<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 6, 1997.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
__________________
AMENDMENT NO. 3
(FINAL AMENDMENT)
TO
SCHEDULE 14D-1
TENDER OFFER STATEMENT PURSUANT TO SECTION 14(d)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934
AND SCHEDULE 13D
VERSA TECHNOLOGIES, INC.
(NAME OF SUBJECT COMPANY)
_________________
APPLIED POWER INC.
TVPA CORP.
(BIDDERS)
_________________
COMMON STOCK, PAR VALUE $.01 PER SHARE
(TITLE OF CLASS OF SECURITIES)
925116-10-5
(CUSIP NUMBER OF CLASS OF SECURITIES)
_________________
ROBERT C. ARZBAECHER
APPLIED POWER INC.
13000 WEST SILVER SPRING DRIVE
BUTLER, WI 53007
(414) 781-6600
(414) 781-0629 (FAX)
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
_________________
COPY TO:
ANTHONY W. ASMUTH III, ESQ.
QUARLES & BRADY
411 EAST WISCONSIN AVENUE
MILWAUKEE, WISCONSIN 53202
(414) 277-5000
(414) 271-3552 (FAX)
<PAGE> 2
AMENDMENT NO. 3 TO
SCHEDULE 14D-1
CUSIP No. 925116-10-5
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
TVPA Corp.
39-1904753
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCES OF FUNDS
AF (from Parent)
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURUSANT TO
ITEMS 2 (e) OR 2(f)
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,429,424 (including 49,109 shares subject to guarantee of delivery)
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[ ]
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
94.9%
10 TYPE OF REPORTING PERSON
CO
2
<PAGE> 3
AMENDMENT NO. 3 TO
SCHEDULE 14D-1
CUSIP No. 925116-10-5
1. NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Applied Power Inc.
39-0168610
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(a) [ ]
(b) [X]
3. SEC USE ONLY
4. SOURCES OF FUNDS
BK, WC
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURUSANT TO
ITEMS 2 (e) OR 2(f)
[ ]
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Wisconsin
7. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,429,424 (including 49,109 shares subject to guarantee of delivery)
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (7) EXCLUDES CERTAIN SHARES
[X] See Schedule II of the Offer to Purchase
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (7)
94.9%
10 TYPE OF REPORTING PERSON
CO
<PAGE> 4
This Amendment No. 3 (Final Amendment) constitutes the final amendment
to the Tender Offer Statement on Schedule 14D-1 filed with the Securities and
Exchange Commission on September 5, 1997, as amended (the "Schedule 14D-1"),
relating to the tender offer by TVPA Corp., a Delaware corporation (the
"Purchaser") and a wholly-owned subsidiary of Applied Power Inc., a Wisconsin
corporation ("Parent"), to purchase all outstanding shares of common stock, par
value $.01 per share (the "Common Stock"), including the associated rights to
purchase Series A Junior Participating Preferred Stock (together with the
Common Stock, the "Shares"), of Versa Technologies, Inc., a Delaware
corporation (the "Company"), at a price of $24.625 per Share, net to the seller
in cash, without interest thereon, upon the terms and subject to the conditions
set forth in the Offer to Purchase dated September 5, 1997 (the "Offer to
Purchase") and in the related Letter of Transmittal (which, as either may be
amended or supplemented from time to time, collectively constitute the
"Offer"). Capitalized terms used and not defined herein shall have the
meanings assigned to them in the Offer to Purchase and the Schedule 14D-1.
This filing also shall be deemed to satisfy the reporting requirements of
Section 13(d) of the Securities Exchange Act of 1934, as amended, with respect
to all securities acquired by the Purchaser and Parent pursuant to the Offer as
reported herein.
ITEM 4. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Item 4(a)-(b) of the Schedule 14D-1 is hereby amended and supplemented
by adding thereto the following:
As contemplated by the Commitment Letter, Parent has entered into a Credit
Agreement (the "Credit Agreement") with the Lenders, dated as of October 3,
1997, providing for the Facility on substantially the terms and conditions set
forth in the Summary of Terms and Conditions attached to the Commitment Letter.
Borrowings under the Facility will be used to consummate the Offer.
Parent has executed a commitment letter dated September 24, 1997 (the
"September Commitment Letter") issued by BoA, and by BASI as arranger,
providing for the refinancing of Parent's current $170,000,000 revolving credit
agreement with a new $350,000,000 five-year revolving credit facility (the "New
Facility"). Parent intends to repay its borrowings under the Facility using
funds received under the New Facility when this financing is finalized.
Pursuant to the September Commitment Letter, BoA agreed, subject to the
terms and conditions contained therein, to commit to fund $65,000,000 of the
New Facility. BASI will act to assemble a syndicate of lenders (the "New
Lenders") to commit to the balance of the New Facility. The New Facility is to
be used to finance the Offer, to refinance existing indebtedness (including the
Facility), and for other general corporate purposes.
The September Commitment Letter provides that Parent will actively assist
BASI in achieving a mutually acceptable syndication. In connection therewith,
Parent has agreed, among other things, to prepare and provide to BASI and BoA
all information which those
4
<PAGE> 5
parties may reasonably request, to assist in the preparation of a confidential
informational memorandum, and to make senior management available to attend
meetings with prospective lenders.
The obligation of the New Lenders to fund the New Facility is subject to
terms and conditions customary for transactions of this type, including,
without limitation, the negotiation and execution of a definitive credit
agreement and related documentation, the absence of material adverse changes
affecting Parent and the Company, the non-occurrence of any material adverse
change in loan syndication or capital market conditions which would affect the
syndication of any portion of the New Facility and the condition that there be
no competing offering, placement or arrangement of any debt securities or bank
financing by or on behalf of Parent (other than for certain permitted
exceptions).
Whether or not the New Facility closes, Parent has agreed to indemnify and
hold harmless the New Lenders and BASI (as well as their respective directors,
officers, employees and affiliates) from and against all losses, damages and
liabilities that arise out of or relate to the September Commitment Letter or
the syndication of the New Facility. Parent also would reimburse such
indemnified parties for reasonable expenses incurred in connection with
defending any such loss. This indemnification obligation would not arise,
however, in respect of a loss resulting from the gross negligence or willful
misconduct of the party seeking indemnification. Neither the New Lenders nor
BASI are liable to Parent for any consequential damages.
The September Commitment Letter provides that Parent will reimburse BoA
and BASI for reasonable out-of-pocket costs and expenses incurred by those
parties in connection with the negotiation and preparation of documents for the
New Facility. Finally, the September Commitment Letter specifies that the New
Lenders' commitment thereunder will expire on November 28, 1997 if the New
Facility has not been closed on or before that date.
Attached to the New Commitment Letter is a Summary of Terms and Conditions
which describes certain relevant features of the proposed New Facility. Among
the matters described therein: (i) the revolving credit loans can accrue
interest, at Parent's option, at either an alternate reference rate or an
interbank market rate; (ii) Parent will pay an unused facility fee; (iii) loans
can be prepaid without premium or penalty (other than standard breakup fees for
prepaying interbank market loans prior to the expiration of their applicable
interest period); (iv) the definitive credit agreement will contain
representations, warranties, covenants (including minimum consolidated
shareholders' equity, minimum fixed charge coverage ratio, and maximum total
funded indebtedness), conditions to borrowing, and events of default which are
consistent with Parent's existing revolving credit agreement; (v) the New
Lenders reserve the right to sell participations in their respective loans and
commitments to certain eligible assignees; and (vi) interest rates and the
unused facility fee will be subject to a "pricing grid" tied to Parent's ratio
of total funded debt to capitalization.
Parent also executed a fee letter with BoA and BASI, pursuant to which
Parent agreed to pay customary closing fees in respect of the New Facility to
BoA and BASI.
5
<PAGE> 6
The foregoing summaries of the Credit Agreement and the September
Commitment Letter are qualified in their entirety by reference to Exhibit
(b)(2) and Exhibit (b)(3) filed herewith, which are incorporated herein by
reference.
ITEM 6. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
Item 6 of the Schedule 14D-1 is hereby amended and supplemented by adding
thereto the following:
(a)-(b) The Offer expired at 5:00 p.m., Eastern time, on Friday,
October 3, 1997. Based on preliminary information provided by the Depositary,
there were validly tendered and not withdrawn approximately 5,429,424 shares of
Common Stock (including approximately 49,109 shares subject to guarantee of
delivery), or approximately 94.9% of the issued and outstanding shares of
Common Stock. The Shares validly tendered and not withdrawn at such time were
accepted for payment. On October 6, 1997, Parent issued the press release
attached hereto as Exhibit (a)(11). The information contained therein is
incorporated by reference herein.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS
Item 11 of the Schedule 14D-1 is hereby amended to add the following
exhibits:
(a)(11) - Press Release, dated October 6, 1997, issued by Parent.
(b)(2) - Credit Agreement, dated as of October 3, 1997, among Applied
Power Inc., Bank of America National Trust and Savings
Association, as Agent, and the other financial institutions party
thereto.
(b)(3) - Commitment letter between Bank of America National Trust and
Savings Corporation, BankAmerica Securities, Inc. and Applied
Power Inc. dated September 24, 1997 (including the Summary of
Terms and Conditions attached thereto).
6
<PAGE> 7
SIGNATURES
After due inquiry and to the best of its knowledge and belief, each of the
undersigned certifies that the information set forth in this statement is true,
complete and correct.
Dated: October 6, 1997
TVPA CORP.
BY: /s/ Robert C. Arzbaecher
------------------------
Robert C. Arzbaecher,
Vice President
APPLIED POWER INC.
BY: /s/ Robert C. Arzbaecher
------------------------
Robert C. Arzbaecher,
Vice President and
Chief Financial Officer
S-1
<PAGE> 8
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO.
<S> <C>
(a)(1)*- Offer to Purchase, dated September 5, 1997.
(a)(2)*- Form of Letter of Transmittal, dated September 5, 1997.
(a)(3)*- Form of Notice of Guaranteed Delivery.
(a)(4)*- Form of Letter for use by Brokers, Dealers, Commercial Banks,
Trust Companies and Other Nominees.
(a)(5)*- Form of Letter to Clients from Brokers, Dealers, Commercial
Banks, Trust Companies and Other Nominees.
(a)(6)*- Form of Guidelines for Certification of Taxpayer
Identification Number on Substitute Form W-9.
(a)(7)*- Text of Joint Press Release, dated September 3, 1997.
(a)(8)*- Form of Summary Advertisement, dated September 5, 1997.
(a)(9)*- Form of Letter to Participants in the Versa Technologies, Inc.
Stock Purchase and Dividend Reinvestment Plan.
(a)(10)*- Text of Joint Press Release, dated September 24, 1997.
(a)(11)- Press Release, dated October 6, 1997, issued by Parent.
(b)(1)*- Commitment Letter between Bank of America National Trust and
Savings Corporation, BankAmerica Securities, Inc., PNC Bank,
National Association and Applied Power Inc. dated August 29, 1997
(including the Summary of Terms and Conditions attached thereto).
(b)(2)- Credit Agreement, dated as of October 3, 1997, among Applied Power
Inc., Bank of America National Trust and Savings Association, as
Agent, and the other financial institutions party thereto.
(b)(3)- Commitment letter between Bank of America National Trust and
Savings Corporation, BankAmerica Securities, Inc. and Applied
Power Inc. dated September 24, 1997 (including the Summary of
Terms and Conditions attached thereto).
</TABLE>
EI-1
<PAGE> 9
<TABLE>
(c)(1)*- Agreement and Plan of Merger, dated as of September 2, 1997, among
Applied Power Inc., TVPA Corp. and Versa Technologies, Inc.
<S> <C>
(d)- Not Applicable.
(e)- Not Applicable.
(f)- Not Applicable.
</TABLE>
______________________
* Previously filed.
EI-1
<PAGE> 10
EXHIBIT (a)(11)
FROM: APPLIED POWER INC., P.O. BOX 325, MILWAUKEE, WI 53201
DATE: OCTOBER 6, 1997
FOR RELEASE: IMMEDIATE
FOR FURTHER INFORMATION CONTACT: ROBERT C. ARZBAECHER
APPLIED POWER COMPLETES TENDER OFFER FOR VERSA TECHNOLOGIES
MILWAUKEE, WISCONSIN, October 6, 1997 -- Applied Power Inc. (APW - NYSE)
announced today that its subsidiary, TVPA Corp., had accepted for payment all
shares of Versa Technologies, Inc. (VRSA - Nasdaq) common stock which have been
tendered pursuant to TVPA's tender offer for all outstanding shares of common
stock of Versa Technologies, Inc. at $24.625 net per share. The tender offer
expired as scheduled at 5:00 p.m., Eastern time, on Friday, October 3, 1997.
Based on a preliminary count from the depositary, approximately 5,429,424
shares of Versa Technologies, Inc. common stock had been tendered and not
withdrawn (including approximately 49,109 by notice of guaranteed delivery),
which constitutes over 94 percent of the outstanding Versa Technologies, Inc.
Common Stock. Subject to the terms of the merger agreement among Applied
Power, TVPA Corp. and Versa Technologies, shares of common stock not tendered
will be converted into the right to receive $24.625 net per share pursuant to a
second-step merger between TVPA Corp. and Versa Technologies. It is
anticipated that Versa Technologies common stock will be delisted from Nasdaq
and the merger completed as soon as practicable.
As contemplated in connection with the tender offer, Applied Power Inc.
has entered into a $140,000,000 loan agreement, with the funds being used for
payment of Versa Technologies Inc. shares acquired. In addition, Applied Power
Inc. has signed a Commitment Letter with its lenders to refinance its current
revolving credit agreement, including an increase in its line of credit from
$170,000,000 to $350,000,000. The Company intends to repay its borrowings
under the $140,000,000 loan agreement using funds received under the revised
revolving credit agreement when this refinancing is finalized.
Applied Power Inc., headquartered in Wisconsin, is a global company
comprised of three business segments. Technical Environments and Enclosures
expertise is in configuring technical equipment for end users and in providing
enclosures for electronic equipment. Engineered Solutions supplies components
and systems based on hydraulic and vibration control technologies to a diverse
group of OEM customers. Distributed Products provides industrial and
electrical tools and accessories through various distributor and retail
channels worldwide.
<PAGE> 11
Versa Technologies, headquartered in Racine, Wisconsin, comprises three
business segments. The Electronics segment designs and manufactures custom
electronic and electrical systems for a broad range of applications. The
Engineered Materials segment fabricates custom engineered elastomeric
components for industrial and medical applications. The Fluid Power segment
manufactures custom engineered cylinders and hydraulic and electromechanical
actuation systems for a broad range of markets including transportation,
recreational vehicle, and construction equipment markets.
For further information contact:
Applied Power Inc.
Robert C. Arzbaecher
Vice President and Chief Financial Officer
414-781-6600
To receive a faxed copy of this or other recent Applied Power communications,
please call the Company's "News on Demand" service at 1-800-549-0679.
<PAGE> 12
EXHIBIT (b)(2)
===================================================================
CREDIT AGREEMENT
DATED AS OF OCTOBER 3, 1997
AMONG
APPLIED POWER INC.,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS AGENT,
AND
THE OTHER FINANCIAL INSTITUTIONS PARTY HERETO
ARRANGED BY
BANCAMERICA SECURITIES, INC.
===================================================================
<PAGE> 13
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S><C>
ARTICLE I DEFINITIONS........................................ 1
1.1 Certain Defined Terms.................................. 1
1.2 Other Interpretive Provisions.......................... 13
1.3 Accounting Principles.................................. 14
ARTICLE II THE CREDITS....................................... 14
2.1 Amounts and Terms of Commitments....................... 14
2.2 Loan Accounts.......................................... 15
2.3 Procedure for Borrowing................................ 15
2.4 Conversion and Continuation Elections.................. 16
2.5 Voluntary Termination or Reduction of Commitments ..... 17
2.6 Optional Prepayments................................... 17
2.7 Repayment.............................................. 18
2.8 Interest............................................... 18
2.9 Fees................................................... 19
(a) Arrangement, Agency Fees......................... 19
(b) Commitment Fees.................................. 19
2.10 Computation of Fees and Interest...................... 19
2.11 Payments by the Company............................... 19
2.12 Payments by the Banks to the Agent.................... 20
2.13 Sharing of Payments, Etc.............................. 21
ARTICLE III TAXES, YIELD PROTECTION AND ILLEGALITY........... 21
3.1 Taxes.................................................. 21
3.2 Illegality............................................. 22
3.3 Increased Costs and Reduction of Return................ 23
3.4 Funding Losses......................................... 24
3.5 Inability to Determine Rates........................... 24
3.6 Certificates of Banks.................................. 25
3.7 Substitution of Banks.................................. 25
3.8 Survival............................................... 25
ARTICLE IV CONDITIONS PRECEDENT.............................. 25
4.1 Conditions of Initial Loans............................ 25
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Page
<S><C>
(a) Credit Agreement and Notes......................... 25
(b) Resolutions; Incumbency............................ 25
(c) Organization Documents; Good Standing.............. 26
(d) Legal Opinions..................................... 26
(e) Payment of Fees.................................... 26
(f) Certificate........................................ 26
(h) Other Documents.................................... 27
4.2 Other Conditions to Initial Loans....................... 27
4.3 Conditions to All Borrowings............................ 27
(a) Notice of Borrowing................................ 27
(b) Continuation of Representations and Warranties..... 27
(c) No Existing Default................................ 27
ARTICLE V REPRESENTATIONS AND WARRANTIES...................... 28
5.1 Organization, etc....................................... 28
5.2 Authorization; No Conflict.............................. 28
5.3 Validity and Binding Nature............................. 28
5.4 Financial Statements.................................... 28
5.5 No Material Adverse Change.............................. 30
5.6 Litigation and Contingent Liabilities................... 30
5.7 Liens................................................... 30
5.8 Subsidiaries............................................ 30
5.9 Pension and Welfare Plans............................... 30
5.10 Regulated Industry...................................... 30
5.11 Regulations G, U and X.................................. 31
5.12 Taxes................................................... 31
5.13 Environmental and Safety Matters........................ 31
5.14 Compliance with Law..................................... 32
5.15 Information............................................. 32
5.16 Ownership of Properties................................. 32
5.17 Patents, Trademarks, etc................................ 32
5.18 Insurance............................................... 33
5.19 Versa Merger Agreement.................................. 33
5.20 Solvency................................................ 33
</TABLE>
-ii-
<PAGE> 15
<TABLE>
<CAPTION>
Page
<S><C>
ARTICLE VI COVENANTS.......................................... 33
ARTICLE VII EVENTS OF DEFAULT AND THEIR EFFECT................ 34
7.1 Events of Default....................................... 34
7.2 Effect of Event of Default.............................. 35
ARTICLE VIII THE AGENT........................................ 36
8.1 Appointment and Authorization........................... 36
8.2 Delegation of Duties.................................... 36
8.3 Liability of Agent...................................... 36
8.4 Reliance by Agent....................................... 37
8.5 Notice of Default....................................... 37
8.6 Credit Decision......................................... 38
8.7 Indemnification......................................... 38
8.8 Agent in Individual Capacity............................ 39
8.9 Successor Agent......................................... 39
8.10 Withholding Tax........................................ 39
ARTICLE IX MISCELLANEOUS...................................... 41
9.1 Amendments and Waivers.................................. 41
9.2 Notices................................................. 42
9.3 No Waiver; Cumulative Remedies.......................... 42
9.4 Costs and Expenses...................................... 43
9.5 Indemnity............................................... 43
9.6 Payments Set Aside...................................... 44
9.7 Successors and Assigns.................................. 44
9.8 Assignments, Participations, etc........................ 44
9.9 Confidentiality......................................... 45
9.10 Setoff................................................. 46
9.11 Notification of Addresses, Lending Offices, Etc........ 46
9.12 Counterparts........................................... 47
9.13 Severability........................................... 47
9.14 No Third Parties Benefited............................. 47
9.15 Governing Law and Jurisdiction......................... 47
9.16 Waiver of Jury Trial................................... 47
9.17 Entire Agreement....................................... 48
</TABLE>
-iii-
<PAGE> 16
Page
SCHEDULES
Disclosure Schedule
Schedule 2.1 Commitments
Schedule 9.2 Lending Offices; Addresses for Notices
-iv-
<PAGE> 17
EXHIBITS
Exhibit A Form of Notice of Borrowing
Exhibit B Form of Notice of Conversion/Continuation
Exhibit D Form of Legal Opinion of Company's Counsel
Exhibit E Form of Assignment and Acceptance
-v-
<PAGE> 18
CREDIT AGREEMENT
This CREDIT AGREEMENT is entered into as of October 3, 1997, among
APPLIED POWER INC., a Wisconsin corporation (the "Company"), the several
financial institutions from time to time party to this Agreement (collectively,
the "Banks"; individually, a "Bank"), and Bank of America National Trust and
Savings Association, as agent for the Banks.
