UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
December 14, 1994
(Date of Report)
Bucyrus-Erie Company
(Exact name of registrant as specified in its charter)
Delaware 1-871 39-0188050
(State or other jurisdiction (Commission File (IRS Employer
of incorporation) Number) ID Number)
P.O. Box 500
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172
(Address of principal executive offices)
(414) 768-4000
(Registrant's telephone number, including area code)
<PAGE>
Item 3. Bankruptcy or Receivership
(b) As previously reported in Registrant's Current Report on Form 8-K
dated December 1, 1994 (the "Form 8-K"), on December 1, 1994, the United
States Bankruptcy Court, Eastern District of Wisconsin entered an order
confirming the Second Amended Joint Plan of Reorganization of B-E Holdings,
Inc. ("Holdings") and Bucyrus-Erie Company ("Bucyrus") under chapter 11 of the
United States Bankruptcy Code as modified December 1, 1994 (the "Amended
Plan"), in respect of Case Nos. 94-20786-RAE and 94-20787-RAE. On December
14, 1994 (the "Effective Date"), the transactions contemplated by the Amended
Plan described in the Form 8-K were consummated and the Amended Plan became
effective.
1. Merger
Pursuant to the Amended Plan on the Effective Date, Holdings and Bucyrus
entered into an Agreement and Plan of Merger (the "Merger Agreement") and,
pursuant to the Merger Agreement, Bucyrus filed a certificate of merger (the
"Certificate of Merger") with the Secretary of State of the State of Delaware.
Upon the filing of the Certificate of Merger, Holdings merged with and into
Bucyrus (the survivor of such merger is referred to as the "Reorganized
Company"). As described in the Form 8-K, pursuant to the Amended Plan and the
Merger Agreement on the Effective Date all of Holdings' and Bucyrus' unsecured
debt securities and Holdings' equity securities were exchanged for
approximately 10,000,000 shares of the Reorganized Company's common stock, par
value $.01 per share (the "New Common Stock").
2. Secured Notes
Pursuant to the Amended Plan, the Reorganized Company entered into an
Indenture, dated as of December 14, 1994 (the "Indenture"), with Harris Trust
and Savings Bank ("Harris Trust"), as Trustee. On the Effective Date pursuant
to the Indenture, the Reorganized Company issued an aggregate principal amount
of $52,072,000 of its Secured Notes due December 14, 1999 (the "Secured
Notes") to South Street Corporate Recovery Fund I, L.P., South Street
Leveraged Corporate Recovery Fund, L.P., and South Street Corporate Recovery
Fund I (International), L.P. in exchange for Bucyrus' Series A 10.65% Senior
Secured Notes due July 1, 1995 and Series B 16.5% Senior Secured Notes due
January 1, 1996 and Bucyrus' obligations under its sale and leaseback
financing arrangement. Interest on the Secured Notes from the Effective Date
until the first anniversary of the Effective Date accrues at a rate of 10.5%
per annum payable in cash or in kind, and thereafter interest accrues at 10.5%
per annum, if interest is paid in cash, or 13.0% per annum, if interest is
paid in kind; provided that the Reorganized Company is generally permitted to
make payments of accrued interest on the Secured Notes in kind rather than in
cash at the discretion of the Reorganized Company during the entire five-year
term of the Secured Notes.
The Secured Notes are secured by a second priority lien and security
interest on substantially all of the Reorganized Company's property (other
than real estate), pursuant to the Security Agreement, dated as of December
14, 1994, between the Reorganized Company and Harris Trust, as Collateral
Agent (the "Secured Note Security Agreement"). The lien on the Reorganized
Company's assets provided in the Secured Note Security Agreement is
subordinated to the first priority lien and security interest created in favor
of Bank One, Milwaukee, N.A. ("Bank One") pursuant to the Bank One Security
Agreement (as defined below) securing up to $16,000,000 in indebtedness and
other amounts outstanding or owing under the Bank One Credit Agreement (as
defined below). Pursuant to the Secured Note Security Agreement, the
Reorganized Company also granted a security interest to Harris Trust, as
Collateral Agent, in all of the shares of capital stock held by the
Reorganized Company in each of its United States subsidiaries and 65% of the
shares of capital stock held by the Reorganized Company in its non-United
States subsidiaries (collectively, the "Pledged Subsidiary Stock").
3. Bank One Credit Agreement
Pursuant to the Amended Plan, the Reorganized Company entered into a
Credit Agreement, dated as of December 14, 1994 (the "Bank One Credit
Agreement"), with Bank One. Under the Bank One Credit Agreement, Bank One has
agreed to extend to the Reorganized Company a credit facility for working
capital and general corporate purposes (the "Loan Facility") and a letter of
credit facility (the "L/C Facility") in an aggregate principal amount not to
exceed $15,000,000.
Under the Loan Facility, from the Effective Date through December 31,
1995, the Reorganized Company may borrow up to $5,000,000. From January 1,
1996 through December 31, 1996 the Reorganized Company may borrow up to
$2,500,000 under the Loan Facility provided that the Reorganized Company meets
certain EBITDA tests provided in the Bank One Credit Agreement. The maturity
date for borrowings under the Loan Facility is December 31, 1996. Interest on
borrowings under the Loan Facility is payable at the Reorganized Company's
option either at a rate equal to Bank One's reference rate plus 0.75% per
annum or an adjusted LIBOR rate plus 2.75% per annum. As of the Effective
Date, the Reorganized Company had not borrowed any amount under the Loan
Facility.
Under the L/C Facility, Bank One has agreed to issue letters of credit for
the benefit of the Reorganized Company in an aggregate amount not in excess of
$15,000,000 minus the then outstanding aggregate borrowings by the Reorganized
Company under the Loan Facility. Letters of credit issued by Bank One may not
expire later than December 31, 1997.
The Bank One Credit Agreement provides for customary events of default,
including but not limited to: the Reorganized Company's failure to pay any
amount due and payable under the Bank One Credit Agreement; breach of
covenants, representations and warranties of the Reorganized Company contained
in the Bank One Credit Agreement; or certain judgments, receivership,
insolvency, or bankruptcy against or affecting the Reorganized Company or any
of its subsidiaries.
The Bank One Credit Agreement also contains negative covenants,
prohibiting the Reorganized Company or any of its subsidiaries from, among
other things: (i) making dividend payments or other distributions on or any
purchases or redemptions of the capital stock of the Reorganized Company,
including the New Common Stock, or any of its subsidiaries (except dividends
payable to the Reorganized Company or dividends payable solely in the capital
stock of the Reorganized Company); (ii) incurring any indebtedness other than
subordinated debt, the Secured Notes or as otherwise expressly permitted;
(iii) engaging in any new line of business; (iv) incurring liens and
encumbrances on its property other than those permitted under the Bank One
Credit Agreement; (v) selling assets outside the ordinary course of business;
(vi) making certain acquisitions; (vii) permitting its debt service coverage
ratio (as described in the Bank One Credit Agreement) to fall below 1.75 to 1
as of the last day of any fiscal quarter; (viii) prior to January 1, 1996
paying interest on the Secured Notes in cash unless the debt service coverage
ratio is greater than 1.75 to 1 as of the two most recently completed fiscal
quarters of the Reorganized Company and (ix) prepaying the Secured Notes
unless the debt service coverage ratio is greater than 1.25 to 1 as of the
most recently completed fiscal quarter and the amount of such principal
prepayment is not less than $5,000,000.
Borrowings under the Bank One Credit Agreement are secured by a first
priority lien and security interest on the Pledged Subsidiary Stock pursuant
to the Pledge Agreement dated as of December 14, 1994, between the Reorganized
Company and Bank One (the "Bank One Pledge Agreement") and on substantially
all of the Reorganized Company's other property (other than real estate),
pursuant to the Security Agreement, dated as of December 14, 1994, between the
Reorganized Company and Bank One (the "Bank One Security Agreement"). The
lien and security interest on the Reorganized Company's assets provided in the
Bank One Security Agreement and the Bank One Pledge Agreement is senior to the
lien and security interest created in favor of Harris Trust, as Collateral
Agent pursuant to the Secured Note Security Agreement to the extent described
in "Secured Notes" above and provided in the Intercreditor Agreement, dated as
of December 14, 1994, between Bank One and Harris Trust, as Collateral Agent.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
2.1 Second Amended Joint Plan of Reorganization of B-E Holdings,
Inc. and Bucyrus-Erie Company under chapter 11 of the Bankruptcy
Code, as modified December 1, 1994, including Exhibits
(incorporated by reference to Exhibit 2.1 of Bucyrus-Erie
Company's Current Report on Form 8-K, dated December 1, 1994
(the "Form 8-K")).
2.2 Order dated December 1, 1994 of the U.S. Bankruptcy Court,
Eastern District of Wisconsin, confirming the Second Amended
Joint Plan of Reorganization of B-E Holdings, Inc. and Bucyrus-
Erie Company under chapter 11 of the Bankruptcy Code as modified
December 1, 1994 (incorporated by reference to Exhibit 2.2 of
the Form 8-K).
2.3 Agreement and Plan of Merger, dated as of December 14, 1994,
between B-E Holdings, Inc. and Bucyrus-Erie Company.
3.1 Restated Certificate of Incorporation of Bucyrus-Erie Company.
3.2 Restated Bylaws of Bucyrus-Erie Company.
4.1 Specimen certificate of Common Stock, par value $.01 per share,
of Bucyrus-Erie Company.
4.2 Registration Rights Agreement, dated as of December 14, 1994,
executed by Bucyrus-Erie Company.
4.3 Indenture, dated as of December 14, 1994, between Bucyrus-Erie
Company and Harris Trust and Savings Bank, as Trustee relating
to Bucyrus-Erie Company's Secured Notes due December 14, 1999.
4.4 Form of Bucyrus-Erie Company's Secured Notes due December 14,
1999.
4.5 Security Agreement, dated as of December 14, 1994, between
Bucyrus-Erie Company and Harris Trust and Savings Bank, as
Collateral Agent.
10.1 Credit Agreement, dated as of December 14, 1994, between Bank
One, Milwaukee, National Association and Bucyrus-Erie Company.
10.2 Security Agreement, dated as of December 14, 1994, between
Bucyrus-Erie Company and Bank One, Milwaukee, National
Association.
10.3 Pledge Agreement, dated as of December 14, 1994, between
Bucyrus-Erie Company and Bank One, Milwaukee, National
Association.
10.4 Intercreditor Agreement, dated as of December 14, 1994, between
Bank One, Milwaukee, National Association and Harris Trust and
Savings Bank, as Collateral Agent.
10.5 Indemnification Agreement, dated as of November 30, 1994, among
Jackson National Life Insurance Company, B-E Holdings, Inc. and
Bucyrus-Erie Company.
99.1 Press Release, dated December 2, 1994, of B-E Holdings, Inc. and
Bucyrus-Erie Company announcing that the Second Amended Joint
Plan of Reorganization has been confirmed (incorporated by
reference to Exhibit 99.1 of the Form 8-K).
99.2 Press Release, dated December 15, 1994, of Bucyrus-Erie Company
announcing that the Second Amended Joint Plan of Reorganization
has become effective.
99.3 Press Release, dated December 29, 1994, of Bucyrus-Erie Company
revenues and earnings for fiscal years 1994 and 1995 will be
lower than projected in its Disclosure Statement and Proxy
Statement-Prospectus dated January 12, 1994.<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BUCYRUS-ERIE COMPANY
(Registrant)
By: /s/ PHILLIP W. MORK
Name: Phillip W. Mork
Title: President
Date: December 29, 1994
<PAGE>
BUCYRUS-ERIE COMPANY
EXHIBIT INDEX
TO
CURRENT REPORT ON FORM 8-K
Incorporated Sequential
Exhibit Herein By Filed Page
Number Description Reference Herewith Number
2.1 Second Amended Joint Plan Exhibit 2.1 to
of Reorganization of B-E Registrant's
Holdings, Inc. and Bucyrus- Current Report
Erie Company under chapter on Form 8-K,
11 of the Bankruptcy Code, dated December 1,
as modified December 1, 1994.
1994, including Exhibits.
2.2 Order dated December 1, Exhibit 2.2 to
1994 of the U.S. Bankruptcy Registrant's
Court, Eastern District of Current Report
Wisconsin, confirming the on Form 8-K
Second Amended Joint Plan dated December 1,
of Reorganization of B-E 1994.
Holdings, Inc. and Bucyrus-
Erie Company under chapter
11 of the Bankruptcy Code,
as modified December 1, 1994.
2.3 Agreement and Plan of Merger, X
dated as of December 14,
1994, between B-E Holdings,
Inc. and Bucyrus-Erie Company.
3.1 Restated Certificate of X
Incorporation of Bucyrus-Erie
Company.
3.2 Restated Bylaws of Bucyrus- X
Erie Company.
4.1 Specimen certificate of X
Common Stock, par value $.01
per share, of Bucyrus-Erie
Company.
4.2 Registration Rights Agreement, X
dated as of December 14, 1994,
executed by Bucyrus-Erie
Company.
4.3 Indenture, dated as of X
December 14, 1994, between
Bucyrus-Erie Company and
Harris Trust and Savings
Bank, as Trustee relating
to Bucyrus-Erie Company's
Secured Notes due
December 14, 1999.
4.4 Form of Bucyrus-Erie Company's X
Secured Notes due December 14,
1999.
4.5 Security Agreement, dated X
as of December 14, 1994,
between Bucyrus-Erie Company
and Harris Trust and Savings
Bank, as Collateral Agent.
10.1 Credit Agreement, dated as X
of December 14, 1994, between
Bank One, Milwaukee, National
Association and Bucyrus-Erie
Company.
10.2 Security Agreement, dated as X
of December 14, 1994, between
Bucyrus-Erie Company and
Bank One, Milwaukee, National
Association.
10.3 Pledge Agreement, dated as of X
December 14, 1994, between
Bucyrus-Erie Company and Bank
One, Milwaukee, National
Association.
10.4 Intercreditor Agreement, X
dated as of December 14,
1994, between Bank One,
Milwaukee, National
Association and Harris
Trust and Savings Bank, as
Collateral Agent.
10.5 Indemnification Agreement, X
dated as of November 30,
1994, among Jackson National
Life Insurance Company,
B-E Holdings, Inc. and
Bucyrus-Erie Company.
99.1 Press Release, dated Exhibit 99.1 to
December 2, 1994, of Registrant's
B-E Holdings, Inc. and Current Report
Bucyrus-Erie Company on Form 8-K,
announcing that the Second dated December 1,
Amended Joint Plan of 1994.
Reorganization has been
confirmed.
99.2 Press Release, dated X
December 15, 1994, of
Bucyrus-Erie Company
announcing that the Second
Amended Joint Plan of
Reorganization has become
effective.
99.3 Press Release, dated X
December 29, 1994, of
Bucyrus-Erie Company
revenues and earnings
for fiscal years 1994
and 1995 will be lower
than projected in its
Disclosure Statement and
Proxy Statement-Prospectus
dated January 12, 1994.
<PAGE>
EXHIBIT 2.3
FORM 8-K
DECEMBER 14, 1994
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (hereinafter called this "Agreement"),
dated as of December 14, 1994, by and between B-E Holdings, Inc., a Delaware
corporation ("Holdings"), and Bucyrus- Erie Company, a Delaware corporation
("Bucyrus") and wholly owned subsidiary of Holdings.
RECITALS
WHEREAS, the boards of directors of both Holdings and Bucyrus have
proposed a plan of reorganization (the "Restructuring"), consisting of the
Second Amended Joint Plan of Reorganization (attached hereto as Exhibit A)
(the "Plan") under chapter 11 of the United States Bankruptcy Code of 1978, as
amended (the "Bankruptcy Code"), as modified December 1, 1994;
WHEREAS, the Plan was confirmed under chapter 11 of the Bankruptcy
Code pursuant to an order (the "Confirmation Order") dated December 1, 1994 of
the United States Bankruptcy Court, Eastern District of Wisconsin (the
"Bankruptcy Court") in In re B-E Holdings, Inc. and Bucyrus-Erie Company, Case
Nos. 94-20786-RAE and 94-20787-RAE;
WHEREAS, the Plan as confirmed by the Bankruptcy Court provides for
Holdings to merge with and into Bucyrus and further provides that the
surviving corporation shall issue: a total of 10,170,413 shares of its common
stock, par value $.01 per share (the "New Bucyrus Common Stock"), to holders
of 10% Senior Notes (interest rate reset to 16% as of January 1, 1993) due
1996 of Bucyrus (the "10% Senior Notes"), holders of Resettable Senior Notes
due 1996 of Bucyrus (the "Resettable Senior Notes"), holders of 9% Sinking
Fund Debentures due 1999 of Bucyrus (the "9% Sinking Fund Debentures"),
holders of Class E Common Stock, par value $.01 per share, of Holdings (the
"Holdings Class E Common Stock") and Bell Helicopter Textron Inc.; and
WHEREAS, pursuant to the Plan, Holdings and Bucyrus desire to make
certain covenants and agreements in connection with this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and
agreements set forth herein, Holdings and Bucyrus hereby agree as follows:
ARTICLE I
THE MERGER; CLOSING; EFFECTIVE TIME
1.1 The Merger
Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in Section 1.2) Holdings and Bucyrus shall
consummate a merger (the "Merger") in which Holdings shall be merged with and
into Bucyrus and the separate corporate existence of Holdings shall thereupon
cease. Bucyrus shall be the surviving corporation in the Merger (sometimes
hereinafter referred to as the "Surviving Corporation"). The Surviving
Corporation shall continue to be governed by the laws of the State of Delaware
and the separate corporate existence of Bucyrus with all its rights,
privileges, immunities, powers and franchises shall continue unaffected by the
Merger. The Merger shall have the effects specified in the General
Corporation Law of the State of Delaware ("the DGCL").
1.2 Closing
The closing of the Merger (the "Closing") shall take place (i) at the
offices of Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York,
NY 10005, at 10:00 A.M. on the Effective Date (as defined in the Plan) or (ii)
at such other place and time and/or on such other date after the Effective
Date as Holdings and Bucyrus may agree. In connection therewith, once all the
conditions to Consummation (as defined in the Plan) of the Plan specified in
Article XI.B of the Plan have been satisfied and so long as no stay of the
Confirmation Order is in effect, Holdings and Bucyrus shall cause a
Certificate of Merger (the "Certificate of Merger") to be executed and filed
with the Secretary of State of the State of Delaware as provided in Sections
251 and 303 of the DGCL. The Merger shall become effective upon due filing of
the Certificate of Merger with the Secretary of State of the State of Delaware
in accordance with Section 103 of the DGCL (or such later time as specified
therein), such time is hereinafter referred to as the "Effective Time."
ARTICLE II
CHARTER AND BYLAWS OF THE SURVIVING CORPORATION
2.1 The Charter
The Restated Certificate of Incorporation of Bucyrus, attached hereto
as Exhibit B, shall be the Certificate of Incorporation of the Surviving
Corporation, until duly amended in accordance with the terms thereof and of
the DGCL.
2.2 The Bylaws
The Restated Bylaws of Bucyrus, attached hereto as Exhibit C, shall
be the Bylaws of the Surviving Corporation until duly amended in accordance
with the terms thereof and of the DGCL.
ARTICLE III
DIRECTORS AND OFFICERS OF THE
SURVIVING CORPORATION
3.1 Directors and Officers
The directors of the Surviving Corporation at the Effective Time
shall, from and after the Effective Time, be the directors specified in the
Plan and the Confirmation Order. The officers of the Surviving Corporation at
the Effective Time shall, from and after the Effective Time, be the officers
of Bucyrus immediately prior to the Effective Time. Such directors and
officers shall serve until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation, retirement
or removal in accordance with the Plan and the Surviving Corporation's
Certificate of Incorporation and Bylaws.
ARTICLE IV
CONVERSION OR CANCELLATION OF SECURITIES IN THE MERGER
4.1 Conversion or Cancellation
The manner of converting or canceling securities of Holdings and
Bucyrus in the Merger shall be as follows:
(a) At the Effective Time, each $1,000 principal amount of 10% Senior
Notes issued and outstanding immediately prior to the Effective Time
shall, by virtue of the Merger and without any action on the part of the
holder thereof, be automatically converted into 67.1374 shares of New
Bucyrus Common Stock. All such issued and outstanding 10% Senior Notes
shall thereby be converted into an aggregate of 5,010,329 shares of New
Bucyrus Common Stock. All such 10% Senior Notes, by virtue of the Merger
and without any action on the part of the holders thereof, shall cease to
be outstanding, be cancelled and cease to exist, and each holder of an
instrument formerly representing any such 10% Senior Notes shall
thereafter cease to have any rights with respect to such instrument other
than the right to exchange such instrument for certificates representing
shares of New Bucyrus Common Stock pursuant to the terms of the Plan.
(b) At the Effective Time, each $1,000 principal amount of Resettable
Senior Notes issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of
the holder thereof, be automatically converted into 67.6201 shares of New
Bucyrus Common Stock. All such issued and outstanding Resettable Senior
Notes shall be converted into an aggregate of 4,057,203 shares of New
Bucyrus Common Stock. All such Resettable Senior Notes, by virtue of the
Merger and without any action on the part of the holders thereof, shall
cease to be outstanding, be cancelled and cease to exist, and each holder
of an instrument formerly representing any such Resettable Senior Notes
shall thereafter cease to have any rights with respect to such instrument
other than the right to exchange such instrument for certificates
representing shares of New Bucyrus Common Stock pursuant to the terms of
the Plan.
(c) At the Effective Time, each $1,000 principal amount of 9% Sinking
Fund Debentures issued and outstanding immediately prior to the Effective
Time shall, by virtue of the Merger and without any action on the part of
the holder thereof, be automatically converted into 63.0427 shares of New
Bucyrus Common Stock. All such issued and outstanding 9% Sinking Fund
Debentures shall be converted into an aggregate of 50,686 shares of New
Bucyrus Common Stock. All such 9% Sinking Fund Debentures, by virtue of
the Merger and without any action on the part of the holders thereof,
shall cease to be outstanding, be cancelled and cease to exist, and each
holder of an instrument formerly representing any such 9% Sinking Fund
Debentures shall thereafter cease to have any rights with respect to such
instrument other than the right to exchange such instrument for
certificates representing shares of New Bucyrus Common Stock pursuant to
the terms of the Plan.
(d) At the Effective Time, each share of Holdings Class E Common
Stock issued immediately prior to the Effective Time pursuant to the Plan
to the former holders of Series A 12-1/2% Senior Debentures due 2002 of
Holdings (the "Holdings Senior Debentures"), the former holders of Series
A 12-1/2% Cumulative Exchangeable Preferred Stock, par value $.01 per
share, of Holdings (the "Holdings Series A Preferred Stock"), the former
holders of Series B Convertible Preferred Stock, par value $.01 per share,
of Holdings (the "Holdings Series B Preferred Stock"), the former holders
of Class C Common Stock, par value $.01 per share, of Holdings (the
"Holdings Class C Stock"), the former holders of Class D Common Stock, par
value $.01 per share, of Holdings (the "Holdings Class D Stock") and the
former holders of stock options granted by Holdings under the B-E
Holdings, Inc. 1988 Stock Option Plan that are exercisable on or prior to
the Voting Record Date (as defined in the Plan) and that are exercised on
or prior to the Effective Date (the "Exercised Stock Options") shall, by
virtue of the Merger and without any action on the part of the holders
thereof, be automatically converted into one share of New Bucyrus Common
Stock. All such issued Holdings Senior Debentures, Holdings Series A
Preferred Stock, Holdings Series B Preferred Stock, Holdings Class C
Stock, Holdings Class D Stock and Exercised Stock Options shall be
converted into an aggregate of 881,782 shares of New Bucyrus Common Stock.
All such shares of Holdings Class E Common Stock, by virtue of the Merger
and without any action on the part of the holders thereof, shall cease to
be outstanding, be cancelled and cease to exist, and each holder of shares
of Holdings Class E Common Stock issued pursuant to the Plan shall cease
to have any rights with respect to such shares other than the right to
exchange an instrument formerly representing Holdings Senior Debentures or
a certificate formerly representing shares of Holdings Series A Preferred
Stock, Holdings Series B Preferred Stock, Holdings Class C Stock or
Holdings Class D Stock or a certificate or other document, if any,
representing Exercised Stock Options, as the case may be, for certificates
representing shares of New Bucyrus Common Stock pursuant to the terms of
the Plan. Holders of Class E Common Stock shall not be required to submit
certificates formerly representing Holdings Class E Common Stock in
exchange for certificates representing shares of New Bucyrus Common Stock
pursuant to the terms of the Plan.
(e) At the Effective Time, all stock options granted by Holdings
under the B-E Holdings, Inc. 1988 Stock Option Plan that are not exercised
on or prior to the Effective Date (the "Unexercised Stock Options") shall,
by virtue of the Merger and without any action on the part of Holdings or
Bucyrus, cease to be outstanding, and be cancelled without payment of any
consideration therefor and cease to exist, and the holder of a certificate
or other document, if any, representing Unexercised Stock Options, shall
thereafter cease to have any rights with respect to such Unexercised Stock
Options.
(f) At the Effective Time, each share of common stock, par value $.01
per share, of Bucyrus (the "Old Bucyrus Common Stock") issued and
outstanding immediately prior to the Effective Time shall, by virtue of
the Merger and without any action on the part of Holdings or Bucyrus,
cease to be outstanding, be cancelled without payment of any consideration
therefor and cease to exist, and the holder of a certificate formerly
representing any such Old Bucyrus Common Stock shall thereafter cease to
have any rights with respect to such Old Bucyrus Common Stock.
4.2 Fractional Shares
Notwithstanding Section 4.1, no fractional shares of New Bucyrus
Common Stock shall be issued. Any holder of 10% Senior Notes, Resettable
Senior Notes, 9% Sinking Fund Debentures or Holdings Class E Common Stock
entitled hereunder to receive a fractional share of New Bucyrus Common Stock
shall be entitled to receive, in lieu of such fractional share, an amount in
cash as set forth in the immediately succeeding sentence. Pursuant to Section
7.10 of the Plan, as promptly as practicable following the Effective Time, one
or more of the Disbursing Agents (as defined in the Plan) chosen by the
Surviving Corporation shall aggregate and sell, at then prevailing prices, all
fractional shares of New Bucyrus Common Stock which would otherwise have been
issuable hereunder and distribute the net proceeds from such sale pro rata to
each of the holders entitled thereto.
ARTICLE V
MISCELLANEOUS AND GENERAL
5.1 Governing Law
This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware.
5.2 Assignment
This Agreement shall not be assignable by operation of law or
otherwise and is not intended to create any obligations to, or rights in
respect of, any persons other than the parties hereto.
5.3 Captions
The Article, Section and paragraph captions herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any of the provisions hereof.
IN WITNESS WHEREOF, the officers of Holdings and Bucyrus designated
by order of the Bankruptcy Court to execute this Agreement, have hereby
executed this Agreement on behalf of Holdings and Bucyrus on the date first
hereinabove written.
B-E HOLDINGS, INC.
By: /s/ Phillip W. Mork
Phillip W. Mork
President
Attest:
By: /s/ David M. Goelzer
David M. Goelzer
Secretary
BUCYRUS-ERIE COMPANY
By: /s/ Phillip W. Mork
Phillip W. Mork
President
Attest:
By: /s/ David M. Goelzer
David M. Goelzer
Secretary
<PAGE>
EXHIBIT 3.1
FORM 8-K
DECEMBER 14, 1994
RESTATED CERTIFICATE OF INCORPORATION
OF
BUCYRUS-ERIE COMPANY
ARTICLE I - NAME
The name of the corporation (which is hereinafter referred to as the
"Corporation") is:
Bucyrus-Erie Company
ARTICLE II - REGISTERED OFFICE
The address of the Corporation's registered office in the State of
Delaware is The Corporation Trust Center, 1209 Orange Street, Wilmington,
Delaware 19801, County of New Castle. The name of the Corporation's
registered agent at such address is The Corporation Trust Company.
ARTICLE III - PURPOSE
The purpose of the Corporation shall be to engage in any lawful act
or activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.
ARTICLE IV - STOCK
(A) Authorized Stock. The total number of shares of stock which the
Corporation shall have authority to issue is Twenty Million (20,000,000)
shares of Common Stock, par value $.01 per share (hereinafter referred to as
"Common Stock").
(B) Restriction on Issuance of Non-Voting Shares of Capital Stock.
The Corporation shall not issue any non-voting equity securities; provided,
however, that this provision included in this Restated Certificate of
Incorporation in compliance with Section 1123(a)(6) of Title 11, United States
Code (the "Bankruptcy Code") shall have no force and effect beyond that
required by Section 1123(a)(6) of the Bankruptcy Code and shall be effective
only for so long as Section 1123(a)(6) of the Bankruptcy Code is in effect and
applicable to the Corporation.
(C) Record Holders. The Corporation shall be entitled to treat the
person in whose name any share of its stock is registered as the owner thereof
for all purposes and shall not be bound to recognize any equitable or other
claim to, or interest in, such share on the part of any other person, whether
or not the Corporation shall have notice thereof, except as may be required by
law.
ARTICLE V - BYLAWS
(A) In furtherance of, and not in limitation of, the powers
conferred by law, the Board of Directors is expressly authorized and empowered
to adopt, amend or repeal the Bylaws of the Corporation, provided, however,
that (i) Sections 3.9, 4.2, 4.7(B) and 4.9 of the Bylaws shall not be amended,
altered, changed or repealed prior to the annual meeting of the stockholders
of the Corporation to be held in 1997 except as provided in the Bylaws as in
effect immediately after the "Effective Date" of the Plan (as defined in the
Plan) and (ii) the Bylaws adopted by the Board of Directors under the powers
hereby conferred may be altered, amended or repealed by the Board of Directors
or by the stockholders having voting power with respect thereto.
(B) The Corporation may in its Bylaws confer powers upon the Board
of Directors in addition to the foregoing and in addition to the powers and
authorities expressly conferred upon the Board of Directors by law.
ARTICLE VI - MEETINGS OF STOCKHOLDERS
Subject to the rights of the holders of any series or class of stock
as set forth in the Certificate of Incorporation to elect additional directors
under specific circumstances or to consent to specific actions taken by the
Corporation, any action required or permitted to be taken by the stockholders
of the Corporation must be effected at a duly called annual or special meeting
of stockholders of the Corporation and may not be effected by any consent in
writing in lieu of a meeting of such stockholders.
ARTICLE VII - DIRECTORS
(A) Subject to the rights of the holders of any series or class of
stock to elect additional directors under specific circumstances, the number
of directors of the Corporation shall be fixed by the Bylaws of the
Corporation and may be increased or decreased from time to time in such a
manner as may be prescribed by the Bylaws; provided, however, that, except as
provided in the Bylaws of the Corporation in effect immediately after the
"Effective Date" of the Plan (as defined in the Plan), the number of directors
shall not be increased or decreased prior to the annual meeting of the
stockholders of the Corporation to be held in 1997.
