and the Owner
Participant will cause any of their respective successors and assigns,
replacements or any other party that succeeds to or substitutes for or
otherwise acquires either the Owner Trustee's or the Owner Participant's
respective rights and interest in the Plants or under any of the Lease
Documents, or in any significant portion thereof, to enter into an
intercreditor agreement with the other parties hereto substantially in the form
of this Agreement. The Collateral Agent, Envirodyne and Viskase each agree
that they will, on request of any party hereto, enter into such an
intercreditor agreement.
(b) The Owner Trustee and the Owner Participant agree to notify
the Collateral Agent of the identities of any of their successors, assigns,
replacements, transferees or substitutes with respect to any of their rights in
any of the Facilities or under any of the Lease Documents, identifying in
reasonable detail the nature of the rights and obligations of any of such
Persons, as promptly as practicable after such Persons acquire such rights or
obligations. The Collateral Agent agrees to notify the Owner Trustee (i) if it
ceases to be the Collateral Agent under the Collateral Agent's Intercreditor
Agreement and (ii) of the identity of its successor agent under the Collateral
Agent's Intercreditor Agreement promptly upon learning of the appointment of
such successor.
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<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first written above.
BT COMMERCIAL CORPORATION, not in its
individual capacity but solely as
Collateral Agent under the
Collateral Agent's Intercreditor
Agreement referred to herein
Address:
233 South Wacker Drive By: _________________________________
Suite 8400 Name Printed: Wayne Hillock
Chicago, Illinois 60606 Title: Senior Vice President
Attn: Credit Department
Facsimile No. 312/993-8096
GENERAL ELECTRIC CAPITAL
CORPORATION, as Owner Participant
Address:
1600 Summer Street By: ___________________________________
Stamford, Connecticut 06927 Name Printed:__________________________
Facsimile No.: Title:_________________________________
Attention:
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION, not in its individual
capacity but solely as Owner Trustee
under the Trust Agreement referred to
herein
Address:
777 Main Street By: ___________________________________
Hartford, Connecticut 06115 Name Printed:__________________________
Facsimile No.: 203/240-7920 Title:_________________________________
Attention: Corporate Trust
Administration
14
<PAGE> 15
Acknowledged and Agreed:
ENVIRODYNE INDUSTRIES, INC.
By: _____________________________________________
Name Printed:______________________________
Title:_____________________________________
Address:
701 Harger Road
Suite 190
Oak Brook, Illinois 60521
Facsimile No.: (708) 571-0959
Attention: Mr. Gordon Donovan
VISKASE CORPORATION
By: _____________________________________________
Name Printed:______________________________
Title:_____________________________________
Address:
6855 West 65th Street
Chicago, Illinois 60638
Facsimile No.:
Attention:
15
<PAGE> 16
SCHEDULE I
TO
INTERCREDITOR
AGREEMENT
DEFINITIONAL SUPPLEMENT
TO INTERCREDITOR AGREEMENT
This is Schedule I to the Intercreditor Agreement dated as of June 20,
1995 among BT Commercial Corporation, as Collateral Agent under the Collateral
Agent's Intercreditor Agreement referred to therein, General Electric Capital
Corporation, as Owner Participant under the Lease Documents referred to
therein, Shawmut Bank, Connecticut National Association (formerly, The
Connecticut National Bank), as Owner Trustee under the Trust Agreement referred
to herein, Envirodyne Industries, Inc. and Viskase Corporation (as amended,
supplemented or otherwise modified from time to time, the "Intercreditor
Agreement").
As used in the Intercreditor Agreement (including this Schedule I):
1. The following capitalized terms shall have the meanings
assigned to such terms in the Preamble, the Recitals or the respective Sections
of the Intercreditor Agreement indicated below:
"Agreement" - Preamble
"Collateral Agent" - Preamble
"Combined Loss" - Section 7
"Cure Notice" - Section 4(b)
"Envirodyne" - Preamble
"Notification Date" - Section 4(a)
"Owner Participant" - Preamble
"Owner Trustee" - Preamble
"Subordination Agreement (Intellectual Property)" - Section 3(b)
"Subordination Agreement (Certain Payments)" - Section 3(c)
"Subordination Agreements (Mortgages)" - Section 3(a)
"Viskase" - Preamble
"Viskase Sales" - Recital B
<PAGE> 17
2. The following capitalized terms shall have the meanings
assigned to such terms in Appendix A to the Participation Agreement dated as of
December 18, 1990 among Viskase, Envirodyne, the Owner Participant and the
Owner Trustee, as in effect on the date of the Intercreditor Agreement:
"Appraisal Procedure"
"Authorized Officer"
"Basic Rent"
"Bills of Sale"
"Cure Rights Letter of Credit"
"Event of Default"
"Facilities"
"Ground Lease"
"Ground Sublease"
"Guaranty"
"Lease"
"License Agreement"
"Lien"
"Maximum Capacity"
"Participation Agreement"
"Permitted Investments"
"Plants"
"Rent"
"Rent Letter of Credit"
"Stipulated Loss Value"
"Stipulated Rate"
"Subsidiary Guarantors"
"Trust Agreement"
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<PAGE> 18
3. The following capitalized terms shall have the meanings
assigned to such terms in the Collateral Agent's Intercreditor Agreement:
"Financing Agreements"
"Person"
"Secured Parties"
"Subsidiary"
4. The following capitalized terms shall have the meanings set
forth below:
"Collateral Agent's Collateral" shall mean all the "Collateral", as
such term is defined in the Collateral Agent's Intercreditor Agreement,
excluding, however, any and all Sale-Leaseback Property, other than
Sale-Leaseback Property which becomes subject to a mortgage, lien and security
interest in favor of the Collateral Agent as described in Section 2(d) of the
Intercreditor Agreement.
"Collateral Documents" shall mean the Mortgages, the Intellectual
Property Security Agreements and the Security Agreements in each case as such
terms are defined in the Subordination Agreements (Mortgages), Subordination
Agreements (Intellectual Property) and Subordination Agreements (Certain
Payments).
"Intercompany Security Agreement" shall mean the Intercompany Security
Agreement, Financing Statement and Assignment of Patents, Trademarks and
Copyrights dated as of June 1, 1989 between Viskase and certain other direct
and indirect Subsidiaries of Envirodyne, as debtors, and Envirodyne, as secured
party, as collaterally assigned by Envirodyne to the Collateral Agent pursuant
to the Collateral Documents.
"Lease Documents" shall mean the "Basic Documents", as such term is
defined in Appendix A to the Participation Agreement.
"Owner Trustee Security Agreement" shall mean the Assignment of Leases
and Rents, Security Agreement and Financing Statement dated as of December 18,
1990 between Viskase and the Owner Trustee, as in effect on the date of the
Intercreditor Agreement.
"Sale-Leaseback Property" shall mean the property listed on Exhibit A
to the Lease, as well as Parts and Alterations (as such terms are defined in
Appendix A to the Participation Agreement).
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<PAGE> 19
EXHIBIT A-1 to
GECC Intercreditor
Agreement
SUBORDINATION AGREEMENT (MORTGAGES)
This SUBORDINATION AGREEMENT (this "Agreement") is entered into as of
June 20, 1995 among BT Commercial Corporation, not in its individual capacity
but solely as Collateral Agent under the Collateral Agent's Intercreditor
Agreement described below (in such capacity together with its successors and
assigns, the "Collateral Agent"), ENVIRODYNE INDUSTRIES, INC., a Delaware
corporation (together with its successors and assigns, the "Company"), SHAWMUT
BANK CONNECTICUT, NATIONAL ASSOCIATION (formerly The Connecticut National
Bank), not in its individual capacity but solely as Owner Trustee under that
certain Trust Agreement, dated as of December 18, 1990, between said
association and General Electric Capital Corporation (herein such Owner
Trustee, together with any institution which shall act as successor Owner
Trustee from time to time under said Trust Agreement, is sometimes called the
"Ground Lessee").
RECITALS:
A. Viskase Corporation (herein together with its successors and
assigns, the "Owner") and the Ground Lessee entered into a certain Ground Lease
(herein called the "Ground Lease"), dated December 18, 1990, whereby the Owner
leased to the Ground Lessee the land described therein (herein called the
"Land") together with all buildings, parking structures, utility sheds,
workrooms, air conditioning towers, open parking areas, and other structures
and improvements situated on the Land, except for any equipment owned by the
Ground Lessee (herein collectively called the "Buildings"; the Buildings and
the Land are collectively called the "Site").
B. Envirodyne has and may hereunder enter into certain Financing
Agreements (such term, and the other defined terms used in these Recitals
without definition, having the meanings assigned to such terms in Schedule I
hereto) under which loans, letters of credit and other financial accommodations
are being and may hereafter be made to or for the account of Envirodyne.
C. Certain of the subsidiaries of Envirodyne, including Viskase
(collectively with Envirodyne, the "Borrowers"), have guaranteed the
obligations of Envirodyne under the Financing Agreements.
D. Pursuant to the Financing Agreements, the Borrowers have
executed and delivered the Collateral Documents under which the Borrowers have
granted to the Collateral Agent, on behalf and for the benefit of the Secured
Parties under and as defined in that certain Intercreditor and Collateral
Agency Agreement, dated as of June 20, 1995 (the "Collateral Agent's
Intercreditor
<PAGE> 20
Agreement"), liens and security interests to secure their obligations under the
Financing Agreements, the Collateral Documents and the guaranties thereof.
E. Pursuant to the Financing Agreements, the Owner has executed
and delivered to the Collateral Agent a certain Leasehold Mortgage, Security
Agreement and Assignment of Leases and Rents and (ii) a certain Mortgage,
Security Agreement and Assignment of Leases and Rents, each dated as of the
date hereof (collectively, as the same may be amended, modified, restated,
supplemented or extended from time to time, called the "Mortgages" and each a
"Mortgage").
NOW THEREFORE, for good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Collateral Agent, the Company
and the Ground Lessee hereby agree as follows:
1. The Collateral Agent and the Company hereby agree with the
Ground Lessee that each Mortgage is, and shall be, subordinate and junior to
the Ground Lease; provided, however, that with respect to the occurrence of any
event described in Section 7 of the Intercreditor Agreement, dated as of the
date hereof, among the Collateral Agent, the Company, the Ground Lessee and
General Electric Capital Corporation, the provisions of such Section 7 shall
prevail over any contrary provisions in the Mortgages or the Ground Lease. The
Collateral Agent and the Company hereby further agree with the Ground Lessee
that, without in any way limiting the generality of the foregoing, in the event
any New Landlord (defined hereinafter) shall commence any proceedings to
foreclose the Mortgages for any reason whatsoever or shall succeed to all or
part of the right, title, and interest of the Owner by foreclosure or otherwise
by, through, under, or in connection with the Mortgages, then, if and so long
as, no "default" has occurred and is continuing under the Ground Lease, the
Ground Lessee's use and possession of the Site, and its other rights and
privileges under the Ground Lease, shall not be disturbed directly or
indirectly by such New Landlord by such foreclosure under such Mortgages or by
any such attempt to foreclose or to succeed to the interests of the Owner by
foreclosure or otherwise by, through, under, or in connection with the
Mortgages.
2. The Ground Lessee agrees that to the extent that the
Collateral Agent or any purchaser at a foreclosure sale under the Mortgages or
any transferee who acquires all or any part of the Owner's or the Collateral
Agent's right, title and interest in and to the Site by deed in lieu of
foreclosure or otherwise, and the successors and assigns of such purchaser or
transferee (the Collateral Agent, and each such other transferee or purchaser
is herein called a "New Landlord") succeeds to all or any part of the interest
of the Owner in the Site, the Ground Lessee will
2
<PAGE> 21
attorn to and recognize such New Landlord as its landlord for the unexpired
balance of the term of the Ground Lease.
3. The Ground Lessee will not (a) amend or otherwise modify
Sections 3.01 or 3.02 or Article X or the definitions of any of the following
terms: "Site Fair Market Rental Value"; "Appraisal Procedure"; and "Plant
Consolidated Operating Income", of the Ground Lease, in each case, without the
prior written consent of the Collateral Agent or (b) assign the Ground Lease or
sublet all or any part of the Site other than in accordance with the Ground
Lease or the Ground Sublease referred to therein.
4. To the extent that any New Landlord (other than the Company)
shall succeed to the right, title or interest of the Owner under the Ground
Lease, the Ground Lessee agrees as follows:
(a) Neither the Collateral Agent nor any such New Landlord shall
be, except (in the case of clauses (i) and (ii)) as expressly provided in the
Assignment of Leases and Rents, Security Agreement and Financing Statement,
dated as of December 18, 1990, between the Owner and the Ground Lessee or in
Section 3.02 of the Ground Lease, in each case as in effect on the date hereof
or as consented to in writing by the Collateral Agent: (i) subject to any
credits, offsets, defenses, claims or counterclaims which the Ground Lessee
might have against any prior landlord (including the Owner), (ii) bound by any
rent or additional rent which the Ground Lessee shall have paid more than
fourteen months in advance to any prior landlord (including the Owner), or
(iii) personally bound by any covenant to undertake or complete any improvement
to the Site;
(b) Neither the Collateral Agent nor such New Landlord shall be
personally liable for any act or omission of any prior landlord (including the
Owner); and
(c) Neither the Collateral Agent nor any other New Landlord shall
have any personal liability, directly or indirectly, under or in connection
with the Ground Lease or this Agreement or any amendment or amendments to
either thereof made at any time or times, heretofore or hereafter, except for
its own breach of any express provision of this Agreement, and the Ground
Lessee hereby forever and irrevocably waives and release any and all such
personal liability. In addition, neither the Collateral Agent nor any such New
Landlord shall have at any time or times hereafter any personal liability,
directly or indirectly, under or in connection with or secured by any
agreement, lease, instrument, encumbrance, claim or right affecting or relating
to the Site or the Collateral (as defined in the Mortgages) or to which the
Site or the Collateral is now or hereafter subject. The limitation of
liability provided in this paragraph is in addition to, and not in limitation
of, any limitation on
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<PAGE> 22
liability applicable to the Collateral Agent or such New Landlord provided by
law or by any other contract, agreement or instrument.
5. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns. This
Agreement shall be binding upon each and every New Landlord which acquires an
interest in the Site by, through, or under the Mortgages.
6. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute both one and the same instrument. This Agreement
shall become effective as of the date first above written when and if
counterparts hereof shall have been executed by all of the parties hereto.
7. If any provision of this Agreement is void or unenforceable in
any jurisdiction, such voidness or unenforceability shall not affect the
enforceability of (a) such provision in any other jurisdiction or (b) any other
provision of this Agreement in any jurisdiction.
4
<PAGE> 23
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this document as of the date first above written.
[Corporate Seal] BT COMMERCIAL CORPORATION,
not in its individual
capacity but solely as
Collateral Agent under the
the Collateral Agent's
Intercreditor Agreement
referred to herein
ATTEST:
By: _______________________________ By: __________________________
Name: _________________________ Name: Wayne Hillock
Title:_________________________ Title: Senior Vice
President
[Corporate Seal] ENVIRODYNE INDUSTRIES, INC.
ATTEST:
By: _______________________________ By: ___________________________
Name:__________________________ Name:______________________
Title:_________________________ Title:_____________________
[Corporate Seal] SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION, not
ATTEST: in its individual capacity
but solely as Owner Trustee
as aforesaid
By: _______________________________ By: ___________________________
Name:__________________________ Name:______________________
Title:_________________________ Title:_____________________
This instrument was prepared
by and upon recordation should
be returned to:
5
<PAGE> 24
STATE OF ________________)
) SS.:
COUNTY OF _______________)
I, the undersigned, a notary public in and for said County, in the
state aforesaid, DO HEREBY CERTIFY THAT _________________, personally known to
me to be the ___________________________ of ENVIRODYNE INDUSTRIES, INC., a
Delaware corporation and ________________________, personally known to me to be
the ___________ Secretary of said corporation, and personally known to me to be
the same persons whose names are subscribed to the foregoing instrument,
appeared before me this day in person and severally acknowledged that as such
_____________ and ___________ Secretary, they signed and delivered the said
instrument as ____________________ and ________________Secretary of said
corporation, and caused the seal of said corporation to be affixed thereto, as
their 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 ____ day of June, 1995.
___________________________________________
Notary Public
My commission expires:
___________________________________________
(SEAL)
6
<PAGE> 25
STATE OF ILLINOIS )
) SS.:
COUNTY OF COOK )
I, the undersigned, a notary public in and for said County, in the
state aforesaid, DO HEREBY CERTIFY THAT __________________ personally known to
me to be a _______________ of BT COMMERCIAL CORPORATION and __________________,
personally known to me to be a _______________ of said corporation, and
personally known to me to be the same persons whose names are subscribed to the
foregoing instrument, appeared before me this day in person and severally
acknowledged that as such __________________ and ___________, they signed and
delivered the said instrument as ___________ and ______________ of said
corporation, and caused the seal of said bank to be affixed thereto, as their
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 ____ day of June, 1995.
___________________________________________
Notary Public
My commission expires:
___________________________________________
(SEAL)
7
<PAGE> 26
STATE OF )
) SS .:
COUNTY OF )
I, the undersigned, a notary public in and for said County, in the
state aforesaid, DO HEREBY CERTIFY THAT _________________, personally known to
me to be the _____________ of SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION, a
national banking association, and _____________, personally known to me to be
the ____________ of said association and personally known to me to be the same
persons whose names are subscribed to the foregoing instrument, appeared before
me this day in person and severally acknowledged that as such
___________________ and ____________________, they signed and delivered the
said instrument as __________________ and _______________ of said association,
and caused the seal of said association to be affixed thereto, as their 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 ___ day of June, 1995.
___________________________________________
Notary Public
My commission expires:
___________________________________________
(SEAL)
8
<PAGE> 27
EXHIBIT A-2 to
GECC Intercreditor
Agreement
SUBORDINATION AGREEMENT (INTELLECTUAL PROPERTY)
This SUBORDINATION AGREEMENT (this " Agreement") is entered into as of
June 20, 1995 among BT COMMERCIAL CORPORATION, not in its individual capacity
but solely as Collateral Agent under the Collateral Agent's Intercreditor
Agreement described below (in such capacity, together with its successors and
assigns, the "Collateral Agent"), ENVIRODYNE INDUSTRIES, INC., a Delaware
corporation (together with its successors and assigns, the "Company"), SHAWMUT
BANK CONNECTICUT, NATIONAL ASSOCIATION (formerly known as The Connecticut
National Bank), not in its individual capacity but solely as Owner Trustee
under that certain Trust Agreement, dated as of December 18, 1990, between said
association and General Electric Capital Corporation (herein such Owner
Trustee, together with any institution which shall act as successor Owner
Trustee from time to time under said Trust Agreement, is sometimes called the
"Licensee"), and GENERAL ELECTRIC CAPITAL CORPORATION, a New York corporation
(herein, together with its successors and assigns, sometimes called the "Owner
Participant").
RECITALS:
A. Viskase Corporation (herein, together with its successors and
assigns, called the "Grantor") and the Licensee have entered into a certain
License Agreement, dated December 18, 1990 (herein called the "License
Agreement"), whereby the Grantor granted to the Licensee a non-exclusive
license with respect to certain patents, trademarks and other intellectual
property described in the License Agreement (the "Intellectual Property").
B. Envirodyne has and may hereunder enter into certain Financing
Agreements (such term, and the other defined terms used in these Recitals
without definition, having the meanings assigned to such terms in Schedule I
hereto) under which loans, letters of credit and other financial accommodations
are being and may hereafter be made to or for the account of Envirodyne.
C. Certain of the subsidiaries of Envirodyne, including Viskase
(collectively with Envirodyne, the "Borrowers"), have guaranteed the
obligations of Envirodyne under the Financing Agreements.
D. Pursuant to the Financing Agreements, the Borrowers have
executed and delivered the Collateral Documents under which the Borrowers have
granted to the Collateral Agent, which is acting as the Collateral Agent for
the Secured Parties pursuant to the Intercreditor and Collateral Agency
Agreement, dated as of June 20, 1995 (the "Collateral Agent's Intercreditor
Agreement"), liens and security interests to secure their obligations under
<PAGE> 28
the Financing Agreements, the Collateral Documents and the guaranties thereof.
E. Pursuant to the Financing Agreements, the Grantor has executed
and delivered to the Collateral Agent, a certain Intellectual Property Security
Agreement, dated as of the date hereof (herein, as the same may be amended,
modified, restated, supplemented or extended from time to time, collectively
called the "Intellectual Property Security Agreement").
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Collateral Agent, the
Company, the Licensee and the Owner Participant hereby agree as follows:
1. The Collateral Agent and the Company hereby agree with the
Licensee and the Owner Participant that the Intellectual Property Security
Agreement is, and shall be, subordinate and junior to the License Agreement.
The Collateral Agent and the Company hereby further agree with the Licensee and
the Owner Participant, without in any way limiting the generality of the
foregoing, that: (a) in the event the Collateral Agent succeeds to all or any
part of the right, title and interest of the Grantor in the Intellectual
Property (upon enforcement of the security interest granted in favor of the
Collateral Agent under the Intellectual Property Security Agreements or
otherwise) then, if and for so long as no event which would entitle the Grantor
to terminate the License Agreement pursuant to the first sentence of Section
9.1 thereof (hereinafter called a "Default") has occurred and is continuing,
the rights and privileges of the Licensee and the Owner Participant under the
License Agreement (including without limitation, use of the Intellectual
Property) shall not be disturbed directly or indirectly by the Collateral Agent
or by any attempt to succeed to such right, title or interest of the Grantor or
otherwise; and (b) in the event all or any part of the right, title, and
interest of the Grantor in the Intellectual Property is transferred by the
Collateral Agent to any person or entity, by sale or other disposition under
the Intellectual Property Security Agreement or otherwise, (i) if and so long
as no Default has occurred and is continuing, the rights and privileges of the
Licensee or the Owner Participant under the License Agreement (including,
without limitation, use of the Intellectual Property) shall not be disturbed
directly or indirectly by the Collateral Agent or by any attempt to transfer
such right, title or interest of the Grantor or otherwise and (ii) as a
condition to the effectiveness of such transfer, the transferee shall agree for
the benefit of the Licensee that, if and for so long as no Default has occurred
and is continuing, such transferee shall not disturb directly or indirectly the
rights and privileges of the Licensee or the Owner Participant under the
License Agreement (including, without limitation, use of the Intellectual
Property).
2
<PAGE> 29
2. The Licensee, for itself and its successors and assigns,
agrees that to the extent that the Collateral Agent, any transferee at a sale
or disposition pursuant to the Intellectual Property Security Agreement or
otherwise, or any subsequent transferee thereof (such Collateral Agent or
transferee, its successors and assigns, being herein called a "New Licensor")
shall succeed to the right, title, and interest of the Grantor under the
License Agreement, the Licensee will attorn to and recognize such New Licensor
as its licensor for the unexpired balance of the term of the License Agreement.
3. The Licensee will not, without the prior written consent of
the Collateral Agent, enter into any amendment of or otherwise modify any
provision of Section 4.1 or 5.2 of the License Agreement.
4. To the extent that the Collateral Agent or any other New
Licensor shall succeed to the right, title or interest of the Grantor under the
License Agreement, each of the Licensee and the Owner Participant agrees as
follows:
(a) The Collateral Agent or such other New Licensor shall not be,
except in the case of clauses (i) and (ii) as expressly provided in the
Assignment of Leases and Rents, Security Agreement and Financing Statement,
dated as of December 18, 1990, between the Grantor and the Licensee or in
Section 5.2 of the License Agreement, in each case as in effect on the date
hereof or as otherwise consented to in writing by the Collateral Agent: (i)
subject to any credits, offsets, defenses, claims or counterclaims which the
Licensee and/or Owner Participant might have against any prior licensor
(including the Grantor), (ii) bound by any royalties or additional royalties
which the Licensee and/or the Owner Participant shall have paid more than one
month in advance to any prior licensor (including the Grantor), or (iii)
personally bound by any covenant to undertake or complete any improvement or
addition to the Intellectual Property;
(b) Neither the Collateral Agent nor any other New Licensor shall
be personally liable for any act or omission of any prior licensor (including
the Grantor); and
(c) Neither the Collateral Agent nor any other New Licensor shall
have any personal liability, directly or indirectly, under or in connection
with the License Agreement or this Agreement or any amendment or amendments to
either thereof made at any time or times, heretofore or hereafter, except for
its own breach of any express provision of this Agreement, and each of the
Licensee and the Owner Participant hereby forever and irrevocably waives and
releases any and all such personal liability. In addition, neither the
Collateral Agent nor any other New Licensor shall have at any time or times
hereafter any personal liability, directly or indirectly, under or in
connection with or secured by
3
<PAGE> 30
any agreement, license, instrument, encumbrance, claim or right affecting or
relating to the Intellectual Property or the Intellectual Property Collateral
(as defined in the Intellectual Property Security Agreement) or to which the
Intellectual Property or the Intellectual Property Collateral is now or may
hereafter be subject. The limitation of liability provided in this paragraph
(c) is in addition to, and not in limitation of, any limitation on liability
applicable to the Collateral Agent or such other New Licensor provided by law
or by any other contract, agreement or instrument.
5. This Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors and assigns.
6. This Agreement may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute both one and the same instrument. This Agreement
shall become effective as of the date first above written when and if
counterparts hereof shall have been executed by all of the parties hereto.
7. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.
8. If any provision of this Agreement is void or unenforceable in
any jurisdiction, such voidness or unenforceability shall not affect the
enforceability of (a) such provision in any other jurisdiction or (b) any other
provision of this Agreement in any jurisdiction.
4
<PAGE> 31
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first above written.
BT COMMERCIAL CORPORATION, not in
its individual capacity but
solely as Collateral Agent under
the Collateral Agent's
Intercreditor Agreement referred
to herein
By: ______________________________
Name:_________________________
Title:________________________
ENVIRODYNE INDUSTRIES, INC.
By: ______________________________
Name:_________________________
Title:________________________
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee as aforesaid
By: ______________________________
Name:_________________________
Title:________________________
GENERAL ELECTRIC CAPITAL
CORPORATION, as Owner Participant
as aforesaid
By: ______________________________
Name:_________________________
Title:________________________
5
<PAGE> 32
The undersigned hereby acknowledges receipt of a copy of the foregoing
Subordination Agreement, waives notice of acceptance thereof by the Collateral
Agent, and agrees to be bound by the terms and provisions thereof, to make no
payments or distributions contrary to the terms and provisions thereof, and to
do every other act and thing necessary or appropriate to carry out such terms
and provisions.
VISKASE CORPORATION
By: ______________________________
Name:_________________________
Title:________________________
6
<PAGE> 33
EXHIBIT A-3 to GECC
INTERCREDITOR AGREEMENT
SUBORDINATION AGREEMENT (CERTAIN PAYMENTS)
This SUBORDINATION AGREEMENT (this "Agreement") is entered into as of
June 20, 1995 among BT COMMERCIAL CORPORATION, not in its individual capacity
but solely as Collateral Agent under the Collateral Agent's Intercreditor
Agreement described below (in such capacity, together with its successors and
assigns, the "Collateral Agent"), ENVIRODYNE INDUSTRIES, INC., a Delaware
corporation (together with its successors and assigns, the "Company"), SHAWUMT
BANK CONNECTICUT, NATIONAL ASSOCIATION (formerly known as The Connecticut
National Bank), not in its individual capacity but solely as Owner Trustee
under that certain Trust Agreement, dated as of December 18, 1990, between said
association and General Electric Capital Corporation (herein such Owner
Trustee, together with any institution which shall act as successor Owner
Trustee from time to time under said Trust Agreement, is sometimes called the
"Owner Trustee"), and GENERAL ELECTRIC CAPITAL CORPORATION, a New York
corporation (herein, together with its successors and assigns, sometimes called
the "Owner Participant").
R E C I T A L S :
A. Viskase Corporation (herein, together with its successors and
assigns, called the "Grantor") and the Owner Trustee have entered into (i) a
certain License Agreement, dated December 18, 1990, (herein called the "License
Agreement"), whereby the Grantor has granted to the Owner Trustee a
non-exclusive license with respect to certain patents, trademarks and other
intellectual property described in the License Agreement, and the Owner Trustee
has agreed to pay certain royalties and other amounts to the Grantor
("Royalties"), and (ii) a certain Ground Lease (herein called the "Ground
Lease"), dated December 18, 1990, whereby the Grantor has leased to the Owner
Trustee the land described therein, together with all buildings and other
structures and improvements situated on such land, and the Owner Trustee has
agreed to pay certain rentals and other amounts to the Grantor ("Ground
Rents").
B. The Grantor has also entered into a certain Assignment of
Leases and Rents, Security Agreement and Financing Statement, dated December
18, 1990 (herein, as the same may be amended, modified, restated, supplemented
or extended from time to time, called the "GECC Security Agreement") in favor
of the Owner Trustee, whereby the Grantor has mortgaged and assigned to the
Owner Trustee and granted to the Owner Trustee a security interest in certain
rights of the Grantor under the License Agreement and the Ground Lease,
including, without limitation, the Grantor's rights to receive payments of
Royalties and Ground Rents thereunder.
<PAGE> 34
C. Envirodyne has and may hereunder enter into certain Financing
Agreements (such term, and the other defined terms used in these Recitals
without definition, having the meanings assigned to such terms in Schedule I
hereto) under which loans, letters of credit and other financial accommodations
are being and may hereafter be made to or for the account of Envirodyne.
D. Certain of the subsidiaries of Envirodyne, including Viskase
(collectively with Envirodyne, the "Borrowers"), have guaranteed the
obligations of Envirodyne under the Financing Agreements.
E. Pursuant to the Financing Agreements, the Borrowers have
executed and delivered the Collateral Documents under which the Borrowers have
granted to the Collateral Agent, on behalf and for the benefit of the Secured
Parties under and as defined in that certain Intercreditor and Collateral
Agency Agreement, dated as of June 20, 1995 (the "Collateral Agent's
Intercreditor Agreement"), liens and security interests to secure their
obligations under the Financing Agreements, the Collateral Documents and the
guaranties thereof.
F. Pursuant to the Financing Agreements, the Grantor has executed
and delivered to the Collateral Agent, (i) a certain Intellectual Property
Security Agreement, dated as of the date hereof (herein, as amended, modified,
restated, supplemented or extended from time to time, called the "Security
Agreement") and (ii) a certain Leasehold Mortgage, Security Agreement and
Assignment of Leases and Rents and Mortgage, Security Agreement and Assignment
of Leases and Rents, each dated as of the date hereof (herein, as amended,
modified, restated, supplemented or extended from time to time, collectively
called the "Mortgages").
NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein contained, the parties hereto agree as follows:
SECTION 1.01 Definitions.
As used herein, the capitalized terms defined in the preamble and the
recitals thereto shall have the meanings as so defined, and the capitalized
terms listed below shall have the following meanings:
"Collateral Agent Claims" means any and all indebtedness and other
obligations of any kind, whether now existing or hereafter arising or acquired,
which are now or hereafter become secured by the Collateral Agent Lien.
"Collateral Agent Lien" means all mortgages, liens, pledges,
encumbrances or other security interests of any kind in any GECC Collateral,
including, without limitation, any Royalties and Ground Rents, now or hereafter
existing in favor of the
2
<PAGE> 35
Collateral Agent and its successors and assigns, under or pursuant to the
Security Agreement and the Mortgages.
"GECC Claims" means any and all monetary obligations of the Grantor to
the Owner Trustee or the Owner Participant, whether now existing or hereafter
arising, which are (or upon arising will be) secured by the GECC Security
Agreement, as in effect on the date hereof.
"GECC Collateral" means the "Collateral", as such term is defined in
the GECC Security Agreement, and includes, without limitation, the rights of
the Grantor to receive payments of Royalties and Ground Rents pursuant to the
License Agreement and the Ground Lease.
"GECC Lien" means all mortgages, liens, pledges, encumbrances or other
security interests of any kind in any GECC Collateral, including, without
limitation, any Royalties and Ground Rents, now or hereafter existing in favor
of the Owner Trustee, its successors and assigns, under or pursuant to the GECC
Security Agreement.
"Subject Payments" means, at any time, that portion of any payments of
Royalties and/or Ground Rents made or otherwise required to be made under the
License Agreement or the Ground Lease, which, pursuant to the terms of Section
5.2 of the License Agreement or Section 3.02 of the Ground Lease, as the case
may be, in each case as in effect on the date hereof, the Owner Trustee would
at such time be entitled to set off against unpaid GECC Claims.
"Transferee" means any purchaser or transferee, pursuant to any
exercise of remedies following a default or event of default under the Security
Agreement or Mortgages or otherwise, which acquires any of the Grantor's
interest under the License Agreement or the Ground Lease, and the successors
and assigns of any such purchaser or transferee.
SECTION 2.01 Partial Subordination of Bank Lien.
The Collateral Agent, on its own behalf and on behalf of the other
Secured Parties, and the Company hereby agrees that, notwithstanding the order
of recording or filing of the Security Agreement, the Mortgages and any
financing statements filed in connection therewith, on the one hand, and of the
GECC Security Agreement and any financing statements filed in connection
therewith, on the other hand, the Collateral Agent Lien shall be subordinate
and junior to the GECC Lien but solely to the following extent:
(a) All GECC Claims shall be paid or satisfied in full before any
payment or distribution of any kind shall be made from
3
<PAGE> 36
any Subject Payment on account of the Collateral Agent Claims; and
(b) Should any payment or distribution of any kind or character in
respect of any Subject Payment be received, directly or indirectly, by the
Collateral Agent or any of its nominees or agents, under circumstances where
such the Collateral Agent would not be entitled to such payment or distribution
by reason of the foregoing, the Collateral Agent shall immediately deliver such
payments or distributions to the Owner Trustee to be held in trust toward the
satisfaction of the GECC Claims.
SECTION 3.01 Acknowledgements and Agreements by Owner Trustee
and the Owner Participant.
