SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Amendment No. 1
to
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: October 31, 1997
(Date of earliest event reported)
THE MANITOWOC COMPANY, INC.
(Exact name of registrant as specified in its charter)
Wisconsin 1-11978 39-0448110
----------------- -------------- -----------------
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) Number)
500 South 16th Street, Manitowoc, WI 54220
- ---------------------------------------------- ---------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (920-684-4410)
N/A
- ------------------------------------------------------------- -------
(Former name or former address, if changed since last report) (Zip Code)
Item 2. Acquisition or Disposition of Assets
- -------------------------------------------------
On October 31, 1997, The Manitowoc Company, Inc. ("Manitowoc"),
pursuant to its Purchase and Sale Agreement, dated as of October 1,
1997, (the "Purchase Agreement"), completed the purchase of the
assets of SerVend International, Inc. ("SerVend") from SerVend
International, Inc. and Fischer Enterprises, Ltd.
The aggregate consideration given by Manitowoc for all the net
business assets of SerVend was approximately $73.0 million, of which
$61.8 million was paid in cash to the Sellers at the October 31, 1997
closing and the balance comprised of borrowed money debt (which was
paid off at the October 31, 1997 closing), retained industrial revenue
bonds, direct acquisition costs, and other assumed liabilities. The
purchase price paid to SerVend is subject to a post-closing adjustment
based on net worth at October 31, 1997, as set forth in the Purchase
Agreement. The aggregate consideration for the purchase of the
SerVend assets was determined by arm's length negotiation between the
parties to the Purchase Agreement.
Since the acquisition is a purchase of assets (versus stock), for tax
purposes, Manitowoc will be able to deduct any related goodwill over a
15-year period. As a result of this benefit, the company's tax rate
will be virtually unaffected by the acquisition.
The transaction was financed through credit facilities provided under
a Credit Agreement, dated as of October 31, 1997, among Manitowoc, as
Borrower, certain subsidiaries of Manitowoc from time to time parties
thereto, as Guarantors, the several lenders from time to time parties
thereto, and NationsBank N.A., as Agent (the "Credit Agreement").
Manitowoc will account for the acquisition as a purchase.
SerVend is one of the world's largest manufacturers of ice/beverage
dispensers and dispensing valves for the soft drink industry. Its
customers include many of the major quick-service restaurant chains,
convenience stores, and soft-drink bottlers in the nation. SerVend is
headquartered in Sellersburg, Indiana. It has one manufacturing
facility located in Sellersburg and another in Portland, Oregon, and
employs about 300 persons.
The Purchase Agreement and the Credit Agreement are exhibits to this
report and are incorporated herein by reference. The descriptions
herein do not purport to be complete and are qualified in their
entirety by reference to the provisions of the respective agreements.
Item 7. Financial Statements and Exhibits.
- ---------------------------------------------
(a) Financial Statements.
As of the date of filing of this Current Report on Form
8-K, it is impracticable for the Registrant to provide the financial
statements for SerVend required by this Item 7(a). In accordance with
Item 7(a)(4) of Form 8-K, such financial statements will be filed by
amendment to this Form 8-K as soon as practicable, but no later than
January 13, 1998.
(b) Pro Forma Financial Information.
As of the date of filing of this Current Report on Form
8-K, it is impracticable for the Registrant to provide the pro forma
financial information required by this Item 7(b). In accordance with
Item 7(b)(2) of Form 8-K, such pro forma financial information will be
filed by amendment to this Form 8-K as soon as practicable, but no
later than January 13, 1998.
(c) Exhibits.
See the Exhibit Index following the Signature page of
this Report, which is incorporated herein by reference.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
DATE: November 14, 1997 THE MANITOWOC COMPANY, INC.
(Registrant)
By: /s/ Robert R. Friedl
-------------------------------
Robert R. Friedl,
Senior Vice President and
Chief Financial Officer
THE MANITOWOC COMPANY, INC.
EXHIBIT INDEX
TO
FORM 8-K CURRENT REPORT
Dated October 31, 1997
Filed Filed
No. Description Herewith
- ------ ------------- -----------
2.1 * Purchase and Sale Agreement, X
dated as of October 1, 1997,
for the acquisition of SerVend
International, Inc. by The
Manitowoc Company, Inc.
4.1 * Credit Agreement, dated as of X
October 31, 1997, among The
Manitowoc Company, Inc.,
as Borrower, certain
subsidiaries from time to
time parties thereto, as
Guarantors, the several
Lenders, and NationsBank,
N.A., as Agent.
20.1 Press Release dated October X
31, 1997 regarding completing
the acquisition of SerVend
International, Inc.
* Pursuant to Item 601(b) (2) of Regulation S-K, the Registrant
agrees to furnish to the Securities and Exchange Commission upon
request a copy of any unfiled exhibits or schedules to such document.
PURCHASE AND SALE AGREEMENT
BY AND AMONG
THE MANITOWOC COMPANY, INC.
SERVEND INTERNATIONAL, INC.
AND
FISCHER ENTERPRISES, LTD.
DATED AS OF OCTOBER 1, 1997
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS .......................................1
1.1 Accounts ..........................................1
1.2 Agreement .........................................1
1.3 Agreement Sections ................................1
1.4 Assumed Liabilities ...............................2
1.5 Bill of Sale ......................................3
1.6 Buildings .........................................3
1.7 Buyer .............................................3
1.8 Buyer Closing Certificate .........................3
1.9 Buyer Counsel Opinion .............................3
1.10 Closing ...........................................3
1.11 Closing Date ......................................3
1.12 Code ..............................................3
1.13 Confidentiality Agreement .........................4
1.14 Contracts .........................................4
1.15 Deed ..............................................4
1.16 Disclosure Schedule ...............................4
1.17 Distributor Contracts .............................4
1.18 Employee Benefit Plans ............................4
1.19 Employment Agreements .............................4
1.20 Equipment .........................................4
1.21 ERISA .............................................4
1.22 Escrow Agent ......................................4
1.23 Escrow Agreement ..................................5
1.24 Escrow Deposit ....................................5
1.25 Existing Contracts ................................5
1.26 Existing Indebtedness .............................5
1.27 Existing Insurance Policies .......................5
1.28 Existing Investments ..............................5
1.29 Existing Liens ....................................5
1.30 Existing Litigation ...............................5
1.31 Existing Permits ..................................5
1.32 Existing Plans ....................................5
1.33 Financial Information .............................5
1.34 Fischer ...........................................5
1.35 HSR Act ...........................................5
1.36 Indebtedness ......................................6
1.37 Intangible Assets .................................6
1.38 Inventory .........................................6
1.39 Investment ........................................6
1.40 IRB Assignment ....................................6
1.41 Knowledge of Sellers ..............................6
1.42 Law ..............................................6
1.43 Lease Assignment ..................................6
1.44 Lien ..............................................7
1.45 Liquid Assets .....................................7
1.46 Material Adverse Effect ...........................7
1.47 Noncompetition Agreements .........................7
1.48 Noncompete Compensation ...........................7
1.49 Permitted Liens ...................................7
1.50 Person ............................................7
1.51 Purchased Assets ..................................7
1.52 Purchased Contracts ...............................7
1.53 Real Property .....................................7
1.54 Records ...........................................7
1.55 Remcor Litigation .................................7
1.56 Retained Assets ...................................8
1.57 Retained Contracts ................................8
1.58 Retained Liabilities ..............................8
1.59 Seller or Sellers .................................8
1.60 Sellers Closing Certificate .......................8
1.61 Sellers Counsel Opinion ...........................8
1.62 Senior Lender .....................................9
1.63 Senior Loan .......................................9
1.64 SerVend ...........................................9
1.65 Shareholders ......................................9
ARTICLE II PURCHASE AND SALE; PURCHASE PRICE .............9
2.1 Purchase and Sale .................................9
2.2 Determination of Purchase Price ...................9
2.3 Payments .........................................10
2.4 Closing Financial Adjustments; Payment Adjustment 11
ARTICLE III OTHER AGREEMENTS ...........................12
3.1 Access and Cooperation ...........................12
3.2 Disclosure Schedule ..............................13
3.3 Duties Concerning Representations ................13
3.4 Deliveries of Information; Consultation ..........13
3.5 Acquisition Proposals ............................14
3.6 Public Announcements .............................14
3.7 Retained Liabilities .............................15
3.8 Access to Records and Employees ..................15
3.9 Referrals and Deliveries .........................16
3.10 Risk Of Loss .....................................16
3.11 Allocation of Purchase Price .....................16
3.12 Employee Matters .................................16
3.13 Effective Time of Closing ........................16
3.14 Change of Name ...................................16
3.15 Intention ........................................16
3.16 Nonassignable Contracts and Existing Permits .....17
3.17 Bulk Sales Law ...................................17
3.18 Real Property ....................................17
3.19 Noncompetition ...................................18
3.20 Termination Fee ..................................18
3.21 HSR Act ..........................................18
3.22 Ice Transport System .............................19
3.23 Distributor Contract Matters .....................20
ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE SELLERS 20
4.1 Organization; Business ...........................21
4.2 Authorization; Enforceability ....................21
4.3 No Violation or Conflict .........................22
4.4 Financial Information; Books and Records .........22
4.5 Assets ...........................................23
4.6 Contingent and Undisclosed Liabilities ...........23
4.7 Taxes ............................................23
4.8 Absence of Certain Changes .......................24
4.9 Existing Plans ...................................24
4.10 Compliance with Law ..............................26
4.11 Litigation .......................................26
4.12 Existing Contracts ...............................26
4.13 Performance of Contracts .........................28
4.14 Existing Insurance Policies ......................28
4.15 Environmental Protection .........................29
4.16 Labor Matters ....................................31
4.17 Brokers ..........................................31
4.18 Governmental Approvals ...........................32
4.19 Disclosure .......................................32
4.20 Intangible Assets ................................32
4.21 Product Matters ..................................32
4.22 Customers ........................................32
4.23 Relationships with Related Parties ...............33
4.24 Real Property ....................................33
4.25 No Other Representations or Warranties ...........33
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE BUYER ..33
5.1 Organization; Business ...........................33
5.2 Authorization; Enforceability ....................34
5.3 No Violation or Conflict .........................34
5.4 Brokers ..........................................34
5.5 Governmental Approvals ...........................34
5.6 Financial Capacity ...............................34
5.7 No Other Representations or Warranties ...........34
ARTICLE VI CONDUCT OF BUSINESS PENDING THE CLOSING ......34
6.1 Carry on in Regular Course .......................34
6.2 Use of Assets ....................................34
6.3 No Default .......................................35
6.4 Existing Insurance Policies ......................35
6.5 Employment Matters ...............................35
6.6 Contracts and Commitments ........................35
6.7 Preservation of Relationships ....................35
6.8 Compliance with Laws .............................35
6.9 Taxes ............................................35
ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATIONS OF
THE BUYER ....................................35
7.1 Compliance with Agreement ........................35
7.2 Proceedings and Instruments Satisfactory .........35
7.3 No Litigation ....................................35
7.4 Representations and Warranties of the Sellers ....35
7.5 No Material Adverse Change .......................36
7.6 Deliveries at Closing ............................36
7.7 Senior Loan ......................................36
7.8 Other Documents ..................................36
7.9 Possession; Instruments of Conveyance ............36
7.10 HSR Act ..........................................36
7.11 Adjusted Cash Amount .............................36
7.12 Buyer's Bankruptcy ...............................36
ARTICLE VIII CONDITIONS PRECEDENT TO THE OBLIGATIONS
OF THE SELLERS ............................37
8.1 Compliance with Agreement ........................37
8.2 Proceedings and Instruments Satisfactory .........37
8.3 No Litigation ....................................37
8.4 Representations and Warranties of the Buyer ......37
8.5 Deliveries at Closing ............................37
8.6 Other Documents ..................................37
8.7 Delivery of Purchase Price ......................37
8.8 HSR Act ..........................................37
8.9 Adjusted Cash Amount .............................37
8.10 Employment Agreements ............................37
ARTICLE IX INDEMNITIES ..................................38
9.1 Sellers' Indemnity ...............................38
9.2 Buyer's Indemnity ................................38
9.3 Provisions Regarding Indemnities .................39
ARTICLE X DISPUTE RESOLUTION MECHANISMS ................42
10.1 Dispute ..........................................42
10.2 Process ..........................................42
10.3 Negotiations .....................................42
10.4 Mediation ........................................42
10.5 Submission to Adjudication .......................43
10.6 General ..........................................43
ARTICLE XI TERMINATION; MISCELLANEOUS ...................44
11.1 Termination ......................................44
11.2 Rights on Termination; Waiver ....................44
11.3 Survival of Representations and Warranties .......44
11.4 Entire Agreement; Amendment ......................45
11.5 Expenses .........................................45
11.6 Governing Law ....................................45
11.7 Assignment .......................................45
11.8 Notices ..........................................45
11.9 Counterparts; Headings ...........................46
11.10 Interpretation ...................................46
11.11 Severability .....................................46
11.12 Specific Performance .............................46
11.13 No Reliance ......................................47
11.14 Exhibits and Disclosure Schedule .................47
11.15 Taxes and Fees ...................................47
11.16 Income Tax Position ..............................47
11.17 Further Assurances ...............................47
11.18 No Strict Construction ...........................47
11.19 No Materiality Acknowledgment ....................47
SIGNATURES .............................................48
EXHIBITS
1. Form of Bill of Sale
2. Form of Buyer Closing Certificate
3. Form of Buyer Counsel Opinion
4. Form of Employment and Noncompetition Agreements
5. Form of Escrow Agreement
6. Form of Noncompetition Agreements
7. Form of Sellers Closing Certificate
8. Form of Sellers Counsel Opinion
PURCHASE AND SALE AGREEMENT
THIS PURCHASE AND SALE AGREEMENT is made as of this 1st day
of October, 1997 by and among THE MANITOWOC COMPANY, INC., SERVEND
INTERNATIONAL, INC. and FISCHER ENTERPRISES, LTD.
RECITALS
WHEREAS, SerVend is and has been engaged in the operation of
the business of designing, manufacturing, selling and distributing ice
dispensers, beverage dispensers, ice/beverage dispensers, beverage
dispenser valves, ice machines and ancillary devices; and
WHEREAS, Fischer is and has been engaged in the operation of
the business of the ownership of certain of the Purchased Assets and
the leasing of such assets to SerVend; and
WHEREAS, Sellers desire to sell to Buyer, and Buyer desires
to purchase from Sellers, certain of the assets, rights and properties
of Sellers, upon all of the terms and subject to all of the conditions
set forth in this Agreement.
NOW, THEREFORE, in consideration of the Recitals and of the
mutual covenants, conditions and agreements set forth in this
agreement and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, it is hereby agreed
that:
ARTICLE I
DEFINITIONS
When used in this Agreement, the following terms shall have
the meanings specified:
1.1 Accounts. "Accounts" shall mean all of the
accounts receivable, notes receivable and similar rights of either or
both of the Sellers, excluding any receivables from shareholders or
partners of the Sellers.
1.2 Agreement. "Agreement" shall mean this Purchase
and Sale Agreement, together with the Exhibits and the Disclosure
Schedule attached hereto, as the same may be amended from time to time
in accordance with the terms hereof.
1.3 Agreement Sections. The following terms shall
have the meanings specified in the Sections of this Agreement listed
in the following table:
TERM SECTION
---- -------
Acquisition Proposal 3.5(a)(i)
Adjusted Cash Amount 2.4(i)
Assumed Benefit Plan 4.9(d)
Buyer Indemnifiable Breach 9.3(h)(i)
Buyer Records 3.8(a)(i)
Calculation 2.4(a)
Cash Amount 2.2(b)
CERCLA 4.15(f)
Closing Financial Statements 2.4(a)
Competing Business 4.23(b)
Competing Transaction 3.5(a)(ii)
Consolidated EBITDA 2.2(c)(i)
Consolidated Net Income 2.2(c)(ii)
Consolidated Net Worth 2.2(c)(iii)
Covered Ice Transportation System 3.22(b)(i)
CPR 10.4
Disclosure Schedule Change 3.2(b)
Dispute 10.1
Effective Time of Closing 3.13
Environmental Claim 4.15(a)(i)
Environmental Hazardous Materials 4.15(a)(ii)
Environmental Laws 4.15(a)(iii)
Environmental Permits 4.15(a)(iv)
Environmental Release 4.15(a)(v)
ERISA Affiliate 4.9(b)
Ice Transportation System 3.22(b)(ii)
Independent Accountants 2.4(g)
IRBs 1.4(c)
IT Patent 3.22(b)(iii)
Lancaster Agreement 3.22(a)
Net Book Value 2.2(c)(iv)
Net Sales Price 3.22(b)(iv)
Proprietary Rights Agreements 4.16(b)
Purchase Price 2.2(a)
Replacement 10.6(g)
Request 10.4
Sellers Indemnifiable Breach 9.3(g)(i)
Sellers Records 3.8(a)(ii)
Survey 3.18(a)(i)
Title Commitments 3.18(a)(ii)
Title Company 3.18(a)(iii)
1.4 Assumed Liabilities. "Assumed Liabilities" shall
mean and be limited to:
(a) those liabilities and obligations of the Sellers
for payment and performance arising after the Effective Time of
Closing pursuant to the Purchased Contracts;
(b) the current liabilities, trade payables and
accrued expenses which: (i) have been incurred in the ordinary course
of business of Sellers; and (ii) are set forth in the Disclosure
Schedule or contained in a list delivered to Buyer at the Closing;
(c) those liabilities and obligations of the Sellers
for payment and performance after the Effective Time of Closing
pursuant to the following Indebtedness of the Sellers: (i) under the
nonrecourse promissory note, dated December 15, 1989, from Fischer to
the Indiana Employment Development Commission in the original
principal amount of $4.3 million maturing on December 1, 2004, and the
related loan agreement, trust indenture and other related mortgages,
credit and security agreements and collateral assignments; and (ii)
under the nonrecourse promissory note, dated November 27, 1991, of
Fischer to the Indiana Development Finance Authority in the original
principal amount of $3.6 million, and the related loan agreement,
trust indenture and related mortgages, credit and security agreements
and collateral assignments (the "IRBs"); and
(d) Costs, expenses and other losses arising out of or
relating to Sellers' warranty claims with respect to product sales
included in revenues reflected in the Financial Information or the
Closing Financial Statements, but only up to a maximum amount equal to
the sum of:
(i) warranty reserves included in the Closing
Financial Statements; plus
(ii) an amount equal to the aggregate value of any
and all aluminum plates delivered without charge to Buyer after the
Closing Date by Kyees Aluminum, Inc., the value of such aluminum
plates to be determined based upon Kyees Aluminum, Inc.'s quoted
prices for purchases of comparable volumes by manufacturers.
1.5 Bill of Sale. "Bill of Sale" shall mean the Bill
of Sale and Assumption of Liabilities in substantially the form of
Exhibit 1 attached to this Agreement.
1.6 Buildings. "Buildings" shall mean all buildings,
fixtures, structures and improvements located on the Real Property.
1.7 Buyer. "Buyer" shall mean The Manitowoc Company,
Inc., a Wisconsin corporation, and any subsidiary designated under
Section 11.7.
1.8 Buyer Closing Certificate. "Buyer Closing
Certificate" shall mean the Closing Certificate of the Buyer in
substantially the form of Exhibit 2 attached to this Agreement.
1.9 Buyer Counsel Opinion. "Buyer Counsel Opinion"
shall mean the opinion of Quarles & Brady in substantially the form of
Exhibit 3 attached to this Agreement.
1.10 Closing. "Closing" shall mean the conference to be
held at 10:00 A.M., Central Time, on the Closing Date at the offices
of Quarles & Brady, 411 East Wisconsin Avenue, Milwaukee, Wisconsin
53202, or such other time and place as the parties may mutually agree
to in writing, at which the transactions contemplated by this
Agreement shall be consummated.
1.11 Closing Date. "Closing Date" shall mean: (a)
October 31, 1997; or (b) such other date as the parties may mutually
agree to in writing.
1.12 Code. "Code" shall mean the Internal Revenue Code
of 1986, as the same may be in effect from time to time.
1.13 Confidentiality Agreement. "Confidentiality
Agreement" shall mean, collectively, the letter agreements between the
Sellers, the Buyer and certain employees of the Buyer dated April 28,
1997 and April 30, 1997, and paragraph 4 of the Letter of Intent dated
as of August 24, 1997 by and among the Buyer and the Sellers.
1.14 Contracts. "Contracts" shall mean all of the
contracts, agreements, leases, relationships and commitments, written
or oral, to which either or both of the Sellers is a party or by which
either or both of the Sellers is bound, excluding agreements between
either of the Sellers and the shareholders or partners of either of
the Sellers.
1.15 Deed. "Deed" shall mean a General Warranty Deed,
in the form customarily used for the transfer of fee simple title to
real estate under Indiana law, from Fischer to the Buyer by which
Fischer conveys to the Buyer title to the Buildings and the Real
Property located at 2100 Future Drive, Sellersburg, Indiana.
1.16 Disclosure Schedule. "Disclosure Schedule" shall
mean the Disclosure Schedule, dated the date of this Agreement,
delivered by the Sellers to the Buyer contemporaneously with the
execution and delivery of this Agreement and as the same may be
amended from time to time after the date of this Agreement and prior
to the Closing Date in accordance with the terms of this Agreement.
1.17 Distributor Contracts. "Distributor Contracts"
shall mean any and all Contracts of either of the Sellers whereby such
Seller appoints any Person, other than an employee of such Seller, as
a distributor, dealer, independent sales representative, independent
manufacturer's representative or other authorized reseller or sales
agent for such Seller's products.
1.18 Employee Benefit Plans. "Employee Benefit Plans"
shall mean any pension plan, profit sharing plan, bonus plan,
incentive compensation plan, stock ownership plan, stock purchase
plan, stock option plan, stock appreciation plan, employee benefit
plan, employee benefit policy, retirement plan, fringe benefit
program, insurance plan, severance plan, disability plan, health care
plan, sick leave plan, death benefit plan, or any other plan or
program to provide retirement income, fringe benefits or other
benefits to former or current employees of either Seller.
1.19 Employment Agreements. "Employment Agreements"
shall mean the Employment and Noncompetition Agreements, in
substantially the form of Exhibit 4 attached to this Agreement, to be
offered by Buyer (or any subsidiary of Buyer designated pursuant to
Section 11.7 of this Agreement) to certain key management personnel of
the Sellers, as described in Section 3.12(d) of this Agreement.
1.20 Equipment. "Equipment" shall mean all machinery,
toolings, equipment, furniture, fixtures, motor vehicles, furnishings,
parts, tools, dies, jigs, patterns, machine tools, office equipment,
computers, leasehold improvements, construction in progress and other
items of tangible personal property which are owned by either or both
of the Sellers and used by or useful to either or both of the Sellers
in the operation of their respective businesses.
1.21 ERISA. "ERISA" shall mean the Employee Retirement
Income Security Act of 1974, as the same may be in effect from time to
time.
1.22 Escrow Agent. "Escrow Agent" shall mean a bank,
trust company or other financial institution mutually selected by the
Sellers and the Buyer to serve as escrow agent under the Escrow
Agreement.
1.23 Escrow Agreement. "Escrow Agreement" shall mean
the Escrow Agreement among the Buyer, the Sellers and the Escrow Agent
in substantially the form of Exhibit 5 attached hereto.
1.24 Escrow Deposit. "Escrow Deposit" shall mean
Twelve Million Four Hundred Thousand and 00/100 Dollars ($12,400,000).
1.25 Existing Contracts. "Existing Contracts" shall
mean those Contracts which are listed and briefly described on the
Disclosure Schedule in response to Section 4.12 of this Agreement.
1.26 Existing Indebtedness. "Existing Indebtedness"
shall mean all of the Indebtedness of the Sellers, all of which is
listed and briefly described on the Disclosure Schedule.
1.27 Existing Insurance Policies. "Existing Insurance
Policies" shall mean all of the insurance policies currently in effect
and owned by either or both of the Sellers, all of which are listed
and briefly described on the Disclosure Schedule.
1.28 Existing Investments. "Existing Investments"
shall mean all Investments of either or both of the Sellers, all of
which are listed and briefly described on the Disclosure Schedule.
1.29 Existing Liens. "Existing Liens" shall mean all
Liens affecting any of the Purchased Assets, all of which are listed
and briefly described on the Disclosure Schedule.
1.30 Existing Litigation. "Existing Litigation" shall
mean those pending or threatened suits, audit inquiries, charges,
workers compensation claims, claims for bodily injury, product
warranty claims, litigation, arbitrations, proceedings, governmental
investigations, citations and actions of any kind, which are listed
and briefly described on the Disclosure Schedule.
1.31 Existing Permits. "Existing Permits" shall mean
all permits, licenses, approvals, qualifications, permissions and
governmental authorizations (including Environmental Permits) obtained
or held by either Seller with respect to the conduct of its business
as presently conducted, all of which are listed and briefly described
on the Disclosure Schedule.
1.32 Existing Plans. "Existing Plans" shall mean all
Employee Benefit Plans of either or both of the Sellers, all of which
are listed and briefly described on the Disclosure Schedule.
1.33 Financial Information. "Financial Information"
shall mean: (a) the audited consolidated financial statements of the
Sellers for the fiscal years ended December 31, 1994, December 31,
1995 and December 31, 1996; (b) the unaudited consolidated financial
statements of the Sellers for the interim period ended July 31, 1997;
(c) the books and records of account of each of the Sellers; and (d)
all other financial information relating to the financial condition of
either or both of the Sellers delivered or to be delivered by the
Sellers to the Buyer.
1.34 Fischer. "Fischer" shall mean Fischer
Enterprises, Ltd., a Kentucky limited partnership.
1.35 HSR Act. "HSR Act" shall mean the Hart-Scott-
Rodino Antitrust Improvements Act of 1976, as amended.
1.36 Indebtedness. "Indebtedness" shall mean all
liabilities or obligations of the relevant Person, whether primary or
secondary or absolute or contingent: (a) for borrowed money; or (b)
evidenced by notes, bonds, debentures or similar instruments; or (c)
secured by Liens on any assets of that Person.
1.37 Intangible Assets. "Intangible Assets" shall mean
all of the intangible assets owned or used by either or both of the
Sellers in their respective businesses, including but not limited to
goodwill, trade secrets, know-how, data, plans, drawings, blue prints,
operating methods and procedures, proprietary information, processes,
technical knowledge, formulae, advertising formats, logos, United
States and foreign patents, patent applications, trade names
(including the "SerVend" name), trademarks, service marks, trademark
registrations, service mark registrations, copyrights, copyright
applications, franchise rights, customer lists, telephone numbers and
related rights. The Disclosure Schedule lists and briefly describes
or otherwise identifies all patents, patent applications, registered
trademarks, trademark applications, registered service marks and
service mark applications owned or held by either or both of the
Sellers, as well as any licenses pursuant to which either Seller
authorizes the use of any of the foregoing by another Person or
pursuant to which either or both of the Sellers use a patent,
trademark or service mark of another Person.
1.38 Inventory. "Inventory" shall mean all inventories
of either or both of the Sellers, including raw materials, store
inventories, work in process and finished goods, wherever located.
1.39 Investment. "Investment" by any Person shall
mean: (a) any transfer or delivery of cash, stock or other property
or value by that Person in exchange for Indebtedness, stock or any
other security of another Person; (b) any loan, advance or capital
contribution to or in any other Person; (c) any guaranty, creation or
assumption of any liability or obligation of any other Person; and (d)
any investments in any fixed property or fixed assets other than fixed
properties and fixed assets acquired in the ordinary course of
business of the relevant Person.
1.40 IRB Assignment. "IRB Assignment" shall mean the
assignment to and assumption by the Buyer of all of the Sellers'
rights and obligations with respect to the IRBs as of the Effective
Time of Closing.
1.41 Knowledge of Sellers. "Knowledge of Sellers"
shall mean any actual knowledge of any officer, director, shareholder
or partner of either Seller or the knowledge which any such Person
should have by virtue of information provided or directed to such
Person in Records of either of the Sellers.
1.42 Law. "Law" shall mean any federal, state, local
or other law, rule, regulation or governmental requirement of any
kind, and the rules, regulations and orders promulgated thereunder.
1.43 Lease Assignment. "Lease Assignment" shall mean
the Assignment of Lease Agreement and Landlord Consent whereby SerVend
assigns to the Buyer, and the landlord consents to such assignment,
the Lease Agreement, dated August 1, 1994, by and between B. Rhodonna
Zilk, individually and as Trustee of the C. S. Zilk Trust Fund, and C.
William Zilk, as Trustee under the same trust (together acting as
Landlord), and SerVend as tenant, with respect to the facility located
at 5924 SE 47th Avenue, Portland, Oregon, as such lease agreement was
assigned by Flomatic Manufacturing, Inc. to SerVend on August 31,
1994, together with the related landlord's estoppel certificate.
1.44 Lien. "Lien" shall mean, with respect to any
asset: (a) any mortgage, pledge, lien, charge, claim, restriction,
condition, easement, covenant, lease, encroachment, title defect
imposition, security interest or other encumbrance of any kind; and
(b) the interest of a vendor or lessor under any conditional sale
agreement, financing lease or other title retention agreement relating
to such asset.
1.45 Liquid Assets. "Liquid Assets" shall mean all
cash, down payments, checks, rights to refunds, security deposits,
prepaid expenses, advance payments, bank accounts and cash equivalents
of either or both of the Sellers.
1.46 Material Adverse Effect. "Material Adverse
Effect" shall mean a material adverse effect on the business, assets,
properties, results of operations, financial condition or prospects of
the Sellers, taken as a whole.
1.47 Noncompetition Agreements. "Noncompetition
Agreements" shall mean the Noncompetition Agreements, in substantially
the form attached as Exhibit 6 to this Agreement, to be entered into
between the Buyer (or any subsidiary of the Buyer designated pursuant
to Section 11.7 of this Agreement) and each of the Shareholders of
SerVend, as described in Section 3.19(c) of this Agreement.
1.48 Noncompete Compensation. "Noncompete
Compensation" shall mean the cash compensation to be paid to each
Shareholder at closing, pursuant to such Shareholder's Noncompetition
Agreement, as consideration for the Shareholder's covenant not to
compete set forth in such Noncompetition Agreement.
1.49 Permitted Liens. "Permitted Liens" shall mean
those of the Existing Liens which are expressly noted as Permitted
Liens on the Disclosure Schedule.
1.50 Person. "Person" shall mean and include a natural
person, corporation, trust, partnership, limited liability company,
limited liability partnership, association, unincorporated
organization, governmental entity, agency or branch or department
thereof, or any other legal entity.
1.51 Purchased Assets. "Purchased Assets" shall mean
all assets of either or both of the Sellers used in the conduct of
their respective businesses (except for the Retained Assets)
including, but not limited to the Accounts, the Buildings, the
Purchased Contracts, the Equipment, the Existing Insurance Policies,
the Existing Investments, the Existing Permits, the Intangible Assets,
the Inventory, the Liquid Assets, the Real Property and the Records.
1.52 Purchased Contracts. "Purchased Contracts" shall
mean all of the Contracts except for the Retained Contracts.
1.53 Real Property. "Real Property" shall mean the
parcels of real property identified by the street addresses and legal
descriptions set forth in the Disclosure Schedule which are owned or
leased by either or both of the Sellers.
1.54 Records. "Records" shall mean all books,
documents and records owned or used by either or both of the Sellers
in the conduct of their respective businesses, including personnel,
medical and accounting records, correspondence, governmentally
required records, engineering data, designs, drawings, blue prints,
plans, specifications, lists, customer lists, computer media, software
and software documentation, sales literature, catalogues, promotional
items, advertising materials and other written materials.
1.55 Remcor Litigation. "Remcor Litigation" shall mean
that former litigation styled as Remcor Products Company v. SerVend
International, Inc., and Fischer, Ltd. in the United States District
Court, Southern District of Indiana, New Albany Division, No. NA 96-
174-7 B/G.
1.56 Retained Assets. "Retained Assets" shall mean the
following assets of Sellers as of the Closing Date which, although
they may relate to Sellers' businesses, are not Purchased Assets and
are to be retained by Sellers:
(a) SerVend's franchise to be a corporation, articles
of incorporation, bylaws, minute books, stock books, corporate seals
and other corporate records having to do with the corporate
organization and capitalization of SerVend;
(b) Fischer's Limited Partnership Agreement and other
partnership records having to do with the partnership organization and
capitalization of Fischer;
(c) Sellers' canceled checks, bank statements and tax
returns;
(d) the approximately 30 acres of vacant and
unimproved land owned by the Sellers, the legal description of which
is set forth on the Disclosure Schedule;
(e) Sellers' rights to purchase tickets to the
Kentucky Derby and season tickets to the University of Louisville
basketball and football games, together with all rights in and to, and
all other rights associated with, any seats or boxes relating to such
tickets including a season box to Churchill Downs spring and fall
meets;
(f) the automobiles described in the Disclosure
Schedule;
(g) the life insurance policies on the lives of
certain shareholders of SerVend described on the Disclosure Schedule;
(h) the Retained Contracts; and
(i) claims relating to any of the Retained Assets or
counterclaims relating to any of the Retained Liabilities.
1.57 Retained Contracts. "Retained Contracts" shall
mean the Distributor Contracts and any of the Existing Contracts
identified on the Disclosure Schedule as being retained by the Sellers
and not being assumed by the Buyer.
1.58 Retained Liabilities. "Retained Liabilities"
shall mean all obligations and liabilities of Sellers or otherwise
arising out of the operation of Sellers' businesses or the ownership
of the Purchased Assets prior to the Effective Time of Closing which
are not Assumed Liabilities, and any obligations and liabilities of
Sellers arising out of or relating to the ownership or operation of
any of the Retained Assets or the Retained Contracts from and after
the Effective Time of Closing.
1.59 Seller or Sellers. "Seller" or "Sellers" shall
mean, individually or collectively, Fischer or SerVend, or both.
1.60 Sellers Closing Certificate. "Sellers Closing
Certificate" shall mean the Closing Certificate of the Sellers in
substantially the form of Exhibit 7 attached to this Agreement.
1.61 Sellers Counsel Opinion. "Sellers Counsel
Opinion" shall mean the opinion of Reed Weitkamp Schell Cox & Vice in
substantially the form of Exhibit 8 attached to this Agreement.
1.62 Senior Lender. "Senior Lender" shall mean
NationsBank, N.A., Charlotte, North Carolina, or any other commercial
bank, financial institution or other Person from whom the Buyer
obtains the Senior Loan.
1.63 Senior Loan. "Senior Loan" shall mean the Senior
Credit Facilities in the principal amount of Two Hundred Five Million
Eight Hundred Seventy-Seven Thousand Six Hundred Fifty-Four and 00/100
Dollars ($205,877,654.00) from the Senior Lender to the Buyer.
1.64 SerVend. "SerVend" shall mean SerVend
International, Inc., a Kentucky corporation.
1.65 Shareholders. "Shareholders" shall mean George E.
Fischer, Mary Lee Fischer (in her individual capacity and as trustee
of the trust created by the George E. Fischer Qualified Annuity Trust
Agreement, dated May 6, 1997), Gregory E. Fischer, Mark J. Fischer,
Paul V. Fischer, and George C. Fischer, who together own all of the
issued and outstanding shares of capital stock of SerVend and all of
the outstanding limited partnership interests of Fischer.
ARTICLE II
PURCHASE AND SALE; PURCHASE PRICE
2.1 Purchase and Sale. At the Closing, and upon all
of the terms and subject to all of the conditions of this Agreement:
(a) Purchased Assets. Sellers shall sell, assign,
convey and deliver to Buyer, and Buyer shall purchase and accept from
the Sellers, the Purchased Assets.
(b) Cash Amount. Buyer shall pay the Cash Amount to
the Sellers, subject to the adjustment as provided in Section 2.4 of
this Agreement.
(c) Assumed Liabilities. Buyer shall assume and agree
to pay and perform in accordance with and be bound by all of the
covenants, terms and obligations under the Assumed Liabilities.
(d) Existing Indebtedness. Buyer shall prepay the
Existing Indebtedness in full, except for the IRBs.
2.2 Determination of Purchase Price.
(a) Purchase Price. The "Purchase Price" for the
Purchased Assets shall be the sum of: (i) the amount determined in
accordance with Section 2.2(b) of this Agreement (the "Cash Amount");
plus (ii) the amount of the Assumed Liabilities; plus (iii) the amount
of the Existing Indebtedness other than the IRBs.
(b) Cash Amount. The "Cash Amount" shall be that
amount equal to:
(i) Sixty-One Million Seven Hundred Seventy
Thousand and 00/100 Dollars ($61,770,000.00); minus
(ii) the amount, if any, by which the Consolidated
Net Worth is less than Eight Million Two Hundred Seventy-Five Thousand
and 00/100 Dollars ($8,275,000.00); minus
(iii) twelve (12) multiplied by the amount, if
any, by which the Consolidated EBITDA is less than Five Million Six
Hundred Thousand and 00/100 Dollars ($5,600,000.00).
(c) Definitions. As used in this Agreement:
(i) "Consolidated EBITDA" shall mean:
(A) the Consolidated Net Income; plus
(B) the actual deductions taken on the books
and records of the Sellers in the calculation of the Consolidated Net
Income for amortization of intangibles, depreciation of fixed assets,
interest on Indebtedness of the Sellers and federal and state income
taxes of the Sellers; plus
(C) any amounts deducted in the calculation
of Consolidated Net Income for the settlement payments in the Remcor
Litigation; plus
(D) any amounts deducted in the calculation
of Consolidated Net Income for expenses related to this Agreement and
the transactions described in this Agreement.
(ii) "Consolidated Net Income" shall mean the
consolidated net after tax income of the Sellers for the period from
and after January 1, 1997 through and including the earlier of the
Effective Time of Closing or the close of business on October 31,
1997, determined in accordance with generally accepted accounting
principles as consistently applied by the Sellers. For purposes of
calculation of the Purchase Price, including the Closing Financial
Statements, the Calculation, and the payment adjustment procedures
under Sections 2.2 and 2.4 of this Agreement, any adjustments to
earnings shall be applied to the period or periods in which the
underlying liability(ies) or revenue(s), as the case may be, first
arose. If the appropriate period or periods for any such adjustment
to earnings cannot be determined, then such adjustment shall be
allocated uniformly over fiscal years 1995, 1996 and 1997, so that
five-eighteenths (5/18) of such adjustment is applied to the period to
which this Section 2.2(c)(ii) relates.
(iii) "Consolidated Net Worth" shall mean, in
each case calculated as of the Effective Time of Closing using
generally accepted accounting principles as consistently applied by
the Sellers:
(A) the Net Book Value of the Purchased
Assets; minus
(B) the Net Book Value of the Assumed
Liabilities; minus
(C) the amount of the Existing Indebtedness
to be prepaid by the Buyer pursuant to this Agreement.
(iv) "Net Book Value" shall mean for any Purchased
Asset the amount equal to the net book value of that Purchased Asset
at the Effective Time of Closing, and for any Assumed Liability, shall
mean the book amount of such liability.
2.3 Payments. At the Closing, the Buyer shall:
(a) deliver the Escrow Deposit to the Escrow Agent to
hold, invest and deliver in accordance with the terms of the Escrow
Agreement; and
(b) prepay the Existing Indebtedness other than the
IRBs; and
(c) deliver to the Sellers by a single wire transfer
of immediately available funds to an account designated by the Sellers
an amount equal to Forty-Nine Million Three Hundred Seventy Thousand
and 00/100 Dollars ($49,370,000.00); and
(d) pay Buyers' closing costs, to include any sales
and transfer taxes or fees, title insurance premiums, and title or
recording fees; and
(e) pay to each Shareholder, by wire transfer of
immediately available funds to an account designated by such
Shareholder, the amount of such Shareholder's Noncompete Compensation.