(B) Unless and except to the extent that the Bylaws of the
Corporation shall so require, the election of directors of the Corporation
need not be by written ballot.
(C) Subject to the rights of the holders of any series or class of
stock as set forth in the Certificate of Incorporation to elect additional
directors under specific circumstances, any director may be removed from
office at any time, but only for cause or otherwise to the extent required by
the GCL.
ARTICLE VIII - LIABILITY OF DIRECTORS
No director of the Corporation shall be personally liable to the
Corporation or any stockholder for monetary damages for breach of fiduciary
duty as a director, except for any matter in respect of which such director
(a) shall be liable under Section 174 of the GCL or any amendment or successor
provisions thereto or (b) shall be liable by reason that, in addition to any
and all other requirements for such liability, he (i) shall have breached his
duty of loyalty to the Corporation or its stockholders, (ii) shall not have
acted in good faith or, in failing to act, shall not have acted in good faith,
(iii) shall have acted in a manner involving intentional misconduct or a
knowing violation of law, or, in failing to act, shall have acted in a manner
involving intentional misconduct or a knowing violation of law, or (iv) shall
have derived from any transaction an improper personal benefit. Neither the
amendment nor repeal of this Article VIII, nor the adoption of any provision
of the Certificate of Incorporation, shall eliminate or otherwise adversely
affect the rights and protections of a director under this Article VIII in
respect of any matter occurring, or any cause of action, suit or claim that,
but for this Article VIII, would accrue or arise prior to such amendment,
repeal or adoption.
ARTICLE IX - AMENDMENTS
Except as may be expressly provided in this Certificate of
Incorporation, the Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and any other provisions authorized by the laws
of the State of Delaware at the time in force may be added or inserted, in the
manner now or hereafter prescribed herein or by law, and all powers,
preferences and rights of whatsoever nature conferred upon stockholders,
directors or any other persons whomsoever by and pursuant to this Certificate
of Incorporation in its present form or as hereafter amended are granted
subject to the right reserved in this Article IX. Article V(A), Article
VII(A), Article VII(C) and this Article IX shall not be amended, altered,
changed or repealed prior to the annual meeting of the stockholders of the
Corporation to be held in 1997.
<PAGE>
EXHIBIT 3.2
FORM 8-K
DECEMBER 14, 1994
RESTATED BYLAWS
OF
BUCYRUS-ERIE COMPANY
Incorporated under the Laws of the State of Delaware
ARTICLE I
GENERAL
Section 1.1. Effectiveness of Bylaws. These Bylaws have been
adopted in accordance with the provisions of the Second Amended Joint Plan of
Reorganization of B-E Holdings, Inc. and Bucyrus-Erie Company (as amended,
modified or supplemented from time to time, the "Plan") under chapter 11 of
title 11, United States Code (the "Bankruptcy Code") in proceedings under
chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for
the Eastern District of Wisconsin. These Bylaws shall constitute the Bylaws
of the Corporation and shall be effective for all purposes as of the Effective
Date (as defined in the Plan) of the Plan.
ARTICLE II
OFFICE AND RECORDS
Section 2.1. Delaware Office. The principal office of the
Corporation in the State of Delaware shall be located in the City of
Wilmington, County of New Castle, and the name and address of its registered
agent is The Corporation Trust Company, 1209 Orange Street, Wilmington,
Delaware 19801.
Section 2.2. Other Offices. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate or as the business of the Corporation may from time to
time require.
Section 2.3. Books and Records. The books and records of the
Corporation may be kept at the Corporation's principal executive offices in
South Milwaukee, Wisconsin or at such other locations outside the State of
Delaware as may from time to time be designated by the Board of Directors.
ARTICLE III
STOCKHOLDERS
Section 3.1. Annual Meeting. The annual meeting of the
stockholders of the Corporation shall be held on the last Wednesday in April
of each year, if not a legal holiday, and if a legal holiday then on the next
succeeding business day, at 1:00 p.m., local time, at the principal executive
offices of the Corporation, or at such other date, place and/or time as may be
fixed by resolution of the Board of Directors. The first annual meeting of
stockholders following the Effective Date will take place in 1996 following
completion of the Corporation's fiscal year ending December 31, 1995 at such
time and place determined in accordance with the immediately preceding
sentence (the "1996 Annual Meeting").
Section 3.2. Special Meeting. Subject to the rights of the holders
of any series or class of stock as set forth in the Restated Certificate of
Incorporation of the Corporation (the "Certificate of Incorporation") to elect
additional directors under specified circumstances, special meetings of the
stockholders may be called only by the Chairman of the Board, by the Board of
Directors pursuant to a written request signed by not less than three
directors and delivered to the Secretary or by the President or the Secretary
upon the written request, stating the time, place, and the purpose or purposes
of the meeting, of stockholders who together own of record a majority of the
outstanding stock of all classes entitled to vote at such meeting.
Section 3.3. Place of Meeting. The Board of Directors may
designate the place of meeting for any meeting of the stockholders. If no
designation is made by the Board of Directors, the place of meeting shall be
the principal executive offices of the Corporation.
Section 3.4. Notice of Meeting. Written or printed notice, stating
the place, day and hour of the meeting and the purpose or purposes for which
the meeting is called, shall be prepared and delivered by the Corporation not
less than ten days nor more than sixty days before the date of the meeting,
either personally, or by mail, to each stockholder of record entitled to vote
at such meeting. If mailed, such notice shall be deemed to be delivered when
deposited in the United States mail with postage thereon prepaid, addressed to
the stockholder at his or her address as it appears on the stock transfer
books of the Corporation. Such further notice shall be given as may be
required by law. Meetings may be held without notice if all stockholders
entitled to vote are present, or if notice is waived as provided in Section
7.2 of these Bylaws. Any previously scheduled meeting of the stockholders may
be postponed by resolution of the Board of Directors upon public notice given
prior to the time previously scheduled for such meeting of stockholders.
Section 3.5. List of Stockholders. A complete list of the
stockholders entitled to vote at the ensuing election, arranged in
alphabetical order, with the address of each, and the number of shares held by
each, shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at
least ten days prior to the meeting, at the Corporation's principal executive
offices. The list shall also be produced and kept at the time and place of
the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 3.6. Quorum and Adjournment. Except as otherwise provided
by law or by the Certificate of Incorporation, the holders of a majority of
the outstanding shares of the Corporation entitled to vote generally in the
election of directors (the "Voting Stock"), represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders, except that when
specified business is to be voted on by a class or series voting as a class,
the holders of a majority of the shares of such class or series shall
constitute a quorum for the transaction of such business. The chairman of the
meeting or a majority of the voting power of the shares of Voting Stock so
represented may adjourn the meeting from time to time, whether or not there is
such a quorum (or in the case of specified business to be voted on as a class
or series, the chairman or a majority of the shares of such class or series so
represented may adjourn the meeting with respect to such specified business).
No notice of the time and place of adjourned meetings need be given except as
required by law. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the
withdrawal of enough stockholders to leave less than a quorum.
Section 3.7. Proxies. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing by the stockholder or as
otherwise permitted by law, or by his or her duly authorized attorney-in-fact.
Such proxy must be filed with the Secretary of the Corporation or his or her
representative at or before the time of the meeting.
Section 3.8. Notice of Stockholder Business and Nominations.
(A) Annual Meetings of Stockholders. (1) Nominations of persons
for election to the Board of Directors of the Corporation and the proposal of
business to be considered by the stockholders may be made at an annual meeting
of stockholders (a) pursuant to the Corporation's notice of meeting delivered
pursuant to Section 3.4 of these Bylaws, (b) by or at the direction of the
Chairman of the Board or pursuant to a written request signed by not less than
three directors and delivered to the Secretary or (c) by any stockholder of
the Corporation who is entitled to vote at the meeting, who complied with the
notice procedures set forth in clauses (2) and (3) of paragraph (A) of this
Bylaw and who was a stockholder of record at the time such notice is delivered
to the Secretary of the Corporation.
(2) For nominations or other business to be properly brought
before an annual meeting by a stockholder pursuant to clause (c) of paragraph
(A)(1) of this Bylaw, the stockholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a stockholder's
notice shall be delivered to the Secretary at the principal executive offices
of the Corporation not less than seventy days nor more than ninety days prior
to the first anniversary of the preceding year's annual meeting; provided,
however, that in the event that the date of the annual meeting is advanced by
more than twenty days, or delayed by more than seventy days, from such
anniversary date, notice by the stockholder to be timely must be so delivered
not earlier than the ninetieth day prior to such annual meeting and not later
than the close of business on the later of the seventieth day prior to such
annual meeting or the tenth day following the day on which public announcement
of the date of such meeting is first made. Such stockholder's notice shall
set forth (a) as to each person whom the stockholder proposes to nominate for
election or reelection as a director all information relating to such person
that is required to be disclosed in solicitations of proxies for election of
directors, or is otherwise required, in each case pursuant to Regulation 14A
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
including such person's written consent to being named in the proxy statement
as a nominee and to serving as a director if elected; (b) as to any other
business that the stockholder proposes to bring before the meeting, a brief
description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest
in such business of such stockholder and the beneficial owner, if any, on
whose behalf the proposal is made; and (c) as to the stockholder giving the
notice and the beneficial owner, if any, on whose behalf the nomination or
proposal is made (i) the name and address of such stockholder, as they appear
on the Corporation's books, and of such beneficial owner and (ii) the class
and number of shares of the Corporation which are owned beneficially and of
record by such stockholder and such beneficial owner.
(3) Notwithstanding anything in the second sentence of paragraph
(A)(2) of this Bylaw to the contrary, in the event that the number of
directors to be elected to the Board of Directors is increased and there is no
public announcement naming all of the nominees for director or specifying the
size of the increased Board of Directors made by the Corporation at least
eighty days prior to the first anniversary of the preceding year's annual
meeting, a stockholder's notice required by this Bylaw shall also be
considered timely, but only with respect to nominees for any new positions
created by such increase, if it shall be delivered to the Secretary at the
principal executive offices of the Corporation not later than the close of
business on the tenth day following the day on which such public announcement
is first made by the Corporation.
(B) Special Meeting of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought
before the meeting pursuant to the Corporation's notice of meeting pursuant to
Section 3.4 of these Bylaws. Nominations of persons for election to the Board
of Directors may be made at a special meeting of stockholders at which
directors are to be elected pursuant to the Corporation's notice of meeting
(i) by or at the direction of the Board of Directors or (ii) by any
stockholder of the Corporation who is entitled to vote at the meeting, who
complies with the notice procedures set forth in this Bylaw and who is a
stockholder of record at the time such notice is delivered to the Secretary of
the Corporation. Nominations by stockholders of persons for election to the
Board of Directors may be made at such a special meeting of stockholders if
the stockholder's notice as required by paragraph (A)(2) of this Bylaw shall
be delivered to the Secretary at the principal executive offices of the
Corporation not earlier than the ninetieth day prior to such special meeting
and not later than the close of business on the later of the seventieth day
prior to such special meeting or the tenth day following the day on which
public announcement is first made of the date of the special meeting and of
the nominees proposed by the Board of Directors to be elected at such meeting.
(C) General. (1) Only persons who are nominated in accordance
with the procedures set forth in this Bylaw shall be eligible to serve as
directors and only such business shall be conducted at a meeting of
stockholders as shall have been brought before the meeting in accordance with
the procedures set forth in this Bylaw. Except as otherwise provided by law,
the Certificate of Incorporation or these Bylaws, the chairman of the meeting
shall have the power and duty to determine whether a nomination or any
business proposed to be brought before the meeting was made in accordance with
the procedures set forth in this Bylaw and, if any proposed nomination or
business is not in compliance with this Bylaw, to declare that such defective
proposal or nomination shall be disregarded.
(2) For purposes of this Bylaw, "public announcement" shall mean
disclosure in a press release reported by the Dow Jones News Service,
Associated Press or comparable national news service or in a document publicly
filed by the Corporation with the Securities and Exchange Commission pursuant
to Section 13, 14 or 15(d) of the Exchange Act.
(3) Notwithstanding the foregoing provisions of this Bylaw, a
stockholder shall also comply with all applicable requirements of the Exchange
Act and the rules and regulations thereunder with respect to the matters set
forth in this Bylaw. Nothing in this Bylaw shall be deemed to affect any
rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.
Section 3.9. Procedure for Election of Directors; Required Vote.
Other than the election of directors at any meeting of stockholders of the
Corporation held prior to the annual meeting of stockholders to be held in
1997 (the "1997 Annual Meeting"), which shall occur as provided in Section
5.04 of the Plan, election of directors at all meetings of the stockholders at
which directors are to be elected shall be by written ballot, and except as
otherwise set forth in the Certificate of Incorporation with respect to the
right of the holders of any series or class of stock to elect additional
directors under specified circumstances, a plurality of the votes cast thereat
shall elect the directors. Except as otherwise provided by law, the
Certificate of Incorporation or these Bylaws, all matters other than the
election of directors submitted to the stockholders at any meeting shall be
decided by a majority of the votes cast with respect thereto. Prior to the
1997 Annual Meeting, this Section 3.9 of these Bylaws shall not be amended,
added to, rescinded or repealed.
Section 3.10. Inspectors of Elections; Opening and Closing the
Polls.
(A) The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve
the Corporation in other capacities, including, without limitation, as
officers, employees, agents or representatives of the Corporation, to act at
the meeting and make a written report thereof. One or more persons may be
designated as alternate inspectors to replace any inspector who fails to act.
If no inspector or alternate has been appointed to act, or if all inspectors
or alternates who have been appointed are unable to act, at a meeting of
stockholders, the chairman of the meeting shall appoint one or more inspectors
to act at the meeting. Each inspector, before discharging his or her duties,
shall take and sign an oath faithfully to execute the duties of inspector with
strict impartiality and according to the best of his or her ability. The
inspectors shall have the duties prescribed by the General Corporation Law of
the State of Delaware (the "GCL").
(B) The chairman of the meeting shall fix and announce at the
meeting the time of the opening and the closing of the polls for each matter
upon which the stockholders will vote at a meeting.
Section 3.11. No Stockholder Action by Written Consent. Subject to
the rights of the holders of any series or class of stock as set forth in the
Certificate of Incorporation to elect additional directors under specific
circumstances or to consent to specific actions taken by the Corporation, any
action required or permitted to be taken by the stockholders of the
Corporation must be effected at an annual or special meeting of stockholders
of the Corporation and may not be effected by any consent in writing by such
stockholders.
ARTICLE IV
BOARD OF DIRECTORS
Section 4.1. General Powers. The business and affairs of the
Corporation shall be managed by or under the direction of its Board of
Directors. In addition to the powers and authorities by these Bylaws
expressly conferred upon them, the Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
law or by the Certificate of Incorporation or by these Bylaws required to be
exercised or done by the stockholders.
Section 4.2. Number, Tenure and Qualifications. Subject to the
rights of the holders of any series or class of stock as set forth in the
Certificate of Incorporation to elect directors under specified circumstances,
as provided in Section 5.04(b) of the Plan from the Effective Date (as defined
in the Plan) until the 1997 Annual Meeting, the Board of Directors shall
consist of seven members, and thereafter the number of directors shall be
fixed from time to time by the Board of Directors, but shall consist of not
more than fifteen nor less than three directors. Upon the Effective Date, the
Board of Directors shall consist of those directors selected as provided in
Section 5.04 of the Plan (the "Original Directors"). Each Original Director
shall hold office from and after the Effective Date until the 1996 Annual
Meeting, and from and after the 1996 Annual Meeting until the 1997 Annual
Meeting as provided in Section 5.04 of the Plan, and otherwise pursuant to the
terms of the Certificate of Incorporation, the Plan, these By-Laws and the
GCL, and until their successors have been duly elected, or appointed pursuant
to Section 4.7(B) of these Bylaws and qualified. Directors shall be elected
annually and shall hold office from the time of such director's election and
qualification until their successors shall have been duly elected and
qualified. At each succeeding annual meeting of stockholders of the
Corporation beginning with the 1997 Annual Meeting, if authorized by a
resolution of the Board of Directors, directors may be elected to fill any
vacancy on the Board of Directors, regardless of how such vacancy shall have
been created. Prior to the 1997 Annual Meeting, this Section 4.2 of these
Bylaws shall not be amended, added to, rescinded or repealed except (x) by
resolution of the Board of Directors increasing the number of directors passed
at a meeting thereof by not less than two-thirds of the number of directors
fixed from time to time by these Bylaws, or (y) by resolution of the Board of
Directors increasing the number of directors passed at a meeting thereof in
connection with any transaction involving the Corporaiton that requires
approval of the stockholders of the Corporation under the GCL and that is
approved at such meeting, provided that in either case notice of the proposed
change was given in a notice given no less than twenty-four hours prior to the
meeting.
Section 4.3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice other than this Bylaw immediately after
the Annual Meeting of Stockholders at the principal executive offices of the
Corporation or at such other place as may be fixed by resolution of the Board
of Directors. The Board of Directors may, by resolution, provide the time and
place for the holding of additional regular meetings without notice other than
such resolution.
Section 4.4. Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the Chairman of the Board, the
President or not less than three directors. The person or persons authorized
to call special meetings of the Board of Directors may fix the place and time
of the meetings.
Section 4.5. Notice. Notice of any special meeting shall be given
to each director at his or her business or residence in writing by hand
delivery, overnight mail, courier service, telegram or facsimile transmission
or orally by telephone communication. If by telegram, overnight mail, or
courier service such notice shall be deemed adequately delivered when the
telegram is delivered to the telegraph company or its notice is delivered to
the overnight mail or courier service company at least twenty-four hours
before such meeting. If by facsimile transmission, such notice shall be
deemed adequately delivered when the notice is transmitted at least twenty-
four hours before such meeting. If by telephone or by hand delivery, the
notice shall be given at least twelve hours prior to the time set for the
meeting. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice of such meeting, except for amendments to these Bylaws as provided
under Section 9.1 of these Bylaws. A meeting may be held at any time without
notice if all the directors are present or if those not present waive notice
of the meeting as provided in Section 7.4 of these Bylaws.
Section 4.6. Quorum. A majority of the Board of Directors shall
constitute a quorum for the transaction of business, but if at any meeting of
the Board of Directors there shall be less than a quorum present, a majority
of the directors present may adjourn the meeting from time to time without
further notice. The act of the majority of the directors present at a meeting
at which a quorum is present shall be the act of the Board of Directors. The
directors present at a duly organized meeting may continue to transact
business until adjournment, notwithstanding the withdrawal of enough directors
to leave less than a quorum.
Section 4.7. Vacancies; Vacancies Prior to the 1997 Annual Meeting.
(A) Subject to the rights of the holders of any series or class of stock
as set forth in the Certificate of Incorporation to elect additional directors
under specified circumstances, and unless the Board of Directors otherwise
determines, vacancies resulting from death, resignation, retirement,
disqualification, removal from office or other cause, and newly created
directorships resulting from any increase in the authorized number of
directors, may be filled only by the affirmative vote of a majority of the
remaining directors, though less than a quorum of the Board of Directors, and
directors so chosen shall hold office for a term expiring at the annual
meeting of stockholders at which the term of office of the class to which they
have been elected expires and until such director's successor shall have been
duly elected and qualified. No decrease in the number of authorized directors
shall shorten the term of any incumbent director.
(B) Notwithstanding the provisions of Section 4.7(A) of these Bylaws, if
prior to the 1997 Annual Meeting, there shall be a vacancy in the Board of
Directors resulting from the death, resignation, retirement or removal for
cause (an "Original Director Vacancy Event") of any Original Director, the
provisions of this Section 4.7(B) of these Bylaws shall govern the appointment
of a successor to fill the remainder of the original unexpired term of office
of such Original Director. If an Original Director Vacancy Event shall occur
in respect of an Original Director (or any successor thereto) prior to the
1997 Annual Meeting who is: (i) a director nominated by the Board of
Directors of the Corporation prior to the Effective Date of the Plan, the
Board of Directors shall appoint an officer of the Corporation who served in
such capacity prior to the Effective Date of the Plan, or, in the absence of
any such person, an officer of the Corporation then serving in such capacity;
(ii) a director selected by the Holder of the Allowed Class 4B Claim (as
defined in the Plan) (a "Class 4B Director") the remaining Class 4B Directors
(or their successors) shall appoint the successor to such Class 4B Director,
provided, however, if an Original Director Vacancy Event occurs in respect of
(x) both Class 4B Directors or (y) the remaining Class 4B Director prior to
the appointment of a successor to the other Class 4B Director, then, if at the
time the Original Director Vacancy Event described in sub-clause (x) or (y)
occurs, Jackson National Life Insurance Company owns (1) 30% or more of the
then issued and outstanding shares of Common Stock, the President of Jackson
National Life Insurance Company shall appoint successors to such Class 4B
Directors or (2) less than 30% of the then issued and outstanding shares of
Common Stock, a majority of the remaining Original Directors shall appoint
successors to such Class 4B Directors; or (iii) a director selected by the
Creditors Committee (as defined in the Plan) (a "Committee Director") the
remaining Committee Directors (or successors) shall appoint the successor to
such Committee Director, provided, however, if an Original Director Vacancy
Event occurs in respect of (x) all Committee Directors or (y) the remaining
Committee Director prior to the appointment of a successor to the other
Committee Director, a majority of the remaining Original Directors shall
appoint successors to such Committee Directors. Prior to the 1997 Annual
Meeting, this Section 4.7(B) of these Bylaws shall not be amended, added to,
rescinded or repealed.
Section 4.8. Committees of the Board of Directors. The Board of
Directors may from time to time, by resolution passed by a majority of the
Board of Directors, designate one or more committees, each committee to
consist of one or more directors of the Corporation. The Board of Directors
may designate one or more directors as alternate members of any committee, who
may replace any absent or disqualified member at any meeting of the committee.
Any such committee, to the extent provided in the resolution of the Board of
Directors, shall have and may exercise such powers and authority of the Board
of Directors in the management of the business and affairs of the Corporation
as provided in such resolution, and may authorize the seal of the Corporation
to be affixed to all papers which may require it, except as otherwise provided
by law. Unless the resolution of the Board of Directors expressly so
provides, no such committee shall have the power or authority to declare a
dividend or to authorize the issuance of stock. Any such committee may adopt
rules governing the method of calling and time and place of holding its
meetings. Unless otherwise provided by the Board of Directors, a majority of
any such committee (or the member thereof, if only one) shall constitute a
quorum for the transaction of business, and the vote of a majority of the
members of such committee present at a meeting at which a quorum is present
shall be the act of such committee. Each such committee shall keep a record
of its acts and proceedings and shall report thereon to the Board of Directors
whenever requested so to do. Any or all members of any such committee may be
removed, with or without cause, by resolution of the Board of Directors,
passed by a majority of the Board of Directors.
Section 4.9. Removal. Any director may be removed from office at
any time, but only for cause or otherwise pursuant to the GCL. Prior to the
1997 Annual Meeting, this Section 4.9 of these Bylaws shall not be amended,
added to, rescinded or repealed.
Section 4.10. Action by Consent of Board of Directors. Any action
required or permitted to be taken at any meeting of the Board of Directors or
of any committee thereof may be taken without a meeting if all members of the
Board of Directors or committee, as the case may be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board of Directors or committee.
Section 4.11. Conference Telephone Meetings. Members of the Board
of Directors, or any committee thereof, may participate in a meeting of the
Board of Directors or such committee by means of conference telephone or
similar communications equipment by means of which all persons participating
in the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.
Section 4.12. Records. The Board of Directors shall cause to be
kept a record containing the minutes of the proceedings of the meetings of the
Board of Directors and of the stockholders, appropriate stock books and
registers and such books of records and accounts as may be necessary for the
proper conduct of the business of the Corporation.
ARTICLE V
OFFICERS
Section 5.1. Elected Officers. The elected officers of the
Corporation shall be a Chairman of the Board, a President, one or more Vice
Presidents, a Secretary, a Treasurer and a Controller, and such other
officers, as the Board of Directors from time to time may deem proper. The
Chairman of the Board shall be chosen from the directors. All officers chosen
by the Board of Directors shall each have such powers and duties as generally
pertain to their respective offices, subject to the specific provisions of
this Article V. Such officers shall also have such powers and duties as from
time to time may be conferred by the Board of Directors. The Board of
Directors may from time to time elect, or the Chairman of the Board or the
President may appoint, such other officers (including one or more Assistant
Vice Presidents, Assistant Secretaries, Assistant Treasurers, and Assistant
Controllers) and such agents, as may be necessary.
Section 5.2. Election and Term of Office. The elected officers of
the Corporation shall be elected annually by the Board of Directors at the
regular meeting of the Board of Directors held after each annual meeting of
the stockholders. If the election of officers shall not be held at such
meeting, such election shall be held as soon thereafter as convenient.
Subject to Section 5.13 of these Bylaws, each officer shall hold office until
his or her successor shall have been duly elected and shall have qualified or
until his or her death or until such officer shall resign.
Section 5.3. Chairman of the Board. The Chairman of the Board
shall preside at all meetings of the stockholders and of the Board of
Directors and shall be the Chief Executive Officer. The Chairman of the Board
shall be responsible for the general management of the affairs of the
Corporation, shall make reports to the Board of Directors and the stockholders
and shall perform all duties incidental to such office which may be required
by law and all such other duties as are properly required by the Board of
Directors. The Chairman of the Board may employ and discharge employees and
agents of the Corporation, except such as shall be elected or appointed by the
Board of Directors, and he may delegate these powers. The Chairman of the
Board shall also have such other powers and duties as may be delegated to him
by the Board of Directors. The Chairman of the Board shall see that all
orders and resolutions of the Board of Directors and of any committee thereof
are carried into effect. The Chairman of the Board may sign, alone or with
the Secretary or any other proper officer of the Corporation authorized by the
Board of Directors, certificates, contracts, and other instruments of the
Corporation as authorized by the Board of Directors.
Section 5.4. President. The President shall act in a general
executive capacity and shall assist the Chairman of the Board in the
administration and operation of the Corporation's business and general
supervision of its policies and affairs and shall have such other powers and
duties as may from time to time be prescribed by the Bylaws, by Resolution of
the Board of Directors or by the Chairman of the Board. The President shall,
in the absence of or because of the inability to act of the Chairman of the
Board, perform all of the duties and may exercise all of the powers of the
Chairman of the Board and shall preside at all meetings of stockholders and of
the Board of Directors. The President may sign, alone or with the Secretary
or any other proper officer of the Corporation authorized by the Board of
Directors, certificates, contracts, and other instruments of the Corporation
as authorized by the Board of Directors.
Section 5.5. Vice President. Each Vice President shall have such
powers and perform such duties as may be prescribed by the Bylaws, by
Resolution of the Board of Directors or by the Chairman of the Board. The
performance of any duty by a Vice President shall, in respect of any other
person dealing with the Corporation, be conclusive evidence of his power to
act. Any Vice President may, by Resolution of the Board of Directors, be
designated an Executive Vice President or a Senior Vice President.
Section 5.6. Secretary. The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and directors and all other
notices required by law or by these Bylaws, and in case of absence or refusal
or neglect so to do, any such notice may be given by any person thereunto
directed by the Chairman of the Board, the President, or the Board of
Directors, upon whose request the meeting is called as provided in these
Bylaws. The Secretary shall record or cause to be recorded all the
proceedings of the meetings of the Board of Directors, any committees thereof
and the stockholders of the Corporation in a book to be kept for that purpose,
and shall perform such other duties as may be assigned by the Board of
Directors, the Chairman of the Board or the President. The Secretary shall
have the custody of the seal of the Corporation and shall affix the same to
all instruments requiring it, when authorized by the Board of Directors, the
Chairman of the Board or the President, and attest to the same. The Secretary
shall have charge of the stock ledger and such other books and papers as the
Board of Directors may direct. The Secretary shall have all such further
powers and duties as generally are incident to the office of Secretary or as
may be prescribed by the Bylaws, by Resolution of the Board of Directors or by
the Chairman of the Board.
Section 5.7. Treasurer. The Treasurer shall have the custody of
the corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the Corporation. The
Treasurer shall deposit all moneys and other valuables in the name and to the
credit of the Corporation in such depositaries as may be designated by the
Board of Directors. The Treasurer shall disburse the funds of the Corporation
as may be ordered by the Board of Directors, the Chairman of the Board or the
President, taking proper vouchers for such disbursements. The Treasurer shall
render to the Chairman of the Board, the President and the Board of Directors,
whenever requested, an account of all transactions engaged in as Treasurer and
of the financial condition of the Corporation. If required by the Board of
Directors, the Treasurer shall give the Corporation a bond for the faithful
discharge of duties in such amount and with such surety as the Board of
Directors shall prescribe. The Treasurer shall have all such further powers
and duties as generally are incident to the office of Treasurer or as may be
prescribed by the Bylaws, by Resolution of the Board of Directors, or by the
Chairman of the Board.
Section 5.8. Controller. The Controller shall be the principal
officer in charge of the accounts of the Corporation. The Controller shall
render to the Board of Directors and the Chairman of the Board regularly and
whenever otherwise required an account of the operation and financial
condition of the Corporation. The Controller shall perform all the duties
incidental to the office of Controller, and shall have such other powers and
duties as may be prescribed by the Bylaws, by Resolution of the Board of
Directors, or by the Chairman of the Board.
Section 5.9. Assistant Treasurer. In the absence or inability to
act of the Treasurer, any duly appointed Assistant Treasurer may perform all
the duties and exercise all the powers of the Treasurer. The performance of
any such duty shall, in respect of any other person dealing with the
Corporation, be conclusive evidence of his power to act. An Assistant
Treasurer shall also perform such other duties as the Treasurer or the
Chairman of the Board may assign to him.
Section 5.10. Assistant Controllers. In the absence or inability
to act of the Controller, any duly appointed Assistant Controller may perform
all of the duties and exercise all the powers of the Controller. The
performance of any such duty shall, in respect of any other person dealing
with the Corporation, be conclusive evidence of his power to act. An
Assistant Controller shall perform such other duties as the Controller or the
Chairman of the Board may assign to him.
Section 5.11. Assistant Secretaries. In the absence or inability
to act of the Secretary, any duly appointed Assistant Secretary may perform
all the duties and exercise all the powers of the Secretary. The performance
of any such duty shall, in respect of any other person dealing with the
Corporation, be conclusive evidence of his power to act. An Assistant
Secretary shall also perform such other duties as the Secretary or the
Chairman of the Board may assign to him.