WHEREAS, the Banks have agreed to make available to the Company a
revolving credit facility upon the terms and conditions set forth in this
Agreement;
NOW, THEREFORE, in consideration of the mutual agreements, provisions
and covenants contained herein, the parties agree as follows:
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms. The following terms have the following
meanings:
"Affected Bank" has the meaning specified in Section 3.7.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, by contract, or otherwise.
"Agent" means BofA in its capacity as agent for the Banks
hereunder, and any successor agent arising under Section 8.9.
<PAGE> 19
"Agent-Related Persons" means BofA and any successor agent
arising under Section 8.9, together with their respective Affiliates
(including, in the case of BofA, the Arranger), and the officers,
directors, employees, agents and attorneys-in-fact of such Persons
and Affiliates.
"Agent's Payment Office" means the address for payments set forth
on the signature page hereto in relation to the Agent, or such other
address as the Agent may from time to time specify.
"Agreement" means this Credit Agreement.
"Applicable Fee Rate" means the rate per annum set forth in the
table below opposite the applicable Total Debt to Capitalization
Ratio:
<TABLE>
<CAPTION>
=====================================================================================================================
DEBT TO CAPITAL RATIO Level I Level II Level III Level IV Level V Level VI
<30 % >30 % AND < >40% AND < > 45 % AND < > 50 % AND < > 55 %
- - - - -
40% 45% 50% 55 %
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Applicable Fee Rate 0.125% 0.1375% 0.1750% 0.200% 0.200% 0.250%
=====================================================================================================================
</TABLE>
The Applicable Fee Rate shall be adjusted, to the extent
applicable 60 days (or, in the case of the last calendar quarter of any year, 90
days) after the end of each calendar quarter, based on the Debt to Capital Ratio
as of the last day of such quarter commencing with the calendar ending November
30, 1997; it being understood that if the Company fails to deliver the financial
statements required by Article VI, and the related Compliance Certificate
required by Article VI by the 60th day (or, if applicable, the 90th day) after
any calendar quarter, the Applicable Fee Rate shall be 0.250% until such
financial statements and Compliance Certificate are delivered. The Applicable
Fee Rate shall be 0.250% until the first adjustment hereunder.
"Applicable Margin" means
(i) with respect to Base Rate Loans, 0%; and
-2-
<PAGE> 20
(ii) with respect to Offshore Rate Loans, the rate per annum
set forth in the table below opposite the applicable Debt to Capital
Ratio:
<TABLE>
<CAPTION>
=====================================================================================================================
DEBT TO CAPITAL RATIO Level I Level II Level III Level IV Level V Level VI
<30 % >30 % AND < >40% AND < > 45 % AND < > 50 % AND < > 55 %
- - - - -
40% 45% 50% 55 %
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Applicable Margin 0.30% 0.375% 0.450% 0.500% 0.550% 0.700%
=====================================================================================================================
</TABLE>
The Applicable Margin shall be adjusted, to the extent applicable 60 days
(or, in the case of the last calendar quarter of any year, 90 days) after the
end of each calendar quarter, based on the Ratio of Total Debt to Capital Ratio
as of the last day of such quarter commencing with the calendar ending November
30, 1997; it being understood that if the Company fails to deliver the financial
statements required by Article VI, and the related Compliance Certificate
required by Article VI by the 60th day (or, if applicable, the 90th day) after
any calendar quarter, the Applicable Offshore Rate Margin shall be 0.70% for
loans bearing interest based on the Offshore Rate until such financial
statements and Compliance Certificate are delivered. The Applicable Margin shall
be 0.700% until the first adjustment hereunder. Each of the above percentages
shall be increased by 0.10% from and after April 6, 1998.
"Arranger" means BancAmerica Securities, Inc., a Delaware corporation.
"Assignee" has the meaning specified in subsection 9.8(a).
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external counsel, the allocated cost
of internal legal services and all reasonable disbursements of internal
counsel.
"Bank" has the meaning specified in the introductory clause hereto.
"Base Rate" means, for any day, the higher of: (a) 0.50% per annum
above the latest Federal Funds Rate; and (b) the rate of interest in
effect for such day as publicly
-3-
<PAGE> 21
announced from time to time by BofA in San Francisco, California, as its
"reference rate." (The "reference rate" is a rate set by BofA based upon
various factors including BofA's costs and desired return, general economic
conditions and other factors, and is used as a reference point for pricing
some loans, which may be priced at, above, or below such announced rate.)
Any change in the reference rate announced by BofA shall take effect
at the opening of business on the day specified in the public announcement
of such change.
"Base Rate Loan" means a Loan that bears interest based on the Base
Rate.
"BofA" means Bank of America National Trust and Savings Association, a
national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans of the
same Type made to the Company on the same day by the Banks under Article
II, and, in the case of Offshore Rate Loans, having the same Interest
Period.
"Borrowing Date" means any date on which a Borrowing occurs under
Section 2.3.
"Business Day" means any day other than a Saturday, Sunday or other
day on which commercial banks in Chicago or San Francisco are authorized or
required by law to close and, if the applicable Business Day relates to any
Offshore Rate Loan, means such a day on which dealings are carried on in
the applicable offshore dollar interbank market.
"Capital Adequacy Regulation" means any guideline, request or
directive of any central bank or other Governmental Authority, or any other
law, rule or regulation, whether or not having the force of law, in each
case, regarding capital adequacy of any bank or of any corporation
controlling a bank.
"Capital Lease" means, with respect to any Person, any lease of (or
other agreement conveying the right to use) any
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real or personal property which, in conformity with GAAP, is accounted for
as a capital lease on the balance sheet of such Person.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"Change of Control" means any Person or group of Persons acting in
concert which are unacceptable to the Majority Banks obtained control of
more than 50% of the issued and outstanding shares of capital stock of the
Company having the power to elect a majority of directors of the Company.
"Closing Date" means the date on which all conditions precedent set
forth in Section 4.1 are satisfied or waived by all Banks (or, in the case
of subsection 4.1(e), waived by the Person entitled to receive such
payment).
"Code" means the Internal Revenue Code of 1986, and regulations
promulgated thereunder.
"Commitment", as to each Bank, has the meaning specified in Section
2.1.
"Contractual Obligation" means, as to any Person, any provision of any
security issued by such Person or of any agreement, undertaking, contract,
indenture, mortgage, deed of trust or other instrument, document or
agreement to which such Person is a party or by which it or any of its
property is bound.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated)
under common control which, together with the Company, are treated as a
single employer under Section 414(b) or 414(c) of the Code or Section 4001
of ERISA.
"Conversion/Continuation Date" means any date on which, under Section
2.4, the Company (a) converts Loans of one
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Type to another Type, or (b) continues as Loans of the same Type, but with
a new Interest Period, Loans having Interest Periods expiring on such date.
"Debt" of any Person means, without duplication, (a) all indebtedness
of such Person for borrowed money, whether or not evidenced by bonds,
debentures, notes or similar instruments, (b) all obligations of such
Person as lessee under Capital Leases which have been recorded as
liabilities on a balance sheet of such Person, (c) all obligations of such
Person to pay the deferred purchase price of property or services (other
than current accounts payable in the ordinary course of business), (d) all
indebtedness secured by a Lien on the property of such Person, whether or
not such indebtedness shall have been assumed by such Person (it being
understood that if such Person has not assumed or otherwise become
personally liable for any such indebtedness, the amount of the Debt of such
Person in connection therewith shall be limited to the lesser of the face
amount of such indebtedness or the fair market value of all property of
such Person securing such indebtedness), (e) all obligations, contingent or
otherwise, with respect to the face amount of all letters of credit
(whether or not drawn) and banker's acceptances issued for the account of
such Person, (f) all obligations of such Person in respect of Swap
Contracts, (g) all Suretyship Liabilities of such Person and (h) all Debt
(as defined above) of any partnership in which such Person is a general
partner. The amount of the Debt of any Person in respect of Swap Contracts
shall be deemed to be the unrealized net loss position of such Person
thereunder (determined for each counterparty individually, but netted for
all Swap Contracts maintained with such counterparty).
"Debt to Capital Ratio" means the ratio of (a) Funded Debt to (b)
Total Capital.
"Default" means any event or circumstance which, with the giving of
notice, the lapse of time, or both, would (if not cured or otherwise
remedied during such time) constitute an Event of Default.
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"Disclosure Schedule" means the Disclosure Schedule attached hereto as
Schedule 1.1.
"Dollars", "dollars" and "$" each mean lawful money of the United
States.
"Eligible Assignee" means (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development (the "OECD"), or a
political subdivision of any such country, and having a combined capital
and surplus of at least $100,000,000, provided that such bank is acting
through a branch or agency located in the United States; and a (c) Person
that is primarily engaged in the business of commercial banking and that is
(i) a Subsidiary of a Bank, (ii) a Subsidiary of a Person of which a Bank
is a Subsidiary, or (iii) a Person of which a Bank is a Subsidiary.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules, regulations and guidelines
(including consent decrees and administrative orders) relating to public
health and safety and protection of the environment.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
regulations promulgated thereunder.
"Eurodollar Reserve Percentage" has the meaning specified in the
definition of "Offshore Rate".
"Event of Default" means any of the events or circumstances specified
in Section 7.1.
"Existing Credit Agreement" has the meaning specified in Article VI.
"Federal Funds Rate" means, for any day, the rate set forth in the
weekly statistical release designated as
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<PAGE> 25
H.15(519), or any successor publication, published by the Federal Reserve
Bank of New York (including any such successor, "H.15(519)") on the
preceding Business Day opposite the caption "Federal Funds (Effective)";
or, if for any relevant day such rate is not so published on any such
preceding Business Day, the rate for such day will be the arithmetic mean
as determined by the Agent of the rates for the last transaction in
overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in
New York City selected by the Agent.
"Fee Letter" has the meaning specified in subsection 2.9(a).
"Fiscal Quarter" means any quarter of a Fiscal Year.
"Fiscal Year" means with respect to the Company and the Subsidiaries
any period of twelve consecutive months ending on August 31.
"FRB" means the Board of Governors of the Federal Reserve System, and
any Governmental Authority succeeding to any of its principal functions.
"Funded Debt" of any Person at any date of determination means the sum
of all Debt described in clauses (a) and (b) of the definition of "Debt".
"Further Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or similar
charges (including, without limitation, net income taxes and franchise
taxes), and all liabilities with respect thereto, imposed by any
jurisdiction on account of Taxes or Other Taxes payable or paid pursuant to
Section 3.1.
"GAAP" means generally accepted accounting principles set forth from
time to time in the opinions and pronouncements of the Accounting
Principles Board and the American Institute of Certified Public Accountants
and statements and pronouncements of the Financial Accounting
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Standards Board (or agencies with similar functions of comparable stature
and authority within the U.S. accounting profession), which except as
provided in Section 1.3 are applicable to the circumstances as of the date
of determination.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof, any central bank (or similar monetary
or regulatory authority) thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government, and any corporation or other entity owned or
controlled, through stock or capital ownership or otherwise, by any of the
foregoing.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act;
(c) any crude oil, petroleum product or fraction
thereof (excluding gasoline and oil in motor vehicles, small amounts
of cleaners and similar items used in the ordinary course of
business); or
(d) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance within the
meaning of any Environmental Law.
"Indemnified Liabilities" has the meaning specified in Section
9.5.
"Indemnified Person" has the meaning specified in Section 9.5.
"Interest Payment Date" means, as to any Loan other than a
Base Rate Loan, the last day of each Interest Period applicable to
such Loan and, as to any Base Rate Loan, the
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last Business Day of each February, May, August and November and each
date such Loan is converted into another Type of Loan, provided,
howeve, that if any Interest Period exceeds three months, the date
that falls three months after the beginning of such Interest Period
and after each Interest Payment Date thereafter is also an Interest
Payment Date.
"Interest Period" means, as to any Offshore Rate Loan, the
period commencing on the Borrowing Date of such Loan or on the
Conversion/Continuation Date on which the Loan is converted into or
continued as an Offshore Rate Loan, and ending on the date one, two,
three or six months thereafter as selected by the Company in its
Notice of Borrowing or Notice of Conversion/Continuation;
provided that:
(i) if any Interest Period would otherwise end on
a day that is not a Business Day, that Interest Period shall
be extended to the following Business Day unless, in the case
of an Offshore Rate Loan, 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 preceding
Business Day;
(ii) any Interest Period pertaining to an Offshore
Rate 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
calendar month at the end of such Interest Period; and
(iii) no Interest Period for any Loan shall extend
beyond the Termination Date.
"IRS" means the Internal Revenue Service, and any Governmental
Authority succeeding to any of its principal functions under the Code.
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"Lending Office" means, as to any Bank, the office or offices
of such Bank specified as its "Lending Office" or "Domestic Lending
Office" or "Offshore Lending Office", as the case may be, on Schedule
9.2, or such other office or offices as such Bank may from time to
time notify the Company and the Agent.
"Lien" means, when used with respect to any Person, any
interest of any other Person in any real or personal property, asset
or other right owned or being purchased or acquired by such Person
which secures payment or performance of any obligation and shall
include any mortgage, lien, encumbrance, charge or other security
interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
"Loan" means an extension of credit by a Bank to the Company
under Article II, and may be a Base Rate Loan or an Offshore Rate Loan
(each, a "Type" of Loan).
"Loan Documents" means this Agreement, the Fee Letters and all
other documents delivered to the Agent or any Bank in connection
herewith.
"Majority Banks" means at any time Banks then holding in
excess of 55% of the then aggregate unpaid principal amount of the
Loans, or, if no such principal amount is then outstanding, Banks then
having in excess of 55% of the Commitments.
"Margin Stock" means "margin stock" as such term is defined in
Regulation G, T, U or X of the FRB.
"Material Adverse Effect" means a material adverse effect on
(a) the financial condition, operations, business, assets or prospects
of the Company and its Subsidiaries as a whole or (b) the ability of
the Company to timely and fully perform any of its payment or other
material obligations under this Agreement or any Note.
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<PAGE> 29
"Notice of Borrowing" means a notice in substantially the form of
Exhibit A.
"Notice of Conversion/Continuation" means a notice in substantially
the form of Exhibit B.
"Obligations" means all advances, debts, liabilities, obligations,
covenants and duties arising under any Loan Document owing by the Company
to any Bank, the Agent, or any Indemnified Person, whether direct or
indirect (including those acquired by assignment), absolute or contingent,
due or to become due, now existing or hereafter arising.
"Offshore Rate" means, for any Interest Period, with respect to
Offshore Rate Loans comprising part of the same Borrowing, the rate of
interest per annum (rounded upward to the next 1/16th of 1%) determined by
the Agent as follows:
Offshore Rate = IBOR
----------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"Eurodollar Reserve Percentage" means for any day for any Interest
Period the maximum reserve percentage (expressed as a decimal, rounded
upward to the next 1/100th of 1%) in effect on such day (whether or not
applicable to any Bank) under regulations issued from time to time by the
FRB for determining the maximum reserve requirement (including any
emergency, supplemental or other marginal reserve requirement) with respect
to Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"); and
"IBOR" means the rate of interest per annum determined by the Agent as
the rate at which dollar deposits in the approximate amount of BofA's
Offshore Rate Loan for such Interest Period would be offered by BofA's
Grand Cayman Branch, Grand Cayman B.W.I. (or such other office as may be
designated for such purpose by BofA), to major banks in the offshore dollar
interbank market at their request at approximately
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11:00 a.m. (New York City time) two Business Days prior to the
commencement of such Interest Period.
The Offshore Rate shall be adjusted automatically as to all
Offshore Rate Loans then outstanding as of the effective date of any
change in the Eurodollar Reserve Percentage.
"Offshore Rate Loan" means a Loan that bears interest based on
the Offshore Rate.
"Other Taxes" means any present or future stamp, court or documentary
taxes or any other excise or property taxes, charges or similar levies
which arise from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement or any
other Loan Documents.
"Participant" has the meaning specified in subsection 9.8(d).
"PBGC" means the Pension Benefit Guaranty Corporation, or any
Governmental Authority succeeding to any of its principal functions under
ERISA.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which
the Company or any corporation, trade or business that is, along with the
Company, a member of a Controlled Group may have any liability, including
any liability by reason of having been a substantial employer within the
meaning of section 4063 of ERISA at any time during the preceding five
years, or by reason of being deemed to be a contributing sponsor under
section 4069 of ERISA.
"Person" means an individual, partnership, limited liability company,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture or Governmental Authority.
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"Pro Rata Share" means, as to any Bank at any time, the percentage
equivalent (expressed as a decimal, rounded to the ninth decimal place) at
such time of such Bank's Commitment divided by the combined Commitments of
all Banks.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Bank" has the meaning specified in Section 3.7.
"Requirement of Law" means, as to any Person, any law (statutory or
common), treaty, rule or regulation or determination of an arbitrator or of
a Governmental Authority, in each case applicable to or binding upon the
Person or any of its property or to which the Person or any of its property
is subject.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 690, et seq., as in effect
from time to time.
"Responsible Officer" means the chief executive officer or the
president of the Company, or any other officer having substantially the
same authority and responsibility; or, with respect to compliance with
financial covenants, the chief financial officer or the treasurer of the
Company, or any other officer having substantially the same authority and
responsibility.
"SEC" means the Securities and Exchange Commission, or any
Governmental Authority succeeding to any of its principal functions.
"Shareholders' Equity" means, at any date of determination, all
amounts which would be included under shareholders' equity on a
consolidated balance sheet of the Company and its Subsidiaries.
"Solvent" means, as to any Person at any time, that (a) the fair value
of the property of such Person is greater than the amount of such Person's
liabilities (including
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disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated for purposes of Section 101(31)
of the Bankruptcy Code and, in the alternative, for purposes of the
Illinois Uniform Fraudulent Transfer Act; (b) the present fair
saleable value of the property of such Person is not less than the
amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured; (c) such
Person is able to realize upon its property and pay its debts and
other liabilities (including disputed, contingent and unliquidated
liabilities) as they mature in the normal course of business; (d) such
Person does not intend to, and does not believe that it will, incur
debts or liabilities beyond such Person's ability to pay as such debts
and liabilities mature; and (e) such Person is not engaged in business
or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute
unreasonably small capital.
"Subsidiary" of a Person means any corporation, association,
limited liability company, partnership, joint venture or other
business entity of which more than 50% of the voting stock or other
equity interests (in the case of Persons other than corporations), is
owned or controlled directly or indirectly by the Person, or one or
more of the Subsidiaries of the Person, or a combination thereof.
Unless the context otherwise clearly requires, references herein to a
"Subsidiary" refer to a Subsidiary of the Company.
"Suretyship Liability" means any agreement, undertaking or
other contractual arrangement by which any Person guarantees, endorses
or otherwise becomes or is contingently liable upon (by direct or
indirect agreement, contingent or otherwise, to provide funds for
payment, to supply funds to or otherwise to invest in a debtor, or
otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability (including accounts payable) of any
other Person (other than by endorsements of instruments in the course
of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The
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amount of any Person's obligation under any Suretyship Liability shall
(subject to any limitation set forth therein) be deemed to be the
principal amount of the indebtedness, obligation or other liability
guaranteed thereby.
"Swap Contract" means any agreement (including any master
agreement and any agreement, whether or not in writing, relating to
any single transaction) that is an interest rate swap agreement, basis
swap, forward rate agreement, commodity swap, commodity option, equity
or equity index swap or option, bond option, interest rate option,
forward foreign exchange agreement, rate cap, collar or floor
agreement, currency swap agreement, cross-currency rate swap
agreement, swaption, currency option or any other, similar agreement
(including any option to enter into any of the foregoing).
"Taxes" means any and all present or future taxes, levies,
assessments, imposts, duties, deductions, fees, withholdings or
similar charges, and all liabilities with respect thereto, excluding,
in the case of each Bank and the Agent, respectively, taxes imposed on
or measured by its net income by the jurisdiction (or any political
subdivision thereof) under the laws of which such Bank or the Agent,
as the case may be, is organized or maintains a lender office.
"Termination Date" means the earlier to occur of:
(a) September 30, 1998; and
(b) the date on which the Commitments terminate in
accordance with the provisions of this Agreement.