Each of the Owner Trustee and the Owner Participant hereby
acknowledges and agrees that, except to the extent expressly set forth in
Sections 2.01 hereof, the GECC Lien is and shall be subordinate and junior to
the Collateral Agent Lien. Without limiting the foregoing:
(a) All Collateral Agent Claims shall be paid or satisfied in full
before any payment or distribution of any kind shall be made on account of the
GECC Claims from any payment in respect of any GECC Collateral, including,
without limitation, any Royalties or Ground Rents, other than any Subject
Payment; and
(b) Should any payment or distribution of any kind or character in
respect of any payment in respect of any GECC Collateral, including, without
limitation, any Royalties or Ground Rents, other than any Subject Payment, be
received, directly or indirectly, by the Owner Trustee or the Owner
Participant, or any of their respective nominees or agents, under circumstances
where the Owner Trustee would not be entitled to such payment or distribution
by reason of the foregoing, the Owner Trustee or the Owner Participant, as the
case may be, shall immediately deliver such payments or distributions to be
held as collateral for or applied to the satisfaction of, the Collateral Agent
Claims.
SECTION 3.02 Restriction on Amendments and Assignments.
The Owner Trustee will not enter into any amendment of or otherwise
modify any provision of the GECC Security Agreement without the express written
consent of the Collateral Agent.
SECTION 3.03 Limitation of Liability.
Each of the Owner Trustee and the Owner Participant hereby agrees
that, to the extent that the Collateral Agent or any other Transferee shall
succeed to all or any part of the right, title
4
<PAGE> 37
or interest of the Grantor under the License Agreement or the Ground Lease:
(a) The Collateral Agent or such other Transferee shall not be,
except (in the case of clauses (i) and (ii)) as expressly provided in the GECC
Security Agreement and in Section 5.2 of the License Agreement or Section 3.02
of the Ground Lease, in each case as in effect on the date hereof or as
otherwise consented to in writing by the Collateral Agent, or as expressly
provided herein: (i) subject to any credits, offsets, defenses, claims or
counterclaims which the Owner Trustee or the Owner Participant might have
against any prior holder of such interest (including the Grantor), (ii) bound
by any Royalties or Ground Rents or additional royalties or rents which the
Owner Trustee shall have paid more than one month (or, in the case of Ground
Rents, fourteen months) in advance to any prior holder of such interest
(including the Grantor), or (iii) personally bound by any covenant to undertake
or complete any improvement or addition to the property licensed or leased
pursuant to the License Agreement or the Ground Lease, as the case may be;
(b) No Transferee (including, without limitation, the Collateral
Agent) shall be personally liable for any act or omission of any prior holder
of such interest (including the Grantor); and
(c) Neither the Collateral Agent nor or any other Transferee shall
have any personal liability, directly or indirectly, under or in connection
with the License Agreement, the Ground Lease, the GECC Security Agreement or
this Agreement or any amendment or amendments to any thereof made at any time
or times, heretofore or hereafter, except for its own breach of any express
provision of this Agreement, and each of the Owner Trustee and the Owner
Participant hereby forever and irrevocably waives and releases any and all such
personal liability. The limitation of liability provided in this paragraph is
in addition to, and not in limitation of, any limitation on liability
applicable to the Collateral Agent or such other Transferee provided by law or
by any other contract, agreement or instrument.
SECTION 3.04 Several Obligations.
The obligations of the Collateral Agent and the Company hereunder are
several, and neither the Collateral Agent nor the Company shall be liable for
any failure by the other such party to perform its obligations hereunder.
SECTION 4.01 Amendments, Etc.
No amendment or waiver of any provision of this Agreement, nor consent
to any departure therefrom by any party hereto, shall in any event be effective
unless the same shall be in writing and
5
<PAGE> 38
signed by each party hereto, and then such amendment, waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which given.
6
<PAGE> 39
SECTION 5.01 No Waiver or Election of Remedies.
No failure on the part of any party hereto to exercise, and no delay
in exercising, any right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right.
SECTION 5.02 Continuing Agreement.
This Agreement is a continuing agreement and shall (a) remain in full
force and effect until all of the GECC Claims shall have been indefeasibly paid
in full and (b) be binding upon and inure to the benefit of each of the parties
hereto and their respective successors, transferees and assigns.
SECTION 5.03 Execution in Counterparts.
This Agreement may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken
together shall constitute both one and the same instrument. This Agreement
shall become effective as of the date first above written when and if
counterparts hereof shall have been executed by all of the parties hereto.
SECTION 5.04 Governing Law.
This Agreement shall be governed by, and construed in accordance
within, the laws of the State of New York.
SECTION 5.05 Severability.
If any provision of this Agreement is void or unenforceable in any
jurisdiction, such voidness or unenforceability shall not affect the
enforceability of (a) such provision in any other jurisdiction or (b) any other
provision of this Agreement in any jurisdiction.
SECTION 5.06 Notices.
All notices and other communications hereunder shall be in writing
(which may include telex communication) and mailed or telexed or delivered to
each party hereto at such party's address listed beside its signature below, or
at such other address as shall be designated by any such party in a written
notice to the other parties hereto. All such notices and other communications
shall be effective upon dispatch.
7
<PAGE> 40
SECTION 5.07 Headings.
Section headings are included in this Agreement for convenience of
reference only and shall not affect the meaning or interpretation of this
Agreement or any part hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date above first written.
BT COMMERCIAL CORPORATION, not in
its individual capacity but
solely as Collateral Agent under
the Collateral Agent's
Intercreditor Agreement referred
to herein
By: ______________________________
Name:_________________________
Its: _________________________
233 South Wacker Drive
Suite 8400
Chicago, Illinois 60606
Attn: Credit Department
Facsimile No. 312/993-8096
ENVIRODYNE INDUSTRIES, INC.
By: ______________________________
Name:_________________________
Its: _________________________
701 Harger Road
Suite 121
Oak Brook, Illinois 60521
Facsimile: (708)
Attention:
8
<PAGE> 41
SHAWMUT BANK CONNECTICUT, NATIONAL
ASSOCIATION, not in its
individual capacity but solely as
Owner Trustee under the Trust
Agreement referred to above
By: ______________________________
Name:_________________________
Its: _________________________
777 Main Street - 11th Floor
Hartford, Connecticut 06115
Facsimile: (203) 240-7920
Attention:
GENERAL ELECTRIC CAPITAL
CORPORATION, as Owner Participant
under the Trust Agreement
referred to above
By: ______________________________
Name:_________________________
Its: _________________________
1600 Summer Street
Stamford, Connecticut 06927
Facsimile No.:
Attention:
9
<PAGE> 42
The Undersigned hereby acknowledges receipt of a copy of the foregoing
Subordination Agreement, waives notice of acceptance thereof by the Collateral
Agent, and agrees to be bound by the terms and provisions thereof, to make no
payments or distributions contrary to the terms and provisions thereof and to
do every other act and thing necessary or appropriate to carry out such terms
and provisions.
VISKASE CORPORATION
By: ______________________________
Name:_________________________
Its: _________________________
6855 West 65th Street
Chicago, Illinois 60638
Facsimile:_____________
Attention: President
10
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(UNAUDITED)
<TABLE>
<CAPTION>
PRO FORMA POST-CONSUMMATION
----------------------------- ----------------------------------------
DECEMBER DECEMBER
30, 1994 TO JANUARY 1 30, 1994 TO JANUARY 1 JANUARY 1
MARCH 30, TO DECEMBER MARCH 30, TO MARCH TO DECEMBER
1995 29,1994 1995 31, 1994 29, 1994
-------------- -------------- -------------- ------------ ------------
<S> <C> <C> <C> <C> <C>
EARNINGS (LOSS) BEFORE INCOME TAXES,
REORGANIZATION ITEMS AND
EXTRAORDINARY GAIN (LOSS) ($5,637) ($8,873) ($4,090) ($1,957) $1,188
--------- --------- --------- -------- -------
ADD:
Outside interest expense 14,397 57,799 12,885 11,697 47,945
Portion of rents representative of
interest factor 477 1,994 477 499 1,994
Amortization of debt expense 584 1,776 549 362 1,569
--------- --------- --------- -------- -------
EARNINGS BEFORE FIXED CHARGES 9,821 52,696 9,821 10,601 52,696
Outside interest expense 14,397 57,799 12,855 11,697 47,945
Portion of rents representative of
interest factor 477 1,994 477 499 1,994
Amortization of debt expense 584 1,776 549 362 1,569
Capitalized interest 169 978 169 245 978
--------- --------- --------- -------- -------
Total fixed charges 15,627 62,547 14,080 12,803 52,486
RATIO OF EARNING TO FIXED CHARGES - - - - 1.00
DEFICIENCY IN THE COVERAGE OF FIXED CHARGES
BY EARNINGS BEFORE FIXED CHARGES (5,806) (9,851) (4,259) (2,202)
</TABLE>
<TABLE>
<CAPTION>
PRE-CONSUMMATION
--------------------------------------------------------
DECEMBER DECEMBER
JANUARY 1 27, 1991 TO 28, 1990 TO JANUARY 1
TO DECEMBER DECEMBER DECEMBER TO DECEMBER
31, 1993 31, 1992 26, 1991 27, 1990
------------ ------------- ------------- ------------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
EARNINGS (LOSS) BEFORE INCOME TAXES,
REORGANIZATION ITEMS AND
EXTRAORDINARY GAIN (LOSS) $18,550 ($50,996) ($40,283) ($22,174)
-------- --------- --------- ---------
ADD:
Outside interest expense 29,242 102,727 98,853 97,926
Portion of rents representative of
interest factor 1,800 1,891 1,716 1,528
Amortization of debt expense 1,948 3,795 4,068 4,408
-------- --------- --------- ---------
EARNINGS BEFORE FIXED CHARGES 51,540 57,417 64,354 81,688
Outside interest expense 29,242 102,727 98,853 97,926
Portion of rents representative of
interest factor 1,800 1,891 1,716 1,528
Amortization of debt expense 1,948 3,795 4,068 4,408
Capitalized interest 1,014 1,204 1,018 826
-------- --------- --------- ---------
Total fixed charges 34,004 109,617 105,655 104,688
RATIO OF EARNING TO FIXED CHARGES 1.52 - - -
DEFICIENCY IN THE COVERAGE OF FIXED CHARGES
BY EARNINGS BEFORE FIXED CHARGES (52,200) (41,301) (23,000)
</TABLE>
<PAGE> 1
EXHIBIT 21.1
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
The Company has the following subsidiaries, each of which is wholly owned by
the Company or by a wholly-owned subsidiary of the Company. Indented names are
subsidiaries of the company under which they are indented.
Clear Shield National, Inc. (California)
Carnival Brands, Inc. (Illinois)
Envirosonics, Inc. (California)
Sandusky Plastics, Inc. (Delaware)
Envirodyne Subsidiary, Inc. (Delaware)
Sandusky Plastics of Delaware, Inc. (Delaware)
Viskase Corporation (Pennsylvania)
Vaskase Holding Corporation (Delaware)
Viskase Australia Limited (Delaware)
Viskase Brasil Embalagens Ltda. (Brazil)
Viskase de Mexico, S.A. de C.V. (Mexico)
Viskase S.A. (France)
Viskase GMBH (Germany)
Viskase S.p.A. (Italy)
Viskase Canada Inc. (Ontario)
Viskase Holdings Limited (United Kingdom)
Filmco International Limited (United
Kingdom)
Viskase Limited (United Kingdom)
Viskase (U.K.) Limited (United
Kingdom)
Envirodyne S.A.R.L. (France)
Viskase Z.A.O. (Russia)
<PAGE> 2
Viskase de Nuevo Laredo, S.A. de C.V. (Mexico)
Viskase Sales Corporation (Delaware)
Viskase Puerto Rico Corporation (Delaware)
WSC Corp. (Delaware)
-2-
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
COOPERS & LYBRAND L.L.P.
We consent to the inclusion in this registration statement on Form S-4 (File
No., 33- ) of our report dated March 15, 1995, except for Note 20, as to
which the date is July 19, 1995, on our audits of the consolidated financial
statements and the financial statement schedules of Envirodyne Industries, Inc.
and Subsidiaries. We also consent to the reference to our firm under the
captions "Summary Historical Consolidated Financial Data," "Selected
Historical Consolidated Financial Data," and "Experts."
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
July 19, 1995
<PAGE> 1
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 17th day of July, 1995.
Donald P. Kelly
-------------------------------
Donald P. Kelly
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 12th day of July, 1995.
Robert N. Dangremond
-------------------------------
Robert N. Dangremond
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 11th day of July, 1995.
Avram A. Glazer
-------------------------------
Avram A. Glazer
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 17th day of July, 1995.
F. Edward Gustafson
-------------------------------
F. Edward Gustafson
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 12th day of July, 1995.
Michael E. Heisley
-------------------------------
Michael E. Heisley
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 11th day of July, 1995.
Gregory R. Page
-------------------------------
Gregory R. Page
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 12th day of July, 1995.
Mark D. Senkpiel
-------------------------------
Mark D. Senkpiel
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 11th day of July, 1995.
Malcolm I. Glazer
-------------------------------
Malcolm I. Glazer
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 11th day of July, 1995.
Denis H. Davidson
-------------------------------
Denis H. Davidson
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 11th day of July, 1995.
Sandra L. Musachia
-------------------------------
Sandra L. Musachia
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 12th day of July, 1995.
J. Robert Tino
-------------------------------
J. Robert Tino
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 13th day of July, 1995.
George E. Collins
-------------------------------
George E. Collins
<PAGE> 13
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 17th day of July, 1995.
Dean A. Mefford
-------------------------------
Dean A. Mefford
<PAGE> 14
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 12th day of July, 1995.
Terry L. Wood
-------------------------------
Terry L. Wood
<PAGE> 15
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the person whose
signature appears below constitutes and appoints J. S. Corcoran and Stephen M.
Schuster, and each of them, the undersigned's true and lawful attorneys-in-fact
and agents, with full power of substitution and resubstitution for the
undersigned and in the undersigned's name, place and stead, in any and all
capacities to sign a registration statement on Form S-4 relating to an exchange
offer for $160,000,000 aggregate principal amount of debt securities of
Envirodyne Industries, Inc. (which are guaranteed by each of Clear Shield
National, Inc., Sandusky Plastics, Inc., Sandusky Plastics of Delaware, Inc.,
Viskase Corporation, Viskase Holding Corporation and Viskase Sales
Corporation), and any and all amendments (including post-effective amendments)
to such registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, and any documents relating to the qualification or
registration under state Blue Sky or securities laws of such securities,
granting unto such attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite or
necessary to be done in and about the premises, as fully to all intents and
purposes the undersigned might or could do in person, ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or the substitute or
substitutes of said attorneys-in-fact and agents or any of them, may lawfully
do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 17th day of July, 1995.
Joseph J. Schulte
-------------------------------
Joseph J. Schulte
<PAGE> 1
EXHIBIT 25
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM T-1
----------
STATEMENT OF ELIGIBILITY AND QUALIFICATION 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)
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
Not applicable 06-0850628
(State of incorporation (I.R.S. Employer
if not a national bank) Identification No.)
777 Main Street, Hartford, Connecticut 06115
(Address of principal executive offices) (Zip Code)
Patricia Beaudry, 777 Main Street, Hartford, CT (203) 728-2065
(Name, address and telephone number of agent for service)
ENVIRODYNE INDUSTRIES, INC.
(Exact name of obligor as specified in its charter)
Delaware 95-2677354
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
701 Harger Road, Suite 190 Oakbrook, Illinois 60521
(Address of principal executive offices) (Zip Code)
12% Series B Senior Secured Notes due 2000
Floating Rate Series D Senior Secured Notes due 2000
(Title of the indenture securities)
<PAGE> 2
Item 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:
The Comptroller of the Currency,
Washington, D.C.
Federal Reserve Bank of Boston
Boston, Massachusetts
Federal Deposit Insurance Corporation
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust powers:
The trustee is so authorized.
Item 2. Affiliations with obligor. If the obligor is an affiliate of the
trustee, describe each such affiliation.
None with respect to the trustee; none with respect to Hartford
National Corporation, Shawmut Corporation, Shawmut Service Corporation and
Shawmut National Corporation (the "affiliates").
Item 16. List of exhibits. List below all exhibits filed as a part of this
statement of eligibility and qualification.
1. A copy of the Articles of Association and By-Laws of the
trustee as now in effect.
2. A copy of the Certificate of Authority of the trustee to do
Business.
3. A copy of the Certification of Fiduciary Powers of the Trustee.
4. A copy of the By-Laws of the trustee are provided in Exhibit 1
referenced above.
5. Consent of the trustee required by Section 321(b) of the Act.
6. A copy of the latest Consolidated Reports of Condition and
Income of the trustee, published pursuant to law or the requirements of its
supervising or examining authority.
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<PAGE> 3
NOTES
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the trustee of all facts on which to base its answer to Item 2, the answer to
said Item is based upon incomplete information. Said Item may, however, be
considered correct unless amended by an amendment to this Form T-1.
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<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939,
the trustee, Shawmut Bank Connecticut, National Association, a national banking
association organized and existing under the laws of the United States, has
duly caused this statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of
Hartford, and State of Connecticut, on the day of July, 1995.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
Trustee
By /s/ SUSAN T. KELLER
Susan T. Keller
Vice President
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<PAGE> 5
ARTICLES OF ASSOCIATION
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
FIRST. The title of this Association, which shall carry on the business of
banking under the laws of the United States, shall be "Shawmut Bank
Connecticut, National Association".
SECOND. The main office of the Association shall be in Hartford, County of
Hartford, State of Connecticut. The general business of the Association shall
be conducted at its main office and its branches.
THIRD. The board of directors of this Association shall consist of not less
than five (5) nor more than twenty-five (25) shareholders, the exact number of
directors within such minimum and maximum limits to be fixed and determined
from time to time by resolution of a majority of the full board of directors or
by resolution of the shareholders at any annual or special meeting thereof.
Unless otherwise provided by the laws of the United States, any vacancy in the
board of directors for any reason, including an increase in the number thereof,
may be filled by action of the board of directors.
FOURTH. The annual meeting of the shareholders for the election of directors
and the transaction of whatever other business may be brought before said
meeting shall be held at the main office or such other place as the board of
directors may designate, on the day of each year specified therefor in the
bylaws, but if no election is held on that day, it may be held on any
subsequent day according to the provisions of law; and all elections shall be
held according to such lawful regulations as may be prescribed by the board of
directors.
FIFTH. The authorized amount of capital stock of this Association shall be
eight million five hundred thousand (8,500,000) shares of which three million
five hundred thousand (3,500,000) shares shall be common stock with a par value
of six and 25/100 dollars ($6.25) each and of which five million (5,000,000)
shares without par value shall be preferred stock. The capital stock may be
increased or decreased from time to time, in accordance with the provisions of
the laws of the United States.
No holder of shares of the capital stock of any class of the Association shall
have any pre-emptive or preferential right of subscription to any shares of any
class of stock of the Association, whether now or hereafter authorized, or to
any obligations convertible into stock of the Association, issued or sold, nor
any right of subscription to any thereof other than such, if any, as the board
of directors, in its discretion, may from time to time determine and at such
price as the board of directors may from time to time fix.
The board of directors of the Association is authorized, subject to limitations
prescribed by law and the provisions of this Article, to provide for the
issuance from time to time in one or more series of any number of the preferred
shares, and to establish the number of shares to be included in each such
series, and to fix the designation, relative rights, preferences,
qualifications and limitations of the shares of each such series. The authority
of the board of directors with respect to each series shall include, but not be
limited to, determination of the following:
a. The number of shares constituting that series and the distinctive
designation of that series;
<PAGE> 6
b. The dividend rate on the shares of that series, whether dividends shall be
cumulative, and, if so, from which date or dates, and whether they shall
be payable in preference to, or in another relation to, the dividends
payable to any other class or classes or series of stock;
c. Whether that series shall have voting rights, in addition to the voting
rights provided by law, and, if so, the terms of such voting rights;
d. Whether that series shall have conversion or exchange privileges, and, if
so, the terms and conditions of such conversion or exchange, including
provision for adjustment of the conversion or exchange rate in such events
as the board of directors shall determine;
e. Whether or not the shares of that series shall be redeemable, and, if so,
the terms and conditions of such redemption, including the manner of
selecting shares for redemption if less than all shares are to be
redeemed, the date or dates upon or after which they shall be redeemable,
and the amount per share payable in case of redemption, which amount may
vary under different conditions and at different redemption dates;
f. Whether that series shall be entitled to the benefit of a sinking fund to
be applied to the purchase or redemption of shares of that series, and, if
so, the terms and amounts of such sinking fund;
g. The right of the shares of that series to the benefit of conditions and
restrictions upon the creation of indebtedness of the Association or any
subsidiary, upon the issue of any additional stock (including additional
shares of such series or of any other series) and upon the payment of
dividends or the making of other distributions on, and the purchase,
redemption or other acquisition by the Association or any subsidiary of
any outstanding stock of the Association;
h. The right of the shares of that series in the event of voluntary or
involuntary liquidation, dissolution or winding up of the Association and
whether such rights shall be in preference to, or in another relation to,
the comparable rights of any other class or classes or series of stock;
and
i. Any other relative, participating, optional or other special rights,
qualifications, limitations or restrictions of that series.
Shares of any series of preferred stock which have been redeemed (whether
through the operation of a sinking fund or otherwise) or which, if convertible
or exchangeable, have been converted into or exchanged for shares of stock of
any other class or classes shall have the status of authorized and unissued
shares of preferred stock of the same series and may be reissued as a part of
the series of which they were originally a part or may be reclassified and
reissued as part of a new series of preferred stock to be created by resolution
or resolutions of the board of directors or as part of any other series of
preferred stock, all subject to the conditions and the restrictions adopted by
the board of directors providing for the issue of any series of preferred stock
and by the provisions of any applicable law.
Subject to the provisions of any applicable law, or except as otherwise
provided by the resolution or resolutions providing for the issue of any series
of preferred stock, the holders of outstanding shares of common stock shall
exclusively possess voting power for the election of directors and for all
other purposes, each holder of record of shares of common stock being entitled
to one vote for each share of common stock standing in his name on the books of
the Association.
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<PAGE> 7
Except as otherwise provided by the resolution or resolutions providing for the
issue of any series of preferred stock, after payment shall have been made to
the holders of preferred stock of the full amount of dividends to which they
shall be entitled pursuant to the resolution or resolutions providing for the
issue of any other series of preferred stock, the holders of common stock shall
be entitled, to the exclusion of the holders of preferred stock of any and all
series, to receive such dividends as from time to time may be declared by the
board of directors.
Except as otherwise provided by the resolution or resolutions for the issue of
any series of preferred stock, in the event of any liquidation, dissolution or
winding up of the Association, whether voluntary or involuntary, after payment
shall have been made to the holders of preferred stock of the full amount to
which they shall be entitled pursuant to the resolution or resolutions
providing for the issue of any series of preferred stock the holders of common
stock shall be entitled, to the exclusion of the holders of preferred stock of
any and all series, to share, ratable according to the number of shares of
common stock held by them, in all remaining assets of the Association available
for distribution to its shareholders.
The number of authorized shares of any class may be increased or decreased by
the affirmative vote of the holders of a majority of the stock of the
Association entitled to vote.
SIXTH. The board of directors shall appoint one of its members president of
this Association, who shall be chairman of the board, unless the board appoints
another director to be the chairman. The board of directors shall have the
power to appoint one or more vice presidents; and to appoint a secretary and
such other officers and employees as may be required to transact the business
of this Association.
The board of directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all bylaws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a board of
directors to do and perform.
SEVENTH. The board of directors shall have the power to change the location of
the main office to any other place within the limits of the City of Hartford,
Connecticut, without the approval of the shareholders but subject to the
approval of the Comptroller of the Currency; and shall have the power to
establish or change the location of any branch or branches of the Association
to any other location, without the approval of the shareholders but subject to
the approval of the Comptroller of the Currency.
EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.
NINTH. The board of directors of this Association, or any three or more
shareholders owning, in the aggregate, not less than ten percent (10%) of the
stock of this Association, may call a special meeting of shareholders at any
time. Unless otherwise provided by the laws of the United States, a notice of
the time, place and purpose of every annual and special meeting of the
shareholders shall be given by first class mail, postage prepaid, mailed at
least ten (10) days prior to the date of such meeting to each shareholder of
record at his address as shown upon the books of this Association.
TENTH. Any person, his heirs, executors, or administrators may be indemnified
or reimbursed by the Association for reasonable expenses actually incurred in
connection with any action, suit, or proceeding, civil or criminal, to which he
or they shall be made a party by reason of his being or having been a director,
officer, or employee of the Association or any firm, corporation, or
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<PAGE> 8
organization which he served in any such capacity at the request of the
Association; provided, that no person shall be so indemnified or reimbursed in
relation to any matter in such action, suit, or proceeding as to which he shall
finally be adjudged to have been guilty of or liable for gross negligence,
willful misconduct or criminal acts in the performance of his duties to the
Association; and, provided further, that no person shall be so indemnified or
reimbursed in relation to any matter in such action, suit, or proceeding which
has been made the subject of a compromise settlement except with the approval
of a court of competent jurisdiction, or the holders of record of a majority of
the outstanding shares of the Association, or the board of directors, acting by
vote of directors not parties to the same or substantially the same action,
suit, or proceeding, constituting a majority of the whole number of directors.
The foregoing right of indemnification or reimbursement shall not be exclusive
of other rights to which such person, his heirs, executors, or administrators
may be entitled as a matter of law. The Association may, upon the affirmative
vote of a majority of its board of directors, purchase insurance for the
purpose of indemnifying its directors, officers and other employees to the
extent that such indemnification is allowed in the preceding paragraph. Such
insurance may, but need not, be for the benefit of all directors, officers, or
employees.
ELEVENTH. These articles of association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount. The notice of any shareholders' meeting at
which an amendment to the articles of association of this Association is to be
considered shall be given as hereinabove set forth.
I hereby certify that the articles of association of this Association, in their
entirety, are listed above in items first through eleventh.
________________________________ Secretary/Assistant Secretary
Dated at _______________________, as of _____________.
Revision of March 30, 1995
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<PAGE> 9
BYLAWS
OF
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
ARTICLE I
MEETINGS OF SHAREHOLDERS
Section 1.1 Annual Meeting. The regular annual meeting of the shareholders to
elect directors and transact whatever other business may properly come before
the meeting, shall be held at the main office of the association, city of
Hartford, state of Connecticut or such other places as the board of directors
may designate, at 1:00 o'clock, on the third Wednesday of April of each year,
or if that date falls on a legal holiday in the state in which the association
is located, on the next following banking day. If, for any cause, an election
of directors is not made on that date, or in the event of a legal holiday, on
the next following banking day, an election may be held on any subsequent day
within 60 days of the date fixed, to be designated by the board directors, or,
if the directors fail to fix the date, by shareholders representing two-thirds
of the shares.
Section 1.2. Special Meetings. Except as otherwise specifically provided by
statute, special meetings of the shareholders may be called for any purpose at
any time by the board of directors or upon call of the Chairman or at the
written request of shareholders owning, in the aggregate, not less than ten
(10) percent of the stock of the association.
Section 1.3. Notice of Meetings. Unless otherwise provided by the laws of the
United States, a notice of the time, place and purpose of every regular annual
meeting or special meeting of shareholders shall be given by first-class mail,
postage prepaid, mailed at least ten (10) days prior to the date of such
meeting to each shareholder of record at his address as shown upon the books of
the association. If an annual or special shareholders' meeting is adjourned to
a different date, time, or place, notice need not be given of the new date,
time or place, if the new date, time or place is announced at the meeting
before adjournment, unless any additional items of business are to be
considered, or the association becomes aware of an intervening event materially
affecting any matter to be voted on more than 10 days prior to the date to
which the meeting is adjourned. If a new record date for the adjourned meeting
is fixed, however, notice of the adjourned meeting must be given to persons who
are shareholders as of the new record date.
Section 1.4. Proxies. Shareholders may vote at any meeting of the shareholders
by proxies duly authorized in writing. Proxies shall be valid only for one
meeting, to be specified therein, and any adjournments of such meeting. Proxies
shall be dated and filed with the records of the meeting. Proxies with
rubber-stamped facsimile signatures may be used and unexecuted proxies may be
counted upon receipt of a confirming telegram from the shareholder. Proxies
meeting the above requirements submitted at any time during a meeting shall be
accepted.
<PAGE> 10
Section 1.5. Quorum. A majority of the outstanding capital stock, represented
in person or by proxy, shall constitute a quorum at any meeting of
shareholders, but less than a quorum may adjourn any meeting, from time to
time, and the meeting may be held, as adjourned, without further notice.
Section 1.6. Voting. In deciding on questions at meetings of shareholders,
except in the election of directors, each shareholder shall be entitled to one
vote for each share of stock held. A majority of votes cast shall decide each
matter submitted to the shareholders at the meeting except in cases where by
law a larger vote is required.
ARTICLE II
DIRECTORS
Section 2.1. Board of Directors. The board of directors shall manage and
administer the business and affairs of the association. Except as expressly
limited by law, all corporate powers of the association shall be vested in and
may be exercised by the board.
Section 2.2. Number. The board shall consist of not less than five nor more
than twenty-five shareholders, the exact number within such minimum and maximum
limits to be fixed and determined from time to time by resolution of a majority
of the full board or by resolution of a majority of the shareholders at any
meeting thereof.
Section 2.3. Term. The directors of this association shall hold office for one
year and until their successors are elected and have qualified.
Section 2.4. Oath. Each person elected or appointed a director of this
association must take the oath of such office as prescribed by the laws of the
United States. No person elected or appointed a director of this association
shall exercise the functions of such office until he has taken such oath.
Section 2.5. Honorary Directors. There may not be more than five honorary
directors of the association who shall be entitled to attend meetings of the
board and take part in its proceedings but without the right to vote. Honorary
directors shall be appointed at the annual meeting of the board of directors to
hold office until the next annual meeting provided, however, that the board may
at any regularly constituted meeting between annual meetings of the board of
directors appoint honorary directors within the limitations imposed by this
bylaw.
Section 2.6. Vacancies. Any vacancies occurring in the board of directors for
any reason, including an increase in the number thereof, may be filled, in
accordance with the laws of the United States, by appointment by the remaining
directors, and any director so appointed shall hold office until the next
annual meeting and until his successor is elected and has qualified.
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<PAGE> 11
Section 2.7. Organization Meeting. The annual meeting of the board of
directors shall be held at the main office of the association to organize the
new board and appoint committees of the board and officers of the association
for the succeeding year, and for transacting such other business as properly
may come before the meeting. Such meeting shall be held on the day of the
election of directors or as soon thereafter as practicable, and, in any event,
within 30 days thereof. If, at the time fixed for such meeting, there shall
not be a quorum, the directors present may adjourn the meeting, from time to
time, until a quorum is obtained.
Section 2.8. Regular Meetings. The regular meetings of the board of directors
shall be held, without notice, at the main office, or at such other place as
has been duly authorized by the board, on such day and at such time as the
board shall determine. When any regular meeting of the board falls upon a
holiday, the meeting shall be held on the next banking business day unless the
board shall designate another day.
Section 2.9. Special Meetings. Special meetings of the board of directors may
be called by the chairman, the president, or at the request of seven or more
directors. Each member of the board of directors shall be given notice stating
the time and place by telegram, letter, or in person, of each special meeting.
Section 2.10. Quorum. A majority of the members of the board shall constitute
a quorum at any meeting. If the number of directors is reduced below the
number that would constitute a quorum, no business may be transacted, except
selecting directors to fill vacancies in conformance with these bylaws. If a
quorum is present, the board of directors may take action through the vote of a
majority of the directors who are in attendance.
Section 2.11. Record Time. The board of directors may fix a day and hour, not
exceeding fifty (50) days preceding the date fixed for the payment of any
dividend or for any meeting of the shareholders as a record time for the
determination of shareholders entitled to receive such dividend, or as the time
as of which shareholders entitled to notice of and to vote at such meeting
shall be determined, as the case may be, and only shareholders of record at the
time so fixed shall be entitled to receive such dividend or to notice of and to
vote at such meeting.
Section 2.12. Fees. All directors other than directors who are officers of the
association or its affiliates shall be entitled to reasonable fees for their
services as such directors and as members of committees of the board, said fees
to be fixed by vote of the board.
ARTICLE III
COMMITTEES OF THE BOARD
Section 3.1. Executive Committee. The board of directors may establish an
executive committee consisting of the chairman, not less than five directors,
not officers, who are appointed by the board, and such other directors as the
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<PAGE> 12
board may appoint. The board shall designate the chairman thereof. The
Executive Committee shall possess and may exercise such powers as are provided
in these bylaws and all other delegable powers of the board and shall meet at
the call of any member thereof. All action of said committee shall be reported
to the board at the next regular board meeting thereafter. Four members of the
Committee, of whom not less than three shall be directors who are not officers,
shall be necessary to constitute a quorum.
Section 3.2. Loan and Investment Committee. The board of directors shall
establish a loan and investment committee consisting of the chairman, the
president, not less than four directors, not officers, who are appointed by the
board, and such other directors as the board may appoint. The committee shall
ensure that the association's credit and investment policies are adequate and
that lending and investment activities are conducted in accordance with the
association's policies and with applicable laws and regulations. The committee
shall exercise oversight and receive reports with respect to lending activities
and credit risk management. The committee shall also exercise oversight and
receive reports with respect to the association's securities portfolio and
securities portfolio activities to ensure appropriate portfolio
diversification, asset quality, liquidity, and profitability. The committee
shall also have oversight responsibilities with respect to the association's
investment policy, liquidity policy, liquidity contingency planning and
interest rate risk exposure. All action by the committee shall be reported to
the board at the next regular board meeting thereafter. Four members of the
committee, of whom not less than two shall be directors who are not officers,
shall be necessary to constitute a quorum.
Section 3.3. Trust Committee. The board of directors shall establish a trust
committee consisting of the president and not less than four directors, not
officers, who are appointed by the board and such other directors as the board
may appoint. The trust committee shall have authority, between meetings of the
board, to discharge the responsibilities of the association with respect to the
exercise of fiduciary powers, except as the board may by resolution or other
appropriate action otherwise from time to time determine. All action by said
committee shall be reported to the board at the next regular board meeting
thereafter. Four members of the trust committee, of whom at least two shall
be directors who are not officers, shall be necessary to constitute a quorum.