Section 5.12. Removal. Any officer elected by the Board of
Directors may be removed by a majority of the members of the Board of
Directors whenever, in their judgment, the best interests of the Corporation
would be served thereby. Any officer or agent appointed by the Chairman of
the Board or the President may be removed by him whenever, in his judgment,
the best interests of the Corporation would be served thereby. No elected
officer shall have any contractual rights against the Corporation for
compensation by virtue of such election beyond the date of such officer's
death, resignation, removal or the election of such officer's successor,
whichever event shall first occur, except as otherwise provided in an
employment contract or an employee plan.
Section 5.13. Vacancies. A newly created office and a vacancy in
any office because of death, resignation or removal may be filled by the Board
of Directors for the unexpired portion of the term at any meeting of the Board
of Directors. Any vacancy in an office appointed by the Chairman of the Board
or the President because of death, resignation or removal may be filled by the
Chairman of the Board or the President.
ARTICLE VI
STOCK CERTIFICATES AND TRANSFERS
Section 6.1. Stock Certificates and Transfers.
(A) The interest of each stockholder of the Corporation shall be
evidenced by certificates for shares of stock in such form as the appropriate
officers of the Corporation may from time to time prescribe. The shares of
the stock of the Corporation shall be transferred on the books of the
Corporation by the holder thereof in person or by the holder's attorney, upon
surrender for cancellation of certificates for the same number of shares, with
an assignment and power of transfer endorsed thereon or attached thereto, duly
executed, with such proof of the authenticity of the signature as the
Corporation or its agents may reasonably require.
(B) The certificates of stock shall be signed, countersigned and
registered in such manner as the Board of Directors may by resolution
prescribe, which resolution may permit all or any of the signatures on such
certificates to be in facsimile. In case any officer, transfer agent or
registrar who has signed or whose facsimile signature has been placed upon a
certificate has ceased to be such officer, transfer agent or registrar before
such certificate is issued, it may be issued by the Corporation with the same
effect as if such officer, transfer agent or registrar were such officer,
transfer agent or registrar at the date of issue.
Section 6.2. Lost, Stolen or Destroyed Certificates. No
certificate for shares of stock in the Corporation shall be issued in place of
any certificate alleged to have been lost, destroyed or stolen, except on
production of such evidence of such loss, destruction or theft and on delivery
to the Corporation of a bond of indemnity in such amount, upon such terms and
secured by such surety, as the Board of Directors or any authorized officer
may in its or his discretion require.
ARTICLE VII
MISCELLANEOUS PROVISIONS
Section 7.1. Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of January and end on the thirty-first day of December
of each year.
Section 7.2. Dividends. The Board of Directors may from time to
time declare, and the Corporation may pay, dividends on its outstanding shares
in the manner and upon the terms and conditions provided by law and the
Certificate of Incorporation.
Section 7.3. Seal. The seal of the Corporation shall be circular
in form and shall bear, in addition to any other emblem or device approved by
the Board of Directors, the name of the Corporation, the year of its
incorporation and the words "Corporate Seal" and "Delaware". The seal may be
used by causing it or a facsimile thereof to be impressed or affixed or in any
other manner reproduced.
Section 7.4. Waiver of Notice. Whenever any notice is required to
be given to any stockholder or director of the Corporation under the
provisions of the GCL, a waiver thereof in writing, signed by the person or
persons entitled to such notice, whether before or after the time stated
therein, shall be deemed equivalent to the giving of such notice. Neither the
business to be transacted at, nor the purpose of, any annual or special
meeting of the stockholders of the Board of Directors need be specified in any
waiver of notice of such meeting.
Section 7.5. Audits. The accounts, books and records of the
Corporation shall be audited upon the conclusion of each fiscal year by an
independent certified public accountant selected by the Board of Directors,
and it shall be the duty of the Board of Directors to cause such audit to be
made annually.
Section 7.6. Resignations. Any Director or any officer, whether
elected or appointed, may resign at any time by serving written notice of such
resignation on the Chairman of the Board, the President or the Secretary, and
such resignation shall be deemed to be effective when said notice is received
by the Chairman of the Board, the President or the Secretary or at such later
date as is stated therein. No formal action shall be required of the Board of
Directors or the stockholders to make any resignation effective.
Section 7.7. Indemnification and Insurance. (A) Each person who
was or is made a party or is threatened to be made a party to or is otherwise
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative (hereinafter a "proceeding"), by reason of the
fact that he or she or a person of whom he or she is the legal representative
is or was a director or officer of the Corporation or is or was serving at the
request of the Corporation as a director, officer, employee or agent of any
other corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to any employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest
extent authorized by the GCL as the same exists or may hereafter be amended
(but, in the case of any such amendment, only to the extent that such
amendment permits the Corporation to provide broader indemnification rights
than said law permitted the Corporation to provide prior to such amendment),
against all expense, liability and loss (including, without limitation,
attorneys' fees, judgments, fines, excise taxes or penalties under the
Employee Retirement Income Security Act of 1974, as amended, and amounts paid
or to be paid in settlement) reasonably incurred by such indemnitee in
connection therewith; provided, however, that, except as provided in paragraph
(C) of this Bylaw with respect to proceedings seeking to enforce rights to
indemnification, the Corporation shall indemnify any such indemnitee seeking
indemnification in connection with a proceeding (or part thereof) initiated by
such indemnitee only if such proceeding (or part thereof) was authorized by
the Board of Directors.
(B) The right to indemnification conferred in paragraph (A) of this Bylaw
shall include the right to be paid by the Corporation the expenses (including
attorneys' fees) incurred in defending any such proceeding in advance of its
final disposition (hereinafter an "advancement of expenses"); provided,
however, that, if the GCL requires, an advancement of expenses incurred by an
indemnitee in his or her capacity as a director or officer (and not in any
other capacity in which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit plan) shall be
made only upon delivery to the Corporation of an undertaking (hereinafter an
"undertaking"), by or on behalf of such indemnitee, to repay all amounts so
advanced if it shall ultimately be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this paragraph (B) or otherwise.
(C) If a claim under paragraphs (A) or (B) of this Bylaw is not paid in
full by the Corporation within thirty days after a written claim has been
received by the Corporation, except in the case of a claim for an advancement
of expenses, in which case the applicable period shall be twenty days, the
indemnitee may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim. If successful in whole or in part in
any such suit, the indemnitee shall be entitled to be paid also the expense of
prosecuting or defending such suit. In (i) any suit brought by the indemnitee
to enforce a right to indemnification hereunder (but not in a suit brought by
the indemnitee to enforce a right of an advancement of expenses) it shall be a
defense that, and (ii) in any suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the
Corporation shall be entitled to recover such expenses upon a final
adjudication that, the indemnitee has not met any applicable standard for
indemnification set forth in the GCL. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel or stockholders)
to have made a determination prior to the commencement of such action that
indemnification of the indemnitee is proper in the circumstances because the
indemnitee has met the applicable standard of conduct set forth in the GCL,
nor an actual determination by the Corporation (including its Board of
Directors, independent legal counsel or stockholders) that the indemnitee has
not met such applicable standard of conduct, shall create a presumption that
the indemnitee has not met the applicable standard of conduct or, in the case
of such a suit brought by the indemnitee, be a defense to such suit. In any
suit brought by the indemnitee to enforce a right to indemnification or to an
advancement of expenses hereunder, or brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Bylaw or otherwise shall be on the
Corporation.
(D) The right to indemnification and the advancement of expenses
conferred in this Bylaw shall not be exclusive of any other right which any
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, provision of these Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise.
(E) The Corporation may maintain insurance, at its expense, to protect
itself and any director, officer, employee or agent of the Corporation or
another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or
loss under the GCL.
(F) The Corporation may, to the extent authorized from time to time by
the Board of Directors, grant rights to indemnification, and rights to the
advancement of expenses, to any employee or agent of the Corporation to the
fullest extent of the provisions of this Bylaw with respect to the
indemnification and advancement of expenses of directors and officers of the
Corporation.
(G) The rights to indemnification and to the advancement of expenses
conferred in paragraphs (A) and (B) of this Bylaw shall be contract rights and
such rights shall continue as to an indemnitee who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
indemnitee's heirs, executors and administrators.
ARTICLE VIII
CONTRACTS, PROXIES, ETC.
Section 8.1. Contracts. Except as otherwise required by law, the
Certificate of Incorporation or these By-Laws, any contracts or other
instruments may be executed and delivered in the name and on the behalf of the
Corporation by such officer or officers of the Corporation as the Board of
Directors may from time to time direct. Such authority may be general or
confined to specific instances as the Board may determine. The Chairman of
the Board, the President or any Vice President may execute bonds, contracts,
deeds, leases and other instruments to be made or executed for or on behalf of
the Corporation. Subject to any restrictions imposed by the Board of
Directors, the Chairman of the Board or the President may delegate contractual
powers to others under such officer's jurisdiction, it being understood,
however, that any such delegation of power shall not relieve such officer of
responsibility with respect to the exercise of such delegated power.
Section 8.2. Proxies. Unless otherwise provided by resolution
adopted by the Board of Directors, the Chairman of the Board, the President or
the Vice President-Finance may from time to time appoint an attorney or
attorneys or agent or agents of the Corporation, to cast the votes which the
Corporation may be entitled to cast as the holder of stock or other securities
in any other corporation, any of whose stock or other securities may be held
by the Corporation, at meetings of the holders of the stock or other
securities of such other corporation, or to consent in writing, in the name of
the Corporation as such holder, to any action by such other corporation, and
may instruct the person or persons so appointed as to the manner of casting
such votes or giving such consent, and may execute or cause to be executed in
the name and on behalf of the Corporation and under its corporate seal or
otherwise, all such written proxies or other instruments as he may deem
necessary or proper in the premises.
ARTICLE IX
AMENDMENTS
Section 9.1. Amendments. Except as these Bylaws may expressly
provide to the contrary, these Bylaws may be amended, added to, rescinded or
repealed at any meeting of the Board of Directors or of the stockholders,
provided notice of the proposed change was given in the notice of the meeting
and, in the case of the Board of Directors, in a notice given no less than
twenty-four hours prior to the meeting.
<PAGE>
EXHIBIT 4.1
FORM 8-K
DECEMBER 14, 1994
SPECIMEN CERTIFICATE OF COMMON STOCK,
PAR VALUE $.01 PER SHARE, OF BUCYRUS-ERIE COMPANY
_________________________________________________
SEE REVERSE FOR ADDITIONAL INFORMATION
AND CERTAIN DEFINITIONS
COMMON STOCK COMMON STOCK
PAR VALUE $.01 PAR VALUE $.01
BUCYRUS-ERIE COMPANY
NUMBER SHARES
BE
INCORPORATED UNDER THE LAWS CUSIP 118902 10 5
OF THE STATE OF DELAWARE
This is to Certify that
is the owner of
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE
of Bucyrus-Erie Company (the "Corporation") transferable only on the books of
the Corporation by the holder hereof in person or by duly authorized attorney
or legal representative, upon surrender of this Certificate properly endorsed.
This Certificate is not valid unless countersigned and registered by the
Transfer Agent and Registrar.
WITNESS, the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
Dated
BUCYRUS-ERIE COMPANY
CORPORATE
SEAL
1927
DELAWARE
/s/ D. M. Goelzer /s/ P. W. Mork
Secretary President
Countersigned and Registered:
BANK ONE, INDIANAPOLIS, N.A.
Transfer Agent and Registrar,
By
/s/ Monica M. Dill
Authorized Officer.
<PAGE>
BUCYRUS-ERIE COMPANY
The shares of Common Stock represented by this stock certificate
are issued pursuant to the Second Amended Joint Plan of Reorganization
of B-E Holdings, Inc. and Bucyrus-Erie Company, as modified December
1, 1994, and as confirmed by the United States Bankruptcy Court,
Eastern District of Wisconsin (the "Plan"). Pursuant to the Plan all
holders of shares of Common Stock and their Transferees (as defined in
the Plan) have irrecoverably agreed to cause the shares of Common
Stock beneficially owned by such holder or Transferee to be voted for
the election of each of the Original Directors (as defined in the
Plan), as directors of the Corporation at the annual meeting of
stockholders of the Corporation to be held in 1996 (the "1996 Annual
Meeting") for a one-year term ending on the date of the annual meeting
of stockholders of the Corporation to be held in 1997 and until their
successors have been duly elected or appointed and qualified. In
addition, any Transfer (as defined in the Plan) of any shares of
Common Stock at any time prior to the 1996 Annual Meeting shall be
made subject to the above-described irrevocable agreement to vote such
shares of Common Stock for the election of each of the Original
Directors at the 1996 Annual Meeting.
BUCYRUS-ERIE COMPANY will furnish without charge to each
stockholder who so requests a statement of the powers, designations,
preferences and relative, participating, optional or other special
rights of each class of stock or series thereof which BUCYRUS-ERIE
COMPANY is authorized to issue and the qualifications, limitations or
restrictions of such preferences and/or rights. Any such request is
to be addressed to the Secretary of BUCYRUS-ERIE COMPANY.
The following abbreviations, when used in the inscription on the face of
this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM -- as tenants in common UNIF GIFT MIN ACT-- ______Custodian _____
TEN ENT -- as tenants by the (Cust) (Minor)
entireties under Uniform Gifts
JT TEN -- as joint tenants with to Minors
right of survivorship
and not as tenants Act__________________
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received, _______________ hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
/_____________________________________/______________________________________
_____________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE OF
ASSIGNEE.
_____________________________________________________________________________
_____________________________________________________________________________
_______________________________________________________________________Shares
of the capital stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint __________________________________________
Attorney to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
Dated,_______________
_______________________________________
NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME
ALTERATION OR ENLARGEMENT, OR ANY CHANGE WHATEVER.
<PAGE>
EXHIBIT 4.2
FORM 8-K
DECEMBER 14, 1994
REGISTRATION RIGHTS AGREEMENT
Dated as of December 14, 1994
executed by
Bucyrus-Erie Company
for the benefit of
The Persons Who Are Listed
On Schedule A Hereto
<PAGE>
TABLE OF CONTENTS
1. Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
3. Demand Registration. . . . . . . . . . . . . . . . . . . . . . . . . . 4
(a) Requests for Registration . . . . . . . . . . . . . . . . . . . . 4
(b) Limitation on Demand Registration . . . . . . . . . . . . . . . . 5
(c) Effective Registration. . . . . . . . . . . . . . . . . . . . . . 5
(d) Priority on Demand Registration . . . . . . . . . . . . . . . . . 6
(e) Postponement of Demand Registration . . . . . . . . . . . . . . . 6
(f) Registration of Other Securities. . . . . . . . . . . . . . . . . 6
(g) Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
(h) Limitations on Demand Registrations . . . . . . . . . . . . . . . 7
4. Piggyback Registration . . . . . . . . . . . . . . . . . . . . . . . . 7
(a) Right to Piggyback. . . . . . . . . . . . . . . . . . . . . . . . 7
(b) Registration Expenses . . . . . . . . . . . . . . . . . . . . . . 8
(c) Priority on Piggyback Registrations . . . . . . . . . . . . . . . 8
5. Hold-Back Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 9
6. Registration Procedures. . . . . . . . . . . . . . . . . . . . . . . . 9
7. Rule 144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8. Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
(a) Indemnification by the Company. . . . . . . . . . . . . . . . . . 14
(b) Indemnification by Holders of Registrable Securities. . . . . . . 15
(c) Conduct of Indemnification Proceedings. . . . . . . . . . . . . . 15
(d) Contribution. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
(e) Other Indemnification . . . . . . . . . . . . . . . . . . . . . . 17
(f) Indemnification Payments. . . . . . . . . . . . . . . . . . . . . 17
9. Underwritten Offerings . . . . . . . . . . . . . . . . . . . . . . . . 17
10. Term of Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . 18
11. Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(a) Amendments and Waivers. . . . . . . . . . . . . . . . . . . . . . 18
(b) Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
(c) Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 19
(d) Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . 19
(e) Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(f) Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
(g) Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
(h) Remedies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
<PAGE>
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT is made and entered into as of
December 14, 1994, by Bucyrus-Erie Company, a Delaware corporation (the
"Company"), for the benefit of those persons listed on Schedule A attached
hereto.
1. Background. This Agreement is made pursuant to the Second Amended
Joint Plan of Reorganization of B-E Holdings, Inc. and Bucyrus-Erie Company
under chapter 11 of the United States Bankruptcy Code as modified December 1,
1994 (the "Plan"), filed with and confirmed by the United States Bankruptcy
Court, Eastern District of Wisconsin (the "Bankruptcy Court"), by order
entered December 1, 1994 (the "Confirmation Order"), Case Nos. 94-20786-RAE
and 94-20787-RAE, for the benefit of those persons listed on Schedule A
attached hereto, which persons are entitled as holders of certain claims
against Bucyrus-Erie Company to each receive 1,000,000 or more shares of the
Common Stock to be distributed pursuant to the Plan. In accordance with the
terms of the Plan and the Confirmation Order, each Relevant Beneficial Holder
to whom Shares are distributed pursuant to the Plan, by such Relevant
Beneficial Holder's acceptance of such Shares, shall be deemed to have agreed
to and become bound by the terms of this Agreement in the event such Relevant
Beneficial Holder exercises any rights granted to such Relevant Beneficial
Holder under this Agreement and, in such event, shall be deemed a party to
this Agreement to the same extent as if such Relevant Beneficial Holder had
executed a counterpart hereof.
The Company hereby covenants and agrees as follows for the benefit of
each Relevant Beneficial Holder upon acceptance of any Shares and exercise of
any rights granted hereunder to such Relevant Beneficial Holder hereby
covenants and agrees as follows:
2. Definitions. Capitalized terms used but not otherwise defined in
this Agreement shall have the respective meaning ascribed to them in the Plan.
In addition, except as otherwise specifically indicated, the following terms
shall have the following meanings for all purposes of this Agreement:
"Agreement" means this Registration Rights Agreement, as the same may
be amended, supplemented or modified from time to time in accordance with the
terms hereof.
"Business Day" means any day other than Saturday, Sunday or any other
day on which banking institutions in the State of New York are authorized or
obligated to close.
"Common Stock" means the common stock, par value $.01 per share, of
the Company, as constituted on the date hereof, and any stock into which such
Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock.
"Demand Notice" has the meaning ascribed to it in Section 3(a).
"Demand Registration" has the meaning ascribed to it in Section 3(a).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations of the SEC promulgated thereunder.
"NASDAQ" means National Association of Securities Dealers Automated
Quotations system.
"Permitted Assignee" has the meaning ascribed to it in Section 11(c).
"Person" means any natural person, corporation, general partnership,
limited partnership, joint venture, association, joint-stock company, trust or
unincorporated organization.
"Piggyback Notice" has the meaning ascribed to it in Section 4(a).
"Piggyback Registration" has the meaning ascribed to it in
Section 4(a).
"Proceeding" means an action, claim, suit or proceeding (including,
without limitation, an investigation or partial proceeding, such as a
deposition).
"Prospectus" means the prospectus included in any Registration
Statement (including, without limitation, a prospectus that discloses
information previously omitted from a Prospectus filed as part of an effective
Registration Statement in reliance upon Rule 430A promulgated under the
Securities Act), as amended or supplemented by any Prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement, and all other amendments
and supplements to the Prospectus, including post-effective amendments, and
all material incorporated by reference or deemed to be incorporated by
reference in such Prospectus.
"Public Offering" means any offering of Common Stock to the public,
either on behalf of the Company or any of its security holders, pursuant to an
effective registration statement under the Securities Act.
"Registrable Securities" means the Shares and any additional shares
of Common Stock issued or distributed by way of a dividend, stock split or
other distribution in respect of the Shares, or acquired by way of any rights
offering or similar offering made in respect of the Shares. As to any
particular Registrable Securities, such securities shall cease to be
Registrable Securities (a) when a Registration Statement with respect to the
disposition of such securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such Registration Statement, (b) when such securities are sold pursuant
to Rule 144 or any other available exemption from the registration
requirements of Section 5 of the Securities Act, or (c) record or beneficial
ownership of such securities otherwise is transferred from a Relevant
Beneficial Holder to any other Person (including any other Relevant Beneficial
Holder) other than a Permitted Assignee of such Relevant Beneficial Holder.
"Registration Expenses" means all expenses incident to the Company's
performance of or compliance with its obligations under this Agreement to
effect the registration of Registrable Securities in a Demand Registration or
a Piggyback Registration, including, without limitation, all registration,
filing, securities exchange listing and National Association of Securities
Dealers fees, all registration, filing, qualifications and other fees and
expenses of complying with securities or blue sky laws, all word processing,
duplicating and printing expenses, messenger and delivery expenses, the fees
and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits or "cold comfort"
letters required by or incident to such performance and compliance, the
reasonable fees and disbursements of Special Counsel and any fees and
disbursements of underwriters customarily paid by issuers or sellers of
securities, but excluding underwriting discounts and commissions and transfer
taxes, if any, in respect of Registrable Securities, which shall be payable by
each holder of the Registrable Securities being registered.
"Registration Statement" means any registration statement of the
Company that covers any of the Registrable Securities pursuant to the
provisions of this Agreement, including the Prospectus, amendments and
supplements to such Registration Statement, including post-effective
amendments, all exhibits, and all material incorporated by reference or deemed
to be incorporated by reference in such Registration Statement.
"Relevant Beneficial Holder" means a Person who, on the Distribution
Record Date, is a Beneficial Holder of Allowed Class 4A Claims, Allowed Class
4B Claims, Allowed Class 4C Claims, Allowed Class 4D Claims, Allowed Class 6
Claims, Allowed Class 9 Claims, Allowed Class 10 Claims, Allowed Class 11
Claims and/or Allowed Class 12 Claims to whom 1,000,000 or more shares of
Common Stock in the aggregate are distributable pursuant to the Plan, which
Persons are listed on Schedule A hereto.
"Requisite Percentage of Outstanding Holders" means the holders of
15% or more of the Registrable Securities then outstanding.
"Requisite Percentage of Participating Holders" means the holders of
40% or more of the Registrable Securities then held by the holders of
Registrable Securities participating in a registration.
"Rule 144" means Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated by the SEC thereunder.
"Selling Holders" means with respect to any Demand Registration or
Piggyback Registration, holders of Registrable Securities requesting to have
Registrable Securities included in such registration in accordance with this
Agreement.
"Shares" means the shares of Common Stock being issued pursuant to
the Plan to the Relevant Beneficial Holders.
"Special Counsel" means any special counsel to the holders of
Registrable Securities retained by the holders of a majority of the
Registrable Securities being registered for which holders of Registrable
Securities will be reimbursed pursuant to Section 3(g) or Section 4(b). There
shall be no more than one law firm acting as Special Counsel with respect to
any one offering.
"underwritten registration" or "underwritten offering" means a
registration in which securities of the Company are sold to an underwriter for
reoffering to the public.
"underwriter" means a securities dealer that purchases (as principal
and not as part of such dealer's market-making activities) any securities
offered pursuant to a Registration Statement filed by the Company.
3. Demand Registration
(a) Requests for Registration. At any time after the date hereof,
upon the written request of one or more holders of Registrable Securities
representing the Requisite Percentage of Outstanding Holders specifying the
number and amount of Registrable Securities to be registered and the intended
method of disposition thereof (a "Demand Notice") requesting that the Company
effect registration (a "Demand Registration") under the Securities Act, the
Company shall: (i) promptly give written notice of the Company's receipt of
such Demand Notice to all other holders of Registrable Securities, who will be
given the opportunity to participate in such Demand Registration and (ii)
thereupon use its best efforts to effect the registration under the Securities
Act, so as to permit promptly the sale, in accordance with the intended method
of distribution, of (x) the Registrable Securities which the Company has been
so requested to register by such holders and (y) all other Registrable
Securities with respect to which the Company has received written requests for
inclusion in such registration within fifteen days after the delivery to the
applicable holders of the Company's notice. If requested by the holders of a
majority of the Registrable Securities requested to be included in a Demand
Registration the method of disposition of all Registrable Securities included
in such registration shall be an underwritten offering effected in accordance
with Section 9.
(b) Limitation on Demand Registration. Notwithstanding any
provision of this Agreement to the contrary, the Company shall not be
obligated to honor any Demand Notice requesting a Demand Registration
hereunder if:
(i) within the 180 day period immediately preceding the request
for such Demand Registration, a Registration Statement covering
Registrable Securities has been declared effective in response to a
Demand Notice delivered pursuant to Section 3(a); or
(ii) the Demand Notice is delivered to the Company during the
period commencing 30 days before the effective date of a registration
statement pursuant to which the Company is offering shares of Common
Stock in an underwritten offering and ending 60 days after the closing
date of any such offering, provided, that the holder or holders of
Registrable Securities requesting such Demand Registration were afforded
the opportunity to participate in such underwritten offering.
(c) Effective Registration. A Demand Registration requested
pursuant to this Section 3 shall not be deemed to have been effected
(including for purposes of Section 3(h)) (i) unless a Registration Statement
with respect thereto has become effective and has been kept continuously
effective for a period of at least 150 days (or such shorter period which
shall terminate when all the Registrable Securities covered by such
Registration Statement have been sold pursuant thereto), (ii) if after it has
become effective, such registration is interfered with by any stop order,
injunction or other order or requirement of the SEC or other governmental
agency or court for any reason not attributable to the Selling Holders and has
not thereafter become effective, or (iii) if the conditions to closing
specified in the underwriting agreement, if any, entered into in connection
with such registration are not satisfied or waived, other than by reason of a
failure on the part of the Selling Holders.
(d) Priority on Demand Registration. If the managing underwriters
of any underwritten offering determine in their opinion that the total number
of securities proposed to be sold in such offering is such as to materially
and adversely affect the success of such offering (whether by a reduction in
the anticipated selling price or otherwise), then the Company shall include in
the Registration Statement relating to such underwritten offering the number
of Registrable Securities that in the opinion of such managing underwriters
can be sold without materially and adversely affecting such offering, and such
number of Registrable Securities shall be allocated (i) first, among the
Selling Holders delivering the Demand Notice under Section 3(a) and the other
Selling Holders that request to participate in such Demand Registration
pursuant to Section 3(a) allocated pro rata on the basis of the aggregate
number of such Registrable Securities requested to be registered and (ii)
second, among the Company and all other holders of securities of the Company
permitted to include their securities in such Demand Registration.
(e) Postponement of Demand Registration. The Company shall be
entitled to postpone, for a reasonable period of time (not exceeding 120
days), the filing of any Registration Statement under this Section 3 if the
Company determines, in its reasonable business judgment, that such
registration and offering would in the good faith judgment of the Board of
Directors of the Company materially interfere with any financing, acquisition,
disposition of assets or stock, merger, other comparable transaction or other
material business plans of the Company or would require public disclosure by
the Company of non-public information, the premature disclosure of which could
materially adversely affect the Company; provided, however, that the Company
shall not be required to disclose to the holders requesting a Demand
Registration any such transaction, plan or non-public information. If the
Company postpones the filing of a Registration Statement under this Section
3(e), it shall promptly notify the holders of Registrable Securities in
writing when the events or circumstances permitting such postponement have
ended and at such time shall proceed with the filing of the Registration
Statement as requested. If the Company shall postpone the filing of a
Registration Statement pursuant to this Section 3(e), then the holders of
Registrable Securities demanding such registration shall have the right to
withdraw their request for Demand Registration under Section 3(a) by giving
written notice to the Company at any time within ten days after the date the
Company notifies such holders of Registrable Securities of its willingness to
proceed with the filing of the Registration Statement and, upon such
withdrawal, the withdrawn demand will not count as a Demand Registration for
purposes of Section 3(h).
(f) Registration of Other Securities. Subject to Section 3(d), the
Company may include in any Demand Registration under this Section 3 other
securities of the same class as the Registrable Securities for sale for its
own account or for the account of any other Person unless the Selling Holders
representing the Requisite Percentage of Participating Holders have objected
in writing to the inclusion therein of such other securities.
(g) Expenses. The Company shall pay all Registration Expenses in
connection with any Demand Registration under Section 3(a).
(h) Limitations on Demand Registrations. In no event will the
Company be required to effect, in the aggregate, without regard to the holder
or holders of Registrable Securities making such request for registration,
more than three Demand Registrations pursuant to Section 3(a); provided,
however, that no holder of Registrable Securities may initiate more than two
Demand Registrations pursuant to Section 3(a) unless such holder is, at the
time of such request, the sole holder of Registrable Securities.
4. Piggyback Registration
(a) Right to Piggyback. If at any time after the date hereof, the
Company proposes to file a registration statement under the Securities Act
with respect to an offering of its equity securities and so long as
Registrable Securities can be included on the proposed form of registration to
be used by the Company to register such equity securities (except (i) a
registration in respect of a dividend reinvestment or similar plan for
stockholders of the Company, (ii) a registration on Form S-4, Form S-8 or any
successor form thereto, or (iii) as part of a Demand Registration (in which
event the provisions of Section 3 shall govern the rights of holders of
Registrable Securities to be included in such Registration Statement)),
whether or not for its own account, then the Company shall give written notice
of such proposed filing to the holders of Registrable Securities at least 30
days before the anticipated filing date (the "Piggyback Notice"). The
Piggyback Notice shall offer holders of Registrable Securities the opportunity
to request inclusion in such registration of any amount of Registrable
Securities. Upon the written request of any holder of Registrable Securities
made as promptly as practicable and in any event within 15 days after the
receipt of a Piggyback Notice (which request shall specify the Registrable
Securities intended to be disposed of by such holder), the Company, subject to
Section 4(c), shall use its best efforts to effect the registration under the
Securities Act of all Registrable Securities which the Company has been so
requested to register (a "Piggyback Registration"). The Company may, at its
option, include such Registrable Securities either in the registration
statement giving rise to such Piggyback Registration or in a separate
Registration Statement filed concurrently therewith. Notwithstanding the
foregoing, if, at any time after giving a Piggyback Notice and prior to the
effective date of the Registration Statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such securities, the Company may, at its election, give
written notice of such determination to each holder of Registrable Securities
who has requested registration of Registrable Securities pursuant to this
Section 4(a) and, thereupon, (i) in the case of a determination not to
register, shall be relieved of its obligation to register any Registrable
Securities in connection with such registration (but not from its obligations
to pay the Registration Expenses in connection therewith) and (ii) in the case
of a determination to delay registering, shall be permitted to delay
registering any Registrable Securities for the same period as the delay in
registering such other securities without prejudice, however, in either case,
to the rights of any requesting holder entitled to do so to request that such
registration be effected as a Demand Registration under Section 3. No
registration effected under this Section 4 shall relieve the Company of its
obligations to effect a Demand Registration under Section 3. Each holder who
has requested registration of Registrable Securities pursuant to this Section
4(a) shall be permitted to withdraw all or part of the Registrable Securities
from a Piggyback Registration at any time prior to the effective date of such
Piggyback Registration by giving written notice to the Company of its request
to withdraw.