2.4 Closing Financial Adjustments; Payment Adjustment.
(a) Closing Financial Adjustments. As promptly as
practicable following the Closing Date, the Sellers shall prepare:
(i) audited consolidated financial statements of the Sellers for the
period of January 1, 1997 through and including the Effective Time of
Closing (the "Closing Financial Statements"); and (ii) a calculation
of the Consolidated EBITDA, the Consolidated Net Worth, the Purchase
Price and the Cash Payment (the "Calculation"). The Closing Financial
Statements shall be as of the Effective Time of Closing and shall be
prepared in accordance with generally accepted accounting principles
as consistently applied by the Sellers and in accordance with the
provisions of this Agreement and the Calculation shall be prepared in
accordance with the terms of this Agreement. The Sellers shall
deliver to the Buyer, as promptly as practicable after the Closing
Date and in any event within ninety (90) calendar days after the
Closing Date, the Closing Financial Statements and the Calculation.
The Buyer shall be responsible for the costs of the auditors
associated with the audit.
(b) Discussions. The Buyer and the Sellers shall,
throughout the entire period from the date of this Agreement to the
date of the deliveries required by Section 2.4(a) of this Agreement,
meet and discuss any and all financial and business matters relating
to such process and the preparation of the Closing Financial
Statements and the Calculation. If the Sellers and the Buyer cannot
resolve any disagreements among themselves, then the procedures
specified in Sections 2.4(c), (d), (e), (f), (g) and (h) of this
Agreement shall be used.
(c) Buyer's Duties. As soon as is reasonably
practicable following the Buyer's receipt of the materials described
in Section 2.4(a) of this Agreement and in any event within thirty
(30) calendar days after receipt of such deliveries, the Buyer shall
comply with either Section 2.4(d) or Section 2.4(f) of this Agreement.
(d) No Objection by Buyer. If the Buyer has no
objection to the Closing Financial Statements or the Calculation, the
amount paid by the Buyer set forth in Section 2.3 of this Agreement
shall be adjusted in the manner set forth in Section 2.4(i) of this
Agreement.
(e) Bases for Objection. The only bases upon which
the Buyer may dispute any matter in the Closing Financial Statements
or the Calculation are: (i) the inaccuracy of such matter, whether
factually or numerically; or (ii) the Closing Financial Statements or
the Calculation, or both, are not prepared as provided in this
Agreement.
(f) Objection by Buyer. If the Buyer objects to any
matter in the Closing Financial Statements or the Calculation in
accordance with Section 2.4(e) of this Agreement, the Buyer shall,
within thirty (30) calendar days after receipt of the deliveries
described in Section 2.4(a) of this Agreement: (i) notify the Sellers
in writing of such objection; and (ii) deliver to the Sellers the
calculation by the Buyer of the amounts of the Purchase Price and the
Cash Amount. If the Sellers agree with the Buyer's objection and the
Buyer's calculations, the amount paid by the Buyer pursuant to Section
2.3 of this Agreement shall be adjusted in the manner set forth in
Section 2.4(i) of this Agreement. If the Sellers do not agree with
the objection of the Buyer or with the Buyer's calculations, the
Sellers shall, within thirty (30) calendar days after receipt of
Buyer's objection, notify the Buyer in writing of such fact.
(g) Independent Accountants. The disagreement between
the Sellers and the Buyer may then be submitted by either party for
resolution to Arthur Andersen LLP, or to such other firm of
independent certified public accountants of national standing with an
office in Milwaukee, Wisconsin and which is not affiliated with the
Buyer or either Seller and which firm is agreed to in writing by the
Sellers and the Buyer (the "Independent Accountants"). Each of the
parties shall furnish, at its own expense, the Independent Accountants
and the other parties with such documents and information as the
Independent Accountants may request. Each party may also furnish to
the Independent Accountants such other information and documents as it
deems relevant with appropriate copies or notification being given to
the other party. The Independent Accountants may, at their
discretion, conduct a conference concerning the disagreement with the
Sellers and the Buyer, at which conference each party shall have the
right to present additional documents, materials and other information
and to have present its advisors, counsel and accountants. In
connection with such process, there shall be no hearings, oral
examinations, testimony, depositions, discovery or other similar
proceedings conducted by any party or by the Independent Accountants.
The Independent Accountants shall determine the proportion of their
fees and expenses to be paid by each of the Sellers and the Buyer,
based primarily on the degree to which the Independent Accountants
have accepted the positions of the respective parties.
(h) Decision. The Independent Accountants shall
promptly render their decision on the question in writing and finalize
the Closing Financial Statements and the calculation of the Purchase
Price and the Cash Amount. The decision of the Independent
Accountants shall be final and binding on the parties.
(i) Adjustments. In the event that the Cash Amount as
finally determined pursuant to this Section 2.4 of this Agreement
("Adjusted Cash Amount") is less than Sixty-Two Million Four Hundred
Thousand and 00/100 Dollars ($62,400,000.00), the difference shall be
paid to Buyer from the Escrow Deposit as set forth in the Escrow
Agreement; provided, however, if the difference between the Cash
Amount and the Adjusted Cash Amount is greater than Eight Million Four
Hundred Thousand and 00/100 Dollars ($8,400,000.00), then only such
amount of the difference shall be distributed to Buyer from the Escrow
Deposit and the balance of the difference shall be paid to Buyer by
the Sellers.
(j) Access to Buyer's Records. During the period
contemplated by this Section 2.4 of this Agreement, Sellers shall have
complete access to the relevant Records of the Buyer during normal
business hours for purposes of the matters covered by said Section
2.4.
ARTICLE III
OTHER AGREEMENTS
3.1 Access and Cooperation.
(a) Access. Upon reasonable notice, the Sellers shall
afford to the officers, employees, accountants, legal counsel and
other representatives of the Buyer full access to all of the
properties, books, contracts, commitments and records of the Sellers.
Buyer shall not unreasonably interfere with, and shall respect the
privacy of, Sellers' employees.
(b) Confidentiality Agreement. The Buyer and the
Sellers agree that the provisions of the Confidentiality Agreement
shall remain in full force and effect; provided that, at the Effective
Time of Closing, the Confidentiality Agreement shall be deemed to have
terminated without further action by the parties.
3.2 Disclosure Schedule.
(a) Disclosure Schedule. Contemporaneously with the
execution and delivery of this Agreement, the Sellers are delivering
to the Buyer the Disclosure Schedule, which is accompanied by a
certificate signed by the President of SerVend and the General Partner
of Fischer, stating that the Disclosure Schedule is being delivered
pursuant to this Agreement and is the Disclosure Schedule referred to
in this Agreement. The Disclosure Schedule is deemed to constitute an
integral part of this Agreement and to modify the representations,
warranties, covenants or agreements of the Sellers contained in this
Agreement to the extent that such representations, warranties,
covenants or agreements expressly refer to the Disclosure Schedule.
(b) Updates. Prior to the Closing Date, the Sellers
shall update the Disclosure Schedule on a weekly basis by written
notice to the Buyer to reflect any matters (i) which exist on the date
of this Agreement but which were not previously included, and (ii)
which have occurred from and after the date of this Agreement which,
if existing on the date of this Agreement, would have been required to
be described in the Disclosure Schedule. If requested by the Buyer,
the Sellers shall meet and discuss with the Buyer any change in the
Disclosure Schedule made by the Sellers which is, in the reasonable
judgment of the Buyer, has a Material Adverse Effect (a "Disclosure
Schedule Change"). If the parties cannot resolve any differences
regarding a Disclosure Schedule Change within a reasonable period of
time (not to exceed ten (10) calendar days) the Buyer may terminate
this Agreement.
3.3 Duties Concerning Representations. Each party to
this Agreement shall: (a) to the extent within its control, use
reasonable efforts to cause all of its representations and warranties
contained in Articles IV and V of this Agreement to be true and
correct in all respects on the Closing Date with the same force and
effect as if such representations and warranties had been made on and
as of the Closing Date; (b) use reasonable efforts, not to include
payments to third parties, to obtain any third party consents or
approvals required by this Agreement; and (c) use reasonable efforts
to cause all of the conditions precedent set forth in Articles VII and
VIII of this Agreement to be satisfied.
3.4 Deliveries of Information; Consultation. From
time to time prior to the Closing Date:
(a) Deliveries by the Sellers. The Sellers shall
furnish promptly to the Buyer: (i) the monthly consolidated financial
statements of the Sellers (as prepared by the Sellers in accordance
with their normal accounting procedures) promptly after such financial
statements are available; (ii) a summary of any action taken by either
Seller's shareholders or Board of Directors, or any committee thereof;
and (iii) all other information concerning the operations, properties
and personnel of the Sellers as the Buyer may reasonably request.
(b) Consultation. The Sellers shall confer and
consult with representatives of the Buyer on a regular and frequent
basis to report on operational matters of the Sellers and the general
status of ongoing business operations of the Sellers.
(c) Acquisitions. The Sellers shall notify the Buyer
immediately: (i) of any Acquisition Proposal; (ii) of any inquiry
received from any Person concerning an Acquisition Proposal; (iii) of
any request from any Person for confidential information concerning
the business of either or both of the Sellers; and (iv) if any Person
seeks to initiate or continue any discussions or negotiations with
either or both of the Sellers concerning a Competing Transaction or an
Acquisition Proposal.
3.5 Acquisition Proposals.
(a) Definitions. As used in this Agreement, the
following terms shall have the meanings specified:
(i) "Acquisition Proposal" shall mean any inquiry,
proposal or offer relating to a Competing Transaction; and
(ii) "Competing Transaction" shall mean any or all of
the following, other than the transactions described in this Agreement
or any other transaction between the Buyer and the Sellers: (A) a
merger, share exchange, consolidation, reorganization, combination or
similar transaction which involves or affects either or both of the
Sellers; or (B) a sale, transfer or other disposition of all or
substantially all of the assets of either or both of the Sellers in a
single transaction or a series of related transactions; or (C) a sale,
exchange offer or tender offer for, or acquisition by any Person or
group of Persons of beneficial ownership of a controlling interest in
either or both of the Sellers in a single transaction or series of
related transactions; or (D) a public announcement of a proposal,
plan, intention or agreement to do any of the foregoing.
(b) Acquisition Proposals. The Sellers shall not, nor
shall they permit their respective shareholders, partners, officers,
directors, employees, agents and representatives (including, without
limitation, any investment banker, attorney or accountant retained or
engaged by that party) to: (i) initiate, solicit, or encourage any
inquiries concerning an Acquisition Proposal or a Competing
Transaction; (ii) engage in any negotiations concerning, or provide
any confidential information or data to, or have any discussions with,
any Person relating to an Acquisition Proposal or a Competing
Transaction; or (iii) facilitate any effort or attempt to make or
implement an Acquisition Proposal; or (iv) consummate, agree or commit
to consummate an Acquisition Proposal or a Competing Transaction.
The Sellers shall immediately cease or cause to be terminated any
existing activities, discussions or negotiations with any Person with
respect to any of the foregoing activities.
(c) Fees. In consideration of the substantial
expenditures of time, effort and expense undertaken and to be
undertaken by the Buyer in connection with the consummation of the
transactions contemplated by this Agreement, and notwithstanding any
provision to the contrary in this Agreement, Sellers shall pay to
Buyer the amount of $2,000,000 upon a termination of this Agreement
for any reason if such termination is a result of Sellers' termination
in connection with the Closing of any Competing Transaction, or is
followed by Sellers entering into, executing, agreeing to or closing
any Competing Transaction on or prior to April 30, 1998. In such
event, and upon payment of such amount by the Sellers to the Buyer,
the Sellers shall have no further liability or obligation of any kind
to the Buyer.
3.6 Public Announcements. Subject to each party's
disclosure obligations imposed by Law, the Buyer and the Sellers will
cooperate and consult with each other in the development and
distribution of all news releases and other public information
disclosures with respect to this Agreement or any of the transactions
contemplated by this Agreement and shall not issue any press release
or public statement without the approval of the other parties, which
approval shall not be unreasonably withheld. Sellers acknowledge
that, as a public company, Buyer is subject to legally required
disclosures, which may require Buyer to make one or more public
announcements regarding this Agreement on very short notice. Under
such circumstances, Buyer will exercise reasonable efforts to comply
with the foregoing provisions of this Section 3.6 of this Agreement,
but Buyer has the right to proceed with any public announcement
without Sellers' prior approval if Buyer is unable to obtain Sellers'
approval at a time when Buyer, on the advice of counsel, has made a
good faith determination that it is necessary to issue such public
statement.
3.7 Retained Liabilities. Except as otherwise
specifically provided for in this Agreement, Buyer is not assuming any
liabilities or obligations of Sellers, and Sellers shall pay, perform
in accordance with, be bound by and satisfy all of the Retained
Liabilities in the ordinary course of business.
3.8 Access to Records and Employees.
(a) Definitions. As used in this Agreement, the
following terms shall have the meanings specified:
(i) "Buyer Records" shall mean all books, documents
and records which are part of the Purchased Assets and relate to the
period prior to the Closing Date, including personnel records,
accounting records, correspondence, manuals, engineering data,
designs, drawings, blueprints, plans, specifications, lists, customer
lists, computer media, software and software documentation, sales
literature, catalogues, promotional items, advertising materials and
other written materials.
(ii) "Sellers Records" shall mean all books, documents
and records owned by the Sellers but which are not included in the
Purchased Assets.
(b) Buyer Records. Until January 1, 2003, the Buyer
agrees to permit the Sellers, and their attorneys, accountants, agents
and designees, such access to, and right to copy, such Buyer Records
as the Sellers may deem reasonably necessary or reasonably desirable.
Any such examination and copying shall be at the expense of the
Sellers, shall be performed at the place where the Buyer Records are
regularly maintained by the Buyer and shall not unreasonably interfere
with the normal business activities of the Buyer. The Buyer shall
notify the Sellers if at any time prior to January 1, 2003 it intends
to destroy any or all of the Buyer Records and the Sellers shall have
the right to review and remove the Buyer Records at the Sellers'
expense.
(c) Seller Records. Until January 1, 2003, the
Sellers agree to permit the Buyer, and its attorneys, accountants,
agents and designees, such access to, and right to copy, such Sellers
Records as the Buyer may deem reasonably necessary or reasonably
desirable. Any such examination and copying shall be at the expense
of the Buyer, shall be performed at the place where the Sellers
Records are regularly maintained by the Sellers and shall not
unreasonably interfere with the normal business activities of the
Sellers. The Sellers shall notify the Buyer if at any time prior to
January 1, 2003 either Seller intends to destroy any or all of the
Sellers Records, and the Buyer shall have the right to review and
remove any of the Sellers Records at the Buyer's expense.
(d) Buyer's Employees. Until January 1, 2003, the
Buyer shall afford the Sellers access to those employees of the Buyer
who were employees of either Seller prior to the Closing Date. Any
such access shall be: (i) at the request of the Sellers; (ii)
scheduled and provided on a reasonable basis taking into account the
business requirements of the Buyer; and (iii) for any proper business
purpose of the Sellers. The Sellers shall pay all reasonable out-of-
pocket expenses, excluding wages and salaries, incurred by the Buyer
in connection with this Section 3.8(d) of this Agreement.
3.9 Referrals and Deliveries. After the Closing, the
Sellers shall immediately: (a) deliver to the Buyer, in the form
received with the addition of any required endorsements by the
Sellers, any cash, checks, or other payments received by the Sellers
which belong to the Buyer; (b) refer to the Buyer any and all
inquiries from customers or suppliers of either Seller or other
Persons relating to the business of the Sellers; and (c) deliver to
the Buyer all purchase orders received by the Buyer relating to the
businesses of the Sellers.
3.10 Risk Of Loss. All risk of loss and rights to
insurance proceeds with respect to the Purchased Assets shall remain
with the Sellers until the Effective Time of Closing and, assuming the
occurrence of the Closing, shall pass to the Buyer effective as of the
Effective Time of Closing.
3.11 Allocation of Purchase Price. The Purchase Price
shall be allocated among the classes of Purchased Assets in accordance
with Section 1060 of the Code and substantially as set forth in the
Disclosure Schedule. The Buyer and the Sellers shall cooperate with
each other in the preparation and filing of IRS Form 8594 in
connection with such allocation. Neither the Buyer nor the Sellers
shall take any position (whether in audits, tax returns or otherwise)
which is inconsistent with such allocation of the Purchase Price
unless required to do so by applicable Law.
3.12 Employee Matters.
(a) Offer. The Buyer shall consider each of the
employees of the Sellers for employment following the Effective Time
of Closing, and the individual appointed by Buyer as the President of
the business and operations being acquired by Buyer from the Sellers
shall have the sole discretion to make all hiring decisions with
respect to such employees, in accordance with Buyer's standards and
policies.
(b) Termination by Sellers. Immediately prior to the
Effective Time of Closing, the Sellers shall terminate the employment
of any and all employees of the Sellers who will receive an offer of
employment from the Buyer.
(c) Employee Benefit Plans. The Buyer will, to the
extent permitted by applicable Law and the terms of the Existing Plans
of the Sellers, assume and continue the Existing Plans with respect to
the employees of the Sellers employed by the Buyer after the Effective
Time of Closing. In due course, the Buyer, in its sole discretion,
will determine whether to maintain and continue such Existing Plans or
substitute some or all of such Existing Plans with other plans
sponsored and maintained from time to time by the Buyer.
(d) Employment Agreements. Buyer shall offer an
Employment Agreement to each of the twelve employees of the Sellers
listed on Appendix 1 attached to the Form of Employment and
Noncompetition Agreement attached as Exhibit 4 to this Agreement.
3.13 Effective Time of Closing. The parties agree that
the transactions described in this Agreement shall be deemed effective
as of 11:59 P.M., Central Time, on the Closing Date (the "Effective
Time of Closing").
3.14 Change of Name. On the Closing Date, SerVend
shall deliver such documentation for filing by the Buyer as is
necessary to change SerVend's corporate name to a name that does not
include the word "SerVend" in any fashion.
3.15 Intention. It is the intention of the parties
that the Purchased Assets shall include all of the tangible and
intangible assets owned by the Sellers and used in or necessary for
the operation of the respective businesses of the Sellers on the date
of this Agreement and as of the Closing Date excepting therefrom only
the Retained Assets.
3.16 Nonassignable Contracts and Existing Permits. To
the extent that the assignment of any Purchased Contract or Existing
Permit to the Buyer pursuant to this Agreement shall require the
consent of any other Person, this Agreement shall not constitute a
contract to assign the same if an attempted assignment would
constitute a breach of such Purchased Contract or Existing Permit.
The Sellers shall use their best efforts (without paying money) and
the Buyer shall cooperate where appropriate to obtain any consent
necessary to any such assignment. If any such consent is not
obtained, the Sellers shall cooperate with the Buyer in any reasonable
arrangement requested by the Buyer designed to provide for the Buyer
the benefit, monetary or otherwise, of any such Purchased Contract or
Existing Permit including enforcement of any and all rights of the
Sellers against the other party thereto arising out of breach or
cancellation by such other party or otherwise.
3.17 Bulk Sales Law. The parties agree that any
applicable Bulk Sales Law need not be complied with in connection with
the transactions contemplated by this Agreement, but may be complied
with in the discretion of the relevant party.
3.18 Real Property.
(a) Definitions. As used in this Agreement, the
following terms shall have the meanings specified:
(i) "Survey" shall mean a certified survey map
prepared by a registered land surveyor selected by the Buyer which
shall be sufficient to enable the Title Company to eliminate all
survey exceptions relating to the surveyed Real Property other than
Permitted Liens and shall include those matters required to be
included on a land survey in accordance with the minimum standards and
detail requirements for land title surveys as jointly established and
adopted by the American Land Title Association and the American
Congress of Surveying and Mapping according to the 1992 Standards for
an Urban Survey and showing the following items (whether covered by
the minimum standard and detail requirements specified above or not):
(A) all courses and distances of the boundaries and the legal
description of the surveyed Real Property ; (B) the location and
dimensions of all improvements and their relation to lot lines and set
back and building line requirements (whether such requirements are
imposed by Law or Lien); (C) the location of all rights of way, water
courses and easements of record, whether above or (if possible) under
the ground; (D) any encroachments by the buildings, structures or
other improvements located on the surveyed Real Property over lot
lines, building lines, easements, roadways, rights of way or other
real property interests in the adjoining lands; and (E) any
encroachments by buildings, structures or other improvements located
on adjoining properties onto the surveyed Real Property.
(ii) "Title Commitments" shall mean binding
commitments issued by the Title Company for the issuance of 1970 Form
B American Land Title Association owners form of title insurance
policies with extended coverage, insuring the title in each parcel of
the Real Property to be in accordance with the terms of this
Agreement, subject only to Permitted Liens, and including all
endorsements requested by Buyer.
(iii) "Title Company" shall mean Chicago Title
Insurance Company or such other title insurance company which may be
selected by the Buyer.
(b) Exceptions. In the event Buyer elects to obtain
Title Commitments or Surveys with respect to the Real Estate, then, at
least ten (10) calendar days prior to the Closing Date, the Buyer
shall: (i) cause the Title Company to deliver to the Sellers the Title
Commitments, together with copies of all recorded documents affecting
the Real Property; and (ii) deliver to the Sellers a Survey of each
parcel of the Real Property. If the Title Commitments or the Surveys
disclose the existence of a Lien which is not a Permitted Lien, the
Sellers shall, at their election, take any of the following actions:
(i) remove or cure such Lien on or prior to the Closing Date; (ii) pay
to the Buyer an amount agreed to by the Buyer and the Sellers as fair
compensation for the fact that such Lien exists; or (iii) enable the
Title Company to expressly insure over such Lien by an endorsement
satisfactory in form and substance to the Buyer and its counsel.
(c) Expenses. The Buyer shall be responsible for the
costs, expenses and premiums for the Surveys, the Title Commitments
and the title insurance policies issued pursuant to the Title
Commitments.
3.19 Noncompetition.
(a) Noncompetition of Sellers. The Sellers jointly
and severally agree that, if the transactions contemplated by this
Agreement are consummated, they will not, directly or indirectly for
the period of five (5) years from and after the Closing Date, in the
United States of America and such other countries in which either
Seller has sold products in the two (2) year period immediately
preceding the Closing Date, own, manage, operate, control, participate
in, consult with, or be connected in any manner with, the operation,
ownership, management or control of any enterprise engaged in the
business of, or any business similar to, designing, manufacturing,
selling and distributing any ice dispenser, beverage dispenser,
ice/beverage dispenser, beverage dispenser valves or ice machines or
any other ice or beverage related equipment whether refrigerated by
ice or other means.
(b) Exception. Notwithstanding the provisions of
Section 3.19(a) of this Agreement, the Sellers shall not be prohibited
from owning or acquiring securities of any corporation or other
business enterprise that may be engaged in activities described in the
foregoing, provided that: (i) no affiliate of such Sellers is an
officer, director or employee of, or consultant to, such corporation
or business enterprise; (ii) such securities are held by such Seller
for investment purposes only and represent less than five percent (5%)
of the total equity interests of such corporation or business
enterprise; and (iii) such securities are listed on a national
securities exchange or are regularly quoted in the over the counter
market by one or more members of the National Association of
Securities Dealers.
(c) Noncompetition of Shareholders. At the Closing,
each of the Shareholders will enter into a Noncompetition Agreement
with Buyer.
3.20 Termination Fee. In consideration of the
substantial expenditures of time, effort and expense undertaken and to
be undertaken by the Sellers in connection with the transactions
described in this Agreement, and notwithstanding anything to the
contrary in this Agreement, the Buyer shall pay to the Sellers the
amount of $1,000,000 upon a termination of this Agreement by the Buyer
other than a termination pursuant to Section 11.1 of this Agreement.
In such event, and upon payment of such amount by the Buyer to the
Sellers, the Buyer shall have no further liability or obligation of
any kind to the Sellers, except for their obligations under the
Confidentiality Agreement.
3.21 HSR Act. The Buyer and the Sellers shall each:
(a) file within five (5) business days after the execution of this
Agreement with the Antitrust Division of the United States Department
of Justice and the Federal Trade Commission the pre-merger
notifications required by the HSR Act from such party, requesting
early termination of the waiting periods thereunder; (b) promptly
respond to inquiries to such party from such Persons in connection
with such filings; and (c) cooperate fully with one another in the
preparation of such filings and responses.
3.22 Ice Transport System.
(a) Pursuant to this Agreement, Buyer is acquiring an
Existing Contract dated as of September 26, 1997 between SerVend and
William G. Lancaster entitled Ice Transportation Assignment Agreement
(the "Lancaster IT Agreement"), and Buyer is assuming SerVend's
obligations under the Lancaster IT Agreement.
(b) For purposes of this Section 3.22 the following
terms shall have the meanings specified:
(i) "Covered Ice Transportation System" shall
mean an Ice Transportation System with respect to which the Buyer is
obligated to pay to Mr. William G. Lancaster a fee under the terms of
the Lancaster IT Agreement.
(ii) "Ice Transportation System" shall mean
devices and processes for transferring ice, including all components
that facilitate and control the transfer of ice, such as augers,
pumps, bulk dispensers/bins, ice flow regulators, sizers, agitators,
diverters, controllers, piping and insulation, but not including
cubers or other icemaking equipment from which ice may be carried or
the binds or dispensers to which ice may be carried, by the Ice
Transportation System.
(iii) "IT Patent" shall mean any patent or
other similar intellectual property protection applied for in or
issued by any country for any invention relating to Covered Ice
Transportation Systems.
(iv) "Net Sales Price" shall mean Buyer's invoice
price for Covered Ice Transportation Systems, FOB factory, after
deduction of regular trade and quantity discounts, but before
deduction of any other items, including but not limited to freight
allowances, cash discounts and agents' commissions. Where Covered Ice
Transportation Systems are not sold but are otherwise placed in
service, the "Net Sales Price" of such products for the purpose of
computing fees shall be the selling price at which products of similar
kind and quality, sold in similar quantities, are currently being
offered for sale by Buyer or, if not offered for sale by Buyer, are
offered for sale by other manufacturers. In the event any Covered Ice
Transportation System shall be sold for purposes of resale either (1)
to a corporation, firm or association which, or an individual who,
owns a controlling interest in Buyer by stock ownership or otherwise
or (2) to a corporation, firm or association in which Buyer owns a
controlling interest by stock ownership or otherwise, the fees to be
paid in respect to such Covered Ice Transportation System shall be
computed upon the net selling price at which the purchaser for resale
sell such Covered Ice Transportation System, rather than upon the Net
Sales of Buyer.
(c) Buyer shall pay to Sellers a fee equal to five
percent (5%) of the Net Sales Price of Covered Ice Transportation
Systems as they may be developed, improved or modified for
commercialization by Buyer; provided that the fee shall be paid: (1)
only to the extent that, after payment of the fee and payment of
royalties to Lancaster under the Lancaster IT Agreement, Buyer's gross
margin shall equal thirty percent (30%), as calculated annually by the
Buyer's audit firm in accordance with GAAP, and (2) only when the
commercial Ice Transportation System is economic-value-added ("EVA")
positive as calculated by Buyer.
(d) The fee as set forth in Section 3.22(c) shall be
paid for on sales of Covered Ice Transportation Systems consummated
during the fifteen-year period following the Closing Date.
(e) The fee payments under this Section 3.22 shall be
made within fifty (50) days after the end of each calendar year to a
single Person as designated from time to time in writing by Sellers.
Buyer shall at the same time make a report to Sellers showing the fee
due to Sellers and setting forth all necessary information and fee
calculations, including the Net Sales Price base and the determination
of any fee percentage less than five percent (5%). This report shall
accompany the payment of the annual fee.
(f) At the option of Sellers, the fee reported and
paid to them by Buyer shall be subject to verification annually by a
firm of independent certified public accountants designated by
Sellers. The cost of verification, whether by inspection,
examination, audit or otherwise, shall be borne by the Sellers unless
such inspection, examination, audit or other verification reflects
under reporting of five percent (5%) or more in the number of units
reported or underpayment of five percent (5%) or more in the fee
accrued or paid. In the event of such discrepancy, all costs of the
verification shall be paid by Buyer. Sellers shall have access to all
information gathered by the accountants with the exception of customer
identifications, and all such information shall be confidential and
shall be used solely for the purposes of verifying the fee to be paid
under this section.
(h) Buyer will provide and expend in calendar 1998
research and development funds for Covered Ice Transportation Systems
totaling $291,000. Thereafter, the provision of further research and
development funds and any decision to commercialize a Covered Ice
Transportation System shall be at the sole discretion of Buyer.
Nothing in this Agreement shall be deemed to require Buyer to pursue
commercialization of Covered Ice Transportation Systems or, if it
elects to proceed with such commercialization, to engage in any
marketing, advertising or distribution plans or programs, or to make
any minimum number of sales of Covered Ice Transportation Systems.
Sellers acknowledge and agree that Buyer is free at any time after
December 31, 1998 to discontinue any such efforts and pursuits as it
determines in its sole discretion, and its decision to do so shall not
be the basis for any claim by Sellers.
3.23 Distributor Contract Matters. The parties
acknowledge and understand that, in connection with the termination of
the Distributor Contracts that will occur as a result of the
transactions contemplated by this Agreement, Sellers may incur certain
costs and expenses including, without limitation, repurchases of
inventory and other payments that the Sellers may be required to make
to the other parties to such Distributor Contracts. Notwithstanding
that the Distributor Contracts constitute Retained Assets and
obligations arising thereunder from and after the Effective Time of
Closing constitute Retained Liabilities, it is the intention of the
parties that the Buyer will pay such costs and expenses without regard
to the provisions of Article IX. Accordingly, the Buyer agrees that,
promptly upon receipt of notice from the Sellers of the nature and
amount of any such costs and expenses reasonably incurred by Sellers,
Buyer promptly will reimburse Sellers for the amount thereof.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers hereby jointly and severally represents and
warrants to the Buyer that:
4.1 Organization; Business.
(a) Organization; Qualification.
(i) SerVend is a corporation duly and validly
organized and existing and in current status under the Laws of the
Commonwealth of Kentucky. The Disclosure Schedule includes a list of
all Persons who are holders of capital stock, options, warrants or
other equity interests in SerVend.
(ii) Fischer is a limited partnership duly and
validly organized and existing and in current status under the laws of
the Commonwealth of Kentucky. The Disclosure Schedule includes a list
of all Persons who are partners or holders of any other equity
interests in Fischer.
(iii) Each of the Sellers is duly qualified to
do business as a foreign corporation or partnership and is in good
standing in all jurisdictions in which either the ownership or use of
the Purchased Assets or the operation of the business of that Seller
requires such qualification, except where the failure to be so
qualified would not have a Material Adverse Effect. The Disclosure
Schedule contains a list of all states and foreign jurisdictions where
each of the Sellers is so qualified.
(b) Power. Each of the Sellers has the full corporate
or partnership power and authority and all franchises, permits,
licenses, approvals, authorizations, registrations, grants and orders
necessary to carry on the business of that Seller as it is now
conducted, to own, lease and operate the Purchased Assets and to
perform all of its obligations under the Purchased Contracts.
(c) Properties. Each of the Sellers owns or has the
right to use all property, real or personal, tangible or intangible,
which is necessary for the operation of its respective business as
currently conducted.
4.2 Authorization; Enforceability.
(a) SerVend. The execution, delivery and performance
of this Agreement and all of the documents and instruments required by
this Agreement to be executed and delivered by SerVend are within the
corporate power of SerVend and have been duly authorized by all
necessary corporate action by SerVend.
(b) Fischer. The execution, delivery and performance
of this Agreement and all of the documents and instruments required by
this Agreement to be executed and delivered by Fischer are within the
partnership power of Fischer and have been duly authorized by all
necessary partnership action by Fischer.
(c) Enforceability. This Agreement is, and the other
documents and instruments required by this Agreement to be executed
and delivered by the Sellers will be, when executed and delivered by
the Sellers, the legal, valid and binding obligations of each of the
Sellers, enforceable against each of the Sellers in accordance with
their respective terms, except as the enforcement thereof may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar Laws generally affecting the rights of creditors
and subject to general equity principles.
4.3 No Violation or Conflict.
(a) No Violation. The execution, delivery and
performance of this Agreement by the Sellers do not and will not,
directly or indirectly (with or without notice or lapse of time):
(i) contravene, conflict with or violate any Law,
the Articles of Incorporation or Bylaws of SerVend or the Limited
Partnership Agreement of Fischer;
(ii) give any governmental body or any other
Person the right to challenge the consummation of the transactions
contemplated by this Agreement or to exercise any remedy or obtain any
relief under any Law or any judgment, order or decree to which either
of the Sellers or any of the Purchased Assets may be subject;
(iii) contravene, conflict with, violate or
breach any provision, or give any Person the right to declare a
default or exercise any remedy under, or to accelerate the maturity or
performance of, or to cancel, terminate or modify, any Contract;
(iv) result in the imposition or creation of any
Lien upon or with respect to the Purchased Assets; or
(v) except as disclosed on the Disclosure
Schedule, disrupt or impair any business relationship with any
supplier, customer, distributor, sales representative or employee of
either Seller so as to cause a Material Adverse Effect.
(b) Consents. Except as set forth in the Disclosure
Schedule and the IRBs, neither Seller is or will be required to give
any notice or obtain any consent or approval from any Person in
connection with the execution and delivery of this Agreement or the
consummation or performance of the transactions contemplated hereby,
except where the failure to do so would have a Material Adverse
Effect.
4.4 Financial Information; Books and Records.
(a) Financial Statements. The Sellers have delivered
to Buyer all of the Financial Information. The financial statements
(and notes where applicable) which are part of the Financial
Information are accurate and complete in all material respects and
fairly present the consolidated financial condition and the
consolidated results of operations of the Sellers as at the respective
dates of and for the periods referred to therein, all in accordance
with generally accepted accounting principles applied on a consistent
basis throughout all periods, subject, in the case of the interim
financial statements, to: (i) normal year-end and audit adjustments
and any other adjustments described therein (the effect of which will
not, on a consolidated basis, be materially adverse); and (ii) the
absence of footnotes thereto (that, if presented would not differ
materially from those included in the most recent audited balance
sheet).
(b) Corporate and Partnership Books. The books of
account, minute books, and other records of the Sellers, all of which
have been made available to Buyer, are complete and correct in all
material respects and have been maintained in accordance with sound
business practices.
(c) Accounting Books. The accounting books and
records of the Sellers: (i) are correct and complete in all material
respects; (ii) are maintained in a manner consistent with past
practice; (iii) have recorded therein all the properties and assets
and liabilities of the Sellers; and (iv) reflect all transactions
entered into by the Sellers or to which either or both of the Sellers
is a party.
(d) Bank Accounts. The Disclosure Schedule sets forth
the name of each bank in which either or both of the Sellers has an
account or safe deposit box or with which either or both of the
Sellers has an arrangement for safekeeping.
4.5 Assets.
(a) Title. The Sellers own good and valid title to
all of the Purchased Assets, free and clear of any and all Liens
except: (a) the Existing Liens on the date of this Agreement; and (b)
the Permitted Liens on the Closing Date. Sellers are in sole
possession of, and have sole control of, the Purchased Assets. All of
the tangible Purchased Assets are physically located on the Real
Property. Except as set forth on the Disclosure Schedule, none of the
Purchased Assets is leased, rented, licensed or otherwise not owned by
Sellers.
(b) All Assets. The Purchased Assets include all
assets of the Sellers which are used in or necessary for the operation
of the businesses of the Sellers as presently conducted, excepting
therefrom only the Retained Assets.
(c) Buildings and Equipment. The Buildings and
Equipment, taken as a whole, are in good operating condition and
repair and are adequate for the uses for which they are being put,
normal wear and tear excepted. No such asset is in need of
maintenance or repair, except for routine maintenance and repairs that
are not material in nature or cost.
(d) Inventory. Except to the extent of specific
reserves for obsolete or slow moving Inventory reflected in the
Financial Information, the Inventory is current, merchantable, usable
and salable at normal prices and discounts in the ordinary course of
business, and is at a level consistent with the normal practices of
the respective businesses of the Sellers.
(e) Investments. Except for the Existing Investments,
neither Seller owns, or has any right or obligation to acquire, any
Investment.
(f) Accounts. All of the Accounts have arisen from
bona fide transactions by the Sellers in the ordinary course of
business and, to the extent not previously collected, are fully
collectible in the ordinary course of business in accordance with
their terms, except to the extent of specific reserves for
uncollectible Accounts reflected in the Financial Information. None
of the Accounts is or will be at the Effective Time of Closing subject
to any counterclaim or set off.
4.6 Contingent and Undisclosed Liabilities. Except
pursuant to the deposit and collection of checks in the ordinary
course of business, neither Seller has guaranteed or become a surety
for or is otherwise contingently liable for the obligations of any
other Person. Neither Seller has any liabilities, obligations or
indebtedness of any nature (whether known or unknown and whether
absolute, accrued, contingent or otherwise), other than those which:
(a) are reflected, reserved against or disclosed in the financial
statements which are a part of the Financial Information or in the
Disclosure Schedule; or (b) arose or were incurred in the ordinary
course of business since July 31, 1997 and which are consistent in
amount and character with past practices and are not required to be
disclosed pursuant to this Agreement or the Disclosure Schedule.
4.7 Taxes.
(a) Tax Returns. Sellers have timely and properly
filed all federal, state, local and foreign tax returns (including but
not limited to income, franchise, sales, payroll, employee withholding
and social security and unemployment) which were required to be filed.
Sellers have delivered to Buyer copies of all such income tax and
other material tax returns which have been filed since December 31,
1993. All such tax returns are true, complete and correct.
(b) Payment of Taxes. Sellers have paid or made
provision for all federal, state, local, foreign or other governmental
charges (except for any sales tax obligation arising from the
transactions described in this Agreement) that may or could follow the
Purchased Assets or otherwise affect Buyer after the consummation of
the transactions contemplated in this Agreement.
(c) Tax Liens. There are no tax Liens upon any of the
Purchased Assets, except for Liens for current taxes not yet due and
payable.
(d) Withholding. Each Seller has properly withheld
and timely paid all withholding and employment taxes which it was
required to withhold and pay relating to salaries, compensation and
other amounts heretofore paid to its employees or other Persons, and
all Forms W-2 and 1099 required to be filed with respect thereto have
been timely and properly filed.
4.8 Absence of Certain Changes. Since July 31, 1997,
and except as disclosed in the Disclosure Schedule, there has not been
any:
(a) change in the financial condition, properties,
liabilities, business, results of operations or prospects of either or
both of the Sellers, such as would have a Material Adverse Effect;
(b) damage, destruction or loss which has had a
Material Adverse Effect (whether or not covered by insurance); or
(c) transactions by either or both of the Sellers
outside the ordinary course of business, except for the transactions
contemplated by this Agreement.
4.9 Existing Plans.
(a) Existing Plans. The Disclosure Schedule contains
a complete and accurate list of all Existing Plans. Except for the
Existing Plans, neither Seller maintains, nor is it bound by, any
Employee Benefit Plan. All of the Existing Plans are and at all times
have been in compliance (or have been brought into compliance) in all
respects with all applicable Laws including ERISA. Based upon the
September 16, 1996 letter from the Internal Revenue Service included
in the Disclosure Schedule, all of the Existing Plans which are
intended to meet the requirements of Section 401(a) of the Code have
been determined by the Internal Revenue Service to be "qualified"
within the meaning of the Code, and there are no facts which would
adversely affect the qualified status of any of the Existing Plans.
(b) ERISA. There is no accumulated funding
deficiency, within the meaning of ERISA or the Code, in connection
with the Existing Plans or any other benefit plan sponsored by either
or both of the Sellers or any affiliate of either of the Sellers, as
determined under Sections 414(b), (c), (m) or (o) of the Code (herein
referred to as an "ERISA Affiliate"), and no reportable event, as
defined in ERISA, has occurred in connection with such Plans. The
Existing Plans have not, nor has any trustee or administrator of the
Existing Plans, engaged in any prohibited transaction as defined in
Section 406 of ERISA or Section 4975 of the Code. Neither Seller nor
any ERISA Affiliate is contributing to, nor has either Seller or any
ERISA Affiliate ever contributed to, any multi-employer plan, as
defined in ERISA.