Section 3.4. Audit Committee. The audit committee of Shawmut National
Corporation, no member of whom is an officer of the association, is designated
to oversee the audit affairs of the association. Members of the association's
board of directors, none of whom may be officers of the association, may serve
on the audit committee of Shawmut National Corporation. In addition, the board
may, from time to time, appoint an audit committee consisting of not less than
four members of the board, no one of whom shall be an executive officer of the
association, to perform such audit functions as may be assigned by the board.
The duty of the audit committee shall be to examine at least once during each
calendar year and within 15 months of the last examination of affairs of the
association or cause suitable examination to be made by auditors responsible
only to the board of directors and to report the result of such examination in
writing to the board at the next regular meeting
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<PAGE> 13
thereafter. Such report shall state whether the association is in a sound
condition, whether fiduciary powers have been administered according to law and
sound fiduciary principles, whether adequate internal controls and procedures
are being maintained, and shall recommend to the board of directors such
changes in the manner of conducting the affairs of the association as shall be
deemed advisable.
Section 3.5. Community Affairs Committee. The board of directors shall
establish a community affairs committee consisting of not less than four
directors and such other persons as shall be appointed by the board. The
community affairs committee shall oversee compliance by the association with
the policies and provisions of the Community Reinvestment Act of 1978, as
amended; shall establish and supervise policies relating to voluntary corporate
contributions and other matters of business and community conduct, all as the
board or the chairman may from time to time specify or request. All actions by
said committee shall be reported to the board at the next regular board meeting
thereafter. Three members of the committee, of whom at least two shall be
directors who are not officers, shall be necessary to constitute a quorum.
Section 3.6. Substitute Committee Members. In the case of the absence of any
member of any committee of the board from any meeting of such committee, the
directors who are not officers and are present at such meeting, or the senior
officer present if no such directors are there, may designate a substitute to
serve in lieu of such absent member. Such substitute need not be a director
unless such absent member is a director, but in any case when the board of
directors shall have designated one or more alternate members for such
committee, the substitute shall be selected from such of said alternates as are
then available.
Section 3.7. Additional Committees. The board of directors may by resolution
designate one or more additional committees, each consisting of two or more of
the directors. Any such additional committee shall have and may exercise such
powers as the board may from time to time prescribe for furthering the business
and affairs of the association.
ARTICLE IV
WAIVER OF NOTICE; WRITTEN CONSENT; PARTICIPATION BY TELEPHONE
Section 4.1. Waiver of Notice. Notice of the time, place and purpose of any
regular meeting of the board of directors or a committee thereof may be waived
in writing by any director or member of such committee, as the case may be,
either before or after such meeting. Attendance in person at a meeting of the
board of directors or a committee thereof shall be deemed to constitute a
waiver of notice thereof.
Section 4.2. Written Consent. Unless otherwise restricted by the articles of
association or these bylaws, any action required or permitted to be taken at
any meeting of the board of directors or a committee thereof may be taken
without a meeting if a consent in writing, setting forth the action to so be
-5-
<PAGE> 14
taken, shall be signed before or after such action by all of the directors, or
all of the members of a committee thereof, as the case may be. Such written
consent shall be filed with the records of the association.
Section 4.3. Participation by Telephone. One or more directors may participate
in a meeting of the board of directors, of a committee of the board, or of the
shareholders, by means of conference telephone or similar communications
equipment by means of which all persons participating in the meeting can hear
each other. Participation in this manner shall constitute presence in person
at such meeting.
ARTICLE V
OFFICERS AND EMPLOYEES
Section 5.1. Officers. The officers of the association shall consist of a
chairman, a president, one or more vice chairmen, one or more executive vice
presidents, one or more senior vice presidents, one or more vice presidents, a
secretary, an auditor and such other officers as may be appropriate for the
prompt and orderly transaction of the business of the association. Any officer
may hold more than one office, except that the chairman and president may not
also serve as secretary. The chairman, the president, any vice chairman, and
the auditor shall be elected annually by the board of directors to serve for
one year and until his successor is elected and qualifies. All other officers
shall be appointed to hold office during the pleasure of the board, which may
in its discretion delegate the authority to appoint and remove any officer or
officers (other than the auditor) below the ranks of president and vice
chairman.
Section 5.2. Chairman. The chairman shall preside or designate the presiding
officer at all meetings of the board of directors and shareholders. The
chairman shall be the chief executive officer of the association unless
otherwise designated by the board, and may have and exercise such further
powers and duties as from time to time may be conferred upon or assigned to the
chairman by the board of directors. The chairman may establish advisory
committees for any branch, region, or division of the association to advise on
the affairs of such branch, region, or division; provided that such advisory
committee members shall not attend meetings of the board of directors or any
committee thereof, and shall not participate in the management of the
association. If at any time the office of chairman shall be vacant, the powers
and duties of that office shall devolve upon the president; if the office of
president shall be vacant, the powers and duties of that office shall devolve
upon the chairman; and if the office of the chairman and president are vacant,
the board shall designate one or more officers of the association to perform
the duties of chairman until such time as a new chairman is appointed.
Section 5.3. President. The president shall have general executive powers and
may also have and exercise such further powers and duties as may be conferred
upon or assigned by the board or the chairman.
-6-
<PAGE> 15
Section 5.4. Vice Chairman. Each Vice Chairman shall perform such duties as
may be assigned from time to time by the board of directors or the chairman.
Section 5.5. Secretary. The secretary of the association, or other designated
officer of the association, shall keep accurate minutes of all meetings of the
board of directors; shall attend to the giving of all notices required by these
bylaws; shall be custodian of the corporate seal, records, documents and papers
of the association; shall provide for the keeping of proper records of all
transactions of the association; shall have and may exercise any and all other
powers and duties pertaining by law, regulation or practice, or imposed by the
bylaws; and shall also perform such other duties as may be assigned from time
to time, by the board of directors or the chairman.
Section 5.6. Auditor. The general auditor of the association, or his designee,
shall be the officer in charge of auditing. Said officer shall be responsible
for the conduct of a program of continuous audits of the association and all of
its departments and shall make, or cause to be made, further examinations as he
deems necessary or are required from time to time by the responsible audit
committee or the board. Said officer shall report the results of audit
activities periodically to the responsible audit committee or the board.
Section 5.7. Other Officers. All other officers shall perform such duties and
exercise such powers as shall pertain to their respective offices, or as shall
be imposed by law, or as may be conferred upon, or assigned to them by the
board of directors or the chairman.
Section 5.8. Resignation. An officer may resign at any time by delivering
notice to the association. A resignation is effective when the notice is given
unless the notice specifies a later effective date.
ARTICLE VI
SIGNING AUTHORITY
Section 6.1. Signing Authority. Each officer of this association, excluding
the auditor and each other officer whose primary duties are auditing in nature,
shall have authority for and on behalf of this association to execute, deliver,
sign and endorse checks, drafts, pledges, certificates, receipts for money,
warehouse receipts, bills of lading or similar documents, contracts arising in
the ordinary course of the business of the association, bankers' acceptances
made by the association, commercial credits of the association, securities and
property received in trust or for deposit, proxies to vote stock held by the
association in any capacity, petitions, foreclosures and other deeds, powers,
leases, assignments, discharges, releases, extensions, purchase agreements,
conveyances, and other written instruments pertaining to real estate or
interest therein and, where indicated, to affix the corporate seal of the
association to any of the foregoing; to guarantee and witness signatures upon
securities, documents or other written
-7-
<PAGE> 16
instruments; to purchase, sell, assign, pledge or transfer funds or other
securities of the association or within its control as a fiduciary; and,
subject to the approval of such officer or committee as the board may
designate, to accept trusts and appointments and to execute trust indentures
and any other instruments establishing trusts or making appointments. Each
officer at the level of senior vice president or above, shall be empowered to
authorize another person or persons, whether or not such other person or
persons are officers or employees of the association, to sign or endorse any of
the foregoing documents on behalf of the association in a particular
transaction; but such officer shall by signed entry personally note the fact of
such authorization on the records of the association relating to such
transaction. The officer in charge of the international division of the
association, or in his absence his designee, shall be empowered to authorize
another person or persons, whether or not such other person or persons are
officers or employees of the association, to execute documents and do such
other acts and things as may be required in connection with a particular loan
or extension of credit, proceeding before a court or other judicial or
administrative body, or other transaction; but such officer shall by signed
entry personally note the fact of such authorization on the records of the
association relating to such act or transaction. Any one officer at the level
of senior vice president or above shall have authority for and on behalf of the
association to borrow money. The chairman, the president, any vice chairman,
any executive vice president, and the senior vice president or other officer in
charge of investment administration or such other officers as may be designated
by the chairman may each, acting singly, authorize borrowings and request
advances from any Federal Reserve Bank or any Federal Home Loan Bank, as the
case may be, and may agree with said bank upon appropriate terms and collateral
for such transactions. The officers and other employees of the association
shall have such further signature powers as may be specified by the board of
directors or by the chairman or his designee.
ARTICLE VII
STOCK AND STOCK CERTIFICATES
Section 7.1. Transfers. Shares of stock shall be transferable on the books of
the association, and a transfer book shall be kept in which all transfers of
stock shall be recorded. Every person becoming a shareholder by such transfer
shall in proportion to his or her shares, succeed to all rights of the prior
holder of such shares. The board of directors may impose conditions upon the
transfer of the stock reasonably calculated to simplify the work of the
association with respect to stock transfer, voting shareholder meetings, and
related matters and to protect it against fraudulent transfer.
Section 7.2. Stock Certificates. Certificates of stock shall bear the
signature of the chairman or president (which may be engraved, printed or
impressed), and shall be signed manually or by facsimile process by the
secretary or assistant secretary, and the seal of the association shall be
engraved thereon. Each certificate shall recite on its face that the stock
represented thereby is transferable only upon the books of the association
properly endorsed.
-8-
<PAGE> 17
ARTICLE VIII
CORPORATE SEAL
Section 8. Corporate Seal. The board of directors shall provide a seal for the
association. The secretary shall have custody thereof and may designate such
other officers as may have counterparts.
ARTICLE IX
MISCELLANEOUS PROVISIONS
Section 9.1. Fiscal Year. The fiscal year of the association shall be the
calendar year.
Section 9.2. Records. The articles of association, the bylaws and the
proceedings of all meetings of the shareholders, the board of directors, and
standing committees of the board, shall be recorded in appropriate minute books
provided for that purpose. The minutes of each meeting shall be signed by the
secretary or other officer appointed to act as secretary of the meeting.
ARTICLE X
BYLAWS
Section 10. Amendments. These bylaws may be altered, amended, or added to or
repealed by a vote of a majority of the members of the board then in office at
any meeting, provided that notice thereof shall have been given in the notice
of such meeting.
A true copy
Attest:
_______________________________________ Secretary/Assistant Secretary
Dated at _______________________________________ , as of
______________________.
Revision of January 11, 1993
-9-
<PAGE> 18
SCHEDULE A
(Attached to the Trustee's Certificates)
of
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
Part I. Officer of Shawmut Bank Connecticut, National Association:
Name Title Signature
---- ----- ---------
Arthur Blakeslee Assistant Vice President Arthur Blakeslee
Michelle K. Blezard Corporate Trust Officer Michelle K. Blezard
Bryan R. Calder Senior Vice President Bryan R. Calder
Steven Cimalore Vice President Steven Cimalore
Alan B. Coffey Assistant Vice President Alan B. Coffey
Debra A. Colon Corporate Trust Officer Debra A. Colon
Jacqueline Connor Corporate Trust Officer Jacqueline Connor
Mari-Elna DeGuia Assistant Vice President Mari-Elna DeGuia
Pablo de la Canal Corporate Trust Officer Pablo de la Canal
Rinette Elovecky Vice President Rinette Elovecky
Robin Bodell Fisher Vice President Robin Bodell Fisher
Mark A. Forgetta Vice President Mark A. Forgetta
Joseph E. Fortuna Assistant Vice President Joseph E. Fortuna
Gilman N. Gauvin Vice President Gilman N. Gauvin
Lynnette Hamilton Vice President Lynnette Hamilton
Elizabeth C. Hammer Vice President Elizabeth C. Hammer
Michael M. Hopkins Vice President Michael M. Hopkins
Vito J. Iacovazzi Vice President Vito J. Iacovazzi
Debra A. Johnson Corporate Trust Officer Debra A. Johnson
Philip G. Kane, Jr. Vice President Philip G. Kane, Jr.
Susan T. Keller Vice President Susan T. Keller
Kathy A. Larimore Assistant Vice President Kathy A. Larimore
Jeffrey D. Masi Assistant Vice President Jeffrey D. Masi
Deborah L. McDonald Vice President Deborah L. McDonald
Frank McDonald, Jr. Vice President Frank McDonald, Jr.
Susan C. Merker Assistant Vice President Susan C. Merker
Robert L. Reynolds Vice President Robert L. Reynolds
Rockwell J. Spalding Vice President Rockwell J. Spalding
Donnee C. Taylor Corporate Trust Officer Donnee C. Taylor
Andrea F. Turlo Vice President Andrea F. Turlo
Part II. Trustee Administrators (authorized only to attest the Seal of Shawmut
Bank Connecticut, National Association and signature of any officer named in
Part I hereof:
Name Title Signature
---- ----- ---------
Karen R. Felt Trustee Administrator Karen R. Felt
Shelley Hassett Trustee Administrator Shelley Hassett
Eileen D. Pepe Trustee Administrator Eileen D. Pepe
Cheryl Sowers Trustee Administrator Cheryl Sowers
Anna M. Vignuolo Trustee Administrator Anna M. Vignuolo
<PAGE> 19
PART III. Authorized Persons (authorized only to attest the seal of Shawmut
Bank Connecticut, National Association and the signature of any
officer named in Part I hereof):
Name Title Signature
---- ----- ---------
DANIEL P. BROWN, JR. AUTHORIZED PERSON DANIEL P. BROWN, JR.
SCOTT L. MURPHY AUTHORIZED PERSON SCOTT L. MURPHY
THOMAS F. TRESSILT AUTHORIZED PERSON THOMAS F. TRESSILT
WILLIAM G. ROCK AUTHORIZED PERSON WILLIAM G. ROCK
DEBORAH SMITH FRISONI AUTHORIZED PERSON DEBORAH SMITH FRISONI
PAUL R. PISCATELLO AUTHORIZED PERSON PAUL R. PISCATELLO
LESLIE L. DAVENPORT AUTHORIZED PERSON LESLIE L. DAVENPORT
THOMAS P. FLYNN AUTHORIZED PERSON THOMAS P. FLYNN
CARRIE A. BRODZINSKI AUTHORIZED PERSON CARRIE A. BRODZINSKI
<PAGE> 20
[LOGO]
- --------------------------------------------------------------------------------
COMPTROLLER OF THE CURRENCY
ADMINISTRATOR OF NATIONAL BANKS
- --------------------------------------------------------------------------------
Washington, D.C. 20219
CERTIFICATE
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify that:
1. The Comptroller of the Currency, pursuant to Revised Statutes
324, et seq., as amended, 12 U.S.C. 1, et seq., as amended, has possession,
custody and control of all records pertaining to the chartering, regulation and
supervision of all National Banking Associations.
2. "Shawmut Bank Connecticut, National Association", Hartford,
Connecticut, (Charter No. 1338), is a National Banking Association formed
under the laws of the United States and is authorized thereunder to transact
the business of banking on the date of this Certificate.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
office to be affixed to these presents at
the Treasury Department, in the City of
Washington and District of Columbia, this
14th day of February, 1995.
/s/ EUGENE A. LUDWIG
Comptroller of the Currency
<PAGE> 21
[LOGO]
- --------------------------------------------------------------------------------
COMPTROLLER OF THE CURRENCY
ADMINISTRATOR OF NATIONAL BANKS
- --------------------------------------------------------------------------------
Washington, D.C. 20219
Certification of Fiduciary Powers
I, Eugene A. Ludwig, Comptroller of the Currency, do hereby certify
the records in this Office evidence "Shawmut Bank Connecticut, National
Association", Hartford, Connecticut, (Charter No. 1338), was granted, under
the hand and seal of the Comptroller, the right to act in all fiduciary
capacities authorized under the provisions of The Act of Congress approved
September 28, 1962, 76 Stat. 668, 12 U.S.C. 92a. I further certify the
authority so granted remains in full force and effect.
IN TESTIMONY WHEREOF, I have hereunto
subscribed my name and caused my seal of
Office of the Comptroller of the Currency
to be affixed to these presents at the
Treasury Department, in the City of
Washington and District of Columbia, this
14th day of February, 1995.
/s/ EUGENE A. LUDWIG
Comptroller of the Currency
<PAGE> 22
EXHIBIT 5
CONSENT OF THE TRUSTEE
REQUIRED BY SECTION 321(b)
OF THE TRUST INDENTURE ACT OF 1939
The undersigned, as Trustee under the Indenture to be entered into between
Envirodyne Industries, Inc. and Shawmut Bank Connecticut, National Association,
Trustee, does hereby consent that, pursuant to Section 321(b) of the Trust
Indenture Act of 1939, reports of examinations with respect to the undersigned
by Federal, State, Territorial or District authorities may be furnished by such
authorities to the Securities and Exchange Commission upon request therefor.
SHAWMUT BANK CONNECTICUT,
NATIONAL ASSOCIATION
as Trustee
By /s/ SUSAN T. KELLER
Susan T. Keller
Vice President
Dated:
<PAGE> 23
Board of Governors of
the Federal Reserve System
OMB Number: 7100-0036
Federal Deposit Insurance
Corporation
OMB Number: 3064-0052
Office of the Comptroller
of the Currency
OMB Number 1557-0081
FEDERAL FINANCIAL INSTITUTIONS EXAMINATION COUNCIL Expires July 31, 1994
/1/
Please refer to page i,
[FEDERAL FINANCIAL INSTITUTIONS LOGO] Table of Contents, for
the required disclosure
of estimated burden.
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC AND
FOREIGN OFFICES--FFIEC 031
(940630)
REPORT AT THE CLOSE OF BUSINESS JUNE 30, 1994 -----------
(RCRI 9999)
This report is required by law: 12 U.S.C. Section 324 (State member banks);
12 U.S.C. Section 1817 (State nonmember banks); and 12 U.S.C. Section 161
(National banks).
This report form is to be filed by banks with branches and consolidated
subsidiaries in U.S. territories and possessions, Edge or Agreement
subsidiaries, foreign branches, consolidated foreign subsidiaries, or
International Banking Facilities.
- --------------------------------------------------------------------------------
NOTE: The Reports of Condition and Income must be signed by an authorized
officer and the Report of Condition must be attested to by not less than two
directors (trustees) for State nonmember banks and three directors for State
member and National banks.
I, Susan E. Lester, E.V.P. and C.F.O.
-------------------------------------------------------
Name and Title of Officer Authorized to Sign Report
of the named bank do hereby declare that these Reports of Condition and
Income (including the supporting schedules) have been prepared in conformance
with the instructions issued by the appropriate Federal regulatory authority
and are true to the best of my knowledge and belief.
/s/ SUSAN E. LESTER
- ----------------------------------------------------------
Signature of Officer Authorized to Sign Report
July 29, 1995
- ----------------------------------------------------------
Date of Signature
- ----------------------------------------------------------
FOR BANKS SUBMITTING HARD COPY REPORT FORMS:
STATE MEMBER BANKS: Return the original and one copy to the appropriate Federal
Reserve District Bank.
STATE NONMEMBER BANKS: Return the original only in the special return address
envelope provided. If express mail is used in lieu of the special return
address envelope, return the original only to the FDIC, c/o Quality Data
Systems, 2139 Espey Court, Crofton, MD 21114.
NATIONAL BANKS: Return the original only in the special return address envelope
provided. If express mail is used in lieu of the special return address
envelope, return the original only to the FDIC, c/o Quality Data Systems, 2139
Espey Court, Crofton, MD 21114.
- --------------------------------------------------------------------------------
The Reports of Condition and Income are to be prepared in accordance with
Federal regulatory authority instructions. NOTE: These instructions may in
some cases differ from generally accepted accounting principles.
We, the undersigned directors (trustees), attest to the correctness of this
Report of Condition (including the supporting schedules) 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 appropriate
Federal regulatory authority and is true and correct.
/s/ GUNNAR S. OVERSTROM
- ----------------------------------------------------------
Director (Trustee)
/s/ DAVID L. EYLES
- ----------------------------------------------------------
Director (Trustee)
/s/ JOEL B. ALVORD
- ----------------------------------------------------------
Director (Trustee)
<TABLE>
<CAPTION>
<S> <C>
___ ___
FDIC Certificate Number | | | | | | | |
______________________
(RCRI 9060) Banks should affix the address label in
this space.
SHAWMUT BANK CONNECTICUT, NATIONAL A
Legal Title of Bank (Text 8010)
777 MAIN STREET
City (Test 9130)
HARTFORD, CT 06115
State Abbrev. (Text ___) Zip Code (Text ___)
| |
--- ---
</TABLE>
Board of Governors of the Federal Reserve System, Federal Deposit Insurance
Corporation, Office of the Comptroller of the Currency
<PAGE> 24
EFIEC 031
Page 1-8
/2/
CONSOLIDATED REPORTS OF CONDITION AND INCOME FOR A BANK WITH DOMESTIC AND
FOREIGN OFFICES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SIGNATURE PAGE Cover
<S> <C>
REPORT OF INCOME
Schedule RI--Income Statement...........................................RI-1, 2, 3
Schedule RI-A--Changes in Equity Capital....................................RI-3
Schedule RI-B--Charge-offs and Recoveries and
Changes in Allowance for Loan and Lease
Losses..................................................................RI-4, 5
Schedule RI-C--Applicable Income Taxes by
Taxing Authority..........................................................RI-5
Schedule RI-D--Income from
International Operations..................................................RI-6
Schedule RI-E--Explanations...............................................RI-7, 8
</TABLE>
DISCLOSURE OF ESTIMATED BURDEN
The estimated average burden associated with this information collection is
30.7 hours per respondent and is estimated to vary from 15 to 200 hours per
response, depending on individual circumstances. Burden estimates include the
time for reviewing instructions, gathering and maintaining data in the required
form, and completing the information collection, but exclude the time for
compiling and maintaining business records in the normal course of a
respondent's activities. Comments concerning the accuracy of this burden
estimate and suggestions for reducing this burden should be directed to the
Office of Information and Regulatory Affairs, Office of Management and Budget,
Washington, D.C. 20503, and to one of the following:
Secretary
Board of Governors of the Federal Reserve System
Washington, D.C. 20551
Legislative and Regulatory Analysis Division
Office of the Comptroller of the Currency
Washington, D.C. 20219
Assistant Executive Secretary
Federal Deposit Insurance Corporation
Washington, D.C. 20429
<TABLE>
<CAPTION>
<S> <C>
REPORT OF CONDITION
Schedule RC--Balance Sheet................................................RC-1, 2
Schedule RC-A--Cash and Balances Due
From Depository Institutions..............................................RC-3
Schedule RC-B--Securities.................................................RC-4, 5
Schedule RC-C--Loans and Lease Financing
Receivables:
Part I. Loans and Leases..............................................RC-6, 7
Part II. Loans to Small Businesses and
Small Farms (included in the forms for
June 30 only).....................................................RC-7a, 7b
Schedule RC-D--Trading Assets and Liabilities
(to be completed only by selected banks)..................................RC-8
Schedule RC-E--Deposit Liabilities.......................................RC-9, 10
Schedule RC-F--Other Assets................................................RC-11
Schedule RC-G--Other Liabilities...........................................RC-11
Schedule RC-H--Selected Balance Sheet Items for
Domestic Offices.........................................................RC-12
Schedule RC-I--Selected Assets and Liabilities
of IBFs..................................................................RC-13
Schedule RC-K--Quarterly Averages..........................................RC-13
Schedule RC-L--Off-Balance Sheet Items..................................RC-14, 15
Schedule RC-M--Memoranda................................................RC-16, 17
Schedule RC-N--Past Due and Nonaccrual Loans,
Leases, and Other Assets..............................................RC-18, 19
Schedule RC-O--Other Data for Deposit
Insurance Assessments.................................................RC-20, 21
Schedule RC-R--Risk-Based Capital.......................................RC-22, 23
Optional Narrative Statement Concerning the
Amounts Reported in the Reports of
Condition and Income.....................................................RC-24
Special Report (TO BE COMPLETED BY ALL BANKS)
Schedule RC-J--Repricing Opportunities (sent only to
and to be completed only by savings banks)
</TABLE>
For information or assistance, national and state nonmember banks should
contact the FDIC's Call Reports Analysis Unit, 550 17th Street, NW, Washington,
D.C. 20429, toll free on (800) 688-FDIC (3342), Monday through Friday between
8:00 a.m. and 5:00 p.m., Eastern time. State member banks should contact their
Federal Reserve District Bank.
<PAGE> 25
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-1
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
Consolidated Report of Income
for the period January 1, 1994-June 31, 1994
All Report of Income schedules are to be reported on a calendar year-to-date
basis in thousands of dollars.
Schedule RI--Income Statement
__________
| I480 | <-
------------ --------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
|--------------------------------------------------------------------------------------------------------------------
<S> <C>
1. Interest income: | ////////////////// |
a. Interest and fee income on loans: | ////////////////// |
(1) In domestic offices: | ////////////////// |
(a) Loans secured by real estate ................................................... | 4011 196,635 | 1.a.(1)(a),
(b) Loans to depository institutions ............................................... | 4019 126 | 1.a.(1)(b)
(c) Loans to finance agricultural production and other loans to farmers ............ | 4024 45 | 1.a.(1)(c)
(d) Commercial and industrial loans ................................................ | 4012 81,941 | 1.a.(1)(d)
(e) Acceptances of other banks ..................................................... | 4026 3 | 1.a.(1)(e)
(f) Loans to individuals for household, family, and other personal expenditures: | ////////////////// |
(1) Credit cards and related plans ............................................. | 4054 1,399 | 1.a.(1)(f)(1)
(2) Other ...................................................................... | 4055 16,286 | 1.a.(1)(f)(2)
(g) Loans to foreign governments and official institutions ......................... | 4056 0 | 1.a.(1)(g)
(h) Obligations (other than securities and leases) of states and political | ////////////////// |
subdivisions in the U.S.: | ////////////////// |
(1) Taxable obligations ........................................................ | 4503 31 | 1.a.(1)(h)(1)
(2) Tax-exempt obligations ..................................................... | 4504 1,398 | 1.a.(1)(h)(2)
(i) All other loans in domestic offices ............................................ | 4058 16,786 | 1.a.(1)(i)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs ...................... | 4059 0 | 1.a.(2)
b. Income from lease financing receivables: | ////////////////// |
(1) Taxable leases ..................................................................... | 4505 91 | 1.b.(1)
(2) Tax-exempt leases .................................................................. | 4307 0 | 1.b.(2)
c. Interest income on balances due from depository institutions:(1) | ////////////////// |
(1) In domestic offices ................................................................ | 4105 3 | 1.c.(1)
(2) In foreign offices, Edge and Agreement subsidiaries, and IBFs ...................... | 4106 1,917 | 1.c.(2)
d. Interest and dividend income on securities: | ////////////////// |
(1) U.S. Treasury securities and U.S. Government agency and corporation obligations .... | 4027 103,941 | 1.d.(1)
(2) Securities issued by states and political subdivisions in the U.S.: | ////////////////// |
(a) Taxable securities ............................................................. | 4506 0 | 1.d.(2)(a)
(b) Tax-exempt securities .......................................................... | 4507 9 | 1.d.(2)(b)
(3) Other domestic debt securities ..................................................... | 3657 29,126 | 1.d.(3)
(4) Foreign debt securities ............................................................ | 3658 94 | 1.d.(4)
(5) Equity securities (including investments in mutual funds) .......................... | 3659 1,408 | 1.d.(5)
e. Interest income from assets held in trading accounts ................................... | 4069 0 | 1.e.
----------------------
</TABLE>
____________
(1) Includes interest income on time certificates of deposit not
held in trading accounts.
3
<PAGE> 26
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-2
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
<TABLE>
<CAPTION>
Schedule RI--Continued
----------------
| Year-to-date |
---------------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- ----------------------------------------------------------------------------------- --------------
<S> <C>
1. Interest income (continued) | |
f. Interest income on federal funds sold and securities purchased | ////////////////// |
under agreements to resell in domestic offices of the bank and of | ////////////////// |
its Edge and Agreement subsidiaries, and in IBFs .................... | 4020 1,330 | 1.f.
g. Total interest income (sum of items 1.a through 1.f) ................ | 4107 452,569 | 1.g.
2. Interest expense: | ////////////////// |
a. Interest on deposits: | ////////////////// |
(1) Interest on deposits in domestic offices: | ////////////////// |
(a) Transaction accounts (NOW accounts, ATS accounts, and | ////////////////// |
telephone and preauthorized transfer accounts) .............. | 4508 5,649 | 2.a.(1)(a)
(b) Nontransaction accounts: | ////////////////// |
(1) Money market deposit accounts (MMDAs) ................... | 4509 7,486 | 2.a.(1)(b)(1)
(2) Other savings deposits .................................. | 4511 21,212 | 2.a.(1)(b)(2)
(3) Time certificates of deposit of $100,000 or more ........ | 4174 11,912 | 2.a.(1)(b)(3)
(4) All other time deposits ................................. | 4512 37,615 | 2.a.(1)(b)(4)
(2) Interest on deposits in foreign offices, Edge and Agreement | ////////////////// |
subsidiaries, and IBFs .......................................... | 4172 2,737 | 2.a.(2)
b. Expense of federal funds purchased and securities sold under | ////////////////// |
agreements to repurchase in domestic offices of the bank and of | ////////////////// |
its Edge and Agreement subsidiaries, and in IBFs .................... | 4180 77,469 | 2.b.
c. Interest on demand notes issued to the U.S. Treasury and on | ////////////////// |
other borrowed money ................................................ | 4185 8,839 | 2.c.
d. Interest on mortgage indebtedness and obligations under | ////////////////// |
capitalized leases .................................................. | 4072 436 | 2.d.
e. Interest on subordinated notes and debentures ....................... | 4200 0 | 2.e.
f. Total interest expense (sum of items 2.a through 2.e) ............... | 4073 173,382 | 2.f.
---------------------------
3. Net interest income (item 1.g minus 2.f) ............................... | ////////////////// | RIAD 4074 | 279,187 | 3.
---------------------------
4. Provisions: | ////////////////// |
---------------------------
a. Provision for loan and lease losses ................................. | ////////////////// | RIAD 4230 | (1,933)| 4.a.
b. Provision for allocated transfer risk ............................... | ////////////////// | RIAD 4243 | 0 | 4.b.
---------------------------
5. Noninterest income: | ////////////////// |
a. Income from fiduciary activities .................................... | 4070 35,011 | 5.a.
b. Service charges on deposit accounts in domestic offices ............. | 4080 33,116 | 5.b.
c. Trading gains (losses) and fees from foreign exchange transactions .. | 4075 (286)| 5.c.
d. Other foreign transaction gains (losses) ............................ | 4076 0 | 5.d.
e. Gains (losses) and fees from assets held in trading accounts ........ | 4077 1,046 | 5.e.
f. Other noninterest income: | ////////////////// |
(1) Other fee income................................................. | 5407 28,253 | 5.f.(1)
(2) All other noninterest income ................................... | 5408 22,474 | 5.f.(2)
---------------------------
g. Total noninterest income (sum of items 5.a through 5.f) ............. | ////////////////// | RIAD 4079 | 119,614 | 5.g.
6. a. Realized gains (losses) on held-to-maturity securities .............. | ////////////////// | RIAD 3521 | 467 | 6.a.
b. Realized gains (losses) on available-for-sale securities ............ | ////////////////// | RIAD 3196 | (3,041)| 6.b.
---------------------------
7. Noninterest expense: | ////////////////// |
a. Salaries and employee benefits ...................................... | 4135 140,465 | 7.a.
b. Expenses of premises and fixed assets (net of rental income) | ////////////////// |
(excluding salaries and employee benefits and mortgage interest) .... | 4217 44,063 | 7.b.
c. Other noninterest expense* .......................................... | 4092 152,231 | 7.c.
---------------------------
d. Total noninterest expense (sum of items 7.a through 7.c) ............ | ////////////////// | RIAD 4093 | 336,759 | 7.d.
---------------------------
8. Income (loss) before income taxes and extraordinary items and other | ////////////////// |
---------------------------
adjustments (item 3 plus or minus items 4.a, 4.b, 5.g, 6.a, 6.b, and 7.d)| ////////////////// | RIAD 4301 | 61,401 | 8.
9. Applicable income taxes (on item 8) .................................... | ////////////////// | RIAD 4302 | 19,897 | 9.
---------------------------
10. Income (loss) before extraordinary items and other adjustments | ////////////////// |
---------------------------
(item 8 minus 9)........................................................ | ////////////////// | RIAD 4300 | 41,504 | 10.
-------------------------------------------------
</TABLE>
____________
*Describe on Schedule RI-E--Explanations.
4
<PAGE> 27
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-3
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RI--Continued
<TABLE>
<CAPTION>
----------------
| Year-to-date |
------ --------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- ----------------------------------------------------------------------------------- --------------
<S> <C> <C> <C> <C> <C>
11. Extraordinary items and other adjustments: | ////////////////// |
a. Extraordinary items and other adjustments, gross of income taxes* . | 4310 0 | 11.a.
b. Applicable income taxes (on item 11.a)* ........................... | 4315 0 | 11.b.
c. Extraordinary items and other adjustments, net of income taxes | ////////////////// |
(item 11.a minus 11.b) ............................................ | ////////////////// --------------------------
| ////////////////// | RIAD 4320 | 0 | 11.c.
12. Net income (loss) (sum of items 10 and 11.c) ......................... | ////////////////// | RIAD 4340 | 41,504 | 12.
-------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
--------------
Memoranda | Year-to-date |
------ --------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- ------------------------------------------------------------------------------------------------------ --------------------
<S> <C> <C> <C>
1. Interest expense incurred to carry tax-exempt securities, loans, and leases acquired after | ////////////////// |
August 7, 1986, that is not deductible for federal income tax purposes .......................... | 4513 5 | M.1.
2. Fee income from the sale and servicing of mutual funds and annuities in domestic offices | ////////////////// |
(included in Schedule RI, item 5.g) ............................................................. | 8431 670 | M.2.