(b) Registration Expenses. The Company will pay all Registration
Expenses incurred in connection with each Piggyback Registration under Section
4(a).
(c) Priority on Piggyback Registrations. The Company shall use
reasonable efforts to cause the managing underwriters of a proposed
underwritten offering of securities of the type described in Section 4(a) to
permit the Registrable Securities requested to be included in the registration
statement (or registration statements) for such offering to be included
therein (on the same terms and conditions as the securities of the Company
included therein by persons other than the Selling Holders, to the extent
appropriate). Notwithstanding the foregoing, if the managing underwriters of
such underwritten offering determine in their opinion that the total number of
securities that the Selling Holders, the Company, and any other persons having
rights (or otherwise permitted) to participate in such registration propose to
include in such offering is such as to materially and adversely affect the
success of such offering (whether by a reduction in the anticipated selling
price or otherwise), then:
(i) if such Piggyback Registration is incident to a primary
registration on behalf of the Company, the securities to be included by
the Company in such registration shall be reduced pro rata among the
Company and the Selling Holders on the basis of the aggregate number of
securities of the Company proposed to be registered by the Company and
Registrable Securities requested to be included by such holders; and
(ii) if such Piggyback Registration is incident to a secondary
registration on behalf of holders of securities of the Company (other
than pursuant to Section 3(a), in which case priority shall be determined
in accordance with Section 3(d)), the Company shall include in such
registration (A) first, up to the number of securities of such persons
exercising "demand" registration rights, or on whose behalf the secondary
registration otherwise is being made, that, in the opinion of such
underwriters, can be sold (allocated among such holders as they may so
determine), and (B) second, the number of Securities requested to be
included in such registration pursuant to Section 4(a) in excess of the
securities such persons exercising "demand" registration rights, or on
whose behalf the secondary registration otherwise is being made, propose
to sell that, in the opinion of such managing underwriters, can be sold
without materially and adversely affecting such offering (allocated pro
rata on the basis of the aggregate number of such Registrable Securities
requested to be registered).
5. Hold-Back Agreements
In connection with a Demand Registration or a Piggyback Registration,
if requested in writing by the managing underwriters in any such firm
underwritten offering, during the period beginning 30 days before, and ending
90 days after, the effective date of any registration statement filed by the
Company in connection with such a Demand Registration or Piggyback
Registration:
(a) the Company agrees not to effect during such period any public
or private offer, sale or distribution of Registrable Securities (except (i)
as part of such underwritten offering, (ii) pursuant to registrations on Form
S-4 or Form S-8 or any successor form to either such form, or (iii) the grant
of options or similar rights to employees of the Company pursuant to any duly
adopted employee benefit plan); and
(b) each holder of Registrable Securities, by acquisition of such
Registrable Securities, agrees not to effect during such period any public
offer, sale or distribution of Registrable Securities, including a sale
pursuant to Rule 144 (except as part of such underwritten offering).
6. Registration Procedures
If and whenever the Company is required to use its best efforts to
effect the registration of any Registrable Securities under the Securities Act
pursuant to Section 3(a) or Section 4(a), the Company will use its best
efforts to effect such registration to permit the sale of Registrable
Securities in accordance with the intended method or methods of disposition
thereof, and pursuant thereto the Company shall, except to the extent
expressly provided otherwise in this Agreement, as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement or
Registration Statements on a Form available for the sale of the Registrable
Securities by the Selling Holders in accordance with the intended method or
methods of distribution thereof, and thereafter use its best efforts to cause
each such Registration Statement to become effective and remain effective as
provided herein.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable time period
as provided in Section 3(c), as applicable, or, in the case of a Piggyback
Registration for such time as the Company shall determine in its sole
discretion but in no event less than 90 days.
(c) Notify the Selling Holders and the managing underwriters, if
any, promptly (i) when a Registration Statement, Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and, with respect to a
Registration Statement or any post-effective amendment, when the same has
become effective, (ii) at any time when a Prospectus is required to be
delivered under the Securities Act, upon discovery that, or upon the happening
of any event that (A) makes any statement made in such Registration Statement
or related Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or (B) that
requires the making of any changes in such Registration Statement, Prospectus
or documents so that it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading, and (iii) of the
Company's reasonable determination that a post-effective amendment to a
Registration Statement would be appropriate.
(d) If requested, furnish to each Selling Holder and each managing
underwriter, if any, without charge, at least one conformed copy of the
Registration Statement or Registration Statements and each post-effective
amendment thereto, including financial statements and schedules, all documents
incorporated or deemed to be incorporated therein by reference, and all
exhibits to the extent requested by each Selling Holder at the earliest
practicable time under the circumstances after the filing of such documents
with the SEC.
(e) Deliver to each Selling Holder and the managing underwriters, if
any, without charge, as many copies of the Prospectus or Prospectuses
(including each form of prospectus) and each amendment or supplement thereto
as such persons may reasonably request to facilitate the disposition of the
Registrable Securities covered by such Prospectus or Prospectuses; and the
Company hereby consents to the use of such Prospectus and each amendment or
supplement thereto by each of the Selling Holders and the underwriters, if
any, in connection with the offering and sale of the Registrable Securities
covered by such Prospectus and any amendment or supplement thereto.
(f) Prior to any public offering of Registrable Securities, use
reasonable efforts to (i) register or qualify or cooperate with the Selling
Holders, the managing underwriters, if any, and their respective counsel in
connection with the registration or qualification (or exemption from such
registration or qualification) of such Registrable Securities for offer and
sale under the securities or Blue Sky laws of such jurisdictions within the
United States as any Selling Holder or managing underwriter reasonably
requests in writing and (ii) keep each such registration or qualification (or
exemption therefrom) effective during the period the applicable Registration
Statement is required to be kept effective and do any and all other acts or
things necessary or advisable to enable the disposition in such jurisdictions
of the Registrable Securities covered by the applicable Registration
Statement; provided, however, that the Company shall not be required to
qualify generally to do business in any jurisdiction where it is not then so
qualified or to take any action that would subject it to general service of
process in any such jurisdiction where it is not then so subject or subject
the Company to any tax in any such jurisdiction where it is not then so
subject.
(g) Notify the Selling Holders and the managing underwriters, if
any, promptly (i) of written comments received from, or any stop order issued
by, the SEC with respect to any Registration Statement and use all reasonable
efforts to respond to such comments or to obtain the withdrawal of such stop
order as of the earliest practicable time and (ii) of the receipt by the
Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction and shall use all reasonable efforts
to obtain the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Registrable Securities for sale in any
jurisdiction as of the earliest practicable time.
(h) Upon the occurrence of any event contemplated by Section
6(c)(ii) or Section 6(c)(iii), prepare and file with the SEC a supplement or
post-effective amendment to the Registration Statement or a supplement to the
related Prospectus or any document incorporated or deemed to be incorporated
therein by reference, and file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder, such Prospectus will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein
or necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading.
(i) Use its best efforts to cause all Registrable Securities covered
by such Registration Statement to be (i) listed on each securities exchange,
if any, on which the same class of securities issued by the Company are then
listed or (ii) authorized to be quoted on NASDAQ or such other national
quotation system, if any, on which the same class of securities issued by the
Company are then quoted.
(j) Enter into and perform customary agreements (including an
underwriting agreement in customary form with the managing underwriters, if
any) and take such other actions as are reasonably required in order to
expedite or facilitate the disposition of such Registrable Securities.
(k) Make available for inspection by the Selling Holders and any
managing underwriter participating in any disposition pursuant to such
Registration Statement, and any attorney, accountant, or other professional
retained by the Selling Holders or any managing underwriter (collectively, the
"Inspectors"), all financial and other records, pertinent corporate documents,
and properties of the Company (collectively, the "Records") as shall be
reasonably necessary to enable them to exercise their due diligence
responsibility under the Securities Act, and cause the Company's officers,
directors, and employees to supply all information reasonably requested by any
such Inspectors in connection with such Registration Statement. Records which
the Company determines, in good faith, to be confidential and which it
notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) in the judgment of counsel to the Company the disclosure
of such Records is necessary to avoid or correct a misstatement or omission in
such Registration Statement or (ii) the release of such Records is ordered
pursuant to a subpoena or other order from a court of competent jurisdiction.
Each holder of Registrable Securities agrees that information obtained by it
or by the Inspectors retained by it as a result of such inspections shall be
deemed confidential and shall not be used by it or by the Inspectors retained
by it as the basis for any market transactions in the securities of the
Company or for any other purpose unless and until such is made generally
available to the public by the Company. Each holder of Registrable Securities
further agrees that it will, upon learning that disclosure of such Records if
sought in or by order of a court of competent jurisdiction, give notice to the
Company and allow the Company, at its expense, to undertake appropriate action
to prevent disclosure of the Records deemed confidential.
(l) Furnish to each Selling Holder and each underwriter, if any,
participating in the offering of the securities covered by a Registration
Statement, a signed counterpart of:
(i) an opinion of outside counsel (or inside counsel if
satisfactory to each underwriter or, if not sold through an underwriter,
to the Selling Holders participating in the registered offering) for the
Company, and
(ii) a "comfort" letter signed by the independent public accountants
who have certified the Company's financial statements included or
incorporated by reference in the Registration Statement,
covering substantially the same matters with respect to the Registration
Statement (and the Prospectus included therein) and, in the case of the
accountants' comfort letter, with respect to events subsequent to the date of
such financial statements, as are customarily covered in opinions of issuer's
counsel and in accountants' comfort letters delivered to the underwriters in
underwritten public offerings of securities (and dated the dates such opinions
and comfort letters are customarily dated) and, in the case of the legal
opinion, such other legal matters, and, in the case of the accountants'
comfort letter, such other financial matters, as the Requisite Percentage of
Participating Holders, or the underwriters, may reasonably request.
(m) Use its best efforts to comply with all applicable rules and
regulations of the SEC and make available to its security holders, as soon as
reasonably practicable, an earnings statement covering a period of at least 12
months beginning with the first full calendar month of the Company after the
effective date of a Registration Statement, which earnings statement shall
satisfy the provisions of Section 11(a) of the Securities Act and Rule 158
promulgated thereunder.
The Company may require each Selling Holder to furnish in writing to
the Company such information regarding such holder and the distribution of his
Registrable Securities as the Company may, from time to time, reasonably
request and the Company may exclude from any registration pursuant hereto the
Registrable Securities of any Selling Holder who fails to furnish such
information within a reasonable time after receiving such request.
Each holder of Registrable Securities agrees by acceptance of such
Registrable Securities that, upon receipt of any notice from the Company of
the happening of any event of the kind described in Section 6(c)(ii) or
Section 6(c)(iii), such holder will forthwith discontinue disposition of such
Registrable Securities covered by such Registration Statement or Prospectus
until such holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 6(h), or until it is advised in writing
(the "Advice") by the Company that the use of the applicable Prospectus may be
resumed, and has received copies of any additional or supplemental filings
that are incorporated or deemed to be incorporated by reference in such
Prospectus. If the Company shall give any such notice, the time period
mentioned in Section 3(c) shall be extended by the number of days during such
period from and including the date of the giving of such notice to and
including the date when each seller of Registrable Securities covered by such
Registration Statement shall have received (x) the copies of the supplemented
or amended Prospectus contemplated by Section 6(h) or (y) the Advice.
7. Rule 144. The Company shall take all actions reasonably necessary to
enable holders of Registrable Securities to sell such securities without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144, or (b) any similar rule or regulation hereafter
adopted by the SEC including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed by the
Exchange Act. Upon the request of any holder of Registrable Securities, the
Company will deliver to such holder a written statement as to whether it has
complied with such requirements.
8. Indemnification
(a) Indemnification by the Company. The Company shall indemnify and
hold harmless each holder of Registrable Securities, the officers, directors,
agents and employees of each such holder, each Person who controls each such
holder (within the meaning of Section 15 of the Securities Act or Section 20
of the Exchange Act) and the officers, directors, agents and employees of each
such controlling person, to the fullest extent lawful, from and against any
and all losses, claims, damages, liabilities, costs (including without
limitation reasonable attorneys' fees) and expenses (collectively, "Losses")
arising out of or based upon any untrue or alleged untrue statement of a
material fact contained in any Registration Statement, Prospectus or form of
prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission
of a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as the same are based upon
information furnished in writing to the Company by or on behalf of such holder
expressly for use in such Registration Statement or Prospectus; provided,
however, that the Company shall not be liable to the extent that (A) any such
Losses arise out of or are based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in any preliminary prospectus
if (i) such holder failed to send or deliver a copy of the Prospectus with or
prior to the delivery of written confirmation of the sale by such holder of a
Registrable Security to the person asserting such Losses who purchased such
Registrable Security that is the subject thereof and (ii) the Prospectus would
have adequately corrected such untrue statement or alleged untrue statement or
such omission or alleged omission; or (B) any such Losses arise out of or are
based upon an untrue statement or alleged untrue statement or omission or
alleged omission in the Prospectus, if such untrue statement or alleged untrue
statement or omission or alleged omission is adequately corrected in an
amendment or supplement to the Prospectus and if, having previously been
furnished by or on behalf of the Company with copies of the Prospectus as so
amended or supplemented, the holder of Registrable Securities thereafter fails
to deliver such Prospectus as so amended or supplemented prior to or
concurrently with the sale of a Registrable Security to the person asserting
such Losses who purchased such Registrable Security that is the subject
thereof from such holder.
(b) Indemnification by Holders of Registrable Securities. In
connection with any Registration Statement in which a holder of Registrable
Securities is participating, such holder of Registrable Securities agrees to
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the
directors, officers, agents or employees of such controlling persons, to the
fullest extent lawful, from and against all Losses arising out of or based
upon any untrue or alleged untrue statement of a material fact contained in
any Registration Statement, Prospectus, or form of prospectus, or arising out
of or based upon any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein not
misleading, to the extent, but only to the extent, that such untrue statement
or alleged untrue statement or omission or alleged omission is contained in
any written information furnished to the Company by or on behalf of such
holder expressly for use in such Registration Statement or Prospectus.
(c) Conduct of Indemnification Proceedings. If any Proceeding shall
be brought or asserted against any person entitled to indemnity hereunder (an
"Indemnified Party"), such Indemnified Party shall promptly notify the party
from which such indemnity is sought (the "Indemnifying Party") in writing, and
the Indemnifying Party shall assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all reasonable fees and expenses incurred in connection with the
defense thereof. The failure of any Indemnified Party to give notice as
provided herein shall not relieve the Indemnifying Party of its obligations
under this Section 8, except to the extent that the Indemnifying Party is
actually prejudiced by the failure to give notice. Any such Indemnified Party
shall have the right to employ separate counsel in any such Proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be borne by such Indemnified Party unless (i) the Indemnifying Party has
agreed to pay such fees and expenses, (ii) the Indemnifying Party shall have
failed to promptly assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to the Indemnified Party, (iii) the Indemnified
Party's counsel shall have advised the Indemnified Party that a conflict of
interest exists that could make it inappropriate under applicable standards of
professional conduct to have the counsel employed by the Indemnifying Party
represent such Indemnified Party, or (iv) the Indemnified Party's counsel
shall have advised the Indemnified Party that there may be defenses available
to the Indemnified Party that are different from or in addition to those
available to the Indemnifying Party and that the Indemnifying Party is not
able to assert on behalf of or in the name of the Indemnified Party (in which
case, if such Indemnified Party notifies the Indemnifying Party in writing
that it elects to employ separate counsel at the expense of the Indemnifying
Party, the Indemnifying Party shall pay the attorneys' fees of the Indemnified
Party to the extent related to the assertion by such counsel of such different
and/or additional defenses, but for no other reason); provided, however, that
the Indemnifying Party shall not, in connection with any one such Proceeding
or separate but substantially similar or related Proceedings in the same
jurisdiction, arising out of the same general allegations or circumstances, be
liable for the fees and expenses of more than one separate firm of attorneys
at any time for all such Indemnified Parties. No Indemnifying Party shall
consent to entry of any judgment or enter into any settlement without the
consent of the Indemnified Party which does not include as an unconditional
term thereof the giving by the claimant or plaintiff to such Indemnified Party
of a release from all liability in respect to such Proceeding. No
Indemnifying Party shall be liable for any settlement of any Proceeding
effected without its written consent, which consent shall not be unreasonably
withheld.
(d) Contribution. If the indemnification provided for in this
Section 8 is unavailable to an Indemnified Party under Section 8(a) or Section
8(b) (other than by reason of exceptions provided in those Sections) in
respect of any Losses, then each applicable Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such Losses as between the
Company, on the one hand, and the Selling Holders, on the other hand, in such
proportion as is appropriate to reflect the relative fault of the Company and
of the Selling Holders in connection with such statements or omissions, as
well as any other relevant equitable considerations. The relative fault of
the Company, on the one hand, and of the Selling Holders, on the other hand,
shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by such
party, and the party's relative intent, knowledge, access to information, and
opportunity to correct or prevent such statement or omission. The amount paid
or payable by a party as a result of any Losses shall be deemed to include,
subject to the limitations set forth in Section 8(c), any legal or other fees
or expenses reasonably incurred by such party in connection with any
investigation or defense of any Proceeding.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 8(d) were determined by pro rata
allocation or by any other method of allocation that does not take into
account the equitable considerations referred to in the immediately preceding
paragraph.
No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) Other Indemnification. Indemnification similar to that
specified in the preceding paragraphs of this Section 8 (with appropriate
modifications) shall be given by the Company and each Selling Holder with
respect to any required registration or other qualification of securities
under any federal or state law or regulation of any governmental authority
other than the Securities Act. The provisions of this Section 8 shall be in
addition to any other rights to indemnification or contribution which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.
(f) Indemnification Payments. The indemnification required by this
Section 8 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or
Losses are incurred.
9. Underwritten Offerings. In connection with each underwritten
offering made pursuant to this Agreement, the managing underwriters to be used
in the offering will be selected by the Company; provided, that such managing
underwriters shall be reasonably satisfactory to the Requisite Percentage of
Participating Holders. Notwithstanding the foregoing, the Company shall have
no obligation to select or otherwise provide an underwriter for any Demand
Registration. If the Company elects not to select the managing underwriters
for any underwritten offering made pursuant to this Agreement (other than an
underwritten offering made pursuant to a Piggyback Registration), then the
managing underwriters to be used in the offering will be selected by the
Requisite Percentage of Participating Holders; provided, that such managing
underwriters shall be reasonably satisfactory to the Company. The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to such underwriting agreement and may, at their option, require that any or
all of the representations and warranties by, and the other agreements on the
part of, the Company to and for the benefit of such underwriters also be made
to and for their benefit and that any or all of the conditions precedent to
the obligations of such underwriters under such underwriting agreement also be
conditions precedent to their obligations. No holder of Registrable
Securities shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such holder and its ownership of the
securities being registered on its behalf and such holder's intended method of
distribution and any other representation required by law. No Person may
participate in any underwritten offering hereunder unless such Person (a)
agrees to sell such Person's Registrable Securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.
10. Term of Agreement. This Agreement shall terminate on the earlier of
(i) the fifth anniversary of the date hereof or (ii) the first date on which
there ceases to be any Registrable Securities; provided, however, that
notwithstanding any termination of this Agreement, the provisions of Section 8
of this Agreement shall survive the termination of this Agreement until the
expiration of all periods during which any Proceeding of the type for which
indemnity may be claimed under Section 8 ("Indemnifiable Claims") have
elapsed, and thereafter until the final and non-appealable resolution of any
and all Indemnifiable Claims commenced during such periods and the final
resolution between the holders of Registrable Securities and the Company of
any and all claims made by any party under Section 8 hereof with respect to
those Indemnifiable Claims.
11. Miscellaneous
(a) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may be amended, waived or modified
only with the written consent of each of (i) the Company and (ii) holders of
at least a majority of the Registrable Securities. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of holders of
Registrable Securities whose securities are being sold pursuant to a
Registration Statement and that does not directly or indirectly affect the
rights of other holders of Registrable Securities may be given by holders of
at least a majority of the Registrable Securities being sold by such holders
pursuant to such Registration Statement; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented
except in accordance with the provisions of the immediately preceding
sentence.
(b) Notices. All notices and other communications provided for
herein shall be in writing and shall be given or made by telecopy, telegraph
or prepaid first class registered or certified mail and shall be delivered as
follows:
1. If to the Company:
Bucyrus-Erie Company
P.O. Box 500
1100 Milwaukee Avenue
South Milwaukee, WI 53172
Attention: Vice President and
General Counsel
Telecopy No.: 414-768-5060
2. If to the holders of Registrable Securities: at the respective
"Address for Notices" specified opposite their names on Schedule A
attached hereto.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given and delivered when
transmitted by telecopy or telegraph, personally delivered, or upon receipt if
delivered by mail, in each case given or addressed as aforesaid. Any party
may, by written notice given as aforesaid, change its address for all
subsequent notices and communications.
(c) Successors and Assigns. No holder of Registrable Securities may
assign any or all of its rights under this Agreement, or delegate any of or
all of its obligations under this Agreement, to any person or entity
(including without limitation any transferee of any Registrable Securities);
and, no transferee of any Registrable Securities shall have any rights granted
under this Agreement as a result of the transfer of any Registrable Securities
to such transferee. Notwithstanding anything to the contrary contained in
this Section 11(c), a holder of Registrable Securities may assign its rights
or delegate its obligations under this Agreement to one or more direct or
indirect wholly owned affiliates (a "Permitted Assignee"). This Agreement may
not be assigned by the Company. This Agreement shall be binding upon and
shall inure to the benefit of and be enforceable by the Company and each
holder of Registrable Securities listed on Schedule A attached hereto and to
any successor to or any Permitted Assignee of such holder and any successor of
the Company.
(d) Entire Agreement. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.
(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN SUCH STATE, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAW.
(f) Severability. In the event that any provision of this
Agreement, or the application thereof to any person or circumstance, is held
by a court of competent jurisdiction to be invalid, illegal or unenforceable
in any respect under present or future laws effective during the effective
term of any such provision, such invalid, illegal or unenforceable provision
shall be fully severable; and this Agreement shall then be construed and
enforced as if such invalid, illegal or unenforceable provision had not been
contained in this Agreement; and the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance from this
Agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Remedies. Each holder of Registrable Securities, in addition to
being entitled to exercise all rights provided herein or granted by law,
including recovery of damages, will be entitled to specific performance of its
rights under this Agreement. The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Agreement and hereby agrees to waive the defense in
any action for specific performance that a remedy at law would be adequate.
<PAGE>
IN WITNESS WHEREOF, the Company has executed this Agreement as of the
date first written above.
BUCYRUS-ERIE COMPANY
By: /s/ William B. Winter
William B. Winter
Chairman and CEO
<PAGE>
Schedule A to Registration Rights Agreement
Name: Address for Notices:
Jackson National Life 5901 Executive Drive
Insurance Company Lansing, Michigan 48911
Attention: Donald A. Pasant,
CEO and President
Each person who after the date The address or addresses
hereof files with the U.S. indicated on the cover page of
Securities and Exchange such beneficial holder's
Commission a Schedule 13D Schedule 13D as the name,
under the Securities Exchange address and telephone number
Act of 1934 within the time of the person authorized to
period contemplated by such receive notices and
Act indicating that such communications.
person is the beneficial owner
of not less than 1,000,000
shares of Common Stock which
were issued to such beneficial
holder pursuant to the terms
of the Plan.
<PAGE>
EXHIBIT 4.3
FORM 8-K
DECEMBER 14, 1994
_____________________________________________________________________________
BUCYRUS-ERIE COMPANY, as the Company
AND
HARRIS TRUST AND SAVINGS BANK
as the Trustee
___________________________
Indenture
Dated as of December 14, 1994
__________________________
Secured Notes due December 14, 1999
_____________________________________________________________________________
<PAGE>
BUCYRUS-ERIE COMPANY
Reconciliation and tie between Trust Indenture Act
of 1939 and Indenture
Trust Indenture Indenture
Act Section Section
Section 310(a)(1) . . . . . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . . . . . N.A.
(a)(4) . . . . . . . . . . . . . . . . N.A.
(a)(5) . . . . . . . . . . . . . . . . 609
(b) . . . . . . . . . . . . . . . . 608
610
(c) N.A.
Section 311(a) . . . . . . . . . . . . . . . . 613(a)
(b) . . . . . . . . . . . . . . . . 613(b)
(b)(2) . . . . . . . . . . . . . . . . 703(a)(3)
703(b)
(c) . . . . . . . . . . . . . . . . N.A
Section 312(a) . . . . . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . . . . . 702(c)
Section 313(a) . . . . . . . . . . . . . . . . 703(a)
(b)(1) . . . . . . . . . . . . . . . . N.A.
(b)(2) . . . . . . . . . . . . . . . . 703(b)
(c) . . . . . . . . . . . . . . . . 703(a)
703(b)
(d) . . . . . . . . . . . . . . . . 703(c)
Section 314(a) . . . . . . . . . . . . . . . . 704
(b) . . . . . . . . . . . . . . . . 1402
(c)(1) . . . . . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . . . . . N.A.
(d) . . . . . . . . . . . . . . . . 1302
(e) . . . . . . . . . . . . . . . . 102
Section 315(a) . . . . . . . . . . . . . . . . 601(a)
(b) . . . . . . . . . . . . . . . . 602
703(a)(8)
(c) . . . . . . . . . . . . . . . . 601(b)
(d) . . . . . . . . . . . . . . . . 601(c)
(d)(1) . . . . . . . . . . . . . . . . 601(a)
(d)(2) . . . . . . . . . . . . . . . . 601(c)(2)
(d)(3) . . . . . . . . . . . . . . . . 601(c)(3)
(e) . . . . . . . . . . . . . . . . 514
______________________
N.A. means Not Applicable
<PAGE>
Section 316(a)(last sentence) . . . . . . . . . . . 101("Out-
standing")
(a)(1)(A) . . . . . . . . . . . . . . . . 502
512
(a)(1)(B) . . . . . . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . . . . . N.A.