(c) Terminated Plans. The Disclosure Schedule
describes any Employee Benefits Plan that has been terminated and the
status of such Plans, the distribution or retention of monies with
respect to said Plans, and any further obligations of the Plans or
either Seller in connection therewith. Any past Employee Benefit Plan
that has been terminated was done so in full compliance with all
applicable Laws. There is no basis for further liability or
obligation of Sellers pursuant to any past Employee Benefit Plan
sponsored by either Seller or an ERISA Affiliate.
(d) Assumed Benefit Plans. Each Existing Plan to be
assumed by Buyer in connection with the acquisition (hereinafter
referred to as an "Assumed Benefit Plan") is identified as such on the
Disclosure Schedule. With respect to each Assumed Benefit Plan:
(i) The funds available under each Assumed
Benefit Plan which is intended to be a funded plan equal or exceed the
amounts required to be paid, or which would be required to be paid, if
such Assumed Benefit Plan were terminated as of the Closing Date.
(ii) Any Assumed Benefit Plan that is intended to
qualify under Section 401(a) of the Code meets in all material
respects all requirements for qualification under Section 401(a) of
the Code and the regulations thereunder, and Seller has provided Buyer
with a copy of the most recent favorable determination letter issued
by the Internal Revenue Service concerning the Plan's qualification.
Each such Assumed Benefit Plan has been administered in accordance
with its terms and the applicable provisions of ERISA and the Code and
the regulations thereunder and no matter exists which would adversely
affect the qualified tax-exempt status of such Assumed Benefit Plan
and any related trust.
(iii) Except as disclosed on the Disclosure
Schedule, with respect to each Assumed Benefit Plan, all reports and
information relating to each such Assumed Benefit Plan required to be
filed with any governmental entity have been accurately and timely
filed; all reports and information relating to each such Assumed
Benefit Plan required to be disclosed or provided to participants or
their beneficiaries have been timely disclosed or provided; each trust
related to any Assumed Benefit Plan which is a voluntary employee
beneficiary association pursuant to Section 501(c)(9) of the Code has
received a favorable determination letter from the Internal Revenue
Service with respect to its tax-exempt status, and nothing has
occurred since the date of such letter that has or is likely to
adversely affect such qualification or exemption; there exist no
restrictions on Buyer's right to terminate or decrease prospectively
the level of benefits under any Assumed Benefit Plan after the Closing
Date without liability to any employee or former employee of either
Seller; to the Knowledge of Sellers, no event has occurred or
circumstance exists that could result in a material increase in
premium costs of any Assumed Benefit Plan that is insured or a
material increase in benefit costs of any Assumed Benefit Plan that is
self-insured; to the Knowledge of Sellers, no fiduciary of an Assumed
Benefit Plan has committed a breach of any responsibility or
obligation imposed upon fiduciaries under Title I of ERISA with
respect to such Assumed Benefit Plan.
(iv) There has been delivered to Buyer, with
respect to each Assumed Benefit Plan the following: a copy of the
annual report (if required under ERISA) with respect to each such
Assumed Benefit Plan for the last three years (including all schedules
and attachments); a copy of the summary plan description, together
with each summary of material modifications, required under ERISA with
respect to such Assumed Benefit Plan; all material employee
communications relating to such Assumed Benefit Plan; a true and
complete copy of such Assumed Benefit Plan; all trust agreements,
insurance contracts, accounts or other documents which establish the
funding vehicle for any Assumed Benefit Plan and the latest financial
statements thereof; any investment management agreements,
administrative services contracts, or other agreements and documents
relating to the ongoing administration and investment of any Assumed
Benefit Plan.
(v) With respect to each such Assumed Benefit
Plan for which an annual report has been filed and delivered to Buyer,
no material adverse change has occurred with respect to the matters
covered by the latest such annual report since the date thereof.
(vi) There are no actions, suits, proceedings,
investigations or hearings pending with respect to any Assumed Benefit
Plan, or to the Sellers' Knowledge any claims (other than claims for
benefits arising in the ordinary course of an Assumed Benefit Plan)
threatened against or with respect to any Assumed Benefit Plan or any
fiduciary or assets thereof, and, to the Knowledge of Sellers, there
are no facts which could reasonably give rise to any such actions,
suits, proceedings, investigations, hearings or claims.
4.10 Compliance with Law.
(a) Operations. The present and past operation of the
businesses of the Sellers and the Purchased Assets is and has been in
compliance with all Existing Permits and Laws. To the Knowledge of
Sellers, neither Seller is currently the subject of an inspection or
inquiry regarding violations or alleged violations of any Law by any
federal, state, local or other governmental agency.
(b) Events. No event has occurred or circumstance
exists that (with or without notice or lapse of time): (i) may
constitute or result in a violation by either or both of the Sellers
of, or a failure on the part of either or both of the Sellers to
comply with, any Existing Permit or Law; or (ii) may give rise to any
obligation on the part of either or both of the Sellers to undertake,
or to bear all or any portion of the cost of, any remedial action of
any nature.
(c) Existing Permits. The Disclosure Schedule
contains a complete and accurate list of each Existing Permit. Each
Existing Permit is valid and in full force and effect, and such
Existing Permits collectively constitute all of the permits, licenses,
approvals, qualifications, permissions or authorizations necessary to
permit the Sellers to lawfully conduct and operate their respective
businesses in the manner currently conducted and to permit the Sellers
to own and use the Purchased Assets in the manner in which they
currently own and use such assets.
4.11 Litigation. Except for the Existing Litigation:
(a) there is no litigation, arbitration, proceeding, governmental
investigation, citation or action of any kind pending or, to the
Knowledge of Sellers, proposed or threatened, against or relating to
the Sellers or the Purchased Assets, nor is there any basis known to
the Sellers for any such action; and (b) there are no actions, suits
or proceedings pending or, to the Knowledge of Sellers, proposed or
threatened, against the Sellers by any Person which question the
legality, validity or propriety of the transactions contemplated by
this Agreement. Sellers have delivered to Buyer copies of all
pleadings, correspondence and other documents relating to the Existing
Litigation.
4.12 Existing Contracts. The Disclosure Schedule
contains a complete and accurate list of, and Sellers have delivered
to Buyer true and complete copies of, the Existing Contracts. The
Existing Contracts are the only Contracts to which either Seller is a
party or by which either Seller is bound which:
(a) involves the performance of services or delivery
of goods or materials by either Seller of an amount or value in excess
of $25,000 in any 12-month period;
(b) involves the performance of services or delivery
of goods or materials to either Seller of an amount or value in excess
of $25,000 in any 12-month period;
(c) was not entered into in the ordinary course of
business and involves expenditures or receipts of either Seller in
excess of $25,000 in any 12-month period;
(d) is a lease, rental or occupancy agreement,
license, installment and conditional sale agreement, or other Contract
affecting the ownership of, leasing of, title to, use of, or any
leasehold or other interest in, any real or personal property (except
personal property leases and installment and conditional sales
agreements having a value per item or aggregate payments of less than
$10,000 and with terms of less than one year);
(e) is a licensing agreement or other Contract with
respect to patents, trademarks, copyrights, or other intellectual
property, including agreements with current or former employees,
consultants, or contractors regarding the appropriation or the
nondisclosure of any of the Intangible Assets;
(f) is a joint venture, partnership or other Contract
(however named) involving a sharing of profits, losses, costs, or
liabilities by either Seller with any other Person;
(g) contains covenants that in any way purport to
restrict the business activity of either Seller or limit the freedom
of either Seller to engage in any line of business or to compete with
any Person or otherwise restricts the right of either Seller to use or
disclose any information in its possession;
(h) provides for payments to or by any Person based on
sales, purchases, or profits, other than direct payments for goods;
(i) is a power of attorney that is currently effective
and outstanding;
(j) was entered into other than in the ordinary course
of business and contains or provides for an express undertaking by
either Seller to be responsible for consequential damages;
(k) is a Contract for capital expenditures in excess
of $10,000;
(l) is a warranty, guaranty or other similar
undertaking with respect to contractual performance extended by either
Seller other than in the ordinary course of business;
(m) is a union labor contract;
(n) is a management, consulting, employment, personal
service, agency or other contract or contracts providing for
employment or rendition of services and which: (i) is in writing; or
(ii) creates other than an at will employment relationship; or (iii)
provides for any commission, bonus, profit sharing, incentive,
retirement, consulting or additional compensation; or (iv) contains
any termination or severance pay obligations or liabilities;
(o) is an agreement for the storage, transportation,
treatment or disposal of any hazardous waste or hazardous byproduct;
(p) is an agreement with either Seller or any
subsidiary or affiliate thereof, or with any director, officer,
employee or shareholder of either Seller or any subsidiary or
affiliate thereof;
(q) is an agreement with any agent, dealer,
distributor, sales representative or manufacturer's representative for
any of the products of either Seller;
(r) is any other agreement which: (A) involves an
amount in excess of $10,000; or (B) is not in the ordinary course of
business;
(s) is an agreement, note or other evidence of any
Indebtedness of either Seller; and
(t) is any other written or unwritten agreement that
is material, either in amount or significance, to the ongoing
operation of either Seller.
4.13 Performance of Contracts. Each Purchased Contract
is in full force and effect and is valid and enforceable in accordance
with its terms. Except as set forth on the Disclosure Schedule:
(a) each Seller is in material compliance with all
applicable terms and requirements of each Purchased Contract under
which that Seller has or had any obligation or liability or by which
that Seller or any of the Purchased Assets is or was bound;
(b) each other Person that has or had any obligation
or liability under any Purchased Contract under which either Seller
has or had any rights is, to the Knowledge of Sellers, in compliance
with all applicable terms and requirements of such Purchased Contract;
(c) no event has occurred or circumstance exists that
(with or without notice or lapse of time) may contravene, conflict
with, or result in a material violation or breach of, or give either
Seller or other Person the right to declare a default or exercise any
remedy under, or to accelerate the maturity or performance of, or to
cancel, terminate, or modify, any Purchased Contract;
(d) neither Seller has given to or received from any
other Person, at any time since July 31, 1997, any notice or other
communication (whether oral or written) regarding any actual or
alleged violation or breach of, or default under, any Purchased
Contract; and
(e) there are no renegotiations of, attempts to
renegotiate, or outstanding rights to renegotiate any material amounts
paid or payable to either Seller under current or completed Purchased
Contracts with any Person other than in the ordinary course of
business and, to the Knowledge of Sellers, no such Person has made
written demand for such renegotiation.
4.14 Existing Insurance Policies.
(a) Deliveries. Sellers have delivered to Buyer true
and complete copies of the Existing Insurance Policies, all pending
applications for an insurance policy to cover the Purchased Assets and
any statement by the auditor of Sellers' financial statements with
regard to the adequacy of the insurance coverage provided by the
Existing Insurance Policies.
(b) Existing Insurance Policies. The Existing
Insurance Policies: (i) are valid, outstanding and enforceable; (ii)
taken together, provide adequate insurance coverage for the Purchased
Assets for all risks normally insured against by a Person carrying on
the same business as either Seller; and (iii) are sufficient for
compliance with all Laws, the Existing Permits and the Contracts.
(c) Losses. The Disclosure Schedule sets forth, by
year, for the current policy year and each of the two preceding policy
years in respect of each policy for liability, property or casualty:
(i) a summary of loss experience under each policy; (ii) statement
describing each claim under each policy for an amount in excess of
$10,000; and (iii) a statement describing the loss experience for all
claims that were self-insured, including the number and aggregate cost
of such claims.
(d) Cancellation. Sellers have not received: (i) any
refusal of coverage or notice that a defense will not be afforded with
reservation of rights; or (ii) any notice of cancellation or any other
indication that any insurance policy is no longer in full force and
effect or will not be renewed or that the issuer of any such policy is
not willing or able to perform its obligations thereunder.
4.15 Environmental Protection.
(a) Definitions. As used in this Agreement:
(i) "Environmental Claim" shall mean any and all
administra tive, regulatory or judicial actions, suits, demands,
demand letters, directives, claims, Liens, investigations proceedings
or notices of noncompliance or violation (written or oral) by any
Person alleging potential liability (including, without limitation,
potential liability for enforcement, investigatory costs, cleanup
costs, governmental response costs, removal costs, remedial costs,
natural resources damages, property damages, personal injuries or
penalties) arising out of, based on or resulting from: (A) the
presence, or release into the environment, of any Environmental
Hazardous Materials at any location, whether or not owned by Sellers;
or (B) circumstances forming the basis of any violation or alleged
violation, of any Environmental Law; or (C) any and all claims by any
Person seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief resulting from the presence or
Environmental Release of any Environmental Hazardous Materials.
(ii) "Environmental Hazardous Materials" shall
mean: (A) any petroleum or petroleum products, radioactive materials,
asbestos in any form, urea formaldehyde foam insulation, and
transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls (PCBs) and radon gas;
and (B) any chemicals, materials or substances which are now or ever
have been defined as or included in the definition of "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely
hazardous wastes," restricted hazardous wastes," "toxic substances,"
"toxic pollutants," or words of similar import, under any
Environmental Law; and (C) any other chemical, material, substance or
waste, exposure to which is now or ever has been prohibited, limited
or regulated by any governmental authority.
(iii) "Environmental Laws" shall mean all
federal, state, local or foreign statutes, Laws, rules, ordinances,
codes, policy, rule of common law, regulations, judgments, and orders
relating to pollution or protection of human health or the environment
(including, without limitation, ambient air, surface water, ground
water, drinking water, wildlife, plants, land surface or subsurface
strata), including, without limitation, Laws and regulations relating
to Environmental Releases or threatened Environmental Releases of
Environmental Hazardous Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Environmental Hazardous Materials.
(iv) "Environmental Permits" shall mean all
environmental, health and safety permits and governmental
authorizations.
(v) "Environmental Release" shall mean any
release, spill, emission, leaking, injection, deposit, disposal,
discharge, dispersal, leaching or migration into the atmosphere, soil,
surface water, groundwater or property.
(b) Compliance. Except as described on the Disclosure
Schedule, each Seller: (i) is in compliance with all applicable
Environmental Laws; and (ii) has not received any communication
(written or oral) that alleges that the Sellers are not or were not in
compliance with applicable Environmental Laws.
(c) Environmental Permits. Except as described on the
Disclosure Schedule, each Seller has obtained all Environmental
Permits necessary for its operations, and all such permits are in good
standing and each Seller is in compliance with all terms and
conditions of such Environmental Permits.
(d) Environmental Claims. Except as described on the
Disclosure Schedule, there is no Environmental Claim pending or, to
the Knowledge of Sellers, threatened, against the Sellers or the
Purchased Assets or against any Person whose liability for any
Environmental Claim either Seller has or may have retained or assumed
either contractually or by operation of Law, or against any real or
personal property or operation which either Seller owns, leases or
operates, nor, to the Knowledge of Sellers, is there any basis for any
such Environmental Claim.
(e) Environmental Releases. Except as described on
the Disclosure Schedule, there have been no Environmental Releases of
any Environmental Hazardous Material by either Seller or any employee
or agent of either Seller, or by any Person on real property owned,
used, leased or operated by either Seller.
(f) CERCLA. Except as described on the Disclosure
Schedule, none of the Real Property is currently listed on the
National Priorities List or the Comprehensive Environmental Response,
Compensation and Liability Information System, both promulgated under
the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"), or on any comparable state list,
and Sellers have not received any written notice from any Person under
or relating to CERCLA or any comparable state or local Law.
(g) Off Site Locations. Except as described on the
Disclosure Schedule, no off-site location at which either Seller has
disposed or arranged for the disposal of any waste is listed on the
National Priorities List or on any comparable state list and Sellers
have not received any written notice from any Person with respect to
any off-site location, of potential or actual liability or a written
request for information from any Person under or relating to CERCLA or
any comparable state or local Law.
(h) Environmental Hazardous Materials. Except as
described on the Disclosure Schedule, there is not and has not been
any Environmental Hazardous Materials used, generated, treated,
stored, transported, disposed of, handled or otherwise existing on,
under or about the Real Property, except for quantities of any such
Environmental Hazardous Materials stored or otherwise held on, under
or about the Real Property in substantial compliance with all
Environmental Laws and intended to be used in the operation of the
businesses of the Sellers.
(i) Tanks. Except as described on the Disclosure
Schedule, there is not now and has not been in the past any
underground or above-ground storage tank or pipeline on the Real
Property, and there has been no Environmental Release from or rupture
of any such tank or pipeline, including, without limitation, any
Environmental Release from or in connection with the filling or
emptying of such tank.
4.16 Labor Matters.
(a) Employees. The Disclosure Schedule sets forth a
complete and accurate list of the following information for each
employee of the Sellers, including each employee on leave of absence
or layoff status: employer; name; job title; current compensation paid
or payable and any change in compensation since December 31, 1996;
vacation accrued; and service credited for purposes of vesting and
eligibility to participate under the Existing Plans.
(b) Proprietary Rights. Except as set forth on the
Disclosure Schedule, no employee of either Seller is a party to, or is
otherwise bound by, any agreement or arrangement, including any
confidentiality, noncompetition, or proprietary rights agreement,
between such employee and either Seller or any other Person
("Proprietary Rights Agreement") that in any way adversely affects or
will affect: (i) the performance of that Person's duties as an
employee of either Seller; or (ii) the ability of the Buyer to conduct
its business. Except as disclosed on the Disclosure Schedule, to the
Knowledge of Sellers, no officer or other key employee of either
Seller intends to terminate employment with Sellers prior to the
Closing or with Buyer following the Closing.
(c) Strikes; etc. There has not been, there is not
presently pending or existing, and, to the Knowledge of Sellers, there
is not threatened: (i) any strike, slowdown, picketing, work stoppage,
or employee grievance process; (ii) any charge, grievance, proceeding
or other claim against or affecting either Seller relating to the
alleged violation of any Law pertaining to labor relations or
employment matters, including any charge or complaint filed by an
employee or union with the National Labor Relations Board, the Equal
Employment Opportunity Commission, or any comparable governmental
body, organizational activity, or other labor or employment dispute
against or affecting either Seller; or (iii) any application for
certification of a collective bargaining agent.
(d) Events. To the Knowledge of Sellers, no event has
occurred or circumstance exists that could provide the basis for any
work stoppage or other labor dispute. There is no lockout of any
employees of either Seller by Sellers, and no such action is
contemplated by Sellers.
(e) Compliance. The Sellers currently are in
compliance with all Laws relating to equal employment opportunity,
nondiscrimination, immigration, wages, hours, benefits, collective
bargaining, the payment of social security and similar taxes,
occupational safety and health and plant closing.
(f) Claims. There is no present or former employee of
either Seller who has any claim against either Seller (whether under
Law, under any employee agreement or otherwise) on account of or for:
(i) overtime pay, other than overtime pay for the current payroll
period; (ii) wages or salaries, other than wages or salaries for the
current payroll period; or (iii) vacations, sick leave, time off or
pay in lieu of vacation, sick leave or time off, other than vacation,
sick leave or time off (or pay in lieu thereof) earned in the twelve-
month period immediately preceding the date of this Agreement.
(g) Unemployment Compensation. Each Seller has made
all required payments to its unemployment compensation reserve
accounts with the appropriate governmental departments and such
accounts have positive balances.
4.17 Brokers. Neither Seller has incurred any
brokers', finders' or any similar fee in connection with the
transactions contemplated by this Agreement.
4.18 Governmental Approvals. Except for the requisite
notices and filings by the Sellers under the HSR Act, and except for
approvals that may need to be obtained in connection with the IRB
Assignments, no permission, approval, determination, consent or waiver
by, or any declaration, filing or registration with, any governmental
or regulatory authority is required in connection with the execution,
delivery and performance of this Agreement by the Sellers.
4.19 Disclosure. Sellers have furnished to Buyer
complete and accurate copies of all documents and information
requested by Buyer. No statement of fact by the Sellers contained in
this Agreement or the Disclosure Schedule (including any supplement
thereto) contains or will contain any untrue statement of a material
fact or omits or will omit to state a material fact necessary in order
to make the statements herein or therein contained, in the light of
the circumstances under which they were made, not misleading as of the
date to which it speaks.
4.20 Intangible Assets.
(a) Disclosure Schedule. The Disclosure Schedule
contains a complete and accurate list and brief description or other
identification of all patents, patent applications, registered
trademarks, trademark applications, registered service marks, and
service mark applications owned or held by either or both of the
Sellers, and all licenses pursuant to which either Seller authorizes
the use of any of the foregoing by another Person or pursuant to which
either or both of the Sellers use a patent, trademark or service mark
owned by another Person.
(b) Ownership. The Sellers own the entire right,
title and interest in and to each of the Intangible Assets. There
are no claims, demands or proceedings pending or, to the Knowledge of
Sellers, threatened by any Person contesting or challenging the
Sellers' right to use any of the Intangible Assets. There are no
patents, trademarks, trade names or copyrights owned by a Person which
either Seller is using without license to do so. The Sellers own or
possess adequate licenses or other rights to use all patents,
trademarks, trade names and copyrights necessary to conduct their
respective businesses as now conducted. All patents, patent
applications, trademarks, trade names, copyrights and rights to
discoveries or inventions (whether or not patentable) owned or held by
any employee of either Seller have been duly and effectively
transferred to the Sellers.
(c) Validity; Infringement. Neither Seller infringes
on the intellectual property rights of any other Person. To the
Knowledge of the Sellers, none of the Intangible Assets is invalid or
unenforceable.
4.21 Product Matters. The Disclosure Schedule
describes: (a) any obligation or liability of either Seller in excess
of $10,000 which is based upon any express or implied warranty
relating to any product produced, sold or shipped by either Seller
since January 1, 1995; and (b) any product recall or any other
obligation or liability of either Seller which is based upon death,
disease or injury to Person or property relating to any product
produced, sold or shipped by either Seller since January 1, 1995.
4.22 Customers. Except for ordinary customer
purchasing cycles and fluctuations, since January 1, 1997, there has
been no termination, cancellation or material curtailment of the
business relationship of either Seller with any customer or group of
affiliated customers whose purchases individually or in the aggregate
constituted more than five percent (5%) of the consolidated sales of
the Sellers for the fiscal year ended on December 31, 1996, nor, to
the Knowledge of Sellers, any notice of intent to so materially
curtail.
4.23 Relationships with Related Parties. Except as set
forth on the Disclosure Schedule, no shareholder (or any affiliate of
any shareholder) of the Sellers has, or since January 1, 1993, has
had, any interest in any property (whether real, personal, or mixed
and whether tangible or intangible), used by the Sellers. No
Shareholder (or any affiliate of a Shareholder) is or since January 1,
1993 has owned (of record or as a beneficial owner) an equity interest
or any other financial or profit interest in, a Person that has: (a)
had material business dealings or a material financial interest in any
transaction with either Seller; or (b) engaged in competition with
either Seller with respect to any line of the products or services of
either Seller (a "Competing Business") in any market presently served
by either Seller except for less than one percent of the outstanding
capital stock of any Competing Business that is publicly traded on any
recognized exchange or in the over-the-counter market. Except as set
forth on the Disclosure Schedule, no shareholder (or any affiliate of
a shareholder) of the Sellers is a party to any Contract with, or has
any claim or right against, Sellers.
42.4 Real Property.
(a) Real Property. The parcels included in the Real
Property: (i) constitute all real property and improvements owned,
leased or used by either Seller; (ii) are not in possession of any
adverse possessors; (iii) are not subject to any leases or tenancies
of any kind (except for any Existing Contract); (iv) have access to
and from a public road or street; (v) are used in a manner which is
consistent and permitted by applicable zoning ordinances and other
Laws without special use approvals or permits; (vi) are, and have been
since the date of possession thereof by the Sellers, in the peaceful
possession of the Sellers; (vii) are served by all water, sewer,
electrical, telephone, drainage and other utilities required for
normal operations of the businesses of the Sellers as presently
conducted; (viii) are not located in a flood plain, wetland or similar
restricted area such that it would hinder the use of the Real Property
in the operation of Sellers' Business as presently conducted; and (ix)
require no work or improvements to bring them into compliance with any
applicable Law.
(b) Notices. To the Knowledge of Sellers, there are
no: (i) planned or contemplated public improvements which may result
in special assessments against the Real Property or which may
adversely affect the availability of utility service to the Real
Property; or (ii) increases or contemplated increases in the assessed
value of the Real Property which would increase the estimated real
estate taxes therefor.
4.25 No Other Representations or Warranties. Except
for the representations and warranties contained in this Article IV of
this Agreement, neither of the Sellers makes any other express or
implied representation or warranty and the Sellers hereby disclaim any
such representation or warranty with respect to the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer hereby represents and warrants to the Sellers that:
5.1 Organization; Business. The Buyer is a
corporation duly and validly organized and existing and in current
status under the Laws of the State of Wisconsin. Buyer or its
subsidiary designated under Section 11.7 of this Agreement, will, by
the Closing Date, be qualified as a foreign corporation authorized to
transact business in the States of Indiana and Oregon. Subject to the
foregoing sentence and Section 3.16 of this Agreement, as of the
Closing Date, Buyer, or its subsidiary designated pursuant to Section
11.7 of this Agreement, will have all franchises, permits, licenses,
approvals, authorizations, registrations, grants and orders necessary
to own, lease and operate the Purchased Assets in pursuit of carrying
on the business heretofore conducted by the Sellers.
5.2 Authorization; Enforceability. The execution,
delivery and performance of this Agreement by the Buyer and all of the
documents and instruments required by this Agreement to be executed
and delivered by the Buyer are within the corporate power of the Buyer
and have been duly authorized by all necessary corporate action by the
Buyer. This Agreement is, and the other documents and instruments
required by this Agreement to be executed and delivered by the Buyer
will be, when executed and delivered by the Buyer, the valid and
binding obligations of the Buyer, enforceable against the Buyer in
accordance with their respective terms, except as the enforcement
thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar Laws generally affecting the
rights of creditors and subject to general equity principles.
5.3 No Violation or Conflict. The execution, delivery
and performance of this Agreement by the Buyer do not and will not
conflict with or violate any Law, the Articles of Incorporation or
Bylaws of the Buyer or any contract or agreement to which the Buyer is
a party or by which Buyer is bound.
5.4 Brokers. Except for fees payable to Dillon, Read
& Co., Inc. which shall be the sole responsibility of the Buyer, the
Buyer has not incurred any brokers', finders' or any similar fee in
connection with the transactions contemplated by this Agreement.
5.5 Governmental Approvals. Except for the requisite
notices and filings by the Buyer under the HSR Act and except for
approvals that may need to be obtained in connection with the IRB
Assignments, no permission, approval, determination, consent or waiver
by, or any declaration, filing or registration with, any governmental
or regulatory authority is required in connection with the execution,
delivery and performance of this Agreement by the Buyer.
5.6 Financial Capacity. Buyer has cash on hand and
definite financing commitments sufficient to satisfy all of its
obligations under this Agreement.
5.7 No Other Representations or Warranties. Except
for the representations and warranties contained in this Article V,
none of the Buyer nor any subsidiary of the Buyer nor any other Person
makes any other express or implied representation or warranty on
behalf of the Buyer, and the Buyer hereby disclaims any such
representation or warranty with respect to the execution and delivery
of this Agreement and the consummation of the transactions
contemplated hereby.
ARTICLE VI
CONDUCT OF BUSINESS PENDING THE CLOSING
From and after the date of this Agreement and until the
Closing Date, each of the Sellers shall:
6.1 Carry on in Regular Course. Diligently carry on
its business in the regular course and substantially in the same
manner as heretofore and shall not make or institute any unusual or
novel methods of purchase, sale, lease, management, accounting or
operation.
6.2 Use of Assets. Use, operate, maintain and repair
all of the Purchased Assets in a normal business manner consistent
with past practices; provided that nothing herein shall obligate, or
be interpreted to obligate, Sellers to maintain a Consolidated Net
Worth in excess of $8,275,000.00.
6.3 No Default. Not do any act or omit to do any act,
or permit any act or omission to act, which will cause a breach of any
of the Contracts.
6.4 Existing Insurance Policies. Maintain all of the
Existing Insurance Policies in full force and effect.
6.5 Employment Matters. Not: (a) except as described
in the Disclosure Schedule and except for routine increases on
employee anniversary dates, grant any increase in the rate of pay of
any of the employees of either Seller; (b) institute or amend any
Employee Benefit Plan; or (c) enter into or modify any written
employment arrangement with any Person.
6.6 Contracts and Commitments. Not enter into any
contract or commitment or engage in any transaction not in the usual
and ordinary course of business and consistent with its normal
practices and not purchase, lease, sell or dispose of any capital
asset.
6.7 Preservation of Relationships. Use its reasonable
efforts to preserve its business organization intact, to retain the
services of its present officers and key employees and to preserve the
goodwill of suppliers, customers, creditors and others having material
business relationships with the Sellers.
6.8 Compliance with Laws. Comply in all respects with
all applicable Laws.
6.9 Taxes. Timely and properly file all federal,
state, local and foreign tax returns which are required to be filed,
and pay or make provision for the payment of all taxes owed by it.
ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE BUYER
Each and every obligation of the Buyer to be performed on
the Closing Date shall be subject to the satisfaction prior to or at
the Closing of the following express conditions precedent:
7.1 Compliance with Agreement. The Sellers shall have
performed and complied in all material respects with all of their
obligations under this Agreement which are to be performed or complied
with by them prior to or on the Closing Date.
7.2 Proceedings and Instruments Satisfactory. All
proceedings, corporate or other, to be taken in connection with the
transactions contemplated by this Agreement, and all documents
incident thereto, shall be reasonably satisfactory in form and
substance to the Buyer, and the Sellers shall have made available to
the Buyer for examination the originals or true and correct copies of
all documents the Buyer may reasonably request in connection with the
transactions contemplated by this Agreement.
7.3 No Litigation. No suit, action or other
proceeding shall be pending or threatened before any court in which
the consummation of the transactions contemplated by this Agreement is
restrained or enjoined or in which the relief requested is to
restrain, enjoin or prohibit the consummation of the transactions
contemplated by this Agreement.
7.4 Representations and Warranties of the Sellers.
The representations and warranties made by the Sellers in Article IV
of this Agreement shall be true and correct in all respects when made
and as of the Closing Date with the same force and effect as though
said representations and warranties had been made at such times.
7.5 No Material Adverse Change. During the period
from the date of this Agreement to the Closing Date: (a) there shall
not have occurred, and there shall not exist on the Closing Date, any
condition or fact which has, or reasonably may be expected to have, a
Material Adverse Effect; and (b) the Purchased Assets, taken as a
whole, shall not have been materially and adversely affected by reason
of any loss, taking, condemnation, destruction or physical damage,
whether or not insured against.
7.6 Deliveries at Closing. The Sellers shall have
delivered to the Buyer the following documents, each dated the Closing
Date and properly executed by the Sellers, the Shareholders or counsel
for the Sellers or other appropriate party(ies) other than Buyer: (a)
the Bill of Sale; (b) the Escrow Agreement; (c) the Sellers Closing
Certificate; (d) the Sellers Counsel Opinion; (e) the Employment
Agreements; (f) a Noncompetition Agreement from each of the
Shareholders; (g) the Deed; (h) the Lease Assignment; (i) all
documents required to effect the IRB Assignments; and (j) Articles of
Amendment to SerVend's Articles of Incorporation and all other
documents necessary to change SerVend's corporate name as described in
Section 3.14 of this Agreement.
7.7 Senior Loan. The Senior Loan shall have closed
and the Buyer shall have received sufficient proceeds thereunder, and
shall have anticipated loan availability thereunder, in order to pay
the Cash Amount, prepay the Existing Indebtedness (other than the
IRBs) and pay the expenses of the Buyer in connection with the
transactions described in this Agreement.
7.8 Other Documents. The Sellers shall have delivered
to the Buyer such certificates and documents of officers of the Seller
and public officials as shall be reasonably requested by the Buyer to
establish the existence of the Sellers and the due authorization of
this Agreement and the transactions contemplated by this Agreement by
the Sellers.
7.9 Possession; Instruments of Conveyance. The
Sellers shall have delivered to the Buyer: (a) legal title to and
legal possession of the Purchased Assets; and (b) such other deeds,
bills of sale, endorsements, assignments and other good and sufficient
instruments of conveyance and transfer as shall be effective to vest
in the Buyer good and valid title to the Purchased Assets as
contemplated by this Agreement.
7.10 HSR Act. All necessary requirements of the HSR
Act shall have been complied with and any "waiting periods" applicable
to the transactions described in this Agreement which are imposed by
the HSR Act shall have expired prior to the Closing Date or shall have
been terminated by the appropriate agency.
7.11 Adjusted Cash Amount. Based on information
provided by Sellers, the Buyer shall be reasonably certain that the
Adjusted Cash Amount will be equal to or greater than Forty-Nine
Million Three Hundred Seventy Thousand and 00/100 Dollars
($49,370,000.00).
7.12 Buyer's Bankruptcy. The Buyer shall not have made
a general assignment for the benefit of its creditors, filed a
petition in bankruptcy or for reorganization or to effect a plan or
other arrangement with creditors, applied to a court for the
appointment of a receiver or custodian for its assets and properties
or ceased to function as a going concern.
ARTICLE VIII
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE SELLERS
Each and every obligation of the Sellers to be performed on
the Closing Date shall be subject to the satisfaction prior to or at
the Closing of the following express conditions precedent:
8.1 Compliance with Agreement. The Buyer shall have
performed and complied in all material respects with all of its
obligations under this Agreement which are to be performed or complied
with by it prior to or on the Closing Date.
8.2 Proceedings and Instruments Satisfactory. All
proceedings, corporate or other, to be taken in connection with the
transactions contemplated by this Agreement, and all documents
incident thereto, shall be reasonably satisfactory in form and
substance to the Sellers, and the Buyer shall have made available to
the Sellers for examination the originals or true and correct copies
of all documents which the Sellers may reasonably request in
connection with the transactions contemplated by this Agreement.
8.3 No Litigation. No suit, action or other
proceeding shall be pending before any court in which the consummation
of the transactions contemplated by this Agreement is restrained or
enjoined.
8.4 Representations and Warranties of the Buyer. The
representations and warranties made by the Buyer in Article V of this
Agreement shall be true and correct in all respects when made and as
of the Closing Date with the same force and effect as though such
representations and warranties had been made at such times.
8.5 Deliveries at Closing. The Buyer shall have
delivered to the Sellers the following documents, each dated the
Closing Date and properly executed by the Buyer or counsel for the
Buyer, as appropriate: (a) the Bill of Sale; (b) the Buyer Closing
Certificate; (c) the Buyer Counsel Opinion; and (d) the Escrow
Agreement.
8.6 Other Documents. The Buyer shall have delivered
to the Sellers such certificates and documents of officers of the
Buyer and of public officials as shall be reasonably requested by the
Sellers to establish the existence and good standing of the Buyer and
the due authorization of this Agreement and the transactions
contemplated by this Agreement by the Buyer.
8.7 Delivery of Purchase Price . The Buyer shall have
delivered to the Sellers the Purchase Price in accordance with
Sections 2.1 and 2.3 of this Agreement.
8.8 HSR Act. All necessary requirements of the HSR
Act shall have been complied with and any "waiting periods" applicable
to the transactions described in this Agreement which are imposed by
the HSR Act shall have expired prior to the Closing Date or shall have
been terminated by the appropriate agency.
8.9 Adjusted Cash Amount. The Sellers shall be
reasonably certain that the Adjusted Cash Amount will be equal to or
greater than Forty-Nine Million Three Hundred Seventy Thousand and
00/100 Dollars ($49,370,000.00).
8.10 Employment Agreements. Buyer shall have offered
the Employment Agreements to certain officers of Sellers as described
in Section 3.12(d) of this Agreement.
ARTICLE IX
INDEMNITIES
9.1 Sellers' Indemnity. Upon the condition that the
Closing be effected, the Sellers hereby jointly and severally
indemnify and hold the Buyer harmless from and against, and agree to
promptly defend the Buyer from and reimburse the Buyer for, any and
all losses, damages, costs, expenses, liabilities, obligations and
claims of any kind (including, without limitation, reasonable
attorneys' fees and other reasonable legal costs and expenses,
including without limitation, those incurred in connection with any
suit, action or other proceeding) which Buyer may at any time suffer
or incur, or become subject to, as a result of or in connection with:
(a) any breach of any of the representations and
warranties made by either or both of the Sellers in or pursuant to
this Article IV of Agreement;
(b) any failure by either or both of the Sellers to
carry out, perform, satisfy and discharge any of their covenants,
agreements, undertakings, liabilities or obligations under this
Agreement or under any of the documents and materials required to be
delivered by either or both of the Sellers pursuant to this Agreement;
(c) the Retained Liabilities;
(d) the Sellers' ownership, occupation and operation
of the Purchased Assets prior to the Effective Time of Closing;
(e) noncompliance with any applicable Bulk Sales Laws
or Plant Closing Laws in connection with the consummation of the
transactions described in this Agreement;
(f) any Environmental Release on the Real Property
prior to the Effective Time of Closing or any Environmental Claim
relating to the off-site disposal of Environmental Hazardous Materials
generated by Sellers on the Real Property prior to the Effective Time
of Closing; and
(g) any suit, action or other proceeding brought by
any Person arising out of, or in any way related to, any of the
matters referred to in Sections 9.1(a), 9.1(b), 9.1(c), 9.1(d), 9.1(e)
or 9.1(f) of this Agreement.
9.2 Buyer's Indemnity. Upon the condition that the
Closing be effected, the Buyer hereby indemnifies and holds the
Sellers harmless from and against, and agrees to promptly defend the
Sellers from and reimburse the Sellers for, any and all losses,
damages, costs, expenses, liabilities, obligations and claims of any
kind (including, without limitation, reasonable attorneys' fees and
other reasonable legal costs and expenses, including, without
limitation, those incurred in connection with any suit, action or
other proceeding) which the Sellers may at any time suffer or incur,
or become subject to, as a result of or in connection with:
(a) any breach of any of the representations and
warranties made by the Buyer in or pursuant to Article V of this
Agreement;
(b) any failure by the Buyer to carry out, perform
satisfy and discharge any of its covenants, agreements, undertakings,
liabilities or obligations under this Agreement or under any of the
documents and materials required to be delivered by the Buyer pursuant
to this Agreement;
(c) the Assumed Liabilities;
(d) Buyer's ownership, occupation and operation of the
Purchased Assets after the Effective Time of Closing (excluding,
however, any matters for which Sellers are required to indemnify Buyer
pursuant to Section 9.1 of this Agreement); and
(e) any suit, action or other proceeding brought by
any Person arising out of, or in any way related to, any of the
matters referred to in Sections 9.2(a), 9.2(b), 9.2(c), or 9.2(d) of
this Agreement.
9.3 Provisions Regarding Indemnities.
(a) Insurance Recoveries. The amounts for which an
indemnifying party shall be liable under Sections 9.1 and 9.2 of this
Agreement shall be net of any insurance proceeds actually received by
the indemnified party in connection with the facts giving rise to the
right of indemnification.