3. Estimated foreign tax credit included in applicable income taxes, items 9 and 11.b above ........ | 4309 0 | M.3.
4. To be completed only by banks with $1 billion or more in total assets: | ////////////////// |
Taxable equivalent adjustment to "Income (loss) before income taxes and extraordinary | ////////////////// |
items and other adjustments" (item 8 above) ..................................................... | 1244 1,207 | M.4.
5. Number of full-time equivalent employees on payroll at end of current period (round to | //// Number |
nearest whole number) ........................................................................... | 4150 5,854 | M.5.
</TABLE>
Schedule RI-A--Changes in Equity Capital
Indicate decreases and losses in parentheses.
<TABLE>
<CAPTION>
--------
| 1483|
--------------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou|
- ------------------------------------------------------------------------------------------------------ --------------------
<S> <C> <C> <C> <C>
1. Total equity capital originally reported in the December 31, 1993, Reports of Condition | ////////////////// |
and Income ...................................................................................... | 3215 1,131,626 | 1.
2. Equity capital adjustments from amended Reports of Income, net* ................................. | 3216 0 | 2.
3. Amended balance end of previous calendar year (sum of items 1 and 2) ............................ | 3217 1,131,626 | 3.
4. Net income (loss) (must equal Schedule RI, item 12) ............................................. | 4340 41,504 | 4.
5. Sale, conversion, acquisition, or retirement of capital stock, net .............................. | 4346 0 | 5.
6. Changes incident to business combinations, net .................................................. | 4356 94,072 | 6.
7. LESS: Cash dividends declared on preferred stock ................................................ | 4470 0 | 7.
8. LESS: Cash dividends declared on common stock ................................................... | 4460 43,150 | 8.
9. Cumulative effect of changes in accounting principles from prior years* (see instructions | ////////////////// |
for this schedule)............................................................................... | 4411 0 | 9.
10. Corrections of material accounting errors from prior years* (see instructions for this schedule) | 4412 0 | 10.
11. Change in net unrealized holding gains (losses) on available-for-sale securities ................ | 8433 (20,830)| 11.
12. Foreign currency translation adjustments ........................................................ | 4414 0 | 12.
13. Other transactions with parent holding company* (not included in items 5, 7, or 8 above) ........ | 4415 0 | 13.
14. Total equity capital end of current period (sum of items 3 through 13) (must equal Schedule RC, | ////////////////// |
item 28) ........................................................................................ | 3210 1,203,222 | 14.
----------------------
</TABLE>
____________
*Describe on Schedule RI-E--Explanations.
5
<PAGE> 28
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-4
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RI-B--Charge-offs and Recoveries and Changes
in Allowance for Loan and Lease Losses
Part I. Charge-offs and Recoveries on Loans and Leases
Part I excludes charge-offs and recoveries through the allocated transfer risk
reserve.
<TABLE>
<CAPTION> --------
| I486 |
--------------------------------- --------
| (Column A) | (Column B) |
| Charge-offs | Recoveries |
-------------------- --------------------
| calendar year-to-date |
-----------------------------------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou | RIAD Bil Mil Thou |
- ------------------------------------------------------------------------------ -------------------- --------------------
<S> <C> <C> <C> <C> <C>
1. Loans secured by real estate: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ......................................... | 4651 54,212 | 4661 3,354 | 1.a.
b. To non-U.S. addressees (domicile) ..................................... | 4652 0 | 4662 0 | 1.b.
2. Loans to depository institutions and acceptances of other banks: | ////////////////// | ////////////////// |
a. To U.S. banks and other U.S. depository institutions .................. | 4653 0 | 4663 0 | 2.a.
b. To foreign banks ...................................................... | 4654 0 | 4664 0 | 2.b.
3. Loans to finance agricultural production and other loans to farmers ...... | 4655 0 | 4665 1 | 3.
4. Commercial and industrial loans: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ......................................... | 4645 9,339 | 4617 3,474 | 4.a.
b. To non-U.S. addressees (domicile) ..................................... | 4646 0 | 4618 0 | 4.b.
5. Loans to individuals for household, family, and other personal | ////////////////// | ////////////////// |
expenditures: | ////////////////// | ////////////////// |
a. Credit cards and related plans ........................................ | 4656 767 | 4666 330 | 5.a.
b. Other (includes single payment, installment, and all student loans) ... | 4657 1,268 | 4667 1,903 | 5.b.
6. Loans to foreign governments and official institutions ................... | 4643 0 | 4627 0 | 6.
7. All other loans .......................................................... | 4644 1,083 | 4628 164 | 7.
8. Lease financing receivables: | ////////////////// | ////////////////// |
a. Of U.S. addressees (domicile) ......................................... | 4658 0 | 4668 0 | 8.a.
b. Of non-U.S. addressees (domicile) ..................................... | 4659 0 | 4669 0 | 8.b.
9. Total (sum of items 1 through 8) ......................................... | 4635 66,669 | 4605 9,226 | 9.
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------
| Cumulative | Cumulative |
| Charge-offs | Recoveries |
| Jan. 1, 1986 | Jan. 1, 1986 |
Memoranda | through | through |
Dollar Amounts in Thousands | Dec. 31, 1989 | Report Date |
- ------------------------------------------------------------------------------ -------------------- --------------------
<S> <C> <C> <C> <C>
To be completed by national banks only. | RIAD Bil Mil Thou | RIAD Bil Mil Thou |
-------------------- --------------------
1. Charge-offs and recoveries of Special-Category Loans, as defined for this | ////////////////// | ////////////////// |
Call Report by the Comptroller of the Currency ........................... | ////////////////// | 4784 645 | M.1.
-------------------------------------------
-------------------------------------------
| (Column A) | (Column B) |
Memorandum items 2 and 3 are to be completed by all banks. | Charge-offs | Recoveries |
-------------------- --------------------
2. Loans to finance commercial real estate, construction, and land | calendar year-to-date |
development activities (not secured by real estate) included in -----------------------------------------
| RIAD Bil Mil Thou | RIAD Bil Mil Thou |
-------------------- --------------------
Schedule RI-B, part I, items 4 and 7, above .............................. | 5409 761 | 5410 199 | M.2.
3. Loans secured by real estate in domestic offices (included in | ////////////////// | ////////////////// |
Schedule RI-B, part I, item 1, above): | ////////////////// | ////////////////// |
a. Construction and land development ..................................... | 3582 3,580 | 3583 463 | M.3.a.
b. Secured by farmland ................................................... | 3584 0 | 3585 13 | M.3.b.
c. Secured by 1-4 family residential properties: | ////////////////// | ////////////////// |
(1) Revolving, open-end loans secured by 1-4 family residential | ////////////////// | ////////////////// |
properties and extended under lines of credit ..................... | 5411 1,307 | 5412 33 | M.3.c.(1)
(2) All other loans secured by 1-4 family residential properties ...... | 5413 23,678 | 5414 848 | M.3.c.(2)
d. Secured by multifamily (5 or more) residential properties ............. | 3588 2,663 | 3589 75 | M.3.d.
e. Secured by nonfarm nonresidential properties .......................... | 3590 22,984 | 3591 1,922 | M.3.e.
-------------------------------------------
</TABLE>
6
<PAGE> 29
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-5
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
Schedule RI-B--Continued
Part II. Changes in Allowance for Loan and
Lease Losses and in Allocated
Transfer Risk Reserve
___________________________________________
| (Column A) | (Column B) |
| Allowance for | Allocated |
| Loan and Lease | Transfer Risk |
| Losses | Reserve |
-------------------- --------------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou | RIAD Bil Mil Thou |
- ------------------------------------------------------------------------------ -------------------- --------------------
1. Balance originally reported in the December 31, 1993, Reports of | ////////////////// | ////////////////// |
Condition and Income ..................................................... | 3124 350,900 | 3131 0 | 1.
2. Recoveries (column A must equal part I, item 9, column B above) .......... | 4605 9,226 | 3132 0 | 2.
3. LESS: Charge-offs (column A must equal part I, item 9, column A above) ... | 4635 66,669 | 3133 0 | 3.
4. Provision (column A must equal Schedule RI, item 4.a; column B must | ////////////////// | ////////////////// |
equal Schedule RI, item 4.b) ............................................. | 4230 1,933 | 4243 0 | 4.
5. Adjustments* (see instructions for this schedule) ........................ | 4815 18,265 | 3134 0 | 5.
6. Balance end of current period (sum of items 1 through 5) (column A must | ////////////////// | ////////////////// |
equal Schedule RC, item 4.b; column B must equal Schedule RC, | ////////////////// | ////////////////// |
item 4.c) ................................................................ | 3123 309,789 | 3128 0 | 6.
-------------------------------------------
____________
*Describe on Schedule RI-E--Explanations.
Schedule RI-C--Applicable Income Taxes by Taxing Authority
Schedule RI-C is to be reported with the December Report of Income.
----------
| I489 | <-
------------ --------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- --------------------------------------------------------------------------------------------------- --------------------
1. Federal ....................................................................................... | 4780 N/A | 1.
2. State and local................................................................................ | 4790 N/A | 2.
3. Foreign ....................................................................................... | 4795 N/A | 3.
4. Total (sum of items 1 through 3) (must equal sum of Schedule RI, items 9 and 11.b) ............ | 4770 N/A | 4.
----------------------------
5. Deferred portion of item 4 ........................................ | RIAD 4772 | N/A | ////////////////// | 5.
--------------------------------------------------
</TABLE>
7
<PAGE> 30
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-6
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RI-D--Income from International Operations
For all banks with foreign offices, Edge or Agreement subsidiaries, or IBFs
where international operations account for more than 10 percent of total
revenues, total assets, or net income.
Part I. Estimated Income from International Operations
<TABLE>
<CAPTION>
__________
| I492 | <-
------ --------
| Year-to-date |
------ --------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- ------------------------------------------------------------------------------------------------- --------------------
<S> <C>
1. Interest income and expense booked at foreign offices, Edge and Agreement subsidiaries, | ////////////////// |
and IBFs: | ////////////////// |
a. Interest income booked ................................................................... | 4837 N/A | 1.a.
b. Interest expense booked .................................................................. | 4838 N/A | 1.b.
c. Net interest income booked at foreign offices, Edge and Agreement subsidiaries, and IBFs | ////////////////// |
(item 1.a minus 1.b)..................................................................... | 4839 N/A | 1.c.
2. Adjustments for booking location of international operations: | ////////////////// |
a. Net interest income attributable to international operations booked at domestic offices .. | 4840 N/A | 2.a.
b. Net interest income attributable to domestic business booked at foreign offices .......... | 4841 N/A | 2.b.
c. Net booking location adjustment (item 2.a minus 2.b) ..................................... | 4842 N/A | 2.c.
3. Noninterest income and expense attributable to international operations: | ////////////////// |
a. Noninterest income attributable to international operations .............................. | 4097 N/A | 3.a.
b. Provision for loan and lease losses attributable to international operations ............. | 4235 N/A | 3.b.
c. Other noninterest expense attributable to international operations ....................... | 4239 N/A | 3.c.
d. Net noninterest income (expense) attributable to international operations (item 3.a | ////////////////// |
minus 3.b and 3.c) ....................................................................... | 4843 N/A | 3.d.
4. Estimated pretax income attributable to international operations before capital allocation | ////////////////// |
adjustment (sum of items 1.c, 2.c, and 3.d) ................................................. | 4844 N/A | 4.
5. Adjustment to pretax income for internal allocations to international operations to reflect | ////////////////// |
the effects of equity capital on overall bank funding costs ................................. | 4845 N/A | 5.
6. Estimated pretax income attributable to international operations after capital allocation | ////////////////// |
adjustment (sum of items 4 and 5) ........................................................... | 4846 N/A | 6.
7. Income taxes attributable to income from international operations as estimated in item 6 .... | 4797 N/A | 7.
8. Estimated net income attributable to international operations (item 6 minus 7) .............. | 4341 N/A | 8.
----------------------
</TABLE>
<TABLE>
<CAPTION>
Memoranda ______________________
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- ------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C>
1. Intracompany interest income included in item 1.a above ..................................... | 4847 N/A | M.1.
2. Intracompany interest expense included in item 1.b above .................................... | 4848 N/A | M.2.
----------------------
</TABLE>
Part II. Supplementary Details on Income from International Operations Required
by the Departments of Commerce and Treasury for Purposes of the U.S.
International Accounts and the U.S. National Income and Product Accounts
<TABLE>
<CAPTION>
----------------
| Year-to-date |
------ --------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- ------------------------------------------------------------------------------------------------- --------------------
<S> <C>
1. Interest income booked at IBFs .............................................................. | 4849 N/A | 1.
2. Interest expense booked at IBFs ............................................................. | 4850 N/A | 2.
3. Noninterest income attributable to international operations booked at domestic offices | ////////////////// |
(excluding IBFs): | ////////////////// |
a. Gains (losses) and extraordinary items ................................................... | 5491 N/A | 3.a.
b. Fees and other noninterest income ........................................................ | 5492 N/A | 3.b.
4. Provision for loan and lease losses attributable to international operations booked at | ////////////////// |
domestic offices (excluding IBFs) ........................................................... | 4852 N/A | 4.
5. Other noninterest expense attributable to international operations booked at domestic offices | ////////////////// |
(excluding IBFs) ............................................................................ | 4853 N/A | 5.
----------------------
</TABLE>
8
<PAGE> 31
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-7
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RI-E--Explanations
Schedule RI-E is to be completed each quarter on a calendar year-to-date basis.
Detail all adjustments in Schedules RI-A and RI-B, all extraordinary items and
other adjustments in Schedule RI, and all significant items of other
noninterest income and other noninterest expense in Schedule RI. (See
instructions for details.)
<TABLE>
<CAPTION> --------
| I495 |
------ --------
| Year-to-date |
------ --------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- --------------------
<S> <C>
1. All other noninterest income (from Schedule RI, item 5.f.(2)) | ////////////////// |
Report amounts that exceed 10% of Schedule RI, item 5.f.(2): | ////////////////// |
a. Net gains on other real estate owned ..................................................... | 5415 0 | 1.a.
b. Net gains on sales of loans .............................................................. | 5416 0 | 1.b.
c. Net gains on sales of premises and fixed assets .......................................... | 5417 0 | 1.c.
Itemize and describe the three largest other amounts that exceed 10% of | ////////////////// |
Schedule RI, item 5.f.(2): | ////////////////// |
-------------
d. | TEXT 4461 | REIMBURSEMENT FROM AFFILIATES________________________________________________| 4461 13,983 | 1.d.
-----------
e. | TEXT 4462 | | 4462 | 1.e.
----------- ------------------------------------------------------------------------------
f. | TEXT 4463 | | 4463 | 1.f.
-------------------------------------------------------------------------------------------
2. Other noninterest expense (from Schedule RI, item 7.c): | ////////////////// |
a. Amortization expense of intangible assets ................................................ | 4531 4,862 | 2.a.
Report amounts that exceed 10% of Schedule RI, item 7.c: | ////////////////// |
b. Net losses on other real estate owned .................................................... | 5418 0 | 2.b.
c. Net losses on sales of loans ............................................................. | 5419 0 | 2.c.
d. Net losses on sales of premises and fixed assets ......................................... | 5420 0 | 2.d.
Itemize and describe the three largest other amounts that exceed 10% of | ////////////////// |
Schedule RI, item 7.c: | ////////////////// |
-------------
e. | TEXT 4464 |_ACQUISITION COSTS____________________________________________________________| 4464 43,800 | 2.e.
-----------
f. | TEXT 4467 | RESTRUCTURING CHARGES | 4467 19,800 | 2.f.
----------- ------------------------------------------------------------------------------
g. | TEXT 4468 | | 4468 | 2.g.
-------------------------------------------------------------------------------------------
3. Extraordinary items and other adjustments (from Schedule RI, item 11.a) and | ////////////////// |
applicable income tax effect (from Schedule RI, item 11.b) (itemize and describe | ////////////////// |
all extraordinary items and other adjustments): | ////////////////// |
-------------
a. (1) | TEXT 4469 | | 4469 | 3.a.(1)
---------------------------------------------------------------------------------------
(2) Applicable income tax effect | RIAD 4486 | | ////////////////// | 3.a.(2)
------------- ----------------------------
b. (1) | TEXT 4487 | | 4487 | 3.b.(1)
---------------------------------------------------------------------------------------
(2) Applicable income tax effect | RIAD 4488 | | ////////////////// | 3.b.(2)
------------- ----------------------------
c. (1) | TEXT 4489 | | 4489 | 3.c.(1)
---------------------------------------------------------------------------------------
(2) Applicable income tax effect | RIAD 4491 | | ////////////////// | 3.c.(2)
----------------------------
4. Equity capital adjustments from amended Reports of Income (from Schedule RI-A, | ////////////////// |
item 2) (itemize and describe all adjustments): | ////////////////// |
-------------
a. | TEXT 4492 | | 4492 | 4.a.
----------- ------------------------------------------------------------------------------
b. | TEXT 4493 | | 4493 | 4.b.
-------------------------------------------------------------------------------------------
5. Cumulative effect of changes in accounting principles from prior years (from | ////////////////// |
Schedule RI-A, item 9) (itemize and describe all changes in accounting principles): | ////////////////// |
-------------
a. | TEXT 4494 | | 4494 | 5.a.
----------- ------------------------------------------------------------------------------
b. | TEXT 4495 | | 4495 | 5.b.
-------------------------------------------------------------------------------------------
6. Corrections of material accounting errors from prior years (from Schedule RI-A, | ////////////////// |
item 10) (itemize and describe all corrections): | ////////////////// |
-------------
a. | TEXT 4496 | | 4496 | 6.a.
----------- ------------------------------------------------------------------------------
b. | TEXT 4497 | | 4497 | 6.b.
------------------------------------------------------------------------------------------- --------------------
</TABLE>
9
<PAGE> 32
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RI-8
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
<TABLE>
<CAPTION>
Schedule RI-E--Continued
----------------
| Year-to-date |
------ --------------
Dollar Amounts in Thousands | RIAD Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- --------------------
<S> <C>
7. Other transactions with parent holding company (from Schedule RI-A, item 13) | ////////////////// |
(itemize and describe all such transactions): | ////////////////// |
-------------
a. | TEXT 4498 | | 4498 30,000 | 7.a.
----------- ------------------------------------------------------------------------------
b. | TEXT 4499 | | 4499 | 7.b.
-------------------------------------------------------------------------------------------
8. Adjustments to allowance for loan and lease losses (from Schedule RI-B, part II, | ////////////////// |
item 5) (itemize and describe all adjustments): | ////////////////// |
-------------
a. | TEXT 4521 | GATEWAY SAVINGS BANK POOLING
| | 4521 18,265 | 8.a.
-------------------------------------------------------------------------------------------
b. | TEXT 4522 | | 4522 | 8.b.
-------------------------------------------------------------------------------------------
____________________
9. Other explanations (the space below is provided for the bank to briefly describe, | I498 | I499 | <-
at its option, any other significant items affecting the Report of Income): ----------------------
No comment |X| (RIAD 4769)
Other explanations (please type or print clearly):
(TEXT 4769)
</TABLE>
10
<PAGE> 33
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-1
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for June 30, 1994
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding as of the last business day of the
quarter.
Schedule RC--Balance Sheet
----------
| C400 | <-
------------ --------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- --------------------
ASSETS | ////////////////// |
1. Cash and balances due from depository institutions (from Schedule RC-A): | ////////////////// |
a. Noninterest-bearing balances and currency and coin(1) ................................... | 0081 85,210 | 1.a.
b. Interest-bearing balances(2) ............................................................ | 0071 145,435 | 1.b.
2. Securities: | ////////////////// |
a. Held-to-maturity securities (from Schedule RC-B, column A) .............................. | 1754 3,906,126 | 2.a.
b. Available-for-sale securities (from Schedule RC-B, column D) ............................ | 1773 779,309 | 2.b.
3. Federal funds sold and securities purchased under agreements to resell in domestic offices | ////////////////// |
of the bank and of its Edge and Agreement subsidiaries, and in IBFs: | ////////////////// |
a. Federal funds sold ...................................................................... | 0276 231,300 | 3.a.
b. Securities purchased under agreements to resell ......................................... | 0277 10 | 3.b.
4. Loans and lease financing receivables: ____________________________| ////////////////// |
a. Loans and leases, net of unearned income (from Schedule RC-C) | RCFD 2122 | 9,146,312 | ////////////////// | 4.a.
b. LESS: Allowance for loan and lease losses ................... | RCFD 3123 | 309,789 | ////////////////// | 4.b.
c. LESS: Allocated transfer risk reserve ....................... | RCFD 3128 | 0 | ////////////////// | 4.c.
----------------------------| |
d. Loans and leases, net of unearned income, | ////////////////// |
allowance, and reserve (item 4.a minus 4.b and 4.c) ..................................... | 2125 8,836,523 | 4.d.
5. Assets held in trading accounts ............................................................ | 3545 0 | 5.
6. Premises and fixed assets (including capitalized leases) ................................... | 2145 178,499 | 6.
7. Other real estate owned (from Schedule RC-M) ............................................... | 2150 32,388 | 7.
8. Investments in unconsolidated subsidiaries and associated companies (from Schedule RC-M) ... | 2130 0 | 8.
9. Customers' liability to this bank on acceptances outstanding ............................... | 2155 31,941 | 9.
10. Intangible assets (from Schedule RC-M) ..................................................... | 2143 77,424 | 10.
11. Other assets (from Schedule RC-F) .......................................................... | 2160 644,600 | 11.
12. Total assets (sum of items 1 through 11) ................................................... | 2170 15,740,755 | 12.
----------------------
</TABLE>
____________
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held in trading accounts.
11
<PAGE> 34
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-2
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
Schedule RC--Continued
---------------------------
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
- ----------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C>
LIABILITIES | /////////////////////// |
13. Deposits: | /////////////////////// |
a. In domestic offices (sum of totals of columns A and C from Schedule RC-E, part I) ..... | RCON 2200 9,973,814 | 13.a.
----------------------------
(1) Noninterest-bearing(1) ................................ | RCON 6631 2,762,398 | /////////////////////// | 13.a.(1)
(2) Interest-bearing ...................................... | RCON 6636 7,001,416 | /////////////////////// | 13.a.(2)
----------------------------
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs (from Schedule RC-E, | /////////////////////// |
part II) .............................................................................. | RCFN 2200 196,619 | 13.b.
----------------------------
(1) Noninterest-bearing ................................... | RCFN 6631 0 | /////////////////////// | 13.b.(1)
(2) Interest-bearing ...................................... | RCFN 6636 196,619 | /////////////////////// | 13.b.(2)
----------------------------
14. Federal funds purchased and securities sold under agreements to repurchase in domestic | /////////////////////// |
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs: | /////////////////////// |
a. Federal funds purchased ............................................................... | RCFD 0278 1,860,850 | 14.a.
b. Securities sold under agreements to repurchase ........................................ | RCFD 0279 1,284,572 | 14.b.
15. a. Demand notes issued to the U.S. Treasury .............................................. | RCON 2840 447,595 | 15.a.
b. Trading liabilities ................................................................... | RCFD 3548 6,575 | 15.b.
16. Other borrowed money: | /////////////////////// |
a. With original maturity of one year or less ............................................ | RCFD 2332 497,414 | 16.a.
b. With original maturity of more than one year .......................................... | RCFD 2333 260,803 | 16.b.
17. Mortgage indebtedness and obligations under capitalized leases ........................... | RCFD 2910 9,784 | 17.
18. Bank's liability on acceptances executed and outstanding ................................. | RCFD 2920 31,941 | 18.
19. Subordinated notes and debentures ........................................................ | RCFD 3200 0 | 19.
20. Other liabilities (from Schedule RC-G) ................................................... | RCFD 2930 177,566 | 20.
21. Total liabilities (sum of items 13 through 20) ........................................... | RCFD 2948 14,537,533 | 21.
| /////////////////////// |
22. Limited-life preferred stock and related surplus ......................................... | RCFD 3282 0 | 22.
EQUITY CAPITAL | /////////////////////// |
23. Perpetual preferred stock and related surplus ............................................ | RCFD 3838 0 | 23.
24. Common stock ............................................................................. | RCFD 3230 19,487 | 24.
25. Surplus (exclude all surplus related to preferred stock).................................. | RCFD 3839 926,125 | 25.
26. a. Undivided profits and capital reserves ................................................ | RCFD 3632 275,774 | 26.a.
b. Net unrealized holding gains (losses) on available-for-sale securities ................ | RCFD 8434 (18,164)| 26.b.
27. Cumulative foreign currency translation adjustments ...................................... | RCFD 3284 0 | 27.
28. Total equity capital (sum of items 23 through 27) ........................................ | RCFD 3210 1,203,222 | 28.
29. Total liabilities, limited-life preferred stock, and equity capital (sum of items 21, 22, | /////////////////////// |
and 28) .................................................................................. | RCFD 3300 15,740,755 | 29.
---------------------------
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that best describes the Number
most comprehensive level of auditing work performed for the bank by independent external ------------------
auditors as of any date during 1993 .............................................................. | RCFD 6724 N/A | M.1.
------------------
1 = Independent audit of the bank conducted in accordance 4 = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
</TABLE>
____________
(1) Includes total demand deposits and noninterest-bearing time
and savings deposits.
12
<PAGE> 35
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-3
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
<TABLE>
<CAPTION>
Schedule RC-A--Cash and Balances Due From Depository Institutions
Exclude assets held in trading accounts.
----------
| C405 | <-
--------------------------------- --------
| (Column A) | (Column B) |
| Consolidated | Domestic |
| Bank | Offices |
-------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCON Bil Mil Thou |
- ----------------------------------------------------------------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
1. Cash items in process of collection, unposted debits, and currency and | ////////////////// | ////////////////// |
coin .................................................................... | 0022 672,793 | ////////////////// | 1.
a. Cash items in process of collection and unposted debits .............. | ////////////////// | 0020 520,047 | 1.a.
b. Currency and coin .................................................... | ////////////////// | 0080 152,746 | 1.b.
2. Balances due from depository institutions in the U.S. ................... | ////////////////// | 0082 133,071 | 2.
a. U.S. branches and agencies of foreign banks (including their IBFs) ... | 0083 0 | ////////////////// | 2.a.
b. Other commercial banks in the U.S. and other depository institutions | ////////////////// | ////////////////// |
in the U.S. (including their IBFs) ................................... | 0085 133,071 | ////////////////// | 2.b.
3. Balances due from banks in foreign countries and foreign central banks .. | ////////////////// | 0070 136,505 | 3.
a. Foreign branches of other U.S. banks ................................. | 0073 0 | ////////////////// | 3.a.
b. Other banks in foreign countries and foreign central banks ........... | 0074 136,505 | ////////////////// | 3.b.
4. Balances due from Federal Reserve Banks ................................. | 0090 78,276 | 0090 78,276 | 4.
5. Total (sum of items 1 through 4) (total of column A must equal | ////////////////// | ////////////////// |
Schedule RC, sum of items 1.a and 1.b) .................................. | 0010 1,020,645 | 0010 1,020,645 | 5.
-------------------------------------------
----------------------
Memorandum Dollar Amounts in Thousands | RCON Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- --------------------
1. Noninterest-bearing balances due from commercial banks in the U.S. (included in item 2, | ////////////////// |
column B above) .............................................................................. | 0050 132,636 | M.1.
----------------------
</TABLE>
13
<PAGE> 36
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-4
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
<TABLE>
<CAPTION>
Schedule RC-B--Securities
Exclude assets held in trading accounts. ---------
| C410 |
------------------------------------------------------------------------------------
| Held-to-maturity | Available-for-sale |
----------------------------------------- -----------------------------------------
| (Column A) | (Column B) | (Column C) | (Column D) |
| Amortized Cost | Fair Value | Amortized Cost | Fair Value(1) |
-------------------- -------------------- -------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
- -------------------------------------- -------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
1. U.S. Treasury securities ......... | 0211 1,068,833 | 0213 1,016,552 | 1286 534,139 | 1287 515,844 | 1.
2. U.S. Government agency | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and corporation obligations | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(exclude mortgage-backed | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities): | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Issued by U.S. Govern- | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
ment agencies(2) .............. | 1289 0 | 1290 0 | 1291 0 | 1293 0 | 2.a.
b. Issued by U.S. | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
Government-sponsored | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
agencies(3) ................... | 1294 0 | 1295 0 | 1297 0 | 1298 0 | 2.b.
3. Securities issued by states | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and political subdivisions | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
in the U.S.: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. General obligations ........... | 1676 0 | 1677 0 | 1678 135 | 1679 137 | 3.a.
b. Revenue obligations ........... | 1681 0 | 1686 0 | 1690 0 | 1691 0 | 3.b.
c. Industrial development | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and similar obligations ....... | 1694 0 | 1695 0 | 1696 0 | 1697 0 | 3.c.
4. Mortgage-backed | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities (MBS): | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Pass-through securities: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(1) Guaranteed by | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
GNMA ...................... | 1698 0 | 1699 0 | 1701 78,175 | 1702 80,542 | 4.a.(1)
(2) Issued by FNMA | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and FHLMC ................. | 1703 1,752,887 | 1705 1,708,934 | 1706 0 | 1707 0 | 4.a.(2)
(3) Privately-issued .......... | 1709 19,308 | 1710 18,253 | 1711 0 | 1713 0 | 4.a.(3)
b. CMOs and REMICs: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(1) Issued by FNMA | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and FHLMC ................. | 1714 0 | 1715 0 | 1716 0 | 1717 0 | 4.b.(1)
(2) Privately-issued | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
and collateralized | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
by MBS issued or | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
guaranteed by | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
FNMA, FHLMC, or | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
GNMA ...................... | 1718 0 | 1719 0 | 1731 0 | 1732 0 | 4.b.(2)
(3) All other privately- | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
issued .................... | 1733 146,608 | 1734 144,265 | 1735 151,600 | 1736 139,578 | 4.b.(3)
5. Other debt securities: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Other domestic debt | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities .................... | 1737 915,240 | 1738 904,035 | 1739 0 | 1741 0 | 5.a.
b. Foreign debt | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities .................... | 1742 3,250 | 1743 3,250 | 1744 0 | 1746 0 | 5.b.
-------------------------------------------------------------------------------------
</TABLE>
_____________
(1) Includes equity securities without readily determinable fair values at
historical cost in item 6.c, column D.
(2) Includes Small Business Administration "Guaranteed Loan Pool Certificates,"
U.S. Maritime Administration obligations, and Export-Import Bank
participation certificates.
(3) Includes obligations (other than pass-through securities, CMOs, and REMICs)
issued by the Farm Credit System, the Federal Home Loan Bank System, the
Federal Home Loan Mortgage Corporation, the Federal National Mortgage
Association, the Financing Corporation, Resolution Funding Corporation, the
Student Loan Marketing Association, and the Tennessee Valley Authority.
14
<PAGE> 37
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-5
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-B--Continued
<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
| Held-to-maturity | Available-for-sale |
----------------------------------------- -----------------------------------------
| (Column A) | (Column B) | (Column C) | (Column D) |
| Amortized Cost | Fair Value | Amortized Cost | Fair Value(1) |
-------------------- -------------------- -------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
- ------------------------------------ -------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C>
6. Equity securities: | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
a. Investments in mutual | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
funds ....................... | ////////////////// | ////////////////// | 1747 5,016 | 1748 5,016 | 6.a.
b. Other equity securities | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
with readily determin- | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
able fair values ............ | ////////////////// | ////////////////// | 1749 0 | 1751 0 | 6.b.
c. All other equity | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
securities(1) ............... | ////////////////// | ////////////////// | 1752 38,192 | 1753 38,192 | 6.c.
7. Total (sum of items 1 | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
through 6) (total of | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
column A must equal | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
Schedule RC, item 2.a) | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
(total of column D must | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
equal Schedule RC, | ////////////////// | ////////////////// | ////////////////// | ////////////////// |
item 2.b) ...................... | 1754 3,906,126 | 1771 3,795,289 | 1772 807,257 | 1773 779,309| 7.
-------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
---------
Memoranda | C412 | <-
----------- ---------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C>
1. Pledged securities(2) ......................................................................... | 0416 2,899,544 | M.1.
2. Maturity and repricing data for debt securities(2)(3)(4) (excluding those in nonaccrual status):| ////////////////// |
a. Fixed rate debt securities with a remaining maturity of: | ////////////////// |
(1) Three months or less ................................................................... | 0343 0 | M.2.a.(1)
(2) Over three months through 12 months .................................................... | 0344 22,223 | M.2.a.(2)
(3) Over one year through five years ....................................................... | 0345 2,058,261 | M.2.a.(3)
(4) Over five years ........................................................................ | 0346 2,384,920 | M.2.a.(4)
(5) Total fixed rate debt securities (sum of Memorandum items 2.a.(1) through 2.a.(4)) ..... | 0347 4,465,404 | M.2.a.(5)
b. Floating rate debt securities with a repricing frequency of: | ////////////////// |
(1) Quarterly or more frequently ........................................................... | 4544 6,016 | M.2.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ........................ | 4545 170,807 | M.2.b.(2)
(3) Every five years or more frequently, but less frequently than annually ................. | 4551 0 | M.2.b.(3)
(4) Less frequently than every five years................................................... | 4552 0 | M.2.b.(4)
(5) Total floating rate debt securities (sum of Memorandum items 2.b.(1) through 2.b.(4)) .. | 4553 176,823 | M.2.b.(5)
c. Total debt securities (sum of Memorandum items 2.a.(5) and 2.b.(5)) (must equal total debt | ////////////////// |
securities from Schedule RC-B, sum of items 1 through 5, columns A and D, minus nonaccrual | ////////////////// |
debt securities included in Schedule RC-N, item 9, column C) ............................... | 0393 4,642,227 | M.2.c.
3. Not applicable | ////////////////// |
4. Held-to-maturity debt securities restructured and in compliance with modified terms (included | ////////////////// |
in Schedule RC-B, items 3 through 5, column A, above) ......................................... | 5365 0 | M.4.
5. Not applicable | ////////////////// |
6. Floating rate debt securities with a remaining maturity of one year or less(2) (included in | ////////////////// |
Memorandum item 2.b.(5) above) ................................................................ | 5519 3,001 | M.6.
7. Amortized cost of held-to-maturity securities sold or transferred to available-for-sale or | ////////////////// |
trading securities during the calendar year-to-date ........................................... | 1778 238 | M.7.