(b) . . . . . . . . . . . . . . . . 508
Section 317(a)(1) . . . . . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . . . . . 1003
Section 318(a) . . . . . . . . . . . . . . . . 107
_____________________________
N.A. means Not Applicable
Note: This reconciliation and tie shall not, for any purpose,
be deemed to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
Parties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Recitals of the Company. . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions. . . . . . . . . . . . . . . . . . . . 1
Act. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Additional Notes . . . . . . . . . . . . . . . . . . . . . . 2
Affiliate. . . . . . . . . . . . . . . . . . . . . . . . . . 2
Asset Disposition. . . . . . . . . . . . . . . . . . . . . . 2
Authenticating Agent . . . . . . . . . . . . . . . . . . . . 2
Bank Credit Agreement. . . . . . . . . . . . . . . . . . . . 3
Bank Documents . . . . . . . . . . . . . . . . . . . . . . . 3
Bank Notes . . . . . . . . . . . . . . . . . . . . . . . . . 3
Bank Obligations . . . . . . . . . . . . . . . . . . . . . . 3
Bank Priority Obligations. . . . . . . . . . . . . . . . . . 3
Bank Security Agreement. . . . . . . . . . . . . . . . . . . 3
Board of Directors . . . . . . . . . . . . . . . . . . . . . 3
Board Resolution . . . . . . . . . . . . . . . . . . . . . . 3
Business Day . . . . . . . . . . . . . . . . . . . . . . . . 4
Capital Lease Obligation . . . . . . . . . . . . . . . . . . 4
Capital Stock. . . . . . . . . . . . . . . . . . . . . . . . 4
Collateral . . . . . . . . . . . . . . . . . . . . . . . . . 4
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . 4
Commission . . . . . . . . . . . . . . . . . . . . . . . . . 4
Common Stock . . . . . . . . . . . . . . . . . . . . . . . . 4
Company. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Company Request" or "Company Order . . . . . . . . . . . . . 5
Consolidated Net Income. . . . . . . . . . . . . . . . . . . 5
Consolidated Net Worth . . . . . . . . . . . . . . . . . . . 5
Consolidated Subsidiaries. . . . . . . . . . . . . . . . . . 5
Corporate Trust Office . . . . . . . . . . . . . . . . . . . 6
corporation. . . . . . . . . . . . . . . . . . . . . . . . . 6
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Defaulted Interest . . . . . . . . . . . . . . . . . . . . . 6
Event of Default . . . . . . . . . . . . . . . . . . . . . . 6
Exchange Act . . . . . . . . . . . . . . . . . . . . . . . . 6
guaranty . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Incur. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Indenture. . . . . . . . . . . . . . . . . . . . . . . . . . 7
Interest Payment Date. . . . . . . . . . . . . . . . . . . . 7
Letter of Credit . . . . . . . . . . . . . . . . . . . . . . 7
Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
LOC Exposure . . . . . . . . . . . . . . . . . . . . . . . . 8
Material Subsidiary. . . . . . . . . . . . . . . . . . . . . 8
Maturity . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Officers' Certificate. . . . . . . . . . . . . . . . . . . . 8
Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . 8
Outstanding. . . . . . . . . . . . . . . . . . . . . . . . . 8
Paying Agent . . . . . . . . . . . . . . . . . . . . . . . . 9
Person . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Plan of Reorganization . . . . . . . . . . . . . . . . . . . 9
Predecessor Security . . . . . . . . . . . . . . . . . . . . 9
Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . 10
Project Financing. . . . . . . . . . . . . . . . . . . . . . 10
Project Financing Lenders. . . . . . . . . . . . . . . . . . 10
Redemption Date. . . . . . . . . . . . . . . . . . . . . . . 10
Redemption Price . . . . . . . . . . . . . . . . . . . . . . 10
Regular Record Date. . . . . . . . . . . . . . . . . . . . . 10
Reimbursement Obligations. . . . . . . . . . . . . . . . . . 10
Related Person . . . . . . . . . . . . . . . . . . . . . . . 10
Responsible Officer. . . . . . . . . . . . . . . . . . . . . 10
Restricted Payments. . . . . . . . . . . . . . . . . . . . . 11
Revolving Note . . . . . . . . . . . . . . . . . . . . . . . 11
Securities . . . . . . . . . . . . . . . . . . . . . . . . . 11
Security Agreement . . . . . . . . . . . . . . . . . . . . . 11
Security Register" and "Security Registrar . . . . . . . . . 11
Secured Notes. . . . . . . . . . . . . . . . . . . . . . . . 11
Senior Lender. . . . . . . . . . . . . . . . . . . . . . . . 11
Special Record Date. . . . . . . . . . . . . . . . . . . . . 11
Stated Maturity. . . . . . . . . . . . . . . . . . . . . . . 11
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . 12
TIA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Vice President . . . . . . . . . . . . . . . . . . . . . . . 12
Voting Stock . . . . . . . . . . . . . . . . . . . . . . . . 12
Wholly owned Subsidiary. . . . . . . . . . . . . . . . . . . 12
SECTION 102. Compliance Certificates and Opinions. . . . . . . . 12
SECTION 103. Form of Documents Delivered to Trustee. . . . . . . 13
SECTION 104. Acts of Holders . . . . . . . . . . . . . . . . . . 14
SECTION 105. Notices, Etc., to Trustee and Company . . . . . . . 15
SECTION 106. Notice to Holders; Waiver . . . . . . . . . . . . . 16
SECTION 107. Conflict with TIA . . . . . . . . . . . . . . . . . 16
SECTION 108. Effect of Headings and Table of
Contents. . . . . . . . . . . . . . . . . . . . . . 17
SECTION 109. Successors and Assigns. . . . . . . . . . . . . . . 17
SECTION 110. Severability Clause . . . . . . . . . . . . . . . . 17
SECTION 111. Benefits of Indenture . . . . . . . . . . . . . . . 17
SECTION 112. Governing Law . . . . . . . . . . . . . . . . . . . 17
SECTION 113. Legal Holidays. . . . . . . . . . . . . . . . . . . 17
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally . . . . . . . . . . . . . . . . . . 18
ARTICLE THREE
The Securities
SECTION 301. Title and Terms . . . . . . . . . . . . . . . . . . 18
SECTION 302. Denominations . . . . . . . . . . . . . . . . . . . 19
SECTION 303. Execution, Authentication, Delivery and
Dating. . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 304. Temporary Securities. . . . . . . . . . . . . . . . 20
SECTION 305. Registration of Transfer and Exchange . . . . . . . 21
SECTION 306. Mutilated, Destroyed, Lost and Stolen
Securities. . . . . . . . . . . . . . . . . . . . . 23
SECTION 307. Payment of Interest; Interest Rights Preserved. . . 24
SECTION 308. Persons Deemed Owners . . . . . . . . . . . . . . . 25
SECTION 309. Cancellation. . . . . . . . . . . . . . . . . . . . 26
SECTION 310. Computation of Interest . . . . . . . . . . . . . . 26
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture . . . . . . 26
SECTION 402. Reinstatement . . . . . . . . . . . . . . . . . . . 28
SECTION 403. Application of Trust Money. . . . . . . . . . . . . 28
ARTICLE FIVE
Remedies
SECTION 501. Events of Default . . . . . . . . . . . . . . . . . 28
SECTION 502. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . . . . . . 31
SECTION 503. Collection of Indebtedness and Suits
for Enforcement by Trustee. . . . . . . . . . . . . 32
SECTION 504. Trustee May File Proofs of Claim. . . . . . . . . . 33
SECTION 505. Trustee May Enforce Claims
Without Possession of Securities. . . . . . . . . . 34
SECTION 506. Application of Money Collected. . . . . . . . . . . 34
SECTION 507. Limitation on Suits . . . . . . . . . . . . . . . . 34
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest. . . . . . . . . . . 35
SECTION 509. Restoration of Rights and Remedies. . . . . . . . . 35
SECTION 510. Rights and Remedies Cumulative. . . . . . . . . . . 36
SECTION 511. Delay or Omission Not Waiver. . . . . . . . . . . . 36
SECTION 512. Control by Holders. . . . . . . . . . . . . . . . . 36
SECTION 513. Waiver of Past Defaults . . . . . . . . . . . . . . 37
SECTION 514. Undertaking for Costs . . . . . . . . . . . . . . . 37
SECTION 515. Waiver of Stay or Extension Laws. . . . . . . . . . 38
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities . . . . . . . . 38
SECTION 602. Notice of Defaults. . . . . . . . . . . . . . . . . 39
SECTION 603. Certain Rights of Trustee . . . . . . . . . . . . . 40
SECTION 604. Not Responsible for Recitals or Issuance
of Securities . . . . . . . . . . . . . . . . . . . 42
SECTION 605. May Hold Securities . . . . . . . . . . . . . . . . 43
SECTION 606. Money Held in Trust . . . . . . . . . . . . . . . . 43
SECTION 607. Compensation and Reimbursement. . . . . . . . . . . 43
SECTION 608. Disqualification; Conflicting Interests . . . . . . 44
SECTION 609. Corporate Trustee Required; Eligibility . . . . . . 44
SECTION 610. Resignation and Removal; Appointment of
Successor . . . . . . . . . . . . . . . . . . . . . 44
SECTION 611. Acceptance of Appointment by Successor. . . . . . . 46
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . . . . 47
SECTION 613. Preferential Collection
of Claims Against Company . . . . . . . . . . . . . 47
SECTION 614. Appointment of Authenticating Agent . . . . . . . . 47
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders. . . . . . . . . . . . . . 49
SECTION 702. Preservation of Information;
Communications to Holders . . . . . . . . . . . . . 49
SECTION 703. Reports by Trustee. . . . . . . . . . . . . . . . . 51
SECTION 704. Reports by Company. . . . . . . . . . . . . . . . . 51
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. Mergers and Consolidations. . . . . . . . . . . . . 52
SECTION 802. Successor Substituted . . . . . . . . . . . . . . . 53
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent
of Holders. . . . . . . . . . . . . . . . . . . . . 54
SECTION 902. Supplemental Indentures With Consent of
Holders . . . . . . . . . . . . . . . . . . . . . . 54
SECTION 903. Execution of Supplemental Indentures. . . . . . . . 55
SECTION 904. Effect of Supplemental Indentures . . . . . . . . . 55
SECTION 905. Conformity with TIA . . . . . . . . . . . . . . . . 56
SECTION 906. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . . . . . . 56
SECTION 907. Notice of Supplemental Indenture. . . . . . . . . . 56
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal and Interest. . . . . . . . . 56
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . 57
SECTION 1003. Money for Security Payments to be Held
in Trust . . . . . . . . . . . . . . . . . . . . . 57
SECTION 1004. Existence. . . . . . . . . . . . . . . . . . . . . 59
SECTION 1005. Maintenance of Properties. . . . . . . . . . . . . 59
SECTION 1006. Payment of Taxes and Other Claims. . . . . . . . . 60
SECTION 1007. Maintenance of Insurance . . . . . . . . . . . . . 60
SECTION 1008. Limitation on Restricted Payments. . . . . . . . . 61
SECTION 1009. Provision of Financial Information . . . . . . . . 61
SECTION 1010. Statement by Officers as to Default;
Compliance Certificates and Opinions . . . . . . . 62
SECTION 1011. Prohibition on Borrowing to Pay Cash
Interest . . . . . . . . . . . . . . . . . . . . . 63
SECTION 1012. Limitation on Liens. . . . . . . . . . . . . . . . 63
SECTION 1013. Waiver of Certain Covenants. . . . . . . . . . . . 63
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Redemption . . . . . . . . . . . . . . . . . . . . 64
SECTION 1102. Applicability of Article . . . . . . . . . . . . . 64
SECTION 1103. Election to Redeem; Notice to Trustee. . . . . . . 64
SECTION 1104. Selection by Trustee of Securities
to Be Redeemed . . . . . . . . . . . . . . . . . . 64
SECTION 1105. Notice of Redemption . . . . . . . . . . . . . . . 65
SECTION 1106. Deposit of Redemption Price. . . . . . . . . . . . 65
SECTION 1107. Securities Payable on Redemption Date. . . . . . . 66
SECTION 1108. Securities Redeemed in Part. . . . . . . . . . . . 66
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance
or Covenant Defeasance . . . . . . . . . . . . . . 67
SECTION 1202. Defeasance and Discharge . . . . . . . . . . . . . 67
SECTION 1203. Covenant Defeasance. . . . . . . . . . . . . . . . 67
SECTION 1204. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . . . . . . . . 68
SECTION 1205. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions . . . . . . . . . . . . . 70
ARTICLE THIRTEEN
Collateral and Security
SECTION 1301. Collateral and Security Agreements . . . . . . . . 71
SECTION 1302. Opinions, etc. Required by TIA . . . . . . . . . . 72
SECTION 1303. Release of Collateral. . . . . . . . . . . . . . . 72
SECTION 1304. Suits to Protect the Collateral. . . . . . . . . . 72
SECTION 1305. Purchaser Protected. . . . . . . . . . . . . . . . 73
SECTION 1306. Determinations Relating to Collateral. . . . . . . 73
SECTION 1307. Release Upon Termination of the
Company's Obligations. . . . . . . . . . . . . . . 73
SECTION 1308. When Trustee Is Collateral Agent . . . . . . . . . 74
EXHIBIT A Form of Security Agreement
EXHIBIT B Form of Secured Notes
<PAGE>
INDENTURE, dated as of December 14, 1994 between BUCYRUS-ERIE
COMPANY, a corporation duly organized and existing under the laws of the State
of Delaware (herein called the "Company"), having its principal office at 1100
Milwaukee Avenue, South Milwaukee, Wisconsin 53172, and Harris Trust and
Savings Bank, as Trustee (herein called the "Trustee")
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of its
Secured Notes due December 14, 1999, such issue of substantially the tenor and
amount hereinafter set forth, and to provide therefor the Company has duly
authorized the execution and delivery of this Indenture.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal and proportionate benefit of all Holders of the Securities, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the TIA,
either directly or by reference therein, have the meanings assigned to
them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted
accounting principles (whether or not such is indicated herein), and,
except as otherwise herein expressly provided, the term "generally
accepted accounting principles" with respect to any computation required
or permitted hereunder shall mean such accounting principles as are
generally accepted at the date of the original issuance of the
Securities; and
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
Certain terms, used principally in Article Six, are defined in
that Article.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Notes" has the meaning specified in Section 301.
"Affiliate" of any Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such Person. For the purposes of this definition, "control" when
used with respect to any Person means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling"
and "controlled" have meanings correlative to the foregoing.
"Asset Disposition" by any Person means any transfer, conveyance,
sale, lease or other disposition by such Person or any of its Subsidiaries
(including a consolidation or merger or other sale of any such Subsidiaries
with, into or to another Person in a transaction in which such Subsidiary
ceases to be a Subsidiary, but excluding a disposition by a Subsidiary of such
Person to such Person or a Wholly owned Subsidiary of such Person or by such
Person to a Wholly owned Subsidiary of such Person) of (i) shares of Capital
Stock (other than directors' qualifying shares) of a Subsidiary of such
Person, (ii) substantially all of the assets of such Person or any of its
Subsidiaries representing a division or line of business or (iii) other assets
of such Person or any of its Subsidiaries outside of the ordinary course of
business.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 614 to act on behalf of the Trustee to authenticate
Securities.
"Bank Credit Agreement" means the Credit Agreement dated as of
December 14, 1994 between Bank One, Milwaukee, National Association and the
Company, or any amendment, supplement or extension thereof or any agreement in
replacement thereof pursuant to which the Senior Lender makes available to the
Company one or more loan and/or other credit facilities.
"Bank Documents" means (i) the Bank Credit Agreement and all the
other Loan Documents (as defined in the Bank Credit Agreement) and (ii) if the
Project Financing Lenders provide Project Financing to the Company, the loan
or credit agreement and all related documents evidencing, securing or provided
in connection with such Project Financing.
"Bank Notes" means the Revolving Note and the PECFA Notes.
"Bank Obligations" means (i) the unpaid principal balance of and
all accrued interest due on the Bank Notes, (ii) the LOC Exposure and all
accrued interest thereon, (iii) the unpaid principal balance of and all
accrued interest due with respect to any Project Financing provided by the
Senior Lender or by the Project Financing Lenders, (iv) all fees owed by the
Company to the Senior Lender or the Project Financing Lenders pursuant to the
Bank Documents, (v) all out-of-pocket expenses (including reasonable
attorneys' fees) paid or incurred by the Senior Lender and/or the Project
Financing Lenders which the Company is obligated to pay to the Senior Lender
and/or the Project Financing Lenders under the Bank Documents (including
without limitation, all costs and expenses paid or incurred by the Senior
Lender and/or the Project Financing Lenders in connection with an enforcement
action in respect of any Bank Documents) and (vi) all indemnity payments,
breakage fees and similar obligations of the Company to the Senior Lender
and/or the Project Financing Lenders.
"Bank Priority Obligations" has the meaning ascribed to it in
Section 1012.
"Bank Security Agreement" means any security agreement entered
into on, as of or after the date hereof by the Company and the Senior Lender
pursuant to the Bank Credit Agreement.
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of
such certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in the City of New
York, State of New York, the City of Chicago, State of Illinois or the City of
Milwaukee, State of Wisconsin are authorized or obligated by law or executive
order to close.
"Capital Lease Obligation" of any Person means the obligation to
pay rent or other payment amounts under a lease of (or other Debt arrangements
conveying the right to use) real or personal property of such Person which is
required to be classified and accounted for as a capital lease or a liability
on the face of a balance sheet of such Person in accordance with generally
accepted accounting principles. The stated maturity of such obligation shall
be the date of the last payment of rent or any other amount due under such
lease prior to the first date upon which such lease may be terminated by the
lessee without payment of a penalty.
"Capital Stock" of any Person means any and all shares, ownership
interests, participations or other equivalents (however designated) of
corporate stock (common or preferred) of such Person.
"Collateral" means the Collateral as such term is defined in the
Security Agreement.
"Collateral Agent" means the collateral agent under the Security
Agreement.
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the TIA, then the body
performing such duties at such time.
"Common Stock" of any Person means Capital Stock of such Person
that does not rank prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter
"Company" shall mean such successor Person.
"Company Request" or "Company Order" means a written request or
order signed in the name of the Company by its Chairman or Vice Chairman of
the Board, its President or a Vice President, and by its Treasurer, an
Assistant Treasurer, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Consolidated Net Income" of any Person means for any period the
consolidated net income (or loss) of such Person, before preferred stock
dividends and accretions, and its Consolidated Subsidiaries for such period
determined in accordance with generally accepted accounting principles;
provided that there shall be excluded therefrom (a) the net income (or loss)
of any Person acquired by such Person or a Subsidiary of such Person in a
pooling-of-interests transaction for any period prior to the date of such
transaction, (b) the net income (but not net loss) of any Consolidated
Subsidiary of such Person which is subject to restrictions (other than any
restriction resulting from the imposition of currency exchange controls) which
prevent the payment of dividends or the making of distributions to such Person
to the extent of such restrictions, (c) the net income (or net loss) of any
Person that is not a Consolidated Subsidiary of such Person except to the
extent of the amount of dividends or other distributions actually paid to such
Person by such other Person during such period, (d) gains or losses on Asset
Dispositions by such Person or its Consolidated Subsidiaries and (e) all
extraordinary gains and extraordinary losses.
"Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person and its Consolidated Subsidiaries, as
determined on a consolidated basis in accordance with generally accepted
accounting principles; provided that, with respect to the Company and its
Consolidated Subsidiaries, adjustments following the date of this Indenture to
the accounting books and records of the Company and its Consolidated
Subsidiaries in accordance with Accounting Principles Board Opinions Nos. 16
and 17 (or successor opinions thereto) or otherwise resulting from the
acquisition of control of the Company by another Person or Persons shall not
be given effect.
"Consolidated Subsidiaries" of any Person means all other Persons
that would be accounted for as consolidated Persons in such Person's financial
statements in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee
in Chicago, Illinois, which shall be at 311 West Monroe Street, Chicago,
Illinois 60606 at which at any particular time its corporate trust business
shall be administered.
"corporation" means a corporation, association, company, joint-
stock company or business trust.
"Debt" means (without duplication) with respect to any Person,
whether recourse is to all or a portion of the assets of such Person, (i)
every obligation of such Person for money borrowed, (ii) every obligation of
such Person evidenced by bonds, debentures, notes or other similar
instruments, including obligations so evidenced which are Incurred in
connection with the acquisition of property, assets or businesses, excluding
trade payables, (iii) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar facilities
issued for the account of such Person, (iv) every obligation of such Person
issued or assumed as the deferred purchase price of property or services (but
excluding trade accounts payable or accrued liabilities arising in the
ordinary course of business (x) which are not overdue by more than 90 days or
(y) which are being contested in good faith) in each case if on terms
permitting a portion of the purchase price to be paid more than 180 days after
the date of the purchase, (v) every Capital Lease Obligation of such Person,
(vi) every payment obligation of such Person under interest rate swap or
similar agreements or foreign currency hedge, exchange or similar agreements
at the time of determination and (vii) every obligation of the type referred
to in clauses (i) through (vi) of another Person and all dividends of another
Person the payment of which, in either case, such Person has guaranteed or is
responsible or liable, directly or indirectly, as obligor, guarantor or
otherwise.
"Defaulted Interest" has the meaning specified in Section 307.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" refers to the Securities Exchange Act of 1934 as it
may be amended and any successor act thereto.
"guaranty" by any Person means any obligation, contingent or
otherwise, of such Person guaranteeing any Debt of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, and
including, without limitation, any obligation of such Person (i) to purchase
or pay (or advance or supply funds for the purchase or payment of) such Debt
or to purchase (or to advance or supply funds for the purchase of) any
security for the payment of such Debt, (ii) to purchase property, securities
or services for the purpose of assuring the holder of such Debt of the payment
of such Debt, or (iii) to maintain working capital, equity capital or other
financial statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Debt (and "guarantee", "guaranteed",
"guaranteeing" and "guarantor" shall have meanings correlative to the
foregoing); provided, however, that the guaranty by any Person shall not
include endorsements by such Person for collection or deposit, in either case,
in the ordinary course of business.
"Holder" means a Person in whose name a Security is registered in
the Security Register.
"Incur" means, with respect to any Debt or other obligation of any
Person, to create, issue, incur (by conversion, exchange or otherwise) assume,
guaranty or otherwise become liable in respect of such Debt or other
obligation or the recording, as required pursuant to generally accepted
accounting principles or otherwise, of any such Debt or other obligation on
the balance sheet of such Person (and "Incurrence", "Incurred", "Incurrable"
and "Incurring" shall have meanings correlative to the foregoing) provided,
however, that a change in generally accepted accounting principles that
results in an obligation of such Person that exists at such time becoming Debt
shall not be deemed an Incurrence of such Debt.
"Indenture" means this instrument as originally executed or as it
may from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Interest Payment Date" means the Stated Maturity of an
installment of interest on the Securities.
"Letter of Credit" means a "letter of credit" (as defined in the
Uniform Commercial Code of the State of Wisconsin) issued by the Senior Lender
at the request of the Company, and any extension, renewal or replacement
thereof.
"Lien" means, with respect to any property or assets, any mortgage
or deed of trust, pledge, hypothecation, assignment, deposit arrangement,
security interest, lien, charge, easement (other than any easement not
materially impairing usefulness or marketability), encumbrance, preference,
priority or other security agreement or preferential arrangement of any kind
or nature whatsoever on or with respect to such property or assets (including,
without limitation, any conditional sale or other title retention agreement
having substantially the same economic effect as any of the foregoing).
"LOC Exposure" means the sum of (a) the aggregate amount available
for drawing under all outstanding Letters of Credit and (b) the aggregate
unpaid Reimbursement Obligations.
"Material Subsidiary" means any Subsidiary of the Company which,
at any particular time, has total assets as shown on its last regularly
prepared balance sheet in excess of $10,000,000.
"Maturity", when used with respect to any Security, means the date
on which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman
or Vice Chairman of the Board, the President or a Vice President, and by the
Treasurer, an Assistant Treasurer, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may
be counsel for the Company, and who shall be acceptable to the Trustee.
"Outstanding", when used with respect to Securities, means, as of
the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities for whose payment or redemption money in the
necessary amount has been theretofore deposited with the Trustee or any
Paying Agent (other than the Company) in trust or set aside and
segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has been duly
given pursuant to this Indenture or provision therefor satisfactory to
the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or in
exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any
such Securities in respect of which there shall have been presented to
the Trustee proof satisfactory to it that such Securities are held by a
bona fide purchaser in whose hands such Securities are valid obligations
of the Company;
provided, however, that, in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities
owned by the Company or any other obligor upon the Securities or any Affiliate
of the Company or of such other obligor shall be disregarded and deemed not to
be Outstanding, except that, in determining whether the Trustee shall be
protected in relying upon any such request, demand, authorization, direction,
notice, consent or waiver, only Securities which the Trustee actually knows to
be so owned shall be so disregarded. Securities so owned which have been
pledged in good faith may be regarded as Outstanding if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right so to act
with respect to such Securities and that the pledgee is not the Company or any
other obligor upon the Securities or any Affiliate of the Company or of such
other obligor.
"PECFA Notes" means promissory notes issued by the Company and
payable to the order of the Senior Lender evidencing a loan by the Senior
Lender to the Company under the Bank Credit Agreement to finance the costs of
removing an underground storage tank which is eligible for reimbursement under
the Petroleum Environmental Cleanup Fund Program administered by the Wisconsin
Department of Industry, Labor and Human Relations.
"Paying Agent" means any Person authorized by the Company to pay
the principal of or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, trust, unincorporated organization or government or any agency or
political subdivision thereof.
"Plan of Reorganization" means the Debtors' Second Amended Joint
Plan of Reorganization filed by B-E Holdings, Inc. and the Company on
September 19, 1994, as modified December 1, 1994 and as confirmed by order of
the United States Bankruptcy Court for the Eastern District of Wisconsin by
order dated December 1, 1994.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that
evidenced by such particular Security; and, for the purposes of this
definition, any Security authenticated and delivered under Section 306 in
exchange for or in lieu of a mutilated, destroyed, lost or stolen Security
shall be deemed to evidence the same debt as the mutilated, destroyed, lost or
stolen Security.
"Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of such Person of any class or classes (however
designated) that ranks prior, as to the payment of dividends or as to the
distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of Capital Stock of any
other class of such Person.
"Project Financing" means Project Financing as such term is
defined in the Security Agreement.
"Project Financing Lenders" means a group of financial
institutions of which the Senior Lender is a member which is providing Project
Financing to the Company.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the June 15 or December 15 (whether or not a Business Day),
as the case may be, next preceding such Interest Payment Date.
"Reimbursement Obligations" means the aggregate amount of drawings
under Letters of Credit honored by the Senior Lender which have not been
reimbursed by the Company.
"Related Person" of any Person means, without limitation, any
other Person owning (a) 5% or more of the outstanding Common Stock of such
Person or (b) 5% or more of the Voting Stock of such Person.
"Responsible Officer", when used with respect to the Trustee,
means the chairman or any vice-chairman of the board of directors, the
chairman or any vice-chairman of the executive committee of the board of
directors, the chairman of the trust committee, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any
assistant treasurer, the cashier, any assistant cashier, any trust officer or
assistant trust officer, the controller or any assistant controller or any
other officer of the Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter
is referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Payments" has the meaning specified in Section 1008.
"Revolving Note" means the promissory note issued by the Company
and payable to the order of the Senior Lender evidencing loans made under the
revolving credit facility provided in the Bank Credit Agreement.
"Securities" means securities designated in the first paragraph of
the RECITALS OF THE COMPANY and more particularly means any Securities
authenticated and delivered pursuant to this Indenture.
"Security Agreement" means the Security Agreement dated as of the
date hereof between the Company and the Collateral Agent, as the same may be
amended, supplemented or modified from time to time, substantially in the form
of Exhibit A.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 305.
"Secured Notes" and "Secured Note" means the Secured Notes Due
December 14, 1999 of the Company, as amended or supplemented from time to
time, that are issued under this Indenture, substantially in the form of
Exhibit B.
"Selected Permitted Liens" means the Liens described in clauses
(i) through (vi) inclusive in the definition "Permitted Liens" contained in
Section 8.1 of the Security Agreement.
"Senior Lender" means the bank(s), other financial institution(s)
and/or credit provider(s) which are parties to the Bank Credit Agreement and
their respective successors and assigns.
"Special Record Date" for the payment of any Defaulted Interest
means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable.
"Subsidiary" of any Person means (i) a corporation more than 50%
of the outstanding Voting Stock of which is owned, directly or indirectly, by
such Person or by one or more other Subsidiaries of such Person or by such
Person and one or more Subsidiaries thereof or (ii) any other Person (other
than a corporation) the policies, management and affairs of which such Person
first mentioned above, or one or more other Subsidiaries of such Person or
such Person and one or more other Subsidiaries thereof, directly or
indirectly, has power to direct.
"TIA" means the Trust Indenture Act of 1939 as in force at the
date as of which this instrument was executed, except as provided in Section
905.
"Trustee" means the Person named as the "Trustee" in
the first paragraph of this instrument until a successor Trustee shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter "Trustee" shall mean such successor Trustee.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words added before or after the title "vice president".
"Voting Stock" of any Person means Capital Stock of such Person
which ordinarily has voting power for the election of directors (or persons
performing similar functions) of such Person, whether at all times or only so
long as no senior class of securities has such voting power by reason of any
contingency.
"Wholly owned Subsidiary" of any Person means a Subsidiary of such
Person all of the outstanding Capital Stock of which (other than qualifying
shares held for the benefit of the Company by directors or others) shall at
the time be owned by such Person or by one or more Wholly owned Subsidiaries
of such Person or by such Person and one or more Wholly owned Subsidiaries of
such Person.
SECTION 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as
to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or
request, no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to enable him
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(4) a statement as to whether or not, in the opinion of each
such individual, such condition or covenant has been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and
one or more other such Persons as to other matters, and any such Person may
certify or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion
of, or representations by, counsel (a copy of which must be attached to such
certificate or opinion of an officer of the Company), unless such officer
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to the matters upon which his
certificate or opinion is based are erroneous. Any such certificate or
Opinion of Counsel may be based, insofar as it relates to factual matters,
upon a certificate or opinion of, or representations by, an officer or
officers of the Company stating that the information with respect to such
factual matters is in the possession of the Company, unless such counsel
knows, or in the exercise of reasonable care should know, that the certificate
or opinion or representations with respect to such matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or
taken by Holders may be embodied in and evidenced by one or more instruments
of substantially similar tenor signed by such Holders in person or by agent
duly appointed in writing; and, except as herein otherwise expressly provided,
such action shall become effective when such instrument or instruments are
received by the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "Act" of the
Holders signing such instrument or instruments. Proof of execution of any
such instrument or of a writing appointing any such agent shall be sufficient
for any purpose of this Indenture and (subject to Section 601) conclusive in
favor of the Trustee and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by a certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the execution thereof.
Where such execution is by a signer acting in a capacity other than his
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security shall bind every
future Holder of the same Security and the Holder of every Security issued
upon the registration of transfer thereof or in exchange therefor or in lieu
thereof in respect of anything done, omitted or suffered to be done by the
Trustee or the Company in reliance thereon, whether or not notation of such
action is made upon such Security.
(e) The Company may, in the circumstances permitted by the TIA,
fix any day as the record date for the purpose of determining the Holders
entitled to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action, or to vote on any action, authorized
or permitted to be given or taken by the Holders. If not set by the Company
prior to the first solicitation of a Holder made by any person in respect of
any such action, or, in the case of any such vote, prior to such vote, the
record date for any such action or vote shall be the 30th day (or, if later,
the date of the most recent list of Holders required to be provided pursuant
to Section 701) prior to such first solicitation or vote, as the case may be.
With regard to any record date, only the Holders on such date (or their duly
designated proxies) shall be entitled to give or take, or vote on, the
relevant action. Notwithstanding the foregoing, the Company shall not set a
record date for, and the provisions of this paragraph shall not apply with
respect to, any Act by the Holders pursuant to Sections 501, 502 or 503.
(f) Without limiting the foregoing, a Holder entitled hereunder
to give or take any action hereunder with regard to any particular Security
may do so with regard to all or any part of the principal amount of such
Security of by one or more duly appointed agents each of which may do so
pursuant to such appointment with regard to all or any different part of such
principal amount.
SECTION 105. Notices, Etc., to Trustee and Company.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given, furnished or
filed in writing to or with the Trustee at its Corporate Trust Office,
Chicago, Illinois, or
(2) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder if in writing and mailed, first-
class postage prepaid, to the Company addressed to it at the address of
its principal office specified in the first paragraph of this instrument
or at any other address previously furnished in writing to the Trustee
by the Company.
SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given if in writing and mailed, first-class
postage prepaid, to each Holder affected by such event, at his address as it
appears in the Security Register, not later than the latest date (if any), and
not earlier than the earliest date (if any), prescribed for the giving of such
notice. In any case where notice to Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee,
but such filing shall not be a condition precedent to the validity of any
action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by
mail, then such notification as shall be made with the approval of the Trustee
shall constitute a sufficient notification for every purpose hereunder.
SECTION 107. Conflict with TIA.
If any provision hereof limits, qualifies or conflicts with a
provision of the TIA that is required under such Act to be a part of and
govern this Indenture, the latter provision shall control. If any provisions
of this Indenture modifies or excludes any provision of the TIA that may be so
modified or excluded, the latter provision shall be deemed to apply to this
Indenture as so modified or excluded, as the case may be.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company
shall bind their successors and assigns, whether so expressed or not.
SECTION 110. Severability Clause.
In case any provision in this Indenture or the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
SECTION 111. Benefits of Indenture.
Nothing in this Indenture or the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, or
Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal need not be made on such date, but may be
made on the next succeeding Business Day with the same force and effect as if
made on the Interest Payment Date or Redemption Date or at the Stated
Maturity, provided that no interest shall accrue for the period from and after
such Interest Payment Date, Redemption Date or Stated Maturity, as the case
may be.
ARTICLE TWO
Security Forms
SECTION 201. Forms Generally.
The Secured Notes and the related Trustee's certificates of
authentication shall be in substantially the form of Exhibit B, with such
appropriate insertions, omissions, substitutions and other variations as are
required or permitted by this Indenture, and may have such letters, numbers or
other marks of identification and such legends or endorsements placed thereon
as may be required to comply with the rules of any securities exchange or as
may, consistently herewith, be determined by the officers executing such
Securities, as evidenced by their execution of the Securities.
The definitive Securities shall be printed or lithographed or
produced by any combination of these methods in any manner permitted by the
rules of any securities exchange on which the Securities may be listed, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
ARTICLE THREE
The Securities
SECTION 301. Title and Terms.
The aggregate principal amount of Secured Notes which may be
authenticated and delivered under this Indenture is limited to the sum of (i)
$52,072,000 and (ii) the aggregate principal amount of additional Secured
Notes (the "Additional Notes") issuable in payment of interest on the Secured
Notes as provided in this Section 301; provided, however, that additional
Securities may be authenticated and delivered upon registration of, transfer
of, or in exchange for, or in lieu of, other Securities pursuant to Section
304, 305, 306, 906, or 1108.
The Secured Notes shall be known and designated as the "Secured
Notes due December 14, 1999" of the Company. Their Stated Maturity shall be
December 14, 1999 and they shall bear interest at the rate of 10.5% per annum.