(b) Notice; Third Party Claims. The indemnified party
shall promptly notify the indemnifying party in reasonable detail of
any claim, demand, action or proceeding for which indemnification will
be sought under Section 9.1 or Section 9.2 of this Agreement, and if
such claim, demand, action or proceeding is a third party claim,
demand, action or proceeding, the indemnifying party will have the
right at its expense to assume the defense thereof using counsel
reasonably acceptable to the indemnified party. The indemnified party
shall have the right to participate, at its own expense, with respect
to any such third party claim, demand, action or proceeding. In
connection with any such third party claim, demand, action or
proceeding, the parties shall cooperate with each other and provide
each other with access to relevant books and records in their
possession. No such third party claim, demand, action or proceeding
shall be settled without the prior written consent of the indemnified
party. If a firm written offer is made to settle any such third party
claim, demand, action or proceeding and the indemnifying party
proposes to accept such settlement and the indemnified party refuses
to consent to such settlement, then: (i) the indemnifying party shall
be excused from, and the indemnified party shall be solely responsible
for, all further defense of such third party claim, demand, action or
proceeding; (ii) the maximum liability of the indemnifying party
relating to such third party claim, demand, action or proceeding shall
be the amount of the proposed settlement if the amount thereafter
recovered from the indemnified party on such third party claim,
demand, action or proceeding is greater than the amount of the
proposed settlement; and (iii) the indemnified party shall pay all
attorneys' fees and legal costs and expenses incurred after rejection
of such settlement by the indemnified party, but if the amount
thereafter recovered by such third party from the indemnified party is
less than the amount of the proposed settlement, the indemnified party
shall be reimbursed by the indemnifying party for such attorneys' fees
and legal costs and expenses up to a maximum amount equal to the
difference between the amount recovered by such third party and the
amount of the proposed settlement.
(c) Exclusivity. The rights of indemnity provided by
this Article IX of this Agreement shall be exclusive of all other
rights of indemnity or contribution, whether created by Law or
otherwise, either before or after the Effective Time of Closing,
relating in any way to the subject matter of this Agreement.
(d) Termination of Sellers' Rights. The right of the
Seller to receive indemnity provided by Section 9.2(a) of this
Agreement shall, as to any matter which has not been described in a
notice delivered to the Buyer pursuant to Section 9.3(b) of this
Agreement prior to such time, expire at 11:59 P.M., Central Time, on
November 1, 2002.
(e) Termination of Buyer's Rights. The right of the
Buyer to receive indemnity provided by Section 9.1(a) of this
Agreement shall, as to any matter which has not been described in a
notice delivered to the Sellers pursuant to Section 9.3(b) of this
Agreement prior to such time, expire at 11:59 P.M. Central Time, on
November 1, 2002.
(f) Rights on Termination. The termination of the
rights of an indemnified party to receive indemnity contained in
Sections 9.3(d) and 9.3(e) of this Agreement shall not affect that
Person's right to prosecute to conclusion any claim made by that
Person prior to the time that the relevant right of indemnity
terminates.
(g) Limitations on Sellers' Liability. The liability
of the Sellers under Section 9.1 of this Agreement shall be without
deduction or limitation, except that:
(i) the liability of the Sellers under Section
9.1(a) of this Agreement shall:
(A) not arise with respect to a single
course of conduct, related set of circumstances, occurrence or event
unless the damages suffered by an indemnified party arising therefrom
exceed Ten Thousand and 00/100 Dollars ($10,000) (a "Sellers
Indemnifiable Breach");
(B) be recoverable only if and to the extent
that the cumulative damages suffered by the Buyer for all Seller
Indemnifiable Breaches exceeds Five Hundred Fifty Thousand and 00/100
Dollars ($550,000);
(C) be limited in the aggregate to:
(1) with respect to all indemnity
claims of which Buyer has provided notice to Sellers pursuant to
Section 9.3(b) of this Agreement prior to midnight, Central Time,
on the first anniversary of the Closing Date, an amount equal to
Four Million and 00/100 Dollars ($4,000,000.00);
(2) with respect to all indemnity
claims of which Buyer has provided notice to Sellers pursuant to
Section 9.3(b) of this Agreement after midnight, Central Time, on
the first anniversary of the Closing Date but prior to midnight,
Central Time, on the second anniversary of the Closing Date, an
amount equal to Three Million and 00/100 Dollars ($3,000,000.00),
less the aggregate amount of all indemnity claims paid by Sellers
to Buyer pursuant to Section 9.1 of this Agreement with respect
to notices of indemnity claims delivered by Buyer to Sellers
prior to midnight, Central Time, on the first anniversary of the
Closing Date; and
(3) with respect to all indemnity
claims of which Buyer has provided notice to Sellers pursuant to
Section 9.3(b) of this Agreement after midnight, Central Time, on
the second anniversary of the Closing Date but prior to midnight,
Central Time, on the fifth anniversary of the Closing Date, an
amount equal to One Million 00/100 Dollars ($1,000,000.00), less
the aggregate amount of all indemnity claims paid by Sellers to
Buyer pursuant to Section 9.1 of this Agreement with respect to
notices of claims for indemnity delivered by Buyer to Sellers
prior to midnight, Central Time, on the second anniversary of the
Closing Date;
(D) the Buyer shall not be entitled to more
than one recovery for any single loss, damage, cost, expense,
liability, obligation or claim even though such may have resulted from
the breach or inaccuracy of more than one of the representations and
warranties made by the Sellers in or pursuant to this Agreement.
(ii) The liability of the Sellers under Section
9.1(b) of this Agreement for an event described in Section 3.5(c)
shall be limited to the payment of the fee described in Section 3.5(c)
of this Agreement.
(h) Limitations on Buyer's Liability. The liability
of the Buyer under Section 9.2 of this Agreement shall be without
deduction or limitation, except that:
(i) the liability of the Buyer under Section
9.2(a) of this Agreement shall:
(A) not arise with respect to a single
course of conduct, related set of circumstances, occurrence or event
unless the damages suffered by an indemnified party arising therefrom
exceed Ten Thousand and 00/100 Dollars ($10,000) (a "Buyer
Indemnifiable Breach");
(B) be recoverable only if and to the extent
that the cumulative damages suffered by the Sellers for all Buyer
Indemnifiable Breaches exceeds Five Hundred Fifty Thousand and 00/100
Dollars ($550,000);
(C) be limited in the aggregate to:
(1) with respect to all indemnity
claims of which Sellers have provided notice to Buyer pursuant to
Section 9.3(b) of this Agreement prior to midnight, Central Time,
on the first anniversary of the Closing Date, an amount equal to
Four Million and 00/100 Dollars ($4,000,000.00);
(2) with respect to all indemnity
claims of which Sellers have provided notice to Buyer pursuant to
Section 9.3(b) of this Agreement after midnight, Central Time, on
the first anniversary of the Closing Date but prior to midnight,
Central Time, on the second anniversary of the Closing Date, an
amount equal to Three Million and 00/100 Dollars ($3,000,000.00),
less the aggregate amount of all indemnity claims paid by Buyer
to Sellers pursuant to Section 9.2 of this Agreement with respect
to notices of indemnity claims delivered by Sellers to Buyer
prior to midnight, Central Time, on the first anniversary of the
Closing Date; and
(3) with respect to all indemnity
claims of which Sellers have provided notice to Buyer pursuant to
Section 9.3(b) of this Agreement after midnight, Central Time, on
the second anniversary of the Closing Date but prior to midnight,
Central Time, on the fifth anniversary of the Closing Date, an
amount equal to One Million 00/100 Dollars ($1,000,000.00), less
the aggregate amount of all indemnity claims paid by Buyer to
Sellers pursuant to Section 9.1 of this Agreement with respect to
notices of claims for indemnity delivered by Sellers to Buyer
prior to midnight, Central Time, on the second anniversary of the
Closing Date;
(D) the Sellers shall not be entitled to
more than one recovery for any single loss, damage, cost, expense,
liability, obligation or claim even though such may have resulted from
the breach or inaccuracy of more than one of the representations and
warranties made by the Buyer in or pursuant to this Agreement; and
(ii) the liability of the Buyer under Section
9.2(b) of this Agreement shall be limited to the payment of the fee
described in Section 3.20 of this Agreement.
(j) Application. A party to this Agreement may elect
to close the transactions described in this Agreement despite the fact
that certain breaches or inaccuracies of the representations and
warranties of the other parties to this Agreement may exist on the
Closing Date or the other parties may have breached certain of their
covenants contained in this Agreement. The provisions of this Article
IX of this Agreement shall not, after the Closing Date and the
consummation of the transactions described in this Agreement, apply to
any such breaches or inaccuracies of the representations and
warranties contained in this Agreement, or any such breaches of the
covenants contained in this Agreement, if such party had the right to
terminate this Agreement pursuant to Sections 7.1, 7.4, 8.1, 8.4 and
11.1 of this Agreement based on such breaches or inaccuracies, and
elected, with knowledge as to such breaches or inaccuracies, to
nonetheless proceed with the Closing.
ARTICLE X
DISPUTE RESOLUTION MECHANISMS
10.1 Dispute. As used in this Agreement, "Dispute"
shall: (a) mean any dispute or disagreement between the Buyer and the
Sellers concerning the interpretation of this Agreement, the validity
of this Agreement, any breach or alleged breach by any party under
this Agreement or any other matter relating in any way to this
Agreement; and (b) exclude any dispute or disagreement between the
Buyer and the Sellers concerning the calculation of the Purchase Price
and the Cash Amount, which shall be resolved pursuant to the
provisions of Section 2.4 of this Agreement.
10.2 Process. If a Dispute arises, the parties shall
follow the procedures specified in Sections 10.3, 10.4 and 10.5 of
this Agreement.
10.3 Negotiations. The parties shall promptly attempt
to resolve any Dispute by negotiations between the Buyer and the
Sellers. Either the Buyer or the Sellers may give the other party
written notice of any Dispute not resolved in the normal course of
business. The Buyer and the Sellers shall meet at a mutually
acceptable time and place within ten (10) calendar days after delivery
of such notice, and thereafter as often as they reasonably deem
necessary, to exchange relevant information and to attempt to resolve
the Dispute. If the Dispute has not been resolved by these Persons
within thirty (30) calendar days of the disputing party's notice, or
if the parties fail to meet within such fifteen (15) calendar days,
either the Buyer or the Sellers may initiate mediation as provided in
Section 10.4 of this Agreement. If a negotiator intends to be
accompanied at a meeting by legal counsel, the other negotiator shall
be given at least three (3) business days' notice of such intention
and may also be accompanied by legal counsel.
10.4 Mediation. If the Dispute is not resolved by
negotiations pursuant to Section 10.3 of this Agreement, the Buyer and
the Sellers shall attempt in good faith to resolve any such Dispute by
nonbinding mediation. Either the Buyer or the Sellers may initiate a
nonbinding mediation proceeding by a request in writing to the other
party (the "Request"), and both parties will then be obligated to
engage in a mediation. The proceeding will be conducted in accordance
with the then current Center for Public Resources ("CPR") Model
Procedure for Mediation of Business Disputes, with the following
exceptions:
(a) if the parties have not agreed within thirty (30)
calendar days of the Request on the selection of a mediator willing to
serve, CPR, upon the request of either the Buyer or the Sellers, shall
appoint a member of the CPR Panels of Neutrals as the mediator; and
(b) efforts to reach a settlement will continue until
the conclusion of the proceedings, which shall be deemed to occur upon
the earliest of the date that: (i) a written settlement is reached; or
(ii) the mediator concludes and informs the parties in writing that
further efforts would not be useful; or (iii) the Buyer and the
Sellers agree in writing that an impasse has been reached; or (iv) is
sixty (60) calendar days after the Request and none of the events
specified in Sections 10.4(b)(i), (ii) or (iii) have occurred. No
party may withdraw before the conclusion of the proceeding.
10.5 Submission to Adjudication. If a Dispute is not
resolved by negotiation pursuant to Section 10.3 of this Agreement or
by mediation pursuant to Section 10.4 of this Agreement within 100
calendar days after initiation of the negotiation process pursuant to
Section 10.3 of this Agreement, such Dispute and any other claims
arising out of or relating to this Agreement may be heard, adjudicated
and determined in an action or proceeding filed in any state or
federal court which has jurisdiction over the parties.
10.6 General.
(a) Provisional Remedies. At any time during the
procedures specified in Sections 10.3 and 10.4 of this Agreement, a
party may seek a preliminary injunction or other provisional judicial
relief if in its judgment such action is necessary to avoid
irreparable damage or to preserve the status quo. Despite such
action, the parties will continue to participate in good faith in the
procedures specified in this Article X of this Agreement.
(b) Tolling Statutes of Limitations. All applicable
statutes of limitation and defenses based upon the passage of time
shall be tolled while the procedures specified in this Article X of
this Agreement are pending. The parties will take such action, if
any, as is required to effectuate such tolling.
(c) Performance to Continue. Each party is required
to continue to perform its obligations under this Agreement pending
final resolution of any Dispute.
(d) Extension of Deadlines. All deadlines specified
in this Article X of this Agreement may be extended by mutual
agreement between the Buyer and the Sellers.
(e) Enforcement. The parties regard the obligations
in this Article X of this Agreement to constitute an essential
provision of this Agreement and one that is legally binding on them.
In case of a violation of the obligations in this Article X of this
Agreement by either the Buyer or the Sellers, the other party may
bring an action to seek enforcement of such obligations in any court
of Law having jurisdiction over the parties.
(f) Costs. The parties shall pay: (i) their own
costs, fees, and expenses incurred in connection with the application
of the provisions of this Article X of this Agreement; and (ii) fifty
percent (50%) of the fees and expenses of CPR and the mediator in
connection with the application of the provisions of Section 10.4 of
this Agreement.
(g) Replacement. If CPR is no longer in business or
is unable or refuses or declines to act or to continue to act under
this Article X of this Agreement for any reason, then the functions
specified in this Article X of this Agreement to be performed by CPR
shall be performed by another Person engaged in a business equivalent
to that conducted by CPR as is agreed to by the Buyer and the Sellers
(the "Replacement"). If the Buyer and the Sellers cannot agree on the
identity of the Replacement within ten (10) calendar days after a
Request, the Replacement shall be selected by the Chief Judge of the
United States District Court for the Eastern District of Wisconsin
upon application. If a Replacement is selected by either means, this
Article X shall be deemed appropriately amended to refer to such
Replacement.
ARTICLE XI
TERMINATION; MISCELLANEOUS
11.1 Termination. This Agreement may be terminated and
the transactions contemplated by this Agreement may be abandoned at
any time prior to the Closing, as follows:
(a) by mutual written agreement of the Buyer and the
Sellers;
(b) by the Buyer if any of the conditions set forth in
Article VII of this Agreement shall not have been fulfilled by the
Closing;
(c) by the Sellers if any of the conditions set forth
in Article VIII of this Agreement shall not have been fulfilled by the
Closing;
(d) by the Buyer pursuant to Section 3.2(b) of this
Agreement; or
(e) by the Buyer or the Sellers if the Closing has not
occurred on or before December 31, 1997.
11.2 Rights on Termination; Waiver. If this Agreement
is terminated pursuant to Section 11.1 of this Agreement, all further
obligations of the parties under or pursuant to this Agreement shall
terminate without further liability of any party to the others,
provided that the obligations of the parties contained in Sections
3.1(b), 3.5, 3.6, 3.20, Article X, 11.2, 11.5 and 11.12 (but only as
to other surviving rights and obligations) of this Agreement shall
survive any such termination. If any of the conditions set forth in
Article VII of this Agreement have not been satisfied, the Buyer may
nevertheless elect to proceed with the consummation of the
transactions contemplated by this Agreement and if any of the
conditions set forth in Article VIII of this Agreement have not been
satisfied, the Sellers may nevertheless elect to proceed with the
consummation of the transactions contemplated by this Agreement. Any
such election to proceed shall be evidenced by a certificate signed on
behalf of the waiving party by an officer of that party.
11.3 Survival of Representations and Warranties. Upon
the condition that the Closing is effected, all representations and
warranties of the parties contained in this Agreement or made pursuant
to this Agreement shall survive the Closing Date and the Effective
Time of Closing and the consummation of the transactions contemplated
by this Agreement and shall terminate and be of no further force and
effect at 11:59 P.M. Central Time on November 1, 1999; provided that
the Sellers' representations and warranties set forth in Sections 4.1,
4.2, 4.3, and 4.7, and the representations and warranties of the Buyer
set forth in Sections 5.1, 5.2, and 5.3, shall survive until 11:59
P.M. Central Time on November 1, 2002, after which time said
representations and warranties shall terminate and be of no further
force and effect. The termination of the representations and
warranties contained in the immediately preceding sentence shall not
affect a party's right to prosecute to conclusion any claim made by
such party prior to such time.
11.4 Entire Agreement; Amendment. This Agreement and
the documents referred to in this Agreement and required to be
delivered pursuant to this Agreement constitute the entire agreement
among the parties pertaining to the subject matter of this Agreement,
and supersede: (a) the Letter of Intent dated as of August 29, 1997
by and among the Buyer and the Sellers; and (b) all prior and
contemporaneous agreements, understandings, negotiations and
discussions of the parties, whether oral or written. There are no
warranties, representations or other agreements between the parties in
connection with the subject matter of this Agreement, except as
specifically set forth in this Agreement. No amendment, supplement,
modification, waiver or termination of this Agreement shall be binding
unless executed in writing by the Buyer and the Sellers. No waiver of
any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision of this Agreement, whether
or not similar, nor shall such waiver constitute a continuing waiver
unless otherwise expressly provided.
11.5 Expenses. Whether or not the transactions
contemplated by this Agreement are consummated, each of the parties to
this Agreement shall pay the fees and expenses of its respective
counsel, accountants, brokers, consultants, investment bankers and
other experts incident to the negotiation and preparation of this
Agreement and consummation of the transactions contemplated by this
Agreement.
11.6 Governing Law. This Agreement shall be construed
and interpreted according to the internal Laws of the State of
Wisconsin without regard to the conflicts of Laws principles thereof.
11.7 Assignment. Prior to the Closing, this Agreement
shall not be assigned by either the Buyer or the Sellers except: (a)
with the prior written consent of the other party; and (b) by the
Buyer, to one or more direct or indirect wholly owned subsidiaries of
the Buyer, provided that the Buyer remains liable for the performance
by such subsidiary of the obligations of the Buyer under this
Agreement.
11.8 Notices. All communications or notices required
or permitted by this Agreement shall be in writing and shall be deemed
to have been given at the earlier of the date when actually delivered
to an officer of a party by personal delivery or telephonic facsimile
transmission or when deposited in the United States mail, certified or
registered mail, postage prepaid, return receipt requested, and
addressed as follows, unless and until any of such parties notifies
the others in accordance with this Section of a change of address:
If to the Sellers: SerVend International, Inc.
and Fischer Enterprises, Ltd.
Attention: Gregory E. Fischer
2100 Future Drive
Sellersburg, IN 47172
Fax No.: 812-246-7025
with a copy to
Reed Weitkamp Schell Cox & Vice
Attention: John S. Reed
2400 Citizens Plaza
Louisville, KY 40202
Fax No.: 502-562-2200
If to the Buyer: The Manitowoc Company, Inc.
Attention: Fred M. Butler
500 South 16th Street
P.O. Box 66
Manitowoc, WI 54221-0066
Fax No.: 920-683-8138
with a copy to:
Quarles & Brady
Attention: Patrick M. Ryan
411 East Wisconsin Avenue
Milwaukee, WI 53202
Fax No: 414-271-3552
11.9 Counterparts; Headings. This Agreement may be
executed in several counterparts, each of which shall be deemed an
original, but such counterparts shall together constitute but one and
the same Agreement. The Table of Contents and Article and Section
headings in this Agreement are inserted for convenience of reference
only and shall not constitute a part hereof.
11.10 Interpretation. Unless the context requires
otherwise, all words used in this Agreement in the singular number
shall extend to and include the plural, all words in the plural number
shall extend to and include the singular, and all words in any gender
shall extend to and include all genders.
11.11 Severability. If any provision, clause, or
part of this Agreement, or the application thereof under certain
circumstances, is held invalid, the remainder of this Agreement, or
the application of such provision, clause or part under other
circumstances, shall not be affected thereby unless such invalidity
materially impairs the ability of the parties to consummate the
transactions contemplated by this Agreement.
11.12 Specific Performance. The parties agree that
the Purchased Assets as a going concern constitute unique property.
There is no adequate remedy at Law for the damage which any party
might sustain for failure of the other parties to consummate the
transactions contemplated by this Agreement, and accordingly, each
party shall be entitled, at its option, to the remedy of specific
performance to enforce the transactions contemplated by this
Agreement.
11.13 No Reliance. Except for the parties to this
Agreement and any assignees permitted by Section 11.7 of this
Agreement: (a) no Person is entitled to rely on any of the
representations, warranties and agreements of the parties contained in
this Agreement; and (b) the parties assume no liability to any Person
because of any reliance on the representations, warranties and
agreements of the parties contained in this Agreement.
11.14 Exhibits and Disclosure Schedule. If a
document or matter is disclosed in the Disclosure Schedule, it shall
be deemed to be disclosed for all purposes of this Agreement without
the necessity of specific repetition or cross-reference. All
capitalized terms used in any Exhibit to this Agreement or in the
Disclosure Schedule shall have the definitions specified in this
Agreement.
11.15 Taxes and Fees. The Sellers and Buyers shall
each pay transfer taxes of any kind, sales and use taxes and recording
and filing fees which arise as a result of the conveyance of the
Purchased Assets by the Sellers to the Buyer in accordance with
applicable law and local custom.
11.16 Income Tax Position. Neither the Buyer nor
the Sellers shall take a position for income tax purposes which is
inconsistent with this Agreement.
11.17 Further Assurances. From time to time after
the Closing Date, upon the reasonable request and expense of the Buyer
and without any additional consideration, the Sellers shall execute
and deliver or cause to be executed and delivered such further
instruments of conveyance, assignment and transfer and take such
further action as the Buyer may reasonably request in order to more
effectively sell, assign, convey, transfer, reduce to possession and
record title to any of the Purchased Assets. The Sellers agree to
cooperate with the Buyer in all reasonable respects to assure to the
Buyer the continued title to and possession of the Purchased Assets in
the condition and manner contemplated by this Agreement.
11.18 No Strict Construction. The language used in
this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent. In the event an ambiguity or question
of intent or interpretation arises, this Agreement will be construed
as if drafted jointly by the parties and no presumption or burden of
proof will arise favoring or disfavoring any Person by virtue of the
authorship of any of the provisions of this Agreement.
11.19 No Materiality Acknowledgment. The
specification of any dollar amount in the representations and
warranties or otherwise in this Agreement or in the Disclosure
Schedule or the inclusion of any specific item in the Disclosure
Schedule is not intended and shall not be deemed to be an admission or
acknowledgment of the materiality of such amounts or items, nor shall
the same be used in any dispute or controversy between the parties to
determine whether any obligation, item or matter (whether or not
described herein or included in the Disclosure Schedule) is or is not
material for purposes of this Agreement.
IN WITNESS WHEREOF, the parties have caused this Purchase and
Sale Agreement to be duly executed as of the day and year first above
written.
THE MANITOWOC COMPANY, INC.
By: /s/ Fred M. Butler
--------------------------
Fred M. Butler
President & Chief Executive Officer
SERVEND INTERNATIONAL, INC.
By: /s/ Gregory E. Fischer
--------------------------
Gregory E. Fischer, President
FISCHER ENTERPRISES, LTD.
By: SerVend International, Inc.,
General Partner
By: /s/ Gregory E. Fischer
----------------------------
Gregory E. Fischer, President
DISCLOSURE SCHEDULE
TO
PURCHASE AND SALE AGREEMENT
AMONG
THE MANITOWOC COMPANY, INC.
SERVEND INTERNATIONAL, INC.
AND
FISCHER ENTERPRISES, LTD.
OCTOBER 1, 1997
SECTION DESCRIPTION
------- -----------
1.4 Assumed Liabilities
1.25, 1.56 and 4.12 Existing Contracts and
Retained Contracts
1.26 and 4.12 Existing Indebtedness
1.27 and 4.14 Existing Insurance Policies
1.28 and 4.5(e) Existing Investments
1.29 and 4.5(a) Existing Liens
1.30 and 4.11 Existing Litigation
1.31 and 4.10(c) Existing Permits
1.32 and 4.9 Existing Plans
1.37 and 4.20 Intangible Assets
1.48 and 4.5(a) Permitted Liens
1.52 and 4.24 Real Property
1.55 Retained Assets
3.11 Allocation of Purchase Price
4.1(a)(i) Shareholders of SerVend
4.1(a)(ii) Partners of Fischer
4.1(a) Foreign Qualifications of Sellers
4.3(a)(v) Business Relationship Matters
4.3(b) Consents
4.4(d) Bank Accounts
4.5(a) Leases
4.6 Contingent Liabilities
4.13 Performance of Contracts
4.15 Environmental Matters
4.16 Employee Matters
4.21 Product Matters
4.23 Relationships with Related Parties
6.5 Certain Employee Matters
CREDIT AGREEMENT
Dated as of October 28, 1997
among
THE MANITOWOC COMPANY, INC.
as Borrower,
CERTAIN SUBSIDIARIES FROM TIME TO TIME
PARTIES HERETO,
as Guarantors,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
NATIONSBANK, N.A.,
as Agent
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Documentation Agent
TABLE OF CONTENTS
SECTION 1 DEFINITIONS..........................................1
1.1 Definitions............................................1
1.2 Other Definitional Provisions.........................23
1.3 Accounting Terms and Determinations...................24
SECTION 2 CREDIT FACILITIES...................................24
2.1 Revolving Loans.......................................24
2.2 Term Loan.............................................26
2.3 Swingline Loan Subfacility............................27
2.4 Letter of Credit Subfacility..........................29
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES......32
3.1 Default Rate..........................................32
3.2 Extension and Conversion..............................33
3.3 Reductions in Commitments and Prepayments.............33
3.4 Fees..................................................36
3.5 Capital Adequacy......................................36
3.6 Inability To Determine Interest Rate..................37
3.7 Illegality............................................37
3.8 Requirements of Law...................................38
3.9 Taxes.................................................39
3.10 Indemnity............................................41
3.11 Pro Rata Treatment...................................42
3.12 Sharing of Payments................................. 43
3.13 Place and Manner of Payments.........................44
3.14 Indemnification; Nature of Issuing Lender's Duties...44
SECTION 4 GUARANTY............................................46
4.1 The Guaranty..........................................46
4.2 Obligations Unconditional.............................46
4.3 Reinstatement.........................................47
4.4 Certain Additional Waivers............................48
4.5 Remedies..............................................48
4.6 Continuing Guarantee................................. 48
SECTION 5 CONDITIONS..........................................48
5.1 Conditions to Closing Date............................48
5.2 Conditions to All Extensions of Credit................50
SECTION 6 REPRESENTATIONS AND WARRANTIES......................51
6.1 Financial Condition...................................51
6.2 No Change.............................................51
6.3 Corporate Existence; Compliance with Law..............52
6.4 Corporate Power; Authorization; Enforceable
Obligations ........................................52
6.5 No Legal Bar; No Default..............................52
6.6 No Material Litigation................................53
6.7 Investment Company Act................................53
6.8 Federal Regulations................................. 53
6.9 ERISA.................................................53
6.10 Environmental Matters................................54
6.11 Use of Proceeds......................................55
6.12 Subsidiaries.........................................55
6.13 Taxes................................................55
6.14 Solvency.............................................56
SECTION 7 AFFIRMATIVE COVENANTS...............................56
7.1 Financial Statements..................................56
7.2 Certificates; Other Information.......................57
7.3 Payment of Obligations................................58
7.4 Conduct of Business and Maintenance of Existence......58
7.5 Maintenance of Property; Insurance....................58
7.6 Inspection of Property; Books and Records;
Discussions.........................................58
7.7 Notices...............................................59
7.8 Environmental Laws....................................60
7.9 Financial Covenants................................. 60
7.10 Additional Subsidiary Guarantors.....................61
7.11 Interest Rate Protection.............................61
SECTION 8 NEGATIVE COVENANTS..................................62
8.1 Indebtedness..........................................62
8.2 Liens.................................................63
8.3 Nature of Business................................. 63
8.4 Consolidation, Merger, Sale or Purchase of
Assets, etc.........................................63
8.5 Advances, Investments and Loans.......................65
8.6 Transactions with Affiliates..........................65
8.7 Ownership of Subsidiaries.............................66
8.8 Fiscal Year...........................................66
8.9 Prepayments of Indebtedness, etc......................66
8.10 Dividends............................................66
8.11 Foreign Assets.......................................67
SECTION 9 EVENTS OF DEFAULT................................ 67
SECTION 10 AGENCY PROVISIONS................................ 70
10.1 Appointment..........................................70
10.2 Delegation of Duties.................................71
10.3 Exculpatory Provisions...............................71
10.4 Reliance on Communications...........................71
10.5 Notice of Default................................. 72
10.6 Non-Reliance on Agent and Other Lenders..............72
10.7 Indemnification......................................73
10.8 Agent in its Individual Capacity.....................73
10.9 Successor Agent......................................73
SECTION 11 MISCELLANEOUS......................................74
11.1 Amendments and Waivers...............................74
11.2 Notices..............................................75
11.3 No Waiver; Cumulative Remedies.......................76
11.4 Survival of Representations and Warranties...........76
11.5 Payment of Expenses and Taxes........................76
11.6 Successors and Assigns; Participations;
Purchasing Lenders.................................77
11.7 Adjustments; Set-off.................................80
11.8 Table of Contents and Section Headings...............81
11.9 Counterparts.........................................81
11.10 Severability........................................81
11.11 Integration.........................................81
11.12 Governing Law.......................................82
11.13 Consent to Jurisdiction and Service of Process......82
11.14 Confidentiality.....................................82
11.15 Acknowledgments.....................................83
11.16 Waivers of Jury Trial...............................83
SCHEDULES
---------
Schedule 2.1(a) Schedule of Lenders and Commitments
Schedule 2.1(b)(i) Form of Borrowing Notice for Revolving Loans
and Swingline Loans
Schedule 2.1(e) Form of Revolving Note
Schedule 2.2(d) Form of Term Note
Schedule 2.3(d) Form of Swingline Note
Schedule 2.4(a) Existing Letters of Credit
Schedule 3.2 Form of Notice for Conversion/Extension
of Revolving Loans or Term Loan
Schedule 3.9 Section 3.9 Certificate
Schedule 5.1(j) Form of Certificate of Secretary of the Borrower
Schedlue 6.6 Litigation
Schedule 6.12 Subsidiaries
Schedule 7.10 Form of Joinder Agreement
Schedule 8.1(b) Indebtedness
Scehdule 8.2 Existing Liens
Schedule 11.2 Schedule of Lenders and Commitments
Schedule 11.6 Form of Commitment Transfer Supplement
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of October 28, 1997 (the "Credit
Agreement"), is by and among THE MANITOWOC COMPANY, INC., a Wisconsin
corporation (the "Borrower"), those Subsidiaries identified as a
"Guarantor" on the signature pages hereto and such other Subsidiaries
as may from time to time become a party hereto (the "Guarantors"),
the several lenders identified on the signature pages hereto and such
other lenders as may from time to time become a party hereto (the
"Lenders"), and NATIONSBANK, N.A., as agent for the Lenders (in such
capacity, the "Agent") and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as Documentation Agent.
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a
$203,133,860.25 credit facility for the purposes hereinafter set
forth; and
WHEREAS, the Lenders have agreed to make the requested credit facility
available to the Borrower on the terms and conditions hereinafter set
forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 Definitions.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Additional Credit Party" means each Person that becomes a
Guarantor after the Closing Date by execution of a Joinder Agreement
in accordance with Section 7.10.
"Affiliate" means, with respect to any Person, any other Person
(i) directly or indirectly controlling or controlled by or under
direct or indirect common control with such Person or (ii) directly
or indirectly owning or holding five percent (5%) or more of the
equity interest in such Person. For purposes of this definition,
"control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled"
have meanings correlative to the foregoing.
"Agent" means NationsBank, N.A. and any successors and assigns in
such capacity.
"Agent's Fee Letter" means the letter agreement dated as of
September 11, 1997 among NationsBank, N.A., NationsBanc Capital
Markets, Inc. and the Borrower, as amended, modified, supplemented
or replaced from time to time.
"Agent's Fees" means such term as defined in Section 3.4(d).
"Aggregate Revolving Committed Amount" means the aggregate amount
of all of the Revolving Commitments in effect from time to time.
"Applicable Percentage" means, for any day, the rate per annum set
forth below opposite the applicable Pricing Level then in effect as
shown below, it being understood that the Applicable Percentage for
(i) Base Rate Loans shall be the percentage set forth under the
column "Base Rate Loans", (ii) Eurodollar Loan shall be the
percentage set forth under the column "Eurodollar Loans and Letter
of Credit Fee", (iii) the Commitment Fee shall be the percentage
set forth under the column "Commitment Fee", and (iv) the Letter
of Credit Fee shall be the percentage set forth under the column
"Eurodollar Loans and Letter of Credit Fee":
Consolidated Base Eurodollar
Pricing Funded Rate Loans and Commitment
Level Debt Ratio Loans Letter Fee
----- ---------------- ----- -------- -------
I >2.5:1.0 0% 0.875% 0.250%
II <2.5:1.0 but >2.0:1.0 0% 0.750% 0.225%
III <2.0:1.0 but >1.5:1.0 0% 0.550% 0.175%
IV <1.5:1.0 but >1.0:1.0 0% 0.425% 0.150%
V <1.0:1.0 0% 0.375% 0.125%
The Applicable Percentage shall, in each case, be determined and
adjusted quarterly by the Agent as soon as practicable (but in any
event within 5 days) after delivery of the annual financial
information required by Section 7.1(a) or the quarterly financial
information required by Section 7.1(b), provided that the date of
determination and adjustment shall not be later than the date 5 days
after the date by which the Borrower is required to provide such
quarterly financial information in accordance with Section 7.1(b)
(each an "Interest Determination Date") based on the information
contained in such quarterly financial information. Such Applicable
Percentage shall be effective from such Interest Determination Date
until the next such Interest Determination Date. The Agent shall
determine the appropriate Pricing Level promptly upon its receipt of
the quarterly financial information and promptly notify the Borrower
and the Lenders of any change thereof. Such determinations by the
Agent shall be conclusive absent manifest error. For purposes
hereof, the initial Applicable Percentage shall be set at Pricing
Level IV.
"Base Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest whole multiple of 1/100 of 1%)
equal to the greater of (a) the Federal Funds Rate in effect on such
day plus / of 1% or (b) the Prime Rate in effect on such day. If
for any reason the Agent shall have determined (which determination
shall be conclusive absent manifest error) that it is unable after
due inquiry to ascertain the Federal Funds Rate for any reason,
including the inability or failure of the Agent to obtain sufficient
quotations in accordance with the terms hereof, the Base Rate shall
be determined without regard to clause (a) of the first sentence of
this definition until the circumstances giving rise to such
inability no longer exist. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Rate shall be
effective on the effective date of such change in the Prime Rate or
the Federal Funds Rate, respectively.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any successors and permitted assigns.
"Borrowing Date" means in respect of any Loan, the date such Loan
is made.
"Business" means such term as defined in Section 6.10(b).
"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina, Chicago,
Illinois or Manitowoc, Wisconsin are authorized or required by law
to close, except that, when used in connection with a rate
determination, borrowing or payment in respect of a Eurodollar Loan,
such day shall also be a day on which dealings between banks are
carried on in U.S. dollar deposits in London, England.
"Capital Lease" means any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on
a balance sheet of the lessee in accordance with GAAP.
"Capital Lease Obligations" means the capital lease obligations
relating to a Capital Lease determined in accordance with GAAP.
"Cash Equivalents" means (a) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support
thereof) having maturities of not more than twelve months from the
date of acquisition, (b) U.S. dollar denominated time deposits and
certificates of deposit of (i) any Lender, (ii) any domestic
commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 or (iii) any bank whose short-term commercial
paper rating from S&P is at least A-1 or the equivalent thereof or
from Moody's is at least P-1 or the equivalent thereof (any such
bank being an "Approved Bank"), in each case with maturities of
not more than 364 days from the date of acquisition, (c) commercial
paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable or fixed rate
notes issued by, or guaranteed by, any domestic corporation rated A-
1 (or the equivalent thereof) or better by S&P or P-1 (or the
equivalent thereof) or better by Moody's and maturing within six
months of the date of acquisition, (d) repurchase agreements with a
bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of
$500,000,000 for direct obligations issued by or fully guaranteed by
the United States of America in which the Borrower shall have a
perfected first priority security interest (subject to no other
Liens) and having, on the date of purchase thereof, a fair market
value of at least 100% of the amount of the repurchase obligations,
(e) obligations of any State of the United States or any political
subdivision thereof, the interest with respect to which is exempt
from federal income taxation under Section 103 of the Code, having a
long term rating of at least Aa-3 or AA- by Moody's or S&P,
respectively, (f) Investments in municipal auction preferred stock
(i) rated AAA (or the equivalent thereof) or better by S&P or Aaa
(or the equivalent thereof) or better by Moody's and (ii) with
dividends that reset at least once every 365 days and (g)
investments, classified in accordance with GAAP as current assets,
in money market investment programs registered under the Investment
Company Act of 1940, as amended, which are administered by reputable
financial institutions having capital of at least $100,000,000 and
the portfolios of which are limited to investments of the character
described in the foregoing subdivisions (a) through (f).
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time.
"Commitment" means the Revolving Commitment, the LOC Commitment
and the Term Loan Commitment, individually or collectively, as
appropriate.
"Commitment Fee" means such term as defined in Section 3.4(a).
"Commitment Percentage" means the Revolving Commitment Percentage,
the LOC Commitment Percentage and/or the Term Loan Percentage, as
appropriate.
"Commitment Period" means the period from and including the
Closing Date to but not including the Termination Date.
"Commitment Transfer Supplement" means a Commitment Transfer
Supplement, substantially in the form of Schedule 11.6(c).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with the Borrower within
the meaning of Section 4001 of ERISA or is part of a group which
includes the Borrower and which is treated as a single employer
under Section 414 of the Code.
"Consolidated Debt Service" means, for any period, the sum of
Consolidated Interest Expense plus scheduled principal payments of
Consolidated Funded Debt (including the portion of scheduled
payments in respect of Capital Leases not included in Consolidated
Interest Expense) occurring during such period. The applicable
period shall be for the four consecutive fiscal quarters ending as
of the date of determination.
"Consolidated EBIT" means, for any period, the sum of Consolidated
Net Income plus Consolidated Interest Expense plus all provisions
for any Federal, state or other income taxes for the Borrower and
its Subsidiaries on a consolidated basis, determined in accordance
with GAAP applied on a consistent basis. Except as expressly
provided otherwise, the applicable period shall be for the four
consecutive quarters ending as of the date of determination.
"Consolidated EBITDA" means, for any period, the sum of
Consolidated Net Income plus Consolidated Interest Expense plus all
provisions for any Federal, state or other income taxes plus
depreciation, amortization and other non-cash charges for the
Borrower and its Subsidiaries on a consolidated basis, determined in
accordance with GAAP applied on a consistent basis. Except as
expressly provided otherwise, the applicable period shall be for the
four consecutive quarters ending as of the date of determination.
"Consolidated Funded Debt" means Funded Debt of the Borrower and
its Subsidiaries on a consolidated basis determined in accordance
with GAAP applied on a consistent basis.
"Consolidated Funded Debt Ratio" means, as of the last day of any
fiscal quarter, the ratio of Consolidated Funded Debt on such day to
Consolidated EBITDA for the period of four consecutive fiscal
quarters ending as of such day.
"Consolidated Interest Expense" means for any period, all interest
expense, including the amortization of debt discount and premium and
the interest component under Capital Leases for the Borrower and its
Subsidiaries on a consolidated basis determined in accordance with
GAAP applied on a consistent basis. The applicable period shall be
for the four consecutive quarters ending as of the date of
determination.
"Consolidated Net Income" means for any period, the net income of
the Borrower and its Subsidiaries on a consolidated basis determined
in accordance with GAAP applied on a consistent basis, but excluding
for purposes of determining the Consolidated Funded Debt Ratio and
the Debt Service Coverage Ratio any extraordinary gains or losses,
and any taxes on such excluded gains and any tax deductions or
credits on account of any such excluded losses. The applicable
period shall be for the four consecutive quarters ending as of the
date of computation.