</TABLE>
- ---------------
1) Includes equity securities without readily determinable fair values at
historical cost in item 6. c, column 0.
2) Includes held-to-maturity securities at amortized cost and
available-for-sale securities at fair value.
3) Exclude equity securities, e.g., investments in mutual funds, Federal
Reserve stock, common stock, and preferred stock.
4) Memorandum item 2 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
15
<PAGE> 38
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-6
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-C--Loans and Lease Financing Receivables
Part I. Loans and Leases
<TABLE>
<CAPTION>
--------
| C415 | <-
Do not deduct the allowance for loan and lease losses from amounts -------------------------------------------
reported in this schedule. Report total loans and leases, net of unearned | (Column A) | (Column B) |
income. Exclude assets held in trading accounts. | Consolidated | Domestic |
| Bank | Offices |
-------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCON Bil Mil Thou |
- ----------------------------------------------------------------------------- -------------------- --------------------
<S> <C>
1. Loans secured by real estate ........................................... | 1410 5,239,388 | ////////////////// | 1.
a. Construction and land development ................................... | ////////////////// | 1415 76,735 | 1.a.
b. Secured by farmland (including farm residential and other | ////////////////// | ////////////////// |
improvements) ....................................................... | ////////////////// | 1420 1,719 | 1.b.
c. Secured by 1-4 family residential properties: | ////////////////// | ////////////////// |
(1) Revolving, open-end loans secured by 1-4 family residential | ////////////////// | ////////////////// |
properties and extended under lines of credit ................... | ////////////////// | 1797 417,777 | 1.c.(1)
(2) All other loans secured by 1-4 family residential properties: | ////////////////// | ////////////////// |
(a) Secured by first liens ...................................... | ////////////////// | 5367 3,226,287 | 1.c.(2)(a)
(b) Secured by junior liens ..................................... | ////////////////// | 5368 211,935 | 1.c.(2)(b)
d. Secured by multifamily (5 or more) residential properties ........... | ////////////////// | 1460 100,761 | 1.d.
e. Secured by nonfarm nonresidential properties ........................ | ////////////////// | 1480 1,204,174 | 1.e.
2. Loans to depository institutions: | ////////////////// | ////////////////// |
a. To commercial banks in the U.S. ..................................... | ////////////////// | 1505 17 | 2.a.
(1) To U.S. branches and agencies of foreign banks .................. | 1506 0 | ////////////////// | 2.a.(1)
(2) To other commercial banks in the U.S. ........................... | 1507 17 | ////////////////// | 2.a.(2)
b. To other depository institutions in the U.S. ........................ | 1517 0 | 1517 0 | 2.b.
c. To banks in foreign countries ....................................... | ////////////////// | 1510 0 | 2.c.
(1) To foreign branches of other U.S. banks ......................... | 1513 0 | ////////////////// | 2.c.(1)
(2) To other banks in foreign countries ............................. | 1516 0 | ////////////////// | 2.c.(2)
3. Loans to finance agricultural production and other loans to farmers .... | 1590 1,280 | 1590 1,280 | 3.
4. Commercial and industrial loans: | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ....................................... | 1763 2,624,506 | 1763 2,624,506 | 4.a.
b. To non-U.S. addressees (domicile) ................................... | 1764 0 | 1764 0 | 4.b.
5. Acceptances of other banks: | ////////////////// | ////////////////// |
a. Of U.S. banks ....................................................... | 1756 240 | 1756 204 | 5.a.
b. Of foreign banks .................................................... | 1757 0 | 1757 0 | 5.b.
6. Loans to individuals for household, family, and other personal | ////////////////// | ////////////////// |
expenditures (i.e., consumer loans) (includes purchased paper) ......... | ////////////////// | 1975 455,734 | 6.
a. Credit cards and related plans (includes check credit and other | ////////////////// | ////////////////// |
revolving credit plans) ............................................. | 2008 26,062 | ////////////////// | 6.a.
b. Other (includes single payment, installment, and all student loans) . | 2011 429,672 | ////////////////// | 6.b.
7. Loans to foreign governments and official institutions (including | ////////////////// | ////////////////// |
foreign central banks) ................................................. | 2081 0 | 2081 0 | 7.
8. Obligations (other than securities and leases) of states and political | ////////////////// | ////////////////// |
subdivisions in the U.S. (includes nonrated industrial development | ////////////////// | ////////////////// |
obligations) ........................................................... | 2107 76,157 | 2107 76,157 | 8.
9. Other loans ............................................................ | 1563 755,405 | ////////////////// | 9.
a. Loans for purchasing or carrying securities (secured and unsecured) . | ////////////////// | 1545 103,947 | 9.a.
b. All other loans (exclude consumer loans) ............................ | ////////////////// | 1564 651,458 | 9.b.
10. Lease financing receivables (net of unearned income) ................... | ////////////////// | 2165 3,418 | 10.
a. Of U.S. addressees (domicile) ....................................... | 2182 3,418 | ////////////////// | 10.a.
b. Of non-U.S. addressees (domicile) ................................... | 2183 0 | ////////////////// | 10.b.
11. LESS: Any unearned income on loans reflected in items 1-9 above ........ | 2123 9,833 | 2123 9,833 | 11.
12. Total loans and leases, net of unearned income (sum of items 1 through | ////////////////// | ////////////////// |
10 minus item 11) (total of column A must equal Schedule RC, item 4.a) . | 2122 9,146,312 | 2122 9,146,312 | 12.
-------------------------------------------
</TABLE>
16
<PAGE> 39
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-7
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
<TABLE>
<CAPTION>
Schedule RC-C--Continued
Part I. Continued
-------------------------------------------
| (Column A) | (Column B) |
| Consolidated | Domestic |
Memoranda | Bank | Offices |
-------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCON Bil Mil Thou |
- ----------------------------------------------------------------------------- -------------------- --------------------
<S> <C>
1. Commercial paper included in Schedule RC-C, part I, above .............. | 1496 0 | 1496 0 | M.1.
2. Loans and leases restructured and in compliance with modified terms | ////////////////// | ////////////////// |
(included in Schedule RC-C, part I, above): | ////////////////// | ////////////////// |
a. Loans secured by real estate: | ////////////////// | ////////////////// |
---------------------
(1) To U.S. addressees (domicile) ................................... | 1687 43,012 | M.2.a.(1)
(2) To non-U.S. addressees (domicile) ............................... | 1689 0 | M.2.a.(2)
b. Loans to finance agricultural production and other loans to farmers . | 1613 0 | M.2.b.
c. Commercial and industrial loans: | ////////////////// |
(1) To U.S. addressees (domicile) ................................... | 1758 0 | M.2.c.(1)
(2) To non-U.S. addressees (domicile)................................ | 1759 0 | M.2.c.(2)
d. All other loans (exclude loans to individuals for household, | ////////////////// |
family, and other personal expenditures) ............................ | 1615 700 | M.2.d.
e. Lease financing receivables: | ////////////////// |
(1) Of U.S. addressees (domicile) ................................... | 1789 0 | M.2.e.(1)
(2) Of non-U.S. addressees (domicile) ............................... | 1790 0 | M.2.e.(2)
f. Total (sum of Memorandum items 2.a through 2.e) ..................... | 1616 43,712 | M.2.f.
3. Maturity and repricing data for loans and leases(1) (excluding those | ////////////////// |
in nonaccrual status): | ////////////////// |
a. Fixed rate loans and leases with a remaining maturity of: | ////////////////// |
(1) Three months or less ............................................ | 0348 450,888 | M.3.a.(1)
(2) Over three months through 12 months ............................. | 0349 81,259 | M.3.a.(2)
(3) Over one year through five years ................................ | 0356 819,672 | M.3.a.(3)
(4) Over five years ................................................. | 0357 2,399,164 | M.3.a.(4)
(5) Total fixed rate loans and leases (sum of | ////////////////// |
Memorandum items 3.a.(1) through 3.a.(4)) ....................... | 0358 3,750,983 | M.3.a.(5)
b. Floating rate loans with a repricing frequency of: | ////////////////// |
(1) Quarterly or more frequently .................................... | 4554 3,963,831 | M.3.b.(1)
(2) Annually or more frequently, but less frequently than quarterly . | 4555 554,895 | M.3.b.(2)
(3) Every five years or more frequently, but less frequently than | ////////////////// |
annually ........................................................ | 4561 722,391 | M.3.b.(3)
(4) Less frequently than every five years ........................... | 4564 3,881 | M.3.b.(4)
(5) Total floating rate loans (sum of Memorandum items 3.b.(1) | ////////////////// |
through 3.b.(4)) ................................................ | 4567 5,244,998 | M.3.b.(5)
c. Total loans and leases (sum of Memorandum items 3.a.(5) and 3.b.(5)) | ////////////////// |
(must equal the sum of total loans and leases, net, from | ////////////////// |
Schedule RC-C, part I, item 12, plus unearned income from | ////////////////// |
Schedule RC-C, part I, item 11, minus total nonaccrual loans and | ////////////////// |
leases from Schedule RC-N, sum of items 1 through 8, column C) ...... | 1479 8,995,981 | M.3.c.
4. Loans to finance commercial real estate, construction, and land | ////////////////// |
development activities (not secured by real estate) included in | ////////////////// |
Schedule RC-C, part I, items 4 and 9, column A, page RC-6(2) ........... | 2746 37,810 | M.4.
5. Loans and leases held for sale (included in Schedule RC-C, part I, above)| 5369 238,903 | M.5.
6. Adjustable rate closed-end loans secured by first liens on 1-4 family | ////////////////// |--------------------
residential properties (included in Schedule RC-C, part I, item | ////////////////// | RCON Bil Mil Thou |
--------------------
1.c.(2)(a), column B, page RC-6) ....................................... | ////////////////// | 5370 1,470,716 | M.6.
-------------------------------------------
</TABLE>
- ---------------
(1) Memorandum item 3 is not applicable to savings banks that must complete
supplemental Schedule RC-J.
(2) Exclude loans secured by real estate that are included in Schedule RC-C,
part I, item 1, column A.
17
<PAGE> 40
<TABLE>
<S> <C> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC- 7a
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-C--Continued
Part II. Loans to Small Businesses and Small Farms
Schedule RC-C, Part II is to be reported only with the June Report of
Condition.
Report the number and amount currenty outstanding as of June 30 of business
loans with "original amounts" of $1,000,000 or less and farm loans with
"original amounts" of $500,000 or less. The following guidelines; should be
used to determine the "original amount" of a loan: (1) For loans drawn down
under lines of credit or loan commitments, the "original amount" of the loan
is the size of the line of credit or loan commitment when the line of credit
or loan commitment was most recently approved, extended, or renewed prior to
the report date. However, if the amount currently outstanding as of the
report date exceeds this size, the "original amount" is the amount currenty
outstanding on the report date. (2) For loan participations and syndications,
the "original amount" of the loan participation or syndication is the entire
amount of the credit originated by the lead lender. (3) For all other loans,
the "original amount" is the total amount of the loan at origination or the
amount currently outstanding as of the report date, whichever is larger.
<TABLE>
<S> <C>
Loans to Small Businesses
1. Indicate in the appropriate box at the right whether all or substantially all
of the bank's "Loans secured by nonfarm nonresidential properties" in -----------------
domestic offices reported in Schedule RC-C, part I, item 1.e, column B, and | C418 | <-
all or substantially all of the bank's "Commercial and industrial loans to -----------------
U.S. addressees" in domestic offices reported in Schedule RC-C, part I, | YES NO |
item 4.a, column B, have original amounts of $100,000 or less (see -------------------------
instructions) ....................................................................... | 6999| | /// | X | 1.
-------------------------
</TABLE>
If YES, complete items 2.a and 2.b below, skip items 3 and 4, and go to item 5.
If NO, skip items 2.a and 2.b, complete items 3 and 4 below, and go to item 5.
<TABLE>
<CAPTION>
-----------------------
| Number of Loans |
-----------------------
<S> <C>
2. Report the total number of loans currently outstanding for each of the | RCON | /////////// |
following Schedule RC-C, part I, loan categories: |-------- /////////// |
a. "Loans secured by nonfarm nonresidential properties" in domestic offices | ////////////////// |
reported in Schedule RC-C, part I, item 1.e, column B ...................| 5562 N/A | 2.a.
b. "Commercial and industrial loans to U.S. addressees" in domestic offices | /////////////////// |
reported in Schedule RC-C, part I, item 4.a, column B ...................| 5563 N/A | 2.b.
----------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------
| (Column A) | (Column B) |
| | Amount |
| | Currently |
| Number of Loans | Outstanding |
|--------------------|---------------------|
Dollar Amounts in Thousands | RCON |/////////////| RCON Bil Mil Thou |
- ----------------------------------------------------------------------------------|------------------------------------------|
<S> <C> <C> <C> <C>
3. Number and amount currently outstanding of "Loans secured by nonfarm | //////////////////////////////////////// |
nonresidential properties" in domestic offices reported in Schedule RC-C, | //////////////////////////////////////// |
part I, item 1.e, column B (sum of items 3.a through 3.c must be less than | //////////////////////////////////////// |
or equal to Schedule RC-C, part I, item 1.e, column B): | //////////////////////////////////////// |
a. With original amounts of $100,000 or less ................................| 5564 1,127 | 5565 39,831 | 3.a.
b. With original amounts of more than $100,000 through $250,000..............| 5566 1,073 | 5567 131,881 | 3.b.
c. With original amounts of more than $250,000 through $1,000,000............| 5568 1,131 | 5569 422,956 | 3.c.
4. Number and amount currently outstanding of "Commercial and industrial loans | //////////////////////////////////////// |
to U.S. addressees" in domestic offices reported in Schedule RC-C, part I, | //////////////////////////////////////// |
item 4.a, column B (sum of items 4.a through 4.c must be less than or equal | //////////////////////////////////////// |
to Schedule RC-C, part I, item 4.a, column B): | //////////////////////////////////////// |
a. With original amounts of $100,000 or less ................................| 5570 2,304 | 5571 49,374 | 4.a.
b. With original amounts of more than $100,000 through $250,000 .............| 5572 507 | 5573 50,467 | 4.b.
c. With original amounts of more than $250,000 through $1,000,000 ...........| 5574 477 | 5575 148,262 | 4.c.
------------------------------------------
</TABLE>
17a
<PAGE> 41
<TABLE>
<S> <C> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-7a
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-C--Continued
Part II. Continued
<TABLE>
<S> <C>
Agricultural Loans to Small Farms
5. Indicate in the appropriate box at the right whether all or substantially
all of the bank's "Loans secured by farmland (incuding farm residential and
other improvements)" in domestic offices reported in Schedule RC-C, part I,
item 1.b, column B, and all or substantially all of the bank's "Loans to
finance agricultural production and other loans to farmers" in domestic Yes No
offices reported in Schedule RC-C, part I, item 3, column B, have original -------------------
amounts of $100,000 or less (see instructions) ................................................... | 6860 | |///| X | 5.
-------------------
</TABLE>
If YES, complete items 6.a and 6.b below and do not complete items 7 and 8.
If NO, skip items 6.a and 6.b and complete items 7 and 8 below.
<TABLE>
<CAPTION>
----------------------
| Number of Loans |
|----------------------|
<S> <C> <C>
6. Report the total number of loans currently outstanding for each of the | RCON |////////////// |
following Schedule RC-C, part I, loan categories: |------| |
a. "Loans secured by farmland (including farm residential and other | //////////////////// |
improvements)" in domestic offices reported in Schedule RC-C, part I, | //////////////////// |
item 1.b, column B ...................................................... | 5576 N/A | 6.a.
b. "Loans to finance agricultural production and other loans to farmers" | //////////////////// |
in domestic offices reported in Schedule RC-C, part I, item 3, column B.. | 5577 N/A | 6.b.
----------------------
</TABLE>
<TABLE>
<CAPTION>
--------------------------------------------
| (Column A) | (Column B) |
| | Amount |
| | Currently |
| Number of Loans | Outstanding |
|----------------------|-------------------|
Dollar Amounts in Thousands | RCON |///////////////| RCON Bil Mil Thou |
- ----------------------------------------------------------------------------------|------------------------------------------|
<S> <C> <C> <C> <C>
7. Number and amount currently outstanding of "Loans secured by farmland | //////////////////////////////////////// |
(including farm residential and other improvements)" in domestic offices | //////////////////////////////////////// |
reported in Schedule RC-C, part I, item 1.b, column B (sum of items 7.a | //////////////////////////////////////// |
through 7.c must be less than or equal to Schedule RC-C, part I, item 1.b, | //////////////////////////////////////// |
column B): | //////////////////////////////////////// |
a. With original amounts of $100,000 or less................................ | 5578 3 | 5579 98 | 7.a.
b. With original amounts of more than $100,000 through $250,000............. | 5580 2 | 5581 312 | 7.b.
c. With original amounts of more than $250,000 through $500,000............. | 5582 4 | 5583 579 | 7.c.
8. Number and amount currently outstanding of "Loans to finance agricultural | //////////////////////////////////////// |
production and other loans to farmers" in domestic offices reported in | //////////////////////////////////////// |
Schedule RC-C, part I, item 3, column B (sum of items 8.a through 8.c must | //////////////////////////////////////// |
be less than or equal to Schedule RC-C, part I, item 3, column B): | //////////////////////////////////////// |
a. With original amounts of $100,000 or less................................. | 5584 23 | 5585 480 | 8.a.
b. With original amounts of more than $100,000 through $250,000.............. | 5586 2 | 5587 233 | 8.b.
c. With original amounts of more than $250,000 through $500,000.............. | 5588 2 | 5589 567 | 8.c.
--------------------------------------------
</TABLE>
17b
<PAGE> 42
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-8
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-D--Trading Assets and Liabilities
Schedule RC-D is to be completed only by banks with $1 billion or more in total
assets or with $2 billion or more in par/notional amount of interest rate,
foreign exchange rate, and other commodity and equity contracts (as reported in
Schedule RC-L, items 11, 12, and 13).
<TABLE>
<CAPTION>
--------
| C420 | <-
----------------- --------
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C>
ASSETS | /////////////////////// |
1. U.S. Treasury securities in domestic offices ................................................ | RCON 3531 0 | 1.
2. U.S. Government agency and corporation obligations in domestic offices (exclude mortgage- | /////////////////////// |
backed securities) .......................................................................... | RCON 3532 0 | 2.
3. Securities issued by states and political subdivisions in the U.S. in domestic offices ...... | RCON 3533 0 | 3.
4. Mortgage-backed securities in domestic offices: | /////////////////////// |
a. Pass-through securities issued or guaranteed by FNMA, FHLMC, or GNMA ..................... | RCON 3534 0 | 4.a.
b. CMOs and REMICs issued by FNMA or FHLMC .................................................. | RCON 3535 0 | 4.b.
c. All other ................................................................................ | RCON 3536 0 | 4.c.
5. Other debt securities in domestic offices ................................................... | RCON 3537 0 | 5.
6. Certificates of deposit in domestic offices ................................................. | RCON 3538 0 | 6.
7. Commercial paper in domestic offices ........................................................ | RCON 3539 0 | 7.
8. Bankers acceptances in domestic offices ..................................................... | RCON 3540 0 | 8.
9. Other trading assets in domestic offices .................................................... | RCON 3541 0 | 9.
10. Trading assets in foreign offices ........................................................... | RCFN 3542 0 | 10.
11. Revaluation gains on interest rate, foreign exchange rate, and other commodity and equity | /////////////////////// |
contracts: | /////////////////////// |
a. In domestic offices ...................................................................... | RCON 3543 11,350 | 11.a.
b. In foreign offices ....................................................................... | RCFN 3544 0 | 11.b.
12. Total trading assets (sum of items 1 through 11) (must equal Schedule RC, item 5) ........... | RCFD 3545 11,350 | 12.
---------------------------
| ///////// Bil Mil Thou |
LIABILITIES ---------------------------
13. Liability for short positions ............................................................... | RCFD 3546 0 | 13.
14. Revaluation losses on interest rate, foreign exchange rate, and other commodity and equity | /////////////////////// |
contracts ................................................................................... | RCFD 3547 6,575 | 14.
15. Total trading liabilities (sum of items 13 and 14) (must equal Schedule RC, item 15.b) ...... | RCFD 3548 6,575 | 15.
---------------------------
</TABLE>
18
<PAGE> 43
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-9
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-E--Deposit Liabilities
Part I. Deposits in Domestic Offices
<TABLE>
<CAPTION>
----------
| C425 |
------------------------------------------------------ --------
| | Nontransaction |
| Transaction Accounts | Accounts |
----------------------------------------- --------------------
| (Column A) | (Column B) | (Column C) |
| Total transaction | Memo: Total | Total |
| accounts (including| demand deposits | nontransaction |
| total demand | (included in | accounts |
| deposits) | column A) | (including MMDAs) |
-------------------- -------------------- --------------------
Dollar Amounts in Thousands | RCON Bil Mil Thou | RCON Bil Mil Thou | RCON Bil Mil Thou |
- ---------------------------------------------------------- -------------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Deposits of: | ////////////////// | ////////////////// | ////////////////// |
1. Individuals, partnerships, and corporations .......... | 2201 3,339,818 | 2240 2,308,854 | 2346 5,743,349 | 1.
2. U.S. Government ...................................... | 2202 59,873 | 2280 59,873 | 2520 0 | 2.
3. States and political subdivisions in the U.S. ........ | 2203 156,286 | 2290 134,195 | 2530 203,512 | 3.
4. Commercial banks in the U.S. ......................... | 2206 106,373 | 2310 106,373 | ////////////////// | 4.
a. U.S. branches and agencies of foreign banks ....... | ////////////////// | ////////////////// | 2347 0 | 4.a.
b. Other commercial banks in the U.S. ................ | ////////////////// | ////////////////// | 2348 1,500 | 4.b.
5. Other depository institutions in the U.S. ............ | 2207 92,936 | 2312 92,936 | 2349 0 | 5.
6. Banks in foreign countries ........................... | 2213 2,164 | 2320 2,164 | ////////////////// | 6.
a. Foreign branches of other U.S. banks .............. | ////////////////// | ////////////////// | 2367 0 | 6.a.
b. Other banks in foreign countries .................. | ////////////////// | ////////////////// | 2373 0 | 6.b.
7. Foreign governments and official institutions | ////////////////// | ////////////////// | ////////////////// |
(including foreign central banks) .................... | 2216 289 | 2300 289 | 2377 0 | 7.
8. Certified and official checks ........................ | 2330 57,714 | 2330 57,714 | ////////////////// | 8.
9. Total (sum of items 1 through 8) (sum of | ////////////////// | ////////////////// | ////////////////// |
columns A and C must equal Schedule RC, | ////////////////// | ////////////////// | ////////////////// |
item 13.a) ........................................... | 2215 3,815,453 | 2210 2,762,398 | 2385 5,948,361 | 9.
----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
----------------------
Memoranda Dollar Amounts in Thousands | RCON Bil Mil Thou |
- ---------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Selected components of total deposits (i.e., sum of item 9, columns A and C): | ////////////////// |
a. Total Individual Retirement Accounts (IRAs) and Keogh Plan accounts ......................... | 6835 931,299 | M.1.a.
b. Total brokered deposits ..................................................................... | 2365 464,856 | M.1.b.
c. Fully insured brokered deposits (included in Memorandum item 1.b above): | ////////////////// |
(1) Issued in denominations of less than $100,000 ........................................... | 2343 48 | M.1.c.(1)
(2) Issued either in denominations of $100,000 or in denominations greater than $100,000 | ////////////////// |
and participated out by the broker in shares of $100,000 or less ........................ | 2344 458,356 | M.1.c.(2)
d. Total deposits denominated in foreign currencies ............................................ | 3776 0 | M.1.d.
e. Preferred deposits (uninsured deposits of states and political subdivisions in the U.S. | ////////////////// |
reported in item 3 above which are secured or collateralized as required under state law) ... | 5590 359,797 | M.1.e.
2. Components of total nontransaction accounts (sum of Memoranda items 2.a through 2.d must | ////////////////// |
equal item 9, column C above): | ////////////////// |
a. Savings deposits: | ////////////////// |
(1) Money market deposit accounts (MMDAs) ................................................... | 6810 837,541 | M.2.a.(1)
(2) Other savings deposits (excludes MMDAs) ................................................. | 0352 2,372,564 | M.2.a.(2)
b. Total time deposits of less than $100,000 ................................................... | 6648 1,923,177 | M.2.b.
c. Time certificates of deposit of $100,000 or more ............................................ | 6645 815,079 | M.2.c.
d. Open-account time deposits of $100,000 or more .............................................. | 6646 0 | M.2.d.
3. All NOW accounts (included in column A above) .................................................. | 2398 1,053,054 | M.3.
----------------------
</TABLE>
19
<PAGE> 44
<TABLE>
<S> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 12/31/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-10
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-E--Continued
Part I. Continued
<TABLE>
<CAPTION>
Memoranda (continued)
- ---------------------------------------------------------------------------------------------------------------------------------
| Deposit Totals for FDIC Insurance Assessments(1) -------------------- |
| Dollar Amounts in Thousands | RCON Bil Mil Thou | |
-------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
| 4. Total deposits in domestic offices (sum of item 9, column A and item 9, column C) |/////////////////// | |
| (must equal Schedule RC, item 13.a) ......................................................... | 2200 9,763,814 | M.4. |
| | ////////////////// | |
| a. Total demand deposits (must equal item 9, column B) ...................................... | 2210 2,762,393 | M.4.a.|
| b. Total time and savings deposits(2) (must equal item 9, column A plus item 9, column C | ////////////////// | |
| minus item 9, column B) .................................................................. | 2350 7,001,416 | M.4.b.|
----------------------
</TABLE>
___________
| (1) An amended Certified Statement should be submitted to the FDIC if the
| deposit totals reported in this item are amended after the semiannual
| Certified Statement originally covering this report date has been
| filed with the FDIC.
| (2) For FDIC insurance assessment purposes, "total time and savings deposits"
| consists of nontransaction accounts and all transaction accounts other
| than demand deposits.
|
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
--------------------
Dollar Amounts in Thousands | RCON Bil Mil Thou |
- --------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
5. Time deposits of less than $100,000 and open-account time deposits of $100,000 or more | ////////////////// |
(included in Memorandum items 2.b and 2.d above) with a remaining maturity or repricing | ////////////////// |
frequency of:(1) | ////////////////// |
a. Three months or less ....................................................................... | 0359 572,417 | M.5.a.
b. Over three months through 12 months (but not over 12 months) ............................... | 3644 718,973 | M.5.b.
6. Maturity and repricing data for time certificates of deposit of $100,000 or more:(1) | ////////////////// |
a. Fixed rate time certificates of deposit of $100,000 or more with a remaining maturity of: | ////////////////// |
(1) Three months or less ................................................................... | 2761 223,575 | M.6.a.(1)
(2) Over three months through 12 months .................................................... | 2762 223,827 | M.6.a.(2)
(3) Over one year through five years ....................................................... | 2763 363,434 | M.6.a.(3)
(4) Over five years ........................................................................ | 2765 4,243 | M.6.a.(4)
(5) Total fixed rate time certificates of deposit of $100,000 or more (sum of | ////////////////// |
Memorandum items 6.a.(1) through 6.a.(4)).............................................. | 2767 815,079 | M.6.a.(5)
b. Floating rate time certificates of deposit of $100,000 or more with a repricing frequency of:| ////////////////// |
(1) Quarterly or more frequently ........................................................... | 4568 0 | M.6.b.(1)
(2) Annually or more frequently, but less frequently than quarterly ........................ | 4569 0 | M.6.b.(2)
(3) Every five years or more frequently, but less frequently than annually ................. | 4571 0 | M.6.b.(3)
(4) Less frequently than every five years .................................................. | 4572 0 | M.6.b.(4)
(5) Total floating rate time certificates of deposit of $100,000 or more (sum of | ////////////////// |
Memorandum items 6.b.(1) through 6.b.(4)) .............................................. | 4573 0 | M.6.b.(5)
c. Total time certificates of deposit of $100,000 or more (sum of Memorandum items 6.a.(5) | ////////////////// |
and 6.b.(5)) (must equal Memorandum item 2.c. above) ....................................... | 6645 815,079 | M.6.c.
----------------------
</TABLE>
_____________
(1) Memorandum items 5 and 6 are not applicable to savings banks
that must complete supplemental Schedule RC-J.
20
<PAGE> 45
<TABLE>
<S> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-11
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
<CAPTION>
Schedule RC-E--Continued
Part II. Deposits in Foreign Offices (including Edge and
Agreement subsidiaries and IBFs)
--------------------
Dollar Amounts in Thousands | RCFN Bil Mil Thou |
- --------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C>
Deposits of: | ////////////////// |
1. Individuals, partnerships, and corporations ................................................... | 2621 196,619 | 1.
2. U.S. banks (including IBFs and foreign branches of U.S. banks) ................................ | 2623 0 | 2.
3. Foreign banks (including U.S. branches and | ////////////////// |
agencies of foreign banks, including their IBFs) .............................................. | 2625 0 | 3.
4. Foreign governments and official institutions (including foreign central banks) ............... | 2650 0 | 4.
5. Certified and official checks ................................................................. | 2330 0 | 5.
6. All other deposits ............................................................................ | 2668 0 | 6.
7. Total (sum of items 1 through 6) (must equal Schedule RC, item 13.b) .......................... | 2200 196,619 | 7.
----------------------
</TABLE>
<TABLE>
<CAPTION>
Schedule RC-F--Other Assets
----------
| C430 | <-
----------------- --------
Dollar Amounts in Thousands | ////////// Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C>
1. Income earned, not collected on loans ........................................................ | RCFD 2164 47,928 | 1.
2. Net deferred tax assets(1) ................................................................... | RCFD 2148 128,218 | 2.
3. Excess residential mortgage servicing fees receivable ........................................ | RCFD 5371 34,070 | 3.
4. Other (itemize amounts that exceed 25% of this item) ......................................... | RCFD 2168 434,384 | 4.
------------- ---------------------------
a. | TEXT 3549 | | RCFD 3549 | | /////////////////////// | 4.a.
----------- ----------------------------------------------------
b. | TEXT 3550 | | RCFD 3550 | | /////////////////////// | 4.b.
----------- ----------------------------------------------------
c. | TEXT 3551 | | RCFD 3551 | | /////////////////////// | 4.c.
--------------------------------------------------------------------------------------------
---------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 11) ........................... | RCFD 2160 644,600 | 5.
---------------------------
Memorandum ---------------------------
Dollar Amounts in Thousands | ////////// Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- -------------------------
1. Deferred tax assets disallowed for regulatory capital purposes ............................... | RCFD 5610 30,674 | M.1.
---------------------------
</TABLE>
Schedule RC-G--Other Liabilities
<TABLE>
<CAPTION>
----------
| C435 | <-
----------------- --------
Dollar Amounts in Thousands | ////////// Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C>
1. a. Interest accrued and unpaid on deposits in domestic offices(2) ............................ | RCON 3645 13,800 | 1.a.
b. Other expenses accrued and unpaid (includes accrued income taxes payable) ................. | RCFD 3646 55,957 | 1.b.
2. Net deferred tax liabilities(1) .............................................................. | RCFD 3049 0 | 2.
3. Minority interest in consolidated subsidiaries ............................................... | RCFD 3000 0 | 3.
4. Other (itemize amounts that exceed 25% of this item) ......................................... | RCFD 2938 107,809 | 4.
------------- ---------------------------
a. | TEXT 3552 | | RCFD 3552 | 52,593 | /////////////////////// | 4.a.
----------- ----------------------------------------------------
b. | TEXT 3553 | | RCFD 3553 | | /////////////////////// | 4.b.
----------- ----------------------------------------------------
c. | TEXT 3554 | | RCFD 3554 | | /////////////////////// | 4.c.
--------------------------------------------------------------------------------------------
---------------------------
5. Total (sum of items 1 through 4) (must equal Schedule RC, item 20) ........................... | RCFD 2930 177,566 | 5.
---------------------------
</TABLE>
____________
(1) See discussion of deferred income taxes in Glossary entry on "income
taxes."
(2) For savings banks, include "dividends" accrued and unpaid on deposits.
21
<PAGE> 46
<TABLE>
<S> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-12
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
<CAPTION>
Schedule RC-H--Selected Balance Sheet Items for Domestic Offices
----------
| C440 | <-
------------ --------
| Domestic Offices |
--------------------
Dollar Amounts in Thousands | RCON Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Customers' liability to this bank on acceptances outstanding .................................... | 2155 31,941 | 1.
2. Bank's liability on acceptances executed and outstanding ........................................ | 2920 31,941 | 2.
3. Federal funds sold and securities purchased under agreements to resell .......................... | 1350 233,300 | 3.
4. Federal funds purchased and securities sold under agreements to repurchase ...................... | 2800 3,145,422 | 4.
5. Other borrowed money ............................................................................ | 2850 758,217 | 5.
EITHER | ////////////////// |
6. Net due from own foreign offices, Edge and Agreement subsidiaries, and IBFs ..................... | 2163 N/A | 6.
OR | ////////////////// |
7. Net due to own foreign offices, Edge and Agreement subsidiaries, and IBFs ....................... | 2941 51,619 | 7.
8. Total assets (excludes net due from foreign offices, Edge and Agreement subsidiaries, and IBFs) . | 2192 15,595,754 | 8.
9. Total liabilities (excludes net due to foreign offices, Edge and Agreement subsidiaries, and IBFs)| 3129 14,340,911 | 9.
----------------------
Items 10-17 include held-to-maturity and available-for-sale securities in domestic offices. --------------------
| RCON Bil Mil Thou |
--------------------
10. U.S. Treasury securities ....................................................................... | 1779 1,728,780 | 10.
11. U.S. Government agency and corporation obligations (exclude mortgage-backed | ////////////////// |
securities) .................................................................................... | 1785 0 | 11.
12. Securities issued by states and political subdivisions in the U.S. ............................. | 1786 49 | 12.
13. Mortgage-backed securities: | ////////////////// |
a. Pass-through securities: | ////////////////// |
(1) Issued or guaranteed by FNMA, FHLMC, or GNMA ............................................ | 1787 1,699,839 | 13.a.(1)
(2) Privately-issued ........................................................................ | 1869 17,122 | 13.a.(2)
b. CMOs and REMICs: | ////////////////// |
(1) Issued by FNMA and FHLMC ................................................................ | 1877 85,184 | 13.b.(1)
(2) Privately-issued ........................................................................ | 2253 349,185 | 13.b.(2)
14. Other domestic debt securities ................................................................. | 3159 857,162 | 14.