Interest on the Secured Notes shall be payable in cash or principal amount of
Additional Notes in such proportion as the Company shall determine; provided,
however, that from and after December 14, 1995, if and to the extent that the
Company elects to pay interest in Additional Notes, interest shall accrue and
be payable in principal amount of Additional Notes at the rate of 13.0% per
annum. Interest shall be payable on the Securities semi-annually on June 30
and December 31, commencing June 30, 1995, until the principal thereof is paid
or made available for payment. Any payment of principal or, to the extent
permitted by applicable law, interest which is payable but is not punctually
paid or duly provided for shall bear interest for each day until paid at a
rate per annum which is 2% in excess of the interest rate then otherwise
applicable to the Securities for payment of interest in cash.
The principal of and interest on the Securities shall be payable
or, in the case of Additional Notes, made available at the office or agency of
the Company maintained for such purpose and at any other office or agency
maintained by the Company for such purpose; provided, however, that at the
option of the Company payment of interest may be made by check or
Additional Notes, as the case may be, mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
The Securities shall be redeemable as provided in Article Eleven.
The Securities shall be subject to defeasance at the option of the
Company as provided in Article Twelve.
The Securities are secured by, and entitled to the benefit of, a
continuing lien on the Collateral pursuant to the Security Agreement. The
Lien on the Collateral provided in the Security Agreement shall be
subordinated only to the lien and security interest in favor of the Senior
Lender granted pursuant to the Bank Security Agreement but only to the extent
of the Bank Priority Obligations. All Securities shall in all respects be
equally and ratably secured thereby without preference, priority or
distinction on account of the actual time or times of the issue or maturity of
the Securities.
SECTION 302. Denominations.
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its
Chairman or Vice-Chairman of the Board, its President or one of its Vice
Presidents, under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of
individuals who were at any time the proper officers of the Company shall bind
the Company, notwithstanding that such individuals or any of them have ceased
to hold such offices prior to the authentication and delivery of such
Securities or did not hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities executed by the Company
to the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities; and the Trustee in accordance
with such Company Order shall authenticate and deliver such Securities as
provided in this Section 303; and the Trustee in accordance with such Company
Order shall either at one time or from time to time pursuant to such
instructions as may be described therein authenticate and deliver such
Securities as provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture
or be valid or obligatory for any purpose unless there appears on such
Security a certificate of authentication substantially in the form provided
for herein executed by the Trustee by manual signature, and such certificate
upon any Security shall be conclusive evidence, and the only evidence, that
such Security has been duly authenticated and delivered hereunder.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities, the Company may
execute, and upon delivery of a Company Order the Trustee shall authenticate
and deliver, temporary Securities which are printed, lithographed,
typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu
of which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities
may determine, as evidenced by their execution of such Securities.
If temporary Securities are issued, the Company will cause
definitive Securities to be prepared without unreasonable delay. After the
preparation of definitive Securities, the temporary Securities shall be
exchangeable for definitive Securities upon surrender of the temporary
Securities at any office or agency of the Company designated pursuant to
Section 1002, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities the Company shall execute and the Trustee
shall authenticate and deliver in exchange therefor a like principal amount of
definitive Securities of authorized denominations. Until so exchanged the
temporary Securities shall in all respects be entitled to the same benefits
under this Indenture as definitive Securities.
SECTION 305. Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 1002 being herein
sometimes collectively referred to as the "Security Register") in which,
subject to such reasonable regulations as it may prescribe, the Company shall
provide for the registration of Securities and of transfers of Securities. The
Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security at an
office or agency of the Company designated pursuant to Section 1002 for such
purpose, the Company shall execute, and the Trustee shall authenticate and
deliver, in the name of the designated transferee or transferees, one or more
new Securities of any authorized denominations and of a like aggregate
principal amount.
At the option of the Holder, Securities may be exchanged for other
Securities of any authorized denominations and of a like aggregate principal
amount, upon surrender of the Securities to be exchanged at such office or
agency. Whenever any Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive.
The legends specified in the forms of the face of the Securities
as set forth in Exhibit B shall be placed by the Trustee on all such
Securities authenticated and delivered upon original issuance under the
Indenture and on all such Securities subsequently issued under the Indenture
upon registration of transfer of, or in exchange for, or in lieu of, any
Securities bearing such legend pursuant to Section 304, 305, 306, 906, or 1108
unless the Company has delivered to the Trustee an Officers' Certificate which
states that (a) as to specified legended Securities, the Holder thereof may
exchange such legended Securities for unlegended Securities or (b) as to
specified legended Securities, Securities not bearing such legend may be
issued upon registration of transfer of such specified Securities at any time
during the period specified in such Officers' Certificate. At any time after
receipt by the Trustee of such Officers' Certificate referred to in clause (a)
above, any legended Securities specified therein may, at the option of the
Holder, be exchanged for unlegended Securities of any authorized denominations
and of a like aggregate principal amount, upon surrender of the legended
Securities to be exchanged at an office or agency of the Company designated
pursuant to Section 1002 for such purpose; and whenever such specified
legended Securities are so surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the unlegended
Securities which the Holder making the exchange is entitled to receive. After
receipt by the Trustee of any such Officers' Certificate referred to in clause
(b) above, any legended Securities specified therein may, at the option of the
Holder, be surrendered for registration of transfer at any time during such
specified period at an office or agency of the Company designated pursuant to
Section 1002 for such purpose; and whenever such specified legended Securities
are so surrendered for registration of transfer, the Company shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee, one or more new Securities not bearing such legend of any
authorized denominations and of a like aggregate principal amount.
All Securities issued upon any registration of transfer or
exchange of Securities shall be the valid obligations of the Company,
evidencing the same debt, and entitled to the same benefits under this
Indenture, as the Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company or the Trustee)
be duly endorsed, or be accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed, by
the Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer
or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed
in connection with any registration of transfer or exchange of Securities,
other than exchanges pursuant to Section 304, 906, or 1108 not involving any
transfer.
The Company shall not be required (i) to issue, register the
transfer of or exchange any Security during a period beginning at the opening
of business 15 days before the day of the mailing of a notice of redemption of
Securities selected for redemption under Section 1104 and ending at the close
of business on the day of such mailing, or (ii) to register the transfer of or
exchange any Security so selected for redemption in whole or in part, except
the unredeemed portion of any Security being redeemed in part.
In the absence of an applicable Officers' Certificate as described
in the fourth paragraph of this Section 305, the Trustee shall not register
the transfer of any Security bearing the legend specified in the form of face
of Security hereinabove set forth unless the Holder shall give written notice
to the Company and the Trustee of such Holder's intention to effect such
transfer, which notice shall be accompanied by (A) an unqualified written
opinion of legal counsel, which counsel and opinion (in form and substance)
shall be reasonably satisfactory to the Company, to the effect that the
proposed transfer of such Securities may be effected without registration
under the Securities Act of 1933, as amended (the "Securities Act"), or (B) a
"no action" letter from the Commission reasonably satisfactory to the Company
to the effect that under the Securities Act the proposed transfer of such
Securities without registration will not result in a recommendation by the
staff of the Commission that action be taken with respect thereto.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If any mutilated Security is surrendered to the Trustee, the
Company shall execute, and the Trustee shall authenticate and deliver, in
exchange therefor a new Security of like tenor and principal amount and
bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any
Security and (ii) such security or indemnity as may be required by them to
save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and upon its
request the Trustee shall authenticate and deliver, in lieu of any such
destroyed, lost or stolen Security, a new Security of like tenor and principal
amount and bearing a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security issued pursuant to this Section in lieu of any
destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately
with any and all other Securities of a similar series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid
or duly provided for, on any Interest Payment Date shall be paid to the Person
in whose name that Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, and
such Defaulted Interest may be paid by the Company, at its election in each
case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities (or their
respective Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of such Defaulted
Interest, which shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security and the date of the proposed
payment, and at the same time the Company shall deposit with the Trustee
an amount of money or Additional Notes, if applicable, equal to the
aggregate amount proposed to be paid in respect of such Defaulted
Interest or shall make arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such money or
Additional Notes when deposited to be held in trust for the benefit of
the Persons entitled to such Defaulted Interest as in this Clause
provided. Thereupon the Trustee shall fix a Special Record Date for the
payment of such Defaulted Interest which shall be not more than 15 days
and not less than 10 days prior to the date of the proposed payment and
not less than 10 days after the receipt by the Trustee of the notice of
the proposed payment and receipt of the aggregate amount necessary to
pay such defaulted interest. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of such
Defaulted Interest and the Special Record Date therefor to be mailed,
first-class postage prepaid, to each Holder at his address as it appears
in the Security Register, not less than 10 days prior to such Special
Record Date. Notice of the proposed payment of such Defaulted Interest
and the Special Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in whose names the
Securities (or their respective Predecessor Securities) are registered
at the close of business on such Special Record Date and shall no longer
be payable pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest in any
other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities may be listed, and upon such
notice as may be required by such exchange, if, after notice given by
the Company to the Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed practicable by the
Trustee in its sole discretion.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Security is registered as the owner of
such Security for the purpose of receiving payment of principal of and
(subject to Section 307) interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration
of transfer or exchange shall, if surrendered to any Person other than the
Trustee, be delivered to the Trustee and shall be promptly canceled by it. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities canceled as provided in this
Section, except as expressly permitted by this Indenture. All canceled
Securities held by the Trustee shall be disposed of as directed by a Company
Order.
SECTION 310. Computation of Interest.
Interest on the Securities shall be computed on the basis of a 360
day year of twelve 30-day months.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 401. Satisfaction and Discharge of Indenture.
This Indenture shall cease to be of further effect (except as to
any surviving rights of registration of transfer or exchange of Securities
herein expressly provided for), and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when
(1) either
(A) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed, lost or
stolen and which have been replaced or paid as provided in Section
306 and (ii) Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust by the
Company and thereafter repaid to the Company or discharged from
such trust, as provided in Section 1003) have been delivered to
the Trustee for cancellation; or
(B) all such Securities not theretofore delivered to the
Trustee for cancellation
(i) have become due and payable,
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption by the Trustee in the name,
and at the expense, of the Company,
and the Company, in the case of (i), (ii) or (iii) above, has
deposited or caused to be deposited with the Trustee as trust
funds in trust for the purpose an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and interest to the date of such deposit (in the case of
Securities which have become due and payable) or to the Stated
Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture pursuant to
this Article Four, the obligations of the Company to the Trustee under Section
607, the obligations of the Trustee to any Authenticating Agent under Section
614 and, if money shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations of the Trustee
under Section 402 and the last paragraph of Section 1003 shall survive.
SECTION 402. Reinstatement.
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article Four by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise
prohibiting such application, then the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article Four until such time as the
Trustee or Paying Agent is permitted to apply all money held in trust with
respect to the Securities; provided, however, that if the Company makes any
payment of principal of or any premium or interest on any Security following
the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of the Securities to receive such payment from the money
so held in trust.
SECTION 403. Application of Trust Money.
Subject to the provisions of the last paragraph of Section 1003,
all money deposited with the Trustee pursuant to Section 401 shall be held in
trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying
Agent (including the Company acting as its own Paying Agent) as the Trustee
may determine, to the Persons entitled thereto, of the principal and interest
for whose payment such money has been deposited with the Trustee.
ARTICLE FIVE
Remedies
SECTION 501. Events of Default.
"Event of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or
pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of the principal of any Security at
its Maturity; or
(2) default in the payment of any interest upon any Security
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(3) default in the performance, or breach, of any covenant of
the Company contained in Section 1008; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture or the Security Agreement
(other than a covenant or warranty a default in whose performance or
whose breach is elsewhere in this Section specifically dealt with), and
continuance of such default or breach for a period of 60 consecutive
days after there has been given by registered or certified mail to the
Company by the Trustee, or to the Company and the Trustee by the Holders
of at least 25% in principal amount of the Outstanding Securities, a
written notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default or defaults under any bond(s), debenture(s),
note(s) or other evidence(s) of Debt of the type specified in clauses
(i), (ii), (iii), (iv), (v) and (vii) (with respect to guarantees of
Debt of the type specified in clauses (i), (ii), (iii), (iv) and (v) of
the definition of Debt) of the definition of "Debt" by the Company or
any Material Subsidiary of the Company or under any mortgage(s),
indenture(s) or instrument(s) under which there may be issued or by
which there may be secured or evidenced any Debt of such type by the
Company or any such Material Subsidiary with a principal amount then
outstanding, individually or in the aggregate, in excess of $10 million,
whether such Debt now exists or shall hereafter be created, which
default or defaults shall have occurred and be continuing after the
expiration of any applicable grace period with respect thereto; or
(6) a final judgment or final judgments for the payment of money
are entered against the Company or any Material Subsidiary of the
Company in an aggregate amount in excess of $5 million in excess of any
applicable insurance coverage by a court or courts of competent
jurisdiction, which judgments remain undischarged or unbonded for a
period (during which execution shall not be effectively stayed) of 60
consecutive days after the right to appeal all such judgments has
expired; or
(7) the entry by a court having jurisdiction in the premises of
(A) a decree or order for relief in respect of the Company or any
Material Subsidiary of the Company in an involuntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging
the Company or any such Material Subsidiary a bankrupt or insolvent, or
approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Company
or any such Material Subsidiary under any applicable Federal or State
law, or appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any such
Material Subsidiary or of any substantial part of the property of the
Company or any such Material Subsidiary, or ordering the winding up or
liquidation of the affairs of the Company or any such Material
Subsidiary, and the continuance of any such decree or order for relief
or any such other decree or order unstayed and in effect for a period of
60 consecutive days; or
(8) the commencement by the Company or any Material Subsidiary
of the Company of a voluntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or of any other case or proceeding to be adjudicated a bankrupt or
insolvent, or the consent by the Company or any Material Subsidiary to
the entry of a decree or order for relief in respect of the Company or
such Subsidiary in an involuntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or
other similar law or to the commencement of any bankruptcy or insolvency
case or proceeding against the Company or any Material Subsidiary of the
Company, or the filing by the Company or any Material Subsidiary of a
petition or answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by the Company or any
such Material Subsidiary of the Company to the filing of such petition
or to the appointment of or taking possession by a custodian, receiver,
liquidator, assignee, trustee, sequestrator or similar official of the
Company or such Subsidiary or of any substantial part of the property of
the Company or such Subsidiary, or the making by the Company or any
Material Subsidiary of the Company of an assignment for the benefit of
creditors, or the admission by the Company or any Material Subsidiary of
the Company in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company or any
Material Subsidiary of the Company in furtherance of any such action.
SECTION 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default (other than an Event of Default specified
in Section 501(7) or (8)) occurs and is continuing, then and in every such
case the Trustee or the Holders of not less than 25% in principal amount of
the Outstanding Securities may declare the principal of and all accrued
interest on all the Securities to be due and payable immediately, by a notice
in writing to the Company (and to the Trustee if given by Holders), and upon
any such declaration such principal and accrued interest thereon shall become
immediately due and payable. If an Event of Default specified in Section
501(7) or (8) occurs, the principal of and any accrued interest on the
Securities then Outstanding shall ipso facto become immediately due and
payable without any declaration or other Act on the part of the Trustee or any
Holder.
At any time after such a declaration of acceleration has been made
and before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter in this Article provided, the Holders of a
majority in principal amount of the Outstanding Securities, by written notice
to the Company and the Trustee, may rescind and annul such declaration and its
consequences if
(1) the Company has paid or deposited with the Trustee:
(A) all overdue interest on all Securities,
(B) the principal of any Securities which have become due
otherwise than by such declaration of acceleration and, to the
extent that payment of such interest is lawful, interest thereon
at the rate provided by the Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate provided by the
Securities, and
(D) all sums paid or advanced by the Trustee hereunder and
the reasonable compensation, expenses, disbursements and advances
of the Trustee, its agents and counsel;
and
(2) all Events of Default, other than the non-payment of the
principal of Securities which have become due solely by such declaration
of acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for
Enforcement by Trustee.
The Company covenants that if
(1) default is made in the payment of any interest on any
Security when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of any
Security at the Maturity thereof,
the Company will, upon demand of the Trustee, pay to it, for the benefit of
the Holders of such Securities, the whole amount then due and payable on such
Securities for principal and interest, and, to the extent that payment of such
interest shall be legally enforceable, interest on any overdue principal and
on any overdue interest, at the rate provided by the Securities, and, in
addition thereto, such further amount as shall be sufficient to cover the
costs and expenses of collection, including the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such
demand, the Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of the sums so due and
unpaid, may prosecute such proceeding to judgment or final decree and may
enforce the same against the Company or any other obligor upon the Securities
and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
the Securities, wherever situated.
If an Event of Default occurs and is continuing, the Trustee may
in its discretion proceed to protect and enforce its rights and the rights of
the Holders by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any such rights, whether for the
specific enforcement of any covenant or agreement in this Indenture or in aid
of the exercise of any power granted herein, or to enforce any other proper
remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency,
liquidation, bankruptcy, reorganization, arrangement, adjustment, composition
or other judicial proceeding relative to the Company or any other obligor upon
the Securities or the property of the Company or of such other obligor, the
Trustee (irrespective of whether the principal of the Securities shall then be
due and payable as therein expressed or by declaration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal
and interest owing and unpaid in respect of the Securities and to file
such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such
judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders,
to pay to the Trustee any amount due it for the reasonable compensation,
expenses, disbursements and advances of the Trustee, its agents and counsel,
and any other amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee
to authorize or consent to or accept or adopt on behalf of any Holder any plan
of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
however, that the Trustee may, on behalf of the Holders, vote for the election
of a trustee in bankruptcy or similar official and may be a member of the
creditors' committee in any such proceeding.
SECTION 505. Trustee May Enforce Claims
Without Possession of Securities.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the
possession of any of the Securities or the production thereof in any
proceeding relating thereto, and any such proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel, be for the ratable benefit of the Holders of the Securities in
respect of which such judgment has been recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall
be applied in the following order, at the date or dates fixed by the Trustee
and, in case of the distribution of such money on account of principal or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection,
including all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses and disbursements of the Trustee, its
agents and counsel and all other amounts due the Trustee under Section
607; and
SECOND: To the payment of the amounts then due and unpaid for
principal of and interest on the Securities in respect of which or for
the benefit of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts due and
payable on such Securities for principal and interest, respectively; and
THIRD: The balance, if any, shall be paid to the Company, its
successors and assigns, or to whomsoever may be lawfully entitled to
receive the same, or as a court of competent jurisdiction may direct.
SECTION 507. Limitation on Suits.
No Holder of any Security shall have any right to institute any
proceeding, judicial or otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more Holders shall have any
right in any manner whatever by virtue of, or by availing of, any provision of
this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any
other Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all the
Holders.
SECTION 508. Unconditional Right of Holders to
Receive Principal and Interest.
Notwithstanding any other provision in this Indenture, the Holder
of any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of and (subject to Section 307) interest on
such Security on the respective Stated Maturities expressed in such Security
(or, in the case of redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders
shall be restored severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the Trustee and the
Holders shall continue as though no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last
paragraph of Section 306, no right or remedy herein conferred upon or reserved
to the Trustee or to the Holders is intended to be exclusive of any other
right or remedy, and every right and remedy shall, to the extent permitted by
law, be cumulative and in addition to every other right and remedy given
hereunder or now or hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or otherwise, shall
not prevent the concurrent assertion or employment of any other appropriate
right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any
Security to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy or constitute a waiver of any such Event
of Default or an acquiescence therein. Every right and remedy given by this
Article or by law to the Trustee or to the Holders may be exercised from time
to time, and as often as may be deemed expedient, by the Trustee or by the
Holders, as the case may be.
SECTION 512. Control by Holders.
Subject to Section 507, the Holders of a majority in principal
amount of the Outstanding Securities shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee, provided
that
(1) such direction shall not be in conflict with any rule of law
or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction; and
(3) (subject to the provisions of Section 601) the Trustee shall
have the right to decline to follow any such direction if the Trustee,
being advised by counsel, shall determine that the action or proceeding
so directed may not lawfully be taken or if the Trustee in good faith
shall determine that the action or proceedings so directed might involve
the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forbearances specified in or pursuant
to such direction shall be unduly prejudicial to the interests of
Holders of Securities not joining in the giving of said direction, it
being understood that (subject to Section 601) the Trustee shall have no
duty to ascertain whether or not such actions or forbearances are unduly
prejudicial to such Holders.
SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities may on behalf of the Holders of all the Securities
waive any past default hereunder and its consequences, except a default
(1) in the payment of the principal of or interest on any
Security, or
(2) in respect of a covenant or provision hereof which under
Article Nine cannot be modified or amended without the consent of the
Holder of each Outstanding Security affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for
every purpose of this Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any
Security by his acceptance thereof shall be deemed to have agreed, that any
court may in its discretion require, in any suit for the enforcement of any
right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered or omitted by it as Trustee, the filing by any
party litigant in such suit of an undertaking to pay the costs of such suit,
and that such court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party litigant in such suit, having
due regard to the merits and good faith of the claims or defenses made by such
party litigant; but the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Holder, or group of
Holders, holding in the aggregate more than 10% in principal amount of the
Outstanding Securities, or to any suit instituted by any Holder for the
enforcement of the payment of the principal of or interest on any Security on
or after the respective Stated Maturity or Maturities expressed in such
Security (or, in the case of redemption, on or after the Redemption Date).
SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner
whatsoever claim or take the benefit or advantage of, any stay or extension
law wherever enacted, now or at any time hereafter in force, which may affect
the covenants or the performance of this Indenture; and the Company (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will
suffer and permit the execution of every such power as though no such law had
been enacted.
ARTICLE SIX
The Trustee
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default and after
the curing or waiving of all such Events of Default which may have occurred:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and the Trustee
shall not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture, and no
implied covenants or obligations shall be read into this Indenture
against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any statements, certificates or
opinions furnished to the Trustee and conforming to the requirements of
this Indenture; but in the case of any certificates or opinions which by
any provision herein are specifically required to be furnished to the
Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture.
(b) In case an Event of Default has occurred and is continuing,
the Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of
his own affairs.
(c) No provision of this Indenture shall be construed to relieve
the Trustee from liability for its own negligent action, its own negligent
failure to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect
of Subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be proved
that the Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance with the
direction of the Holders of not less than a majority in principal amount
of the Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision
of this Indenture relating to the conduct or affecting the liability of or
affording protection to the Trustee shall be subject to the provisions of this
Section and subject to Sections 315 and 316 TIA.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder
actually known to the Trustee, the Trustee shall transmit by mail to all
Holders, as their names and addresses appear in the Security Register, notice
of such default hereunder actually known to the Trustee, unless such default
shall have been cured or waived; provided, however, that, except in the case
of a default in the payment of the principal of or interest on any Security,
the Trustee shall be protected in withholding such notice if and so long as
the board of directors, the executive committee or a trust committee of
directors or Responsible Officers of the Trustee in good faith determine that
the withholding of such notice is in the interest of the Holders; and provided
further that in the case of any default of the character specified in Section
501(5), no such notice to Holders shall be given until at least 30 days after
the occurrence thereof. For the purpose of this Section, the term "default"
means any event which is, or after notice or lapse of time or both would
become, an Event of Default.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it to be genuine and
to have been signed or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless
other evidence be herein specifically prescribed) may, in the absence of
bad faith on its part, rely upon an Officers' Certificate;
(d) before the Trustee acts or refrains from acting the Trustee
may consult with counsel and the written advice of such counsel or any
Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it
hereunder in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or
direction of any of the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee security or indemnity
reasonable to the Trustee against the costs, expenses and liabilities
which might be incurred by it in compliance with such request or
direction;
(f) prior to the occurrence of an Event of Default hereunder and
after the curing or waiving of all Events of Default, the Trustee shall
not be bound to make any investigation into the facts or matters stated
in any resolution, Officers' Certificate, or other request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security, or
other paper or document unless requested in writing to do so by the
Holders of not less than a majority in aggregate principal amount of the
Securities then outstanding; provided that, if the payment within a
reasonable time to the Trustee of the costs, expenses or liabilities
likely to be incurred by it in the making of such investigations, in the
opinion of the Trustee, not reasonably assured to the Trustee by the
security afforded to it by the terms of this Indenture, the Trustee may
require reasonable indemnity against such expenses or liabilities as a
condition to proceeding; the reasonable expenses of every such
examination shall be paid by the Company or, if advanced by the Trustee,
shall be repaid by the Company upon demand;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible for
any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, or where information
is required or necessary to be furnished by the Company in order for the
Trustee to act, the Trustee (unless otherwise evidence be herein
specifically prescribed), shall not be liable for any action it takes or
omits to take in good faith in reliance upon an Officer's Certificate,
or for any action taken or omitted by it in good faith and believed by
it to be authorized or within the discretion, rights or powers conferred
upon it by this Indenture;
(i) the Trustee shall not be bound to ascertain or inquire as to
the performance or observance of any covenants, conditions or agreements
on the part of the Company, except as otherwise specifically set forth
in this Indenture, but the Trustee may require of the Company full
information and advice as to the performance of the covenants,
conditions and agreements contained herein and should be entitled in
connection therewith to examine the books, records and premises of the
Company;
(j) the permissive rights of the Trustee to do things enumerated
in this Indenture shall not be construed as a duty;
(k) except for (i) a default under Section 501(1) or (2) of this
Indenture, (ii) the failure of the Company to file any financial
statements, documents or certificates specifically required to be filed
with the Trustee pursuant to the provisions of this Indenture or (iii)
any other event of which the Trustee has "actual knowledge" and which
event, with the giving of notice or the passage of time or both, would
constitute an Event of Default under this Indenture, the Trustee shall
not be deemed to have notice of any default or event unless specifically
notified in writing by the Company or the holders of not less than 25%
in aggregate principal amount of the Securities Outstanding; as used
herein, the term "actual knowledge" means the actual fact of knowing,
without a duty to make any investigation with regard thereto; and
(l) the Trustee shall not be required to give any note, bond or
surety in respect of the execution of the trusts and powers under this
Indenture.
SECTION 604. Not Responsible for Recitals or Issuance
of Securities.
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities. The Trustee shall not be accountable for the
use or application by the Company of Securities or the proceeds thereof.
SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company, in its individual or any
other capacity, may become the owner or pledgee of Securities and, subject to
Sections 608 and 613, may otherwise deal with the Company with the same rights
it would have if it were not Trustee, Authenticating Agent, Paying Agent,
Collateral Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee in trust hereunder need not be
segregated from other funds except to the extent required by law. The Trustee
shall be under no liability for interest on any money received by it hereunder
except as otherwise agreed in writing with the Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered
by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust);
(2) to reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of its agents
and counsel), except any such expense, disbursement or advance as may be
attributable to its negligence or willful misconduct; and
(3) to indemnify the Trustee for, and to hold it harmless
against, any loss, liability or expense incurred without negligence or
willful misconduct on its part, arising out of or in connection with the
acceptance or administration of this trust, including the costs and
expenses of defending itself against or investigating any claim or
liability in connection with the exercise or performance of any of its
powers or duties hereunder.
(4) The Company acknowledges receipt of a preliminary proposal
from the Trustee regarding certain services to be rendered by the
Trustee on behalf of Company and agrees to the payment of the fees set
forth therein and to the other terms and conditions therein. The
Company acknowledges that such preliminary fees are subject to periodic
review and adjustment by the Trustee.
The obligations of the Company under this Section to compensate the Trustee,
to pay or reimburse the Trustee for expenses, disbursements and advances and
to indemnify and hold harmless the Trustee shall constitute additional
indebtedness hereunder and shall survive the satisfaction and discharge of
this Indenture. When the Trustee incurs expenses under Article Five hereof,
the expenses (including reasonable fees and expenses of its counsel) and the
compensation for the service in connection therewith are intended to
constitute expense of administration under any applicable bankruptcy law.
SECTION 608. Disqualification; Conflicting Interests.
The Trustee shall at all times satisfy the requirements of TIA
Section 310(a)(1) and shall comply with TIA Section 310(b).
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States
of America, any State or Territory thereof or the District of Columbia,
authorized under such laws to exercise corporate trust powers, having a
combined capital and surplus of at least $5,000,000, subject to supervision or
examination by Federal or State authority and having its Corporate Trust
Office in the United States of America. If such corporation publishes reports
of condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority, then for the purposes of this Section, the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of
condition so published. If at any time the Trustee shall cease to be eligible
in accordance with the provisions of this Section, it shall resign immediately
in the manner and with the effect hereinafter specified in this Article. No
obligor upon the Securities may, nor may any person directly or indirectly
controlling, controlled by or under common control with such obligor, serve as
Trustee.
SECTION 610. Resignation and Removal; Appointment of
Successor.
(a) No resignation or removal of the Trustee and no appointment
of a successor Trustee pursuant to this Article shall become effective until
the acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
required by Section 611 shall not have been delivered to the Trustee within 30
days after the giving of such notice of resignation, the resigning Trustee may
petition any court of competent jurisdiction for the appointment of a
successor Trustee. If a successor Trustee has not been appointed and has not
accepted such appointment within 60 days after the resigning Trustee has
petitioned a court of competent jurisdiction for the appointment of a
successor Trustee, then the resignation of the resigning Trustee shall
nevertheless become immediately effective on such 60th day.
(c) The Trustee may be removed at any time by Act of the Holders
of a majority in principal amount of the Outstanding Securities, delivered to
the Trustee and to the Company.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 608 after
written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, unless the Trustee's duty to resign
is stayed as provided in subsection (f) of Section 608, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
(e) If the Trustee shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of Trustee for any cause,
the Company, by a Board Resolution, shall promptly appoint a successor Trustee
and shall comply with the applicable requirements of Section 611. If, within
one year after such resignation, removal or incapability, or the occurrence of
such vacancy, a successor Trustee shall be appointed by Act of the Holders of
a majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment in accordance with the
applicable requirements of Section 611, become the successor Trustee and
supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and
accepted appointment in the manner provided by Section 611, any Holder who has
been a bona fide Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor Trustee by mailing
written notice of such event by first-class mail, postage prepaid, to all
Holders as their names and addresses appear in the Security Register. Each
notice shall include the name of the successor Trustee and the address of its
Corporate Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument transferring to
such successor Trustee all the rights, powers and trusts of the retiring
Trustee and shall duly assign, transfer and deliver to such successor Trustee
all property and money held by such retiring Trustee hereunder. Upon request
of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the
time of such acceptance such successor Trustee shall be qualified and eligible
under this Article.
SECTION 612. Merger, Conversion, Consolidation or
Succession to Business.
Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation succeeding to all or substantially all the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on
the part of any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 613. Preferential Collection
of Claims Against Company.
The provisions of TIA Sections 311(a) and 311(b) shall apply to
this Indenture and the Trustee shall comply with TIA Sections 311(a).