"Total Capital" at any date of determination means the sum of
(a) Funded Debt,
plus
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(b) all federal, state, local and foreign income taxes
carried as deferred income taxes in accordance with GAAP on the
consolidated balance sheet of the Company and its Subsidiaries,
plus
(c) Shareholders' Equity of the Company and its Subsidiaries
"Type" has the meaning specified in the definition of "Loan."
"United States" and "U.S." each means the United States of
America.
"Versa" means Versa Technologies, Inc., a Delaware corporation.
"Versa Acquisition" means the acquisition by the Company of the
capital stock of VERSA pursuant to the Versa Merger Agreement.
"Versa Merger Agreement" means the Agreement and Plan of Merger
dated September 2, 1997 by and among the Company, TVPA Corp. and Versa.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA.
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) The words "hereof", "herein", "hereunder" and similar words
refer to this Agreement as a whole and not to any particular provision of this
Agreement; and subsection, Section, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
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(c) (i) The term "documents" includes any and all
instruments, documents, agreements, certificates, indentures,
notices and other writings, however evidenced.
(ii) The term "including" is not limiting and means
"including without limitation.
(iii) In the computation of periods of time from a
specified date to a later specified date, the word
"from" means "from and including"; the words "to" and
"until" each mean "to but excluding", and the word "through"
means "to and including."
(d) Unless otherwise expressly provided herein, (i)
references to agreements (including this Agreement) and other contractual
instruments shall be deemed to include all subsequent amendments and other
modifications thereto, but only to the extent such amendments and other
modifications are not prohibited by the terms of any Loan Document, and (ii)
references to any statute or regulation are to be construed as including all
statutory and regulatory provisions consolidating, amending, replacing,
supplementing or interpreting the statute or regulation.
(e) The captions and headings of this Agreement are for
convenience of reference only and shall not affect the interpretation of this
Agreement.
(f) This Agreement and other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(g) This Agreement and the other Loan Documents are the
result of negotiations among and have been reviewed by counsel to the Agent,
the Company and the other parties, and are the products of all parties.
Accordingly, they shall not be construed against the Banks or the Agent merely
because of the Agent's or Banks' involvement in their preparation.
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1.3 Accounting Principles. References to financial statements
include notes thereto in accordance with GAAP; and accounting terms used but not
defined herein shall be construed in accordance with GAAP, and whenever the
character or amount of any asset or liability or item of income or expenses is
required to be determined, or any consolidation or other accounting computation
is required to be made, for purposes hereof, such determination or computation
shall be made in accordance with GAAP; provided that such determinations and
computations with respect to financial covenants and ratios hereunder shall be
made in accordance with GAAP as in effect on the date hereof.
ARTICLE II
THE CREDITS
2.1 Amounts and Terms of Commitments. Each Bank severally agrees, on
the terms and conditions set forth herein, to make loans to the Company from
time to time on any Business Day during the period from the Closing Date to the
Termination Date, in an aggregate amount not to exceed at any time outstanding
the amount set forth on Schedule 2.1 (such amount, as the same may be reduced
under Section 2.5 or as a result of one or more assignments under Section 9.8,
the Bank's "Commitment"); provided, however, that, after giving effect to any
Borrowing, the aggregate principal amount of all outstanding Loans shall not at
any time exceed the combined Commitments. Within the limits of each Bank's
Commitment, and subject to the other terms and conditions hereof, the Company
may borrow under this Section 2.1, prepay under Section 2.6 and reborrow under
this Section 2.1.
2.2 Loan Accounts. The Loans made by each Bank shall be evidenced by
one or more loan accounts or records maintained by such Bank in the ordinary
course of business. The loan accounts or records maintained by the Agent and
each Bank shall be rebuttable presumptive evidence of the amount of the Loans
made by the Banks to the Company and the interest and payments thereon. Any
failure so to record or any error in doing so shall not, however, limit or
otherwise affect the obligation of the Company hereunder to pay any amount owing
with respect to the Loans.
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2.3 Procedure for Borrowing. (a) Each Borrowing shall be made upon the
Company's irrevocable written notice delivered to the Agent in the form of a
Notice of Borrowing (which notice must be received by the Agent prior to 8:00
a.m. (San Francisco time) (i) two Business Days prior to the requested Borrowing
Date, in the case of Offshore Rate Loans; and (ii) on the requested Borrowing
Date, in the case of Base Rate Loans, specifying:
(A) the amount of the Borrowing, which shall be in an
aggregate minimum amount of $1,000,000 or any multiple of $500,000 in
excess thereof;
(B) the requested Borrowing Date, which shall be a
Business Day;
(C) the Type of Loans comprising the Borrowing; and
(D) the duration of the Interest Period applicable to
such Loans included in such notice. If the Notice of Borrowing fails
to specify the duration of the Interest Period for any Borrowing
comprised of such Interest Period shall be one month.
; provided, however, that with respect to the Borrowing to be made on the
Closing Date, the Notice of Borrowing for Offshore Rate Loans and an appropriate
indemnification letter shall be delivered to the Agent not later than 8:00 a.m.
(San Francisco time) three Business Days before the Closing Date.
(b) The Agent will promptly notify each Bank of its receipt of
any Notice of Borrowing and of the amount of such Bank's Pro Rata Share of that
Borrowing.
(c) Each Bank will make the amount of its Pro Rata Share of each
Borrowing available to the Agent for the account of the Company at the Agent's
Payment Office by 11:00 a.m. (San Francisco time) on the Borrowing Date
requested by the Company in funds immediately available to the Agent. The
proceeds of all such Loans will then be made available to the Company by the
Agent by wire transfer in accordance with written instructions
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provided to the Agent by the Company of like funds as received by the Agent.
(d) After giving effect to any Borrowing, there may not be more
than four different Interest Periods in effect.
2.4 Conversion and Continuation Elections. (a) The Company may, upon
irrevocable written notice to the Agent in accordance with subsection 2.4(b):
(i) elect, as of any Business Day, in the case of Base Rate
Loans, or as of the last day of the applicable Interest Period, in the case
of any other Type of Loans, to convert any such Loans (or any part thereof
in an amount not less than $1,000,000, or that is in an integral multiple
of $500,00 in excess thereof) into Loans of any other Type; or
(ii) elect, as of the last day of the applicable Interest
Period, to continue any Loans having Interest Periods expiring on such day
(or any part thereof in an amount not less than $1,000,000, or that is in
an integral multiple of $500,000 in excess thereof);
provided, that if at any time the aggregate amount of Offshore Rate Loans in
respect of any Borrowing is reduced, by payment, prepayment, or conversion of
part thereof to be less than $1,000,000, such Offshore Rate Loans shall
automatically convert into Base Rate Loans, and on and after such date the right
of the Company to continue such Loans as, and convert such Loans into, Offshore
Rate Loans shall terminate.
(b) The Company shall deliver a Notice of Conversion/
Continuation to be received by the Agent not later than 8:00 a.m. (San
Francisco) at least (i) two Business Days in advance of the
Conversion/Continuation Date, if the Loans are to be converted into or continued
as Offshore Rate Loans; and (ii) on the Conversion/Continuation Date, if the
Loans are to be converted into Base Rate Loans, specifying:
(A) the proposed Conversion/Continuation Date;
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<PAGE> 39
(B) the aggregate amount of Loans to be converted or renewed;
(C) the Type of Loans resulting from the proposed conversion or
continuation; and
(D) other than in the case of conversions into Base Rate Loans,
the duration of the requested Interest Period.
(c) If upon the expiration of any Interest Period applicable to
Offshore Rate Loans, the Company has failed to select timely a new Interest
Period to be applicable to such Offshore Rate Loans or if any Default or Event
of Default then exists, the Company shall be deemed to have elected to convert
such Offshore Rate Loans into Base Rate Loans effective as of the expiration
date of such Interest Period.
(d) The Agent will promptly notify each Bank of its receipt of a
Notice of Conversion/Continuation, or, if no timely notice is provided by the
Company, the Agent will promptly notify each Bank of the details of any
automatic conversion. All conversions and continuations shall be made ratably
according to the respective outstanding principal amounts of the Loans with
respect to which the notice was given held by each Bank.
(e) Unless the Majority Banks otherwise agree, during the
existence of a Default or Event of Default, the Company may not elect to have a
Loan converted into or continued as an Offshore Rate Loan.
(f) After giving effect to any conversion or continuation of
Loans, there may not be more than four different Interest Periods in effect.
2.5 Voluntary Termination or Reduction of Commitments. The Company may,
upon not less than five Business Days' prior notice to the Agent, terminate the
Commitments, or permanently reduce the Commitments by an aggregate minimum
amount of $5,000,000 or any multiple of $1,000,000 in excess thereof; unless,
after giving effect thereto and to any prepayments of Loans made on the
effective date thereof, the then- outstanding principal amount of
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the Loans would exceed the amount of the combined Commitments then in effect.
Once reduced in accordance with this Section , the Commitments may not be
increased. Any reduction of the Commitments shall be applied to each Bank
according to its Pro Rata Share. All accrued commitment fees to, but not
including the effective date of any reduction or termination of Commitments,
shall be paid on the effective date of such reduction or termination.
2.6 Optional Prepayments. Subject to Section 3.4, the Company may, at any
time or from time to time, by giving to the Agent irrevocable notice not later
than 8:30 a.m. (San Francisco time) on the date of the proposed prepayment, in
the case of Base Rate Loans and two Business Days prior to the proposed
prepayment date, in the case of Offshore Rate Loans, ratably prepay Loans in
whole or in part, in minimum amounts of $5,000,000 or any multiple of $1,000,000
in excess thereof. Such notice of prepayment shall specify the date and amount
of such prepayment and the Type(s) of Loans to be prepaid. The Agent will
promptly notify each Bank of its receipt of any such notice, and of such Bank's
Pro Rata Share of such prepayment. If such notice is given by the Company, the
Company shall make such prepayment and the payment amount specified in such
notice shall be due and payable on the date specified therein, together with
accrued interest to each such date on the amount prepaid and any amounts
required pursuant to Section 3.4.
2.7 Repayment. The Company shall repay to the Banks on the Termination
Date the aggregate principal amount of Loans outstanding on such date.
2.8 Interest. (a) Each Loan shall bear interest on the outstanding
principal amount thereof from the applicable Borrowing Date at a rate per annum
equal to the Offshore Rate or the Base Rate, as the case may be (and subject to
the Company's right to convert to other Types of Loans under Section 2.4), plus
the Applicable Margin.
(b) Interest on each Loan shall be paid in arrears on each
Interest Payment Date. Interest shall also be paid on the date of any
prepayment of Loans under Section 2.6 for the portion of the Loans so prepaid
and upon payment (including prepayment)
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in full thereof and, during the existence of any Event of Default, interest
shall be paid on demand of the Agent at the request or with the consent of the
Majority Banks.
(c) Notwithstanding subsection (a) of this Section, if any amount of
principal of or interest on any Loan, or any other amount payable hereunder or
under any other Loan Document is not paid in full when due (whether at stated
maturity, by acceleration, demand or otherwise), the Company agrees to pay
interest on such unpaid principal or other amount, from the date such amount
becomes due until the date such amount is paid in full, and after as well as
before any entry of judgment thereon to the extent permitted by law, payable on
demand, at a fluctuating rate per annum equal to the Base Rate plus 2%.
2.9 Fees. (a) Closing Fees. The Company shall pay such closing fees as
required by the letter agreement ("Fee Letter") among the Company, the Arranger,
the Agent and PNC Bank, National Association dated August 29, 1997.
(b) Commitment Fees. The Company shall pay to the Agent for the
account of each Bank a commitment fee on the average daily unused portion of
such Bank's Commitment, computed on a quarterly basis in arrears on the last
Business Day of each fiscal quarter at the Applicable Fee Rate per annum. Such
commitment fee shall accrue from the date hereof to the Termination Date and
shall be due and payable quarterly in arrears on the last Business Day of each
February, May, August and November commencing on November 28, 1997 through the
Termination Date, with the final payment to be made on the Termination Date;
provided that, in connection with any reduction or termination of Commitments
under Section 2.5, the accrued commitment fee calculated for the period ending
on such date shall also be paid on the date of such reduction or termination,
with the following quarterly payment being calculated on the basis of the period
from such reduction or termination date to such quarterly payment date. The
commitment fees provided in this subsection shall accrue at all times after the
above-mentioned commencement date, including at any time during which one or
more conditions in Article IV are not met.
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2.10 Computation of Fees and Interest. (a) All computations of fees and
interest shall be made on the basis of a 360-day year and actual days elapsed
(which results in more interest being paid than if computed on the basis of a
365-day year). Interest and fees shall accrue during each period during which
interest or such fees are computed from the first day thereof to the last day
thereof.
(b) Each determination of an interest rate by the Agent shall be
conclusive and binding on the Company and the Banks in the absence of manifest
error.
2.11 Payments by the Company. (a) All payments to be made by the Company
shall be made without set-off, recoupment or counterclaim. Except as otherwise
expressly provided herein, all payments by the Company shall be made to the
Agent for the account of the Banks at the Agent's Payment Office, and shall be
made in dollars and in immediately available funds, no later than 11:00 a.m.
(San Francisco time) on the date specified herein. The Agent will promptly
distribute to each Bank its Pro Rata Share (or other applicable share as
expressly provided herein) of such payment in like funds as received. Any
payment received by the Agent later than 11:00 a.m. (San Francisco time) shall
be deemed to have been received on the following Business Day and any applicable
interest or fee shall continue to accrue.
(b) Subject to the provisions set forth in the definition of
"Interest Period" herein, whenever any payment is due on a day other than a
Business Day, such payment shall be made on the following Business Day, and such
extension of time shall in such case be included in the computation of interest
or fees, as the case may be.
(c) Unless the Agent receives notice from the Company prior to
the date on which any payment is due to the Banks that the Company will not make
such payment in full as and when required, the Agent may assume that the Company
has made such payment in full to the Agent on such date in immediately available
funds and the Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such due date an amount equal to the
amount then due such Bank. If and to the extent the Company has not made such
payment in full
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to the Agent, each Bank shall repay to the Agent on demand such amount
distributed to such Bank, together with interest thereon at the Federal Funds
Rate for each day from the date such amount is distributed to such Bank until
the date repaid.
2.12 Payments by the Banks to the Agent. (a) Unless the Agent receives
notice from a Bank on or prior to the Closing Date or, with respect to any
Borrowing after the Closing Date, at least one Business Day prior to the date of
such Borrowing, that such Bank will not make available as and when required
hereunder to the Agent for the account of the Company the amount of that Bank's
Pro Rata Share of the Borrowing, the Agent may assume that each Bank has made
such amount available to the Agent in immediately available funds on the
Borrowing Date and the Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a corresponding
amount. If and to the extent any Bank shall not have made its full amount
available to the Agent in immediately available funds and the Agent in such
circumstances has made available to the Company such amount, that Bank shall on
the Business Day following such Borrowing Date make such amount available to the
Agent, together with interest at the Federal Funds Rate for each day during such
period. A notice of the Agent submitted to any Bank with respect to amounts
owing under this subsection (a) shall be conclusive, absent manifest error. If
such amount is so made available, such payment to the Agent shall constitute
such Bank's Loan on the date of Borrowing for all purposes of this Agreement.
If such amount is not made available to the Agent on the Business Day following
the Borrowing Date, the Agent will notify the Company of such failure to fund
and, upon demand by the Agent, the Company shall pay such amount to the Agent
for the Agent's account, together with interest thereon for each day elapsed
since the date of such Borrowing, at a rate per annum equal to the interest rate
applicable at the time to the Loans comprising such Borrowing.
(b) The failure of any Bank to make any Loan on any Borrowing
Date shall not relieve any other Bank of any obligation hereunder to make a Loan
on such Borrowing Date, but no Bank shall be responsible for the failure of any
other Bank to make the Loan to be made by such other Bank on any Borrowing Date.
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2.13 Sharing of Payments, Etc. If, other than as expressly provided
elsewhere herein, any Bank shall obtain on account of the Loans made by it any
payment (whether voluntary, involuntary, through the exercise of any right of
set-off, or otherwise) in excess of its Pro Rata Share, such Bank shall
immediately (a) notify the Agent of such fact, and (b) purchase from the other
Banks such participations in the Loans made by them as shall be necessary to
cause such purchasing Bank to share the excess payment pro rata with each of
them; provided, however, that if all or any portion of such excess payment is
thereafter recovered from the purchasing Bank, such purchase shall to that
extent be rescinded and each other Bank shall repay to the purchasing Bank the
purchase price paid therefor, together with an amount equal to such paying
Bank's ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered from the
purchasing Bank) of any interest or other amount paid or payable by the
purchasing Bank in respect of the total amount so recovered. The Company agrees
that any Bank so purchasing a participation from another Bank may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 10.9) with respect to such
participation as fully as if such Bank were the direct creditor of the Company
in the amount of such participation. The Agent will keep records (which shall
be conclusive and binding in the absence of manifest error) of participations
purchased under this Section and will in each case notify the Banks following
any such purchases or repayments.
ARTICLE III
TAXES, YIELD PROTECTION AND ILLEGALITY
3.1 Taxes.
(a) Any and all payments by the Company to each Bank or the Agent
under this Agreement and any other Loan Document shall be made free and clear
of, and without deduction or withholding for, any Taxes. In addition, the
Company shall pay all Other Taxes and Further Taxes.
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(b) If the Company shall be required by law to deduct or withhold any
Taxes, Other Taxes or Further Taxes from or in respect of any sum payable
hereunder to any Bank or the Agent, then:
(i) the sum payable shall be increased as necessary so that,
after making all required deductions and withholdings (including deductions
and withholdings applicable to additional sums payable under this Section)
such Bank or the Agent, as the case may be, receives and retains an amount
equal to the sum it would have received and retained had no such deductions
or withholdings been made;
(ii) the Company shall make such deductions and withholdings;
(iii) the Company shall pay the full amount deducted or withheld
to the relevant taxing authority or other authority in accordance with
applicable law; and
(iv) the Company shall also pay to each Bank or the Agent for
the account of such Bank, at the time interest is paid, Further Taxes in an
amount that the respective Bank specifies as necessary to preserve the
after-tax yield the Bank would have received if such Taxes, Other Taxes or
Further Taxes had not been imposed.
(c) The Borrower agrees to indemnify and hold harmless each Bank and
the Agent for the full amount of (i) Taxes, (ii) Other Taxes, and (iii) Further
Taxes in the amount that the respective Bank reasonably specifies as necessary
to preserve the after-tax yield said Bank would have received if such Taxes,
Other Taxes or Further Taxes had not been imposed, and any liability (including
penalties, interest, additions to tax and expenses) arising therefrom or with
respect thereto, whether or not such Taxes, Other Taxes or Further Taxes were
correctly or legally asserted. Payment under this indemnification shall be made
within 30 days after the date a Bank or the Agent makes written demand therefor.
(d) Within 30 days after the date of any payment by the Company of
Taxes, Other Taxes or Further Taxes, the Borrowers
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shall furnish to each Bank or the Agent the original or a certified copy of a
receipt evidencing payment thereof, or other evidence of payment satisfactory to
such Bank or the Agent.
(e) If the Company is required to pay additional amounts to any Bank
or the Agent pursuant to Section 3.1(b) or (c) then such Bank shall use
reasonable efforts (consistent with legal and regulatory restrictions) to change
the jurisdiction of its Lending Office so as to eliminate any such additional
payment by the Borrowers which may thereafter accrue, if such change in the sole
judgment of such Bank is not otherwise disadvantageous to such Bank.
3.2 Illegality.
(a) If any Bank determines that the introduction of any Requirement
of Law, or any change in any Requirement of Law, or in the interpretation or
administration of any Requirement of Law, has made it unlawful, or that any
central bank or other Governmental Authority has asserted that it is unlawful,
for any Bank or its applicable Lending Office to make Offshore Rate Loans
(including Offshore Rate Loans in any Applicable Currency), then, on notice
thereof by the Bank to the Company through the Agent, any obligation of that
Bank to make Offshore Rate Loans shall be suspended until the Bank notifies the
Agent and the Borrowers that the circumstances giving rise to such determination
no longer exist.