15. Foreign debt securities ........................................................................ | 3160 2,900 | 15.
16. Equity securities: | ////////////////// |
a. Investments in mutual funds ................................................................. | 3161 5,892 | 16.a.
b. Other equity securities with readily determinable fair values ............................... | 3162 0 | 16.b.
c. All other equity securities ................................................................. | 3169 65,788 | 16.c.
17. Total held-to-maturity and available-for-sale securities (sum of items 10 through 16) .......... | 3170 4,811,901 | 17.
----------------------
</TABLE>
<TABLE>
<CAPTION>
Memorandum (to be completed only by banks with IBFs and other "foreign" offices)
--------------------
Dollar Amounts in Thousands | RCON Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C>
EITHER | ////////////////// |
1. Net due from the IBF of the domestic offices of the reporting bank .............................. | 3051 N/A | M.1.
OR | ////////////////// |
2. Net due to the IBF of the domestic offices of the reporting bank ................................ | 3059 N/A | M.2.
----------------------
</TABLE>
22
<PAGE> 47
<TABLE>
<S> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 06/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-13
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-I--Selected Assets and Liabilities of IBFs
<TABLE>
<CAPTION>
To be completed only by banks with IBFs and other "foreign" offices. --------
| C445 | <-
------------ --------
Dollar Amounts in Thousands | RCFN Bil Mil Thou |
- ----------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Total IBF assets of the consolidated bank (component of Schedule RC, item 12) .................. | 2133 N/A | 1.
2. Total IBF loans and lease financing receivables (component of Schedule RC-C, part I, item 12, | ////////////////// |
column A) ...................................................................................... | 2076 N/A | 2.
3. IBF commercial and industrial loans (component of Schedule RC-C, part I, item 4, column A) ..... | 2077 N/A | 3.
4. Total IBF liabilities (component of Schedule RC, item 21) ...................................... | 2898 N/A | 4.
5. IBF deposit liabilities due to banks, including other IBFs (component of Schedule RC-E, | ////////////////// |
part II, items 2 and 3) ........................................................................ | 2379 N/A | 5.
6. Other IBF deposit liabilities (component of Schedule RC-E, part II, items 1, 4, 5, and 6) ...... | 2381 N/A | 6.
----------------------
</TABLE>
<TABLE>
<CAPTION>
Schedule RC-K--Quarterly Averages (1)
----------
| C455 | <-
----------------- --------
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
- ----------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C>
ASSETS | /////////////////////// |
1. Interest-bearing balances due from depository institutions ............................... | RCFD 3381 113,132 | 1.
2. U.S. Treasury securities and U.S. Government agency and corporation obligations(2) ....... | RCFD 3382 3,557,492 | 2.
3. Securities issued by states and political subdivisions in the U.S.(2) .................... | RCFD 3383 408 | 3.
4. a. Other debt securities(2) .............................................................. | RCFD 3647 1,099,528 | 4.a.
b. Equity securities(3) (includes investments in mutual funds and Federal Reserve stock) . | RCFD 3648 47,593 | 4.b.
5. Federal funds sold and securities purchased under agreements to resell in domestic offices | /////////////////////// |
of the bank and of its Edge and Agreement subsidiaries, and in IBFs ...................... | RCFD 3365 86,013 | 5.
6. Loans: | /////////////////////// |
a. Loans in domestic offices: | /////////////////////// |
(1) Total loans ....................................................................... | RCON 3360 9,223,155 | 6.a.(1)
(2) Loans secured by real estate ...................................................... | RCON 3385 5,209,698 | 6.a.(2)
(3) Loans to finance agricultural production and other loans to farmers ............... | RCON 3386 1,094 | 6.a.(3)
(4) Commercial and industrial loans ................................................... | RCON 3387 2,806,178 | 6.a.(4)
(5) Loans to individuals for household, family, and other personal expenditures ....... | RCON 3388 436,911 | 6.a.(5)
(6) Obligations (other than securities and leases) of states and political subdivisions | /////////////////////// |
in the U.S. ....................................................................... | RCON 3389 52,626 | 6.a.(6)
b. Total loans in foreign offices, Edge and Agreement subsidiaries, and IBFs ............. | RCFN 3360 0 | 6.b.
7. Assets held in trading accounts .......................................................... | RCFD 3301 0 | 7.
8. Lease financing receivables (net of unearned income) ..................................... | RCFD 3484 2,938 | 8.
9. Total assets ............................................................................. | RCFD 3368 15,427,856 | 9.
LIABILITIES | /////////////////////// |
10. Interest-bearing transaction accounts in domestic offices (NOW accounts, ATS accounts, | /////////////////////// |
and telephone and preauthorized transfer accounts) (exclude demand deposits) ............. | RCON 3485 1,052,580 | 10.
11. Nontransaction accounts in domestic offices: | /////////////////////// |
a. Money market deposit accounts (MMDAs) ................................................. | RCON 3486 674,355 | 11.a.
b. Other savings deposits ................................................................ | RCON 3487 2,337,570 | 11.b.
c. Time certificates of deposit of $100,000 or more ...................................... | RCON 3345 654,640 | 11.c.
d. All other time deposits ............................................................... | RCON 3469 1,817,001 | 11.d.
12. Interest-bearing deposits in foreign offices, Edge and Agreement subsidiaries, and IBFs .. | RCFN 3404 166,104 | 12.
13. Federal funds purchased and securities sold under agreements to repurchase in domestic | /////////////////////// |
offices of the bank and of its Edge and Agreement subsidiaries, and in IBFs .............. | RCFD 3353 4,145,690 | 13.
14. Other borrowed money ..................................................................... | RCFD 3355 559,025 | 14.
---------------------------
</TABLE>
_____________
(1) For all items, banks have the option of reporting either (1) an average of
daily figures for the quarter, or (2) an average of weekly figures (i.e.,
the Wednesday of each week of the quarter).
(2) Quarterly averages for all debt securities should be based on amortized
cost.
(3) Quarterly averages for all equity securities should be based on historical
cost.
23
<PAGE> 48
<TABLE>
<S> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 06/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-14
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-L--Off-Balance Sheet Items
Please read carefully the instructions for the preparation of Schedule RC-L.
Some of the amounts reported in Schedule RC-L are regarded as volume indicators
and not necessarily as measures of risk.
<TABLE>
<CAPTION> --------
| C460 | <-
------------ --------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- ---------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Unused commitments: | ////////////////// |
a. Revolving, open-end lines secured by 1-4 family residential properties, e.g., home | ////////////////// |
equity lines ............................................................................... | 3814 434,131 | 1.a.
b. Credit card lines .......................................................................... | 3815 0 | 1.b.
c. Commercial real estate, construction, and land development: | ////////////////// |
(1) Commitments to fund loans secured by real estate ....................................... | 3816 64,337 | 1.c.(1)
(2) Commitments to fund loans not secured by real estate ................................... | 6550 19,581 | 1.c.(2)
d. Securities underwriting .................................................................... | 3817 0 | 1.d.
e. Other unused commitments ................................................................... | 3818 4,646,357 | 1.e.
2. Financial standby letters of credit and foreign office guarantees ............................. | 3819 717,700 | 2.
---------------------------
a. Amount of financial standby letters of credit conveyed to others | RCFD 3820 | 1,464 | ////////////////// | 2.a.
---------------------------
3. Performance standby letters of credit and foreign office guarantees ........................... | 3821 52,474 | 3.
a. Amount of performance standby letters of credit conveyed to | ////////////////// |
---------------------------
others .......................................................... | RCFD 3822 | 0 | ////////////////// | 3.a.
---------------------------
4. Commercial and similar letters of credit ...................................................... | 3411 8,082 | 4.
5. Participations in acceptances (as described in the instructions) conveyed to others by | ////////////////// |
the reporting bank ............................................................................ | 3428 0 | 5.
6. Participations in acceptances (as described in the instructions) acquired by the reporting | ////////////////// |
(nonaccepting) bank ........................................................................... | 3429 0 | 6.
7. Securities borrowed ........................................................................... | 3432 0 | 7.
8. Securities lent (including customers' securities lent where the customer is indemnified | ////////////////// |
against loss by the reporting bank) ........................................................... | 3433 0 | 8.
9. Mortgages transferred (i.e., sold or swapped) with recourse that have been treated as sold | ////////////////// |
for Call Report purposes: | ////////////////// |
a. FNMA and FHLMC residential mortgage loan pools: | ////////////////// |
(1) Outstanding principal balance of mortgages transferred as of the report date ........... | 3650 135,753 | 9.a.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................... | 3651 135,753 | 9.a.(2)
b. Private (nongovernment-issued or -guaranteed) residential mortgage loan pools: | ////////////////// |
(1) Outstanding principal balance of mortgages transferred as of the report date ........... | 3652 0 | 9.b.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................... | 3653 0 | 9.b.(2)
c. Farmer Mac agricultural mortgage loan pools: | ////////////////// |
(1) Outstanding principal balance of mortgages transferred as of the report date ........... | 3654 0 | 9.c.(1)
(2) Amount of recourse exposure on these mortgages as of the report date ................... | 3655 0 | 9.c.(2)
10. When-issued securities: | ////////////////// |
a. Gross commitments to purchase .............................................................. | 3434 0 | 10.a.
b. Gross commitments to sell .................................................................. | 3435 0 | 10.b.
11. Interest rate contracts (exclude when-issued securities): | ////////////////// |
a. Notional value of interest rate swaps ...................................................... | 3450 2,353,000 | 11.a.
b. Futures and forward contracts .............................................................. | 3823 1,617,000 | 11.b.
c. Option contracts (e.g., options on Treasuries): | ////////////////// |
(1) Written option contracts ............................................................... | 3824 542,750 | 11.c.(1)
(2) Purchased option contracts ............................................................. | 3825 1,317,750 | 11.c.(2)
12. Foreign exchange rate contracts: | ////////////////// |
a. Notional value of exchange swaps (e.g., cross-currency swaps)............................... | 3826 0 | 12.a.
b. Commitments to purchase foreign currencies and U.S. dollar exchange (spot, forward, | ////////////////// |
and futures)................................................................................ | 3415 6,636,878 | 12.b.
c. Option contracts (e.g., options on foreign currency): | ////////////////// |
(1) Written option contracts................................................................ | 3827 0 | 12.c.(1)
(2) Purchased otion contracts............................................................... | 3828 0 | 12.c.(2)
</TABLE>
24
<PAGE> 49
<TABLE>
<S> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 06/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-15
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-L--Continued
<TABLE>
<CAPTION> --------
| C461 | <-
----------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- ---------------------------------------------------------------------------------------------------- ---------------------
<S> <C> <C> <C>
13. Contracts on other commodities and equities: | ////////////////// |
a. Notional value of other swaps (e.g., oil swaps) ............................................ | 3829 0 | 13.a
b. Futures and forward contracts (e.g., stock index and commodity--precious metals, | ////////////////// |
wheat, cotton, livestock--contracts) ....................................................... | 3830 0 | 13.b.
c. Option contracts (e.g., options on commodities, individual stocks and stock indexes): | ////////////////// |
(1) Written option contracts................................................................ | 3831 0 | 13.c.(1)
(2) Purchased option contracts ............................................................. | 3832 0 | 13.c.(2)
14. All other off-balance sheet liabilities (itemize and describe each component of this item | ////////////////// |
over 25% of Schedule RC, item 28, "Total equity capital") ..................................... | 3430 0 | 14.
--------------- -----------------------------
a. | TEXT 3555 | | RCFD 3555 | | ////////////////// | 14.a.
---------------------------------------------------------------------------------------------
b. | TEXT 3556 | | RCFD 3556 | | ////////////////// | 14.b.
----------------------------------------------------------------------------------------------
c. | TEXT 3557 | | RCFD 3557 | | ////////////////// | 14.c.
----------------------------------------------------------------------------------------------
d. | TEXT 3558 | | RCFD 3558 | | ////////////////// | 14.d.
----------------------------------------------------------------------------------------------
15. All other off-balance sheet assets (itemize and describe each component of this item | ////////////////// |
over 25% of Schedule RC, item 28, "Total equity capital") ..................................... | 5591 0 | 15.
--------------- -----------------------------
a. | TEXT 5592 | | RCFD 5592 | | ////////////////// | 15.a.
---------------------------------------------------------------------------------------------
b. | TEXT 5593 | | RCFD 5593 | | ////////////////// | 15.b.
----------------------------------------------------------------------------------------------
c. | TEXT 5594 | | RCFD 5594 | | ////////////////// | 15.c.
----------------------------------------------------------------------------------------------
d. | TEXT 5595 | | RCFD 5595 | | ////////////////// | 15.d.
----------------------------------------------------------------------------------------------
</TABLE>
Memoranda
<TABLE>
----------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- ---------------------------------------------------------------------------------------------------- ---------------------
<S> <C> <C> <C>
1. Not applicable | ////////////////// |
2. Not applicable | ////////////////// |
3. Unused commitments with an original maturity exceeding one year that are reported in | ////////////////// |
Schedule RC-L, items 1.a through 1.e, above (report only the unused portions of commitments | ////////////////// |
that are fee paid or otherwise legally binding) ............................................... | 3833 2,816,829 | M.3.
a. Participations in commitments with an original maturity ---------------------|
exceeding one year conveyed to others ............................... | RCFD 3834 | 19,202 | ////////////////// | M.3.a.
---------------------
4. To be completed only by banks with $1 billion or more in total assets: | ////////////////// |
Standby letters of credit and foreign office guarantees (both financial and performance) issued | ////////////////// |
to non-U.S. addresses (domicile) included in Schedule RC-L, items 2 and 3, above .............. | 3377 247,737 | M.4.
5. To be completed for the September report only: | ////////////////// |
Installment loans to individuals for household, family, and other personal expenditures that | ////////////////// |
have been securitized and sold without recourse (with servicing retained), amounts | ////////////////// |
outstanding by type of loan: | ////////////////// |
a. Loans to purchase private passenger automobiles ............................................ | 2741 N/A | M.5.a.
b. Credit cards and related plans ............................................................. | 2742 N/A | M.5.b.
c. All other consumer installment credit (including mobile home loans) ........................ | 2743 N/A | M.5.c.
----------------------
</TABLE>
25
<PAGE> 50
<TABLE>
<S> <C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 06/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-16
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-M--Memoranda
<TABLE>
<CAPTION>
--------
| C460 | <-
----------- ---------
Dollar Amounts in Thousands | RCFD Bil Mil Thou |
- ------------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Extensions of credit by the reporting bank to its executive officers, directors, principal | ////////////////// |
shareholders, and their related interests as of the report date: | ////////////////// |
a. Aggregate amount of all extensions of credit to all executive officers, directors, principal | ////////////////// |
shareholders, and their related interests .................................................... | 6164 2,850 | 1.a.
b. Number of executive officers, directors, and principal shareholders to whom the amount of all | ////////////////// |
extensions of credit by the reporting bank (Including extensions of credit to | ////////////////// |
related interests) equals or exceeds the lesser of $500,000 or 5 percent Number | ////////////////// | 1.b.
--------------------------
of total capital as defined for this purpose in agency regulations. | RCFD 6165 | 6 | ////////////////// |
--------------------------
2. Federal funds sold and securities purchased under agreements to resell with U.S. branches | ////////////////// |
and agencies of foreign banks(1) (included in Schedule RC, items 3.a and 3.b) .................... | 3405 0 | 2.
3. Not applicable. | ////////////////// |
4. Outstanding principal balance of 1-4 family residential mortgage loans serviced for others | ////////////////// |
(include both retained servicing and purchased servicing): | ////////////////// |
a. Mortgages serviced under a GNMA contract ...................................................... | 5500 25,771 | 4.a.
b. Mortgages serviced under a FHLMC contract: | ////////////////// |
(1) Serviced with recourse to servicer ........................................................ | 5501 79,375 | 4.b.(1)
(2) Serviced without recourse to servicer ..................................................... | 5502 772,633 | 4.b.(2)
c. Mortgages serviced under a FNMA contract: | ////////////////// |
(1) Serviced under a regular option contract .................................................. | 5503 56,379 | 4.c.(1)
(2) Serviced under a special option contract .................................................. | 5504 2,531,783 | 4.c.(2)
d. Mortgages serviced under other servicing contracts ............................................ | 5505 4,598,318 | 4.d.
5. To be completed only by banks with $1 billion or more in total assets: | ////////////////// |
Customers' liability to this bank on acceptances outstanding (sum of items 5.a and 5.b must | ////////////////// |
equal Schedule RC, item 9): | ////////////////// |
a. U.S. addressees (domicile) .................................................................... | 2103 31,941 | 5.a.
b. Non-U.S. addressees (domicile) ................................................................ | 2104 0 | 5.b.
6. Intangible assets: | ////////////////// |
a. Mortgage servicing rights ..................................................................... | 3164 17,632 | 6.a.
b. Other identifiable intangible assets: | ////////////////// |
(1) Purchased credit card relationships ....................................................... | 5506 0 | 6.b.(1)
(2) All other identifiable intangible assets .................................................. | 5507 4,262 | 6.b.(2)
c. Goodwill ...................................................................................... | 3163 55,530 | 6.c.
d. Total (sum of items 6.a through 6.c) (must equal Schedule RC, item 10) ........................ | 2143 77,424 | 6.d.
e. Intangible assets that have been grandfathered for regulatory capital purposes ................ | 6442 0 | 6.e.
YES NO
--------------------
7. Does your bank have any mandatory convertible debt that is part of yor Tier 2 capital? ........... | 6167 |///| X | 7.
--------------------
If yes, complete items 7.a throught 7.e: | RCFD Bil Mil Thou |
--------------------
a. Total equity contract notes, gross ............................................................ | 3290 N/A | 7.a.
b. Common or perpetual preferred stock dedicated to redeem the above notes ....................... | 3291 N/A | 7.b.
c. Total equity commitment notes, gross .......................................................... | 3293 N/A | 7.c.
d. Common or perpetual preferred stock dedicated to redeem the above notes ....................... | 3294 N/A | 7.d.
e. Total (item 7.a minus 7.b plus 7.c minus 7.d) ................................................. | 3295 N/A | 7.e.
--------------------
- --------------
</TABLE>
(1) Do not report federal funds sold and securities purchased under agreements
to resell with other commercial banks in the U.S. in this item.
26
<PAGE> 51
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-17
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-M --Continued
<TABLE>
<CAPTION> -------------------------
Dollar Amounts in Thousands | ///////// Bil Mil Thou |
- --------------------------------------------------------------------------------------------- -------------------------
<S> <C> <C> <C>
8. a. Other real estate owned: | /////////////////////// |
(1) Direct and indirect investments in real estate ventures ......................... | RCFD 5372 0 | 8.a.(1)
(2) All other real estate owned: | /////////////////////// |
(a) Construction and land development in domestic offices ....................... | RCON 5508 6,966 | 8.a.(2)(a)
(b) Farmland in domestic offices ................................................ | RCON 5509 0 | 8.a.(2)(b)
(c) 1-4 family residential properties in domestic offices ....................... | RCON 5510 6,043 | 8.a.(2)(c)
(d) Multifamily (5 or more) residential properties in domestic offices .......... | RCON 5511 927 | 8.a.(2)(d)
(e) Nonfarm nonresidential properties in domestic offices ....................... | RCON 5512 18,452 | 8.a.(2)(e)
(f) In foreign offices .......................................................... | RCFN 5513 0 | 8.a.(2)(f)
(3) Total (sum of items 8.a.(1) and 8.a.(2)) (must equal Schedule RC, item 7) ....... | RCFD 2150 32,388 | 8.a.(3)
b. Investments in unconsolidated subsidiaries and associated companies: | /////////////////////// |
(1) Direct and indirect investments in real estate ventures ......................... | RCFD 5374 0 | 8.b.(1)
(2) All other investments in unconsolidated subsidiaries and associated companies ... | RCFD 5375 0 | 8.b.(2)
(3) Total (sum of items 8.b.(1) and 8.b.(2)) (must equal Schedule RC, item 8) ....... | RCFD 2130 0 | 8.b.(3)
c. Total assets of unconsolidated subsidiaries and associated companies ................ | RCFD 5376 0 | 8.c.
9. Noncumulative perpetual preferred stock and related surplus included in Schedule RC, | /////////////////////// |
item 23, "Perpetual preferred stock and related surplus" ............................... | RCFD 3778 0 | 9.
10. Mutual fund and annuity sales in domestic offices during the quarter (include | /////////////////////// |
proprietary, private label, and third party mutual funds): | /////////////////////// |
a. Money market funds .................................................................. | RCON 6441 39,322 | 10.a.
b. Equity securities funds ............................................................. | RCON 8427 4,703 | 10.b.
c. Debt securities funds ............................................................... | RCON 8428 3,190 | 10.c.
d. Other mutual funds .................................................................. | RCON 8429 0 | 10.d.
e. Annuities ........................................................................... | RCON 8430 0 | 10.e.
---------------------------
</TABLE>
<TABLE>
<CAPTION>
----------------------
|Memorandum Dollar Amounts in Thousands | RCFD Bil Mil Thou |
------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Interbank holdings of capital instruments (to be completed for the December report only): | ////////////////// |
a. Reciprocal holdings of banking organizations' capital instruments ........................ | 3836 N/A | M.1.a.
b. Nonreciprocal holdings of banking organizations' capital instruments ..................... | 3837 N/A | M.1.b.
----------------------
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
27
<PAGE> 52
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-18
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-N--Past Due and Nonaccrual Loans, Leases,
and Other Assets
The FFIEC regards the information reported in
all of Memorandum item 1, in items 1 through 10,
column A, and in Memorandum items 2 through 4,
column A, as confidential.
<TABLE>
<CAPTION>
| C470 | <-
---------------------------------------------------------------
| (Column A) | (Column B) | (Column C) |
| Past due | Past due 90 | Nonaccrual |
| 30 through 89 | days or more | |
| days and still | and still | |
| accruing | accruing | |
-------------------- -------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
- ------------------------------------------------------ -------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
1. Loans secured by real estate: | C | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ................ | | 1246 20,512 | 1247 129,736 | 1.a.
b. To non-U.S. addressees (domicile) ............ | O | 1249 0 | 1250 0 | 1.b.
2. Loans to depository institutions and | | ////////////////// | ////////////////// |
acceptances of other banks: | N | ////////////////// | ////////////////// |
a. To U.S. banks and other U.S. depository | | ////////////////// | ////////////////// |
institutions ................................. | F | 5378 0 | 5379 0 | 2.a.
b. To foreign banks ............................. | | 5381 0 | 5382 0 | 2.b.
3. Loans to finance agricultural production and | I | ////////////////// | ////////////////// |
other loans to farmers .......................... | | 1597 0 | 1583 117 | 3.
4. Commercial and industrial loans: | D | ////////////////// | ////////////////// |
a. To U.S. addressees (domicile) ................ | | 1252 1,695 | 1253 24,247 | 4.a.
b. To non-U.S. addressees (domicile) ............ | E | 1255 0 | 1256 0 | 4.b.
5. Loans to individuals for household, family, and | | ////////////////// | ////////////////// |
other personal expenditures: | N | ////////////////// | ///////////////// |
a. Credit cards and related plans ............... | | 5384 117 | 5385 266 | 5.a.
b. Other (includes single payment, installment, | T | ////////////////// | ////////////////// |
and all student loans) ....................... | | 5387 230 | 5388 5,636 | 5.b.
6. Loans to foreign governments and official | I | ////////////////// | ////////////////// |
institutions .................................... | | 5390 0 | 5391 0 | 6.
7. All other loans ................................. | A | 5460 191 | 5461 162 | 7.
8. Lease financing receivables: | | ////////////////// | ////////////////// |
a. Of U.S. addressees (domicile) ................ | L | 1258 0 | 1259 0 | 8.a.
b. Of non-U.S. addressees (domicile) ............ | | 1272 0 | 1791 0 | 8.b.
9. Debt securities and other assets (exclude other | | ////////////////// | ////////////////// |
real estate owned and other repossessed assets) . | | 3506 0 | 3507 0 | 9.
----------------------------------------------------------------
</TABLE>
Amounts reported in items 1 through 8 above include guaranteed and unguaranteed
portions of past due and nonaccrual loans and leases. Report in item 10 below
certain guaranteed loans and leases that have already been included in the
amounts reported in items 1 through 8.
<TABLE>
<CAPTION>
----------------------------------------------------------------
| RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
-------------------- -------------------- --------------------
<S> <C> <C> <C> <C> <C> <C> <C>
10. Loans and leases reported in items 1
through 8 above which are wholly or partially | ////////////////// | ////////////////// | ////////////////// |
guaranteed by the U.S. Government ............... | 5612 807 | 5613 229 | 5614 187 | 10.
a. Guaranteed portion of loans and leases | ////////////////// | ////////////////// | ////////////////// |
included in item 10 above .................... | 5615 703 | 5616 229 | 5617 179 | 10.a.
----------------------------------------------------------------
</TABLE>
28
<PAGE> 53
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-19
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
<TABLE>
<CAPTION>
Schedule RC-N--Continued
----------
| C473 | <-
------------------------------------------------------ --------
| (Column A) | (Column B) | (Column C) |
| Past due | Past due 90 | Nonaccrual |
| 30 through 89 | days or more | |
| days and still | and still | |
Memoranda | accruing | accruing | |
-------------------- -------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
- ------------------------------------------------------ -------------------- -------------------- --------------------
<S> <C> <C> <C>
1. Restructured loans and leases included in | | |
Schedule RC-N, items 1 through 8, above ......... | | | M.1.
2. Loans to finance commercial real estate, | | C O N F I D E N T I A L |
construction, and land development activities | C | |
(not secured by real estate) included in | O | |
Schedule RC-N, items 4 and 7, above ............. | N | | M.2.
F -------------------- --------------------
3. Loans secured by real estate in domestic offices | I | RCON Bil Mil Thou | RCON Bil Mil Thou |
D -------------------- --------------------
(included in Schedule RC-N, item 1, above): | E | ////////////////// | ////////////////// |
a. Construction and land development ............ | N | 2769 6,083 | 3492 16,905 | M.3.a.
b. Secured by farmland .......................... | T | 3494 0 | 3495 379 | M.3.b.
c. Secured by 1-4 family residential properties: | I | ////////////////// | ////////////////// |
(1) Revolving, open-end loans secured by | A | ////////////////// | ////////////////// |
1-4 family residential properties and | L | ////////////////// | ////////////////// |
extended under lines of credit ........... | | 5399 65 | 5400 2,248 | M.3.c.(1)
(2) All other loans secured by 1-4 family | | ////////////////// | ////////////////// |
residential properties ................... | | 5402 6,173 | 5403 26,957 | M.3.c.(2)
d. Secured by multifamily (5 or more) | | ////////////////// | ////////////////// |
residential properties ....................... | | 3500 160 | 3501 1,769 | M.3.d.
e. Secured by nonfarm nonresidential properties . | | 3503 8,031 | 3504 76,078 | M.3.e.
----------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
-------------------------------------------
| (Column A) | (Column B) |
| Past due 30 | Past due 90 |
| through 89 days | days or more |
-------------------- --------------------
| RCFD Bil Mil Thou | RCFD Bil Mil Thou |
-------------------- --------------------
<S> <C> <C> <C> <C>
4. Interest rate, foreign exchange rate, and other | | ////////////////// |
commodity and equity contracts: | | ////////////////// |
a. Book value of amounts carried as assets ...... | CONFIDENTIAL | 3528 0 | M.4.a.
b. Replacement cost of contracts with a | | ////////////////// |
positive replacement cost .................... | | 3530 0 | M.4.b.
-------------------------------------------
</TABLE>
29
<PAGE> 54
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-20
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-O--Other Data for Deposit Insurance Assessments
An amended Certified Statement should be submitted to the FDIC if the amounts
reported in items 1 through 10 of this schedule are amended after the
semiannual Certified Statement originally covering this report date has been
filed with the FDIC.
<TABLE>
<CAPTION>
----------
------------| C475 |
Dollar Amounts in Thousands | RCON Bil Mil Thou |
- --------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Unposted debits (see instructions): | ////////////////// |
a. Actual amount of all unposted debits ...................................................... | 0030 N/A | 1.a.
OR | ////////////////// |
b. Separate amount of unposted debits: | ////////////////// |
(1) Actual amount of unposted debits to demand deposits ................................... | 0031 0 | 1.b.(1)
(2) Actual amount of unposted debits to time and savings deposits(1) ...................... | 0032 0 | 1.b.(2)
2. Unposted credits (see instructions): | ////////////////// |
a. Actual amount of all unposted credits ..................................................... | 3510 N/A | 2.a.
OR | ////////////////// |
b. Separate amount of unposted credits: | ////////////////// |
(1) Actual amount of unposted credits to demand deposits .................................. | 3512 110,947 | 2.b.(1)
(2) Actual amount of unposted credits to time and savings deposits(1) ..................... | 3514 0 | 2.b.(2)
3. Uninvested trust funds (cash) held in bank's own trust department (not included in total | ////////////////// |
deposits in domestic offices) ................................................................ | 3520 0 | 3.
4. Deposits of consolidated subsidiaries in domestic offices and in insured branches in | ////////////////// |
Puerto Rico and U.S. territories and possessions (not included in total deposits): | ////////////////// |
a. Demand deposits of consolidated subsidiaries .............................................. | 2211 13,275 | 4.a.
b. Time and savings deposits(1) of consolidated subsidiaries ................................. | 2351 0 | 4.b.
c. Interest accrued and unpaid on deposits of consolidated subsidiaries ...................... | 5514 0 | 4.c.
5. Deposits in insured branches in Puerto Rico and U.S. territories and possessions: | ////////////////// |
a. Demand deposits in insured branches (included in Schedule RC-E, Part II) .................. | 2229 0 | 5.a.
b. Time and savings deposits(1) in insured branches (included in Schedule RC-E, Part II) ..... | 2383 0 | 5.b.
c. Interest accrued and unpaid on deposits in insured branches | ////////////////// |
(included in Schedule RC-G, item 1.b) ..................................................... | 5515 0 | 5.c.
----------------------
----------------------
Item 6 is not applicable to state nonmember banks that have not been authorized by the | ////////////////// |
Federal Reserve to act as pass-through correspondents. | ////////////////// |
6. Reserve balances actually passed through to the Federal Reserve by the reporting bank on | ////////////////// |
behalf of its respondent depository institutions that are also reflected as deposit liabilities| ////////////////// |
of the reporting bank: | ////////////////// |
a. Amount reflected in demand deposits (included in Schedule RC-E, Part I, | ////////////////// |
Memorandum item 4.a) ...................................................................... | 2314 0 | 6.a.
b. Amount reflected in time and savings deposits(1) (included in Schedule RC-E, Part I, | ////////////////// |
Memorandum item 4.b) ...................................................................... | 2315 0 | 6.b.
7. Unamortized premiums and discounts on time and savings deposits:(1) | ////////////////// |
a. Unamortized premiums ...................................................................... | 5516 0 | 7.a.
b. Unamortized discounts ..................................................................... | 5517 0 | 7.b.
----------------------
- -------------------------------------------------------------------------------------------------------------------------------
| |
|8. To be completed by banks with "Oakar deposits." |
| ---------------------- |
| Total "Adjusted Attributable Deposits" of all institutions acquired under Section 5(d)(3) of | ////////////////// | |
| the Federal Deposit Insurance Act (from most recent FDIC Oakar Transaction Worksheet(s)) .... | 5518 242,934 | 8. |
| ---------------------- |
| |
- -------------------------------------------------------------------------------------------------------------------------------
______________________
9. Deposits in lifeline accounts ................................................................ | 5596 ///////////// | 9.
10. Benefit-responsive "Depository Institution Investment Contracts" (included in total | ////////////////// |
deposits in domestic offices) ................................................................ | 8432 0 | 10.
----------------------
</TABLE>
______________
(1) For FDIC insurance assessment purposes, "time and savings deposits"
consists of nontransaction accounts and all transaction accounts other than
demand deposits.
30
<PAGE> 55
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-21
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-O--Continued
<TABLE>
<CAPTION>
Memoranda (to be completed each quarter except as noted)
----------------------
Dollar Amounts in Thousands | RCON Bil Mil Thou |
- -------------------------------------------------------------------------------------------------- --------------------
<S> <C> <C> <C>
1. Total deposits in domestic offices of the bank (sum of Memorandum items 1.a.(1) and 1.b.(1) | ////////////////// |
must equal Schedule RC, item 13.a): | ////////////////// |
a. Deposit accounts of $100,000 or less: | ////////////////// |
(1) Amount of deposit accounts of $100,000 or less ........................................ | 2702 5,837,328 | M.1.a.(1)
(2) Number of deposit accounts of $100,000 or less (to be Number | ////////////////// |
---------------------------
completed for the June report only) ........................ | RCON 3779 | 214,627 | ////////////////// | M.1.a.(2)
---------------------------
b. Deposit accounts of more than $100,000: | ////////////////// |
(1) Amount of deposit accounts of more than $100,000 ........... Number | 2710 3,926,486 | M.1.b.(1)
---------------------------
(2) Number of deposit accounts of more than $100,000 ........... | RCON 2722 | 7,236 | ////////////////// | M.1.b.(2)
-------------------------------------------------
2. Estimated amount of uninsured deposits in domestic offices of the bank:
a. An estimate of your bank's uninsured deposits can be determined by multiplying the number of
deposit accounts of more than $100,000 reported in Memorandum item 1.b.(2) above by
$100,000 and subtracting the result from the amount of deposit accounts of more than
$100,000 reported in Memorandum item 1.b.(1) above.
Indicate in the appropriate box at the right whether your bank has a method or procedure for YES NO
----------------------
determining a better estimate of uninsured deposits than the estimate described above ..... | 6861| |///| X | M.2.a.
--------------------
b. If the box marked YES has been checked, report the estimate of uninsured deposits | RCON Bil Mil Thou |
--------------------
determined by using your bank's method or procedure ....................................... | 5597 N/A | M.2.b.