"Consolidated Net Worth" means total stockholders' equity of the
Borrower and its Subsidiaries on a consolidated basis as determined
in accordance with GAAP applied on a consistent basis.
"Contractual Obligation" means, as to any Person, any provision of
any security issued by such Person or of any agreement, instrument
or undertaking to which such Person is a party or by which it or any
of its property is bound.
"Credit Documents" means this Credit Agreement, the Notes, any
Joinder Agreement, the Agent's Fee Letter, and all other related
agreements and documents issued or delivered hereunder or thereunder
or pursuant hereto or thereto.
"Credit Party" means any of the Borrower and the Guarantors.
"Credit Party Obligations" means, without duplication, all of the
obligations of the Borrower and the other Credit Parties to the
Lenders, the Agent and the Issuing Lender (including the obligations
to pay principal of and interest on the Loans, to pay LOC
Obligations, to pay all Fees, to provide cash collateral in respect
of Letters of Credit, to pay certain expenses and the obligations
arising in connection with various indemnities) whenever arising,
under this Credit Agreement, the Notes or any other of the Credit
Documents to which the Borrower or any other Credit Party is a
party.
"Debt Service Coverage Ratio" means, as of the last day of any
fiscal quarter, the ratio of Consolidated EBITDA for the period of
four consecutive fiscal quarters ending as of such day to
Consolidated Debt Service determined as of such day.
"Debt Transaction" means any sale, issuance or placement of
Indebtedness for borrowed money, including senior or subordinated
debt, whether or not evidenced by promissory note or other written
evidence of indebtedness, of the Borrower or any of its
Subsidiaries.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means at any time, any Lender that, at such
time (a) has failed to make a Loan or advance required pursuant to
the terms of this Credit Agreement, including the funding of a
Participation Interest in accordance with the terms hereof, (b) has
failed to pay to the Agent or any Lender an amount owed by such
Lender pursuant to the terms of this Credit Agreement, or (c) has been
deemed insolvent or has become subject to a bankruptcy or insolvency
proceeding or to a receiver, trustee or similar official.
"Dollars" and "$" means dollars in lawful currency of the United
States of America.
"Domestic Credit Party" means any Credit Party that is organized
and existing under the laws of the United States or any state or
commonwealth thereof or under the laws of the District of Columbia.
"Domestic Lending Office" means the office or branch of the Lender
identified on Schedule 11.2, or such other office or branch as the
Lender may identify by written notice to the Borrower and the Agent.
"Domestic Subsidiary" means any Subsidiary that is organized and
existing under the laws of the United States or any state or
commonwealth thereof or under the laws of the District of Columbia.
"Eligible Transferee" means and includes a commercial bank,
financial institution or other "accredited investor" (as defined
in Regulation D of the Securities Act of 1933, as amended).
"Environmental Laws" means any and all applicable foreign,
Federal, state, local or municipal laws, rules, orders, regulations,
statutes, ordinances, codes, decrees, requirements of any
Governmental Authority or other Requirement of Law (including common
law) regulating, relating to or imposing liability or standards of
conduct concerning protection of human health or the environment, as
now or may at any time be in effect during the term of this Credit
Agreement.
"Equity Transaction" means any issuance by the Borrower or any of
its Subsidiaries of (i) shares of its capital stock, (ii) any shares
of its capital stock pursuant to the exercise of options or warrants
or (iii) any shares of its capital stock pursuant to the conversion
of any debt securities to equity; provided, however, "Equity
Transaction" shall not include any such transactions described in
this definition which result in proceeds of less than $500,000
during any fiscal year.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and
the rulings issued thereunder.
"Eurodollar Lending Office" means the office or branch of the
Lender identified on Schedule 11.2, or such other office or branch
as the Lender may identify by written notice to the Borrower and the
Agent.
"Eurodollar Loan" means any Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.
"Eurodollar Rate" means, for the Interest Period for each
Eurodollar Loan comprising part of the same borrowing (including
conversions, extensions and renewals), a per annum interest rate
determined pursuant to the following formula:
Eurodollar Rate = Interbank Offered Rate
--------------------------------------
1 - Eurodollar Reserve Percentage
"Eurodollar Reserve Percentage" means for any day, that percentage
(expressed as a decimal) which is in effect from time to time under
Regulation D of the Board of Governors of the Federal Reserve System
(or any successor), as such regulation may be amended from time to
time or any successor regulation, as the maximum reserve requirement
(including, without limitation, any basic, supplemental, emergency,
special, or marginal reserves) applicable with respect to
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurodollar Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurodollar Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available
from time to time to a Lender. The Eurodollar Rate shall be
adjusted automatically on and as of the effective date of any change
in the Eurodollar Reserve Percentage. The parties hereto
acknowledge and agree that, as of the Closing Date, the Eurodollar
Reserve Percentage is zero (0).
"Event of Default" means such term as defined in Section 9.
"Existing Letters of Credit" means those Letters of Credit
outstanding on the Closing Date and identified on Schedule 2.4(a).
"Extension of Credit" means as to any Lender, the making of a Loan
by such Lender or the issuance of, or participation in, a Letter of
Credit by such Lender.
"Federal Funds Rate" means, for any day, the rate of interest per
annum (rounded upwards, if necessary, to the nearest whole multiple
of 1/100 of 1%) 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 on such day, as
published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (A) if such day is not a
Business Day, the Federal Funds Rate for such day shall be such rate
on such transactions on the next preceding Business Day and (B) if
no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted
to the Agent on such day on such transactions as determined by the
Agent.
"Fee" means any fee payable pursuant to Section 3.4.
"Foreign Subsidiary" means any Subsidiary that is not organized
and existing under the laws of the United States or any state or
commonwealth thereof or under the laws of the District of Columbia.
"Funded Debt" means, for any Person, without duplication, (i) all
Indebtedness of such Person for borrowed money (including without
limitation, indebtedness evidenced by promissory notes, bonds,
debentures and similar instruments and further any portion of the
purchase price for assets or acquisitions permitted hereunder which
may be financed by the seller and Guarantee Obligations by such
Person of Funded Debt of Other Persons), (ii) all purchase money
Indebtedness of such Person, (iii) the principal portion of Capital
Lease Obligations, (iv) the maximum amount available to be drawn
under standby letters of credit and bankers' acceptances issued or
created for the account of such Person, (v) all preferred stock
issued by such Person and required by the terms thereto to be
redeemed, or for which mandatory sinking fund payments are due, by a
fixed date, and (vi) the aggregate amount of uncollected accounts
receivable of such Person subject at such time to a sale of
receivables (or other similar transaction) regardless of whether
such transaction is effected without recourse to such Person or in a
manner which would not be reflected on the balance sheet of such
Person in accordance with GAAP. Funded Debt shall include payments
in respect of Funded Debt which constitute current liabilities of
the obligor under GAAP. For purposes hereof, Funded Debt shall not
include Subordinated Debt or intercompany Indebtedness owing by a
Credit Party to another Credit Party.
"GAAP" means generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, subject,
however, in the case of determination of compliance with the
financial covenants set out in Section 7.9 to the provisions of
Section 1.3.
"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 Obligation" means, as to any Person (the "guaranteeing
person"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any
letter of credit) to induce the creation of which the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing
any Indebtedness, leases, dividends or other obligations (the
"primary obligations") of any other third Person (the "primary
obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person,
whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or
payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose
of assuring the owner of any such primary obligation of the ability
of the primary obligor to make payment of such primary obligation or
(iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; provided,
however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Guarantee Obligation
of any guaranteeing person shall be deemed to be the lower of (a) an
amount equal to the stated or determinable amount of the primary
obligation in respect of which such Guarantee Obligation is made and
(b) the maximum amount for which such guaranteeing person may be
liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum
amount for which such guaranteeing person may be liable are not
stated or determinable, in which case the amount of such Guarantee
Obligation shall be such guaranteeing person's maximum reasonably
anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guarantor" means those Subsidiaries of the Borrower identified as
a "Guarantor" on the signature pages hereto, and each Additional
Credit Party which has executed a Joinder Agreement, together with
their successors and permitted assigns.
"Guaranty" means the guaranty of the Guarantors set forth in
Section 4.
"Indebtedness" means, of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable
in accordance with customary practices), (b) any other indebtedness
of such Person which is evidenced by a note, bond, debenture or
similar instrument, (c) all obligations of such Person under Capital
Leases, (d) all obligations of such Person in respect of acceptances
issued or created for the account of such Person, (e) all
liabilities secured by any Lien on any property owned by such Person
even though such Person has not assumed or otherwise become liable
for the payment thereof, (f) all obligations of such Person under
conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations
or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (g) all obligations of such
Person under take-or-pay or similar arrangements or under
commodities agreements, (h) all Guarantee Obligations of such
Person, (i) all obligations of such Person in respect of interest
rate protection agreements, foreign currency exchange agreements,
commodity purchase or option agreements or other interest or
exchange rate or commodity price hedging agreements, (j) the maximum
amount of all letters of credit issued or bankers' acceptances
created for the account of such Person and, without duplication, all
drafts drawn thereunder (to the extent not theretofore reimbursed),
(k) all preferred stock issued by such Person and required by the
terms thereto to be redeemed, or for which mandatory sinking fund
payments are due, by a fixed date, (l) all other obligations which
would be shown as a liability on the balance sheet of such Person
and (m) the aggregate amount of uncollected accounts receivable of
such Person subject at such time to a sale of receivables (or other
similar transaction) regardless of whether such transaction is
effected without recourse to such Person or in a manner which would
not be reflected on the balance sheet of such Person in accordance
with GAAP; but specifically excluding from the foregoing trade
payables and other expenses and reserves (whether classified as long
term or short term) arising or incurred in the ordinary course of
business. For purposes hereof, Indebtedness shall include
Indebtedness of any partnership in which such Person is a general
partner (except for any such Indebtedness with respect to which the
holder is limited to the assets of such partnership or joint
venture).
"Insolvency" means with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such
term as used in Section 4245 of ERISA.
"Insolvent" means pertaining to a condition of Insolvency.
"Interbank Offered Rate" means, with respect to any Eurodollar
Loan for the Interest Period applicable thereto, the average
(rounded upward to the nearest one-sixteenth (1/16) of one percent)
per annum rate of interest determined by the office of the Agent
(each such determination to be conclusive and binding absent
manifest error) as of two Business Days prior to the first day of
such Interest Period, as the effective rate at which deposits in
immediately available funds in U.S. dollars are being, have been, or
would be offered or quoted by the Agent to major banks in the
applicable interbank market for Eurodollar deposits at such time as
the Agent may determine during the Business Day which is the second
Business Day immediately preceding the first day of such Interest
Period, for a term comparable to such Interest Period and in the
amount of the requested Eurodollar Loan. If no such offers or
quotes are generally available for such amount, then the Agent shall
be entitled to determine the Eurodollar Rate by estimating in its
reasonable judgment the per annum rate (as described above) that
would be applicable if such quote or offers were generally
available.
"Interest Payment Date" means (a) as to any Base Rate Loan, the
last day of each March, June, September and December and the
Termination Date, (b) as to any Swingline Loan, such day as may be
mutually agreed upon by the Borrower and the Swingline Lender, but
not less frequently than once a quarter, (c) as to any Eurodollar Loan
having an Interest Period of three months or less, the last day of
such Interest Period, and (d) as to any Eurodollar Loan having an
Interest Period longer than three months, each day which is three
months after the first day of such Interest Period and the last day
of such Interest Period. Whenever any Interest Payment Date shall
be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such
extension), except that in the case of Eurodollar Loans, if the
extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next
preceding Business Day as provided in Section 3.13.
"Interest Period" means with respect to any Eurodollar Loan,
(i) initially, the period commencing on the Borrowing Date or
conversion date, as the case may be, with respect to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in the notice of
borrowing or notice of conversion given with respect thereto; and
(ii) thereafter, each period commencing on the last day of the
immediately preceding Interest Period applicable to such
Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to
the Agent not less than three Business Days prior to the last day
of the then current Interest Period with respect thereto;
provided that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a Eurodollar Loan would
otherwise end on a day that is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day
unless the result of such extension would be to carry such
Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business
Day;
(B) any Interest Period pertaining to a Eurodollar Loan that
begins on the last Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period) shall end on
the last Business Day of the relevant calendar month;
(C) if the Borrower shall fail to give notice as provided above,
the Borrower shall be deemed to have selected a Base Rate Loan to
replace the affected Eurodollar Loan;
(D) with regards to Revolving Loans, any Interest Period that
would otherwise extend beyond the Termination Date shall end on
the Termination Date and with regard to the Term Loan, no
Interest Period shall extend beyond any principal amortization
payment date unless the portion of the Term Loan consisting of
Base Rate Loans together with the portion of the Term Loan
consisting of Eurodollar Loans with Interest Periods expiring
prior to or concurrently with the date such principal
amortization payment date is due, is at least equal to the amount
of such principal amortization payment due on such date; and
(E) no more than 20 Eurodollar Loans may be in effect at any
time. For purposes hereof, Eurodollar Loans with different
Interest Periods shall be considered as separate Eurodollar
Loans, even if they shall begin on the same date and have the
same duration, although borrowings, extensions and conversions
may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar
Loan with a single Interest Period.
"Interest Protection Agreement" means an interest rate swap or
other interest rate protection agreement or interest rate future,
option, cap, collar or other hedging arrangement.
"Issuing Lender" means as to the Existing Letters of Credit, the
Issuing Lenders identified on Schedule 2.4(a), and as to Letters of
Credit issued after the Closing Date, NationsBank, The Northern
Trust Company and PNC Bank, National Association, as the Borrower
may elect.
"Issuing Lender Fees" means such term as defined in Section 3.4c.
"Joinder Agreement" means a Joinder Agreement substantially in the
form of Schedule 7.10, executed and delivered by an Additional
Credit Party in accordance with the provisions of Section 7.10.
"Lenders" means each of the Persons identified as a "Lender" on
the signature pages hereto, and each Person which may become a
Lender by way of assignment in accordance with the terms hereof,
together with their successors and permitted assigns.
"Letter of Credit" means any Existing Letter of Credit and any
letter of credit issued for the account of a Credit Party by an
Issuing Lender as provided in Section 2.4, as such letter of credit
may be amended, supplemented, extended or otherwise modified from
time to time.
"Letter of Credit Fees" means such term as defined in Section
3.4(b).
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory
or otherwise), preference, priority or charge of any kind (including
any agreement to give any of the foregoing, any conditional sale or
other title retention agreement, any financing or similar statement
or notice filed under the Uniform Commercial Code as adopted and in
effect in the relevant jurisdiction or other similar recording or
notice statute, and any lease in the nature thereof).
"Loan" means a Revolving Loan, a Swingline Loan and/or the Term
Loan, as appropriate.
"LOC Commitment" means the commitment of the Issuing Lender to
issue Letters of Credit and with respect to each Lender, the
commitment of such Lender to purchase participation interests in the
Letters of Credit up to such Lender's LOC Committed Amount as
specified in Schedule 2.1(a) (subject to adjustment on account of
assignment pursuant to the provisions of Section 11.6(c) hereof), as
such amount may be reduced from time to time in accordance with the
provisions hereof.
"LOC Commitment Percentage" means for each Lender, the percentage
identified as its LOC Commitment Percentage on Schedule 2.1(a), as
such percentage may be modified in connection with any assignment
made in accordance with the provisions of Section 11.6(c).
"LOC Committed Amount" means, collectively, the aggregate amount
of all of the LOC Commitments of the Lenders to issue and
participate in Letters of Credit as referenced in Section 2.4 and,
individually, the amount of each Lender's LOC Commitment as
specified in Schedule 2.1(a) (subject to adjustment on account of
assignment pursuant to the provisions of Section 11.6(c) hereof).
"LOC Documents" means with respect to any Letter of Credit, such
Letter of Credit, any amendments thereto, any documents delivered in
connection therewith, any application therefor, and any agreements,
instruments, guarantees or other documents (whether general in
application or applicable only to such Letter of Credit) governing
or providing for (i) the rights and obligations of the parties
concerned or (ii) any collateral security for such obligations.
"LOC Obligations" means, at any time, the sum of (i) the maximum
amount which is, or at any time thereafter may become, available to
be drawn under Letters of Credit then outstanding, assuming
compliance with all requirements for drawings referred to in such
Letters of Credit plus (ii) the aggregate amount of all drawings
under Letters of Credit honored by the Issuing Lender but not
theretofore reimbursed.
"Mandatory Borrowing" means such term as defined in Section
2.3(b)(ii) or Section 2.4(e).
"Material Adverse Effect" means a material adverse effect on (a)
the business, operations, property, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken
as a whole, (b) the ability of the Borrower or the other Credit
Parties to perform their obligations, when such obligations are
required to be performed, under this Credit Agreement or any of the
other Credit Documents or (c) the validity or enforceability of this
Credit Agreement, any of the Notes or any of the other Credit
Documents or the rights or remedies of the Agent or the Lenders
hereunder or thereunder.
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"Moody's" means Moody's Investors Service, Inc., or any successor
or assignee of the business of such company in the business of
rating securities.
"Multiemployer Plan" means a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NationsBank" means NationsBank, N.A. and its successors.
"Net Proceeds" means the gross cash proceeds (including cash by
way of deferred payment pursuant to a promissory note, receivable or
otherwise, but only as and when received) received from the sale,
lease, conveyance, disposition or other transfer of assets, or from
a Recovery Event or from the sale, issuance or placement of equity
securities, Indebtedness for borrowed money or Subordinated Debt to
or from a Person other than a Credit Party, net of (i) transaction
costs payable to third parties, (ii) the estimated taxes payable
with respect to such proceeds (including, without duplication,
withholding taxes), (iii) Indebtedness (other than Indebtedness of
the Lenders pursuant to the Credit Documents) which is secured by
the assets which are the subject of such event to the extent such
Indebtedness is paid with a portion of the proceeds therefrom, and
(iv) any and all cash costs which may occur as a result of
discontinuing operations, shut-downs or otherwise resulting from,
the disposition of such assets.
"Non-Excluded Taxes" means such term as is defined in Section 3.9.
"Non-Guarantor Domestic Subsidiaries" means such term as defined
in Section 7.10.
"Note" or "Notes" means the Revolving Notes, the Swingline Note
and/or the Term Notes, collectively, separately or individually, as
appropriate.
"Notice of Borrowing" means the written notice of borrowing as
referenced and defined in Section 2.1(b)(i) or 2.3(b)(i), as
appropriate.
"Notice of Extension/Conversion" means the written notice of
extension or conversion as referenced and defined in Section 3.2.
"Obligations" means collectively, Loans and LOC Obligations.
"Participants" means such term as defined in Section 11.6.
"Participation Interest" means the purchase by a Lender of a
participation interest in Swingline Loans as provided in Section
2.3(b)(ii) or in Letters of Credit as provided in Section 2.4.
"PBGC" means the Pension Benefit Guaranty Corporation established
under ERISA, and any successor thereto.
"Permitted Investments" means (i) cash and Cash Equivalents, (ii)
receivables owing to the Borrower or any of its Subsidiaries or any
receivables and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms, (iii)
investments in and to a Domestic Credit Party, (iv) loans and
advances to officers, directors, employees and Affiliates in an
aggregate amount not to exceed $500,000 at any time outstanding, (v)
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business,
(vi) investments, acquisitions or transactions permitted under
Section 8.4(b), (vii) with respect to any Subsidiary that is a
Foreign Subsidiary, loans, advances and/or investments (A) in and to
Foreign Subsidiaries (subject, however, to the provisions of Section
8.11) and (B) by such Foreign Subsidiary to or in other foreign
Persons, whether denominated in Dollars or otherwise, (viii) with
respect to any pension trust maintained for the benefit of any
present or former employees of the Borrower or any Subsidiary, such
loans, advances and/or investments as the trustee or administrator
of the trust shall deem advisable pursuant to the terms of such
trust, and (ix) additional loan advances and/or investments of a
nature not contemplated by the foregoing clauses hereof, provided
that such loans, advances and/or investments made pursuant to this
clause (ix) shall not exceed an aggregate amount of $5,000,000. As
used herein, "investment" means all investments, in cash or by
delivery of property made, directly or indirectly in, to or from any
Person, whether by acquisition of shares of capital stock, property,
assets, indebtedness or other obligations or securities or by loan
advance, capital contribution or otherwise.
"Permitted Liens" means
(i) Liens created by or otherwise existing, under or in
connection with this Credit Agreement or the other Credit
Documents in favor of the Lenders;
(ii) Liens in favor of a Lender hereunder as the provider of
interest rate protection relating to the Loans hereunder, but
only (A) to the extent such Liens secure obligations under such
interest rate protection agreements permitted under Section 8.1,
(B) to the extent such Liens are on the same collateral as to
which the Lenders also have a Lien and (C) if such provider and the
Lenders shall share pari passu in the collateral subject to such
Liens;
(iii) purchase money Liens securing purchase money indebtedness
(and refinancings thereof) to the extent permitted under Section
8.1(c);
(iv) Liens for taxes, assessments, charges or other governmental
levies not yet due or as to which the period of grace (not to
exceed 60 days), if any, related thereto has not expired or which
are being contested in good faith by appropriate proceedings,
provided that adequate reserves with respect thereto are
maintained on the books of the Borrower or its Subsidiaries, as
the case may be, in conformity with GAAP (or, in the case of
Subsidiaries with significant operations outside of the United
States of America, generally accepted accounting principles in
effect from time to time in their respective jurisdictions of
incorporation);
(v) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days
or which are being contested in good faith by appropriate
proceedings;
(vi) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers
under insurance or self-insurance arrangements;
(vii) deposits to secure the performance of bids, trade contracts,
(other than for borrowed money), leases, statutory obligations,
surety and appeal bonds, performance bonds and other obligations
of a like nature incurred in the ordinary course of business;
(viii) any extension, renewal or replacement (or successive
extensions, renewals or replacements) , in whole or in part, of
any Lien referred to in the foregoing clauses; provided that such
extension, renewal or replacement Lien shall be limited to all or
a part of the property which secured the Lien so extended,
renewed or replaced (plus improvements on such property);
(ix) easements, rights of way, restrictions and other similar
encumbrances incurred in the ordinary course of business which,
in the aggregate, are not material in amount and which do not in
any case materially detract from the value of the property
subject thereto or materially interfere with the ordinary conduct
of the business of the Borrower or any Subsidiary;
(x) Liens in existence on the date hereof listed on Schedule
8.2, securing Indebtedness permitted by Section 8.1(b), provided
that no such Lien is spread to cover any additional property
(other than proceeds of the collateral originally subject to such
Lien in accordance with the instrument creating such Lien) after
the Closing Date and that the amount of Indebtedness secured
thereby is not increased;
(xi) Liens on the property or assets of a corporation which
becomes a Subsidiary after the Closing Date securing Indebtedness
permitted by Section 8.1(i), provided that (A) such Liens existed
at the time such corporation became a Subsidiary and were not
created in anticipation thereof, and (B) no such Lien is spread
to cover any additional property (other than proceeds of the
collateral originally subject to such Lien in accordance with the
instrument creating such Lien) after the Closing Date and that
the amount of Indebtedness secured thereby is not increased;
(xii) Liens in the nature of licenses that arise in the ordinary
course of business and consistent with past practice;
(xiii) Liens incurred in connection with Indebtedness permitted by
Section 8.1(h), provided that no such Lien shall be spread to
cover any additional property after the Closing Date and the
amount of Indebtedness secured thereby shall not be increased;
(xiv) leases and subleases otherwise permitted hereunder granted
to others not interfering in any material respect in the business
of the Borrower or any Subsidiary; and
(xv) attachment or judgment Liens, where the attachment or
judgment which gave rise to such Liens does not constitute an
Event of Default hereunder.
"Permitted Sale-Leaseback Transaction" means a transaction
pursuant to which a Credit Party sells an item of equipment to a
financial institution and concurrently with such sale (i) leases
such item of equipment back from such financial institution and
(ii) subleases such item of equipment to a customer of the Credit
Party pursuant to a sublease agreement under which such customer
obtains an option to purchase such item of equipment at or before
the end of such sublease.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or
other enterprise (whether or not incorporated) or any
Governmental Authority.
"Plan" means at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which the
Borrower or a Commonly Controlled Entity is (or, if such plan
were terminated at such time, would under Section 4069 of ERISA
be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Prime Rate" means the per annum rate of interest established
from time to time by the Agent at its principal office in
Charlotte, North Carolina as its Prime Rate. Any change in the
interest rate resulting from a change in the Prime Rate shall
become effective as of 12:01 a.m. of the Business Day on which
each change in the Prime Rate is announced by the Agent. The
Prime Rate is a reference rate used by the Agent in determining
interest rates on certain loans and is not intended to be the
lowest rate of interest charged on any extension of credit to any
debtor.
"Pro Forma Basis" means, with respect to any transaction, that
such transaction shall be deemed to have occurred as of the first
day of the four-fiscal quarter period ending as of the end of the
fiscal quarter most recently ended prior to the date of such
transaction with respect to which the Agent has received the
financial information required under Section 7.1. As used
herein, "transaction" means any merger, consolidation or
acquisition as referenced in Section 8.4(c).
"Properties" means such term as defined in subsection 6.10(a).
"Purchasing Lender" means such term as defined in Section 11.6(c).
"Recovery Event" means the receipt by the Borrower or any of its
Subsidiaries of any cash insurance proceeds or condemnation award
payable by reason of theft, loss, physical destruction or damage,
taking or similar event with respect to any of their respective
property or assets.
"Register" means such term as defined in Section 11.6(d).
"Reorganization" means with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of
such term as used in Section 4241 of ERISA.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA, other than those events as to which the thirty-day
notice period is waived under subsections .13, .14, .16, .18, .19 or
.20 of PBGC Reg. S2615.
"Required Lenders" means Lenders holding in the aggregate at least
51% of the sum of (i) all Obligations then outstanding at such time
and (ii) the aggregate unused Commitments at such time (treating for
purposes hereof in the case of Swingline Loans and LOC Obligations,
in the case of the Swingline Lender and the Issuing Lender, only the
portion of the Swingline Loans and the LOC Obligations of the
Swingline Lender and the Issuing Lender, respectively, which is not
subject to the Participation Interests of the other Lenders and, in
the case of the Lenders other than the Swingline Lender and the
Issuing Lender, the Participation Interests of such Lenders in
Swingline Loans and LOC Obligations hereunder as direct
Obligations); provided, however, that if any Lender shall be a
Defaulting Lender at such time, then there shall be excluded from
the determination of Required Lenders the Obligations (including
Participation Interests) of such Defaulting Lender and such
Defaulting Lender's Commitments, or after termination of the
Commitments, the principal balance of the Obligations owing to such
Defaulting Lender.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
to which any of its material property is subject.
"Revolving Commitment" means with respect to each Lender, the
commitment of such Lender to make Revolving Loans in an aggregate
principal amount at any time outstanding up to such Lender's
Revolving Committed Amount as specified in Schedule 2.1(a) (subject
to adjustment on account of assignment pursuant to the provisions of
Section 11.6(c) hereof), as such amount may be reduced from time to
time in accordance with the provisions hereof.
"Revolving Commitment Percentage" means for each Lender, the
percentage identified as its Revolving Commitment Percentage on
Schedule 2.1(a), as such percentage may be modified in connection
with any assignment made in accordance with the provisions of
Section 11.6(c).
"Revolving Committed Amount" means collectively, the aggregate
amount of all of the Revolving Commitments as referenced in Section
2.1(a) and, individually, the amount of each Lender's Revolving
Commitment as specified in Schedule 2.1(a) (subject to adjustment on
account of assignment pursuant to the provisions of Section 11.6(c)
hereof).
"Revolving Loans" means as defined in Section 2.1.
"Revolving Note" or "Revolving Notes" means the promissory notes
of the Borrower in favor of each of the Lenders evidencing the
Revolving Loans provided pursuant to Section 2.1(e), individually or
collectively, as appropriate, as such promissory notes may be
amended, modified, supplemented, extended, renewed or replaced from
time to time.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc., or any successor or assignee of the business of such
division in the business of rating securities.
"Single Employer Plan" means any Plan which is not a Multi-
Employer Plan.
"Solvent" means, with respect to any Credit Party as of a
particular date, that on such date (i) such Credit Party is able to
realize upon its assets and pay its debts and other liabilities,
contingent obligations and other commitments as they mature in the
normal course of business, (ii) such Credit Party does not intend
to, and does not believe that it will, incur debts or liabilities
beyond such Credit Party's ability to pay as such debts and
liabilities mature in their ordinary course, (iii) such Credit Party
is not engaged in a business or a transaction, and is not about to
engage in a business or a transaction, for which such Credit Party's
property would constitute unreasonably small capital after giving
due consideration to the prevailing practice in the industry in
which such Credit Party is engaged or is to engage, (vi) the fair
value of the property of such Credit Party is greater than the total
amount of liabilities, including, without limitation, contingent
liabilities, of such Credit Party and (v) the present fair saleable
value of the assets of such Credit Party is not less than the amount
that will be required to pay the probable liability of such Credit
Party on its debts as they become absolute and matured. In
computing the amount of contingent liabilities at any time, it is
intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Specified Sales" means (i) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of
business, (ii) the sale, transfer, lease or other disposition of
machinery, parts, equipment and real estate no longer useful in the
conduct of the business of the Borrower or any of its Subsidiaries,
as appropriate, and (iii) in addition to the transactions described
in subsections (i) and (ii), any other sale, transfer, lease or
other disposition of assets where the proceeds of such disposition
do not exceed $10,000,000 during any fiscal year or $20,000,000
during the term of this Credit Agreement.
"Subordinated Debt" means such term as defined in Section 8.9.
"Subsidiary" means, as to any Person, a corporation, partnership
or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the
happening of a contingency) to elect a majority of the board of
directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is
otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person. Unless otherwise
qualified, all references to a "Subsidiary" or to "Subsidiaries"
in this Credit Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Swingline Commitment" means the commitment of the Swingline
Lender to make Swingline Loans in an aggregate principal amount at
any time outstanding up to the Swingline Committed Amount, and the
commitment of the Lenders to purchase participation interests in the
Swingline Loans as provided in Section 2.3(b)(ii), as such amounts
may be reduced from time to time in accordance with the provisions
hereof.
"Swingline Committed Amount" means the amount of the Swingline
Lender's Swingline Commitment as specified in Section 2.3(a).
"Swingline Lender" means NationsBank, in its capacity as such.
"Swingline Loan" or "Swingline Loans" means as defined in Section
2.3(a).
"Swingline Note" means the promissory note of the Borrower in
favor of the Swingline Lender evidencing the Swingline Loans
provided pursuant to Section 2.3(d), as such promissory note may be
amended, modified, supplemented, extended, renewed or replaced from
time to time.
"Term Loan" means as defined in Section 2.2(a).
"Term Loan Commitment" means with respect to each Lender, the
commitment of such Lender to make its portion of the Term Loan as
specified in Schedule 2.1(a) (and for purposes of making
determinations of Required Lenders hereunder after the Closing Date,
the principal amount outstanding on the Term Loan).
"Term Loan Commitment Percentage" means for each Lender, its Term
Loan Commitment Percentage on Schedule 2.1(a), as such percentage
may be modified in accordance with the provisions of Section 11.6(c).
"Term Loan Committed Amount" means collectively, the aggregate
amount of all of the Term Loan Commitments as referenced in Section
2.2(a) and, individually, the amount of each Lender's Term Loan
Commitment as specified in Schedule 2.1(a).
"Term Note" or "Term Notes" means the promissory notes of the
Borrower in favor of each of the Lenders evidencing the Term Loan
provided pursuant to Section 2.2(d), individually or collectively,
as appropriate, as such promissory notes may be amended, modified,
supplemented, extended, renewed or replaced from time to time.
"Termination Date" means December 31, 2001.
"Threshold Requirement" means such term as defined in Section
7.10.
"Tranche" means the collective reference to Eurodollar Loans whose
Interest Periods begin and end on the same day. A Tranche may
sometimes be referred to as a "Eurodollar Tranche".
"Transfer Effective Date" means such term as defined in the
Commitment Transfer Supplement.
"Transferee" means such term as defined in Section 11.6(f).
"Type" means, as to any Loan, its nature as a Base Rate Loan,
Eurodollar Loan or Swingline Loan, as the case may be.
1.2 Other Definitional Provisions
(a) Unless otherwise specified therein, all terms defined in
this Credit Agreement shall have the defined meanings when used
in the Notes or other Credit Documents or any certificate or
other document made or delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Credit Agreement shall refer
to this Credit Agreement as a whole and not to any particular
provision of this Credit Agreement, and Section, subsection,
Schedule and Exhibit references are to this Credit Agreement
unless otherwise specified.
(c) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(d) For purposes of computation of periods of time hereunder,
the word "from" means "from and including" and the words "to" and
"until" each mean "to but excluding".
1.3 Accounting Terms and Determinations.
Unless otherwise specified herein, all terms of an accounting
character used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements
required to be delivered hereunder shall be prepared, in accordance
with GAAP, applied on a basis consistent (except for changes concurred
in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited
consolidated financial statements of the Borrower and its consolidated
Subsidiaries delivered to the Lenders unless with respect to any such
change concurred in by the Borrower's independent public accountants
or required by GAAP, in determining compliance with any of the
provisions of this Credit Agreement or any of the other Credit
Documents: (i) the Borrower shall have objected to determining such
compliance on such basis at the time of delivery of such financial
statements, or (ii) the Required Lenders shall so object in writing
within 30 days after the delivery of such financial statements, in
either of which events such calculations shall be made on a basis
consistent with those used in the preparation of the latest financial
statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements
delivered under Section 7.1 hereof, shall mean the financial
statements referred to in Section 6.1).
SECTION 2
CREDIT FACILITIES
2.1 Revolving Loans.
(a) Revolving Commitment. During the Commitment Period, subject
to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans ("Revolving Loans") to
the Borrower from time to time for the purposes hereinafter set
forth; provided, however, that (i) with regard to each Lender
individually, the sum of such Lender's share of outstanding
Revolving Loans plus such Lender's Revolving Commitment
Percentage of Swingline Loans plus such Lender's LOC Commitment
Percentage of LOC Obligations shall not exceed such Lender's
Revolving Committed Amount, and (ii) with regard to the Lenders
collectively, the sum of the aggregate amount of outstanding
Revolving Loans plus Swingline Loans plus the aggregate amount
of LOC Obligations shall not exceed ONE HUNDRED TWENTY-FIVE
MILLION DOLLARS ($125,000,000) (as such aggregate maximum
amount may be reduced from time to time as provided herein, the
"Revolving Committed Amount"). Revolving Loans may consist
of Base Rate Loans or Eurodollar Loans, or a combination
thereof, as the Borrower may request, and may be repaid and
reborrowed in accordance with the provisions hereof.
Eurodollar Loans shall be made by each Lender at its Eurodollar
Lending Office and Base Rate Loans at its Domestic Lending
Office.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. The Borrower shall request a
Revolving Loan borrowing by written notice (or telephone
notice promptly confirmed in writing which confirmation may
be by fax) to the Agent not later than 11:30 A.M.
(Charlotte, North Carolina time) on the Business Day prior
to the date of requested borrowing in the case of Base Rate
Loans, and on the third Business Day prior to the date of
the requested borrowing in the case of Eurodollar Loans.
Each such request for borrowing shall be irrevocable and
shall specify (A) that a Revolving Loan is requested, (B)
the date of the requested borrowing (which shall be a
Business Day), (C) the aggregate principal amount to be
borrowed, and (D) whether the borrowing shall be comprised
of Base Rate Loans, Eurodollar Loans or a combination
thereof, and if Eurodollar Loans are requested, the Interest
Period(s) therefor. A form of Notice of Borrowing (a
"Notice of Borrowing") is attached as Schedule 2.1(b)(i).
If the Borrower shall fail to specify in any such Notice of
Borrowing (I) an applicable Interest Period in the case of a
Eurodollar Loan, then such notice shall be deemed to be a
request for an Interest Period of one month, or (II) the
type of Revolving Loan requested, then such notice shall be
deemed to be a request for a Base Rate Loan hereunder. The
Agent shall give notice to each Lender promptly upon
receipt of each Notice of Borrowing, the contents thereof
and each such Lender's share thereof.
(ii) Minimum Amounts. Each Revolving Loan borrowing shall
be in a minimum aggregate amount of $2,000,000 and integral
multiples of $1,000,000 in excess thereof (or the remaining
amount of the Revolving Commitment, if less).
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing
available to the Agent for the account of the Borrower at
the office of the Agent specified in Schedule 11.2, or at
such other office as the Agent may designate in writing, by
1:00 P.M. (Charlotte, North Carolina time) on the date
specified in the applicable Notice of Borrowing in Dollars
and in funds immediately available to the Agent. Such
borrowing will then be made available to the Borrower by the
Agent by crediting the account of the Borrower on the books
of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as
received by the Agent.
(c) Repayment. The principal amount of all Revolving Loans
shall be due and payable in full on the Termination Date.
(d) Interest. Subject to the provisions of Section 3.1,
Revolving Loans shall bear interest as follows:
(i) Base Rate Loans. During such periods as Revolving
Loans shall be comprised of Base Rate Loans, each such Base
Rate Loan shall bear interest at a per annum rate equal to
the sum of the Base Rate plus the Applicable Percentage; and
(ii) Eurodollar Loans. During such periods as Revolving
Loans shall be comprised of Eurodollar Loans, each such
Eurodollar Loan shall bear interest at a per annum rate
equal to the sum of the applicable Eurodollar Rate plus the
Applicable Percentage.
Interest on Revolving Loans shall be payable in arrears on each
Interest Payment Date.
(e) Revolving Notes. The Revolving Loans shall be evidenced by
a duly executed promissory note of the Borrower to each Lender in
the original principal amount of each such Lender's Revolving
Committed Amount in substantially the form of Schedule 2.1(e).
2.2 Term Loan.
(a) Term Loan. Subject to and upon the terms and
conditions hereof, each Lender severally agrees to make its
Term Loan Commitment Percentage of a term loan (the "Term
Loan") to the Borrower on the Closing Date in the aggregate
principal amount of SEVENTY-EIGHT MILLION ONE HUNDRED
THIRTY-THREE THOUSAND EIGHT HUNDRED SIXTY DOLLARS AND
TWENTY-FIVE CENTS ($78,133,860.25) for the purposes
hereinafter set forth. The Term Loan may consist of Base
Rate Loans or Eurodollar Loans, or a combination thereof, as
the Borrower may request. Amounts repaid on the Term Loan
may not be reborrowed. Eurodollar Loans shall be made by
each Lender at its Eurodollar Lending Office and Base Rate
Loans at its Domestic Lending Office.
(b) Repayment of Term Loan. The principal amount of the
Term Loan shall be repaid in seventeen (17) consecutive
quarterly installments as follows:
Payment Date Amount
December 31, 1997 $ 2,743,794.25
March 31, 1998 $ 3,727,836.75
June 30, 1998 $ 3,727,836.75
September 30, 1998 $ 3,727,836.75
December 31, 1998 $ 3,727,836.75
March 31, 1999 $ 4,711,879.25
June 30, 1999 $ 4,711,879.25
September 30, 1999 $ 4,711,879.25
December 31, 1999 $ 4,711,879.25
March 31, 2000 $ 4,711,879.25
June 30, 2000 $ 4,711,879.25
September 30, 2000 $ 4,711,879.25
December 31, 2000 $ 4,711,879.25
March 31, 2001 $ 5,695,921.25
June 30, 2001 $ 5,695,921.25
September 30, 2001 $ 5,695,921.25
December 31, 2001 $ 5,695,921.25
---------------
$ 78,133,860.25
(c) Interest on the Term Loan. Subject to the provisions
of Section 3.1, the Term Loan shall bear interest as
follows:
(i) Base Rate Loans. During such periods as the Term Loan
shall be comprised of Base Rate Loans, each such Base Rate
Loan shall bear interest at a per annum rate equal to the
sum of the Base Rate plus the Applicable Percentage; and
(ii) Eurodollar Loans. During such periods as the Term Loan
shall be comprised of Eurodollar Loans, each such
Eurodollar Loan shall bear interest at a per annum rate
equal to the sum of the applicable Eurodollar Rate plus
the Applicable Percentage.