(b) If a Bank determines that it is unlawful to maintain any Offshore
Rate Loan, the Company shall, upon its receipt of notice of such fact and demand
from such Bank (with a copy to the Agent), prepay in full such Offshore Rate
Loans of that Bank then outstanding, together with interest accrued thereon and
amounts required under Section 3.4, either on the last day of the Interest
Period thereof, if the Bank may lawfully continue to maintain such Offshore Rate
Loans to such day, or immediately, if the Bank may not lawfully continue to
maintain such Offshore Rate Loan. If the Company is required to so prepay any
Offshore Rate Loan, then concurrently with such prepayment, the Company shall
borrow from the affected Bank, in the amount of such repayment, a Base Rate
Loan.
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(c) If the obligation of any Bank to make or maintain Offshore Rate
Loans has been so terminated or suspended, the Company may elect, by giving
notice to the Bank through the Agent that all Loans which would otherwise be
made by the Bank as Offshore Rate Loans shall be instead Base Rate Loans.
(d) Before giving any notice to the Agent under this Section, the
affected Bank shall designate a different Lending Office with respect to its
Offshore Rate Loans if such designation will avoid the need for giving such
notice or making such demand and will not, in the judgment of the Bank, be
illegal or otherwise disadvantageous to the Bank.
3.3 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either (i) the introduction
of or any change in or in the interpretation of any law or regulation after the
Closing Date or (ii) the compliance by that Bank with any guideline or request
from any central bank or other Governmental Authority after the Closing Date
(whether or not having the force of law), there shall be any increase in the
cost to such Bank of agreeing to make or making, funding or maintaining any
Offshore Rate Loans, then the Company shall be liable for, and shall from time
to time, within 10 days after demand (with a copy of such demand to be sent to
the Agent), pay to the Agent for the account of such Bank, additional amounts as
are sufficient to compensate such Bank for such increased costs.
(b) If any Bank shall have determined that (i) the introduction after
the Closing Date of any Capital Adequacy Regulation, (ii) any change after the
Closing Date in any Capital Adequacy Regulation, (iii) any change after the
Closing Date in the interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority charged with the
interpretation or administration thereof, or (iv) compliance by the Bank (or its
Lending Office) or any corporation controlling the Bank with any Capital
Adequacy Regulation adopted after the Closing Date, affects or would affect the
amount of capital required or expected to be maintained by the Bank or any
corporation controlling the Bank and (taking into consideration such Bank's or
such corporation's policies with respect to capital adequacy and such Bank's
desired
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return on capital) determines that the amount of such capital is increased as a
consequence of its Commitment, loans, credits or obligations under this
Agreement, then, upon demand of such Bank to the Company through the Agent, the
Borrowers shall pay to the Bank, from time to time as specified by the Bank,
additional amounts sufficient to compensate the Bank for such increase.
3.4 Funding Losses. The Company shall reimburse each Bank and hold each
Bank harmless from any loss or expense which the Bank may sustain or incur as a
consequence of:
(a) the failure of the Company to make on a timely basis any payment
of principal of any Offshore Rate Loan;
(b) the failure of the Company to borrow, continue or convert a Loan
after the Company has given (or is deemed to have given) a Notice of Borrowing
or a Notice of Conversion/Continuation;
(c) the failure of the Company to make any prepayment of any Loan in
accordance with any notice delivered under Section 2.6;
(d) the prepayment or other payment (including after acceleration
thereof) of any Offshore Rate Loan on a day that is not the last day of the
relevant Interest Period; or
(e) the automatic conversion under Section 2.4 of any Offshore Rate
Loan to a Base Rate Loan on a day that is not the last day of the relevant
Interest Period;
including any such loss or expense arising from the liquidation or reemployment
of funds obtained by it to maintain its Offshore Rate Loans or from fees
payable to terminate the deposits from which such funds were obtained.
3.5 Inability to Determine Rates. If the Majority Banks determine that
for any reason adequate and reasonable means do not exist for determining the
Offshore Rate for any requested Interest Period with respect to a proposed
Offshore Rate Loan, or that the Offshore Rate for any requested Interest Period
with respect to a proposed Offshore Rate Loan does not adequately and
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fairly reflect the cost to such Banks of funding such Loan, the Agent will
promptly so notify the Company and each Bank. Thereafter, the obligation of
the Banks to make or maintain Offshore Rate Loans hereunder shall be suspended
until the Agent upon the instruction of the Majority Banks revokes such notice
in writing. Upon receipt of such notice, the Company may revoke any Notice of
Borrowing or Notice of Conversion/Continuation then submitted by it. If the
Company does not revoke such Notice, the Banks shall make, convert or continue
the Loans, as proposed by the Company, in the amount specified in the
applicable notice submitted by the Company, but such Loans shall be made,
converted or continued as Base Rate Loans instead of Offshore Rate Loans.
3.6 Certificates of Banks. Any Bank claiming reimbursement or
compensation under this Article III shall deliver to the Borrowers (with a copy
to the Agent) a certificate setting forth in reasonable detail the amount
payable to the Bank hereunder and such certificate shall be conclusive and
binding on the Borrowers in the absence of manifest error. In determining the
amount payable to the Bank pursuant to this Article III, each Bank shall act
reasonably and in good faith and will, to the extent the increased costs or
reductions in amounts received or receivable relate to such Bank's loans in
general (including the Loans) and are not specifically attributable to the
Loans and other amounts due hereunder, use averaging and attribution methods
which are reasonable and which cover all loans similar to the Loans made by
such Bank.
3.7 Substitution of Banks. Upon the receipt by the either Borrower
from any Bank (an "Affected Bank") of a claim for compensation under Section
3.1, 3.2 or 3.3, the Company may: (i) request the Affected Bank to cooperate
with the Company in its efforts to obtain a replacement bank or financial
institution satisfactory to the Company to acquire and assume all or a ratable
part of all of such Affected Bank's Loans and Commitment (a "Replacement
Bank"); (ii) request one more of the other Banks to acquire and assume all or
part of such Affected Bank's Loans and Commitment; or (iii) designate a
Replacement Bank. Any such designation of a Replacement Bank under clause (i)
or (iii) shall be subject to the prior written consent of the Agent (which
consent shall not be unreasonably withheld).
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3.8 Survival. The agreements and obligations of the Borrowers in this
Article III shall survive the payment of all other Obligations.
ARTICLE IV
CONDITIONS PRECEDENT
4.1 Conditions of Initial Loans. The obligation of each Bank to make
its initial Loan hereunder is subject to the condition that the Agent have
received on or before the Closing Date all of the following, in form and
substance satisfactory to the Agent and each Bank, and in sufficient copies for
each Bank:
(a) Credit Agreement. This Agreement executed by each party
thereto;
(b) Resolutions; Incumbency.
(i) Copies of the resolutions of the board of directors of the
Company authorizing the transactions contemplated hereby, certified as of
the Closing Date by the Secretary or an Assistant Secretary of the Company;
and
(ii) A certificate of the Secretary or Assistant Secretary of
the Company certifying the names and true signatures of the officers of the
Company authorized to execute, deliver and perform, as applicable, this
Agreement, and all other Loan Documents to be delivered by it hereunder;
(c) Legal Opinion. An opinion of Quarles & Brady, counsel to the
Company and addressed to the Agent and the Banks, substantially in the form of
Exhibit C;
(d) Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Closing Date, together with Attorney Costs of BofA to the extent invoiced
prior to or on the Closing Date, plus such additional amounts of Attorney Costs
as shall constitute BofA's reasonable estimate of Attorney Costs incurred or to
be incurred by it through the closing proceedings
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(provided that such estimate shall not thereafter preclude final settling of
accounts between the Company and BofA); including any such costs, fees and
expenses arising under or referenced in Sections 2.9 and 9.4;
(e) Certificate. A certificate signed by a Responsible Officer,
dated as of the Closing Date, stating that:
(i) the representations and warranties contained in Article V
are true and correct on and as of such date, as though made on and as of
such date;
(ii) no Default or Event of Default exists or would result from
the initial Borrowing; and
(iii) No event or circumstance that has resulted or could
reasonably be expected to result in a Material Adverse Effect has occurred
with respect to the Company and its Subsidiaries since August 31, 1996 or
with respect to Versa and its Subsidiaries since March 31, 1997; and
(f) Pro Forma Financial Statement. A proforma financial statement and
compliance certificate as of August 31, 1997 of the Company and its
Subsidiaries, giving effect to the Versa Acquisition in form satisfactory to the
Banks.
(g) Other Documents. Such other approvals, opinions, documents or
materials as the Agent or any Bank may reasonably request.
4.2 Other Conditions to Initial Loans. The obligation of each Bank
to make its initial Loan hereunder shall be subject, in addition to the
conditions set forth in Section 4.1, to the following conditions:
(a) Versa Acquisition. The Versa Acquisition shall have occurred
pursuant to the terms of the Versa Merger Agreement without material amendment
or waiver.
(b) Governmental Approvals. All governmental, shareholder and
third party consents, including Hart-Scott-Rodino clearance, and approvals
necessary in connection with the Versa
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Acquisition, the financing contemplated hereby and the continued operations of
the business of the Company and its Subsidiaries shall have been obtained and be
in full force and effect, and all applicable waiting periods shall have expired
without any action being taken or threatened by any competent authority which
would restrain, prevent or otherwise impose adverse conditions upon the Versa
Acquisition.
(c) Certificate. Company shall have delivered a certificate of
its chief financial officer to the effect that all the conditions set forth in
Section 4.2(a) - (b) above shall have been accomplished.
4.3 Conditions to All Borrowings. The obligation of each Bank to make any
Loan to be made by it (including its initial Loan) is subject to the
satisfaction of the following conditions precedent on the relevant Borrowing
Date:
(a) Notice of Borrowing. The Agent shall have received (with, in
the case of the initial Loan only, a copy for each Bank) a Notice of Borrowing;
(b) Continuation of Representations and Warranties. The
representations and warranties (excluding except in the case of the initial Loan
hereunder, Sections 5.6 and 5.8) in Article V shall be true and correct on and
as of such Borrowing Date with the same effect as if made on and as of such
Borrowing Date; and
(c) No Existing Default. No Default or Event of Default shall
exist or shall result from such Borrowing.
Each Notice of Borrowing submitted by the Company hereunder shall constitute a
representation and warranty by the Company hereunder, as of the date of each
such notice and as of each Borrowing Date, that the conditions in Section 4.3
are satisfied.
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
To induce the Banks to enter into this Agreement and to make Loans
hereunder, the Company represents and warrants to the Agent and the Banks as
follows:
5.1 Organization, etc. The Company, Versa and their respective
Subsidiaries are corporations duly incorporated, validly existing and in good
standing (or similar concept under applicable state law) under the laws of the
jurisdiction of their respective incorporation. Each of the Company, Versa and
each Subsidiary of the Company or Versa is duly qualified to do business, and
is in good standing, in all other jurisdictions where failure to so qualify
would have a Material Adverse Effect. Each of the Company, Versa and each
Subsidiary of the Company or Versa has all requisite corporate power to own or
lease the properties used in its business and to carry on its business as now
being conducted. The Company has full power and authority as proposed to be
conducted, and to execute and deliver this Agreement and the other Loan
Documents and to engage in the transactions contemplated by this Agreement.
5.2 Authorization; No Conflict. The execution and delivery of this
Agreement, the borrowings hereunder, the execution and delivery of the other
Loan Documents, and the performance by the Company of its obligations under
this Agreement and the other Loan Documents are within the Company's corporate
powers, have been duly authorized by all necessary corporate action, have
received all necessary governmental and regulatory approval, and do not and
will not contravene or conflict with, or result in the creation or imposition
of a lien under, any provision of law or of the charter or by-laws of the
Company or of any agreement, instrument, order or decree that is binding upon
the Company or any Subsidiary.
5.3 Validity and Binding Nature. This Agreement and each other Loan
Document constitute the legal, valid, and binding obligations of the Company
enforceable against the Company in accordance with their respective terms,
except to the extent enforceability thereof is limited by bankruptcy,
insolvency or
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other laws relating to, or affecting the enforcement of, creditors' rights in
general, and by general principles of equity.
5.4 Financial Statements.
(a) All balance sheets, all statements of earnings, stockholders' equity
and cash flow, and all other financial information which have been furnished by
or on behalf of the Company to the Agent and the Banks, including (i) the
audited consolidated balance sheet at August 31, 1996 and the related audited
consolidated statements of earnings, stockholders' equity and cash flow, for the
Fiscal Year then ended, of the Company and its Subsidiaries, certified by
Deloitte & Touche LLP, and (ii) the unaudited consolidated balance sheet dated
May 31, 1997 and the related unaudited consolidated statements of earnings and
cash flow, for the Fiscal Quarter then ended, of the Company and its
Subsidiaries, as appearing in the report of the Company on Form 10-Q for such
Fiscal Quarter filed by the Company with the U.S. Securities and Exchange
Commission, have been prepared in accordance with GAAP consistently applied,
except where not applicable thereto or as otherwise disclosed therein,
throughout the periods involved and present fairly (subject to normal year-end
adjustments, if applicable) the financial condition of the Company and its
Subsidiaries, as at the dates thereof and the results of their operations for
the periods then ended. The Company and its Subsidiaries did not have as of
such dates any material contingent liability or liabilities for taxes, long-term
leases or unusual forward or long-term commitments which are not reflected in
the financial statements described above, and which, in accordance with GAAP,
should have been reflected in such financial statements.
(b) With respect to any representation and warranty which is deemed to be
made after the date hereof by the Company, the balance sheet and statements of
earnings, shareholders' equity and cash flow, which as of such date shall most
recently have been furnished by or on behalf of the Company to the Banks for the
purposes of or in connection with this Agreement shall have been prepared in
accordance with GAAP consistently applied (except as disclosed therein), and
shall present fairly the consolidated financial condition of the corporations
covered
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thereby as at the dates thereof for the periods then ended, subject, in the
case of quarterly financial statements, to normal year-end audit adjustments.
(c) To the best of the Company's knowledge, all balance sheets,
all statements of earnings, stockholders' equity and cash flow, and all other
financial information furnished by or on behalf of Versa to the Agent and the
Banks, including (i) the audited consolidated balance sheet at March 31, 1997
and the related audited consolidated statements of earnings, stockholders'
equity and cash flow, for the fiscal year then ended, of Versa and its
Subsidiaries, certified by Deloitte and Touche LLP and (ii) the unaudited
consolidated balance sheet dated June 30, 1997 and the related unaudited
consolidated statements of earnings and cash flow, for the Fiscal Quarter then
ended, of Versa and its Subsidiaries, as appearing in the report of Versa on
Form 10-Q for such fiscal quarter filed by the Versa with the U.S. Securities
and Exchange Commission, have been prepared in accordance with GAAP consistently
applied, except where not applicable thereto or as otherwise disclosed therein,
throughout the periods involved and present fairly (subject to normal year-end
adjustments, if applicable) the financial condition of Versa and its
Subsidiaries, as at the dates thereof and the results of their operations for
the periods then ended. The best of the Company's knowledge, Versa and its
Subsidiaries did not have as of such dates any material contingent liability or
liabilities for taxes, long-term leases or unusual forward or long-term
commitments which are not reflected in the financial statements described above,
and which, in accordance with GAAP, should have been reflected in such financial
statements.
5.5 No Material Adverse Change. No event has occurred or condition has
arisen that has had or is reasonably likely to have a Material Adverse Effect
since August 31, 1996 with respect to the Company and its Subsidiaries or March
31, 1997 with respect to Versa and its Subsidiaries.
5.6 Litigation and Contingent Liabilities. To the best of the Company's
knowledge, no litigation (including, without limitation, derivative actions),
arbitration proceedings or governmental or regulatory proceedings are pending or
threatened against the Company, Versa or their respective Subsidiaries that
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would, if adversely determined, be reasonably likely to have a Material Adverse
Effect, except as set forth in Item 5.6 of the Disclosure Schedule. Other than
any liability incident to such litigation or proceedings, neither the Company,
Versa, nor any Subsidiary of the Company or Versa has any material contingent
liabilities not provided for or disclosed in the financial statements referred
to in Section 5.4.
5.7 Liens. None of the assets of the Company or any Subsidiary is
subject to any Lien, except as permitted by Article VI and except as set forth
in Item 5.7 to the Disclosure Schedule.
5.8 Subsidiaries. Item 5.8 of the Disclosure Schedule correctly sets
forth the corporate name, jurisdiction of incorporation and ownership of each
Subsidiary of the Company and of Versa. Such Subsidiaries and each corporation
becoming a Subsidiary of the Company after the date hereof is and will be a
corporation duly organized, validly existing and in good standing under the
laws of its jurisdiction of incorporation, and each Subsidiary of the Company
is and will be duly qualified to do business in each other jurisdiction where
failure to so qualify would have a Material Adverse Effect.
5.9 Pension and Welfare Plans. During the twelve-consecutive-month
period prior to the date of the execution and delivery of this Agreement or the
making of any Loan hereunder, no steps have been taken to terminate any Pension
Plan, and no contribution failure has occurred with respect to any Pension Plan
sufficient to give rise to a lien under Section 302(f) of ERISA. No condition
exists or event or transaction has occurred with respect to any Pension Plan
which could result in the incurrence by the Company of any material liability,
fine or penalty. Except as disclosed Footnote L of the 1996 Annual Report,
neither the Company nor Versa has any contingent liability with respect to any
post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of subtitle B of title I of ERISA.
5.10 Regulated Industry. Neither the Company nor any Subsidiary is (a)
an "investment company" or a company "controlled" by an "investment company",
within the meaning of
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the Investment Company Act of 1940, as amended, or (b) a "holding company", or
a "subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as amended.
5.11 Regulations G, U and X. Neither the Company nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock, and no
proceeds of any Loan will be used for the purpose, whether immediate,
incidental or ultimate, of purchasing or carrying any Margin Stock or
maintaining or extending credit to others for such purpose.
5.12 Taxes. Each of the Company, Versa and each Subsidiary of the
Company and of Versa has filed all federal and all other material tax returns
and reports required by law to have been filed by it and has paid all taxes and
governmental charges thereby shown to be owing, except any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside on its
books.
5.13 Environmental and Safety Matters. The Company, Versa and each
Subsidiary of the Company and of Versa is in substantial compliance with all
federal, state and local laws, ordinances and regulations relating to safety
and industrial hygiene or to environmental condition, including, without
limitation, all Environmental Laws in jurisdictions in which the Company, Versa
or any such Subsidiary owns or operates, or has owned or operated, a facility
or site, or arranges or has arranged for disposal or treatment of Hazardous
Material, accepts or has accepted for transport any Hazardous Material or holds
or has held any interest in real property or otherwise, except as disclosed on
Item 5.13 of the Disclosure Schedule, and, except as disclosed in items 2, 3
and 15 of Item 5.13 of the Disclosure Schedule, none of the matters disclosed
on such Schedule has had or is reasonably likely to have a Material Adverse
Effect. No demand, claim, notice, suit, suit in equity, action, administrative
action, investigation or inquiry, whether brought by any governmental
authority, private person or entity or otherwise, arising under, relating to or
in connection with any
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Environmental Laws is pending or, to the best of the Company's knowledge, after
due investigation, threatened against the Company, Versa or any of their
respective Subsidiaries, any real property in which the Company, Versa or any
such Subsidiary holds or has held an interest or any past or present operation
of the Company, Versa or any such Subsidiary, except as disclosed on Item 5.13
of the Disclosure Schedule, and, except as disclosed in items 2, 3 and 15 of
Item 5.13 of the Disclosure Schedule, none of the matters disclosed on such
Schedule has had or is reasonably likely to have a Material Adverse Effect.
Neither the Company, Versa nor any of its Subsidiaries (i) is, to the best of
the Company's knowledge, after due investigation, the subject of any federal or
state investigation evaluating whether any remedial action is needed to respond
to a Release of any Hazardous Material into the environment, (ii) has received
any notice of any Hazardous Material in or upon any of its properties in
violation of any Environmental Laws, or (iii) knows of any basis for any such
investigation, notice or violation, except as disclosed on Item 5.13 of the
Disclosure Schedule, and, except as disclosed in items 2, 3 and 15 of Item 5.13
of the Disclosure Schedule, none of the matters disclosed on such Schedule has
had or is reasonably likely to have a Material Adverse Effect. No Release,
threatened Release or disposal of Hazardous Material is occurring or has
occurred on, under or to any real property in which the Company, Versa or any
of its Subsidiaries holds any interest or performs any of its operations in
violation of any Environmental Law except as disclosed on Item 5.13 of the
Disclosure Schedule, and, except as disclosed in items 2, 3 and 15 of Item 5.13
of the Disclosure Schedule, none of the matters disclosed on such Schedule has
had or is reasonably likely to have a Material Adverse Effect.