SECTION 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or Agents which
shall be authorized to act on behalf of the Trustee to authenticate Securities
issued upon original issue and upon exchange, registration of transfer or
partial redemption or pursuant to Section 306, and Securities so authenticated
shall be entitled to the benefits of this Indenture and shall be valid and
obligatory for all purposes as if authenticated by the Trustee hereunder.
Wherever reference is made in this Indenture to the authentication and
delivery of Securities by the Trustee or the Trustee's certificate of
authentication, such reference shall be deemed to include authentication and
delivery on behalf of the Trustee by an Authenticating Agent and a certificate
of authentication executed on behalf of the Trustee by an Authenticating
Agent. Each Authenticating Agent shall be acceptable to the Company and shall
at all times be a corporation organized and doing business under the laws of
the United States of America, any State thereof or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less than $5,000,000 and subject to supervision or
examination by Federal or State authority. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or to the
requirements of said supervising or examining authority, then for the purposes
of this Section, the combined capital and surplus of such Authenticating Agent
shall be deemed to be its combined capital and surplus as set forth in its
most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged
or converted or with which it may be consolidated, or any corporation
resulting from any merger, conversion or consolidation to which such
Authenticating Agent shall be a party, or any corporation succeeding to the
corporate agency or corporate trust business of an Authenticating Agent, shall
continue to be an Authenticating Agent, provided such corporation shall be
otherwise eligible under this Section, without the execution or filing of any
paper or any further act on the part of the Trustee or the Authenticating
Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice
thereof to such Authenticating Agent and to the Company. Upon receiving such
a notice of resignation or upon such a termination, or in case at any time
such Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice
of such appointment by first-class mail, postage prepaid, to all Holders as
their names and addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment hereunder shall become
vested with all the rights, powers and duties of its predecessor hereunder,
with like effect as if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time
to time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 607.
If an appointment is made pursuant to this Section, the Securities
may have endorsed thereon, in addition to the Trustee's certificate of
authentication, an alternate certificate of authentication in the following
form:
This is one of the Securities described in the within-mentioned
Indenture.
HARRIS TRUST AND SAVINGS BANK
As Trustee
By__________________________
As Authenticating Agent
By___________________________
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
SECTION 701. Company to Furnish Trustee Names
and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably require,
of the names and addresses of the Holders as of such Regular Record
Date, and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such request, a
list of similar form and content as of a date not more than 15 days
prior to the time such list is furnished;
provided that no such list need be furnished as long as the Trustee is
Security Registrar.
SECTION 702. Preservation of Information; Communications
to Holders.
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders contained in the
most recent list furnished to the Trustee as provided in Section 701 and the
names and addresses of Holders received by the Trustee in its capacity as
Security Registrar. The Trustee may destroy any list furnished to it as
provided in Section 701 upon receipt of a new list so furnished.
(b) If three or more Holders (herein referred to as
"applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security for a period of
at least six months preceding the date of such application, and such
application states that the applicants desire to communicate with other
Holders with respect to their rights under this Indenture or under the
Securities and is accompanied by a copy of the form of proxy or other
communication which such applicants propose to transmit, then the Trustee
shall, within five Business Days after the receipt of such application, at its
election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders whose names and addresses appear in the information preserved at
the time by the Trustee in accordance with Section 702(a), and as to the
approximate cost of mailing to such Holders the form of proxy or other
communication, if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to
such information, the Trustee shall, upon the written request of such
applicants, mail to each Holder whose name and address appear in the
information preserved at the time by the Trustee in accordance with Section
702(a) a copy of the form of proxy or other communication which is specified
in such request, with reasonable promptness after a tender to the Trustee of
the material to be mailed and of payment, or provision for the payment, of the
reasonable expenses of mailing, unless within five days after such tender the
Trustee shall mail to such applicants and file with the Commission, together
with a copy of the material to be mailed, a written statement to the effect
that, in the opinion of the Trustee, such a mailing would be contrary to the
best interest of the Holders or would be in violation of applicable law. Such
written statement shall specify the basis of such opinion. If the Commission,
after opportunity for a hearing upon the objections specified in the written
statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for
hearing, that all the objections so sustained have been met and shall enter an
order so declaring, the Trustee shall mail copies of such material to all such
Holders with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved of any
obligation or duty to such applicants respecting their application.
(c) Every Holder of Securities, by receiving and holding the
same, agrees with the Company and the Trustee that neither the Company nor the
Trustee nor any agent of either of them shall be held accountable by reason of
the disclosure of any such information as to the names and addresses of the
Holders in accordance with Section 702(b), regardless of the source from which
such information was derived, and that the Trustee shall not be held
accountable by reason of mailing any material pursuant to a request made under
Section 702(b).
SECTION 703. Reports by Trustee.
(a) The Trustee shall transmit to Holders such reports
concerning the Trustee and its actions under this Indenture as may be required
pursuant to the TIA at the times and in the manner provided pursuant thereto.
(b) A copy of each such report shall, at the time of such
transmission to Holders, be filed by the Trustee with each stock exchange upon
which the Securities are listed, with the Commission and with the Company.
The Company will notify the Trustee when the Securities are listed on any
stock exchange.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual
reports and of the information, documents and other reports (or copies
of such portions of any of the foregoing as the Commission may from time
to time by rules and regulations prescribe) which the Company may be
required to file with the Commission pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934; or, if the Company is not
required to file information, documents or reports pursuant to either of
said Sections, then it shall file with the Trustee and the Commission,
in accordance with rules and regulations prescribed from time to time by
the Commission, such of the supplementary and periodic information,
documents and reports which may be required pursuant to Section 13 of
the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from
time to time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission,
such additional information, documents and reports with respect to
compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and
regulations; and
(3) transmit by mail to all Holders, as their names and
addresses appear in the Security Register, within 30 days after the
filing thereof with the Trustee, such summaries of any information,
documents and reports required to be filed by the Company pursuant to
paragraphs (1) and (2) of this Section as may be required by rules and
regulations prescribed from time to time by the Commission.
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 801. Mergers and Consolidations.
The Company (a) shall not consolidate with or merge into any other
Person or, directly or indirectly, transfer, convey, sell, lease, or otherwise
dispose of all or substantially all of its properties and assets as an
entirety to any Person; (b) shall not permit any Subsidiary to consolidate
with or merge into another Person (other than a Wholly owned Subsidiary) in a
transaction in which such Subsidiary remains a Subsidiary; and (c) shall not
permit (i) any other Person (other than a Wholly owned Subsidiary) to
consolidate with or merge into the Company or (ii) any other Person (other
than a Wholly owned Subsidiary) to consolidate with or merge into any
Subsidiary in a transaction in which such Subsidiary remains a Subsidiary;
unless, in any such transaction:
(1) immediately before and after giving effect to such
transaction no Event of Default, and no event which, after notice or
lapse of time, or both, would become an Event of Default, shall have
happened and be continuing;
(2) in case the Company shall consolidate with or merge into
another Person or shall directly or indirectly transfer, convey, sell,
lease or otherwise dispose of all or substantially all of its properties
and assets as an entirety, the Person formed by such consolidation or
into which the Company is merged or the Person which acquires by
transfer, conveyance, sale, lease or other disposition all or
substantially all of the properties and assets of the Company as an
entirety (for purposes of this Article Eight, a "Successor Company")
shall be a corporation, partnership or trust, shall be organized and
validly existing under the laws of the United States of America, any
State thereof or the District of Columbia and shall expressly assume by
an indenture supplemental hereto executed and delivered to the Trustee,
in form satisfactory to the Trustee, the due and punctual payment of the
principal of and interest on all the Securities and the performance of
every covenant of this Indenture on the part of the Company to be
performed or observed;
(3) immediately after giving effect to such transaction, the
Consolidated Net Worth of the Company or, if applicable, the Successor
Company shall be equal to or greater than the Consolidated Net Worth of
the Company immediately prior to such transaction; and
(4) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer, lease or acquisition and,
if a supplemental indenture is required in connection with such
transaction, such supplemental indenture, complies with this Article and
that all conditions precedent herein provided for relating to such
transaction have been complied with.
SECTION 802. Successor Substituted.
Upon any consolidation of the Company with, or merger of the
Company into, any other Person or any transfer, conveyance, sale, lease or
other disposition of all or substantially all of the properties and assets of
the Company as an entirety in accordance with Section 801, the Successor
Company shall succeed to, and be substituted for, and may exercise every right
and power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except
in the case of a lease, the predecessor Person shall be relieved of all
obligations and covenants under this Indenture and the Securities.
ARTICLE NINE
Supplemental Indentures
SECTION 901. Supplemental Indentures Without Consent
of Holders.
Without the consent of any Holders, the Company, when authorized
by a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more indentures supplemental hereto, in form satisfactory to
the Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company
and the assumption by any such successor of the covenants of the Company
herein and in the Securities; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company; or
(3) to comply with any requirements of the Commission in order
to effect and maintain the qualification of this Indenture under the
TIA; or
(4) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to matters or
questions arising under this Indenture which shall not be inconsistent
with the provisions of this Indenture.
SECTION 902. Supplemental Indentures With Consent of Holders.
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities, by Act of said Holders
delivered to the Company and the Trustee, the Company, when authorized by a
Board Resolution, and the Trustee may enter into an indenture or indentures
supplemental hereto for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture or of
modifying in any manner the rights of the Holders under this Indenture;
provided, however, that no such supplemental indenture shall, without the
consent of the Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of interest on, any Security, or reduce the principal amount
thereof or the rate of interest thereon, or change the place of payment
where, or the coin or currency in which, any Security or the interest
thereon is payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Stated Maturity thereof
(or, in the case of redemption, on or after the Redemption Date), or
(2) reduce the percentage in principal amount of the Outstanding
Securities, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for
any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1009, except to increase any such percentage or to provide that
certain other provisions of this Indenture cannot be modified or waived
without the consent of the Holder of each Outstanding Security affected
thereby.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby
of the trusts created by this Indenture, the Trustee shall be entitled to
receive, and (subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes;
and every Holder of Securities theretofore or thereafter authenticated and
delivered hereunder shall be bound thereby.
SECTION 905. Conformity with TIA.
Every supplemental indenture executed pursuant to this Article
shall conform to the requirements of the TIA as then in effect.
SECTION 906. Reference in Securities to Supplemental
Indentures.
Securities authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may bear a notation in form
approved by the Trustee as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities so modified as
to conform, in the opinion of the Trustee and the Company, to any such
supplemental indenture may be prepared and executed by the Company and
authenticated and delivered by the Trustee in exchange for Outstanding
Securities.
SECTION 907. Notice of Supplemental Indenture.
Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to Section 902, the Company shall transmit to
the Holders a notice setting forth the substance of such supplemental
indenture.
ARTICLE TEN
Covenants
SECTION 1001. Payment of Principal and Interest.
The Company will duly and punctually pay the principal of and
interest on the Securities in accordance with the terms of the Securities and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain an office or agency where Securities may
be presented or surrendered for payment, where Securities may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities and this Indenture may be
served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such
presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices
and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice to the Trustee of any such
designation or rescission and of any change in the location of any such other
office or agency.
SECTION 1003. Money for Security Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent, it
will, on or before each due date of the principal of or interest on any of the
Securities, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal or cash interest so
becoming due until such sums shall be paid to such Persons or otherwise
disposed of as herein provided and will promptly notify the Trustee of its
action or failure so to act. To the extent the Company elects pursuant to the
terms hereof to pay interest in Additional Notes, the Company will, on or
before each due date of such interest, authorize, issue and hold in trust for
the benefit of the Persons entitled thereto Additional Notes to be issued in
payment of interest so becoming due until such Additional Notes shall be
delivered to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it
will, on or prior to each due date of the principal of or interest on any
Securities, deposit with the Paying Agent or Paying Agents a sum sufficient to
pay the principal or cash interest and/or Additional Notes so becoming due,
such sum and/or Additional Notes to be held in trust for the benefit of the
Persons entitled to such principal or interest, and (unless such Paying Agent
is the Trustee) the Company will promptly notify the Trustee of its action or
failure so to act; provided, that, at all times that the Trustee acts as
Paying Agent, the Company will, on or prior to each due date of the principal
of or interest on any Securities, deposit with the Trustee a sum sufficient to
pay the principal or cash interest and/or Additional Notes so becoming due in
an account with the Trustee entitled "Bucyrus-Erie Company Secured Notes Due
December 14, 1999."
The Company will cause each Paying Agent other than the Trustee to
execute and deliver to the Trustee an instrument in which such Paying Agent
shall agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will:
(1) hold all sums and/or Additional Notes held by it for the
payment of the principal of or interest on Securities in trust for the
benefit of the Persons entitled thereto until such sums and/or
Additional Notes shall be paid to such Persons or otherwise disposed of
as herein provided;
(2) give the Trustee notice of any default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal or interest; and
(3) at any time during the continuance of any such default, upon
the written request of the Trustee, forthwith pay to the Trustee all
sums and/or Additional Notes so held in trust by such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by Company Order direct any Paying Agent to pay, to the Trustee all sums
and/or Additional Notes held in trust by the Company or such Paying Agent,
such sums and/or Additional Notes to be held by the Trustee upon the same
trusts as those upon which such sums and/or Secured Notes were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to
the Trustee, such Paying Agent shall be released from all further liability
with respect to such money and/or Additional Notes.
Any money and/or Additional Notes deposited with the Trustee or
any Paying Agent, or then held by the Company, in trust for the payment of the
principal of or interest on any Security and remaining unclaimed for two years
after such principal or interest has become due and payable shall be paid
(together with accrued interest thereon) to the Company on Company Request, or
(if then held by the Company) shall be discharged from such trust; and the
Holder of such Security shall thereafter, as an unsecured general creditor,
look only to the Company for payment thereof, and all liability of the Trustee
or such Paying Agent with respect to such trust money, and all liability of
the Company as trustee thereof, shall thereupon cease; provided, however, that
the Trustee or such Paying Agent, before being required to make any such
repayment, may at the expense of the Company cause to be published once, in a
newspaper published in the English language, customarily published on each
Business Day and of general circulation in The City of New York, notice that
such money and/or Additional Notes remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money and/or Additional Notes then
remaining will be repaid to the Company.
SECTION 1004. Existence.
Subject to Article Eight, the Company will do or cause to be done
all things necessary to preserve and keep in full force and effect its
existence, material rights (charter and statutory) and franchises; provided,
however, that the Company shall not be required to preserve any such right or
franchise if the Board of Directors shall determine (whose determination shall
be conclusive) that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Holders.
SECTION 1005. Maintenance of Properties.
The Company will cause all properties which are material to the
Company and its Subsidiaries taken as a whole and which are used or useful in
the conduct of its business or the business of any Subsidiary of the Company
to be maintained and kept in good condition, repair and working order and
supplied with all necessary equipment and will cause to be made all necessary
repairs, renewals, replacements, betterments and improvements thereof, all as
in the judgment of the Company may be necessary so that the business carried
on in connection therewith may be properly and advantageously conducted at all
times; provided, however, that nothing in this Section shall prevent the
Company from discontinuing the operation or maintenance of any of such
properties if such discontinuance is, as determined by the Board of Directors
(whose determination shall be conclusive), desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 1006. Payment of Taxes and Other Claims.
The Company will pay or discharge or cause to be paid or
discharged, before the same shall become delinquent, (1) all taxes,
assessments and other governmental charges levied or imposed upon the Company
or any of its Subsidiaries or upon the income, profits or property of the
Company or any of its Subsidiaries, and (2) all lawful claims for labor,
materials and supplies which, if unpaid, might by law become a lien upon the
property of the Company or any of its Subsidiaries; provided, however, that
the Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount,
applicability or validity is being contested in good faith by appropriate
proceedings, which may consist of the filing of an appropriate return or
report or asserting a different position with respect to the amount,
applicability or validity of such tax, assessment, charge or claim; and
provided further, that the Company shall not be required to pay or discharge
or cause to be paid or discharged any such tax, assessment, charge or claim,
the liability for which has been discharged by confirmation of the Plan of
Reorganization.
SECTION 1007. Maintenance of Insurance.
The Company shall, and shall cause its Subsidiaries to, keep at
all times all of their properties which are (i) material to the Company and
its Subsidiaries, taken as a whole, and (ii) of an insurable nature, insured
against loss or damage with insurers believed by the Company to be responsible
to the extent that property of similar character is usually so insured by
corporations similarly situated and owning like properties in accordance with
good business practice. The Company shall, and shall cause its Subsidiaries
to, use the proceeds from any such insurance policy to repair, replace or
otherwise restore the property to which such proceeds relate, unless the Board
of Directors (whose determination shall be conclusive) determines that such
property is not necessary for the conduct of the Company business.
SECTION 1008. Limitation on Restricted Payments.
Except as provided in the Plan of Reorganization, the Company (i)
shall not declare or pay any dividend, or make any distribution, of any kind
or character (whether in cash, property or securities) in respect of any class
of its Capital Stock or to the holders of any class of its Capital Stock
(including pursuant to a merger or consolidation of the Company, but excluding
any dividends or distributions payable solely in shares of its Capital Stock
or in options, warrants or other rights to acquire its Capital Stock), (ii)
shall not, and shall not permit any Subsidiary of the Company, directly or
indirectly, to purchase, redeem or otherwise acquire or retire for value (a)
any Capital Stock of the Company or any Related Person of the Company or (b)
any options, warrants or rights to purchase or acquire shares of Capital Stock
of the Company or any Related Person of the Company, and (iii) shall not make,
or permit any Subsidiary of the Company to make, any loan, advance, capital
contribution to or investment in, or payment on a guaranty of any obligation
of, any Affiliate or any Related Person, other than the Company or a
Subsidiary of the Company which is a Subsidiary prior to such contribution or
investment (the transactions described in clauses (i) through (iii) being
referred to herein as "Restricted Payments"), if at the time thereof an Event
of Default, or an event that with the lapse of time or the giving of notice,
or both, would constitute an Event of Default, shall have occurred and be
continuing.
The foregoing provision shall not be violated by reason of the
payment of any dividend within 60 days after declaration thereof if at the
declaration date such payment would have complied with the foregoing
provision.
SECTION 1009. Provision of Financial Information.
In addition to and without limitation of the Company's obligations
pursuant to Section 704, for so long as the Company is subject to the
requirements of Section 13(a) or 15(d) of the Exchange Act or any successor
provisions thereto, the Company shall file with the Commission the annual
reports, quarterly reports and other documents (the "Documents") required to
be filed with the Commission pursuant to such Section 13(a) or 15(d) or any
successor provisions thereto on or prior to the respective dates (the "Filing
Dates") such Documents are required to be so filed under the Exchange Act, and
shall mail to each Holder a copy of any such filing on or prior to the
respective Filing Dates; provided, however, that any Document which is deemed
to be timely filed pursuant to Rule 12b-25 under the Exchange Act or any
successor provisions thereto shall be deemed to be timely filed hereunder,
and, in any such case, the Filing Date with respect to such Document shall be
the date the Document is actually filed with the Commission. If the Company
is not required to file Documents under the Exchange Act, the Company shall
prepare quarterly and annual financial statements, including notes thereto, in
accordance with both generally accepted accounting principles and the rules
and regulations of the Commission that would otherwise be applicable thereto
(and with respect to any annual financial statement, an auditors' report by a
firm of established national reputation) and a quarterly and annual
"Management's Discussion and Analysis of Financial Condition and Results of
Operations," prepared substantially in accordance with Item 303 of Regulation
S-K of the Exchange Act or any successor provision thereto (collectively with
the quarterly and annual financial statements, the "Alternative Documents").
The Company shall, on or prior to each Filing Date (whether filing with the
Commission is required or not), mail to each Holder, without cost to such
Holder, and file with the Trustee, within 10 Business Days of such Filing
Date, copies of the Documents or the Alternative Documents as applicable. The
Company shall also comply with the provisions of TIA Section 314(a). The
Company shall provide to any Holder such other information regarding the
Company as such Holder shall from time to time reasonably request.
SECTION 1010. Statement by Officers as to Default;
Compliance Certificates and Opinions.
(a) The Company will deliver to the Trustee and each Holder,
within 90 days after the end of each fiscal year of the Company ending after
the date hereof, an Officers' Certificate, stating whether or not to the best
knowledge of the signers thereof the Company is in default in the performance
and observance of any of the terms, provisions and conditions of any of the
Company's obligations under this Indenture and if the Company shall be in
default, specifying all such defaults and the nature and status thereof of
which they may have knowledge. For purposes of this Section 1010 one of the
signatories of such Officers' Certificate shall be the principal executive
officer, the principal financial officer or the principal accounting officer
of the Company.
(b) The Company shall deliver to the Trustee and each Holder, as
soon as possible and in any event within 10 days after the Company becomes
aware of the occurrence of an Event of Default or an event which, with notice
or the lapse of time or both, would constitute an Event of Default, an
Officers' Certificate setting forth the details of such Event of Default or
default, and the action which the Company proposes to take with respect
thereto; provided, however, that no such Notice shall be required to be given
to the Trustee if such default or event shall not be continuing on the date
the Company would otherwise be required to provide such notice to the Trustee.
SECTION 1011. Prohibition on Borrowing to Pay Cash Interest.
The Company shall not borrow any amounts, or utilize any amounts
otherwise advanced, under the Credit Agreement dated as of December 14, 1994
between the Company and Bank One, Milwaukee, National Association, as the same
may be amended or modified from time to time, or the Bank Credit Agreement for
the purpose of paying any cash interest due on any of the Securities.
SECTION 1012. Limitation on Liens.
The Company shall not create, assume or permit to exist any Lien
senior to the Lien under the Security Agreement securing repayment of any Debt
over or in respect of any of the Collateral other than (i) Liens securing
repayment of the Bank Priority Obligations (as hereinafter defined) or (ii)
Selected Permitted Liens. "Bank Priority Obligations" means the Bank
Obligations (other than the unpaid principal balance of and all accrued
interest due on the PECFA Notes), provided that (i) such amount shall not
exceed $16,000,000, (ii) the aggregate amount of the principal balance of the
Revolving Note, the LOC Exposure and the unpaid principal balance of any
Project Financing furnished by the Senior Lender and/or the Project Financing
Lenders considered Bank Priority Obligations shall be limited to $15,000,000
and (iii) the aggregate amount of the principal balance of the Revolving Note
to be included as Bank Priority Obligations shall not exceed the lesser of the
actual outstanding principal balance of the Revolving Note and (A) from the
date hereof until December 31, 1995, $5,000,000 and (B) from and after January
1, 1996, $2,500,000.
SECTION 1013. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Section 801 and Sections 1004 to 1008,
inclusive, if before the time for such compliance the Holders of at least a
majority in principal amount of the Outstanding Securities shall, by Act of
such Holders, either waive such compliance in such instance or generally waive
compliance with such covenant or condition, but no such waiver shall extend to
or affect such covenant or condition except to the extent so expressly waived,
and, until such waiver shall become effective, the obligations of the Company
and the duties of the Trustee, if any, in respect of any such covenant or
condition shall remain in full force and effect.
ARTICLE ELEVEN
Redemption of Securities
SECTION 1101. Redemption.
The Secured Notes may be redeemed, pro rata, based on the
principal amount of the Outstanding Securities on the Redemption Date, at the
election of the Company, as a whole or from time to time in part at such times
and at such Redemption Prices specified in the forms of Securities set forth
in Exhibit B attached hereto, together with accrued interest to the Redemption
Date.
SECTION 1102. Applicability of Article.
Redemption of Securities at the election of the Company, as
permitted by any provision of this Indenture, shall be made in accordance with
such provision and this Article.
SECTION 1103. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities pursuant to
Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of less than all the Securities, the
Company shall, at least 60 days prior to the Redemption Date fixed by the
Company (unless a shorter notice shall be satisfactory to the Trustee) notify
the Trustee of such Redemption Date and of the principal amount of Securities
to be redeemed.
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.
If less than all the Securities are to be redeemed, the particular
Securities to be redeemed shall be selected not more than 60 days prior to the
Redemption Date by the Trustee, from the Outstanding Securities not previously
called for redemption, by such method as the Trustee shall determine and which
may provide for the selection for redemption of portions of the principal
amount of Securities of a denomination larger than $1,000, provided, that, the
Trustee shall select Securities for redemption in principal amounts of $1,000
and integral multiples thereof.
The Trustee shall promptly notify the Company and each Security
Registrar in writing of the Securities selected for redemption and, in the
case of any Securities selected for partial redemption, the principal amount
thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall
relate, in the case of any Securities redeemed or to be redeemed only in part,
to the portion of the principal amount of such Securities which has been or is
to be redeemed.
SECTION 1105. Notice of Redemption.
Notice of redemption shall be given by first-class mail, postage
prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, to each Holder of Securities to be redeemed, at his address appearing in
the Security Register.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become
due and payable upon each such Security to be redeemed and that interest
thereon will cease to accrue on and after said date, and
(5) the place or places where such Securities are to be
surrendered for payment of the Redemption Price.
Notice of redemption of Securities to be redeemed at the election
of the Company shall be given by the Company or, at the Company's request, by
the Trustee in the name and at the expense of the Company.
SECTION 1106. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the
Trustee or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust as provided in Section 1003) an amount of
money sufficient to pay the Redemption Price of, and (except if the Redemption
Date shall be an Interest Payment Date) accrued interest on all the Securities
which are to be redeemed on that date.
SECTION 1107. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price herein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Upon
surrender of any such Security for redemption in accordance with said notice,
such Security shall be paid by the Company at the Redemption Price, together
with accrued interest to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the
Redemption Date shall be payable to the Holders of such Securities, or one or
more Predecessor Securities, registered as such at the close of business on
the relevant Record Dates according to their terms and the provisions of
Section 307.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear
interest from the Redemption Date at the rate provided by the Security.
SECTION 1108. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be
surrendered at an office or agency of the Company designated for that purpose
pursuant to Section 1002 (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to
the Company and the Trustee duly executed by, the Holder thereof or his
attorney duly authorized in writing), and the Company shall execute, and the
Trustee shall authenticate and deliver to the Holder of such Security without
service charge, a new Security or Securities, of any authorized denomination
as requested by such Holder, in aggregate principal amount equal to and in
exchange for the unredeemed portion of the principal of the Security so
surrendered.
ARTICLE TWELVE
Defeasance and Covenant Defeasance
SECTION 1201. Company's Option to Effect Defeasance or Covenant
Defeasance.
The Company may at its option by Board Resolution, at any time,
elect to have either Section 1202 or Section 1203 applied to the Outstanding
Securities upon compliance with the conditions set forth below in this Article
Twelve.
SECTION 1202. Defeasance and Discharge.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, the Company shall be deemed to have been
discharged from its obligations with respect to the Outstanding Securities on
the date the conditions set forth below are satisfied (hereinafter,
"defeasance"). For this purpose, such defeasance means that the Company shall
be deemed to have paid and discharged the entire indebtedness represented by
the Outstanding Securities and to have satisfied all its other obligations
under such Securities and this Indenture insofar as such Securities are
concerned (and the Trustee, at the expense of the Company, shall execute
proper instruments acknowledging the same) except for the following which
shall survive until otherwise terminated or discharged hereunder: (A) the
rights of Holders of such Securities to receive, solely from the trust fund
described in Section 1204 and as more fully set forth in such Section,
payments in respect of the principal of and interest on such Securities when
such payments are due, (B) the Company's obligations with respect to such
Securities under Sections 304, 305, 306, 1002 and 1003, (C) the rights,
powers, trusts, duties and immunities of the Trustee hereunder and (D) this
Article Twelve. Subject to compliance with this Article Twelve, the Company
may exercise its option under this Section 1202 notwithstanding the prior
exercise of its option under Section 1203. Such defeasance shall not affect
the Company's obligation to pay compensation and reimbursement to the Trustee
pursuant to Section 607.
SECTION 1203. Covenant Defeasance.
Upon the Company's exercise of the option provided in Section 1201
applicable to this Section, (i) the Company shall be released from its
obligations under Sections 1004 through 1008, inclusive, and Clauses (1), (3)
and (4) of Section 801 and (ii) the occurrence of an event specified in Clause
(x) of Section 501(3) and in Sections 501(4) (with respect to Clauses (1), (3)
and (4) of Section 801 or Sections 1004 through 1008, inclusive), 501(5) and
501(6) shall not be deemed to be an Event of Default on and after the date the
conditions set forth below are satisfied (hereinafter, "covenant defeasance").
For this purpose, such covenant defeasance means that the Company may omit to
comply with and shall have no liability in respect of any term, condition or
limitation set forth in any such Section or clause whether directly or
indirectly by reason of any reference elsewhere herein to any such Section or
clause or by reason of any reference in any such Section or clause to any
other provision herein or in any other document, but the remainder of this
Indenture and such Securities shall be unaffected thereby.
SECTION 1204. Conditions to Defeasance or Covenant Defeasance.
The following shall be the conditions to application of either
Section 1202 or Section 1203 to the then Outstanding Securities:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the
requirements of Section 609 who shall agree to comply with the
provisions of this Article Twelve applicable to it) as trust funds in
trust for the purpose of making the following payments specifically
pledged as security for, and dedicated solely to, the benefit of the
Holders of such Securities, (A) money in an amount, or (B) U.S.
Government Obligations which through the scheduled payment of principal
and interest in respect thereof in accordance with their terms will
provide, not later than one Business Day before the due date of any
payment, money in an amount, or (C) a combination thereof, sufficient,
in the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay and discharge, and which shall be applied by the
Trustee (or other qualifying trustee) to pay and discharge, the
principal of and each installment of interest on the Securities on the
Stated Maturity of such principal or installment of interest in
accordance with the terms of this Indenture and of such Securities. For
this purpose, "U.S. Government Obligations" means securities that are
(x) direct obligations of the United States of America for the payment
of which its full faith and credit is pledged or (y) obligations of a
Person controlled or supervised by and acting as an agency or
instrumentality of the United States of America the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the
United States of America, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a) (2) of
the Securities Act of 1933, as amended) as custodian with respect to any
such U.S. Government Obligation or a specific payment of principal of or
interest on any such U.S. Government Obligation held by such custodian
for the account of the holder of such depository receipt, provided that
(except as required by law) such custodian is not authorized to make any
deduction from the amount payable to the holder of such depository
receipt from any amount received by the custodian in respect of the U.S.
Government Obligation or the specific payment of principal of or
interest on the U.S. Government Obligation evidenced by such depository
receipt.
(2) In the case of an election under Section 1202, the Company
shall have delivered to the Trustee an Opinion of Counsel stating that
(x) the Company has received from, or there has been published by, the
Internal Revenue Service a ruling, or (y) since the date of this
Indenture there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion
shall confirm that, the Holders of the Outstanding Securities will not
recognize gain or loss for Federal income tax purposes as a result of
such deposit, defeasance and discharge and will be subject to Federal
income tax on the same amount, in the same manner and at the same times
as would have been the case if such deposit, defeasance and discharge
had not occurred.