Interest on the Term Loan shall be payable in arrears on each Interest
Payment Date.
(d) Term Notes. The Term Loan shall be evidenced by a duly
executed promissory note of the Borrower to each Lender in
substantially the form of Schedule 2.2(d) in the original
principal amount of each such Lender's Term Loan Committed
Amount.
2.3 Swingline Loan Subfacility.
(a) Swingline Commitment. During the Commitment Period,
subject to the terms and conditions hereof, the Swingline
Lender, in its individual capacity, agrees to make certain
revolving credit loans to the Borrower (each a "Swingline
Loan" and, collectively, the "Swingline Loans") for the
purposes hereinafter set forth; provided, however, (i) the
aggregate amount of Swingline Loans outstanding at any time
shall not exceed TEN MILLION DOLLARS ($10,000,000) (the
"Swingline Committed Amount"), and (ii) the sum of the
aggregate amount of outstanding Revolving Loans plus
Swingline Loans plus the aggregate amount of LOC Obligations
shall not exceed the aggregate Revolving Committed Amount.
Swingline Loans hereunder may be repaid and reborrowed in
accordance with the provisions hereof.
(b) Swingline Loan Borrowings.
(i) Notice of Borrowing and Disbursement. The Swingline
Lender will make Swingline Loans available to the Borrower
upon request or on the basis of such other arrangements as
may be agreed upon between the Swingline Lender and the
Borrower. A notice of request for Swingline Loan
borrowing may, but need not, be in the form of Schedule
2.1(b)(i). There shall be no minimum amount for Swingline
Loan borrowings hereunder.
(ii) Repayment of Swingline Loans. Each Swingline Loan
borrowing shall be due and payable on the earlier of (A)
the date of the next Revolving Loan borrowing, or (B) the
Termination Date. If, and to the extent, any Swingline
Loans shall be outstanding on the date of any Revolving
Loan borrowing, such Swingline Loans shall first be repaid
from the proceeds of such Revolving Loan borrowing prior
to disbursement to the Borrower. In addition, the
Swingline Lender may, at any time, in its sole discretion,
by written notice to the Borrower and the Agent, demand
repayment of its Swingline Loans by way of a Revolving
Loan borrowing, in which case the Borrower shall be deemed
to have requested a Revolving Loan borrowing comprised
entirely of Base Rate Loans in the amount of such
Swingline Loans; provided, however, that, in the following
circumstances, any such demand shall also be deemed to
have been given one Business Day prior to each of (i) the
Termination Date, (ii) the occurrence of any Event of
Default described in Section 9(e), (iii) upon acceleration
of the Obligations hereunder, whether on account of an
Event of Default described in Section 9(e) or any other
Event of Default, and (iv) the exercise of remedies in
accordance with the provisions of Section 9 hereof (each
such Revolving Loan borrowing made on account of any such
deemed request therefor as provided herein being
hereinafter referred to as a "Mandatory Borrowing").
Each Lender hereby irrevocably agrees to make such
Revolving Loans promptly upon any such request or deemed
request on account of each Mandatory Borrowing in the
amount and in the manner specified in the preceding
sentence and on the same such date notwithstanding (I) the
amount of Mandatory Borrowing may not comply with the
minimum amount for borrowings of Revolving Loans otherwise
required hereunder, (II) whether any conditions specified
in Section 5.2 are then satisfied, (III) whether a Default
or an Event of Default then exists, (IV) failure of any
such request or deemed request for Revolving Loans to be
made by the time otherwise required in Section 2.1(b)(i),
(V) the date of such Mandatory Borrowing, or (VI) any
reduction in the Revolving Committed Amount or termination
of the Commitments relating thereto immediately prior to
such Mandatory Borrowing or contemporaneous therewith. In
the event that any Mandatory Borrowing cannot for any
reason be made on the date otherwise required above
(including, without limitation, as a result of the
commencement of a proceeding in bankruptcy with respect to
the Borrower), then each Lender hereby agrees that it
shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for
any payments received from the Borrower on or after such
date and prior to such purchase) from the Swingline Lender
such participations in the outstanding Swingline Loans as
shall be necessary to cause each such Lender to share in
such Swingline Loans ratably based upon its respective
Revolving Commitment Percentage (determined before giving
effect to any termination of the Commitments pursuant to
Section 9), provided that (A) all interest payable on the
Swingline Loans shall be for the account of the Swingline
Lender until the date as of which the respective
participation is purchased, and (B) at the time any
purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to
pay to the Swingline Lender interest on the principal
amount of such participation purchased for each day from
and including the day upon which the Mandatory Borrowing
would otherwise have occurred to but excluding the date of
payment for such participation, at the rate equal to, if
paid within two (2) Business Days of the date of the
Mandatory Borrowing, the Federal Funds Rate, and
thereafter at a rate equal to the Base Rate.
(c) Interest on Swingline Loans. Subject to the provisions
of Section 3.1, Swingline Loans shall bear interest at a per
annum rate equal to the Base Rate plus the Applicable
Percentage. Interest on Swingline Loans shall be payable in
arrears on each Interest Payment Date.
(d) Swingline Note. The Swingline Loans shall be evidenced
by a duly executed promissory note of the Borrower to the
Swingline Lender in the original amount of the Swingline
Committed Amount and substantially in the form of Schedule
2.3(d).
2.4 Letter of Credit Subfacility.
(a) Issuance. Subject to the terms and conditions hereof
and of the LOC Documents, if any, and any other terms and
conditions which the Issuing Lender may reasonably require,
during the Commitment Period the Issuing Lender shall issue,
and the Lenders shall participate in, Letters of Credit for
the account of the Borrower from time to time upon request
in a form reasonably acceptable to the Issuing Lender;
provided, however, that (i) the aggregate amount of LOC
Obligations shall not at any time exceed FIFTEEN MILLION
DOLLARS ($15,000,000) (the "LOC Committed Amount"), and
(ii) the sum of the aggregate amount of Revolving Loans plus
Swingline Loans plus the aggregate amount of LOC Obligations
shall not at any time exceed the aggregate Revolving
Committed Amount. Except as otherwise expressly agreed upon
by all of the Lenders, no Letter of Credit shall have an
original expiry date more than one year from the date of
issuance or extension; provided, however, that so long as no
Default or Event of Default shall have occurred and be
continuing and subject to the other terms and conditions to
the issuance of Letters of Credit hereunder, the expiry
dates of Letters of Credit may be extended annually on each
anniversary date of their date of issuance for an additional
period not to exceed one year; and provided further that no
Letter of Credit as originally issued or as extended, shall
have an expiry date extending beyond the Termination Date,
except that prior to the Termination Date a Letter of Credit
may be issued or extended with an expiry date extending
beyond the Termination Date if, and to the extent that the
Borrower shall provide cash collateral to the Issuing Lender
on the date of issuance or extension in an amount equal to
the maximum amount available to be drawn under such Letter
of Credit. Each Letter of Credit shall comply with the
related LOC Documents. The issuance and expiry date of each
Letter of Credit shall be a Business Day. Letters of Credit
shall be issued or extended in minimum original face amounts
of $200,000. In the case of a conflict in the terms of the
LOC Documents and this Credit Agreement, the terms of this
Credit Agreement shall control.
(b) Notice and Reports. The request for the issuance of a
Letter of Credit shall be submitted to the Issuing Lender
and the Agent at least five (5) Business Days prior to the
requested date of issuance. The Issuing Lender will, at
least quarterly and more frequently upon request, provide to
the Agent for dissemination to the Lenders a detailed report
specifying the Letters of Credit which are then issued and
outstanding and any activity with respect thereto which may
have occurred since the date of the prior report, and
including therein, among other things, the account party,
the beneficiary, the face amount, expiry date as well as any
payments or expirations which may have occurred. The
Issuing Lender will further provide to the Agent promptly
upon request copies of the Letters of Credit. The Issuing
Lender will provide to the Agent prompt notice of any
changes in LOC Obligations issued by it, and more frequently
upon request, a summary report of the nature and extent of
LOC Obligations then outstanding.
(c) Participations. Each Lender, with respect to the
Existing Letters of Credit, hereby purchases a participation
interest in such Existing Letters of Credit and with respect
to Letters of Credit issued on or after the Closing Date,
upon issuance of a Letter of Credit, shall be deemed to have
purchased without recourse a risk participation from the
Issuing Lender in such Letter of Credit and the obligations
arising thereunder and any collateral relating thereto, if
any, in each case in an amount equal to its LOC Commitment
Percentage of the obligations under such Letter of Credit
and shall absolutely, unconditionally and irrevocably
assume, as primary obligor and not as surety, and be
obligated to pay to the Issuing Lender therefor and
discharge when due, its LOC Commitment Percentage of the
obligations arising under such Letter of Credit. Without
limiting the scope and nature of each Lender's participation
in any Letter of Credit, to the extent that the Issuing
Lender has not been reimbursed as required hereunder or
under any LOC Document, each such Lender shall pay to the
Issuing Lender its LOC Commitment Percentage of such
unreimbursed drawing in same day funds on the day of
notification by the Issuing Lender of an unreimbursed
drawing pursuant to the provisions of subsection (d) hereof.
The obligation of each Lender to so reimburse the Issuing
Lender shall be absolute and unconditional and shall not be
affected by the occurrence of a Default, an Event of Default
or any other occurrence or event. Any such reimbursement
shall not relieve or otherwise impair the obligation of the
Borrower to reimburse the Issuing Lender under any Letter of
Credit, together with interest as hereinafter provided.
(d) Reimbursement. In the event of any drawing under any
Letter of Credit, the Issuing Lender will promptly notify
the Borrower and the Agent. The Borrower shall reimburse
the Issuing Lender on the day of drawing under any Letter of
Credit (either with the proceeds of a Swingline Loan or
Revolving Loan obtained hereunder or otherwise) in same day
funds as provided herein or in the LOC Documents. If the
Borrower shall fail to reimburse the Issuing Lender as
provided herein, the unreimbursed amount of such drawing
shall bear interest at a per annum rate equal to the Base
Rate plus two percent (2%). Unless the Borrower shall
immediately notify the Issuing Lender and the Agent of its
intent to otherwise reimburse the Issuing Lender, the
Borrower shall be deemed to have requested a Swingline Loan,
or if and to the extent Swingline Loans shall not be
available, a Revolving Loan in the amount of the drawing as
provided in subsection (e) hereof, the proceeds of which
will be used to satisfy the reimbursement obligations. The
Borrower's reimbursement obligations hereunder shall be
absolute and unconditional under all circumstances
irrespective of any rights of set-off, counterclaim or
defense to payment the Borrower may claim or have against
the Issuing Lender, the Agent, the Lenders, the beneficiary
of the Letter of Credit drawn upon or any other Person,
including without limitation any defense based on any
failure of the Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the
Letter of Credit. The Issuing Lender will promptly notify
the other Lenders of the amount of any unreimbursed drawing
and each Lender shall promptly pay to the Agent for the
account of the Issuing Lender in Dollars and in immediately
available funds, the amount of such Lender's LOC Commitment
Percentage of such unreimbursed drawing. Such payment shall
be made on the day such notice is received by such Lender
from the Issuing Lender if such notice is received at or
before 2:00 P.M. (Charlotte, North Carolina time), otherwise
such payment shall be made at or before 12:00 Noon
(Charlotte, North Carolina time) on the Business Day next
succeeding the day such notice is received. If such Lender
does not pay such amount to the Issuing Lender in full upon
such request, such Lender shall, on demand, pay to the Agent
for the account of the Issuing Lender interest on the unpaid
amount during the period from the date of such drawing until
such Lender pays such amount to the Issuing Lender in full
at a rate per annum equal to, if paid within two (2)
Business Days of the date of such request, the Federal Funds
Rate and thereafter at a rate equal to the Base Rate. Each
Lender's obligation to make such payment to the Issuing
Lender, and the right of the Issuing Lender to receive the
same, shall be absolute and unconditional, shall not be
affected by any circumstance whatsoever and without regard
to the termination of this Credit Agreement or the
Commitments hereunder, the existence of a Default or Event
of Default or the acceleration of the Obligations hereunder
and shall be made without any offset, abatement, withholding
or reduction whatsoever.
(e) Repayment with Revolving Loans. On any day on which
the Borrower shall be deemed to have requested, (i) a
Swingline Loan borrowing to reimburse a drawing under a
Letter of Credit, the Swingline Lender shall make the
Swingline Loan advance pursuant to the terms of the request
or deemed request in accordance with the provisions for
Swingline Loan advances hereunder, or (ii) a Revolving Loan
to reimburse a drawing under a Letter of Credit, the Agent
shall give notice to the Lenders that a Revolving Loan has
been requested or deemed requested in connection with a
drawing under a Letter of Credit, in which case a Revolving
Loan borrowing comprised entirely of Base Rate Loans (each
such borrowing, a "Mandatory Borrowing") shall be
immediately made (without giving effect to any termination
of the Commitments pursuant to Section 9) pro rata based on
each Lender's respective Revolving Commitment Percentage
(determined before giving effect to any termination of the
Commitments pursuant to Section 9) and in the case of both
clauses (i) and (ii) the proceeds thereof shall be paid
directly to the Issuing Lender for application to the
respective LOC Obligations. Each Lender hereby irrevocably
agrees to make such Revolving Loans immediately upon any
such request or deemed request on account of each Mandatory
Borrowing in the amount and in the manner specified in the
preceding sentence and on the same such date notwithstanding
(i) the amount of Mandatory Borrowing may not comply with
the minimum amount for borrowings of Revolving Loans
otherwise required hereunder, (ii) whether any conditions
specified in Section 5.2 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) failure for
any such request or deemed request for Revolving Loan to be
made by the time otherwise required in Section 2.1(b), (v)
the date of such Mandatory Borrowing, or (vi) any reduction
in the Revolving Committed Amount after any such Letter of
Credit may have been drawn upon; provided, however, that in
the event any such Mandatory Borrowing should be less than
the minimum amount for borrowings of Revolving Loans
otherwise provided in Section 2.1(b)(ii), the Borrower shall
pay to the Agent for its own account an administrative fee
of $500. In the event that any Mandatory Borrowing cannot
for any reason be made on the date otherwise required above
(including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower or the Company), then each such
Lender hereby agrees that it shall forthwith fund (as of the
date the Mandatory Borrowing would otherwise have occurred,
but adjusted for any payments received from the Borrower on
or after such date and prior to such purchase) its
Participation Interests in the outstanding LOC Obligations;
provided, further, that in the event any Lender shall fail
to fund its Participation Interest on the day the Mandatory
Borrowing would otherwise have occurred, then the amount of
such Lender's unfunded Participation Interest therein shall
bear interest payable to the Issuing Lender upon demand, at
the rate equal to, if paid within two (2) Business Days of
any such request, the Federal Funds Rate, and thereafter at
a rate equal to the Base Rate.
(f) Modification, Extension. The issuance of any
supplement, modification, amendment, renewal, or extension
to any Letter of Credit shall, for purposes hereof, be
treated in all respects the same as the issuance of a new
Letter of Credit hereunder.
(g) Uniform Customs and Practices. The Issuing Lender
shall have the Letters of Credit be subject to The Uniform
Customs and Practice for Documentary Credits, as published
as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be
incorporated therein and deemed in all respects to be a part
thereof.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 Default Rate.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law,
interest on the Loans and any other amounts owing hereunder or under
the other Credit Documents shall bear interest, payable on demand, at
a per annum rate 2% greater than the rate which would otherwise be
applicable (or if no rate is applicable, whether in respect of
interest, fees or other amounts, then 2% greater than the Base Rate).
3.2 Extension and Conversion.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to
convert Loans into Loans of another type; provided, however, that (i)
except as provided in Section 3.7, Eurodollar Loans may be converted
into Base Rate Loans only on the last day of the Interest Period
applicable thereto, (ii) Eurodollar Loans may be extended, and Base
Rate Loans may be converted into Eurodollar Loans, only if no Default
or Event of Default is in existence on the date of extension or
conversion, (iii) Loans extended as, or converted into, Eurodollar
Loans shall be subject to the terms of the definition of "Interest
Period" set forth in Section 1.1 and shall be in such minimum amounts
as provided in Section 2.1(b)(ii), (iv) no more than 20 separate
Eurodollar Loans shall be outstanding hereunder at any time, (v) any
request for extension or conversion of a Eurodollar Loan which shall
fail to specify an Interest Period shall be deemed to be a request for
an Interest Period of one month and (vi) Swingline Loans may not be
extended or converted pursuant to this Section 3.2. Each such
extension or conversion shall be effected by the Borrower by giving a
Notice of Extension/Conversion (or telephone notice promptly confirmed
in writing) to the Agent prior to 11:00 A.M. (Charlotte, North
Carolina time) on the Business Day of, in the case of the conversion
of a Eurodollar Loan into a Base Rate Loan and on the third Business
Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of
the proposed extension or conversion, specifying the date of the
proposed extension or conversion, the Loans to be so extended or
converted, the types of Loans into which such Loans are to be
converted and, if appropriate, the applicable Interest Periods with
respect thereto. Each request for extension or conversion shall
constitute a representation and warranty by the Borrower of the
matters specified in subsections as appropriate (a) and (b), and in (c)
or (d) of Section 5.2. In the event the Borrower fails to request
extension or conversion of any Eurodollar Loan in accordance with this
Section, or any such conversion or extension is not permitted or
required by this Section, then such Loans shall be automatically
converted into Base Rate Loans at the end of their Interest Period.
The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
3.3 Reductions in Commitments and Prepayments.
(a) Voluntary Reduction in Revolving Commitment. The Borrower
may from time to time permanently reduce the aggregate amount of
the Revolving Commitments in whole or in part without premium or
penalty except as provided in Section 3.10 upon three (3)
Business Days' prior written notice to the Agent; provided that
after giving effect to any such voluntary reduction the sum of
Revolving Loans plus Swingline Loans plus LOC Obligations then
outstanding shall not exceed the Aggregate Revolving Committed
Amount, as reduced. Partial reductions in the aggregate
Revolving Commitment shall in each case be in a minimum aggregate
amount of $1,000,000 and integral multiples of $500,000 in excess
thereof.
(b) Mandatory Reductions in Revolving Commitments and Mandatory
Prepayments.
(i) Asset Sales and Dispositions. Other than with respect to
Specified Sales and transfers described in Section 8.4(a)(iii)
which shall not be subject to this subsection (i), the
aggregate amount of the Commitments (including for purposes
hereof, the aggregate amount of the Revolving Commitments and
the aggregate amount of the Term Loan then outstanding) shall
be automatically and permanently reduced by an aggregate amount
equal to 100% of the Net Proceeds received by the Borrower or
any its Subsidiaries from the sale, transfer or disposition of
assets or from a Recovery Event (to the extent such Net
Proceeds received in connection with a Recovery Event are not
reinvested as provided in Section 8.4(a)(ii)). The prepayments
made pursuant to this subsection (i) shall be applied as
provided in subsection (iv) hereof. Any payment owing
hereunder, whether in respect of the Revolving Loans or the
Term Loan on account of any such reduction in Commitments under
this subsection (i) shall be made to the Agent promptly (but in
any event within five (5) Business Days) following receipt by
the Borrower or a Subsidiary of the Net Proceeds therefrom
(taking into account any periods permitted for reinvestment
thereof as provided in Section 8.4(a)(ii)).
(ii) Equity Transactions. The aggregate amount of the
Commitments (including for purposes hereof, the aggregate
amount of the Revolving Commitments and the aggregate amount of
the Term Loan then outstanding) shall be automatically and
permanently reduced by an aggregate amount equal to 50% of the
Net Proceeds received by the Borrower or any its Subsidiaries
in connection with an Equity Transaction. The prepayments made
pursuant to this subsection (ii) shall be applied as provided
in subsection (iv) hereof. Any payment owing hereunder,
whether in respect of the Revolving Loans or the Term Loan on
account of any such reduction in Commitments under this
subsection (ii) shall be made to the Agent promptly (but in any
event within five (5) Business Days) following receipt by the
Borrower or a Subsidiary of the Net Proceeds therefrom.
(iii) Debt Transactions. The aggregate amount of the
Commitments (including for purposes hereof, the aggregate
amount of the Revolving Commitments and the aggregate amount of
the Term Loan then outstanding) shall be automatically and
permanently reduced by an aggregate amount equal to 100% of the
Net Proceeds received by the Borrower or any its Subsidiaries
in connection with a Debt Transaction. The prepayments made
pursuant to this subsection (iii) shall be applied as provided
in subsection (iv) hereof. Any payment owing hereunder,
whether in respect of the Revolving Loans or the Term Loan on
account of any such reduction in Commitments under this
subsection (iii) shall be made to the Agent promptly (but in
any event within five (5) Business Days) following receipt by
the Borrower or a Subsidiary of the Net Proceeds therefrom.
(iv) Application. In the case of mandatory reduction in the
Commitments by operation of subsections (i), (ii) or (iii)
hereof, the Commitments (including for purposes hereof, the
aggregate amount of the Revolving Commitments and the aggregate
amount of the Term Loan then outstanding) shall, be reduced as
follows:
First, prepayment shall be made on the Term Loan until paid in
full;
Second, the aggregate amount of the Revolving Commitment shall
be permanently reduced and the Revolving Loans outstanding
thereunder shall paid until reduced to zero; and
Third, the aggregate amount of the Revolving Commitment shall
be permanently reduced and payment shall be made to a cash
collateral account to secure outstanding LOC Obligations until
reduced to zero;
Mandatory payments made on the Term Loan in accordance with this
subsection (b) shall be made to principal installments in inverse
order of maturity. Payments made on or in respect of the Revolving
Commitments shall be applied first to the Swingline Loans, then to
Revolving Loans then outstanding until paid in full and then to a
cash collateral account in respect of the LOC Obligations. Payments
on Loans hereunder shall be applied first to Base Rate Loans and
then to Eurodollar Loans in direct order of their Interest Period
maturities.
(v) Mandatory Prepayment on Revolving Loans. If at any time the
sum of the aggregate amount of Revolving Loans plus Swingline
Loans plus LOC Obligations then outstanding shall exceed the
Aggregate Revolving Committed Amount, as reduced from time to
time, the Borrower shall immediately make payment on the
Swingline Loans and then the Revolving Loans and then to a cash
collateral account in respect of the LOC Obligations, in an
amount sufficient to eliminate the deficiency. Any such payments
shall be applied first to Base Rate Loans and then to Eurodollar
Loans in direct order of their Interest Period maturities.
(c) Voluntary Prepayments. Loans may be prepaid in whole or in
part without premium or penalty; provided that (i) Eurodollar
Loans may not be prepaid other than at the end of the Interest
Period applicable thereto and only then on three (3) Business
Days' prior written notice to the Agent, and (ii) each such
partial prepayment shall be in a minimum aggregate principal
amount of $1,000,000 and integral multiples of $500,000 in excess
thereof. Amounts prepaid on the Revolving Loans may be
reborrowed in accordance with the provisions hereof. Amounts
prepaid on the Term Loan shall be applied to principal
installments in inverse order of maturity and may not be
reborrowed.
(d) Notice. Except as otherwise provided herein, the Borrower
will provide notice to the Agent of any prepayment by 11:00 A.M.
(Charlotte, North Carolina time) on the day prior to the date of
prepayment.
3.4 Fees.
(a) Commitment Fee. In consideration of the Commitments by the
Lenders hereunder, the Borrower agrees to pay to the Agent for
the ratable benefit of the Lenders a commitment fee (the
"Commitment Fee") in an amount equal to the Applicable
Percentage per annum on the average daily unused portion of the
Revolving Committed Amount in effect from time to time. For
purposes of computing the Commitment Fee, Swingline Loans shall
not be considered usage under the Revolving Committed Amount.
The Commitment Fee shall be payable quarterly in arrears on the
15th day following the last day of each calendar quarter for
the prior calendar quarter and on the Termination Date.
(b) Letter of Credit Fee. In consideration of the issuance of
Letters of Credit hereunder, the Borrower or other Credit Party
agrees to pay to the Agent for the ratable benefit of the
Lenders a fee (the "Letter of Credit Fee") equal to the
Applicable Percentage per annum on the average daily maximum
amount available to be drawn under each Letter of Credit from
the date of issuance to the date of expiration. In addition to
the foregoing fee, the Borrower or other Credit Party shall pay
to the Issuing Lender for its own account without sharing by
the other Lenders an amount equal to one-eighth of one percent
(1/8%) per annum on the average daily maximum amount available to
be drawn under each Letter of Credit issued by such Issuing
Lender from the date of issuance to the date of expiration.
The Letter of Credit Fee will be payable quarterly in arrears
on the 15th day following the last day of each calendar quarter
and on the Termination Date.
(c) Issuing Lender Fees. In addition to the Letter of Credit
Fees payable pursuant to subsection (b) above, the Borrower
shall pay to the Issuing Lender for its own account without
sharing by the other Lenders the customary charges from time to
time of the Issuing Lender with respect to the issuance,
amendment, transfer, administration, cancellation and
conversion of, and drawings under, such Letters of Credit
(collectively, the "Issuing Lender Fees").
(d) Agent's Fees. The Borrower agrees to pay to the Agent, for
its own account, the annual administrative fee, structuring fee
and other fees (collectively, the "Agent's Fees") referred to
in the Agent's Fee Letter.
3.5 Capital Adequacy.
If any Lender has reasonably determined that the adoption or
effectiveness of any applicable law, rule or regulation regarding
capital adequacy made after the date hereof, or any change therein
made after the date hereof, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration
thereof made after the date hereof, or compliance by such Lender or
its parent company with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency made after the date
hereof, has or would have the effect of reducing the rate of return on
such Lender's of its parent company's capital or assets as a
consequence of its commitments or obligations hereunder to a level
below that which such Lender could have achieved but for such
adoption, effectiveness, change or compliance (taking into
consideration the policies of such Lender and its parent company with
respect to capital adequacy), then, within 10 Business Days after the
Borrower's receipt of the certificate referred to in the next
sentence, the Borrower shall pay to such Lender such additional amount
or amounts as will compensate such Lender and its parent company for
such reduction; provided that no such amounts shall be payable with
respect to reduction in rate of return incurred more than three (3)
months before such Lender demands compensation under this Section 3.5.
A certificate as to the amount of such reduction in rate of return,
the good faith basis therefor and setting forth in reasonable detail
the calculations used by the applicable Lender to arrive at the amount
or amounts claimed to be due, shall be submitted to the Borrower and
the Agent. Each determination by a Lender of amounts owing under this
Section shall be rebuttably presumptive evidence of the matters set
forth therein. The provisions of this Section shall survive
termination of this Credit Agreement and the payment of the Loans and
all other amounts payable hereunder.
3.6 Inability To Determine Interest Rate.
If prior to the first day of any Interest Period, the Agent shall have
reasonably determined (which determination shall be conclusive and
binding upon the Borrower) that, by reason of circumstances affecting
the relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period, the Agent
shall give telecopy or telephonic notice thereof to the Borrower and
the Lenders as soon as practicable thereafter. If such notice is
given (x) any Eurodollar Loans requested to be made on the first day
of such Interest Period shall be made as Base Rate Loans, (y) any
Loans that were to have been converted on the first day of such
Interest Period to or continued as Eurodollar Loans shall be converted
to or continued as Base Rate Loans and (z) any outstanding Eurodollar
Loans shall be converted, on the first day of such Interest Period, to
Base Rate Loans. Until such notice has been withdrawn by the Agent,
no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert Base Rate Loans to
Eurodollar Loans.
3.7 Illegality.
Notwithstanding any other provision herein, if the adoption of or any
change in any Requirement of Law or in the interpretation or
application thereof occurring after the Closing Date shall make it
unlawful for any Lender to make or maintain Eurodollar Loans as
contemplated by this Credit Agreement, (a) such Lender shall promptly
give written notice of such circumstances to the Borrower and the
Agent (which notice shall be withdrawn whenever such circumstances no
longer exist), (b) the commitment of such Lender hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and convert a Base
Rate Loan to Eurodollar Loans shall forthwith be canceled and, until
such time as it shall no longer be unlawful for such Lender to make or
maintain Eurodollar Loans, such Lender shall then have a commitment
only to make a Base Rate Loan when a Eurodollar Loan is requested and
(c) such Lender's Loans then outstanding as Eurodollar Loans, if any,
shall be converted automatically to Base Rate Loans on the respective
last days or the then current Interest Periods with respect to such
Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last
day of the then current Interest Period with respect thereto, the
Borrower shall pay to such Lender such amounts, if any, as may be
required pursuant to subsection 3.10.
8 .3 Requirements of Law.
If the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof applicable to any Lender, or
compliance by any Lender with any request or directive (whether or not
having the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date (or, if
later, the date on which such Lender becomes a Lender):
(i) shall subject such Lender to any tax of any kind whatsoever
on or in respect of any Letter of Credit, letter of credit
application or any Eurodollar Loans made by it or its
obligation to make Eurodollar Loans, or change the basis of
taxation of payments to such Lender in respect thereof (except
for Non-Excluded Taxes covered by subsection 3.9 (including
Non-Excluded Taxes imposed solely by reason of any failure of
such Lender to comply with its obligations under subsection
3.9(b)) and changes in taxes measured by or imposed upon the
overall net income, or franchise tax (imposed in lieu of such
net income tax), of such Lender or its applicable lending
office, branch, or any affiliate thereof);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account
of, advances, loans or other extensions of credit by, or any
other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender deems to be material, of
making, converting into, continuing or maintaining Eurodollar Loans or
to reduce any amount receivable hereunder in respect thereof, then, in
any such case, upon notice to the Borrower from such Lender, through
the Agent, in accordance herewith, the Borrower shall promptly pay
such Lender, upon its demand, any additional amounts necessary to
compensate such Lender for such increased cost or reduced amount
receivable, provided that, in any such case, the Borrower may elect to
convert the Eurodollar Loans made by such Lender hereunder to Base
Rate Loans by giving the Agent at least one Business Day's notice of
such election, in which case the Borrower shall promptly pay to such
Lender, upon demand, without duplication, such amounts, if any, as may
be required pursuant to subsection 3.10. If any Lender becomes
entitled to claim any additional amounts pursuant to this subsection,
it shall provide prompt notice thereof to the Borrower, through the
Agent, certifying (x) that one of the events described in this Section
3.8 has occurred and describing in reasonable detail the nature of
such event, (y) as to the increased cost or reduced amount resulting
from such event and (z) as to the additional amount demanded by such
Lender and a reasonably detailed explanation of the calculation
thereof. Such a certificate as to any additional amounts payable
pursuant to this subsection submitted by such Lender, through the
Agent, to the Borrower shall be conclusive in the absence of manifest
error. This covenant shall survive the termination of this Credit
Agreement and the payment of the Loans and all other amounts payable
hereunder.
3.9 Taxes.
(a) Except as provided below in this subsection, all payments
made by the Borrower under this Credit Agreement and any Notes
shall be made free and clear of, and without deduction or
withholding for or on account of, any present or future income,
stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority,
excluding taxes measured by or imposed upon the overall net
income of any Lender or its applicable lending office, or any
branch or affiliate thereof, and all franchise taxes, branch
taxes, taxes on doing business or taxes on the overall capital or
net worth of any Lender or its applicable lending office, or any
branch or affiliate thereof, in each case imposed in lieu of net
income taxes, imposed: (i) by the jurisdiction under the laws of
which such Lender, applicable lending office, branch or affiliate
is organized or is located, or in which its principal executive
office is located, or any nation within which such jurisdiction
is located or any political subdivision thereof; or (ii) by
reason of any connection between the jurisdiction imposing such
tax and such Lender, applicable lending office, branch or
affiliate other than a connection arising solely from such Lender
having executed, delivered or performed its obligations, or
received payment under or enforced, this Credit Agreement or any
Notes. If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes")
are required to be withheld from any amounts payable to the Agent
or any Lender hereunder or under any Notes, (A) the amounts so
payable to the Agent or such Lender shall be increased to the
extent necessary to yield to the Agent or such Lender (after
payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts
specified in this Credit Agreement and any Notes, provided,
however, that the Borrower shall be entitled to deduct and
withhold any Non-Excluded Taxes and shall not be required to
increase any such amounts payable to any Lender that is not
organized under the laws of the United States of America or a
state thereof if such Lender fails to comply with the
requirements of paragraph (b) of this subsection whenever any
Non-Excluded Taxes are payable by the Borrower, and (B) as
promptly as possible thereafter the Borrower shall send to the
Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the
Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the Agent the
required receipts or other required documentary evidence, the
Borrower shall indemnify the Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable
by the Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of
this Credit Agreement and the payment of the Loans and all other
amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(X)(i) on or before the date of any payment by the
Borrower under this Credit Agreement or Notes to such
Lender, deliver to the Borrower and the Agent (A) two duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case
may be, certifying that it is entitled to receive payments
under this Credit Agreement and any Notes without deduction
or withholding of any United States federal income taxes and
(B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be, certifying
that it is entitled to an exemption from United States
backup withholding tax;
(ii) deliver to the Borrower and the Agent two further
copies of any such form or certification on or before the
date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a
change in the most recent form previously delivered by it to
the Borrower; and
(iii) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by
the Borrower or the Agent; or
(Y) in the case of any such Lender that is not a "bank" within
the meaning of Section 881(c)(3)(A) of the Code, (i) represent to the
Borrower (for the benefit of the Borrower and the Agent) that it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code,
(ii) agree to furnish to the Borrower on or before the date of any
payment by the Borrower, with a copy to the Agent (A) a certificate
substantially in the form of Schedule 3.10 (any such certificate a
"U.S. Tax Compliance Certificate") and (B) two accurate and
complete original signed copies of Internal Revenue Service Form W-
8, or successor applicable form certifying to such Lender's legal
entitlement at the date of such certificate to an exemption from
U.S. withholding tax under the provisions of Section 881(c) of the
Code with respect to payments to be made under this Credit Agreement
and any Notes (and to deliver to the Borrower and the Agent two
further copies of such form on or before the date it expires or
becomes obsolete and after the occurrence of any event requiring a
change in the most recently provided form and, if necessary, obtain
any extensions of time reasonably requested by the Borrower or the
Agent for filing and completing such forms), and (iii) agree, to the
extent legally entitled to do so, upon reasonable request by the
Borrower, to provide to the Borrower (for the benefit of the
Borrower and the Agent) such other forms as may be reasonably
required in order to establish the legal entitlement of such Lender
to an exemption from withholding with respect to payments under this
Credit Agreement and any Notes;
unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with
respect to it and such Lender so advises the Borrower and the Agent.
Each Person that shall become a Lender or a participant of a Lender
pursuant to subsection 11.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection,
provided that in the case of a participant of a Lender the
obligations of such participant of a Lender pursuant to this
subsection (b) shall be determined as if the participant of a Lender
were a Lender except that such participant of a Lender shall furnish
all such required forms, certifications and statements to the Lender
from which the related participation shall have been purchased.
(c) In the event that any Lender requests payment by the
Borrower of any additional amounts pursuant to subsection (a) of
this Section 3.9, then, provided that no Default or Event of
Default has occurred and is continuing at such time, the Borrower
may, at its own expense (such expense to include any transfer fee
payable to the Agent under Section 11.6(b)), and in its sole
discretion require such Lender to transfer and assign in whole or
in part, without recourse (in accordance with and subject to the
terms and conditions of Section 11.6(b)), all or part of its
interests, rights and obligations under this Credit Agreement to
an Eligible Transferee which shall assume such assigned
obligations; provided that (i) such assignment shall not relieve
the Borrower from its obligations to pay such additional amounts
that may be due in accordance with subsection (a) of this Section
3.9, (ii) such assignment shall not conflict with any law, rule
or regulation or order of any court or other Governmental
Authority and (iii) the Borrower or such Eligible Transferee
shall have paid to the assigning Lender in immediately available
funds the principal of and interest accrued to the date of such
payment on the Loans made by it hereunder and all accrued Fees
and other amounts owed to it hereunder.
3.10 Indemnity.
The Borrower agrees to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or
incur (other than through such Lender's gross negligence or willful
misconduct) as a consequence of (a) default by the Borrower in making
a borrowing of, conversion into or continuation of Eurodollar Loans
after the Borrower has given a notice requesting the same in
accordance with the provisions of this Credit Agreement, (b) default
by the Borrower in making any prepayment of a Eurodollar Loan after
the Borrower has given a notice thereof in accordance with the
provisions of this Credit Agreement or (c) the making of a prepayment of
Eurodollar Loans on a day which is not the last day of an Interest
Period with respect thereto. Such indemnification may include an
amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed,
converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the
last day of the applicable Interest Period (or, in the case of a
failure to borrow, convert or continue, the Interest Period that would
have commenced on the date of such failure) in each case at the
applicable rate of interest for such Eurodollar Loans provided for
herein (excluding, however, the Applicable Percentage included
therein, if any) over (ii) the amount of interest (as reasonably
determined by such Lender) which would have accrued to such Lender on
such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank Eurodollar market. This covenant
shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
3.11 Pro Rata Treatment.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or prepayment of principal
of any Loan, each payment of interest on the Loans, each payment
of Commitment Fees, each reduction of the Revolving Committed
Amount and each conversion or extension of any Loan, shall be
allocated pro rata among the Lenders in accordance with the
respective Commitment Percentages relating to such respective
Loans and Participation Interests.
(b) Advances. Unless the Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will
not make the amount that would constitute its Commitment
Percentage of such borrowing available to the Agent, the Agent
may assume that such Lender is making such amount available to
the Agent, and the Agent may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. If such
amount is not made available to the Agent by such Lender within
the time period specified therefor hereunder, such Lender shall
pay to the Agent, on demand, such amount with interest thereon at
a rate equal to the Federal Funds Rate for the period until such
Lender makes such amount immediately available to the Agent. A
certificate of the Agent submitted to any Lender with respect to
any amounts owing under this subsection shall be conclusive in
the absence of manifest error. If such Lender's Commitment
Percentage of such borrowing is not made available to the Agent
by such Lender within two Business Days of the date of the
related borrowing, (i) the Agent shall notify the Borrower of the
failure of such Lender to make such amount available to the Agent
and the Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to Base Rate
Loans hereunder, on demand, from the Borrower and (ii) then the
Borrower may, without waiving any rights it may have against such
Lender, borrow a like amount on an unsecured basis from any
commercial bank for a period ending on the date upon which such
Lender does in fact make such borrowing available, provided that
at the time such borrowing is made and at all times while such
amount is outstanding the Borrower would be permitted to borrow
such amount pursuant to subsection 2.1 of this Credit Agreement.