5.14 Compliance with Law. Except as otherwise disclosed in Item 5.14 the
Disclosure Schedule, each of the Company, Versa and each Subsidiary of the
Company and of Versa is in compliance with all statutes, judicial and
administrative orders, permits and governmental rules and regulations which are
material to its business or the non-compliance with which has had or is
reasonably likely to have a Material Adverse Effect.
5.15 Information. All information heretofore or contemporaneously
herewith furnished by the Company, Versa or any
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Subsidiary of the Company or Versa to any Bank for purposes of or in connection
with this Agreement and the transactions contemplated hereby is, and all
information hereafter furnished by or on behalf of the Company, Versa or any
Subsidiary of the Company or Versa to any Bank pursuant hereto or in connection
herewith will be, true and accurate in every material respect on the date as of
which such information is dated or certified, and such information, taken as a
whole, does not and will not omit to state any material fact necessary to make
such information, taken as a whole, not misleading.
5.16 Ownership of Properties. Each of the Company, Versa and each
Subsidiary of the Company and of Versa owns good and marketable title to or
holds valid leasehold interests in all of its material properties and assets,
real and personal, of any nature whatsoever, free and clear of all Liens except
as permitted pursuant to Article VI and none of them are in default beyond the
expiration of any applicable grace period of any material obligation under any
leases creating any of their leasehold interests in real property, and none of
such property is subject to any Lien except as permitted pursuant to Article VI.
5.17 Patents, Trademarks, etc. Each of the Company, Versa and each
Subsidiary of the Company and of Versa owns or licenses and possesses all such
patents, patent rights, trademarks, trademark rights, trade names, trade name
rights, service marks, service mark rights and copyrights as the Company
considers necessary for the conduct of the businesses of the Company, Versa and
such Subsidiaries as now conducted without, individually or in the aggregate,
any infringement upon rights of other persons which would be reasonably likely
to have a Materially Adverse Effect, except as may be disclosed in Item 5.17 of
the Disclosure Schedule.
5.18 Insurance. The Company, Versa and their Subsidiaries maintain with
responsible insurance companies insurance (including insurance against claims
and liabilities arising out of the manufacture or distribution of any products)
with respect to their properties and businesses against such casualties and
contingencies and of such types and in such amounts as is
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customary in the case of similar businesses, except as may be disclosed in Item
5.18 of the Disclosure Schedule.
5.19 Versa Merger Agreement. The representations and warranties
contained in the Versa Merger Agreement (a true and correct copy of which Versa
Merger Agreement, together with all schedules and exhibits thereto, has been
delivered to the Banks), are true and correct in all respects except where the
failure to be so true and correct, upon consummation of the Versa Acquisition,
could not reasonably be expected to have a Material Adverse Effect. As of the
date of the Versa Acquisition, (i) the Company shall have taken all necessary
corporate actions to authorize the Versa Acquisition; and (ii) no representation
made by Versa or the Company in any notices or filings with the shareholders of
the Company or of Versa, with the SEC or any applicable state securities
commissions or with any governmental authority, including, without limitation,
any representations concerning any agreement with, or financing provided by, the
Banks, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they are
made, not misleading as of the time when made or delivered. Any representation
or warranty by the Company under this Section 5.19 as to the representations and
warranties of Versa in the Versa Merger Agreement shall be made to the best of
the knowledge of the Company.
5.20 Solvency. The Company, before and after giving effect to the
Versa Acquisition, is Solvent.
ARTICLE VI
COVENANTS
The Company covenants and agrees that, from and after the date hereof and
thereafter until all Obligations are paid in full and this Agreement is
terminated, it shall duly keep, perform and observe each and every covenant on
its part to be performed as set forth in that certain Multicurrency Credit
Agreement dated as of August 22, 1995 among the Company, Applied Power Finance
S.A.,
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various institutions, and the Agent as in effect on the date hereof (the
"Existing Credit Agreement"). All of such covenants, together with related
definitions and ancillary provisions, are hereby incorporated into this
Agreement by reference, mutatis mutandis, as if such terms were set forth in
this Agreement in full, without regard to any amendment, modification or
termination of the Existing Credit Agreement after the date hereof, without
regard to any expiration of any commitment thereunder and without regard to the
final payment in full of any obligations of the Company or any other person or
entity thereunder; provided, however that the definition of "Permitted
Receivables Securitization" shall be amended by the deletion of the number
"$50,000,000" and the substitution of the number "$75,000,000." If the
Existing Credit Agreement and any covenant incorporated herein by reference
requires the Company to obtain the consent of any agent, lender or lenders,
then, for the purpose of this Agreement, the Company shall be required to
obtain the consent of the Majority Banks.
ARTICLE VII
EVENTS OF DEFAULT AND THEIR EFFECT
7.1 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:
(a) Non-Payment of Loans, etc. Default in the payment when due of
the principal of any Loan; or default, and continuance thereof for five Business
Days, in the payment when due of any interest on any Loan or any fees or other
amounts payable by the Company hereunder.
(b) Non-Payment of Other Indebtedness for Borrowed Money. Default in
the payment when due (subject to any applicable grace period), whether by
acceleration or otherwise, of any other Debt of, or guaranteed by, the Company
or any Subsidiary in excess in the aggregate of $2,000,000; or default in the
performance or observance of any obligation or condition with respect to any
such other indebtedness in excess in the aggregate of $2,000,000 if the effect
of such default is to
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accelerate the maturity of any such indebtedness or to permit the holder or
holders thereof, or any trustee or agent for such holders, to cause such
indebtedness to become due and payable prior to its expressed maturity.
(c) Warranties. Any warranty made by the Company herein is breached,
or is false or misleading, in any material respect, or any schedule,
certificate, financial statement, report, notice or other writing furnished by
the Company to the Agent or any Bank is false or misleading in any material
respect on the date as of which the facts therein set forth are stated or
certified.
(d) Bankruptcy, Insolvency, etc. The Company or any Subsidiary
becomes insolvent (it being understood that a Subsidiary shall not be deemed to
be insolvent solely because it has negative net worth) or generally fails to
pay, or admits in writing its inability to pay, debts as they become due; or the
Company or any Subsidiary applies for, consents to or acquiesces in the
appointment of a trustee, receiver or other custodian for the Company or such
Subsidiary or any property thereof, or makes a general assignment for the
benefit of creditors; or, in the absence of such application, consent or
acquiescence, a trustee, receiver or other custodian is appointed for the
Company or any Subsidiary or for a substantial part of its property and is not
discharged within 30 days; or any bankruptcy, reorganization, debt arrangement
or other case or proceeding under any bankruptcy or insolvency law, or any
dissolution or liquidation proceeding (except the voluntary dissolution, not
under any bankruptcy or insolvency law, of a Subsidiary), is commenced in
respect of the Company or any Subsidiary, and, if such case or proceeding is not
commenced by the Company or such Subsidiary, it is consented to or acquiesced in
by the Company or such Subsidiary or remains for 30 days undismissed; or the
Company or any Subsidiary takes any corporate action to authorize, or in
furtherance of, any of the foregoing.
(e) Non-Compliance with Certain Covenants. Failure by the Company to
comply with or to perform any provision of Sections 6.6 through 6.10, 6.16, 6.18
or 6.19 of the Existing Credit Agreement as incorporated herein by reference.
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(f) Non-Compliance with Other Provisions of this Agreement. Failure
by the Borrowers to comply with or to perform any provision of this Agreement
(if such failure does not constitute an Event of Default under any of the other
provisions of this Section 7.1), and continuance of such failure for 30 days
after notice thereof to the Company from the Agent or any Bank.
(g) Pension Plans. (i) Institution of any steps by the Company or
any other Person to terminate a Pension Plan if as a result of such termination
the Company could be required to make a contribution to such Pension Plan, or
could incur a liability or obligation to such Pension Plan, in excess of
$1,000,000, or (ii) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA.
(h) Judgments. Final judgments which exceed an aggregate of
$2,000,000 (excluding any portion thereof which is covered by insurance
maintained with a responsible insurance company which has accepted a tender of
defense and indemnification without reservation of rights) shall be rendered
against the Company or any Subsidiary and shall not have been discharged or
vacated or had execution thereof stayed pending appeal within 30 days after
entry or filing of such judgments.
(i) Change of Control. A Change of Control shall occur.
(j) Material Adverse Effect. Any event shall occur which, in the
reasonable opinion of the Majority Banks, has had or is reasonably likely to
have a Material Adverse Effect.
7.2 Effect of Event of Default. If any Event of Default described in
Section 7.1(d) shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and all Loans and all interest and other
amounts due hereunder shall become immediately due and payable, all without
presentment, demand or notice of any kind (all of which are hereby expressly
waived by the Company); and, in the case of any other Event of Default, the
Agent may with the consent of the Majority Banks, and shall upon written request
of the Majority Banks, declare the Commitments (if they have not theretofore
terminated) to be
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terminated and/or all Loans and all interest and other amounts due hereunder to
be due and payable, whereupon the Commitments (if they have not theretofore
terminated) shall immediately terminate and/or all Loans and all interest and
other amounts due hereunder shall become immediately due and payable, all
without presentment, demand or notice of any kind (all of which are hereby
expressly waived by the Company). The Agent shall promptly advise the Company
and each Bank of any such declaration, but failure to do so shall not impair
the effect of such declaration. Notwithstanding the foregoing, the effect as
an Event of Default of any event described in Section 7.1(a) or Section 7.1(d)
may be waived by the written concurrence of all of the Banks, and the effect as
an Event of Default of any other event described in Section 7.1 may be waived
by the written concurrence of the Majority Banks.
ARTICLE VIII
THE AGENT
8.1 Appointment and Authorization. Each Bank hereby irrevocably (subject
to Section 8.9) appoints, designates and authorizes the Agent to take such
action on its behalf under the provisions of this Agreement and each other Loan
Document and to exercise such powers and perform such duties as are expressly
delegated to it by the terms of this Agreement or any other Loan Document,
together with such powers as are reasonably incidental thereto. Notwithstanding
any provision to the contrary contained elsewhere in this Agreement or in any
other Loan Document, the Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall the Agent have or be deemed
to have any fiduciary relationship with any Bank, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Agent.
8.2 Delegation of Duties. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees 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
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negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
8.3 Liability of Agent. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
8.4 Reliance by Agent. (a) The Agent shall be entitled to rely, and
shall be fully protected in relying, upon any writing, resolution, notice,
consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone
message, statement 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 counsel
to the Company), independent accountants and other experts selected by the
Agent. The Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Majority Banks as it deems appropriate
and, if it so requests, it shall first be indemnified to its satisfaction by the
Banks 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
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Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement or any other Loan Document in accordance with a
request or consent of the Majority Banks and such request and any action taken
or failure to act pursuant thereto shall be binding upon all of the Banks.
(b) For purposes of determining compliance with the conditions
specified in Section 4.1, each Bank that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by the Agent to such Bank for consent,
approval, acceptance or satisfaction, or required thereunder to be consented to
or approved by or acceptable or satisfactory to the Bank.
8.5 Notice of Default. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default, except with respect
to defaults in the payment of principal, interest and fees required to be paid
to the Agent for the account of the Banks, unless the Agent shall have received
written notice from a Bank or the Company referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"notice of default". The Agent will notify the Banks of its receipt of any such
notice. The Agent shall take such action with respect to such Default or Event
of Default as may be requested by the Majority Banks in accordance with Article
VIII; provided, however, that unless and until the Agent has received any such
request, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Banks.
8.6 Credit Decision. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereinafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to
the Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal
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of and investigation into the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company and its
Subsidiaries, and all applicable bank regulatory laws relating to the
transactions contemplated hereby, and made its own decision to enter into this
Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person 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 Agreement
and the other Loan Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of the Company. Except for
notices, reports and other documents expressly herein required to be furnished
to the Banks by the Agent, the Agent shall not have any duty or responsibility
to provide any Bank with any credit or other information concerning the
business, prospects, operations, property, financial and other condition or
creditworthiness of the Company which may come into the possession of any of
the Agent-Related Persons.
8.7 Indemnification. Whether or not the transactions contemplated hereby
are consummated, the Banks shall indemnify upon demand the Agent-Related Persons
(to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; provided, however, that no Bank shall be liable
for the payment to the Agent-Related Persons of any portion of such Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by the Agent in connection with the
preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that the Agent is not reimbursed for such expenses by or on behalf
of the Company. The undertaking in this Section shall survive the payment of
all
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Obligations hereunder and the resignation or replacement of the Agent.
8.8 Agent in Individual Capacity. BofA and its Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent hereunder and
without notice to or consent of the Banks. The Banks acknowledge that, pursuant
to such activities, BofA or its Affiliates may receive information regarding the
Company or its Affiliates (including information that may be subject to
confidentiality obligations in favor of the Company or such Subsidiary) and
acknowledge that the Agent shall be under no obligation to provide such
information to them. With respect to its Loans, BofA shall have the same rights
and powers under this Agreement as any other Bank and may exercise the same as
though it were not the Agent, and the terms "Bank" and "Banks" include BofA in
its individual capacity.
8.9 Successor Agent. The Agent may, and at the request of the Majority
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Majority Banks shall appoint from among the
Banks a successor agent for the Banks which successor agent shall be approved by
the Company. If no successor agent is appointed prior to the effective date of
the resignation of the Agent, the Agent may appoint, after consulting with the
Banks and the Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such successor agent and the retiring Agent's
appointment, powers and duties as Agent shall be terminated. After any retiring
Agent's resignation hereunder as Agent, the provisions of this Article IX and
Sections 90.4 and 9.5 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Agent under this Agreement. If no
successor agent has accepted appointment as Agent by the date which is 30 days
following a retiring Agent's notice of resignation, the retiring Agent's
resignation shall nevertheless thereupon become effective and the
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Banks shall perform all of the duties of the Agent hereunder until such time,
if any, as the Majority Banks appoint a successor agent as provided for above.
8.10 Withholding Tax. (a) If any Bank is a "foreign corporation,
partnership or trust" within the meaning of the Code and such Bank claims
exemption from, or a reduction of, U.S. withholding tax under Sections 1441 or
1442 of the Code, such Bank agrees with and in favor of the Agent, to deliver to
the Agent:
(i) if such Bank claims an exemption from, or a reduction of,
withholding tax under a United States tax treaty, properly completed IRS
Forms 1001 and W-8 before the payment of any interest in the first calendar
year and before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this Agreement;
(ii) if such Bank claims that interest paid under this Agreement
is exempt from United States withholding tax because it is effectively
connected with a United States trade or business of such Bank, two properly
completed and executed copies of IRS Form 4224 before the payment of any
interest is due in the first taxable year of such Bank and in each
succeeding taxable year of such Bank during which interest may be paid
under this Agreement, and IRS Form W-9; and
(iii) such other form or forms as may be required under the Code
or other laws of the United States as a condition to exemption from, or
reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in circumstances
which would modify or render invalid any claimed exemption or reduction.
(b) If any Bank claims exemption from, or reduction of, withholding
tax under a United States tax treaty by providing IRS Form 1001 and such Bank
sells, assigns, grants a participation in, or otherwise transfers all or part of
the
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Obligations of the Company to such Bank, such Bank agrees to notify the Agent of
the percentage amount in which it is no longer the beneficial owner of
Obligations of the Company to such Bank. To the extent of such percentage
amount, the Agent will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding tax
by filing IRS Form 4224 with the Agent sells, assigns, grants a participation
in, or otherwise transfers all or part of the Obligations of the Company to such
Bank, such Bank agrees to undertake sole responsibility for complying with the
withholding tax requirements imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to such Bank
an amount equivalent to the applicable withholding tax after taking into account
such reduction. If the forms or other documentation required by subsection (a)
of this Section are not delivered to the Agent, then the Agent may withhold from
any interest payment to such Bank not providing such forms or other
documentation an amount equivalent to the applicable withholding tax.
(e) If the IRS or any other Governmental Authority of the
United States or other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any Bank
(because the appropriate form was not delivered, was not properly executed, or
because such Bank failed to notify the Agent of a change in circumstances which
rendered the exemption from, or reduction of, withholding tax ineffective, or
for any other reason) such Bank shall indemnify the Agent fully for all amounts
paid, directly or indirectly, by the Agent as tax or otherwise, including
penalties and interest, and including any taxes imposed by any jurisdiction on
the amounts payable to the Agent under this Section, together with all costs and
expenses (including Attorney Costs). The obligation of the Banks under this
subsection shall survive the payment of all Obligations and the resignation or
replacement of the Agent.
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ARTICLE IX
MISCELLANEOUS
9.1 Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Document, and no consent with respect to any
departure by the Company therefrom, shall be effective unless the same shall be
in writing and signed by the Majority Banks (or by the Agent at the written
request of the Majority Banks) and the Company and acknowledged by the Agent,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided, however, that
no such waiver, amendment, or consent shall, unless in writing and signed by all
the Banks and the Company and acknowledged by the Agent, do any of the
following:
(a) increase or extend the Commitment of any Bank (or
reinstate any Commitment terminated pursuant to Section 8.2);
(b) postpone or delay any date fixed by this Agreement or
any other Loan Document for any payment of principal, interest, fees or other
amounts due to the Banks (or any of them) hereunder or under any other Loan
Document;
(c) reduce the principal of, or the rate of interest
specified herein on any Loan, or (subject to clause (ii) below) any fees or
other amounts payable hereunder or under any other Loan Document;
(d) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Loans which is required for the Banks
or any of them to take any action hereunder; or
(e) amend this Section, or Section 2.13, or any provision
herein providing for consent or other action by all Banks;
and, provided further, that (i) no amendment, waiver or consent shall, unless
in writing and signed by the Agent in addition to the Majority Banks or all the
Banks, as the case may be, affect
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the rights or duties of the Agent under this Agreement or any other Loan
Document, and (ii) the Fee Letters may be amended, or rights or privileges
thereunder waived, in a writing executed by the parties thereto.
9.2 Notices. (a) All notices, requests and other communications shall be
in writing (including, unless the context expressly otherwise provides, by
facsimile transmission, provided that any matter transmitted by the Company by
facsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on Schedule 9.2, and (ii) shall be followed
promptly by delivery of a hard copy original thereof) and mailed, faxed or
delivered, to the address or facsimile number specified for notices on Schedule
9.2; or, as directed to the Company or the Agent, to such other address as shall
be designated by such party in a written notice to the other parties, and as
directed to any other party, at such other address as shall be designated by
such party in a written notice to the Company and the Agent.
(b) All such notices, requests and communications shall,
when transmitted by overnight delivery, or faxed, be effective when delivered
for overnight (next-day) delivery, or transmitted in legible form by facsimile
machine, respectively, or if mailed, upon the third Business Day after the date
deposited into the U.S. mail, or if delivered, upon delivery; except that
notices pursuant to Article II or IX shall not be effective until actually
received by the Agent.
(c) Any agreement of the Agent and the Banks herein to
receive certain notices by telephone or facsimile is solely for the convenience
and at the request of the Company. The Agent and the Banks shall be entitled to
rely on the authority of any Person purporting to be a Person authorized by the
Company to give such notice and the Agent and the Banks shall not have any
liability to the Company or other Person on account of any action taken or not
taken by the Agent or the Banks in reliance upon such telephonic or facsimile
notice. The obligation of the Company to repay the Loans shall not be affected
in any way or to any extent by any failure by the Agent and the Banks to receive
written confirmation of any telephonic or facsimile notice or the receipt by the
Agent and the Banks of a confirmation which is at
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variance with the terms understood by the Agent and the Banks to be contained
in the telephonic or facsimile notice.
9.3 No Waiver; Cumulative Remedies. No failure to exercise and no delay
in exercising, on the part of the Agent or any Bank, 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.
9.4 Costs and Expenses. The Company shall:
(a) whether or not the transactions contemplated hereby are
consummated, pay or reimburse BofA (including in its capacity as Agent) within
five Business Days after demand (subject to subsection 4.1(d)) for all costs and
expenses incurred by BofA (including in its capacity as Agent) in connection
with the development, preparation, delivery, administration and execution of,
and any amendment, supplement, waiver or modification to (in each case, whether
or not consummated), this Agreement, any Loan Document and any other documents
prepared in connection herewith or therewith, and the consummation of the
transactions contemplated hereby and thereby, including reasonable Attorney
Costs incurred by BofA (including in its capacity as Agent) with respect
thereto; and
(b) pay or reimburse the Agent, the Arranger and each Bank
within five Business Days after demand (subject to subsection 4.1(d)) for all
costs and expenses (including Attorney Costs) incurred by them in connection
with the enforcement, attempted enforcement, or preservation of any rights or
remedies under this Agreement or any other Loan Document during the existence of
an Event of Default or after acceleration of the Loans (including in connection
with any "workout" or restructuring regarding the Loans, and including in any
Insolvency Proceeding or appellate proceeding).