----------------------
- -----------------------------------------------------------------------------------------------------------------------------
| C477 | <-
Person to whom questions about the Reports of Condition and Income should be directed: ----------
</TABLE>
ROBERT DUFF, ASSISTANT VICE PRESIDENT (203) 986-2474
- --------------------------------------- --------------------------------------
Name and Title (TEXT 8901) Area code and phone number (TEXT 8902)
31
<PAGE> 56
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-22
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
Schedule RC-R--Risk-Based Capital
This schedule must be completed by all banks as follows: Banks that reported
total assets of $1 billion or more in Schedule RC, item 12, for June 30, 1993,
must complete items 2 through 9 and Memorandum item 1. Banks with assets of
less than $1 billion must complete items 1 through 3 below or Schedule RC-R in
its entirety, depending on their response to item 1 below.
1. Test for determining the extent to which Schedule RC-R must be completed. To be completed
------------
only by banks with total assets of less than $1 billion. Indicate in the appropriate | C480 | <-
----- ----------
box at the right whether the bank has total capital greater than or equal to eight percent | YES NO |
------------ ---------------
of adjusted total assets ............................................................... | RCFD 6056 | |////| | 1.
-----------------------------
For purposes of this test, adjusted total assets equals total assets less cash, U.S. Treasuries, U.S. Government
agency obligations, and 80 percent of U.S. Government-sponsored agency obligations plus the allowance for loan
and lease losses and selected off-balance sheet items as reported on Schedule RC-L (see instructions).
If the box marked YES has been checked, then the bank only has to complete items 2 and 3 below. If the box marked
NO has been checked, the bank must complete the remainder of this schedule.
A NO response to item 1 does not necessarily mean that the bank's actual risk-based capital ratio is less than eight
percent or that the bank is not in compliance with the risk-based capital guidelines.
------------------------------------------
| (Column A) | (Column B) |
|Subordinated Debt(1)| Other |
| and Intermediate | Limited- |
Items 2 and 3 are to be completed by all banks. | Term Preferred | Life Capital |
| Stock | Instruments |
-------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
- ------------------------------------------------------------------------------ -------------------- --------------------
2. Subordinated debt(1) and other limited-life capital instruments (original | ////////////////// | ////////////////// |
weighted average maturity of at least five years) with a remaining | ////////////////// | ////////////////// |
maturity of: | ////////////////// | ////////////////// |
a. One year or less ...................................................... | 3780 0 | 3786 0 | 2.a.
b. Over one year through two years ....................................... | 3781 0 | 3787 0 | 2.b.
c. Over two years through three years .................................... | 3782 0 | 3788 0 | 2.c.
d. Over three years through four years ................................... | 3783 0 | 3789 0 | 2.d.
e. Over four years through five years .................................... | 3784 0 | 3790 0 | 2.e.
f. Over five years ....................................................... | 3785 0 | 3791 0 | 2.f.
-------------------------------------------
---------------------
3. Total qualifying capital (i.e., Tier 1 and Tier 2 capital) allowable under the risk-based | RCFD Bil Mil Thou |
--------------------
capital guidelines ......................................................................... | 3792 1,315,830 | 3.
----------------------
------------------------------------------
| (Column A) | (Column B) |
Items 4-9 and Memorandum item 1 are to be completed | Assets | Credit Equiv- |
by banks that answered NO to item 1 above and | Recorded | alent Amount |
by banks with total assets of $1 billion or more. | on the | of Off-Balance |
| Balance Sheet | Sheet Items(2) |
-------------------- --------------------
4. Assets and credit equivalent amounts of off-balance sheet items assigned | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
-------------------- --------------------
to the Zero percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet: | ////////////////// | ////////////////// |
(1) Securities issued by, other claims on, and claims unconditionally | ////////////////// | ////////////////// |
guaranteed by, the U.S. Government and its agencies and other | ////////////////// | ////////////////// |
OECD central governments .......................................... | 3794 1,682,256 | ////////////////// | 4.a.(1)
(2) All other ......................................................... | 3795 257,131 | ////////////////// | 4.a.(2)
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3796 0 | 4.b.
-------------------------------------------
</TABLE>
______________
(1) Exclude mandatory convertible debt reported in Schedule RC-M, item 7.e,
"Total."
(2) Do not report in column B the risk-weighted amount of assets reported in
column A.
32
<PAGE> 57
<TABLE>
<S><C>
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION Call Date: 6/30/94 ST-BK: 09-0590 FFIEC 031
Address: 777 MAIN STREET Page RC-23
City, State Zip: HARTFORD, CT 06115
FDIC Certificate No.: |0|2|4|9|9|
</TABLE>
Schedule RC-R--Continued
<TABLE>
<CAPTION>
-------------------------------------------
| (Column A) | (Column B) |
| Assets | Credit Equiv- |
| Recorded | alent Amount |
| on the | of Off-Balance |
| Balance Sheet | Sheet Items(1) |
-------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
- ------------------------------------------------------------------------------ -------------------- --------------------
<S> <C> <C> <C> <C> <C>
5. Assets and credit equivalent amounts of off-balance sheet items | ////////////////// | ////////////////// |
assigned to the 20 percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet: | ////////////////// | ////////////////// |
(1) Claims conditionally guaranteed by the U.S. Government and its | ////////////////// | ////////////////// |
agencies and other OECD central governments ....................... | 3798 28,703 | ////////////////// | 5.a.(1)
(2) Claims collateralized by securities issued by the U.S. Govern- | ////////////////// | ////////////////// |
ment and its agencies and other OECD central governments; by | ////////////////// | ////////////////// |
securities issued by U.S. Government-sponsored agencies; and | ////////////////// | ////////////////// |
by cash on deposit ................................................ | 3799 0 | ////////////////// | 5.a.(2)
(3) All other ......................................................... | 3800 2,841,097 | ////////////////// | 5.a.(3)
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3801 206,582 | 5.b.
6. Assets and credit equivalent amounts of off-balance sheet items | ////////////////// | ////////////////// |
assigned to the 50 percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet .................................. | 3802 3,482,611 | ////////////////// | 6.a.
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3803 224,752 | 6.b.
7. Assets and credit equivalent amounts of off-balance sheet items | ////////////////// | ////////////////// |
assigned to the 100 percent risk category: | ////////////////// | ////////////////// |
a. Assets recorded on the balance sheet .................................. | 3804 7,786,693 | ////////////////// | 7.a.
b. Credit equivalent amount of off-balance sheet items ................... | ////////////////// | 3805 2,142,903 | 7.b.
8. On-balance sheet asset values excluded from the calculation of the | ////////////////// | ////////////////// |
risk-based capital ratio(2) .............................................. | 3806 (27,947)| ////////////////// | 8.
9. Total assets recorded on the balance sheet (sum of | ////////////////// | ////////////////// |
items 4.a, 5.a, 6.a, 7.a, and 8, column A)(must equal Schedule RC, | ////////////////// | ////////////////// |
item 12 plus items 4.b and 4.c) .......................................... | 3807 16,050,544 | ////////////////// | 9.
-------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
------------------------------------------
| (Column A) | (Column B) |
| Notional | Replacement |
| Principal | Cost |
Memorandum | Value | (Market Value) |
-------------------- --------------------
Dollar Amounts in Thousands | RCFD Bil Mil Thou | RCFD Bil Mil Thou |
- ------------------------------------------------------------------------------ -------------------- --------------------
<S> <C> <C> <C> <C> <C>
1. Notional principal value and replacement cost of interest rate and | ////////////////// | ////////////////// |
foreign exchange rate contracts (in column B, report only those | ////////////////// | ////////////////// |
contracts with a positive replacement cost): | ////////////////// | ////////////////// |
a. Interest rate contracts (exclude futures contracts) ................... | ////////////////// | 3808 24,909 | M.1.a.
(1) With a remaining maturity of one year or less ..................... | 3809 900,000 | ////////////////// | M.1.a.(1)
(2) With a remaining maturity of over one year ........................ | 3812 2,770,750 | ////////////////// | M.1.a.(2)
b. Foreign exchange rate contracts (exclude contracts with an original | ////////////////// | ////////////////// |
maturity of 14 days or less and futures contracts) .................... | ////////////////// | 3811 182,605 | M.1.b.
(1) With a remaining maturity of one year or less ..................... | 3812 6,314,817 | ////////////////// | M.1.b.(1)
(2) With a remaining maturity of over one year ........................ | 3813 0 | ////////////////// | M.1.b.(2)
-------------------------------------------
</TABLE>
- ---------------
(1) Do not report in column B the risk-weighted amount of assets reported in
column A.
(2) Until a final rule on the regulatory capital treatment of net unrealized
holding gains (losses) on available-for-sale securities that is applicable
to the reporting bank has taken effect, a bank that has adopted FASB
Statement No. 115 should include the difference between the fair value and
the amortized cost of its available-for-sale securities in item 8 and
report the amortized cost of these securities in items 4 through 7 above.
Item 8 also includes on-balance sheet asset values (or portions thereof) of
off-balance sheet interest rate, foreign exchange rate, and commodity
contracts and those contracts (e.g., futures contracts) not subject to
risk-based capital. Exclude from item 8 margin accounts and accrued
receivables as well as any portion of the allowance for loan and lease
losses in excess of the amount that may be included in Tier 2 capital.
33
<PAGE> 58
Legal Title of Bank: SHAWMUT BANK CONNECTICUT, Call Date: 6/30/94
NATIONAL ASSOCIATION ST-BK: 09-0590
Address: 777 MAIN STREET FFIEC 031
City, State Zip: HARTFORD, CT, 06115 Page RC-24
FDIC Certificate No.: 02499
OPTIONAL NARRATIVE STATEMENT CONCERNING THE AMOUNTS
REPORTED IN THE REPORTS OF CONDITION AND INCOME
at close of business on June 30, 1994
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION HARTFORD , Connecticut
- ---------------------------------------------- ----------- -----------
Legal Title of Bank City State
The management of the reporting bank may, if it wishes, submit a brief
narrative statement on the amounts reported in the Reports of Condition and
Income. This optional statement will be made available to the public, along
with the publicly available data in the Reports of Condition and Income, in
response to any request for individual bank report data. However, the
information reported in column A and in all of Memorandum item 1 of Schedule
RC-N is regarded as confidential and will not be released to the public. BANKS
CHOOSING TO SUBMIT THE NARRATIVE STATEMENT SHOULD ENSURE THAT THE STATEMENT
DOES NOT CONTAIN THE NAMES OR OTHER IDENTIFICATIONS OF INDIVIDUAL BANK
CUSTOMERS, REFERENCES TO THE AMOUNTS REPORTED IN THE CONFIDENTIAL ITEMS IN
SCHEDULE RC-N, OR ANY OTHER INFORMATION THAT THEY ARE NOT WILLING TO HAVE MADE
PUBLIC OR THAT WOULD COMPROMISE THE PRIVACY OF THEIR CUSTOMERS. Banks choosing
not to make a statement may check the "No comment" box below and should make no
entries of any kind in the space provided for the narrative statement; i.e., DO
NOT enter in this space such phrases as "No statement," "Not applicable,"
"N/A," "No comment," and "None."
The optional statement must be entered on this sheet. The statement should not
exceed 100 words. Further, regardless of the number of words, the statement
must not exceed 750 characters, including punctuation, identation, and standard
spacing between words and sentences. If any submission should exceed 750
characters, as defined, it will be truncated at 750 characters with no notice
to the submitting bank and the truncated statement will appear as the bank's
statement both on agency computerized records and in computer-file releases to
the public.
All information furnished by the bank in the narrative statement must be
accurate and not misleading. Appropriate efforts shall be taken by the
submitting bank to ensure the statement's accuracy. The statement must be
signed, in the space provided below, by a senior officer of the bank who
thereby attests to its accuracy.
If, subsequent to the original submission, material changes are submitted for
the data reported in the Reports of Condition and Income, the existing
narrative statement will be deleted from the files, and from disclosure; the
bank, at its option, may replace it with a statement, under signature,
appropriate to the amended data.
The optional narrative statement will appear in agency records and in release
to the public exactly as submitted (or amended as described in the preceding
paragraph) by the management of the bank (except for the truncation of
statements exceeding the 750-character limit described above). THE STATEMENT
WILL NOT BE EDITED OR SCREENED IN ANY WAY BY THE SUPERVISORY AGENCIES FOR
ACCURACY OR RELEVANCE. DISCLOSURE OF THE STATEMENT SHALL NOT SIGNIFY THAT ANY
FEDERAL SUPERVISORY AGENCY HAS VERIFIED OR CONFIRMED THE ACCURACY OF THE
INFORMATION CONTAINED THEREIN. A STATEMENT TO THIS EFFECT WILL APPEAR ON ANY
PUBLIC RELEASE OF THE OPTIONAL STATEMENT SUBMITTED BY THE MANAGEMENT OF THE
REPORTING BANK.
- -------------------------------------------------------------------------------
No comment /X/ (RCON 6979) C471 C472
BANK MANAGEMENT STATEMENT (please type or print clearly):
(TEXT 6980)
[signature] JULY 29, 1994
---------------------- -------------
Signature of Executive Date of
Officer of Bank Signature
34
<PAGE> 1
EXHIBIT 99.1
LETTER OF TRANSMITTAL
THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 p.m., NEW YORK
CITY TIME, ON __________, 1995 (AS SUCH DATE AND TIME MAY BE EXTENDED BY THE
COMPANY IN ITS SOLE DISCRETION, THE "EXPIRATION DATE").
ENVIRODYNE INDUSTRIES, INC.
12% Series A Senior Secured Notes due 2000
and
Floating Rate Series C Senior Secured Notes due 2000
PLEASE READ CAREFULLY THE ATTACHED INSTRUCTIONS
If you desire to accept the Exchange Offer, this Letter of Transmittal
should be completed, signed, and submitted to:
By Overnight Carrier: By Facsimile:
Shawmut Bank Connecticut, N.A. Shawmut Bank Connecticut, N.A.
Corporate Trust Operations, MSN 224 Attn: Patricia Williams
777 Main Street, Lower Level (203) 986-7908
Hartford, Connecticut 06115
Attn: Patricia Williams
DELIVERY OF THIS LETTER OF TRANSMITTAL TO AN ADDRESS OTHER THAN AS SET
FORTH ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN
THAT SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY.
The undersigned hereby acknowledges receipt of the Prospectus dated
_____________, 1995 (the "Prospectus") of Envirodyne Industries, Inc., a
Delaware corporation ("Envirodyne" or the "Company"), and this Letter of
Transmittal (the "Letter of Transmittal"), that together constitute
Envirodyne's offer (the "Exchange Offer") to exchange (i) $1,000 principal
amount of its new 12% Series B Senior Secured Notes due 2000 (the "New Series B
Notes") for each $1,000 principal amount of its outstanding 12% Series A Senior
Secured Notes due 2000 (the "Old Series A Notes"), and (ii) $1,000 principal
amount of its new Floating Rate Series D Senior Secured Notes due 2000 (the
"New Series D Notes" and collectively with the New Series B Notes, the "New
Notes") for each $1,000 principal amount of its outstanding Floating Rate
Series C Senior Secured Notes due 2000 (the "Old Series C Notes" and
collectively with the Old Series A Notes, the "Old Notes"). Capitalized terms
used but not defined herein have the meanings ascribed to them in the
Prospectus.
The undersigned hereby tenders the Old Notes described in Box 1 below
(the "Tendered Old Notes") pursuant to the terms and conditions described in
the Prospectus and this Letter of Transmittal. The undersigned is the
registered owner of all the Tendered Old Notes and the undersigned represents
that it has received from each beneficial owner of Tendered Old Notes
("Beneficial Owners") a duly completed and executed form of "Instruction to
Registered Holder from Beneficial Owner" accompanying
<PAGE> 2
this Letter of Transmittal, instructing the undersigned to take the action
described in this Letter of Transmittal.
This Letter of Transmittal is to be used whether the Old Notes are to
be physically delivered herewith, or whether guaranteed delivery procedures or
book-entry delivery procedures are being used, pursuant to the procedures set
forth in the Prospectus under the caption "The Exchange Offer -- Procedures for
Tendering." If delivery of Tendered Old Notes is to be made by book-entry
transfer to the account maintained by the Exchange Agent at The Depository
Trust Company ("DTC"), this Letter of Transmittal need not be manually
executed; provided, however, that tenders of Old Notes must be effected in
accordance with the procedures mandated by DTC's Automated Tender Offer Program
("ATOP") and the procedures set forth in the Prospectus under the caption "The
Exchange Offer -- Exchanging Book Entry Old Notes." If a registered holder
desires to tender Old Notes and such Old Notes are not immediately available or
time will not permit all documents required by the Exchange Offer to reach the
Exchange Agent (or such registered holder is unable to complete the procedure
for book-entry transfer on a timely basis) prior to the Expiration Date, a
tender may be effected in accordance with the guaranteed delivery procedures
set forth in the Prospectus under the caption "The Exchange Offer -- Guaranteed
Delivery Procedures." See instruction 2.
Subject to, and effective upon, the acceptance for exchange of the
Tendered Old Notes, the undersigned hereby exchanges, assigns, and transfers
to, or upon the order of, Envirodyne all right, title, and interest in, to, and
under the Tendered Old Notes.
Please issue the New Notes exchanged for Tendered Old Notes in the
name(s) of the undersigned. Similarly, unless otherwise indicated under
"Special Delivery Instructions" below (Box 3), please send or cause to be sent
the certificates for New Notes (and accompanying documents, as appropriate) to
the undersigned at the address shown below in Box 1.
The undersigned hereby irrevocably constitutes and appoints the
Exchange Agent as the true and lawful agent and attorney in fact of the
undersigned with respect to the Tendered Old Notes, with full power of
substitution (such power of attorney being deemed to be an irrevocable power
coupled with an interest), to (i) deliver the Tendered Old Notes to the Company
or cause ownership of the Tendered Old Notes to be transferred to, or upon the
order of, the Company, on the books of the registrar for the Old Notes and
deliver all accompanying evidences of transfer and authenticity to, or transfer
ownership of such Old Notes on the account books maintained by DTC to, or upon
the order of, the Company upon receipt by the Exchange Agent, as the
undersigned's agent, of the New Notes to which the undersigned is entitled upon
the acceptance by the Company of the Tendered Old Notes pursuant to the
Exchange Offer, and (ii) receive all benefits and otherwise exercise all rights
of beneficial ownership of the Tendered Old Notes, all in accordance with the
terms of the Exchange Offer.
The undersigned understands that tenders of Old Notes pursuant to the
procedures described under the caption "The Exchange Offer -- Procedures for
Tendering" in the Prospectus and in the instructions hereto will constitute a
binding agreement between the undersigned and Envirodyne upon the terms and
subject to the conditions of the Exchange Offer, subject only to withdrawal of
such tenders on the terms set forth in the Prospectus under the caption "The
Exchange Offer -- Withdrawal of Tenders." All authority herein conferred or
agreed to be conferred shall survive the death or incapacity of the undersigned
and any Beneficial Owner(s), and every obligation of the undersigned or any
Beneficial Owners hereunder shall be binding upon the heirs, representatives,
successors, and assigns of the undersigned and such Beneficial Owner(s).
-2-
<PAGE> 3
The undersigned hereby represents and warrants that the undersigned
has full power and authority to tender, exchange, assign, and transfer the
Tendered Old Notes and that Envirodyne will acquire good and unencumbered title
thereto, free and clear of all liens, restrictions, charges, encumbrances, and
adverse claims when the Tendered Old Notes are acquired by Envirodyne as
contemplated herein. The undersigned and each Beneficial Owner will, upon
request, execute and deliver any additional documents reasonably requested by
the Company as necessary or desirable to complete and give effect to the
transactions contemplated hereby.
The undersigned hereby represents and warrants that the information
set forth in Box 2 is true and correct.
By accepting the Exchange Offer, the undersigned hereby represents and
warrants that (i) the New Notes to be acquired by the undersigned and any
Beneficial Owner(s) in connection with the Exchange Offer are being acquired by
the undersigned and any Beneficial Owner(s) in the ordinary course of business
of the undersigned and any Beneficial Owner(s), (ii) the undersigned and each
Beneficial Owner are not participating, do not intend to participate, and have
no arrangement or understanding with any person to participate, in the
distribution of the New Notes, and (iii) the undersigned and each Beneficial
Owner acknowledge and agree that any person participating in the Exchange Offer
for the purpose of distributing the New Notes must comply with the registration
and prospectus delivery requirements of the Securities Act of 1933, as amended
(together with the rules and regulations promulgated thereunder, the
"Securities Act"), in connection with a secondary resale transaction of the New
Notes acquired by such person and cannot rely on the position of the Staff of
the Securities and Exchange Commission (the "Commission") set forth in
no-action letters that are discussed in the section of the Prospectus entitled
"The Exchange Offer--Resales of the New Notes."
The undersigned and each Beneficial Owner understand that a secondary
resale transaction described in clause (iii) above should be covered by an
effective registration statement containing the selling securityholder
information required by Item 507 of Regulation S-K of the Commission. Except as
otherwise disclosed to the Company in writing, the undersigned hereby
represents and warrants that neither it nor any Beneficial Owner(s) is an
"affiliate," as defined under Rule 405 of the Securities Act, of the Company.
If the undersigned or any Beneficial Owner(s) is a "broker" or
"dealer" registered under the Exchange Act, the undersigned understands and
acknowledges that it and any such Beneficial Owner(s) may be deemed to be an
"underwriter" within the meaning of the Securities Act and, therefore, must
deliver a prospectus relating to the New Notes in connection with any resales
by it or any Beneficial Owner(s) of New Notes acquired for its own account or
the account of any Beneficial Owner(s) in the Exchange Offer. If the
undersigned or any Beneficial Owner(s) is a "broker" or "dealer" that acquired
Old Notes for its own account pursuant to its market-making or other trading
activities (other than Old Notes acquired directly from the Company), the
undersigned and any Beneficial Owner(s) may use the Prospectus to satisfy the
prospectus delivery requirements of the Securities Act. Notwithstanding the
foregoing, the undersigned does not thereby admit that it or any Beneficial
Owner(s) is an "underwriter" within the meaning of the Securities Act.
-3-
<PAGE> 4
PLEASE READ THIS ENTIRE LETTER OF TRANSMITTAL
CAREFULLY BEFORE COMPLETING THE BOXES
BOX 1
DESCRIPTION OF OLD NOTES TENDERED
(ATTACH ADDITIONAL SIGNED PAGES, IF NECESSARY)
<TABLE>
<CAPTION>
Aggregate
Principal
Name(s) and address(es) of Registered Old Note Series of Amount Aggregate
Holder(s), exactly as name(s) appear(s) on Old Note Old Notes Certificate Represented Principal
Certificate(s) (Series A or Number(s) by Amount
(Please fill in, if blank) Series C) of Old Notes Certificate(s) Tendered*
<S> <C> <C> <C> <C>
</TABLE>
* The minimum permitted tender is $1,000 in principal amount of Old
Notes. All other tenders must be in integral multiples of $1,000 of
principal amount. Unless otherwise indicated in this column, the
principal amount of all Old Note Certificates identified in this Box 1
or delivered to the Exchange Agent herewith shall be deemed tendered.
See Instruction 4.
BOX 2
BENEFICIAL OWNER(S)
<TABLE>
<CAPTION>
State of Principal Residence of Each Beneficial Owner of Principal Amount of Tendered Old Notes Held for Account
Tendered Old Notes of Beneficial Owner
<S> <C>
</TABLE>
If delivery of Old Notes is to be made by book-entry transfer to the
account maintained by the Exchange Agent at DTC, then tenders of Old Notes must
be effected in accordance with the procedures mandated by DTC's Automated
Tender Offer Program and the procedures set forth in the Prospectus under the
caption "The Exchange Offer -- Exchanging Book Entry Old Notes."
-4-
<PAGE> 5
BOX 3
SPECIAL DELIVERY INSTRUCTIONS
(SEE INSTRUCTIONS 5, 6 AND 7)
To be completed ONLY if the New Notes exchanged for the Old Notes and
untendered Old Notes are to be sent to someone other than the undersigned, or
to the undersigned at an address other than that shown above.
Mail New Note(s) and any untendered Old Notes to:
Name(s):
________________________________________________________________________________
(please print)
Address:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(include Zip Code)
Tax Identification or
Social Security No.:
BOX 4
USE OF GUARANTEED DELIVERY
[ ] CHECK HERE ONLY IF OLD NOTES ARE BEING TENDERED BY MEANS OF A NOTICE
OF GUARANTEED DELIVERY. See Instruction 2. If this box is checked,
please provide the following information:
Name(s) of Registered Holder(s): ______________________________________________
_______________________________________________________________________________
Date of Execution of Notice of Guaranteed Delivery: ___________________________
Name of Institution which Guaranteed Delivery: ________________________________
-5-
<PAGE> 6
BOX 5
TENDERING HOLDER SIGNATURE
(SEE INSTRUCTIONS 1 AND 5)
IN ADDITION, COMPLETE SUBSTITUTE FORM W-9
<TABLE>
<S> <C>
X _________________________________________ Signature Guarantee
(If required by Instruction 5)
X _________________________________________ Authorized Signature
(Signature of Registerd Holder(s)
or Authorized Signatory) X _____________________________________
Note: Note: The above lines must be signed by the Name: _________________________________
registered holder(s) of Old Notes as their name(s) (please print)
appear(s) on the Old Notes or by person(s) authorized to
become registered holder(s) (which must be transmitted Title: __________________________________
with this Letter of Transmittal). If signature is by a
trustee, executor, administrator, guardian, attorney- Name of Firm: __________________________
in-fact officer, or other person acting in a fiduciary (Must be an Eligible Institution
or representative capacity, such person must set as defined in Instruction 2)
forth his or her full title below. See Instruction 5.
Address: _______________________________
Name(s): ______________________________________
_______________________________
______________________________________
_______________________________
Capacity: _____________________________________
(include Zip Code)
_____________________________________
Street Address: _______________________________
Area Code and Telephone Number:
__________________________________
_______________________________
__________________________________
(include Zip Code) _______________________________
Area Code and Telephone Number:
__________________________________ Dated: _______________________________
Tax Identification of Social Security Number:
__________________________________
</TABLE>
-6-
<PAGE> 7
<TABLE>
<S><C>
397 4-94 1041-15
SUBSTITUTE
FORM W-9
(REV. MARCH 1994) REQUEST FOR TAXPAYER GIVE FORM TO THE
Department of the Treasury IDENTIFICATION NUMBER AND CERTIFICATION REQUESTER. DO NOT
Internal Revenue Service SEND TO THE IRS.
- ------------------------------------------------------------------------------------------------------------------------------------
PLEASE PRINT OR TYPE
Name (if joint names, list first and circle the name of the person or entity whose number you enter in Part I below. See
instructions on Page 2 if your name has changed.)
- ------------------------------------------------------------------------------------------------------------------------------------
Business name (Sale proprietors see instructions on page 2.)
- ------------------------------------------------------------------------------------------------------------------------------------
Please check appropriate box: / / Individual Sale proprietor / / Corporation / / Partnership / / Other ____________________
- ------------------------------------------------------------------------------------------------------------------------------------
Address (number, street, and apt. or suite no.) Requestor's name and address (optional)
- ----------------------------------------------------------------
City, State, and ZIP code
- ------------------------------------------------------------------------------------------------------------------------------------
PART I TAXPAYER IDENTIFICATION NUMBER (TIN) List account number(s) here (optional)
- ------------------------------------------------------------------------------
Enter your TIN in the appropriate box. For Social Security Number
individuals, this is your social security number _____-____-________
(SSN). For sole proprietors, see the enclosed
guidelines. For other entities, it is your OR ------------------------------------------------------
employer identification number (EIN). If you do PART II For Payees Exempt From Backup
not have a number, see How To Get a TIN below. Employer identification Withholding (See the enclosed guidelines
number on page 2)
NOTE: If the account is in more than one name, _____-____-________ ------------------------------------------------------
see the chart on the enclosed guidelines on
whose number to enter.
- ------------------------------------------------------------------------------------------------------------------------------------
PART III CERTIFICATION
- ------------------------------------------------------------------------------------------------------------------------------------
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification number (or I am waiting for a number to be issued to me),
and
2. I am not subject to the backup withholding because: (a) I am exempt from backup withholding, or (b) I have not been notified by
the Internal Revenue Service that I am subject to backup withholding as a result of a failure to report all interest or
dividends, or (c) the IRS has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS. -- You must cross out Item 2 above if you have been notified by the IRS that you are currently subject
to backup withholding because of underreporting interest or dividends on your tax return. For real estate transactions, Item 2 does
not apply. For mortgage interest paid, the acquisition or abandonment of secured property, cancellation of debt, contributions to
an individual retirement arrangement (IRA), and generally payments other than interest and dividends, you are not required to sign
the Certification, but you must provide your correct TIN. (Also see Part III Instructions on page 2.)
- ------------------------------------------------------------------------------------------------------------------------------------
Sign
Here Signature Date
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-7-
<PAGE> 8
INSTRUCTIONS TO LETTER OF TRANSMITTAL
FORMING PART OF THE TERMS AND CONDITIONS
OF THE EXCHANGE OFFER
1. Delivery of this Letter of Transmittal and Old Notes. The
Tendered Old Notes, as well as a properly completed and duly executed copy of
this Letter of Transmittal, a Substitute Form W-9 (or facsimile thereof) and
any other documents required by this Letter of Transmittal must be received by
the Exchange Agent at its address set forth herein prior to the Expiration
Date; provided, however that book-entry transfers of Old Notes may be effected
in accordance with the procedures set forth in the Prospectus under the caption
"The Exchange Offer -- Exchanging Book-Entry Old Notes." The method of
delivery of certificates for Old Notes and all other required documents is at
the election and risk of the tendering holder and delivery will be deemed made
only when actually received by the Exchange Agent. If delivery is by mail,
registered mail with return receipt requested, properly insured, is
recommended. Instead of delivery by mail, it is recommended that the holder
use an overnight or hand delivery service. In all cases, sufficient time
should be allowed to assure timely delivery. Neither Envirodyne nor the
Exchange Agent is under any obligation to notify any tendering holder of the
Company's acceptance of Tendered Old Notes prior to the Closing of the Exchange
Offer.
2. Guaranteed Delivery Procedures. Holders who wish to tender their
Old Notes but whose Old Notes are not immediately available and who cannot
deliver their Old Notes, Letter of Transmittal and 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 below, including completion of Box 4. Pursuant to such procedures: (i)
such tender must be made by or through a firm which is a member of one of the
following signature guarantee programs: the Securities Transfer Agents
Medallion Program (STAMP), the New York Stock Exchange Medallion Signature
Program (MSP) and the Stock Exchange Medallion Program (SEMP) (an "Eligible
Institution") and the Notice of Guaranteed Delivery must be signed by the
holder; (ii) prior to the Expiration Date, the Exchange Agent must have
received from the holder and the Eligible Institution a properly completed and
duly executed Notice of Guaranteed Delivery (by facsimile transmission, mail,
or hand delivery setting forth the name and address of the holder, the
certificate number or numbers of the Tendered Old Notes (except in the case of
book-entry tenders), and the principal amount of Tendered Old Notes, stating
that the tender is being made thereby and guaranteeing that, within five
business days after the Expiration Date, the Letter of Transmittal (or
facsimile thereof), together with the Tendered Old Notes and any other required
documents will be deposited by the Eligible Institution with the Exchange
Agent; and (iii) such properly completed and executed documents required by
this Letter of Transmittal and the Tendered Old Notes in proper form for
transfer (or a Book-Entry Confirmation with respect to such Old Notes) must be
received by the Exchange Agent within five business days after the Expiration
Date. Any holder who wishes to tender Old Notes pursuant to the guaranteed
delivery procedures described above must ensure that the Exchange Agent
receives the Notice of Guaranteed Delivery relating to such Old Notes prior to
the Expiration Date. Failure to complete the guaranteed delivery procedures
outlined above will not, of itself, affect the validity or effect a revocation
of any Letter of Transmittal form properly completed and executed by an
Eligible Holder who attempted to use the guaranteed delivery process.
3. Beneficial Owner Instructions to Registered Holders. Only a
holder in whose name the Old Notes are registered on the books of the registrar
(or the legal representative or attorney-in-fact of such registered holder) may
execute and deliver this Letter of Transmittal. Any Beneficial Owner of Old
-8-
<PAGE> 9
Notes who is not the registered holder must arrange promptly with the
registered holder to execute and deliver this Letter of Transmittal on his or
her behalf through the execution and delivery to the registered holder of the
Instructions to Registered Holder from Beneficial Owner form accompanying this
Letter of Transmittal.
4. Partial Tenders. Tenders of Old Notes will be accepted only in
integral multiples of $1,000 in principal amount. If less than the entire
principal amount of Old Notes is tendered, the tendering holder should fill in
the principal amount tendered in the column labeled "Aggregate Principal Amount
Tendered" of the box entitled "Description of Old Notes Tendered" (Box 1)
above. The entire principal amount of Old Notes delivered to the Exchange
Agent will be deemed to have been tendered unless otherwise indicated. If the
entire principal amount of all Old Notes is not tendered, Old Notes for the
principal amount of Old Notes not tendered and New Notes exchanged for any Old
Notes tendered will be sent to the holder at his or her registered address,
unless a different address is provided in the appropriate box on this Letter of
Transmittal, as soon as practicable following the Expiration Date.
5. Signatures on the Letter of Transmittal; Bond Powers and
Endorsements; Guarantee of Signatures. If this Letter of Transmittal is signed
by the registered holder(s) of the Tendered Old Notes, the signature must
correspond with the name(s) as written on the face of the Tendered Old Notes
without alteration, enlargement, or any change whatsoever.
If any of the Tendered Old Notes are owned of record by two or more
joint owners, all such owners must sign this Letter of Transmittal. If any
Tendered Old Notes are held in different names on several Old Notes, it will be
necessary to complete, sign, and submit as many separate copies of the Letter
of Transmittal documents as there are names in which Tendered Old Notes are
held.
If this Letter of Transmittal is signed by the registered holder(s) of
Tendered Old Notes tendered and New Notes are to be issued and any untendered
principal amount of Old Notes is to be reissued to the registered holder(s),
the registered holder(s) need not and should not endorse any Tendered Old Notes
nor provide a separate bond power. In any other case, such registered
holder(s) must either properly endorse the Old Notes tendered or transmit a
properly completed separate bond power with this Letter of Transmittal, with
the signature(s) on the endorsement or bond power guaranteed by an Eligible
Institution.