3.12 Sharing of Payments.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan or any other obligation
owing to such Lender under this Credit Agreement through the exercise
of a right of setoff, banker's lien or counterclaim, or pursuant to a
secured claim under Section 506 of Title 11 of the United States Code
or other security or interest arising from, or in lieu of, such
secured claim, received by such Lender under any applicable
bankruptcy, insolvency or other similar law or otherwise, or by any
other means, in excess of its pro rata share of such payment as
provided for in this Credit Agreement, such Lender shall promptly
purchase from the other Lenders a participation in such Loans and
other obligations in such amounts, and make such other adjustments
from time to time, as shall be equitable to the end that all Lenders
share such payment in accordance with their respective ratable shares
as provided for in this Credit Agreement. The Lenders further agree
among themselves that if payment to a Lender obtained by such Lender
through the exercise of a right of setoff, banker's lien, counterclaim
or other event as aforesaid shall be rescinded or must otherwise be
restored, each Lender which shall have shared the benefit of such
payment shall, by repurchase of a participation theretofore sold,
return its share of that benefit (together with its share of any
accrued interest payable with respect thereto) to each Lender whose
payment shall have been rescinded or otherwise restored. The Borrower
agrees that any Lender so purchasing such a participation may, to the
fullest extent permitted by law, exercise all rights of payment,
including setoff, banker's lien or counterclaim, with respect to such
participation as fully as if such Lender were a holder of such Loan or
other obligation in the amount of such participation. Except as
otherwise expressly provided in this Credit Agreement, if any Lender
or the Agent shall fail to remit to the Agent or any other Lender an
amount payable by such Lender or the Agent to the Agent or such other
Lender pursuant to this Credit Agreement on the date when such amount
is due, such payments shall be made together with interest thereon for
each date from the date such amount is due until the date such amount
is paid to the Agent or such other Lender at a rate per annum equal to
the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim
in lieu of a setoff to which this Section 3.12 applies, such Lender
shall, to the extent practicable, exercise its rights in respect of
such secured claim in a manner consistent with the rights of the
Lenders under this Section 3.12 to share in the benefits of any
recovery on such secured claim.
3.13 Place and Manner of Payments.
Except as otherwise specifically provided herein, all payments
hereunder shall be made to the Agent in dollars in immediately
available funds, without offset, deduction, counterclaim or
withholding of any kind, at its offices at the Agent's office
specified in Schedule 11.2 not later than 2:00 P.M. (Charlotte, North
Carolina time) on the date when due. Payments received after such
time shall be deemed to have been received on the next succeeding
Business Day. The Agent may (but shall not be obligated to) debit the
amount of any such payment which is not made by such time to any
ordinary deposit account of the Borrower maintained with the Agent
(with notice to the Borrower). The Borrower shall, at the time it
makes any payment under this Credit Agreement, specify to the Agent
the Loans, Fees or other amounts payable by the Borrower hereunder to
which such payment is to be applied (and in the event that it fails so
to specify, or if such application would be inconsistent with the
terms hereof, the Agent shall distribute such payment to the Lenders
in such manner as the Agent may determine to be appropriate in respect
of obligations owing by the Borrower hereunder, subject to the terms
of Section 3.11). The Agent will distribute such payments to such
Lenders, if any such payment is received prior to 2:00 p.m.
(Charlotte, North Carolina time) on a Business Day in like funds as
received prior to the end of such Business Day and otherwise the Agent
will distribute such payment to such Lenders on the next succeeding
Business Day. Whenever any payment hereunder shall be stated to be
due on a day which is not a Business Day, the due date thereof shall
be extended to the next succeeding Business Day (subject to accrual of
interest and Fees for the period of such extension), except that in
the case of Eurodollar Loans, if the extension would cause the payment
to be made in the next following calendar month, then such payment
shall instead be made on the next preceding Business Day. Except as
expressly provided otherwise herein, all computations of interest and
fees shall be made on the basis of actual number of days elapsed over
a year of 360 days, except with respect to computation of interest on
Base Rate Loans which shall be calculated based on a year of 365 or
366 days, as appropriate. Interest shall accrue from and include the
date of borrowing, but exclude the date of payment.
3.14 Indemnification; Nature of Issuing Lender's Duties.
(a) In addition to its other obligations under Section 2.4, the
Borrower hereby agrees to protect, indemnify, pay and save each
Issuing Lender harmless from and against any and all claims,
demands, liabilities, damages, losses, costs, charges and
expenses (including reasonable attorneys' fees) that the Issuing
Lender may incur or be subject to as a consequence, direct or
indirect, of (A) the issuance of any Letter of Credit or (B) the
failure of the Issuing Lender to honor a drawing under a Letter
of Credit as a result of any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government
or governmental authority (all such acts or omissions, herein
called "Government Acts").
(b) As between the Borrower and the Issuing Lender, the Borrower
shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuing Lender
shall not be responsible: (i) for the form, validity,
sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the
application for and issuance of 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, that may prove to be invalid or ineffective
for any reason; (iii) for failure of the beneficiary of a Letter
of Credit to comply fully with conditions required in order to
draw upon a Letter of Credit; (iv) for errors, omissions,
interruptions or delays in transmission or delivery of any
messages, by mail, cable, telegraph, telex or otherwise, whether
or not they be in cipher; (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 drawing
under a Letter of Credit or of the proceeds thereof; and (vii)
for any consequences arising from causes beyond the control of
the Issuing Lender, including, without limitation, any Government
Acts. None of the above shall affect, impair, or prevent the
vesting of the Issuing Lender's rights or powers hereunder.
(c) In furtherance and extension and not in limitation of the
specific provisions hereinabove set forth, any action taken or
omitted by the Issuing Lender, under or in connection with any
Letter of Credit or the related certificates, if taken or omitted
in good faith, shall not put such Issuing Lender under any
resulting liability to the Borrower. It is the intention of the
parties that this Credit Agreement shall be construed and applied
to protect and indemnify the Issuing Lender against any and all
risks involved in the issuance of the Letters of Credit, all of
which risks are hereby assumed by the Borrower, including,
without limitation, any and all risks of the acts or omissions,
whether rightful or wrongful, of any present or future Government
Acts. The Issuing Lender shall not, in any way, be liable for
any failure by the Issuing Lender or anyone else to pay any
drawing under any Letter of Credit as a result of any Government
Acts or any other cause beyond the control of the Issuing Lender.
(d) Nothing in this Section 3.14 is intended to limit the
reimbursement obligation of the Borrower contained in Section
2.4(d) hereof. The obligations of the Borrower under this
Section 3.14 shall survive the termination of this Agreement. No
act or omissions of any current or prior beneficiary of a Letter
of Credit shall in any way affect or impair the rights of the
Issuing Lender to enforce any right, power or benefit under this
Credit Agreement.
(e) Notwithstanding anything to the contrary contained in this
Section 3.14, the Borrower shall have no obligation to indemnify
any Issuing Lender in respect of any liability incurred by such
Issuing Lender arising out of the gross negligence or willful
misconduct of the Issuing Lender (including action not taken by
an Issuing Lender), as determined by a court of competent
jurisdiction.
SECTION 4
GUARANTY
4.1 The Guaranty.
Each of the Credit Parties hereby jointly and severally guarantees to
each Lender, the Agent and the Issuing Lender as hereinafter provided
the prompt payment of the Credit Party Obligations in full when due
(whether at stated maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise)
strictly in accordance with the terms thereof. The Credit Parties
hereby further agree that if any of the Credit Party Obligations are
not paid in full when due (whether at stated maturity, as a mandatory
prepayment, by acceleration, as a mandatory cash collateralization or
otherwise), the Credit Parties will, jointly and severally, promptly
pay the same, without any demand or notice whatsoever, and that in the
case of any extension of time of payment or renewal of any of the
Credit Party Obligations, the same will be promptly paid in full when
due (whether at extended maturity, as a mandatory prepayment, by
acceleration, as a mandatory cash collateralization or otherwise) in
accordance with the terms of such extension or renewal.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, the obligations of each Credit
Party hereunder shall be limited to an aggregate amount equal to the
largest amount that would not render its obligations hereunder subject
to avoidance under Section 548 of the U.S. Bankruptcy Code or any
comparable provisions of any applicable state law.
4.2 Obligations Unconditional.
The obligations of the Credit Parties under Section 4.1 hereof are
joint and several, absolute and unconditional, irrespective of the
value, genuineness, validity, regularity or enforceability of any of
the Credit Documents, or any other agreement or instrument referred to
therein, or any substitution, release or exchange of any other
guarantee of or security for any of the Credit Party Obligations, and,
to the fullest extent permitted by applicable law, irrespective of any
other circumstance whatsoever which might otherwise constitute a legal
or equitable discharge or defense of a surety or guarantor, it being
the intent of this Section 4.2 that the obligations of the Credit
Parties hereunder shall be absolute and unconditional under any and
all circumstances. Without limiting the generality of the foregoing,
it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of any Credit Party hereunder
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to any
Credit Party, the time for any performance of or compliance with
any of the Credit Party Obligations shall be extended, or such
performance or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of any of
the Credit Documents or any other agreement or instrument
referred therein shall be done or omitted;
(iii) the maturity of any of the Credit Party Obligations shall be
accelerated, or any of the Credit Party Obligations shall be
modified, supplemented or amended in any respect, or any right
under any of the Credit Documents or any other agreement or
instrument referred to therein shall be waived or any other
guarantee of any of the Credit Party Obligations or any security
therefor shall be released or exchanged in whole or in part or
otherwise dealt with;
(iv) any Lien granted to, or in favor of, the Agent or any Lender
or Lenders as security for any of the Credit Party Obligations
shall fail to attach or be perfected; or
(v) any of the Credit Party Obligations shall be determined to
be void or voidable (including, without limitation, for the
benefit of any creditor of any Credit Party) or shall be
subordinated to the claims of any Person (including, without
limitation, any creditor of any Credit Party).
With respect to its obligations hereunder, each Credit Party hereby
expressly waives diligence, presentment, demand of payment, protest
and all notices whatsoever, and any requirement that the Agent or any
Lender exhaust any right, power or remedy or proceed against any
Person under any of the Credit Documents or any other agreement or
instrument referred to therein, or against any other Person under any
other guarantee of, or security for, any of the Credit Party
Obligations.
4.3 Reinstatement.
The obligations of the Credit Parties under this Section 4 shall be
automatically reinstated if and to the extent that for any reason any
payment by or on behalf of any Person in respect of the Credit Party
Obligations is rescinded or must be otherwise restored by any holder
of any of the Credit Party Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and each
Credit Party agrees that it will indemnify the Agent and each Lender
on demand for all reasonable costs and expenses (including, without
limitation, fees of counsel) incurred by the Agent or such Lender in
connection with such rescission or restoration, including any such
costs and expenses incurred in defending against any claim alleging
that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4 Certain Additional Waivers.
Without limiting the generality of the provisions of any other Section
of this Section 4, each Credit Party hereby specifically waives the
benefits of N.C. Gen. Stat. S 26-7 through 26-9, inclusive. Each
Credit Party further agrees that such Guarantor shall have no right of
recourse to security for the Credit Party Obligations. Each of the
Credit Parties further agrees that it shall have no right of
subrogation, reimbursement or indemnity, nor any right of recourse to
security, if any, for the Credit Party Obligations so long as any
amounts payable to the Agent, the Lenders or the Issuing Lender in
respect of the Credit Party Obligations shall remain outstanding and
until all of the Commitments shall have expired or been terminated.
4.5 Remedies.
The Guarantors agree that, as between the Credit Parties, on the one
hand, and the Agent, the Lenders and the Issuing Lender, on the other
hand, the Credit Party Obligations may be declared to be forthwith due
and payable as provided in Section 9 hereof (and shall be deemed to
have become automatically due and payable in the circumstances
provided in said Section 9) for purposes of Section 4.1 hereof
notwithstanding any stay, injunction or other prohibition preventing
such declaration (or preventing such Credit Party Obligations from
becoming automatically due and payable) as against any other Person
and that, in the event of such declaration (or such Credit Party
Obligations being deemed to have become automatically due and
payable), such Credit Party Obligations (whether or not due and
payable by any other Person) shall forthwith become due and payable by
the Credit Parties for purposes of said Section 4.1.
4.6 Continuing Guarantee.
The guarantee in this Section 4 is a continuing guarantee, and shall
apply to all Credit Party Obligations whenever arising.
SECTION 5
CONDITIONS
5.1 Conditions to Closing Date.
This Credit Agreement shall become effective upon the satisfaction of
the following conditions precedent:
(a) Execution of Agreement. The Agent shall have received (i)
multiple counterparts of this Credit Agreement for each Lender,
executed by a duly authorized officer of each party hereto and
(ii) for the account of each Lender a Revolving Note and a Term
Note and for the account of the Swingline Lender the Swingline
Note.
(b) Liability and Casualty Insurance. The Agent shall have
received copies of insurance policies or certificates of
insurance evidencing liability and casualty insurance meeting the
requirements set forth herein, together with evidence of payment
of premiums thereon.
(c) Financial Information. The Agent shall have received copies
of audited consolidated financial statements for the Borrower and
its Subsidiaries for fiscal years 1995 and 1996; interim
quarterly company-prepared consolidated financial statements for
the Borrower and its Subsidiaries for the fiscal quarter ended
June 30, 1997.
(d) Corporate Documents. The Agent shall have received the
following:
(i) Articles of Incorporation. Copies of the articles of
incorporation or charter documents of the Borrower and each of
the other Credit Parties certified to be true and complete as
of a recent date by the appropriate governmental authority of
the state of its incorporation.
(ii) Resolutions. Copies of resolutions of the Board of
Directors of the Borrower and each of the other Credit Parties
approving and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary as of
the Closing Date to be true and correct and in force and effect
as of such date.
(iii) Bylaws. A copy of the bylaws of the Borrower and each
of the other Credit Parties certified by a secretary or
assistant secretary as of the Closing Date to be true and
correct and in force and effect as of such date.
(iv) Good Standing. Copies of (i) certificates of good standing,
existence or its equivalent with respect to the Borrower and
each of the other Credit Parties certified as of a recent date
by the appropriate governmental authorities of the state of
incorporation and each other state in which the failure to so
qualify and be in good standing would have a material adverse
effect on the business or operations of the Borrower or other
Credit Party in such state and (ii) a certificate indicating
payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing authorities.
(e) Officer's Certificate. The Agent shall have received, with
a counterpart for each Lender, a certificate of a duly authorized
officer of each of the Borrower and each of the other Credit
Parties dated the Effective Date, substantially in the form of
Schedule 5.1(j) with appropriate insertions and attachments.
(f) Legal Opinion of Counsel. The Agent shall have received,
with a copy for each Lender, an opinion of Quarles & Brady,
counsel for the Borrower and the Guarantors, dated the Closing
Date and addressed to the Agent and the Lenders, in form and
substance satisfactory to the Agent and the Required Lenders.
(g) Fees. The Agent shall have received all fees, if any, owing
pursuant to the Agent's Fee Letter and Section 3.4.
(h) Subsection 5.2 Conditions. The conditions specified in
subsections 5.2(a) and (b) shall be satisfied on the Closing Date
as if Loans were to be made on such date.
(i) Additional Matters. All other documents and legal matters
in connection with the transactions contemplated by this Credit
Agreement shall be reasonably satisfactory in form and substance
to the Agent and its counsel.
5.2 Conditions to All Extensions of Credit.
The obligation of each Lender to make any Extension of Credit
hereunder (including the initial Loans to be made hereunder) is
subject to the satisfaction of the following conditions precedent on
the date of making such Extension of Credit:
(a) Representations and Warranties. The representations and
warranties made by the Borrower and the other Credit Parties
herein or which are contained in any certificate furnished at any
time under or in connection herewith shall be true and correct in
all material respects on and as of the date of such Extension of
Credit as if made on and as of such date.
(b) No Default or Event of Default. No Default or Event of
Default shall have occurred and be continuing on such date or
after giving effect to the Extension of Credit to be made on such
date unless such Default or Event of Default shall have been
waived in accordance with this Credit Agreement.
(c) Additional Conditions to Revolving Loans. If such Loan is
made pursuant to subsection 2.1, all conditions set forth in such
subsection shall have been satisfied.
(d) Additional Conditions to Term Loan. If such Loan is made
pursuant to subsection 2.2 all conditions set forth in such
subsection shall have been satisfied.
(e) Additional Conditions to Swingline Loan. If such Loan is
made pursuant to subsection 2.3 all conditions set forth in such
subsection shall have been satisfied.
(f) Additional Conditions to Letters of Credit. If such
Extension of Credit is made pursuant to subsection 2.4 all
conditions set forth in such subsection shall have been
satisfied.
Each request for Extension of Credit and each acceptance by the
Borrower of an Extension of Credit shall be deemed to constitute a
representation and warranty by the Borrower as of the date of such
Extension of Credit that the applicable conditions in paragraphs (a)
and (b), and in (c), (d), (e) or (f) of this subsection have been
satisfied.
SECTION 6
REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Extensions of Credit herein provided for, each of the Credit Parties
hereby represents and warrants to the Agent and to each Lender that:
6.1 Financial Condition.
The consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at December 31, 1996 (audited annual) and June 30,
1997 (interim company-prepared), and the related consolidated
statements of income and of cash flows for the fiscal year (or portion
thereof) ended on such date, reported on (only in the case of such
annual statements) by Coopers & Lybrand LLP, copies of which have
heretofore been furnished to each Lender, are complete and correct and
present fairly the consolidated financial condition of the Borrower
and its consolidated Subsidiaries as at such date, and the
consolidated results of their operations and their consolidated cash
flows for the fiscal year (or portion thereof) then ended, subject in
the case of the June 30, 1997 interim company-prepared statements to
normal year end adjustments. All such financial statements, including
the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods
involved (except as disclosed therein). Neither the Borrower nor any
of its consolidated Subsidiaries had, at the date of the balance
sheets referred to above, any material Guaranty Obligation, contingent
liabilities or liability for taxes, long-term lease or unusual forward
or long-term commitment, including, without limitation, any material
interest rate or foreign currency swap or exchange transaction, which
is not reflected in the foregoing statements or in the notes thereto.
6.2 No Change.
Since December 31, 1996 there has been no development or event which
has had a Material Adverse Effect.
6.3 Corporate Existence; Compliance with Law.
Each of the Borrower and its Subsidiaries (a) is duly organized,
validly existing and in good standing under the laws of the
jurisdiction of its organization, (b) has the corporate or partnership
power and authority and the legal right to own and operate all its
material property, to lease the material property it operates as
lessee and to conduct the business in which it is currently engaged, (c)
is duly qualified as a foreign corporation or partnership and in good
standing under the laws of each jurisdiction where its ownership,
lease or operation of property or the conduct of its business requires
such qualification except to the extent that the failure to so qualify
or be in good standing would not, in the aggregate, have a Material
Adverse Effect and (d) is in compliance with all Requirements of Law
except to the extent that the failure to comply therewith would not,
in the aggregate, reasonably be expected to have a Material Adverse
Effect.
6.4 Corporate Power; Authorization; Enforceable Obligations .
Each of the Borrower and the other Credit Parties has full power and
authority and the legal right to make, deliver and perform the Credit
Documents to which it is party and has taken all necessary corporate
action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or
authorization of, filing with, notice to or other act by or in respect
of, any Governmental Authority or any other Person is required in
connection with the borrowings hereunder or with the execution,
delivery or performance of any Credit Document by the Borrower or the
other Credit Parties(other than those which have been obtained) or
with the validity or enforceability of any Credit Document against the
Borrower or the Guarantors. Each Credit Document to which it is a
party has been duly executed and delivered on behalf of the Borrower
or the other Credit Parties, as the case may be. Each Credit Document
to which it is a party constitutes a legal, valid and binding
obligation of the Borrower or the Guarantors, as the case may be,
enforceable against the Borrower or the other Credit Parties, as the
case may be, in accordance with its terms, except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforcement of creditors'
rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
6.5 No Legal Bar; No Default.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of Extensions of
Credit will not violate any Requirement of Law or any Contractual
Obligation of the Borrower or its Subsidiaries (except those as to
which waivers or consents have been obtained), and will not result in,
or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any Requirement of
Law or Contractual Obligation other than the Liens arising under or
contemplated in connection with the Credit Documents. Neither the
Borrower nor any of its Subsidiaries is in default under or with
respect to any of its Contractual Obligations in any respect which
would reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
6.6 No Material Litigation.
Except as set forth in Schedule 6.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is
pending or, to the best knowledge of the Borrower and the other Credit
Parties, threatened by or against the Borrower or any of its
Subsidiaries or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any
of the transactions contemplated hereby, or (b) which, if adversely
determined, would reasonably be expected to have a Material Adverse
Effect.
6.7 Investment Company Act.
Neither the Borrower nor any of the other Credit Parties is an
"investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940,
as amended.
6.8 Federal Regulations.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation G, T, U or X of the
Board of Governors of the Federal Reserve System as now and from time
to time hereafter in effect. The Borrower and its Subsidiaries taken
as a group do not own "margin stock" except as identified in the
financial statements referred to in Section 6.1 and the aggregate
value of all "margin stock" owned by the Borrower and its
Subsidiaries taken as a group does not exceed 25% of the value of
their assets.
6.9 ERISA.
Neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any
Plan, and each Plan has complied in all material respects with the
applicable provisions of ERISA and the Code, except to the extent that
any such occurrence or failure to comply would not reasonably be
expected to have a Material Adverse Effect. No termination of a
Single Employer Plan has occurred resulting in any liability that has
remained underfunded, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period which would reasonably be
expected to have a Material Adverse Effect. The present value of all
accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual
valuation date prior to the date on which this representation is made
or deemed made, exceed the value of the assets of such Plan allocable
to such accrued benefits by an amount which, as determined in
accordance with GAAP, would reasonably be expected to have a Material
Adverse Effect. Neither the Borrower nor any Commonly Controlled
Entity is currently subject to any liability for a complete or partial
withdrawal from a Multiemployer Plan which would reasonably be
expected to have a Material Adverse Effect. For purposes of this
Section 6.9 only, the parties hereto agree that "Material Adverse
Effect" shall include any event referred to in this Section 6.9 which
would (or could be reasonably expected to) cause a reduction in
Consolidated Net Worth of ten percent (10%) or more.
6.10 Environmental Matters.
Except to the extent that all of the following, in the aggregate,
would not reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrower and the other Credit
Parties, the facilities and properties owned, leased or operated
by the Borrower or any of its Subsidiaries (the "Properties") do
not contain any Materials of Environmental Concern in amounts or
concentrations which (i) constitute a violation of, or (ii) could
give rise to liability under, any Environmental Law.
(b) To the best knowledge of the Borrower and the other Credit
Parties, the Properties and all operations at the Properties are
in compliance, and have in the last five years been in
compliance, in all material respects with all applicable
Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with
respect to the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "Business").
(c) Neither the Borrower nor any of its Subsidiaries has
received any notice of violation, alleged violation, non-
compliance, liability or potential liability regarding
environmental matters or compliance with Environmental Laws with
regard to any of the Properties or the Business, nor do the
Borrower nor the other Credit Parties have knowledge or reason to
believe that any such notice will be received or is being
threatened.
(d) To the best knowledge of the Borrower and the other Credit
Parties, Materials of Environmental Concern have not been
transported or disposed of from the Properties in violation of,
or in a manner or to a location which could give rise to
liability under any Environmental Law, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Properties in violation of, or in a
manner that could give rise to liability under, any applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the knowledge of the Borrower and the
other Credit Parties, threatened, under any Environmental Law to
which the Borrower or any Subsidiary is or will be named as a
party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law
with respect to the Properties or the Business.
(f) To the best knowledge of the Borrower and the other Credit
Parties, there has been no release or threat of release of
Materials of Environmental concern at or from the Properties, or
arising from or related to the operations of the Borrower or any
Subsidiary in connection with the Properties or otherwise in
connection with the Business, in violation of or in amounts or in
a manner that could give rise to liability under Environmental
Laws.
6.11 Use of Proceeds.
Extensions of Credit hereunder may be used to (i) refinance certain
existing indebtedness of the Borrower, and (ii) provide for working
capital and other general corporate purposes, including acquisitions,
not prohibited by this Credit Agreement.
6.12 Subsidiaries.
Set forth on Schedule 6.12 is a complete and accurate list of all
Subsidiaries of the Borrower. Information on the attached Schedule
includes state of incorporation; the number of shares of each class of
capital stock or other equity interests outstanding; the number and
percentage of outstanding shares of each class of stock; and the
number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and similar rights. The outstanding
capital stock and other equity interests of all such Subsidiaries is
validly issued, fully paid and non-assessable and is owned, free and
clear of all Liens (other than those arising under or contemplated in
connection with the Credit Documents). Subject to the terms of this
Agreement, the Borrower may, from time to time, amend Schedule 6.12 by
delivering (effective upon receipt) to the Agent and each Lender a
copy of such amended Schedule 6.12 which shall (i) be dated the date
of delivery, (ii) be certified by a duly authorized officer of the
Borrower as true, complete and correct as of such date as delivered in
replacement for the Schedule 6.12 previously in effect, and (iii) show
in reasonable detail (by blacklining or other appropriate graphic
means) the changes from the predecessor Schedule 6.12.
6.13 Taxes.
Each of the Borrower and its Subsidiaries has filed, or caused to be
filed, all material tax returns (Federal, state, local and foreign)
required to be filed and paid all taxes shown thereon to be due
(including interest and penalties) and has paid all other taxes, fees,
assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangibles taxes) owing
by them, except for such taxes (i) which are not yet delinquent or
(ii) as are being contested in good faith and by proper proceedings,
and against which adequate reserves are being maintained in accordance
with GAAP. The Borrower is not aware of any proposed material tax
assessments against it or any of its Subsidiaries.
6.14 Solvency.
The Borrower and its Subsidiaries, both collectively and individually,
is and, after execution of this Credit Agreement and after giving
effect to the Indebtedness and Guarantee Obligations incurred
hereunder, will be Solvent.
SECTION 7
AFFIRMATIVE COVENANTS
Each of the Credit Parties hereby covenants and agrees that on the
Closing Date, and thereafter for so long as this Credit Agreement is
in effect and until the Commitments have terminated, no Note or Letter
of Credit remains outstanding and unpaid and the Obligations, together
with interest, Commitment Fees and all other amounts owing to the
Agent or any Lender hereunder, are paid in full, the Borrower shall,
and in the case of subsections 7.3, 7.4, 7.5, 7.6, 7.7, 7.8 and 7.10
shall cause each of its Subsidiaries, to:
7.1 Financial Statements.
Furnish to the Agent and each of the Lenders:
(a) Annual Financial Statements. As soon as available, but in
any event within 90 days after the end of each fiscal year of the
Borrower, a copy of the consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such
fiscal year and the related consolidated statements of income and
retained earnings and of cash flows of the Borrower and its
consolidated Subsidiaries for such year, audited by Coopers &
Lybrand or other firm of independent certified public accountants
of nationally recognized standing reasonably acceptable to the
Required Lenders, setting forth in each case in comparative form
the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification
indicating that the scope of the audit was inadequate to permit
such independent certified public accountants to certify such
financial statements without such qualification; and
(b) Quarterly Financial Statements. As soon as available and in
any event within 45 days after the end of each of the first three
fiscal quarters of the Borrower, a company-prepared consolidated
balance sheet of the Borrower and its consolidated Subsidiaries
as at the end of such period and related company-prepared
statements of income and retained earnings and of cash flows for
the Borrower and its consolidated Subsidiaries for such quarterly
period and for the portion of the fiscal year ending with such
period, in each case setting forth in comparative form
consolidated figures for the corresponding period or periods of
the preceding fiscal year (subject to normal recurring year-end
audit adjustments);
(c) Annual Budget Plan. As soon as available after approval by
the Borrower's Board of Directors, but in any event no more than
120 days after the end of each fiscal year, a copy of the
detailed annual budget or plan for the next fiscal year, in form
and detail reasonably acceptable to the Agent and the Required
Lenders, together with a summary of the material assumptions made
in the preparation of the budget or plan.
all such financial statements to be complete and correct in all
material respects (subject, in the case of interim statements, to
normal recurring year-end audit adjustments) and to be prepared in
reasonable detail and, in the case of the annual and quarterly
financial statements provided in accordance with subsections (a) and
(b) above, in accordance with GAAP applied consistently throughout the
periods reflected therein (except as approved by such accountants or
Responsible Officer, as the case may be, and disclosed therein) and
further accompanied by a description of, and an estimation of the
effect on the financial statements on account of, a change in the
application of accounting principles as provided in Section 1.3.
7.2 Certificates; Other Information.
Furnish to the Agent and each of the Lenders:
(a) concurrently with the delivery of the financial statements
referred to in subsection 7.1(a) above, a certificate of the
independent certified public accountants reporting on such
financial statements stating that in making the examination
necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 7.1(a) and 7.1(b) above, a certificate of
a Responsible Officer stating that, to the best of such
Responsible Officer's knowledge, the Borrower during such period
observed or performed in all material respects all of its
covenants and other agreements, and satisfied in all material
respects every material condition, contained in this Agreement to
be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and such
certificate shall include the calculation required to indicate
compliance with Section 7.9;
(c) within thirty days after the same are sent, copies of all
reports (other than those otherwise provided pursuant to
subsection 7.1) and other financial information which the
Borrower sends to its stockholders, and within thirty days after
the same are filed, copies of all financial statements and non-
confidential reports which the Borrower may make to, or file
with, the Securities and Exchange Commission or any successor or
analogous Governmental Authority;
(d) promptly, such additional financial and other information as
the Agent, at the request of any Lender, may from time to time
reasonably request.
7.3 Payment of Obligations.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with
industry practice (subject, where applicable, to specified grace
periods) all its material obligations of whatever nature and any
additional costs that are imposed as a result of any failure to so
pay, discharge or otherwise satisfy such obligations (including
without limitation, obligations to pay taxes), except when the amount
or validity of such obligations and costs is currently being contested
in good faith by appropriate proceedings and reserves, if applicable,
in conformity with GAAP with respect thereto have been provided on the
books of the Borrower or its Subsidiaries, as the case may be.
7.4 Conduct of Business and Maintenance of Existence.
Continue to engage in business of the same general type as now
conducted by it on the date hereof and preserve, renew and keep in
full force and effect its corporate existence and take all reasonable
action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; comply with all
Contractual Obligations and Requirements of Law applicable to it
except to the extent that failure to comply therewith would not, in
the aggregate, have a Material Adverse Effect.
7.5 Maintenance of Property; Insurance.
Keep all material property useful and necessary in its business in
good working order and condition (ordinary wear and tear excepted);
maintain with financially sound and reputable insurance companies
insurance on all its material property in at least such amounts and
against at least such risks as are usually insured against in the same
general area by companies engaged in the same or a similar business;
and furnish to the Agent, upon written request, full information as to
the insurance carried; provided, however, that the Borrower and its
Subsidiaries may maintain self insurance plans to the extent companies
of similar size and in similar businesses do so.
7.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law
shall be made of all dealings and transactions in relation to its
businesses and activities; and permit, during regular business hours
and upon reasonable notice by the Agent, the Agent and, after the
occurrence and during the continuance of an Event of Default, any of
the Lenders to visit and inspect any of its properties and examine and
make abstracts from any of its books and records (other than materials
protected by the attorney-client privilege and materials which the
Borrower may not disclose without violation of a confidentiality
obligation binding upon it) at any reasonable time and as often as may
reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its
Subsidiaries and with its independent certified public accountants.
7.7 Notices.
Give notice to the Agent (which shall promptly transmit such notice to
each Lender) of:
(a) immediately (and in any event within two (2) Business Days)
after the Borrower knows or has reason to know thereof, the
occurrence of any Default or Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of the Borrower or any of its Subsidiaries
or the Borrower which would reasonably be expected to have a
Material Adverse Effect;
(c) promptly, any litigation, or any investigation or proceeding
(including without limitation, any environmental proceeding)
known to the Borrower, affecting the Borrower or any of its
Subsidiaries or the Borrower which, if adversely determined,
would reasonably be expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within 30 days after
the Borrower knows or has reason to know thereof: (i) the
occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution
to a Plan, the creation of any Lien in favor of the PBGC or a
Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan; and
(e) promptly, any other development or event which would
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer setting forth details of the
occurrence referred to therein and stating what action the Borrower
proposes to take with respect thereto.
7.8 Environmental Laws.
(a) Comply in all material respects with, and ensure compliance
in all material respects by all tenants and subtenants, if any,
with, all applicable Environmental Laws and obtain and comply in
all material respects with and maintain, and ensure that all
tenants and subtenants obtain and comply in all material respects
with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable
Environmental Laws except to the extent that failure to do so
would not reasonably be expected to have a Material Adverse
Effect;
(b) Conduct and complete all investigations, studies, sampling
and testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws except to
the extent that the same are being contested in good faith by
appropriate proceedings and the pendency of such proceedings
would not reasonably be expected to have a Material Adverse
Effect; and
(c) Defend, indemnify and hold harmless the Agent and the
Lenders, and their respective employees, agents, officers and
directors, from and against any and all claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown, contingent
or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower,
any of its Subsidiaries or the Properties, or any orders,
requirements or demands of Governmental Authorities related
thereto, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent
that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification therefor.
The agreements in this paragraph shall survive repayment of the
Notes and all other amounts payable hereunder.
7.9 Financial Covenants.
(a) Debt Service Coverage Ratio. There shall be maintained as
of the end of each fiscal quarter a Debt Service Coverage Ratio
of at least 1.75:1.0.
(b) Consolidated Funded Debt Ratio. There shall be maintained
as of the end of each fiscal quarter to occur during the periods
shown below a Consolidated Funded Debt Ratio of not greater than:
Period
------
From the Closing Date through June 29, 1998 3.0:1.0
June 30, 1998 and thereafter 2.75:1.0.
(c) Consolidated Net Worth. There shall be maintained at all
times a Consolidated Net Worth of at least the lesser of (i)
$70,000,000 or (ii) an amount equal to 85% of Consolidated Net
Worth as of the end of fiscal year 1995; provided, however, that
the minimum Consolidated Net Worth required hereunder shall be
increased (but not decreased) on the last day of each fiscal year
by an amount equal to 50% of Consolidated Net Income for the
fiscal year then ended and on the date of receipt by the Borrower
or its Subsidiaries by an amount equal to 100% of the Net
Proceeds from any Equity Transaction.
7.10 Additional Subsidiary Guarantors.
Where Domestic Subsidiaries of the Borrower which are not Guarantors
hereunder (the "Non-Guarantor Domestic Subsidiaries") shall, as a
group, at any time constitute more than either
(i) one percent (1%), in any instance, or five percent (5%), in
the aggregate, of consolidated total assets, or
(ii) one percent (1%), in any instance, or five percent (5%), in
the aggregate, of Consolidated EBITDA,
(collectively, the "Threshold Requirement"), then the Borrower will
promptly notify the Agent thereof, and promptly cause one or more
Domestic Subsidiaries to become a "Guarantor" hereunder by way of
execution of a Joinder Agreement, such that immediately after the
joinder of such Subsidiaries as Guarantors hereunder, the remaining
Non-Guarantor Domestic Subsidiaries shall not, individually or as a
group, exceed the Threshold Requirement.
7.11 Interest Rate Protection.
At all times subsequent to the date which is 60 days after the Closing
Date, maintain in effect one or more Interest Protection Agreements
with any of the Lenders, or with other financial institutions
reasonably satisfactory to the Agent, the effect of which shall be to
limit the interest payable by the Borrower in connection with an
aggregate principal amount of at least 50% of the scheduled principal
amount of the Term Loan for a weighted average to maturity of not less
than three (3) years. Such Interest Protection Agreements shall be on
terms and conditions reasonably acceptable to the Agent. The Borrower
shall deliver from time to time to the Agent evidence of its
compliance with this subsection.
SECTION 8
NEGATIVE COVENANTS
Each of the Credit Parties hereby covenants and agrees that on the
Closing Date, and thereafter for so long as this Agreement is in
effect and until the Commitments have terminated, no Note or Letter of
Credit remains outstanding and unpaid and the Obligations, together
with interest, Commitment Fees and all other amounts owing to the
Agent or any Lender hereunder, are paid in full, the Borrower shall,
and shall cause each of its Subsidiaries and the Borrower, to:
8.1 Indebtedness.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and
the other Credit Documents;
(b) Indebtedness existing as of the Closing Date and set out in
Schedule 8.1(b) and renewals, refinancings or extensions thereof
in a principal amount not in excess of that outstanding as of the
date of such renewal, refinancing or extension;
(c) Indebtedness incurred after the Closing Date consisting of
Capital Leases or Indebtedness incurred to provide all or a
portion of the purchase price or cost of construction of an asset
provided that (i) such Indebtedness when incurred shall not
exceed the purchase price or cost of construction of such asset;
(ii) no such Indebtedness shall be refinanced for a principal
amount in excess of the principal balance outstanding thereon at
the time of such refinancing; and (iii) the total aggregate
amount of all such Indebtedness of the Borrower and its
subsidiaries, as a group, shall not exceed $10,000,000 at any
time outstanding;
(d) Unsecured intercompany Indebtedness between a Credit Party
and another Credit Party;
(e) Indebtedness and obligations owing under Interest Protection
Agreements relating to the Loans hereunder and currency
protection agreements and commodity purchase or option agreements
entered into in order to manage existing or anticipated interest
rate, exchange rate or commodity price risks and not for
speculative purposes;
(f) Subordinated Debt of the Borrower the terms of subordination
and other terms and provisions of which are acceptable to the
Required Lenders in their reasonable discretion (the proceeds of
which shall be subject to the provisions of Section 3.3(b)(iii));
(g) Guarantee Obligations of a Credit Party relating to
Indebtedness of another Domestic Credit Party otherwise permitted
under this Section 8.1;
(h) Public or privately placed unsecured senior Funded Debt in
an aggregate amount up to $100,000,000 at any time outstanding
(subject to the provisions of Section 3.3(b)(iii) hereof);
(i) Indebtedness incurred by a Credit Party in connection with a
Permitted Sale-Leaseback Transaction, provided that the aggregate
amount of such Indebtedness shall not exceed $20,000,000 at any
time outstanding;
(j) Indebtedness (including, but without duplication for,
related letters of credit) relating to industrial revenue bond or
other similar tax-advantaged financing assumed by the Borrower in
connection with the acquisition of SerVend International, Inc.
which does not exceed at any time $6,600,000 in the aggregate;
and
(k) other Indebtedness of the Borrower and its Subsidiaries, as
a group, which does not exceed $10,000,000 in the aggregate at
any time outstanding.
8.2 Liens.
The Borrower will not, nor will it permit any Subsidiary to, contract,
create, incur, assume or permit to exist any Lien with respect to any
of its property or assets of any kind (whether real or personal,
tangible or intangible), whether now owned or hereafter acquired,
except for Permitted Liens.
8.3 Nature of Business.
The Borrower will not, nor will it permit any Subsidiary to, alter the
character of its business in any material respect from that conducted
as of the Closing Date.
8.4 Consolidation, Merger, Sale or Purchase of Assets, etc.
The Borrower will not, nor will it permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell, transfer,
lease or otherwise dispose of any substantial part of its
property or assets outside of the ordinary course of business or
agree to do so at a future time except the following, without
duplication, shall be expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition of property
or assets not in the ordinary course of business (other than
Specified Sales), where and to the extent that such transaction
is the result of a Recovery Event and the Net Proceeds
therefrom are used to repair or replace damaged property or to
purchase or otherwise acquire new assets or property provided
that such purchase or acquisition is committed to within 180
days of receipt of the Net Proceeds from the Recovery Event and
such purchase or acquisition is consummated within 270 days of
such receipt; and
(iii) the sale, lease or transfer of property or assets by a
Credit Party other than the Borrower to a domestic Credit
Party.
As used herein, "substantial part" shall mean property and assets,
the book value of which, when added to the book value of all other
assets sold, leased or otherwise disposed of by the Borrower and its
Subsidiaries (other than in the ordinary course of business),
(i) shall in any fiscal year exceed 10% of Consolidated Net
Worth; or
(ii) shall from the Closing Date exceed 25% of Consolidated Net
Worth;
in each case determined as of the end of the immediately preceding
fiscal year; or
(b) enter into any transaction of merger or consolidation,
provided, however, that so long as no Default or Event of Default
would be directly or indirectly caused as a result thereof,
(i) a Domestic Subsidiary may merge or consolidate with another
Domestic Subsidiary, provided that (A) the Borrower shall be
the surviving entity if it is a party thereto, and (B) a
Domestic Credit Party shall be the surviving entity if it is a
party thereto or the surviving entity becomes a Domestic Credit
Party pursuant to the terms of Section 7.10(a) immediately
after the consummation of such merger or consolidation;
(ii) a Foreign Subsidiary may merge or consolidate with any other
Foreign Subsidiary;
(iii) a Foreign Subsidiary may merge or consolidate with a
Domestic Subsidiary, provided that the Domestic Subsidiary
shall be the surviving entity and the applicable conditions set
forth in Section 7.10 are complied with in connection
therewith; and
(iv) a Subsidiary may merge or consolidate with any Person that
is not a Subsidiary, provided that (A) the applicable
conditions set forth in Section 7.10 and Section 8.4(c) are
complied with in connection with such acquisition by merger or
consolidation and (B) the Board of Directors of the Person that
is the subject of the acquisition, merger or consolidation
shall have consented to and approved the acquisition, merger or
consolidation.