9.5 Indemnity. Whether or not the transactions contemplated hereby are
consummated, the Company shall indemnify and hold the Agent-Related Persons,
and each Bank and each of its respective officers, directors, employees,
counsel, agents and
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<PAGE> 74
attorneys-in-fact (each, an "Indemnified Person") harmless from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time
(including at any time following repayment of the Loans and the termination,
resignation or replacement of the Agent or replacement of any Bank) be imposed
on, incurred by or asserted against any such Person in any way relating to or
arising out of this Agreement or any document contemplated by or referred to
herein, or the transactions contemplated hereby, or any action taken or omitted
by any such Person under or in connection with any of the foregoing, including
with respect to any investigation, litigation or proceeding (including any
insolvency proceeding or appellate proceeding) related to or arising out of
this Agreement or the Loans or the use of the proceeds thereof, whether or not
any Indemnified Person is a party thereto (all the foregoing, collectively, the
"Indemnified Liabilities"); provided, that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified Liabilities
resulting from the gross negligence or willful misconduct of such Indemnified
Person. The agreements in this Section shall survive payment of all other
Obligations.
9.6 Payments Set Aside. To the extent that the Company makes a payment to
the Agent or the Banks, or the Agent or the Banks exercise their right of
set-off, and such payment or the proceeds of such set-off or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by the
Agent or such Bank in its discretion) to be repaid to a trustee, receiver or any
other party, in connection with any Insolvency Proceeding or otherwise, then (a)
to the extent of such recovery the obligation or part thereof originally
intended to be satisfied shall be revived and continued in full force and effect
as if such payment had not been made or such set-off had not occurred, and (b)
each Bank severally agrees to pay to the Agent upon demand its pro rata share of
any amount so recovered from or repaid by the Agent.
9.7 Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the
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<PAGE> 75
parties hereto and their respective successors and assigns, except that the
Company may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of the Agent and each Bank.
9.8 Assignments, Participations, etc. (a) Any Bank may, with the written
consent of the Company at all times other than during the existence of an Event
of Default and the Agent, which consents shall not be unreasonably withheld, at
any time assign and delegate to one or more Eligible Assignees (provided that no
written consent of the Company or the Agent shall be required in connection with
any assignment and delegation by a Bank to an Eligible Assignee that is an
Affiliate of such Bank) (each an "Assignee") all, or any ratable part of all, of
the Loans, the Commitments and the other rights and obligations of such Bank
hereunder, in a minimum amount of $5,000,000; provided, however, that the
Company and the Agent may continue to deal solely and directly with such Bank in
connection with the interest so assigned to an Assignee until (i) written notice
of such assignment, together with payment instructions, addresses and related
information with respect to the Assignee, shall have been given to the Company
and the Agent by such Bank and the Assignee; (ii) such Bank and its Assignee
shall have delivered to the Company and the Agent an Assignment and Acceptance
in the form of Exhibit E ("Assignment and Acceptance") and (iii) the assignor
Bank or Assignee has paid to the Agent a processing fee in the amount of $3,000.
(b) From and after the date that the Agent notifies the
assignor Bank that it has received (and provided its consent with respect to) an
executed Assignment and Acceptance and payment of the above-referenced
processing fee, (i) the Assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder have been assigned to it pursuant
to such Assignment and Acceptance, shall have the rights and obligations of a
Bank under the Loan Documents, and (ii) the assignor Bank shall, to the extent
that rights and obligations hereunder and under the other Loan Documents have
been assigned by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Loan Documents.
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<PAGE> 76
(c) Immediately upon each Assignee's making its processing
fee payment under the Assignment and Acceptance, this Agreement shall be deemed
to be amended to the extent, but only to the extent, necessary to reflect the
addition of the Assignee and the resulting adjustment of the Commitments arising
therefrom. The Commitment allocated to each Assignee shall reduce such
Commitments of the assigning Bank pro tanto.
(d) Any Bank may at any time sell to one or more commercial
banks or other Persons not Affiliates of the Company (a "Participant")
participating interests in any Loans, the Commitment of that Bank and the other
interests of that Bank (the "originating Bank") hereunder and under the other
Loan Documents; provided, however, that (i) the originating Bank's obligations
under this Agreement shall remain unchanged, (ii) the originating Bank shall
remain solely responsible for the performance of such obligations, (iii) the
Company and the Agent shall continue to deal solely and directly with the
originating Bank in connection with the originating Bank's rights and
obligations under this Agreement and the other Loan Documents, and (iv) no Bank
shall transfer or grant any participating interest under which the Participant
has rights to approve any amendment to, or any consent or waiver with respect
to, this Agreement or any other Loan Document, except to the extent such
amendment, consent or waiver would require unanimous consent of the Banks as
described in the first proviso to Section 10.1. In the case of any such
participation, the Participant shall be entitled to the benefit of Sections 3.1,
3.3 and 9.5 as though it were also a Bank hereunder, and if amounts outstanding
under this Agreement are due and unpaid, or shall have been declared or shall
have become due and payable upon the occurrence of an Event of Default, each
Participant shall be deemed to have the right of set-off in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Bank under this Agreement.
(e) Notwithstanding any other provision in this Agreement, any Bank
may at any time create a security interest in, or pledge, all or any portion of
its rights under and interest in this Agreement in favor of any Federal Reserve
Bank in accordance with Regulation A of the FRB or U.S. Treasury
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<PAGE> 77
Regulation 31 CFR Section 203.14, and such Federal Reserve Bank may enforce
such pledge or security interest in any manner permitted under applicable law.
9.9 Confidentiality. Each Bank agrees to take and to cause its Affiliates
to take normal and reasonable precautions and exercise due care to maintain the
confidentiality of all information identified as "confidential" or "secret" by
the Company and provided to it by the Company or any Subsidiary, or by the Agent
on such Company's or Subsidiary's behalf, under this Agreement or any other Loan
Document, and neither it nor any of its Affiliates shall use any such
information other than in connection with or in enforcement of this Agreement
and the other Loan Documents or in connection with other business now or
hereafter existing or contemplated with the Company or any Subsidiary; except to
the extent such information (i) was or becomes generally available to the public
other than as a result of disclosure by the Bank, or (ii) was or becomes
available on a non-confidential basis from a source other than the Company,
provided that such source is not bound by a confidentiality agreement with the
Company known to the Bank; provided, however, that any Bank may disclose such
information (A) at the request or pursuant to any requirement of any
Governmental Authority to which the Bank is subject or in connection with an
examination of such Bank by any such authority; (B) pursuant to subpoena or
other court process; (C) when required to do so in accordance with the
provisions of any applicable Requirement of Law; (D) to the extent reasonably
required in connection with any litigation or proceeding to which the Agent, any
Bank or their respective Affiliates may be party; (E) to the extent reasonably
required in connection with the exercise of any remedy hereunder or under any
other Loan Document; (F) to such Bank's independent auditors and other
professional advisors; (G) to any Participant or Assignee, actual or potential,
provided that such Person agrees in writing to keep such information
confidential to the same extent required of the Banks hereunder; (H) as to any
Bank or its Affiliate, as expressly permitted under the terms of any other
document or agreement regarding confidentiality to which the Company or any
Subsidiary is party or is deemed party with such Bank or such Affiliate; and (I)
to its Affiliates.
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<PAGE> 78
9.10 Set-off. In addition to any rights and remedies of the Banks provided
by law, if an Event of Default exists or the Loans have been accelerated, each
Bank is authorized at any time and from time to time, without prior notice to
the Company, any such notice being waived by the Company to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held by, and other
indebtedness at any time owing by, such Bank to or for the credit or the account
of the Company against any and all Obligations owing to such Bank, now or
hereafter existing, irrespective of whether or not the Agent or such Bank shall
have made demand under this Agreement or any Loan Document and although such
Obligations may be contingent or unmatured. Each Bank agrees promptly to notify
the Company and the Agent after any such set-off and application made by such
Bank; provided, however, that the failure to give such notice shall not affect
the validity of such set-off and application.
9.11 Notification of Addresses, Lending Offices, Etc. Each Bank shall
notify the Agent in writing of any changes in the address to which notices to
the Bank should be directed, of addresses of any Lending Office, of payment
instructions in respect of all payments to be made to it hereunder and of such
other administrative information as the Agent shall reasonably request.
9.12 Counterparts. This Agreement may be executed in any number of
separate counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed to
constitute but one and the same instrument.
9.13 Severability. The illegality or unenforceability of any provision of
this Agreement or any instrument or agreement required hereunder shall not in
any way affect or impair the legality or enforceability of the remaining
provisions of this Agreement or any instrument or agreement required hereunder.
9.14 No Third Parties Benefited. This Agreement is made and entered into
for the sole protection and legal benefit of the Company, the Banks, the Agent
and the Agent-Related Persons, and their permitted successors and assigns, and
no other Person shall
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<PAGE> 79
be a direct or indirect legal beneficiary of, or have any direct or indirect
cause of action or claim in connection with, this Agreement or any of the other
Loan Documents.
9.15 Governing Law and Jurisdiction. (a) THIS AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS; PROVIDED
THAT THE AGENT AND THE BANKS SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF ILLINOIS OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF ILLINOIS, AND
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE COMPANY, THE AGENT AND
THE BANKS CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE
NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH OF THE COMPANY, THE AGENT AND
THE BANKS IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING 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 ACTION OR PROCEEDING IN SUCH
JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT RELATED HERETO. THE
COMPANY, THE AGENT AND THE BANKS EACH WAIVE PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
ILLINOIS LAW.
9.16 Waiver of Jury Trial. THE COMPANY, THE BANKS AND THE AGENT EACH WAIVE
THEIR RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS,
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION, PROCEEDING OR
OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER
PARTY OR ANY AGENT-RELATED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. THE COMPANY, THE BANKS AND THE
AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
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<PAGE> 80
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS.
9.17 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the Company,
the Banks and the Agent, and supersedes all prior or contemporaneous agreements
and understandings of such Persons, verbal or written, relating to the subject
matter hereof and thereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
APPLIED POWER INC.
By: /s/ Douglas R. Dorszynski
-----------------------------
Title: Vice President, Tax and Treasurer
---------------------------------
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<PAGE> 81
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
By: /s/ Margaret Claggett
--------------------------------
Title: Vice President
-----------------------------
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<PAGE> 82
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as a Bank
By: /s/ Margaret Claggett
--------------------------------
Title: Vice President
-----------------------------
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<PAGE> 83
PNC BANK, NATIONAL ASSOCIATION
By: /s/ Richard T. Jander
-------------------------
Title: Vice President
----------------------
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<PAGE> 84
DISCLOSURE SCHEDULE
Item 5.6 - Litigation
Item 5.7 - Liens
Item 5.8 - Subsidiaries
Item 5.13 - Environmental Matters
Item 5.17 - Intellectual Property
Item 5.18 - Insurance
1
<PAGE> 85
SCHEDULE 2.1
COMMITMENTS
<TABLE>
<CAPTION>
=======================================================================================
PRO RATA
BANK COMMITMENT SHARE
- ---------------------------------------------------------------------------------------
<S> <C> <C>
Bank of America National Trust and Savings $70,000,000 50%
Association
- ---------------------------------------------------------------------------------------
PNC Bank, National Association $70,000,000 50%
=======================================================================================
</TABLE>
Schedule 2.1- 1
<PAGE> 86
SCHEDULE 9.2
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Bank of America National Trust
and Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Vice President: Margaret Claggett
Telephone: (312) 828-1549
Facsimile: (312) 987-1276
AGENT'S PAYMENT OFFICE
Bank of America National Trust
and Savings Association
1850 Gateway Boulevard
Concord, California 94520
ABA No. 121-000-358
For Credit to Account No.: 12336-14489
Attn: Agency Management Services #5596
Ref: Applied Power Inc.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as a Bank
231 South LaSalle Street
Chicago, Illinois 60697
Attention: Marion Alongi
Telephone: (312) 828-6212
Schedule 9.2- 1
<PAGE> 87
Facsimile: (312) 974-9626
Notices (other than Borrowing notices and Notices of
Conversion/Continuation):
Bank of America National Trust
and Savings Association
231 South LaSalle Street
Chicago, Illinois 60697
Vice President: Margaret Claggett
Telephone: (312) 828-1549
Facsimile: (312) 987-1276
PNC BANK NATIONAL ASSOCIATION
Domestic and Offshore Lending Office
Fifth Avenue and Wood Street
Pittsburgh, PA 15221
Notices (other than Borrowing Notices and Notices of Conversion/Continuation)
PNC Bank, National Association
500 West Madison Street
Suite 3140
Chicago, IL 60661
Attention: Richard T. Jander/Tammy Dunn
Telephone: (312) 906-3440/906-3403
Facsimile: (312) 906-3420
Schedule 9.2- 2
<PAGE> 88
EXHIBIT A
FORM OF NOTICE OF BORROWING
Date: _____________, ____
To: Bank of America National Trust and Savings Association as Agent for the
Banks parties to the Credit Agreement dated as of , 1997
(as extended, renewed, amended or restated from time to time, the "Credit
Agreement") among Applied Power, Inc., certain Banks which are signatories
thereto and Bank of America National Trust and Savings Association, as
Agent
Ladies and Gentlemen:
The undersigned, Applied Power, Inc. (the "Company"), refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.3 of the Credit
Agreement, of the Borrowing specified below:
1. The Business Day of the proposed Borrowing is
___________________, 1997.
2. The aggregate amount of the proposed Borrowing is
$_______________.
3. The Borrowing is to be comprised of $____________of [Base Rate]
[Offshore Rate] Loans.
4. The duration of the Interest Period for the Offshore Rate Loans
included in the Borrowing shall be [_____ month(s)].
The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the proposed Borrowing, before
and after giving effect thereto and to the application of the proceeds
therefrom:
<PAGE> 89
(a) the representations and warranties of the Company contained in
Article V of the Credit Agreement are true and correct as though made on
and as of such date (except to the extent such representations and
warranties relate to an earlier date, in which case they are true and
correct as of such date);
(b) no Default or Event of Default has occurred and is continuing,
or would result from such proposed Borrowing.
APPLIED POWER INC.
By:____________________
Title:_________________
Notification to:
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
1850 Gateway Blvd.
Concord, CA 94520
Attn: Elizabeth Chao
phone: (510) 675-8395
facsimile: (510) 675-8500
<PAGE> 90
EXHIBIT B
FORM OF NOTICE OF CONVERSION/CONTINUATION
Date:_______________, 1997
To: Bank of America National Trust and Savings Association, as Agent
for the Banks parties to the Credit Agreement dated as of ________,
1997 (as extended, renewed, amended or restated from time
to time, the "Credit Agreement") among Applied Power Inc., certain
Banks which are signatories thereto and Bank of America National
Trust and Savings Association, as Agent
Ladies and Gentlemen:
The undersigned, Applied Power Inc. (the "Company"), refers to the Credit
Agreement, the terms defined therein being used herein as therein defined, and
hereby gives you notice irrevocably, pursuant to Section 2.4 of the Credit
Agreement, of the [conversion] [continuation] of the Loans specified herein,
that:
1. The Conversion/Continuation Date is______________, 19__.
2. The aggregate amount of the Loans to be [converted] [continued]
is $_______________.
3. The Loans are to be [converted into] [continued as]
[Offshore Rate] [Base Rate] Loans.
4. [If applicable:] The duration of the Interest Period for the
Loans included in the [conversion] [continuation] shall be [
month(s)].
<PAGE> 91
APPLIED POWER INC.
By:__________________
Title:_______________
Notification to:
Bank of America National Trust
and Savings Association
Agency Administrative Services #5596
1850 Gateway Blvd.
Concord, CA 94520
Attn: Elizabeth Chao
Phone: (510)675-8395
Fax: (510)675-8500
<PAGE> 92
EXHIBIT C
[FORM OF] OPINION OF COMPANY'S COUNSEL
[Letterhead of Quarles & Brady]
___________, 1997
To the Administrative Agent and
each of the Banks party to the
Agreement referred to below
c/o Bank of America National Trust
and Savings Association, as Agent
231 South LaSalle St.
Chicago, IL 60697
Attn: M.H. Claggett
Re: Credit Agreement dated as of ___________, 1997
(the "Credit Agreement") among Applied Power Inc. (the
"Company"), certain financial institutions parties
thereto, and Bank of America National Trust and
Savings Association, as Agent (the "Agent").
Ladies and Gentlemen:
We have acted as counsel to the Company in connection with (i) the
negotiation, execution and delivery of the Credit Agreement and the other
documents to which it is party pursuant to the Credit Agreement (the "Loan
Documents") and (ii) the borrowing by the Company of the initial Loans. This
opinion is being delivered to you pursuant to Section 4.1(c) of the Credit
Agreement. Terms used herein which are defined in the Credit Agreement shall
have the respective meanings set forth in the Credit Agreement unless otherwise
defined herein.
In giving the opinions set forth in this letter, we have (i) reviewed each
of (a) the Articles of Incorporation and the By-Laws of the Company, (b) the
records of the corporate proceedings
<PAGE> 93
of the Company, (c) the Credit Agreement and the other Loan Documents and (d)
certificates of various state governmental authorities as to the corporate
subsistence or good standing of the Company; and (ii) examined such other
documents, records and questions of law and made such other investigation and
review as we have deemed necessary or appropriate as a basis for the opinions
hereinafter expressed. As to questions of fact material to the opinions
expressed herein and as to the content and form of by-laws, minutes, and
resolutions and other documents or writings, we have relied, to the extent that
we have considered reasonably appropriate, upon factual representations of the
Company's management.
With your permission we have assumed without inquiry or other
investigation (i) the full capacity, power and authority of each Person (other
than the Company) to execute, deliver and perform the Credit Agreement and the
other Loan Documents, and each document heretofore executed and delivered or
hereafter to be executed and delivered and to do such other acts heretofore
done or hereafter to be done by such Person as contemplated by the Credit
Agreement and the other Loan Documents; (ii) the legality, validity, binding
effect and enforceability as to each Person (other than the Company) of the
Credit Agreement and the other Loan Documents, and each document executed and
delivered as contemplated by the Credit Agreement and the other Loan Documents;
(iii) the genuineness of each signature on all documents that we have examined;
(iv) the completeness and authenticity of each document submitted to us; and
(v) the conformity to the original of each document submitted to us as a copy.
Based upon and subject to the foregoing, and subject to the qualifications
and exceptions set forth herein, we are of the opinion that:
1. The Company (i) is a corporation validly existing and in good standing
under the laws of the jurisdiction of its incorporation, and (ii) has full
corporate power and authority and, to the best of our knowledge without
specific investigation, holds all material requisite governmental licenses,
permits and
<PAGE> 94
other approvals to own and hold under lease its property, to conduct its
business substantially as currently conducted by it. The Company has full
corporate power and authority to execute, deliver and perform its obligations
under the Credit Agreement and to take all other actions incidental to any
thereof. Effective January 1, 1991 the concept of "good standing" was deleted
from the Wisconsin Business Corporation Law. Accordingly, the opinion as to
"good standing" in the first sentence of this paragraph means "active and
current with the Wisconsin Secretary of State".
2. The execution and delivery by the Company of the Credit Agreement and
each other Loan Document executed or to be executed by it and the performance
by the Company of all its obligations thereunder and all other actions
incidental to any thereof (i) have been duly authorized by the Board of
Directors of the Company, (ii) do not and will not conflict with, result in any
violation of, or constitute any default under, (A) any provision of any
document or material Contractual Obligation of which we have knowledge after
due inquiry which is binding on the Company, or (B) any applicable Wisconsin or
federal law or governmental regulation or, to the best of our knowledge after
due inquiry, any applicable decree, order, writ or injunction or any court,
arbitrator or governmental authority having jurisdiction over the Company or
its property, and (iii) will not result in or require the creation or
imposition of any Lien on any of the properties of the Company pursuant to the
provisions of any material Contractual Obligation of which we have knowledge
after due inquiry.
3. The Company has duly executed and delivered the Credit Agreement and
the Notes to which it is a party on the date hereof. Each of the Credit
Agreement and such Notes constitutes the legal, valid and binding obligation of
the Company enforceable against the Company in accordance with its respective
terms.