If this Letter of Transmittal is signed by a person other than the
Registered Holder(s) of any Old Notes, the Tendered Old Notes must be endorsed
or accompanied by appropriate bond powers, in each case, signed as the name of
the registered holder(s) appears on the Old Notes, with the signature on the
endorsement or bond power guaranteed by an Eligible Institution along with the
other documents required upon transfer by the Purchase Agreements.
If this 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, evidence satisfactory to the Company of their authority to so act
must be submitted with this Letter of Transmittal.
Endorsements on Old Notes or signatures on bond powers required by
this Instruction 5 must be guaranteed by an Eligible Institution.
-9-
<PAGE> 10
Signatures on this Letter of Transmittal must be guaranteed by an
Eligible Institution unless the Tendered Old Notes are tendered (i) by a
Registered Holder who has not completed the box set forth herein entitled
"Special Delivery Instructions" (Box 3) or (ii) by an Eligible Institution.
6. Special Delivery Instructions. Tendering Eligible Holders should
indicate, in the applicable box (Box 3), the name and address to which the New
Notes and/or substitute Old Notes for principal amounts not tendered or not
accepted for exchange are to be sent, if different from the name and address of
the person signing this Letter of Transmittal.
7. Transfer Taxes. The Company will pay all transfer taxes, if any,
applicable to the sale and transfer of Old Notes to the Company pursuant to the
Exchange Offer. If, however, a transfer tax is imposed for any reason other
than the transfer and sale of Old Notes to the Company pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or on any other person) will be payable by the tendering
holder and billed directly to such tendering holder. The Company will not bill
a holder for any transfer taxes if satisfactory evidence of payment of such
taxes or exemption from taxes is submitted with this Letter of Transmittal.
With respect to transfer taxes payable by the Company, as provided in
this Instruction 7, it will not be necessary for transfer tax stamps to be
affixed to the Old Notes listed in this Letter of Transmittal.
8. Tax Identification Number. Federal income tax law requires that a
holder of Old Notes or New Notes must provide Envirodyne (as payor) with its
correct taxpayer identification number ("TIN"), which, in the case of a holder
who is an individual, is his or her social security number. If Envirodyne is
not provided with the correct TIN, the holder may be subject to a $50 penalty
imposed by the Internal Revenue Service.
To prevent backup withholding with respect to payments of interest on
the New Notes, each tendering holder must provide such holder's correct TIN by
completing the Substitute Form W-9 set forth herein, certifying that the TIN
provided is correct (or that such holder is awaiting a TIN), and that (i) the
holder is exempt from backup withholding, or (ii) the holder has not been
notified by the Internal Revenue Service that such holder is subject to backup
withholding as a result of failure to report all interest or dividends, or
(iii) the Internal Revenue Service has notified the holder that such holder is
no longer subject to backup withholding. If the New Notes will be registered
in more than one name or are not in the name of the actual owner, consult the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for information on which TIN to report. Certain holders
(including, among others, all corporations and certain foreign individuals) are
not subject to these backup withholding and reporting requirements. See the
enclosed "Guidelines for Certification of Taxpayer Identification Number on
Substitute Form W-9" for additional instructions.
Envirodyne reserves the right in its sole discretion to take whatever
steps are necessary to comply with Envirodyne's obligation regarding backup
withholding. Any amount paid as backup withholding will be creditable against
a holder's tax liability.
9. Validity of Tenders. All questions as to the validity, form,
eligibility (including time of receipt), and acceptance of Tendered Old Notes
will be determined by Envirodyne in its sole discretion, which determination
will be final and binding. Envirodyne reserves the right to reject any and all
Old Notes not validly tendered or any Old Notes Envirodyne's acceptance of
which would, in the opinion of Envirodyne or its counsel, be unlawful.
Envirodyne also reserves the right to waive any conditions of the Exchange
Offer or defects or irregularities in tenders of Old Notes as to any
ineligibility of any
-10-
<PAGE> 11
holder who seeks to tender Old Notes in the Exchange Offer. The interpretation
of the terms and conditions of the Exchange Offer (including this Letter of
Transmittal and the instructions hereto) by Envirodyne shall 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
Envirodyne shall determine. Envirodyne will use reasonable efforts to give
notification of defects or irregularities with respect to tenders of Old Notes,
but shall not incur any liability for failure to give such notification.
10. Waiver of Conditions. Envirodyne reserves the absolute right to
amend, waive, or modify specified conditions in the Exchange Offer in the case
of any Tendered Old Notes.
11. No Conditional Tender. No alternative, conditional, irregular,
or contingent tender of Old Notes or transmittal of this Letter of Transmittal
will be accepted.
12. Mutilated, Lost, Stolen, or Destroyed Old Notes. Any tendering
holder whose Old Notes have been mutilated, lost, stolen, or destroyed should
contact the Exchange Agent at the address indicated above for further
instruction.
13. Requests for Assistance or Additional Copies. Questions and
requests for assistance and requests for additional copies of the Prospectus
may be directed to the Exchange Agent at the address and telephone number
specified in the Prospectus. Holders may also contact their broker, dealer,
commercial bank, trust company, or other nominee for assistance concerning the
Exchange Offer.
14. Acceptance of Tendered Old Notes and Issuance of New Notes;
Return of Old Notes. Subject to the terms and conditions of the Exchange
Offer, Envirodyne will accept for exchange all validly tendered Old Notes as
soon as practicable after the Expiration Date and will issue New Notes therefor
as soon as practicable thereafter. For purposes of the Exchange Offer,
Envirodyne shall be deemed to have accepted tendered Old Notes when, as and if
Envirodyne has given written or oral notice thereof to the Exchange Agent. If
any Tendered Old Notes are not exchanged pursuant to the Exchange Offer for any
reason, such unexchanged Old Notes will be returned, without expense, to the
undersigned at the address shown below or at a different address as may be
indicted herein under "Special Delivery Instructions."
15. Withdrawal. Tenders may be withdrawn only pursuant to the
limited withdrawal rights set forth in the Prospectus under the caption "The
Exchange Offer--Withdrawal of Tenders".
-11-
<PAGE> 12
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
Guidelines for Determining the Proper Identification Number to Give the Payer.
- --Social Security numbers have nine digits separated by two hyphens: i.e.
000-00-0000. Employer identification number have nine digits separated by only
one hyphen: i.e. 00-0000000. The table below will help determine the number
to give the payer.
<TABLE>
<CAPTION>
Give the SOCIAL Give the EMPLOYER
For this type of account SECURITY number of -- For this type of account IDENTIFICATION number of--
<S> <C> <C> <C>
1. Individual The individual 5. Sole proprietorship The Owner3
account
2. Two or more individuals The actual owner of the 6. A valid trust, estate, Legal entity (Do not
(joint account) account or, if combined or pension furnish the identifying
funds, the first trust number of the personal
individual on the representative or trustee
account1 unless the legal entity
itself is not designated
in the account title.)4
3. Custodian account of a The minor2 7. Corporate The Corporation
minor (Uniform Gift to
Minors Act)
4. a. The usual revocable The grantor-trustee1 8. Association, club, The organization
savings trust account religious, charitable,
(grantor is also trustee) educational, or other
tax-exempt organization
b. So-called trust account The actual owner 1
that is not a legal or
valid trust under
State law
9. Partnership The partnership
10. A broker or registered The broker or nominee
nominee
11. Account with the The public entity
Department of
Agriculture in the
name of a
public entity (such as
a State or local
government, school
district, or person)
that receives
agricultural program
payments
</TABLE>
1 List first and circle the name of the person whose number you furnish.
2 Circle the minor's name and furnish the minor's social security
number.
3 You must show your individual name, but you may also enter your
business or "doing business as" name. You may use either your SSN or
EIN.
4 List first and circle the name of the legal trust, estate, or pension
trust.
Note: If no name is circled when there is more than one name, the number
will be considered to be that of the first name issued.
-12-
<PAGE> 13
GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION
NUMBER ON SUBSTITUTE FORM W-9
OBTAINING A NUMBER
If you don't have a taxpayer identification number or you don't know your
number, obtain Form SS-5. Application or a Social Security Number Card, for
Form SS-4. Application for Employer identification Number, at the local
office of the Social Security Administration or the Internal Revenue
Service and apply for a number.
Payees Exempt from Backup Withholding Payees specifically exempted from backup
withholding on most payments include the following:
- - A Corporation
- - A financial institution
- - An organization exempt from tax under Section 501(a), or, an individual
retirement plan.
- - The United States or any agency or instrumentality thereof.
- - A State, the District of Columbia, a possession of the United States, or
any subdivision or instrumentality thereof.
- - A foreign government, a political subdivision of a foreign government, or
any agency or instrumentality thereof.
- - An international organization or any agency, or instrumentality thereof.
- - A registered dealer in securities or commodities registered in the U.S. or a
possession of the U.S.
- - A real estate investment trust.
- - A common trust fund operated by a bank under section 584(a).
- - An exempt charitable remainder trust, or a non-exempt trust described in
section 4947(a)(1).
- - An entity registered at all times under the Investment Company Act of 1940.
- - A foreign central bank of issue.
Payment of dividends and patronage dividends not generally subject to
backup withholding include the following:
- - Payments to nonresident aliens subject to withholding under section 1441.
- - Payments to partnerships not engaged in a trade or business in the U.S.
and which have at least one nonresident partner.
- - Payments of patronage dividends where the amount received is not paid in
money.
- - Payments made by certain foreign organizations.
Payments of interest not generally subject to backup withholding include
the following:
- - Payments of interest on obligations issued by individuals.
Note: You may be subject to backup withholding if this interest is
$600 or more and is paid in the course of the payer's trade or
business and you have not provided your correct taxpayer identification
number to the payer.
- - Payments of tax-exempt interest (including exempt interest dividends
under section 852).
- - Payments described in section 6049(b)(5) to nonresident aliens.
- - Payments on tax free covenant bonds under section 1451.
- - Payments made by certain foreign organizations.
Exempt payee described above should file Form W-9 to avoid possible erroneous
backup withholding. FILE THIS FORM WITH THE PAYER, FURNISH YOUR TAXPAYER
IDENTIFICATION NUMBER, WRITE "EXEMPT" ON THE FACE OF THE FORM, AND RETURN IT TO
THE PAYER. IF THE PAYMENTS ARE INTEREST, DIVIDENDS, OR PATRONAGE DIVIDENDS, ALSO
SIGN AND DATE THE FORM.
Certain payments other than interest, dividends, and patronage
dividends that are not subject to information reporting are also not subject to
backup withholding. For details, see the regulations under sections 6041,
6041A(a), 6045 and 6050A.
PENALTIES
FAILURE TO FURNISH TIN. --If you fail to furnish your correct TIN to a
requester, you are subject to a penalty of $50 for each such failure unless your
failure is due to reasonable cause and not to willful neglect.
CIVIL PENALTY FOR FALSE INFORMATION WITH RESPECT TO WITHHOLDING. --If you make
a false statement with no reasonable basis that results in no backup
withholding, you are subject to a $500 penalty.
CRIMINAL PENALTY FOR FALSIFYING INFORMATION. --Willfully falsifying
certifications or affirmations may subject you to criminal penalties
including fines and/or imprisonment.
MISUSE OF TINS. --If the requester discloses or uses TINs in violation
of Federal law, the requester may be subject to civil and criminal penalties.
PRIVACY ACT NOTICE. --Section 6109 requires you to furnish your correct TIN
to persons who must file information returns with the IRS to report interest,
dividends, and certain other income paid to you, mortgage interest you paid,
the acquisition or abandonment of secured property, cancellation of debt, or
contributions you made to an IRA. The IRS uses the numbers for identification
purposes and to help verify the accuracy of your tax return. You must provide
your TIN whether or not you are required to file a tax return. Payers must
generally withhold 31% of taxable interest, dividend, and certain other
payments to a payee who does not furnish a TIN to a payer. Certain penalties
may also apply.
-13-
<PAGE> 1
EXHIBIT 99.2
NOTICE OF GUARANTEED DELIVERY
FOR TENDER OF
12% SERIES A SENIOR SECURED NOTES DUE 2000
AND
FLOATING RATE SERIES C SENIOR SECURED NOTES DUE 2000
OF
ENVIRODYNE INDUSTRIES, INC.
As set forth in the Exchange Offer (as defined below), this form or
one substantially equivalent hereto or the electronic form used by The
Depository Trust Company for this purpose must be used to accept the Offer (as
defined below) if certificates for (i) 12% Series A Senior Secured Notes due
2000 (the "Old Series A Notes") or (ii) Floating Rate Series C Senior Secured
Notes due 2000 (the "Old Series C Notes") of Envirodyne Industries, Inc. (the
"Company") are not immediately available or if a holder of the Old Notes is
unable to complete the procedure for book entry transfer on a timely basis, or
if time will not permit all required documents to reach the Exchange Agent
prior to 5:00 p.m. New York City time on ___________, 1995 unless extended (the
"Expiration Date"). This form or a facsimile hereof may be delivered by hand
or sent by telegram, facsimile transmission or mail to the Exchange Agent.
Capitalized terms used herein and not defined herein shall have the meanings
assigned to them in the Exchange Offer.
The Exchange Agent is:
SHAWMUT BANK CONNECTICUT, NATIONAL ASSOCIATION
By Overnight Carrier: By Facsimile:
Shawmut Bank Connecticut, N.A. Shawmut Bank Connecticut, N.A.
Corporate Trust Operations, MSN 224 Attn: Patricia Williams
777 Main Street, Lower Level (203) 986-7908
Hartford, Connecticut 06115
Attn: Patricia Williams
For information with respect to
the Offer call the Corporate Trust Department of the Exchange Agent
Phone No. (203) 986-1271
DELIVERY OF THIS INSTRUMENT TO AN ADDRESS OTHER THAN AS SET FORTH
ABOVE OR TRANSMISSION OF INSTRUCTIONS VIA A FACSIMILE NUMBER OTHER THAN THE ONE
LISTED ABOVE, WILL NOT CONSTITUTE A VALID DELIVERY.
This form is not to be used to guarantee signatures. If a signature
on a Letter of Transmittal is required to be guaranteed by an Eligible
Institution (as defined therein) under the instructions thereto, such signature
guarantee must appear in the applicable space provided in the signature box on
the Letter of Transmittal.
Ladies and Gentlemen:
The undersigned hereby tenders the Old Notes indicated below pursuant
to the guaranteed delivery procedures set forth in the accompanying Prospectus
dated __________, 1995 (the "Prospectus") and in the related Letter of
Transmittal (which together with the Prospectus constitute the "Exchange
Offer"), receipt of which is hereby acknowledged.
<PAGE> 2
The undersigned hereby represents and warrants that the undersigned
accepts the terms and conditions of the Exchange Offer, has full power and
authority to tender, exchange, assign and transfer the Old Notes tendered
hereby, and that when the same are accepted for exchange by the Company, the
Company will acquire good and unencumbered title thereto, free and clear of all
liens, restrictions, charges and encumbrances and not subject to any adverse
claim or right. The undersigned will, upon request, execute and deliver any
additional documents deemed by the Exchange Agent or the Company to be
reasonably necessary or desirable to complete the sale, assignment and transfer
of the Old Notes tendered hereby.
The undersigned acknowledges that this Exchange Offer is being made in
reliance on an interpretation by the staff of the Securities and Exchange
Commission that the New Notes issued pursuant to the terms of the Prospectus in
exchange for the Old Notes may be offered for resale, resold and otherwise
transferred by holders thereof (other than any such holder which is an
"affiliate" of the company within the meaning of Rule 405 under the Securities
Act of 1933, as amended (the "Securities Act"), or a "broker" or "dealer"
registered under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) 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 holders' business and such holders have no
arrangement with any person to participate in the distribution of such New
Notes.
The undersigned represents that (i) the New Notes acquired pursuant to
the Offer are being obtained in the ordinary course of such holder's business,
(ii) such holder is not participating, does not intend to participate, and has
no arrangement or understanding with any person to participate, in the
distribution of such New Notes, and (iii) such holder is not an "affiliate," as
defined under Rule 405 of the Securities Act, of the Company or, if such holder
is an affiliate, that such holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent
applicable.
If the undersigned is a broker or dealer registered under the Exchange
Act that acquired Old Notes for its own account pursuant to its market-making
or other trading activities (other than Old Notes acquired directly from the
Company), the undersigned understands and acknowledges that it may be deemed to
be an "underwriter" within the meaning of the Securities Act and, therefore,
must deliver a prospectus relating to the New Notes in connection with any
resales by it of New Notes acquired for its own account in the Exchange Offer.
Notwithstanding the foregoing, the undesigned does not thereby admit that it is
an "underwriter" within the meaning of the Securities Act.
The undersigned understands and acknowledges that the Company reserves
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 in the
Prospectus under the caption "The Exchange Offer - Conditions of the Exchange
Offer," to terminate the 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 Exchange Offer.
THE UNDERSIGNED UNDERSTANDS AND AGREES THAT THE COMPANY RESERVES THE
RIGHT NOT TO ACCEPT TENDERED OLD NOTES FROM ANY TENDERING HOLDER IF THE COMPANY
DETERMINES, IN ITS SOLE AND ABSOLUTE DISCRETION, THAT SUCH ACCEPTANCE COULD
RESULT IN A VIOLATION OF APPLICABLE SECURITIES LAWS.
Names(s) of Record Holder(s): __________________________________________________
________________________________________________________________________________
Please Print
Address(es): ___________________________________________________________________
________________________________________________________________________________
-2-
<PAGE> 3
Area Code and Tel. No(s): ______________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Signature(s)
<TABLE>
<CAPTION>
Certificate No(s) Principal Amount
(if available) Tendered
----------------- ----------------
<S> <C>
_____________________________________________ _____________________________________________
_____________________________________________ _____________________________________________
_____________________________________________ _____________________________________________
_____________________________________________ _____________________________________________
</TABLE>
GUARANTEE
(Not to be used for signature guarantee)
The undersigned, a member firm of a registered national securities
exchange or a member of the National Association of Securities Dealers, Inc.,
or a commercial bank or trust company having an office or correspondent in the
United States, hereby guarantees delivery to the Exchange Agent of certificates
for the Old Notes tendered hereby, in proper form for transfer with delivery of
a properly completed and duly executed Letter of Transmittal (or facsimile
thereof) and any other documents required by the Letter of Transmittal, all
within five (5) business days after the Expiration Date.
The undersigned acknowledges that it must communicate the guarantee to
the Exchange Agent and must deliver the Letter of Transmittal and certificates
for Old Notes to the Exchange Agent within the time period shown hereon.
Failure to do so could result in a financial loss to the undersigned.
<TABLE>
<S> <C>
_____________________________________________ _____________________________________________
Firm Authorized Signature
_____________________________________________ Name ________________________________________
Address (Please Type or Print)
_____________________________________________ Title _______________________________________
Zip Code
Dated ___________________________________, 1994
Area Code and Tel. No. _____________________________________________
</TABLE>
DO NOT SEND CERTIFICATES FOR OLD NOTES WITH THIS FORM -- THEY SHOULD
BE SENT WITH THE LETTER OF TRANSMITTAL.
-3-
<PAGE> 1
EXHIBIT 99.3
ENVIRODYNE INDUSTRIES, INC.
OFFER TO EXCHANGE
ITS
12% SERIES B SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
12% SERIES A SENIOR SECURED NOTES DUE 2000
AND ITS
FLOATING RATE SERIES D SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
FLOATING RATE SERIES C SENIOR SECURED NOTES DUE 2000
To Our Clients:
Enclosed for your consideration are the Prospectus, dated __________,
1995 (the "Prospectus") and the related Letter of Transmittal (which together
with the Prospectus constitute the "Offer") in connection with the offer by
Envirodyne Industries, Inc., a Delaware corporation (the "Company"), to
exchange its (i) 12% Series B Senior Secured Notes due 2000 ( the "New Series B
Notes") for any and all of the outstanding 12% Series A Senior Secured Notes
due 2000 (the "Old Series A Notes"), and (ii) Floating Rate Series D Senior
Secured Notes due 2000 (the "New Series D Notes" and collectively with the New
Series B Notes, the "New Notes") for any and all outstanding Floating Rate
Series C Senior Secured Notes due 2000 (the "Old Series C Notes" and
collectively with the Old Series A Notes, the "Old Notes"), upon the terms and
subject to the conditions set forth in the Offer.
We are the Registered Holders of Old Notes held for your account. An
exchange of the Old Notes can be made only by us as the Registered Holders and
pursuant to your instructions. The Letter of Transmittal is furnished to you
for your information only and cannot be used by you to exchange the Old Notes
held by us for your account. The Offer provides a procedure for holders to
tender by means of guaranteed delivery.
We request information as to whether you wish us to exchange any or
all of the Old Notes held by us for your account upon the terms and subject to
the conditions of the Offer.
Your attention is directed to the following:
1. The New Notes will be exchanged for the Old Notes at
the rate of $1,000 principal amount of New Notes in a series for each
$1,000 principal amount of Old Notes of the series. Interest will
accrue from the last June 15 or December 15 on which interest was paid
on the Old Notes, or, if no interest has been paid on the Old Notes,
from June 20, 1995. The form and terms of the New Notes are the same
in all material respects as the form and terms of the Old Notes (which
they replace) except that the New Notes have been registered under the
Securities Act of 1933, as amended (the "Securities Act").
2. Based on an interpretation by the staff of the
Securities and Exchange Commission (the "SEC"), New Notes issued
pursuant to the Offer in exchange for Old Notes may be offered for
resale, resold and otherwise transferred by holders thereof (other
than any such holder which is an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act or a "broker" or "dealer"
registered under the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) without compliance with the registration and
prospectus
<PAGE> 2
delivery provisions of the Securities Act provided that such New Notes
are acquired in the ordinary course of such holders' business and such
holders have no arrangement with any person to participate in the
distribution of such New Notes. See "Shearman & Sterling," SEC
No-Action Letter (available July 2, 1993), "Morgan Stanley & Co.,
Inc.," SEC No-Action Letter (available June 5, 1991) and "Exxon
Capital Holdings Corporation," SEC No-Action Letter (available May 13,
1988).
3. The Offer is not conditioned on any minimum principal
amount of Old Notes being tendered except that Old Notes may be
tendered only in integral multiples of $1,000.
4. Notwithstanding any other term of the Offer, the
Company will not be required to accept for exchange, or exchange New
Notes for, any Old Notes not theretofore accepted for exchange, and
may terminate or amend the Offer as provided herein before the
acceptance of such Old Notes, if any of the conditions described in
the Prospectus under "The Exchange Offer -- Conditions of the Exchange
Offer" exist.
5. Tendered Old Notes may be withdrawn at any time prior
to 5:00 p.m., New York City time, on ___________, 1995 if such Old
Notes have not previously been accepted for exchange pursuant to the
Offer.
6. Any transfer taxes applicable to the exchange of the
Old Notes pursuant to the Offer will be paid by the Company, except as
otherwise provided in Instruction 7 of the Letter of Transmittal.
If you wish to have us tender any or all of your Old Notes, please so
instruct us by completing, detaching and returning to us the instruction form
attached hereto. An envelope to return your instructions is enclosed. If you
authorize a tender of your Old Notes, the entire principal amount at maturity
of Old Notes held for your account will be tendered unless otherwise specified
on the instruction form. Your instructions should be forwarded to us in ample
time to permit us to submit a tender on your behalf by the Expiration Date.
THE OFFER IS NOT BEING MADE TO, NOR WILL TENDERS BE ACCEPTED FROM OR
ON BEHALF OF, HOLDERS OF THE OLD NOTES IN ANY JURISDICTION IN WHICH THE MAKING
OF THE OFFER OR ACCEPTANCE THEREOF WOULD NOT BE IN COMPLIANCE WITH THE LAWS OF
SUCH JURISDICTION OR WOULD OTHERWISE NOT BE IN COMPLIANCE WITH ANY PROVISION OF
ANY APPLICABLE SECURITY LAW.
-2-
<PAGE> 3
ENVIRODYNE INDUSTRIES, INC.
OFFER TO EXCHANGE
ITS
12% SERIES B SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
12% SERIES A SENIOR SECURED NOTES DUE 2000
AND ITS
FLOATING RATE SERIES D SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
FLOATING RATE SERIES C SENIOR SECURED NOTES DUE 2000
The undersigned acknowledge(s) receipt of your letter and the enclosed
Prospectus and the related Letter of Transmittal, in connection with the offer
by the Company to purchase the Old Notes.
This will instruct you to tender the principal amount of Old Notes
indicated below held by you for the account of the undersigned, upon the terms
and subject to the conditions set forth in the Prospectus and the related
Letter of Transmittal.
The undersigned represents that (i) the New Notes acquired pursuant to
the Offer are being obtained in the ordinary course of such holder's business,
(ii) such holder is not participating, does not intend to participate, and has
no arrangement or understanding with any person to participate, in the
distribution of such New Notes, and (iii) such holder is not an "affiliate," as
defined under Rule 405 of the Securities Act, of the Company or, if such holder
is an affiliate, that such holder will comply with the registration and
prospectus delivery requirements of the Securities Act to the extent
applicable.
If the undersigned is a "broker" or "dealer" registered under the
Exchange Act that acquired Old Notes for its own account pursuant to its
market-making or other trading activities (other than Old Notes acquired
directly from the Company), the undersigned understands and acknowledges that
it may be deemed to be an "underwriter" within the meaning of the Securities
Act and, therefore, must deliver a prospectus relating to the New Notes in
connection with any resales by it of New Notes acquired for its own account in
the Exchange Offer. Notwithstanding the foregoing, the undersigned does not
thereby admit that it is an "underwriter" within the meaning of the Securities
Act.
Sign Here
...................................
Signature(s)
-3-
<PAGE> 1
EXHIBIT 99.4
ENVIRODYNE INDUSTRIES, INC.
OFFER TO EXCHANGE
ITS
12% SERIES B SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
12% SERIES A SENIOR SECURED NOTES DUE 2000
AND ITS
FLOATING RATE SERIES D SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
FLOATING RATE SERIES C SENIOR SECURED NOTES DUE 2000
__________, 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing herewith an offer by Envirodyne Industries, Inc., a
Delaware corporation (the "Company"), to exchange its (i) 12% Series B Senior
secured Notes due 2000 (the "New Series B Notes") for any and all of the
outstanding 12% Series A Senior Secured Notes due 2000 (the "Old Series A
Notes"), and (ii) Floating Rate Series D Senior Secured Notes due 2000 (the
"New Series D Notes" and collectively with the New Series B Note, the "New
Notes") for any and all outstanding Floating Rate Series C Senior Secured Notes
due 2000 (the "Old Series C Notes" and collectively with the Old Series A
Notes, the "Old Notes"), upon the terms and subject to the conditions set forth
in the accompanying Prospectus, dated __________, 1995 (the "Prospectus"), and
related Letter of Transmittal (which together with the Prospectus constitutes
the "Offer").
The Offer provides a procedure for holders to tender the Old Notes by
means of guaranteed delivery.
The Offer will expire at 5:00 p.m., New York City time, on
___________, 1995, unless extended (the "Expiration Date"). Tendered Old Notes
may be withdrawn at any time prior to 5:00 p.m., New York City time, on the
Expiration Date, if such Old Notes have not previously been accepted for
exchange pursuant to the Offer.
Based on an interpretation by the staff of the Securities and Exchange
Commission (the "SEC"), New Notes issued pursuant to the Offer in exchange for
Old Notes may be offered for resale, resold and otherwise transferred by
holders thereof (other than any such holder which is an "affiliate" of the
Company with the meaning of Rule 405 under the Securities Act of 1933, as
amended (the "Securities Act") or a "broker" or "dealer" registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) 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 such holders have no arrangement with any person
to participate in the distribution of such New Notes. See "Shearman &
Sterling," SEC No- Action Letter (available July 2, 1993), "Morgan Stanley &
Co., Inc.," SEC No-Action Letter (available June 5, 1991) and "Exxon Capital
Holding Corporation," SEC No-Action Letter (available May 13, 1988).
The Offer is not conditioned on any minimum principal amount of Old
Notes being tendered except that Old Notes may be tendered only in integral
multiples of $1,000.
Notwithstanding any other term of the Offer, the Company will not be
required to accept for exchange, or exchange New Notes for, any Old Notes not
theretofore accepted for exchange, and may terminate or amend the
<PAGE> 2
Offer as provided herein before the acceptance of such Old Notes, if any of the
conditions described in the Prospectus under "The Exchange Offer - Conditions
of the Exchange Offer" exist.
THE COMPANY RESERVES THE RIGHT NOT TO ACCEPT TENDERED OLD NOTES FROM
ANY TENDERING HOLDER IF THE COMPANY DETERMINES, IN ITS SOLE AND ABSOLUTE
DISCRETION, THAT SUCH ACCEPTANCE COULD RESULT IN A VIOLATION OF APPLICABLE
SECURITIES LAWS.
For your information and for forwarding to your clients for whom you
hold Old Notes registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. A Prospectus, dated __________, 1995.
2. A Letter of Transmittal for your use and for the
information of your clients.
3. A printed form of letter which may be sent to your clients
for whose accounts you hold Old Notes registered in your name or in
the name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Offer.
4. Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 of the Internal Revenue Service
(included in Letter of Transmittal instruction number 8).
<PAGE> 3
ENVIRODYNE INDUSTRIES, INC.
OFFER TO EXCHANGE
ITS
12% SERIES B SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
12% SERIES A SENIOR SECURED NOTES DUE 2000
AND ITS
FLOATING RATE SERIES D SENIOR SECURED NOTES DUE 2000
FOR ANY AND ALL OF THE
FLOATING RATE SERIES C SENIOR SECURED NOTES DUE 2000
__________, 1995
To Brokers, Dealers, Commercial
Banks, Trust Companies and
Other Nominees:
We are enclosing herewith an offer by Envirodyne Industries, Inc., a
Delaware corporation (the "Company"), to exchange its (i) 12% Series B Senior
secured Notes due 2000 (the "New Series B Notes") for any and all of the
outstanding 12% Series A Senior Secured Notes due 2000 (the "Old Series A
Notes"), and (ii) Floating Rate Series D Senior Secured Notes due 2000 (the
"New Series D Notes" and collectively with the New Series B Note, the "New
Notes") for any and all outstanding Floating Rate Series C Senior Secured Notes
due 2000 (the "Old Series C Notes" and collectively with the Old Series A
Notes, the "Old Notes"), upon the terms and subject to the conditions set forth
in the accompanying Prospectus, dated __________, 1995 (the "Prospectus"), and
related Letter of Transmittal (which together with the Prospectus constitutes
the "Offer").
The Offer provides a procedure for holders to tender the Old Notes by
means of guaranteed delivery.
The Offer will expire at 5:00 p.m., New York City time, on
___________, 1995, unless extended (the "Expiration Date"). Tendered Old Notes
may be withdrawn at any time prior to 5:00 p.m., New York City time, on the
Expiration Date, if such Old Notes have not previously been accepted for
exchange pursuant to the Offer.
Based on an interpretation by the staff of the Securities and Exchange
Commission (the "SEC"), New Notes issued pursuant to the Offer in exchange for
Old Notes may be offered for resale, resold and otherwise transferred by
holders thereof (other than any such holder which is an "affiliate" of the
Company with the meaning of Rule 405 under the Securities Act of 1933, as
amended (the "Securities Act") or a "broker" or "dealer" registered under the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) 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 such holders have no arrangement with any person
to participate in the distribution of such New Notes. See "Shearman &
Sterling," SEC No-Action Letter (available July 2, 1993), "Morgan Stanley &
Co., Inc.," SEC No-Action Letter (available June 5, 1991) and "Exxon Capital
Holding Corporation," SEC No-Action Letter (available May 13, 1988).
The Offer is not conditioned on any minimum principal amount of Old
Notes being tendered except that Old Notes may be tendered only in integral
multiples of $1,000.
Notwithstanding any other term of the Offer, the Company will not be
required to accept for exchange, or exchange New Notes for, any Old Notes not
theretofore accepted for exchange, and may terminate or amend the
<PAGE> 4
Offer as provided herein before the acceptance of such Old Notes, if any of the
conditions described in the Prospectus under "The Exchange Offer - Conditions
of the Exchange Offer" exist.
THE COMPANY RESERVES THE RIGHT NOT TO ACCEPT TENDERED OLD NOTES FROM
ANY TENDERING HOLDER IF THE COMPANY DETERMINES, IN ITS SOLE AND ABSOLUTE
DISCRETION, THAT SUCH ACCEPTANCE COULD RESULT IN A VIOLATION OF APPLICABLE
SECURITIES LAWS.
For your information and for forwarding to your clients for whom you
hold Old Notes registered in your name or in the name of your nominee, we are
enclosing the following documents:
1. A Prospectus, dated __________, 1995.
2. A Letter of Transmittal for your use and for the
information of your clients.
3. A printed form of letter which may be sent to your clients
for whose accounts you hold Old Notes registered in your name or in
the name of your nominee, with space provided for obtaining such
clients' instructions with regard to the Offer.
4. Guidelines for Certification of Taxpayer Identification
Number on Substitute Form W-9 of the Internal Revenue Service
(included in Letter of Transmittal instruction number 8).
WE URGE YOU TO CONTACT YOUR
CLIENTS AS PROMPTLY AS POSSIBLE.
Any inquiries you may have with respect to the Offer may be addressed
to, and additional copies of the enclosed materials may be obtained from the
Corporate Trust and Agency Department of the Exchange Agent at the following
telephone number: (202) 986-1271.
Very truly yours,
ENVIRODYNE INDUSTRIES, INC.
NOTHING CONTAINED HEREIN OR IN THE ENCLOSED DOCUMENTS SHALL CONSTITUTE
YOU AS THE AGENT OF THE COMPANY, THE EXCHANGE AGENT OR ANY OTHER PERSON, OR
AUTHORIZE YOU OR ANY OTHER PERSON TO USE ANY DOCUMENT OR MAKE ANY STATEMENT ON
BEHALF OF ANY OF THEM IN CONNECTION WITH THE OFFER OTHER THAN THE DOCUMENTS
ENCLOSED HEREWITH AND THE STATEMENTS CONTAINED THEREIN.
-2-