(c) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) (i) all or any
portion of the capital stock or securities of any other Person or
(ii) all or any substantial part of the property or assets of any
other Person, unless:
(A) where the aggregate cost (including all cash paid, seller
financing provided, debt assumed and stock transferred in
respect thereof) of any such individual acquisition shall not
exceed $75,000,000;
(B) where the aggregate cost (including all cash paid, seller
financing provided, debt assumed and stock transferred in
respect thereof) of all such acquisitions shall not exceed
$100,000,000 in any calendar year;
(C) if after giving effect thereto such Person is not a
Subsidiary, such acquisition is permitted pursuant to Section
8.5; and
(D) no Default or Event of Default would exist after giving
effect to any such acquisition on a Pro Forma Basis.
8.5 Advances, Investments and Loans.
The Borrower will not, nor will it permit any Subsidiary to, lend
money or extend credit or make advances to any Person, or purchase or
acquire any stock, obligations or securities of, or any other interest
in, or make any capital contribution to, any Person except for
Permitted Investments.
8.6 Transactions with Affiliates.
Except as permitted in subsection (iv) of the definition of Permitted
Investments, the Borrower will not, nor will it permit any Subsidiary
to, enter into any transaction or series of transactions, whether or
not in the ordinary course of business, with any officer, director,
shareholder or Affiliate other than on terms and conditions
substantially as favorable as would be obtainable in a comparable
arm's-length transaction with a Person other than an officer,
director, shareholder or Affiliate.
8.7 Ownership of Subsidiaries.
The Borrower will not, nor will it permit any Subsidiary to, create,
form or acquire a Subsidiary, unless any such domestic Subsidiary
shall become an Additional Credit Party in accordance with the
provisions of Section 7.10, or the investment in any such foreign
Subsidiary shall constitute a Permitted Investment.
8.8 Fiscal Year.
The Borrower will not, nor will it permit any Subsidiary to, change
its fiscal year, except with the prior written consent of the Agent.
8.9 Prepayments of Indebtedness, etc.
The Borrower will not, nor will it permit any Subsidiary to,
(a) after the issuance thereof, amend or modify, or permit the
amendment or modification of, any of the terms of subordination
or other terms or provisions relating to any senior Indebtedness
for borrowed money or Subordinated Debt if such amendment or
modification is reasonably adverse to interests of the Lenders as
determined by Required Lenders in their discretion;
(b) make (or give notice with respect thereto) any voluntary or
optional payment or prepayment or redemption or acquisition for
value (including, without limitation, by way of depositing money
or securities with the trustee with respect thereto before due
for the purpose of paying when due) or exchange of any senior
Indebtedness for borrowed money or Subordinated Debt permitted
pursuant to Section 8.1, except to the extent repaid from the Net
Proceeds of any Equity Transaction; or
(c) make any prepayment, redemption, acquisition for value of
(including, without limitation, by way of depositing money or
securities with the trustee with respect thereto before due for
the purpose of paying when due) refund, refinance or exchange of
any Subordinated Debt;
As used herein, "Subordinated Debt" means any indebtedness for
borrowed money which by its terms is, or upon the happening of certain
events may become, subordinated in right of payment to the Obligations
hereunder and other amounts owing hereunder or in connection herewith.
8.10 Dividends.
The Borrower will not, nor will it permit any non-wholly-owned
Subsidiaries to, make any payment, distribution or dividend (other
than a dividend or distribution payable solely in stock or equity
interest of the Person making the dividend or distribution) on or any
payment on account of the purchase, redemption or retirement of, or
any other distribution on, any partnership interest, share of any
class of stock or other ownership interest in such Person, if and to
the extent that a Default or Event of Default shall exist or would
exist after giving effect thereto.
8.11 Foreign Assets.
No more than twenty-five percent (25%) of assets of the Borrower and
its Subsidiaries, taken as a whole on a consolidated basis, will at
any time be held by Foreign Subsidiaries.
SECTION 9
EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) The Borrower shall fail to pay any principal on any Note
when due in accordance with the terms thereof or hereof; or the
Borrower shall fail to reimburse the Issuing Lender for any LOC
Obligations when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Note or any fee or
other amount payable hereunder when due in accordance with the
terms thereof or hereof and such failure shall continue
unremedied for five (5) Business Days (or any Guarantor shall
fail to pay on the Guaranty in respect of any of the foregoing or
in respect of any other Guarantee Obligations thereunder); or
(b) Any representation or warranty made or deemed made by the
Borrower or other Credit Party herein or in any of the other
Credit Documents or which is contained in any certificate,
document or financial or other statement furnished at any time
under or in connection with this Agreement shall prove to have
been incorrect, false or misleading in any material respect on or
as of the date made or deemed made; or
(c) The Borrower shall (i) default in the due performance or
observance of Section 7.7, 7.9 or 8.10, or (ii) default in the
observance or performance of any other term, covenant or
agreement contained in this Agreement (other than as described in
subsections 9(a), 9(b) or 9(c)(i) above), and such default shall
continue unremedied for a period of 30 days or more; or
(d) The Borrower or any of its Subsidiaries shall (i) default in
any payment of principal of or interest on any Indebtedness
(other than the Notes) in a principal amount outstanding of at
least $2,000,000 in the aggregate for the Borrower and its
Subsidiaries or in the payment of any matured Guarantee
Obligation in a principal amount outstanding of at least
$2,000,000 in the aggregate for the Borrower and its Subsidiaries
beyond the period of grace (not to exceed 30 days), if any,
provided in the instrument or agreement under which such
Indebtedness or Guarantee Obligation was created; or (ii) default
in the observance or performance of any other agreement or
condition relating to any such Indebtedness in a principal amount
outstanding of at least $2,000,000 in the aggregate for the
Borrower and its Subsidiaries or Guarantee Obligation in a
principal amount outstanding of at least $2,000,000 in the
aggregate for the Borrower and its Subsidiaries or contained in
any instrument or agreement evidencing, securing or relating
thereto, or any other event shall occur or condition exist, the
effect of which default or other event or condition is to cause,
or to permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Guarantee Obligation (or a
trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of notice
if required, such Indebtedness to become due prior to its stated
maturity or such Guarantee Obligation to become payable; or
(e) (i) The Borrower or any of its Subsidiaries shall commence
any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors,
seeking to have an order for relief entered with respect to it,
or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or
its debts, or (B) seeking appointment of a receiver, trustee,
custodian, conservator or other similar official for it or for
all or any substantial part of its assets, or the Borrower or any
Subsidiary shall make a general assignment for the benefit of its
creditors; or (ii) there shall be commenced against the Borrower
or any Subsidiary any case, proceeding or other action of a
nature referred to in clause (i) above which (A) results in the
entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded
for a period of 60 days; or (iii) there shall be commenced
against the Borrower or any Subsidiary any case, proceeding other
action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part
of its assets which results in the entry of an order for any such
relief which shall not have been vacated, discharged, or stayed
or bonded pending appeal within 60 days from the entry thereof;
or (iv) the Borrower or any Subsidiary shall take any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) the Borrower or any Subsidiary shall
generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(f) One or more judgments or decrees shall be entered against
the Borrower or any of its Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered
by insurance) of $2,000,000 or more and all such judgments or
decrees shall not have been paid and satisfied, vacated,
discharged, stayed or bonded pending appeal within 60 days from
the entry thereof; or
(g) (i) Any Person shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, (ii) any "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived,
shall exist with respect to any Plan or any Lien in favor of the
PBGC or a Plan shall arise on the assets of the Borrower or any
Commonly Controlled Entity, (iii) a Reportable Event shall occur
with respect to, or proceedings shall commence to have a trustee
appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a Trustee is, in
the reasonable opinion of the Required Lenders, likely to result
in the termination of such Plan for purposes of Title IV of
ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, (v) the Borrower, any of its Subsidiaries
or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability
in connection with a withdrawal from, or the Insolvency or
Reorganization of, any Multiemployer Plan or (vi) any other
similar event or condition shall occur or exist with respect to a
Plan; and in each case in clauses (i) through (vi) above, such
event or condition, together with all other such events or
conditions, if any, could have a Material Adverse Effect; or
(h) Either (i) a "person" or a "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934 other than members of management of the Borrower as of the
Closing Date) becomes the "beneficial owner" (as defined in Rule
13d-3 under the Securities Exchange Act of 1934) of more than 30%
of the then outstanding voting stock of the Borrower or (ii) a
majority of the Board of Directors of the Borrower shall consist
of individuals who are not Continuing Directors; "Continuing
Director" means, as of any date of determination, (A) an
individual who on the date two years prior to such determination
date was a member of the Borrower's Board of Directors or (B) any
new Director whose nomination for election by the Borrower's
shareholders was approved by a vote of at least 75% of the
Directors then still in office who either were Directors on the
date two years prior to such determination date or whose
nomination for election was previously so approved; or
(i) The Guaranty or any provision thereof shall cease to be in
full force and effect or any Credit Party or any Person acting by
or on behalf of any Credit Party shall deny or disaffirm any
Credit Party's obligations under the Guaranty; or
(j) Any other Credit Document shall fail to be in full force and
effect or to give the Agent and/or the Lenders the security
interests, liens, rights, powers and privileges purported to be
created thereby (except as such documents may be terminated or no
longer in force and effect in accordance with the terms thereof,
other than those indemnities and provisions which by their terms
shall survive);
then, and in any such event, (A) if such event is an Event of Default
specified in paragraph (e) above, automatically the Commitments shall
immediately terminate and the Loans (with accrued interest thereon),
and all other amounts under the Credit Documents (including without
limitation the maximum amount of all contingent liabilities under
Letters of Credit) shall immediately become due and payable, and (B)
if such event is any other Event of Default, either or both of the
following actions may be taken: (i) with the written consent of the
Required Lenders, the Agent may, or upon the written request of the
Required Lenders, the Agent shall, by notice to the Borrower declare
the Commitments to be terminated forthwith, whereupon the Commitments
shall immediately terminate; and (ii) the Agent may, or upon the
written request of the Required Lenders, the Agent shall, by notice of
default to the Borrower, declare the Loans (with accrued interest
thereon) and all other amounts owing under this Agreement and the
Notes to be due and payable forthwith and direct the Borrower to pay
to the Agent cash collateral as security for the LOC Obligations for
subsequent drawings under then outstanding Letters of Credit an amount
equal to the maximum amount of which may be drawn under Letters of
Credit then outstanding, whereupon the same shall immediately become
due and payable. Except as expressly provided above in this Section
9, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
SECTION 10
AGENCY PROVISIONS
10.1 Appointment.
Each Lender hereby designates and appoints NationsBank, N.A. as
administrative agent (in such capacity as Agent hereunder, the
"Agent") of such Lender to act as specified herein and the other
Credit Documents, and each such Lender hereby authorizes the Agent as
the agent for such Lender, to take such action on its behalf under the
provisions of this Credit Agreement and the other Credit Documents and
to exercise such powers and perform such duties as are expressly
delegated by the terms hereof and of the other Credit Documents,
together with such other powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary elsewhere herein and in
the other Credit Documents, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein and therein,
or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Credit Agreement or any of the
other Credit Documents, or shall otherwise exist against the Agent.
The provisions of this Section are solely for the benefit of the Agent
and the Lenders and none of the Credit Parties shall have any rights
as a third party beneficiary of the provisions hereof. In performing
its functions and duties under this Credit Agreement and the other
Credit Documents, the Agent shall act solely as agent of the Lenders
and does not assume and shall not be deemed to have assumed any
obligation or relationship of agency or trust with or for the Borrower
or any other Credit Party. The title of Documentation Agent is
bestowed in recognition of the Documentation Agent's participation in
this credit, and such title shall not impose or imply any duties or
responsibilities hereunder of a fiduciary nature or otherwise, in its
capacity as such.
10.2 Delegation of Duties.
The Agent may execute any of its duties hereunder or under the other
Credit Documents by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
10.3 Exculpatory Provisions.
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any
action lawfully taken or omitted to be taken by it or such Person
under or in connection herewith or in connection with any of the other
Credit Documents (except for its or such Person's own gross negligence
or willful misconduct), or (ii) responsible in any manner to any of
the Lenders for any recitals, statements, representations or
warranties made by any of the Credit Parties contained herein or in
any of the other Credit Documents or in any certificate, report,
statement or other document referred to or provided for in, or
received by the Agent under or in connection herewith or in connection
with the other Credit Documents, or enforceability or sufficiency
herefor of any of the other Credit Documents, or for any failure of
the Borrower to perform its obligations hereunder or thereunder. The
Agent shall not be responsible to any Lender for the effectiveness,
genuineness, validity, enforceability, collectability or sufficiency
of this Credit Agreement, or any of the other Credit Documents or for
any representations, warranties, recitals or statements made herein or
therein or made by the Borrower or any Credit Party in any written or
oral statement or in any financial or other statements, instruments,
reports, certificates or any other documents in connection herewith or
therewith furnished or made by the Agent to the Lenders or by or on
behalf of the Credit Parties to the Agent or any Lender or be required
to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained
herein or therein or as to the use of the proceeds of the Loans or of
the existence or possible existence of any Default or Event of Default
or to inspect the properties, books or records of the Credit Parties.
10.4 Reliance on Communications.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex
or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation,
counsel to the Borrower or any of the other Credit Parties,
independent accountants and other experts selected by the Agent with
reasonable care). The Agent may deem and treat the Lenders as the
owner of their respective interests hereunder for all purposes unless
a written notice of assignment, negotiation or transfer thereof shall
have been filed with the Agent in accordance with Section 11.6(d).
The Agent shall be fully justified in failing or refusing to take any
action under this Credit Agreement or under any of the other Credit
Documents unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all
liability and expense which may be incurred by it by reason of taking
or continuing to take any such action. The Agent shall in all cases
be fully protected in acting, or in refraining from acting, hereunder
or under any of the other Credit Documents in accordance with a
request of the Required Lenders (or to the extent specifically
provided in Section 11.1, all the Lenders) and such request and any
action taken or failure to act pursuant thereto shall be binding upon
all the Lenders (including their successors and assigns).
10.5 Notice of Default.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the
Agent has received notice from a Lender or a Credit Party referring to
the Credit Document, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that
the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders. The Agent shall take such action with respect
to such Default or Event of Default as shall be reasonably directed by
the Required Lenders.
10.6 Non-Reliance on Agent and Other Lenders.
Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or
affiliates has made any representations or warranties to it and that
no act by the Agent or any affiliate thereof hereinafter taken,
including any review of the affairs of the Borrower, shall be deemed
to constitute any representation or warranty by the Agent to any
Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the
business, assets, operations, property, financial and other
conditions, prospects and creditworthiness of the Borrower and made
its own decision to make its Loans hereunder and enter into this
Credit Agreement. Each Lender also represents that it will,
independently and without reliance upon the Agent or any other Lender,
and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this
Credit Agreement, and to make such investigation as it deems necessary
to inform itself as to the business, assets, operations, property,
financial and other conditions, prospects and creditworthiness of the
Borrower. Except for notices, reports and other documents expressly
required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender
with any credit or other information concerning the business,
operations, assets, property, financial or other conditions, prospects
or creditworthiness of the Borrower which may come into the possession
of the Agent or any of its officers, directors, employees, agents,
attorneys-in-fact or affiliates.
10.7 Indemnification.
The Lenders agree to indemnify the Agent in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to their
respective Commitment Percentages (or if the Commitments have expired
or been terminated, in accordance with the respective principal
amounts of outstanding Loans and Participation Interests of the
Lenders), from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind whatsoever which may at any time
(including without limitation at any time following the termination of
this Credit Agreement) be imposed on, incurred by or asserted against
the Agent in its capacity as such in any way relating to or arising
out of this Credit Agreement or the other Credit Documents or any
documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or any action taken or
omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Agent. If any indemnity
furnished to the Agent for any purpose shall, in the opinion of the
Agent, be insufficient or become impaired, the Agent may call for
additional indemnity and cease, or not commence, to do the acts
indemnified against until such additional indemnity is furnished.
10.8 Agent in its Individual Capacity.
The Agent and its affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or any
other Credit Party as though the Agent were not Agent hereunder. With
respect to its Loans and Participation Interests, the Agent shall have
the same rights and powers under this Credit Agreement as any Lender
and may exercise the same as though they were not Agent, and the terms
"Lender" and "Lenders" shall include the Agent in its individual
capacity.
10.9 Successor Agent.
The Agent may, at any time, resign upon 20 days' written notice to the
Lenders. Upon any such resignation, the Required Lenders shall have
the right to appoint a successor Agent. If no successor Agent shall
have been so appointed by the Required Lenders, and shall have
accepted such appointment, within 30 days after the notice of
resignation, as appropriate, then the retiring Agent shall select a
successor Agent provided such successor is a Lender hereunder or a
commercial bank organized under the laws of the United States of
America or of any State thereof and has a combined capital and surplus
of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor, such successor Agent shall thereupon
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 as Agent, as appropriate,
under this Credit Agreement and the other Credit Documents and the
provisions of this Section 10.9 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under
this Credit Agreement.
SECTION 11
MISCELLANEOUS
11.1 Amendments and Waivers.
Neither this Credit Agreement, nor any of the Notes, nor any of the
other Credit Documents, nor any terms hereof or thereof may be
amended, supplemented, waived or modified except in accordance with
the provisions of this subsection. The Required Lenders may, or, with
the written consent of the Required Lenders, the Agent may, from time
to time, (a) enter into with the Borrower written amendments,
supplements or modifications hereto and to the other Credit Documents
for the purpose of adding any provisions to this Credit Agreement or
the other Credit Documents or (b) waive, on such terms and conditions
as the Required Lenders may specify in such instrument, any of the
requirements of this Credit Agreement or the other Credit Documents or
any Default or Event of Default and its consequences; provided,
however, that no such waiver and no such amendment, waiver,
supplement, modification or release shall (i) reduce the amount or
extend the scheduled date of maturity of any Loan or Note or any
installment thereon, or reduce the stated rate of any interest or fee
payable hereunder (other than interest at the increased post-default
rate) or extend the scheduled date of any payment thereof or increase
the amount or extend the expiration date of any Lender's Commitment,
in each case without the written consent of each Lender directly
affected thereby, or (ii) amend, modify or waive any provision of this
subsection or reduce the percentage specified in the definition of
Required Lenders, or consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Credit
Agreement, in each case without the written consent of all the
Lenders, or (iii) amend, modify or waive any provision of Section 10
without the written consent of the then Agent, or (iv) release all or
substantially all of the Guarantors without the written consent of all
of the Lenders. Any such waiver, any such amendment, supplement or
modification and any such release shall apply equally to each of the
Lenders and shall be binding upon the Borrower, the Lenders, the Agent
and all future holders of the Notes. In the case of any waiver, the
Borrower, the Lenders and the Agent shall be restored to their former
position and rights hereunder and under the outstanding Loans and
Notes and other Credit Documents, and any Default or Event of Default
waived shall be deemed to be cured and not continuing; but no such
waiver shall extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereon.
11.2 Notices
Except as otherwise provided in Section 2, all notices, requests and
demands to or upon the respective parties hereto to be effective shall
be in writing (including by telecopy), and, unless otherwise expressly
provided herein, shall be deemed to have been duly given or made (i)
when delivered by hand, (ii) when transmitted via telecopy (or other
facsimile device) on a Business Day between the hours of 8:30 A.M. and
7:00 P.M. (EST or EDT, as appropriate) (or on the following Business
Day if sent after 7:00 P.M.) to the number set out herein, (iii) the
day following the day on which the same has been delivered prepaid to
a reputable national overnight air courier service, or (iv) the third
Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed as
follows in the case of the Borrower and the Agent, and as set forth on
Schedule 11.2 in the case of the Lenders, or to such other address as
may be hereafter notified by the respective parties hereto and any
future holders of the Notes:
The Credit Parties: c/o The Manitowoc Company, Inc.
500 South 16th Street
P.O. Box 66
Manitowoc, Wisconsin 54221-0066
Attn: Philip Keener
Phone: (920) 683-8133
Fax: (920) 683-8138
with a copy to:
Quarles & Brady
411 E. Wisconsin Avenue
Milwaukee, Wisconsin 53202
Attn: Patrick M. Ryan
Andrew M. Barnes
Phone: (414) 277-5000
Fax: (414) 271-3552
The Agent: NationsBank, N.A.
Independence Center, 15th Floor
NC1-001-15-04
Charlotte, North Carolina 28255
Attn: Linda Ballard
Phone: (704) 386-9368
Fax: (704) 386-9923
with a copy to:
NationsBank, N.A.
Sears Tower, Suite 2800
233 South Wacker Drive
Chicago, Illinois 60606-6308
Attn: Lisa Donoghue
Phone: (312) 234-5639
Fax: (312) 234-5601
11.3 No Waiver; Cumulative Remedies.
No failure to exercise and no delay in exercising, on the part of the
Agent or any Lender, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and
privileges herein provided are cumulative and not exclusive of any
rights, remedies, powers and privileges provided by law.
11.4 Survival of Representations and Warranties.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Credit
Agreement and the Notes and the making of the Loans, provided that all
such representations and warranties shall terminate on the date upon
which the Commitments have been terminated and all amounts owing
hereunder and under any Notes have been paid in full.
11.5 Payment of Expenses and Taxes.
The Borrower agrees (a) to pay or reimburse the Agent for all its
reasonable out-of-pocket costs and expenses incurred in connection
with the preparation and execution of, and any amendment, supplement
or modification to, the Credit Documents and any other documents
prepared in connection herewith or therewith, and the consummation and
administration of the transactions contemplated hereby and thereby,
together with the reasonable fees and disbursements of counsel to the
Agent, (b) to pay or reimburse each Lender and the Agent for all its
costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Credit Agreement, the Notes and
any such other documents, including, without limitation, the
reasonable fees and disbursements of counsel to the Agent and to the
Lenders (including reasonable allocated costs of in-house legal
counsel), and (c) on demand, to pay, indemnify, and hold each Lender and
the Agent harmless from, any and all recording and filing fees and any
and all liabilities with respect to, or resulting from any delay in
paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution
and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, the
Credit Documents and any such other documents, and (d) to pay,
indemnify, and hold each Lender and the Agent and their Affiliates
harmless from and against, any and all other liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of
the Credit Documents and any such other Documents and the use, or
proposed use, of proceeds of the Loans (all the foregoing,
collectively, the "indemnified liabilities"); provided, however, that
the Borrower shall not have any obligation hereunder to the Agent or
any Lender with respect to indemnified liabilities arising from (i)
the gross negligence or willful misconduct of the Agent or any such
Lender, (ii) legal proceedings commenced against the Agent or any
Lender by any other Lender or its participants or the Agent or (iii) a
breach of any of the Credit Documents by the Lenders. The agreements
in this subsection shall survive repayment of the Loans, Notes and all
other amounts payable hereunder.
11.6 Successors and Assigns; Participations; Purchasing Lenders.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of the Borrower, the Lenders, the Agent, all future
holders of the Notes and their respective successors and assigns,
except that the Borrower may not assign or transfer any of its
rights or obligations under this Credit Agreement or the other
Credit Documents without the prior written consent of each
Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to
such Lender, any Note held by such Lender, any Commitment of such
Lender, or any other interest of such Lender hereunder. In the
event of any such sale by a Lender of participating interests to
a Participant, such Lender's obligations under this Credit
Agreement to the other parties to this Credit Agreement shall
remain unchanged, such Lender shall remain solely responsible for
the performance thereof, such Lender shall remain the holder of
any such Note for all purposes under this Credit Agreement, and
the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights
and obligations under this Credit Agreement. No Lender shall
transfer or grant any participation under which the Participant
shall have rights to approve any amendment to or waiver of this
Credit Agreement or any other Credit Document except to the
extent such amendment or waiver would (i) extend the scheduled
maturity of any Loan or Note or any installment thereon in which
such Participant is participating, or reduce the stated rate or
extend the time of payment of interest or Fees thereon (except in
connection with a waiver of interest at the increased post-
default rate) or reduce the principal amount thereof, or increase
the amount of the Participant's participation over the amount
thereof then in effect (it being understood that a waiver of any
Default or Event of Default shall not constitute a change in the
terms of such participation, and that an increase in any
Commitment or Loan shall be permitted without consent of any
Participant if the Participant's participation is not increased
as a result thereof), or (ii) consent to the assignment or
transfer by the Borrower of any of its rights and obligations
under this Credit Agreement. In the case of any such
participation, the Participant shall not have any rights under
this Credit Agreement or any of the other Credit Documents (the
Participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by
such Lender in favor of the Participant relating thereto) and all
amounts payable by the Borrower hereunder shall be determined as
if such Lender had not sold such participation, provided that
each Participant shall be entitled to the benefits of subsections
3.6, 3.7, 3.8, 3.9 and 11.5 with respect to its participation in
the Commitments and the Loans outstanding from time to time;
provided, that no Participant shall be entitled to receive any
greater amount pursuant to such subsections than the transferor
Lender would have been entitled to receive in respect of the
amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any
time sell or assign to any Lender or any affiliate thereof and
with the consent of the Agent and, so long as no Event of Default
has occurred and is continuing, the consent of the Borrower
(which consents shall not be unreasonably withheld), to one or
more additional banks or financial institutions ("Purchasing
Lenders"), all or any part of its rights and obligations under
this Credit Agreement and the Notes in minimum amounts of
$10,000,000 (or, if less, the entire amount of such Lender's
obligations) if the Purchasing Lender is not a Lender hereunder,
or with no minimum amount if the Purchasing Lender is a Lender
hereunder, pursuant to a Commitment Transfer Supplement, executed
by such Purchasing Lender, such transferor Lender (and, in the
case of a Purchasing Lender that is not then a Lender or an
affiliate thereof so long as no Event of Default has occurred and
is continuing, by the Borrower and the Agent), and delivered to
the Agent for its acceptance and recording in the Register. Upon
such execution, delivery, acceptance and recording, from and
after the Transfer Effective Date specified in such Commitment
Transfer Supplement, (x) the Purchasing Lender thereunder shall
be a party hereto and, to the extent provided in such Commitment
Transfer Supplement, have the rights and obligations of a Lender
hereunder with a Commitment as set forth therein, and (y) the
transferor Lender thereunder shall, to the extent provided in
such Commitment Transfer Supplement, be released from its
obligations under this Credit Agreement (and, in the case of a
Commitment Transfer Supplement covering all or the remaining
portion of a transferor Lender's rights and obligations under
this Credit Agreement, such transferor Lender shall cease to be a
party hereto). Such Commitment Transfer Supplement shall be
deemed to amend this Credit Agreement to the extent, and only to
the extent, necessary to reflect the addition of such Purchasing
Lender and the resulting adjustment of Commitment Percentages
arising from the purchase by such Purchasing Lender of all or a
portion of the rights and obligations of such transferor Lender
under this Credit Agreement and the Notes. On or prior to the
Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrower, at its own expense, shall execute and
deliver to the Agent in exchange for the Note delivered to the
Agent pursuant to such Commitment Transfer Supplement a new Note
to the order of such Purchasing Lender in an amount equal to the
Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, a new Note to the order of the transferor
Lender in an amount equal to the Commitment retained by it
hereunder. Such new Note shall be dated the Closing Date and
shall otherwise be in the form of the Note replaced thereby.
The Note surrendered by the transferor Lender shall be returned
by the Agent to the Borrower marked "canceled".
(d) The Agent shall maintain at its address referred to in
subsection 11.2 a copy of each Commitment Transfer Supplement
delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower,
the Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded
therein for all purposes of this Credit Agreement. The Register
shall be available for inspection by the Borrower or any Lender
at any reason able time and from time to time upon reasonable
prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Lender and a Purchasing Lender (and, in
the case of a Purchasing Lender that is not then a Lender or an
affiliate thereof, by the Borrower and the Agent) together with
payment to the Agent (by the transferor Lender or the Purchasing
Lender, as agreed between them) of a registration and processing
fee of $3,500 for each Purchasing Lender listed in such
Commitment Transfer Supplement, and the Notes subject to such
Commitment Transfer Supplement, the Agent shall (i) accept such
Commitment Transfer Supplement, (ii) record the information
contained therein in the Register and (iii) give prompt notice of
such acceptance and recordation to the Lenders and the Borrower.
(f) The Borrower authorizes each Lender to disclose to any
Participant or Purchasing Lender (each, a "Transferee") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrower and its Affiliates
which has been delivered to such Lender by or on behalf of the
Borrower pursuant to this Credit Agreement or which has been
delivered to such Lender by or on behalf of the Borrower in
connection with such Lender's credit evaluation of the Borrower
and its Affiliates prior to becoming a party to this Credit
Agreement; in each case subject to subsection 11.14.
(g) At the time of each assignment pursuant to this subsection
11.6 to a Person which is not already a Lender hereunder and
which is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Lender shall provide to the Borrower and
the Agent the appropriate Internal Revenue Service Forms (and, if
applicable, a U.S. Tax Compliance Certificate) described in
Section 3.9.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Credit Agreement
(including, without limitation, any right to payment of principal
and interest under any Note) to any Federal Reserve Bank in
accordance with applicable laws.
11.7 Adjustments; Set-off.
(a) Each Lender agrees that if any Lender (a "benefited
Lender") shall at any time receive any payment of all or part of
its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-
off, pursuant to events or proceedings of the nature referred to
in clause (e) of Section 9, or otherwise) in a greater proportion
than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or
interest thereon, such benefited Lender shall purchase for cash
from the other Lenders a participating interest in such portion
of each such other Lender's Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefited Lender to
share the excess payment or benefits of such collateral or
proceeds ratably with each of the Lenders; provided, however,
that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase
shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of
another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect
to such portion as fully as if such Lender were the direct holder
of such portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice
to the Borrower, any such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon the
occurrence of any Event of Default, to setoff and appropriate and
apply any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured,
at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the Borrower, or
any part thereof in such amounts as such Lender may elect,
against and on account of the obligations and liabilities of the
Borrower to such Lender hereunder and claims of every nature and
description of such Lender against the Borrower, in any currency,
whether arising hereunder, under the Notes or under any documents
contemplated by or referred to herein or therein, as such Lender
may elect, whether or not such Lender has made any demand for
payment and although such obligations, liabilities and claims may
be contingent or unmatured. The aforesaid right of set-off may
be exercised by such Lender against the Borrower or against any
trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver or execution, judgment or
attachment creditor of the Borrower, or against anyone else
claiming through or against the Borrower or any such trustee in
bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment
creditor, notwithstanding the fact that such right of set-off
shall not have been exercised by such Lender prior to the
occurrence of any Event of Default. Each Lender agrees promptly
to notify the Borrower and the Agent after any such set-off and
application made by such Lender; provided, however, that the
failure to give such notice shall not affect the validity of such
set-off and application.
11.8 Table of Contents and Section Headings.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing
this Credit Agreement.
11.9 Counterparts.
This Credit Agreement may be executed by one or more of the parties to
this Credit Agreement on any number of separate counterparts, and all
of said counterparts taken together shall be deemed to constitute one
and the same instrument. A set of the copies of this Credit Agreement
signed by all the parties shall be lodged with the Borrower and the
Agent.
11.10 Severability.
Any provision of this Credit 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.
11.11 Integration.
This Credit Agreement, the Notes and the other Credit Documents
represent the agreement of the Borrower, the Agent and the Lenders
with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Agent, the Borrower
or any Lender relative to the subject matter hereof not expressly set
forth or referred to herein or in the Notes.
11.12 Governing Law.
This Credit Agreement and the Notes and the rights and obligations of
the parties under this Credit Agreement and the Notes shall be
governed by, and construed and interpreted in accordance with, the law
of the State of North Carolina.
11.13 Consent to Jurisdiction and Service of Process.
All judicial proceedings brought against the Borrower or any other
Credit Party with respect to this Credit Agreement, any Note or any of
the other Credit Documents may be brought in any state or federal
court of competent jurisdiction in the State of North Carolina, and,
by execution and delivery of this Credit Agreement, the Borrower and
each of the other Credit Parties accepts, for itself and in connection
with its properties, generally and unconditionally, the non-exclusive
jurisdiction of the aforesaid courts and irrevocably agrees to be
bound by any final judgment rendered thereby in connection with this
Credit Agreement from which no appeal has been taken or is available.
The Borrower and each of the other Credit Parties irrevocably agrees
that all process in any such proceedings in any such court may be
effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to it at its
address set forth in subsection 11.2 or at such other address of which
the Agent shall have been notified pursuant thereto, such service
being hereby acknowledged by the Borrower and each of the other Credit
Parties to be effective and binding service in every respect. The
Borrower, each of the other Credit Parties, the Agent and the Lenders
irrevocably waive any objection, including, without limitation, any
objection to the laying of venue or based on the grounds of forum non
conveniens which it may now or hereafter have to the bringing of any
such action or proceeding in any such jurisdiction. Nothing herein
shall affect the right to serve process in any other manner permitted
by law or shall limit the right of any Lender to bring proceedings
against the Borrower and each of the other Credit Parties in the court
of any other jurisdiction.
11.14 Confidentiality.
The Agent and each of the Lenders agrees that it will use its best
efforts not to disclose without the prior consent of the Borrower
(other than to its employees, Subsidiaries, Affiliates, auditors or
counsel or to another Lender) any information with respect to the
Borrower and its Subsidiaries which is furnished pursuant to this
Credit Agreement, any other Credit Document or any documents
contemplated by or referred to herein or therein and which is
designated by the Borrower to the Lenders in writing as confidential
or as to which it is otherwise reasonably clear such information is
not public, except that any Lender may disclose any such information
(a) as has become generally available to the public other than by a
breach of this subsection 11.14, (b) as may be required or appropriate
in any report, statement or testimony submitted to any municipal,
state or federal regulatory body having or claiming to have
jurisdiction over such Lender or to the Federal Reserve Board or the
Federal Deposit Insurance Corporation or the OCC or similar
organizations (whether in the United States or elsewhere) or their
successors or the National Association of Insurance Commissioners,(c)
as may be required or appropriate in response to any summons or
subpoena or any law, order, regulation or ruling applicable to such
Lender, (d) as may be necessary or appropriate in the exercise of the
Agent's and the Lender's rights under this Credit Agreement or the
other Credit Documents, or (E) to any prospective Participant or
assignee in connection with any contemplated transfer pursuant to
Section 11.6, provided that such prospective transferee shall have
been made aware of this Section 11.14 and shall have agreed to be
bound by its provisions as if it were a party to this Credit
Agreement.
11.15 Acknowledgments.
Each of the Credit Parties hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution
and delivery of each Credit Document;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Credit Parties arising out of or
in connection with this Credit Agreement and the relationship
between Agent and Lenders, on one hand, and the Credit Parties,
on the other hand, in connection herewith is solely that of
debtor and creditor; and
(c) no joint venture exists among the Lenders or among the
Credit Parties and the Lenders.
11.16 Waivers of Jury Trial.
The Credit Parties, the Agent and the Lenders hereby irrevocably and
unconditionally waive, to the extent permitted by applicable law,
trial by jury in any legal action or proceeding relating to this
Credit Agreement or any other Credit Document and for any counterclaim
therein.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, each of the parties hereto has caused a
counterpart of this Credit Agreement to be duly executed and delivered
as of the date first above written.
BORROWER:
THE MANITOWOC COMPANY, INC.,
a Wisconsin corporation
By /s/ Phil Keener
-------------------------
Title Treasurer
-------------------------
GUARANTORS:
MANITOWOC MEC, INC.,
a Nevada corporation
MANITEX, INC.,
a Texas corporation
FEMCO MACHINE COMPANY, INC.,
a Nevada corporation
WEST-MANITOWOC, INC.,
a Wisconsin corporation
NORTH CENTRAL CRANE & EXCAVATOR SALES
CORP.,
a Nevada corporation
MANITOWOC RE-MANUFACTURING, INC.,
a Wisconsin corporation
KOLPAK MANUFACTURING COMPANY,
a Tennessee corporation
MANITOWOC EQUIPMENT WORKS, INC.,
a Nevada corporation
MANITOWOC MARINE GROUP, INC.,
a Nevada corporation
MANITOWOC ICE, INC.,
a Wisconsin corporation
KMT REFRIGERATION, INC.,
a Wisconsin corporation
MANITOWOC CRANES, INC.,
a Wisconsin corporation
SI ACQUISITION, INC.,
a Nevada corporation
By: /s/ Phil Keener
-------------------------
Title: Treasurer
for each of the foregoing
MANITOWOC CP, INC.,
a Nevada corporation
MANITOWOC CRANE GROUP, INC.,
a Nevada corporation
MANITOWOC FP, INC.,
a Nevada corporation
MANITOWOC-FOODSERVICE GROUP, INC.,
a Nevada corporation
By: /s/ Phil Keener
-------------------------
Title: Authorized Representative
for each of the foregoing
LENDERS:
NATIONSBANK, N.A.,
in its capacity as Agent and as
a Lender
By /s/ Lisa S. Donoghue
-------------------------
Title Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
in its capacity as Documentation Agent and as
a Lender
By /s/ Robert Ritter
-------------------------
Title Vice President
PNC BANK NATIONAL ASSOCIATION
By /s/ Richard T. Jander
-------------------------
Title Vice President
THE BANK OF NOVA SCOTIA
By /s/ F. C. H. Ashby
-------------------------
Title Senior Manager Loan Operations
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ Jerry Kane
-------------------------
Title Senior Vice President
FLEET BANK, N.A.
By /s/ Robert Bloch
-------------------------
Title Vice President
THE NORTHERN TRUST COMPANY
By /s/ Julie Wigdale Kennedy
-------------------------
Title Vice President
THE LONG-TERM CREDIT BANK OF
JAPAN, LTD. CHICAGO BRANCH
By /s/ Armund J. Schoen
------------------------
Title Senior Vice President
THE BANK OF NEW YORK
By /s/ Mark Familo
------------------------
Title Assistant Vice President
ASSOCIATED BANK LAKESHORE
NATIONAL ASSOCIATION
By /s/ Scott A. Yeoman
------------------------
Title Senior Vice President
NEWS For Immediate Release
MANITOWOC'S PURCHASE OF
SERVEND COMPLETED AS PLANNED
MANITOWOC, WISCONSIN, October 31, 1997 - The Manitowoc Company, Inc. (MTW)
says it has closed on its acquisition of SerVend International in line with its
previously announced plan.
The cash purchase of SerVend operations and assets was completed today.
The final price will be between $65-75 million, depending on final P&L and
Balance Sheet results.
SerVend is one of the world's largest manufacturers of ice/beverage
dispensers and dispensing valves for the soft-drink industry.
The family-owned business was founded in 1980 in Sellersburg, Indiana.
SerVend also operates a plant in Portland, Oregon.
George E. Fischer, co-founder of the company, has been named to the
Manitowoc board of directors.
Gregory E. Fischer will continue as president of SerVend.
The Manitowoc Company, Inc., is a leading manufacturer of ice-cube
machines, ice-cube/beverage dispensers, and commercial refrigeration equipment
for the foodservice industry. It is also a leading producer of lattice-boom
cranes, boom trucks, and related products for the construction industry and
specializes in ship-repair work for vessels operating on the Great Lakes.
Company Contact:
Robert R. Friedl
Senior Vice President and
Chief Financial Officer
920-683-8136