4. To the best of our knowledge after due inquiry, except as disclosed in
the Disclosure Schedule, there is no pending or overtly threatened litigation,
action or proceeding affecting either the Company or any Subsidiary of the
Company, or
<PAGE> 95
any of their respective properties, assets or revenues, which would have a
Material Adverse Effect.
5. No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other Person
pursuant to any law or regulation of the United States of America or the States
of Wisconsin or Illinois is required to be obtained or made by the Company in
connection with the due execution, delivery or performance by the Company of
the Credit Agreement or any other Loan Document to which it is or is to be a
party, or the borrowing by the Company of Loans on the date hereof, except for
authorizations, approvals, actions, notices or filings which have been duly
obtained or made and are in full force and effect or where the failure to
obtain or make any there would not have a Material Adverse Effect.
6. Neither the Company nor any Subsidiary of the Company is an "investment
company" within the meaning of the Investment Company Act of 1940, as amended,
or a "holding company," a "subsidiary company" of a "holding company" or an
"affiliate" of a "holding company," within the meaning of and subject to
regulation under the Public Utility Holding Company Act or 1935, as amended.
7. Neither the execution or delivery by the Company of any of the Loan
Documents to which it is a party, nor the performance of its respective
obligations thereunder, will violate F.R.S. Board Regulation G, T, U or X.
Our opinions expressed in this letter are subject to: (a) the effect or
bankruptcy, insolvency, reorganization, receivership, fraudulent conveyance,
moratorium and other similar federal and state laws and judicially developed
doctrines relevant to any such laws affecting the rights and remedies of
creditors generally; and (b) the effect of general principles of equity,
whether applied by a court of law or equity (including, without limitation,
principles governing the availability of specific performance, injunctive
relief or other equitable remedies or affording equitable defenses against a
party seeking
<PAGE> 96
enforcement). Without limiting the foregoing, we note that a Wisconsin court
might impose obligations of good faith, fair dealing, diligence and
reasonableness in connection with any of the Credit Agreement and the Notes.
The law covered by the opinions expressed herein is limited to the federal
laws of the United States of America and the present internal laws of the
States of Wisconsin and (as qualified below) Illinois. In rendering the
opinions expressed herein with respect to matters of the laws of Illinois, we
have assumed, with your permission, that the present internal laws of Illinois
are identical to the present internal laws of Wisconsin in all respects
material to our opinions. We express no opinion whether that assumption is
correct or reasonable under the circumstances.
This opinion deals only with the specific legal issues that it explicitly
addresses and no opinions shall be implied as to matters not so addressed.
Our opinions herein are subject to the following additional
qualifications:
(a) Except as specifically set forth herein, no
opinion is rendered as to title of the Company to any assets,
nor as to priority of any mortgage or security interest.
(b) This opinion is given as of the date hereof, it
is intended to apply only to those facts and circumstances
which exist as of the date hereof, and we assume no obligation
or responsibility to update or supplement this opinion to
reflect any facts or circumstances which may hereafter come to
our attention, any changes in laws which may hereafter occur,
or to inform the addressee of any change in circumstances
occurring after the date of this opinion which would alter the
opinions rendered herein.
This opinion letter is intended solely for your benefit
<PAGE> 97
and that of the other Banks who may become parties to the Credit Agreement
(including assignees and participants of such Banks), and may not be relied
upon, referred to or otherwise used by any other Person without our express
written consent, except that Mayer, Brown & Platt are authorized to rely on
this letter, in connection with their representation of you, as if this letter
were addressed to them. Subject to the foregoing, this opinion letter may be
relied upon by you only in connection with the transactions contemplated by the
Credit Agreement, and may not be used or relied upon by you or any other Person
for any other purpose whatsoever without in each instance our prior written
consent.
We note that Anthony W. Asmuth III, a partner of this firm, is also
Secretary of the Company and Secretary, Assistant Secretary and/or a Director
of certain Subsidiaries of the Company.
Very truly yours,
QUARLES & BRADY
<PAGE> 98
EXHIBIT D
[FORM OF] ASSIGNMENT AND ACCEPTANCE AGREEMENT
This ASSIGNMENT AND ACCEPTANCE AGREEMENT (this "Assignment and
Acceptance") dated as of __________, 199__ is made between
______________________________ (the "Assignor") and __________________________
(the "Assignee").
RECITALS
WHEREAS, the Assignor is party to that certain Credit Agreement dated as
of _____________, 1997 (as amended, amended and restated, modified,
supplemented or renewed, the "Credit Agreement") among Applied Power Inc., a
Wisconsin corporation (the "Company"), the several financial institutions from
time to time party thereto (including the Assignor, the "Banks"), and Bank of
America National Trust and Savings Association, as agent for the Banks (the
"Agent"). Any terms defined in the Credit Agreement and not defined in this
Assignment and Acceptance are used herein as defined in the Credit Agreement;
WHEREAS, as provided under the Credit Agreement, the Assignor has
committed to making Loans (the "Loans") to the Company in an aggregate amount
not to exceed $__________ (the "Commitment");
WHEREAS, [the Assignor has made Loans in the aggregate principal amount of
$__________ to the Company] [no Loans are outstanding under the Credit
Agreement]; and
WHEREAS, the Assignor wishes to assign to the Assignee [part of the] [all]
rights and obligations of the Assignor under the Credit Agreement in respect of
its Commitment, [together with a corresponding portion of each of its
outstanding Loans,] in an amount equal to $__________ (the "Assigned Amount")
on the terms and subject to the conditions set forth herein and the Assignee
wishes to accept assignment of such rights and to assume such
<PAGE> 99
obligations from the Assignor on such terms and subject to such conditions;
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
1. Assignment and Acceptance.
(a) Subject to the terms and conditions of this Assignment and
Acceptance, (i) the Assignor hereby sells, transfers and assigns to the
Assignee, and (ii) the Assignee hereby purchases, assumes and undertakes from
the Assignor, without recourse and without representation or warranty (except
as provided in this Assignment and Acceptance) __% (the "Assignee's Percentage
Share") of (A) the Commitment [and the Loans] of the Assignor and (B) all
related rights, benefits, obligations, liabilities and indemnities of the
Assignor under and in connection with the Credit Agreement and the Loan
Documents.
[If appropriate, add paragraph specifying payment to Assignor by
Assignee of outstanding principal of, accrued interest on, and fees with
respect to, Loans.]
(b) With effect on and after the Effective Date (as defined in Section 5
hereof), the Assignee shall be a party to the Credit Agreement and succeed to
all of the rights and be obligated to perform all of the obligations of a Bank
under the Credit Agreement, including the requirements concerning
confidentiality and the payment of indemnification, with a Commitment in an
amount equal to the Assigned Amount. The Assignee agrees that it will perform
in accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank. It is the
intent of the parties hereto that the Commitment of the Assignor shall, as of
the Effective Date, be reduced by an amount equal to the Assigned Amount and
the Assignor shall relinquish its rights and be released from its obligations
under the Credit Agreement to the extent such obligations have been assumed by
the Assignee; provided, however, the Assignor shall not relinquish its rights
under Sections 9.4 and 9.5 of the Credit Agreement to
<PAGE> 100
the extent such rights relate to the time prior to the Effective Date.
(c) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignee's Commitment will be $__________.
(d) After giving effect to the assignment and assumption set forth
herein, on the Effective Date the Assignor's Commitment will be $__________.
2. Payments.
(a) As consideration for the sale, assignment and transfer contemplated
in Section 1 hereof, the Assignee shall pay to the Assignor on the Effective
Date in immediately available funds an amount equal to $__________,
representing the Assignee's Pro Rata Share of the principal amount of all
Loans.
(b) The [Assignor] [Assignee] further agrees to pay to the Agent a
processing fee in the amount specified in Section 9.8(a) of the Credit
Agreement.
3. Reallocation of Payments.
Any interest, fees and other payments accrued to the Effective Date with
respect to the Commitment shall be for the account of the Assignor. Any
interest, fees and other payments accrued on and after the Effective Date with
respect to the Assigned Amount shall be for the account of the Assignee. Each
of the Assignor and the Assignee agrees that it will hold in trust for the
other party any interest, fees and other amounts which it may receive to which
the other party is entitled pursuant to the preceding sentence and pay to the
other party any such amounts which it may receive promptly upon receipt.
4. Independent Credit Decision.
The Assignee (a) acknowledges that it has received a copy of the Credit
Agreement and the Schedules and Exhibits thereto, together with copies of the
most recent financial statements required to be delivered pursuant to the
Credit Agreement, and
<PAGE> 101
such other documents and information as it has deemed appropriate to make its
own credit and legal analysis and decision to enter into this Assignment and
Acceptance; and (b) agrees that it will, independently and without reliance
upon the Assignor, the Agent or any other Bank and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit and legal decisions in taking or not taking action under the Credit
Agreement.
5. Effective Date; Notices.
(a) As between the Assignor and the Assignee, the effective date for
this Assignment and Acceptance shall be __________, 199__ (the "Effective
Date"); provided that the following conditions precedent have been satisfied on
or before the Effective Date:
(i) this Assignment and Acceptance shall be executed and delivered
by the Assignor and the Assignee;
(ii) the consent of the Company and the Agent required for an
effective assignment of the Assigned Amount by the Assignor to the Assignee
under Section 9.8(a) of the Credit Agreement shall have been duly obtained and
shall be in full force and effect as of the Effective Date;
(iii) the Assignee shall pay to the Assignor all amounts due to the
Assignor under this Assignment and Acceptance;
(iv) the processing fee referred to in Section 2(b) hereof and in
Section 9.8(a) of the Credit Agreement shall have been paid to the Agent; and
(v) the Assignor shall have assigned and the Assignee shall have
assumed a percentage equal to the Assignee's Percentage Share of the rights and
obligations of the Assignor under the Credit Agreement (if such agreement
exists).
(b) Promptly following the execution of this Assignment and Acceptance,
the Assignor shall deliver to the Company and the Agent for acknowledgment by
the Agent, a Notice
<PAGE> 102
of Assignment in the form attached hereto as Schedule 1.
[6. Agent. [INCLUDE ONLY IF ASSIGNOR IS AGENT]
(a) The Assignee hereby appoints and authorizes the Assignor to
take such action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the Banks pursuant to the
terms of the Credit Agreement.
(b) The Assignee shall assume no duties or obligations held by the
Assignor in its capacity as Agent under the Credit Agreement.]
7. Withholding Tax.
The Assignee (a) represents and warrants to the Bank, the Agent and the
Company that under applicable law and treaties no tax will be required to be
withheld by the Bank with respect to any payments to be made to the Assignee
hereunder, (b) agrees to furnish (if it is organized under the laws of any
jurisdiction other than the United States or any State thereof) to the Agent
and the Company prior to the time that the Agent or Company is required to make
any payment of principal, interest or fees hereunder, duplicate executed
originals of either U.S. Internal Revenue Service Form 4224 or U.S. Internal
Revenue Service Form 1001 (wherein the Assignee claims entitlement to the
benefits of a tax treaty that provides for a complete exemption from U.S.
federal income withholding tax on all payments hereunder) and agrees to provide
new Forms 4224 or 1001 upon the expiration of any previously delivered form or
comparable statements in accordance with applicable U.S. law and regulations
and amendments thereto, duly executed and completed by the Assignee, and (c)
agrees to comply with all applicable U.S. laws and regulations with regard to
such withholding tax exemption.
8. Representations and Warranties.
(a) The Assignor represents and warrants that (i) it is the legal
and beneficial owner of the interest being assigned by it hereunder and that
such interest is free and clear of any Lien or other adverse claim; (ii) it is
duly organized and
<PAGE> 103
existing and it has the full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Acceptance and any
other documents required or permitted to be executed or delivered by it in
connection with this Assignment and Acceptance and to fulfill its obligations
hereunder; (iii) no notices to, or consents, authorizations or approvals of,
any Person are required (other than any already given or obtained) for its due
execution, delivery and performance of this Assignment and Acceptance, and
apart from any agreements or undertakings or filings required by the Credit
Agreement, no further action by, or notice to, or filing with, any Person is
required of it for such execution, delivery or performance; and (iv) this
Assignment and Acceptance has been duly executed and delivered by it and
constitutes the legal, valid and binding obligation of the Assignor,
enforceable against the Assignor in accordance with the terms hereof, subject,
as to enforcement, to bankruptcy, insolvency, moratorium, reorganization and
other laws of general application relating to or affecting creditors' rights
and to general equitable principles.
(b) The Assignor makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto. The
Assignor makes no representation or warranty in connection with, and assumes no
responsibility with respect to, the solvency, financial condition or statements
of the Company, or the performance or observance by the Company, of any of its
respective obligations under the Credit Agreement or any other instrument or
document furnished in connection therewith.
(c) The Assignee represents and warrants that (i) it is duly organized
and existing and it has full power and authority to take, and has taken, all
action necessary to execute and deliver this Assignment and Acceptance and any
other documents required or permitted to be executed or delivered by it in
connection with this Assignment and Acceptance, and to fulfill its obligations
hereunder; (ii) no notices to, or consents, authorizations or approvals of, any
Person are required (other
<PAGE> 104
than any already given or obtained) for its due execution, delivery and
performance of this Assignment and Acceptance; and apart from any agreements or
undertakings or filings required by the Credit Agreement, no further action by,
or notice to, or filing with, any Person is required of it for such execution,
delivery or performance; (iii) this Assignment and Acceptance has been duly
executed and delivered by it and constitutes the legal, valid and binding
obligation of the Assignee, enforceable against the Assignee in accordance with
the terms hereof, subject, as to enforcement, to bankruptcy, insolvency,
moratorium, reorganization and other laws of general application relating to or
affecting creditors' rights and to general equitable principles; and (iv) it is
an Eligible Assignee.
9. Further Assurances.
The Assignor and the Assignee each hereby agree to execute and deliver
such other instruments, and take such other action, as either party may
reasonably request in connection with the transactions contemplated by this
Assignment and Acceptance, including the delivery of any notices or other
documents or instruments to the Company or the Agent, which may be required in
connection with the assignment and assumption contemplated hereby.
10. Miscellaneous.
(a) Any amendment or waiver of any provision of this Assignment and
Acceptance shall be in writing and signed by the parties hereto. No failure or
delay by either party hereto in exercising any right, power or privilege
hereunder shall operate as a waiver thereof and any waiver of any breach of the
provisions of this Assignment and Acceptance shall be without prejudice to any
rights with respect to any other or further breach thereof.
(b) All payments made hereunder shall be made without any set-off or
counterclaim.
(c) The Assignor and the Assignee shall each pay its own costs and
expenses incurred in connection with the negotiation, preparation, execution
and performance of this
<PAGE> 105
Assignment and Acceptance.
(d) This Assignment and Acceptance may be executed in any number of
counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
(e) THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF ILLINOIS. The Assignor and the
Assignee each irrevocably submits to the non-exclusive jurisdiction of any
State or Federal court sitting in Illinois over any suit, action or proceeding
arising out of or relating to this Assignment and Acceptance and irrevocably
agrees that all claims in respect of such action or proceeding may be heard and
determined in such Illinois State or Federal court. Each party to this
Assignment and Acceptance hereby irrevocably waives, to the fullest extent it
may effectively do so, the defense of an inconvenient forum to the maintenance
of such action or proceeding.
(f) THE ASSIGNOR AND THE ASSIGNEE EACH HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH
THIS ASSIGNMENT AND ACCEPTANCE, THE CREDIT AGREEMENT, ANY RELATED DOCUMENTS AND
AGREEMENTS OR ANY COURSE OF CONDUCT, COURSE OF DEALING, OR STATEMENTS (WHETHER
ORAL OR WRITTEN).
[Other provisions to be added as may be negotiated between the Assignor
and the Assignee, provided that such provisions are not inconsistent with the
Credit Agreement.]
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Assignment and Acceptance to be executed and delivered by their duly authorized
officers as of the date first above written.
[ASSIGNOR]
By:
<PAGE> 106
Title:
Address:
<PAGE> 107
[ASSIGNEE]
By:
Title:
Address:
<PAGE> 108
SCHEDULE 1
NOTICE OF ASSIGNMENT AND ACCEPTANCE
_______________, 19__
Bank of America National Trust
and Savings Association, as Agent and
as Issuing Bank
231 South LaSalle Street
Chicago, IL 60697
Applied Power Inc.
13000 West Silver Spring Drive
Butler, WI 53007
Ladies and Gentlemen:
We refer to the Credit Agreement dated as of _________, 1997 (as amended,
amended and restated, modified, supplemented or renewed from time to time the
"Credit Agreement") among Applied Power Inc. (the "Company"), the Banks
referred to therein and Bank of America National Trust and Savings Association
as agent for the Banks (the "Agent"). Terms defined in the Credit Agreement
are used herein as therein defined.
1. We hereby give you notice of, and request your consent to, the
assignment by __________________ (the "Assignor") to _______________ (the
"Assignee") of _____% of the right, title and interest of the Assignor in and
to the Credit Agreement (including, without limitation, the right, title and
interest of the Assignor in and to the Commitments of the Assignor all
outstanding Loans made by the Assignor) pursuant to the Assignment and
Acceptance Agreement attached hereto (the "Assignment and Acceptance"). Before
giving effect to such assignment the Assignor's Commitment is $ ___________ and
the aggregate amount of its outstanding Loans is $_____________.
2. The Assignee agrees that, upon receiving the consent of
<PAGE> 109
the Agent and, if applicable, the Company to such assignment, the Assignee will
be bound by the terms of the Credit Agreement as fully and to the same extent
as if the Assignee were the Bank originally holding such interest in the Credit
Agreement.
3. The following administrative details apply to the Assignee:
(A) Notice Address:
Assignee name: __________________________
Address: _______________________________
_______________________________
_______________________________
Attention: _____________________________
Telephone: (___) _______________________
Telecopier: (___) ______________________
Telex (Answerback): ____________________
(B) Payment Instructions:
Account No.: ___________________________
At: ___________________________
___________________________
___________________________
Reference: ___________________________
Attention: ___________________________
4. You are entitled to rely upon the representations, warranties and covenants
of each of the Assignor and Assignee contained in the Assignment and
Acceptance.
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this Notice
of Assignment and Acceptance to be executed by their respective duly authorized
officials, officers or agents as of the date first above mentioned.
Very truly yours,
[NAME OF ASSIGNOR]
<PAGE> 110
By:
Title:_____________________
[NAME OF ASSIGNEE]
By:
Title:_____________________
ACKNOWLEDGED AND ASSIGNMENT
CONSENTED TO:
APPLIED POWER INC.
By:
Title: __________________________
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By: __________________________
Its: _________________________
<PAGE> 111
EXHIBIT (b)(3)
[BANKAMERICA LETTERHEAD]
September 24, 1997
CONFIDENTIAL
Applied Power Inc.
13000 West Silver Spring Drive
Butler, Wisconsin 53007-1093
Ladies and Gentlemen:
Bank of America National Trust and Savings Association ("Bank of America") is
pleased to advise you that it is willing, subject to the terms and conditions
contained in this letter and in the attached Summary of Terms and Conditions
(the "Term Sheet"), to commit $65 million towards a $350 million Senior
Multi-Currency Revolving Credit Facility (the "Facility") for Applied Power
Inc. (the "Company"). Upon your acceptance of this commitment, BancAmerica
Securities, Inc. ("BASI") will endeavor as arranger (the "Arranger"), on a best
efforts basis, to assemble a syndicate of lenders (together with Bank of
America, the "Lenders") to commit to a portion of the Facility. Bank of America
will serve as agent (the "Agent") for the Facility.
BASI is a wholly-owned, direct subsidiary of BankAmerica Corporation, the
parent company of Bank of America, and is a registered broker-dealer. Please
refer to the attached "Disclosure Statement" for important additional
information on this relationship.
The fees payable to the Arranger and the Agent in connection with the
Facility are set forth in a separate letter of even date herewith (the
"Fee Letter").
It is agreed that Bank of America will act as the sole and exclusive Agent for
the Facility, and that BASI will act as the sole and exclusive Arranger for the
Facility. You agree that no other agents, co-agents or arrangers will be
appointed, no other titles will be awarded and no compensation (other than
that expressly contemplated by the Fees Letter) will be paid in connection with
the Facility unless you and we shall so agree.
You hereby authorize BASI to commence syndication efforts immediately and agree
actively to assist BASI in achieving a syndication that is satisfactory to BASI,
Bank of America and the Company. To assist BASI in its syndication efforts, (i)
you agree to promptly prepare and provide to BASI and Bank of America all
information which we may reasonably request, including all financial information
and projections, (ii) you understand that in arranging and syndicating the
Facility we may use and rely upon the information and projections without
independent verification thereof, (iii) you agree to use commercially
reasonable efforts to ensure that the syndications efforts benefit materially
from your existing lending relationships, (iv) you agree, if deemed necessary
by BASI, to host with BASI one or more meetings with
<PAGE> 112
Applied Power Inc.
September 24, 1997
Page 2
prospective Lenders and you agree to make senior management available for these
meetings, and (v) you agree to assist in the preparation of a Confidential
Information Memorandum and other marketing materials to be used in connection
with the syndication. BASI as Arranger, will manage all aspects of the
syndication and reserves the right in consultation with the Company to allocate
the commitments from the Lenders.
In addition to the conditions to funding or closing set forth in the Term
Sheet, Bank of America's commitment to provide financing hereunder is subject
to, among other conditions, (i) the negotiation and execution of a definitive
credit agreement and other related documentation satisfactory to the Lenders,
(ii) there being no material adverse change in the reasonable opinion of BASI,
Bank of America in the financial condition, business, operations, properties or
prospects of the Company or the Company and its consolidated subsidiaries, and
Versa Technologies, Inc. and its subsidiaries from the date of the audited
financial statements most recently provided prior to the date hereof, (iii) the
non-occurrence of any material adverse change in loan syndication or capital
market conditions after the date of this letter, generally, which in the
reasonable opinion of BASI, would affect our syndication efforts in respect of
any portion of the Facility, and (iv) until the earlier of November 28, 1997 or
notification by BASI of the completion of the syndication of the Facility,
there be no competing offering, placement, or arrangement of any debt
securities or bank financing by or on behalf of the Company, other than the
contemplated $140 million 364-day senior revolving credit facility described in
the August 29, 1997 commitment letter executed by BASI, Bank of America, PNC
Bank, National Association, and the Company, a possible amendment or replacement
of the Company's asset securitization agreement, as well as certain financing
in connection with the Company's Irish subsidiaries.
Whether or not the transactions contemplated hereby are consummated, the
Company hereby agrees to indemnify and hold harmless each of Bank of America
and BASI, and their respective directors, officers, employees and affiliates
(each, an "indemnified person") from and against any and all losses, claims,
damages, liabilities (or actions or other proceedings commenced or threatened
in respect thereof) and expenses that arise out of, result from or in any way
relate to this commitment letter, or the providing or syndication of the
Facility, and to reimburse each indemnified person, upon its demand, for any
reasonable legal or other expenses (including the allocated cost of in-house
counsel) incurred in connection with investigating, defending or participating
in any such loss, claim, damage, liability or action or other proceeding
(whether or not such indemnified person is a party to any action or proceeding
out of which any such expenses arise), other than any of the foregoing claimed
by any indemnified person to the extent incurred by reason of the gross
negligence or willful misconduct of such person. Neither Bank of America nor
BASI, nor any of their affiliates, shall be responsible or liable to the
Company or other person for any consequential damages which may be alleged.
The obligations contained in this paragraph will survive the closing of the
Facility.
<PAGE> 113
Applied Power Inc.
September 24, 1997
Page 3
In addition, the Company hereby agrees to reimburse Bank of America and BASI
from time to time upon demand for their reasonable out-of-pocket costs and
expenses (including the allocated cost of in-house counsel) incurred by Bank of
America or BASI in connection with the negotiation and preparation of documents
for the Facility, regardless of whether the credit agreement is executed or the
Facility closes. The obligations contained in this paragraph shall remain in
effect until the closing of the Facility, and thereafter, these obligations
will be superseded by the expense reimbursement obligations contained in the
definitive documentation.
The terms contained in this letter and the Term Sheet are confidential and,
except for disclosure to your or our board of directors, officers and
employees, to professional advisors retained by you or us in connection with
this transaction, or as may be required by law, may not be disclosed in whole
or in part to any other person or entity without our prior written consent (in
the case of disclosure by you) or your prior written consent (in the case of
disclosure by us). We hereby consent to your disclosure of a copy of the Term
Sheet and this letter (but not the Fee Letter), to Versa Technologies, Inc. and
their professional advisors, provided that the copy of the Term Sheet is
redacted to omit information relating to pricing, fees and expenses and that no
such disclosure may be made prior to your acceptance of this letter and the Fee
Letter and payment of the arrangement fees. No such consent shall create any
third-party beneficiary as to our commitment.
No modification or waiver of any of the terms and conditions contained in this
letter or the Term Sheet will be valid and binding unless agreed to in writing
by all of the undersigned.
Upon your delivery to us of a signed copy of this letter and the Fee Letter,
this letter agreement and the Fee Letter shall become binding agreements under
Illinois law as of the date so accepted. Bank of America's commitment
hereunder shall remain in effect until 5:00 p.m. Chicago time, on September 24,
1997 when, if not so accepted, Bank of America's commitment hereunder will
terminate. This commitment will expire on November 28, 1997 if the Facility
has not closed on or before that date.
<PAGE> 114
Applied Power Inc.
September 24, 1997
Page 4
We are pleased to have the opportunity to work with you on this important
financing.
Very truly yours,
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS CORPORATION
By: /s/ M.H. Claggett
---------------------------
Title: Vice President
------------------------
BANCAMERICA SECURITIES, INC.
By: /s/ Thomas M. Brown
---------------------------
Title: Vice President
------------------------
ACCEPTED AND AGREED TO:
this 24 day of Sept., 1997
APPLIED POWER INC,
By: /s/ D.R. Dorszynski
---------------------------
Title: Vice President
------------------------
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Confidential Applied Power Inc.
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SUMMARY OF TERMS AND CONDITIONS
APPLIED POWER INC.
$350,000,000 SENIOR MULTI-CURRENCY REVOLVING CREDIT FACILITY
SEPTEMBER 24, 1997
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Borrower: Applied Power Inc. ("Applied Power" or "Company")
Co-Borrower: Applied Power Europe S.A. (up to a $80,000,000 sub-limit)
Guarantors: Versa Technologies, Inc. ("Versa/Tek"). In addition, advances
to Applied Power Europe S.A. will also be unconditionally
guaranteed by Applied Power Inc.
Arranger: BancAmerica Securities, Inc.(1) (in such capacity, the "Arranger").
Agent: Bank of America National Trust and Savings Association ("Bank
of America" or "BofA").
Facility Description
and Amount: A $350 million revolving multi-currency credit facility
(the "Revolver") with a maturity of 5 years from execution of definitive loan
documentation ("Closing") with a $80 million sublimit available to Applied
Power Europe S.A.
Lenders: Bank of America and a syndicate of lenders acceptable to the Arranger
and the Company (the "Lenders").
Purpose: To finance the tender offer and second step cash merger for the
acquisition of all the outstanding stock of Versa/Tek to refinance
existing indebtedness, and to provide for working capital,
capital expenditures and other general corporate purposes.
Revolver Commitment
Reductions: To the extent that Funded Debt (defined as all obligations for borrowed
money and all capital lease obligations and excluding any debt
associated with the sale of the Company's accounts receivable) to
EBITDA is less than 2.0% at the end of year three or year four,
aggregate commitments under the Revolver shall reduce by $50 million
at the end of year three and $50 million at the end of year four.
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(1) BancAmerica Securities, Inc. is a wholly-owned, non-bank subsidiary of
BankAmerica Corporation, the parent company of Bank of America National Trust
and Savings Association. BancAmerica Securities, Inc. is a broker-dealer
registered with the Securities and Exchange Commission, and is a member of the
National Association of Securities Dealers, Inc. and the Securities Investor
Protection Corporation.
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Confidential Applied Power Inc.
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Borrowing Options: Eurocurrency Loans and Alternate Reference Rate Loans.
In addition, a Competitive Bid Loan option will continue
to be available for U.S. Dollar borrowings (together
referred to as "Loans").
Available Currency: U.S. Dollars, Guilders, Sterling, Deutche Marks, Yen,
French Francs, Italian Lira, Swiss Francs, Irish Punt
and any other currency requested by either Borrower and
acceptable to the Agent and all Lenders which meets the
following criteria: (i) freely available in the
international bank market, (ii) freely transferable and
freely convertible into U.S. Dollars and (iii) readily
utilized for the settlement of private international
debt transactions.
Interest Periods: Committed Borrowings:
Eurocurrency Loans - 1, 2, 3 months or if available for
the requested Available Currency by all Lenders, 6
months.
Uncommitted Borrowings:
Bid Loans - 7 to 183 days
Bid Loans will mature at the end of their respective
Interest Periods.
Interest Payments: Accrued interest on each Alternate Reference Rate Loan
shall be payable on the last day of each quarter.
Accrued interest on each Committed Eurocurrency Loan and
uncommitted Bid Loan shall be payable at maturity or
quarterly, if earlier.
Interest Rates: Loans will bear interest as shown in the attached
pricing grid.
Alternate Reference Rate is defined as the higher of
(i) the rate of interest publicly announced from
time to time by the Agent as its Reference Rate, and
(ii) 0.5% per annum above the Federal Funds Rate in
effect on such date. Any change in the Reference
Rate shall take effect at the opening of business on
the date specified in the public announcement of
such change, or on a daily basis in the case of (ii)
above. Interest is to accrue based on a 360-day
year and actual days elapsed and is to be paid in
arrears.
Eurocurrency Rate is defined as the rate per annum
which deposits in the relevant currency in
immediately available funds are offered to the
Funding Office of the Administrative Agent two
business days prior to the beginning of such
Interest Period by major banks in the major
interbank eurocurrency market as at
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Confidential Applied Power Inc.
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or about 10:00 a.m. Chicago time, for delivery on
the first day on such Interest Period, for the
number of days comprised therein. Interest is to
accrue based on a 360-day year and actual days
elapsed and is to be paid in arrears.
Bid Borrowing Options: Consistent with the Company's existing revolving credit
agreement, the Bid Option will be provided on an
uncommitted basis for U.S. Dollar advances only, through
a competitive auction mechanism. Borrower may, from
time to time, request the Agent to solicit competitive
bids from the Lenders through an auction for short-term
loans (a "Bid Auction") priced at an absolute interest
rate upon one business days' prior notice ("Bid Loans").
Bid Loans may be requested for periods of 7 days to 183
days. Pricing on Bid Loans is not reserve-adjusted. Bid
Loans may not be prepaid.
Requests for Bid Loans shall be for minimum principal
amounts of $5,000,000 and in multiples of $1,000,000 in
excess thereof.
Interest on Bid Loans is payable at the maturity of each
Bid Loan, or quarterly if earlier.
Non-Use Fee: A per annum fee, as determined by the attached pricing
grid, on the average daily amount of the unused
commitment calculated on a 360 day basis, payable on the
last day of each fiscal quarter in arrears.
Drawdowns: Minimum amounts of $5,000,000 with additional
increments of $1,000,000 (or 1,000,000 units as
applicable). Drawdowns are at the Borrower's option
with (i) same day notice (by 10:30 a.m. Chicago time)
for Alternate Reference Rate Loans, (ii) three
business days advance notice (by 10:30 a.m. Chicago
time) for Eurocurrency U.S. Dollar Loans, and (iii)
four business days advance notice (by 10:30 a.m.
Chicago time) for Eurocurrency Loans for currencies
other than U.S. dollars.
Voluntary
Prepayments: Alternate Reference Rate Loans may be prepaid at any
time with same day notice (by 10:30 a.m. Chicago
time). Eurocurrency Loans may be prepaid at any time
with at least three business days advance notice (by
10:30 a.m. Chicago time), subject to compensating the
Lenders for any funding losses and related expenses.
Each partial prepayment of Loans shall be in an
aggregate principal dollar amount of at least
$5,000,000 and an integral multiple of $1,000,000 or
the equivalent in Available Currency. Bid Loans may not
be prepaid.
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Confidential Applied Power Inc.
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Mandatory Prepayments: If the dollar amount of the aggregate outstanding principal amount of
all Loans exceeds (as a result of fluctuations in applicable foreign
exchange rates or otherwise) the aggregate Commitment, the Borrower
shall make a mandatory prepayment of the Loans in an amount equal to
such excess. Such prepayment shall be applied (and, to the extent
necessary, made in the applicable Available Currencies) to repay first,
Alternative Reference Rate Loans, and second, committed
Eurocurrency Loans.
Mandatory Reduction in
Facility Commitment: If Funded Debt/EBITDA is greater than 2.0% as measured by the last
compliance certificate, 100% of the net proceeds from the issuance of
debt will be required to reduce the facility commitment. This provision
will not apply if Funded Debt/EBITDA is less than 2.0%
Termination or
Reduction of the Revolver: The Company may irrevocably reduce the Revolver in amounts of at
least $5,000,000 or a higher integral multiple of $1,000,000 at any time
on five business days' notice, subject to compensating the Lenders for
any funding losses and related expenses.
Representations
and Warranties: Consistent with the Company's existing revolving credit agreement,
including but not limited to:
* Corporate existence.
* Corporate and governmental authorization; no contravention,
binding effect.
* Compliance with laws, including ERISA and environmental
regulations.
* Payment of taxes.
* No Material Adverse Change; solvency.
* No material litigation.
* Books, insurance and liens.
* Financial condition as to the Company and its subsidiaries and
as to Versa/Tek.
* Patents/Trademarks.
* Ownership of shares.
* Disclosure of Subsidiaries.
* Representations and warranties in the merger agreement are
true and correct.
Conditions
Precedent: Usual and customary for a credit agreement of this type, including but
not limited to:
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CONFIDENTIAL ALLIED POWER INC.
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* The successful acquisition of Versa/Tek on terms as outlined
in the merger agreement dated September 2, 1997.
* No Material Adverse Change or Effect. No material adverse
change in the condition (financial or otherwise), business,
assets, liabilities, properties, results of operations or pros-
pects of the Company and its subsidiaries shall have occurred
since May 31, 1997 or shall have occurrred since June 30, 1997
for Versa/Tek.
* Proforma balance sheet and compliance certificate (for initial
pricing purposes and proforma covenant compliance purposes).
* Corporate authorizations.
* Receipt of satisfactory closing documentation, including opinions
of counsel.
* Extinguishment of the existing $170 million revolving credit
agreement.
* Cancellation of the $140 million 364-day credit agreement or
commitment thereto, if execution of final documentation has
yet to occur.
* All representations and warranties are true and complete.
CONDITIONS OF
EACH BORROWING: Consistent with the Company's existing revolving credit agreement,
including but not limited to:
* Absence of default or event of default.
* Accuracy of representations and warranties (excluding
disclosure of subsidiaries).
COVENANTS: Consistent with the Company's existing revolving credit agreement,
including but not limited to:
* Information.
* Maintenance of books and records.
* Maintenance of property, insurance.
* Conduct of business; maintenance of existence.
* Compliance with laws, including ERISA and environmental
regulations.
* Payment of taxes and obligations.
* Liens.
* Additional indebtedness.
* Use of proceeds.
* Business activities.
* Permit inspection.
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Confidential Applied Power Inc.
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* Mergers and Acquisitions
* Dividends and other restricted payments.
* Asset Sales to include language to allow (1) the sale of
accounts receivable of up to $80 million, and also (2) the sale
of up to 15% of tangible assets per fiscal year.
FINANCIAL COVENANTS: Consistent with the Company's existing revolving credit agreement,
including but not limited to:
(i) Minimum Consolidated Shareholders' Equity, (a) Not
permit Shareholders' Equity at any time to be less than
$170 million plus 50% of the net proceeds of any stock
offering and (b) not permit Applied Power Europe S.A.'s
Shareholders' Equity to be less than $1. Shareholders'
Equity means, at any date of determination, all amounts
which would be included under shareholders' equity on a
consolidated balance sheet of the Company or Applied
Power Europe S.A.
(ii) Minimum Fixed Charge Coverage Ratio. Maintain a
minimum Fixed Charge Coverage Ratio (defined as
Consolidated Net Income plus Interest Expense plus
Income Tax Expense plus Lease Expense in operating
leases to Interest Expense plus Lease Expense on
operating leases) on a rolling four quarter basis of 1.75%.
(iii) Maximum Total Funded Indebtedness/Capitalization. Not
permit the ratio of Funded Debt (defined as all obligations
for borrowed money and all capital lease obligations and
excludes any debt associated with the sale of the
Company's accounts receivable) to Total Capitalization
(defined as Total Funded Debt plus Deferred Taxes plus
Shareholders' Equity) to exceed 58%, until the third
anniversary of Closing, at which time the maximum permitted
ratio will be reduced to 56%.
EVENTS OF DEFAULT: Consistent with the Company's existing revolving credit agreement,
including but not limited to:
- Non-payment of interest, principal or fees payable under the
Credit Agreement.
- Non-performance of covenants.
- Cross default to other material debt of the Company and its
subsidiaries.
- Bankruptcy, insolvency.
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Confidential Applied Power Inc.
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- Materially inaccurate or false
representations or warranties.
- ERISA.
- Change in control or ownership.
Increased Costs/
Change of Circumstances: The Credit Agreement will contain customary
provisions protecting the Lenders in
the event of unavailability of funding,
increased costs, increased capital adequacy
requirements, tax gross up and funding losses.
The Credit Agreement will also provide for the
general indemnification by the Company of the
Agent, Arranger and their affiliates as well as
the Lenders.
Transfers and
Participations: Each Lender will have the right to
sell participations in its Loans and
commitments with the transferability of voting
rights limited to reductions in principal
amount, interest rate or fees and increases in
term. Assignments to financial institutions
meeting the criteria of an "Eligible
Assignee", in minimum amounts of $5,000,000,
will be permitted with the consent of the
Company (which shall not be unreasonably
withheld) and the Agent.
Expenses: Reasonable costs and expenses, including
attorney's fees (including costs and
expenses of outside counsel and allocated cost
of in-house legal services), incurred at any
time by the Agent and the Arranger in the
negotiation, syndication, documentation and the
closing of the Revolver, as well as the ongoing
administration of the Revolver, shall be paid
by the Company regardless of whether the
Revolver closes. The Company shall pay all
reasonable costs and expenses, including legal
costs, incurred by the Agent and any Lender in
enforcing any loan document.
Required Banks: Lenders having at least 55% of the commitments.
Documentation: The Revolver will be subject to a credit
agreement (the "Credit Agreement") and
other documentation, which shall contain
suitable conditions and covenants mutually
acceptable to the Company, the Agent and the
Lenders, but not limited to those described
above.
Governing Law: State of Illinois.
Miscellaneous: Waiver of jury trial; consent to jurisdiction
in Illinois.
This Indicative Summary of Terms And Conditions (the "Term Sheet") indicates
our desire to enter into or continue discussions with you toward the possible
end of providing the credit facilities as described more fully above. The Term
Sheet is not meant to be, nor shall it be construed as, a commitment by Bank of
America (as defined above) or any of its affiliates to extend credit, or by
BancAmerica Securities, Inc. (as defined above) to enter into syndication
efforts in order to extend credit. Moreover, it does not attempt to describe
all other terms and conditions that would pertain to these
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Confidential Applied Power Inc.
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Facilities (as defined above), nor do its terms suggest the specific phrasing
of documentation clauses. Instead, it is intended to outline certain basic
points of business understanding around which the Facilities could be
structured. This Term Sheet may, if so decided by Bank of America or
BancAmerica Securities, Inc. in their discretion, be superseded by a written
commitment to extend credit by Bank of America, or to enter into syndication
efforts by BancAmerica Securities, Inc. The closing of any financial
transaction relating to the Facilities would be subject to various conditions
precedent, including without limitation, the conditions set forth above.
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CONFIDENTIAL APPLIED POWER INC.
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PRICING GRID
================================================================================
APPLIED POWER INC.
$350,000,000
SENIOR MULTI-CURRENCY REVOLVING CREDIT FACILITY
(IN BASIS POINTS)
<TABLE>
<CAPTION>
RATIO OF TOTAL TENDERED LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V LEVEL VI
DEBT TO CAPITALIZATION* <30% >30% and <40% >40% and <45% >45% and <50% >50% and <55% >55%
- - - - -
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<S> <C> <C> <C> <C> <C> <C>
EUROCURRENCY MARGIN 27.50 35.00 42.50 47.50 51.50 67.50
REFERENCE RATE 0 0 0 0 0 0
NON-USE FEE 10.00 12.50 15.00 17.50 17.50 22.50
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</TABLE>
* To be calculated quarterly, based on the covenant definition.
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