(3) In the case of an election under Section 1203, the Company
shall have delivered to the Trustee an Opinion of Counsel to the effect
that the Holders of the Outstanding Securities will not recognize gain
or loss for Federal income tax purposes as a result of such deposit and
covenant defeasance and will be subject to Federal income tax on the
same amount, in the same manner and at the same times as would have been
the case if such deposit and covenant defeasance had not occurred.
(4) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities, if then listed on any
securities exchange, will not be delisted as a result of such deposit.
(5) No Event of Default or event which with notice or lapse of
time or both would become an Event of Default shall have occurred and be
continuing on the date of such deposit or, insofar as subsections 501(7)
and (8) are concerned, at any time during the period ending on the 121st
day after the date of such deposit (it being understood that this
condition shall not be deemed satisfied until the expiration of such
period).
(6) Such defeasance or covenant defeasance shall not cause the
Trustee to have a conflicting interest as defined in Section 608 and for
purposes of the TIA with respect to any securities of the Company.
(7) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by which it
is bound.
(8) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
1202 or the covenant defeasance under Section 1203 (as the case may be)
have been complied with.
(9) Such defeasance or covenant defeasance shall not result in
the trust arising from such deposit constituting an investment company
as defined in the Investment Company Act of 1940, as amended, or such
trust shall be qualified under such act or exempt from regulation
thereunder.
(10) All fees and expenses of the Trustee then owing shall have
been paid.
SECTION 1205. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions.
Subject to the provisions of the last paragraph of Section 1003,
all money and U.S. Government Obligations (including the proceeds thereof)
deposited with the Trustee (or other qualifying trustee -- collectively, for
purposes of this Section 1205, the "Trustee") pursuant to Section 1204 in
respect of the Securities shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and this Indenture, to
the payment, either directly or through any Paying Agent (including the
Company acting as its own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, of all sums due and to become due thereon in
respect of principal and interest, but such money need not be segregated from
other funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax,
fee or other charge imposed on or assessed against the U.S. Government
Obligations deposited pursuant to Section 1204 or the principal and interest
received in respect thereof other than any such tax, fee or other charge which
by law is for the account of the Holders of the Outstanding Securities.
Anything in this Article Twelve to the contrary notwithstanding,
the Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or U.S. Government Obligations held by it as provided in
Section 1202 which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are then in excess of the amount thereof which then
would have been required to be deposited for the purpose for which such money
or U.S. Government Obligations were deposited or received.
ARTICLE THIRTEEN
Collateral and Security
SECTION 1301. Collateral and Security Agreements.
In order to secure the due and punctual payment of the principal
of and interest on the Securities when and as the same shall be due and
payable, whether on an interest payment date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest (to the extent permitted by law), if any, on the Securities and
performance of all other obligations of the Company to the Holders, the
Trustee or the Collateral Agent under this Indenture, the Securities or the
Security Agreement, as applicable, according to the terms hereunder, the
Company has simultaneously with the execution of this Indenture entered into
the Security Agreement and has granted a security interest in its right, title
and interest in and to the Collateral within the meaning of the Security
Agreement to the Collateral Agent pursuant to the Security Agreement and, to
the extent therein provided, for the benefit and security of the Holders, the
Trustee and the Collateral Agent equally and ratably. Each Holder of a
Security, by its acceptance thereof, consents and agrees to the terms of the
Security Agreement (including, without limitation, the provisions providing
for the release or substitution of Collateral) as the same may be in effect or
may be amended from time to time in accordance with its terms and authorizes
and directs the Collateral Agent to enter into the Security Agreement and the
Intercreditor Agreement (as defined in the Security Agreement) and to perform
its obligations and exercise its rights thereunder in accordance therewith;
provided, however, that upon qualification of this Indenture with the TIA, if
any provision of the Security Agreement limits, qualifies or conflicts with
the duties imposed by the provisions of the TIA, the TIA shall control.
SECTION 1302. Opinions, etc. Required by TIA.
If requested by Holders of a majority in principal amount of the
Outstanding Securities, upon the granting of the Lien on each item of
Collateral to the Collateral Agent pursuant to the Security Agreement and
thereafter as may be required, the Company shall provide to the Trustee such
Opinions of Counsel, Officers' Certificates, certificates of fair value,
compliance certificates and other reports as shall be required by Section 314
of the TIA.
SECTION 1303. Release of Collateral.
(a) Collateral may be released from time to time in accordance
with the terms of the Security Agreement. The Trustee shall, from time to
time, confirm to the Collateral Agent that any release of Collateral from the
security interest or Lien of the Security Agreement is permitted under this
Indenture upon receipt by the Trustee of (i) at least one Business Day prior
to the requested date for such confirmation, an Officers' Certificate from the
Company requesting such release and describing the property to be so released
and stating that such release complies with the terms of this Indenture and
the Security Agreement and (ii) simultaneously with or prior to such request,
any Officers' Certificates or Opinions of Counsel required by TIA Section
314(d) in connection with such release, in compliance with Section 102.
(b) The release of any Collateral from the terms of the Security
Agreement or the release of, in whole or in part, the security interests or
Liens created by the Security Agreement will not be deemed to impair the
security interests in contravention of the provisions hereof.
SECTION 1304. Suits to Protect the Collateral.
The Trustee shall not have the power independent of Section 512 to
institute and to maintain suits and proceedings to prevent any impairment of
the Collateral by any acts which may be unlawful or in violation of the
Security Agreement or this Indenture. In the case of any impairment of the
Collateral by any acts which may be unlawful or in violation of the Security
Agreement or this Indenture of which the Trustee has actual knowledge, the
Trustee shall promptly notify the Collateral Agent who shall, pursuant to the
terms of the Security Agreement, institute such suits and proceedings as the
Collateral Agent may deem expedient to preserve or protect its interests and
the interests of the Holders in the applicable Collateral (including power to
institute and maintain suits or proceedings to restrain the enforcement of or
compliance with any legislative or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of, or
compliance with, such enactment, rule or order would impair the security
interests or be prejudicial to the interests of the Holders or the Collateral
Agent).
SECTION 1305. Purchaser Protected.
In no event shall any purchaser in good faith of any property
purported to be released hereunder be bound to ascertain the authority of the
Trustee or the Collateral Agent to execute the confirmation of release or to
inquire as to the satisfaction of any conditions required by the provisions
hereof for the exercise of such authority or to see to the application of any
consideration given by such purchaser or other transferee; nor shall any
purchaser or other transferee of any property or rights permitted by this
Article Thirteen to be sold be under obligation to ascertain or inquire into
the authority of the Company to make any such sale or other transfer.
SECTION 1306. Determinations Relating to Collateral.
In the event (i) the Trustee shall receive any written request
from the Company or the Collateral Agent for consent or approval with respect
to any matter or thing relating to any Collateral or the Company's obligations
with respect thereto or (ii) the Trustee shall receive actual knowledge of any
nonperformance by the Company of any covenant or any breach of any
representation or warranty of the Company set forth in the Security Agreement,
then, in each such event, the Trustee shall be entitled to hire experts,
consultants, agents and attorneys to advise the Trustee on the manner in which
the Trustee should respond, or make written request to the Collateral Agent to
respond, to such request or render any requested performance or response to
such nonperformance or breach; provided that the Trustee's right to make
written request to the Collateral Agent to respond shall be subject to the
terms of the Security Agreement. The Trustee shall be fully protected in the
taking of any action recommended or approved by any such expert, consultant,
agent or attorney or agreed to by Holders of a majority in principal amount of
the Outstanding Securities.
SECTION 1307. Release Upon Termination of the
Company's Obligations.
(a) In the event that the Company delivers an Officers'
Certificate certifying that all of the Obligations (as defined in the Security
Agreement) have been satisfied and discharged by complying with the provisions
of Section 401 or Article Twelve hereof, the Trustee shall deliver to the
Collateral Agent a notice stating that the Trustee, on behalf of the Holders,
disclaims and gives up any and all rights it has in or to the applicable
Collateral, and any rights it has under the Security Agreement, and, upon and
after the receipt by the Collateral Agent of such notice, the Collateral Agent
shall not be deemed to hold the security interests in the Collateral on behalf
of the Trustee for the benefit of the Holders.
(b) Any release of Collateral made strictly in compliance with
the provisions of this Section 1307 shall not be deemed to impair the security
interests in contravention of the provisions of this Indenture.
SECTION 1308. When Trustee Is Collateral Agent.
At any time the Trustee under this Indenture and the Collateral
Agent under the Security Agreement are the same Person, then the Trustee and
the Collateral Agent shall not be required to provide any written notices or
issue any written instructions that are required under this Indenture to be
provided or issued (i) by the Trustee to such Collateral Agent or (ii) by such
Collateral Agent to the Trustee.
* * * * * * * * * * *
This Indenture may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture
to be duly executed, and the Company has caused its corporate seal to be
hereunto affixed and attested, all as of the day and year first above written.
[SEAL]
Attest: BUCYRUS-ERIE COMPANY
/s/ David M. Goelzer By: /s/ William B. Winter
David M. Goelzer William B. Winter
Secretary Chairman and CEO
HARRIS TRUST AND SAVINGS BANK
as Trustee
By: /s/ J. Bartolini
Name: J. Bartolini
Title: Vice President
<PAGE>
EXHIBIT 4.4
FORM 8-K
DECEMBER 14, 1994
THIS SECURED NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
TRANSFERRED, SOLD OR OTHERWISE DISPOSED OF EXCEPT WHILE A REGISTRATION
STATEMENT IS IN EFFECT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION
UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS. THE TRANSFERABILITY OF
THIS SECURED NOTE IS ALSO SUBJECT TO RESTRICTIONS CONTAINED IN THE INDENTURE
HEREINAFTER REFERRED TO WHICH THE COMPANY WILL FURNISH TO THE HOLDER HEREOF
UPON REQUEST.
BUCYRUS-ERIE COMPANY
SECURED NOTES DUE DECEMBER 14, 1999
No. ___ $_________
Bucyrus-Erie Company, a corporation duly organized and existing under
the laws of the State of Delaware (herein called the "Company", which term
includes any successor Person under the Indenture hereinafter referred to),
for value received, hereby promises to pay to
____________________________________________, or registered assigns, the
principal sum of __________ on December 14, 1999, and to pay interest thereon
from the date hereof or from the most recent date to which interest has been
paid or duly provided for, semi-annually on June 30 and December 31 in each
year (an "Interest Payment Date"), commencing June 30, 1995, until the
principal hereof is paid or made available for payment. The Secured Notes
shall bear interest at the rate of 10.50% per annum. Interest on the Secured
Notes shall be payable in cash or principal amount of additional Secured Notes
in such proportion as the Company shall determine; provided, however, that
from and after December 14, 1995, if and to the extent that the Company elects
to pay interest in additional Secured Notes, interest shall accrue and be
payable in principal amount of additional Secured Notes at the rate of 13.00%
per annum.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in the Indenture, be paid to the
Person in whose name this Secured Note (or one or more Predecessor Securities)
is registered at the close of business on the Regular Record Date for such
interest, which shall be the June 15 or December 15 (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to
be payable to the Holder on such Regular Record Date and may either be paid to
the Person in whose name this Secured Note (or one or more Predecessor
Securities) is registered at the close of business on a Special Record Date
for the payment of the Defaulted Interest to be fixed by the Trustee, notice
whereof shall be given to Holders of Secured Notes not less than 10 days prior
to such Special Record Date, or be paid at any time in any other lawful manner
not inconsistent with the requirements of any securities exchange on which the
Secured Notes may be listed, and upon such notice and may be required by such
exchange, all as more fully provided in said Indenture. Any payment of
principal or, to the extent permitted by applicable law, interest which is
payable but is not punctually paid or duly provided for, shall bear interest
for each day until paid at the rate which is 2% per annum in excess of the
interest rate then otherwise applicable in this Secured Note for payment of
interest in cash.
Payment of the principal of and interest on this Secured Note will be
made at such office or agency of the Company maintained for that purpose and,
when payable in cash, in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts; provided, however, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Secured
Note set forth on the reverse hereof, which further provisions shall for all
purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the face hereof by manual signature, this Secured
Note shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated: _______________
BUCYRUS-ERIE COMPANY
By:_______________________
Name:
Title:
<PAGE>
This Secured Note is one of a duly authorized issue of Securities of
the Company designated as its Secured Notes due December 14, 1999, (all such
Secured Notes and additional Secured Notes issuable in payment of interest on
the Secured Notes are herein called the "Secured Notes"), issued or issuable
under an Indenture, dated as of December 14, 1994 (herein called the
"Indenture"; capitalized terms used herein and not defined herein have the
meanings ascribed thereto in the Indenture), between the Company and Harris
Trust and Savings Bank, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement
of the respective rights, limitations of rights, duties and immunities
thereunder of the Company, the Trustee and the Holders of the Secured Notes
and of the terms upon which the Secured Notes are, and are to be,
authenticated and delivered.
The Secured Notes are subject to redemption, in whole or in part,
upon not less than 30 nor more than 60 days' notice by mail, at the election
of the Company, pro rata, based on the principal amount of Outstanding
Securities on the Redemption Date, at a Redemption Price of 100% of principal
amount outstanding plus accrued interest to the Redemption Date. Interest
installments whose Stated Maturity is on or prior to such Redemption Date,
however, will be payable to the Holders of Secured Notes, or one or more
Predecessor Securities, of record at the close of business on the relevant
Record Dates referred to on the face hereof, all as provided in the Indenture.
In the event of redemption of this Secured Note in part only, a new
Secured Note or Notes for the unredeemed portion hereof will be issued in the
name of the Holder hereof upon the cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
and accrued interest thereon of all the Secured Notes may be declared due and
payable in the manner and with the effect provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Secured Note or (ii) certain restrictive
covenants and Events of Default with respect to this Secured Note, in each
case upon compliance with certain conditions set forth therein.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of
the Company and the rights of the Holders of the Secured Notes under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Secured Notes at
the time Outstanding; provided, however, that any such addition, change,
deletion or modification which applies or affects only the Secured Notes shall
only require the consent of not less than a majority in principal amount of
the Outstanding Secured Notes. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount
of the Secured Notes at the time Outstanding, on behalf of the Holders of all
the Secured Notes, to waive compliance by the Company with certain provisions
of the Indenture and certain past defaults under the Indenture and their
consequences. Any such consent or waiver by the Holder of this Secured Note
shall be conclusive and binding upon such Holder and upon all future Holders
of this Secured Note and of any Secured Note issued upon the registration of
transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Secured Note.
No reference herein to the Indenture and no provision of this Secured
Note or of the Indenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of and interest on
this Secured Note at the times, place and rate, and in the coin or currency,
herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Secured Note is registrable in the
Security Register, upon surrender of this Secured Note for registration of
transfer at such office or agency of the Company as designated in the
Indenture, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Secured Notes, of authorized denominations and for
the same aggregate principal amount, will be issued to the designated
transferee or transferees.
The Secured Notes are issuable only in registered form without
coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set
forth, Secured Notes are exchangeable for a like aggregate principal amount of
Secured Notes of any different authorized denominations, as requested by the
Holder surrendering the same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Secured Note for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Secured Note is registered as the
owner hereof for all purposes, whether or not this Secured Note be overdue,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary.
All terms used in this Secured Note which are defined in the
Indenture shall have the meanings assigned to them in the Indenture.
Form of Trustee's Certificate of Authentication.
This is one of the Secured Notes referred to in the within-mentioned
Indenture.
Harris Trust and Savings Bank
as Trustee
By__________________________
Authorized Officer
<PAGE>
EXHIBIT 4.5
FORM 8-K
DECEMBER 14, 1994
SECURITY AGREEMENT
between
BUCYRUS-ERIE COMPANY
and
HARRIS TRUST AND SAVINGS BANK
as Collateral Agent
for the Secured Creditors referred to herein
Dated as of December 14, 1994
<PAGE>
TABLE OF CONTENTS
Section Page
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interest. . . . . . . . . . . . . . . . . . . 1
1.2. Power of Attorney . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1. Ownership. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.2. Sale of Goods or Services Rendered . . . . . . . . . . . . . . . 5
2.3. Enforceability . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.4. Location of Collateral . . . . . . . . . . . . . . . . . . . . . 5
2.5. Financing Statements . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE III
COVENANTS
3.1. Maintenance of Collateral. . . . . . . . . . . . . . . . . . . . 6
3.2. Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.3. Maintenance of Security Interest . . . . . . . . . . . . . . . . 7
3.4. Books and Records Inspection . . . . . . . . . . . . . . . . . . 8
3.5. Chattel Paper; Instruments . . . . . . . . . . . . . . . . . . . 8
ARTICLE IV
THE COLLATERAL AGENT
4.1. Appointment of Harris Trust and Savings Bank as
Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2. Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . 9
4.3. Lack of Reliance on the Collateral Agent . . . . . . . . . . . . 9
4.4. Certain Rights of the Collateral Agent . . . . . . . . . . . . . 10
4.5. Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.6. The Collateral Agent in its Individual Capacity. . . . . . . . . 10
4.7. Resignation by the Collateral Agent. . . . . . . . . . . . . . . 11
4.8. Duties of Successor Collateral Agent . . . . . . . . . . . . . . 11
4.9. Distributions by Collateral Agent. . . . . . . . . . . . . . . . 12
4.10. Fees and Expenses of the Collateral Agent. . . . . . . . . . . . 12
ARTICLE V
PROVISIONS CONCERNING COLLATERAL
5.1. Obligor Remains Liable . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VI
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
6.1. Remedies Upon Default. . . . . . . . . . . . . . . . . . . . . . 13
6.2. No Marshalling . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3. Instruments of Sale. . . . . . . . . . . . . . . . . . . . . . . 14
6.4. Proceeds Cash Collateral Account . . . . . . . . . . . . . . . . 14
6.5. Application of Proceeds. . . . . . . . . . . . . . . . . . . . . 14
6.6. Discontinuance of Proceedings. . . . . . . . . . . . . . . . . . 15
ARTICLE VII
INDEMNITY
7.1. Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.2. Indemnity Obligations Secured by Collateral;
Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
7.3. Action Contrary to Direction . . . . . . . . . . . . . . . . . . 17
ARTICLE VIII
DEFINITIONS
8.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ARTICLE IX
MISCELLANEOUS
9.1. Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.2. Waiver; Amendment. . . . . . . . . . . . . . . . . . . . . . . . 21
9.3. Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . 21
9.4. Successors . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
9.5. Headings Descriptive . . . . . . . . . . . . . . . . . . . . . . 22
9.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.7. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . 22
9.8. Obligor's Duties . . . . . . . . . . . . . . . . . . . . . . . . 22
9.9. Termination; Release . . . . . . . . . . . . . . . . . . . . . . 22
9.10. Duplicate Originals. . . . . . . . . . . . . . . . . . . . . . . 22
9.11. Intercreditor Agreement. . . . . . . . . . . . . . . . . . . . . 23
SCHEDULE 1.1 Subsidiary Stock Included as Collateral
SCHEDULE 2.1 Financing Statements
SCHEDULE 2.4 Location of Collateral Equipment
<PAGE>
SECURITY AGREEMENT
SECURITY AGREEMENT dated as of December 14, 1994 between BUCYRUS-ERIE
COMPANY, a Delaware corporation (together with its successors and assigns, the
"Obligor"), and Harris Trust and Savings Bank, acting not in its individual
capacity but solely as collateral agent hereunder (in such capacity and
together with any successors in such capacity, the "Collateral Agent").
W I T N E S S E T H:
WHEREAS, the Second Amended Joint Plan of Reorganization (the "Plan")
of the Obligor and B-E Holdings, Inc., a Delaware corporation, provides for
the issuance on the Effective Date (as defined in the Plan) of the Obligor's
Secured Notes due December 14, 1999 (the "Secured Notes") and for the issuance
from time to time thereafter of additional Secured Notes (the "Additional
Notes", and together with the Secured Notes, the "Securities") pursuant to an
Indenture of even date herewith (as the same may be amended, supplemented or
modified from time to time, the "Indenture");
WHEREAS, the Obligor has entered into a Credit Agreement dated the
date hereof (as the same may be amended, supplemented or modified from time to
time, the "Credit Agreement") pursuant to which Bank One, Milwaukee, National
Association, as the Bank thereunder (the "Bank") has agreed, subject to the
terms and conditions set forth therein, to issue letters of credit and make
advances to the Obligor on a revolving basis; and
WHEREAS, pursuant to the Plan and the Indenture, and in order to
induce the Bank to enter into the Credit Agreement, the Obligor has agreed to
grant a security interest in the Collateral (as defined in Section 1.1(a)
hereof), as provided for herein.
NOW, THEREFORE, in consideration of the premises and other benefits
to the Obligor, the receipt and sufficiency of which is hereby acknowledged,
the Obligor hereby makes the following representations and warranties and
hereby covenants and agrees as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interest.
(a) As collateral security for the prompt and complete payment and
performance when due of the Obligations, the Obligor does hereby grant to the
Collateral Agent for the benefit of the Secured Creditors, the Collateral
Agent and the Trustee a continuing second priority security interest
(subordinated only to the security interest in favor of the Senior Lender
pursuant to the Bank Security Agreement but only to the extent of the Bank
Priority Obligations in all of the right, title and interest of the Obligor
in, to and under the following, whether now owned and existing or hereafter
created or acquired, wherever located, together with all additions and
accessions thereto and all proceeds and products thereof (all being
collectively referred to herein as the "Collateral"):
(1) all amounts owed to the Obligor as payment for goods sold or
services rendered (hereinafter, collectively, "Accounts");
(2) all negotiable instruments held by the Obligor, securities owned
by the Obligor (but including shares of capital stock of the subsidiaries
of Obligor only to the extent set forth in Schedule 1.1 hereto) or any
other writing held by the Obligor which evidences a right to the payment
of money (hereinafter, collectively, "Instruments");
(3) all writings or a series of writings which evidence both a
monetary obligation owed to the Obligor and a security interest in or
lease (but not a sublease) of specific goods (hereinafter, collectively,
"Chattel Paper");
(4) all personal property of the Obligor (including but not limited
to contract rights, things in action, goodwill, patents, trademarks,
copyrights, trade names, licenses and franchises) other than Accounts,
Instruments, Chattel Paper, Equipment, Inventory and money (hereinafter,
collectively, "General Intangibles");
(5) all machinery, equipment and furnishings owned by the Obligor and
all modifications, alterations, repairs, substitutions and replacements
thereof or thereto (hereinafter, collectively, "Equipment");
(6) all of the Obligor's inventory (including all goods held for
sale, lease (but not sublease) or demonstration or to be furnished under
contracts of service, all goods leased (but not subleased) to others,
trade-ins and repossessions, raw materials, work-in-process and materials
or supplies used or consumed in the Obligor's business) and documents
related to inventory (hereinafter, collectively, "Inventory"); and
(7) all insurance coverage relating to the foregoing and all books
and records of the Obligor pertaining to any of the foregoing.
Notwithstanding the foregoing, the term "Collateral" shall not include the
following:
(i) any cash collateral in which the Obligor provides a security
interest in connection with the issuance of letters of credit by banking
institutions;
(ii) the Obligor's rights under the Remarketing Agreement to the
extent collaterally assigned to the Bank;
(iii) the Obligor's rights to the PECFA Reimbursement;
(iv) any of the funds to the extent on deposit, from time to time, in
an account established under an account agreement which may be entered
into by the Obligor and the Bank in connection with the issuance of the
China Letter of Credit (as such term is defined in the Credit Agreement);
(v) property shipped under or relative to Commercial Letters of
Credit (as such term is defined in the Credit Agreement), including all
policies or certificates of insurance, bills of lading, shipping and other
documents accompanying or relative to drafts drawn under such Commercial
Letters of Credit, and all proceeds of the foregoing (provided that upon
reimbursement in full of amounts owed by the Obligor to the Bank with
respect to a Commercial Letter of Credit, then the property shipped under
or relative to such Commercial Letter of Credit, and all other property
described in this paragraph (v) securing the reimbursement obligations
relating to such Commercial Letter of Credit, shall constitute
"Collateral" hereunder);
(vi) the Obligor's rights in computer equipment leases and other
Contracts the grant of a security interest in which would result in a
violation or breach of such Contract;
(vii) inventory and accounts relating to such inventory to the extent
now or hereafter financed by Project Financing;
(viii) property acquired after the date hereof, to be used by the
Obligor in the normal course of its business, to the extent the Obligor
has granted a purchase money security interest therein to secure Debt
created or incurred to finance such purchase simultaneously with the
acquisition of such property if such Debt does not exceed 100% of the
purchase price of such property and the aggregate Debt secured by all such
property does not exceed $1,000,000 at any time outstanding; and
(x) all the Obligor's rights in, to and under the China Contract and
all letters of credit, and confirmations thereof, issued with respect to
such contract (as such letters of credit may from time to time be amended,
extended, reissued or replaced).
(b) Unless an Event of Default shall have occurred and be continuing
and the Collateral Agent notifies the Obligor to the contrary, the Obligor (i)
shall have the right to remain in possession and to use and to retain
exclusive control of the Collateral with power to manage, operate, develop,
use and enjoy the Collateral (except to the extent otherwise expressly
provided herein with respect to Chattel Paper, Instruments and the amounts to
be deposited in the Proceeds Cash Collateral Account); (ii) may (A) sell, use,
dispose or otherwise transfer Inventory in the ordinary course of business and
(B) sell, assign or otherwise transfer up to $5,000,000 of its assets and
properties used in connection with the operation of its rigging business to
its wholly owned subsidiary, Boonville Mining Services, Inc. ("BMSI"), or a
wholly owned subsidiary of BMSI ("BMSI Sub") in connection with a
restructuring of the Obligor's rigging business; provided, however, in the
event that such assets and properties are sold, assigned or otherwise
transferred to BMSI Sub, the Obligor shall substantially simultaneously
therewith pledge all of the issued and outstanding capital stock of BMSI Sub
to the Collateral Agent and such stock shall constitute Collateral for
purposes of this Agreement; (iii) shall diligently collect (at its own
expense) the Accounts constituting Collateral in accordance with sound
business practices; (iv) may sell or otherwise dispose of, free from the Lien
of this Security Agreement, any Equipment constituting Collateral which may
have become obsolete, inadequate, worn-out or no longer necessary in the
conduct of the business of the Obligor; (v) as to Equipment constituting
Collateral which is necessary in the conduct of the Obligor's business, may
replace any item of such Equipment which has become obsolete, inadequate or
worn-out with another item of Equipment which is suitable for a use which is
the same or similar to such item of replaced Equipment; (vi) may alter, add
to, repair or replace any and all Equipment constituting Collateral; and (vii)
shall have the right to exercise all voting, consensual and other powers of
ownership pertaining to Collateral consisting of capital stock and the
Collateral Agent shall execute and deliver to the Obligor or cause to be
executed and delivered to the Obligor, at the expense of the Obligor, all such
proxies, powers of attorney, dividend and other payment orders, and all such
instruments, without recourse, as the Obligor may reasonably request for the
purpose of enabling the Obligor or its designee to exercise the rights and
powers which they are entitled to exercise pursuant to this Section 1.1(b).
1.2. Power of Attorney. Effective upon the occurrence and during
the continuance of an Event of Default, the Obligor appoints any officer of
the Collateral Agent as the Obligor's true and lawful attorney-in-fact with
the power to endorse any notes, acceptances, checks, drafts, money orders or
other evidences of payment that are in the Collateral Agent's possession from
time to time; to sign any invoice or bill relating to Accounts constituting
Collateral, and to sign drafts against customers and notices to customers; and
to do all other acts and things necessary to carry out this Security Agreement
and to perfect and protect the Collateral Agent's security interest in the
Collateral. This power, coupled with an interest, is irrevocable while any
Obligations remain unpaid.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
The Obligor represents, warrants, in all material respects, as
follows:
2.1. Ownership. The Obligor owns the Collateral (other than
after-acquired property) free from all Liens other than Permitted Liens and
those in favor of the Collateral Agent.
2.2. Sale of Goods or Services Rendered. Each Account and
Chattel Paper constituting Collateral as of this date arose from the
performance of services by the Obligor or from a bona fide sale or lease of
goods which have been delivered or shipped to the account debtor and for which
the Obligor has genuine invoices, shipping documents or receipts.
2.3. Enforceability. Each Account and Chattel Paper constituting
Collateral as of this date is genuine and enforceable against the account
debtor according to its terms and complies with all applicable laws and
regulations. As of this date, there has been no default under the terms of
any Collateral and the Obligor has taken no action to foreclose any security
interest in favor of the Obligor or otherwise enforce the payment of the
amount due.
2.4. Location of Collateral. The Obligor's principal place of
business and chief executive office and the place where the Obligor keeps its
records concerning Accounts is 1100 Milwaukee Avenue, South Milwaukee,
Wisconsin 53172. All Equipment and Inventory constituting Collateral is
located at the locations set forth in Schedule 2.4 attached hereto.
2.5. Financing Statements. The Obligor has duly filed, or will
use its best efforts to obtain and file, with the appropriate office or
offices, before shipping any Consigned Inventory, a financing statement
containing a description of all of the Consigned Inventory to be shipped to
the customer and naming the customer as debtor or as consignee and the Obligor
as secured party or as consignor. The Obligor owns and will continue to own
all such Consigned Inventory until the customer has paid, or has become
obligated to pay, in full the purchase price for the Consigned Inventory to
the Obligor.
ARTICLE III
COVENANTS
The Obligor agrees that while any of the Obligations remain unpaid:
3.1. Maintenance of Collateral. The Obligor shall, in all
material respects, maintain the Collateral in good condition and repair and
not permit its value to be impaired; keep the Collateral free from all Liens
except Liens in favor of the Collateral Agent and holders of Permitted Liens;
defend the Collateral against all claims and legal proceedings by persons
other than the Collateral Agent; pay and discharge when due all taxes, levies
and other charges or fees upon the Collateral; not sell, lease or otherwise
dispose of the Collateral or permit the Collateral to become a fixture or an
accession to other goods, except as permitted by this Security Agreement; not
permit the Collateral to be used in violation of any applicable law or
regulation or policy of insurance; and, as to Collateral consisting of
Instruments and Chattel Paper, preserve the rights of the Obligor therein
against prior parties. The Obligor will not change the location of its
principal place of business, chief executive office, the place where it keeps
records concerning Accounts or the place where Equipment or Inventory having a
value in excess of $100,000 is kept unless 30 days' advance written notice of
such change, describing the new location, has been given to the Collateral
Agent.
3.2. Insurance. The Obligor will keep all Equipment and
Inventory constituting Collateral insured against loss by fire, extended
coverage perils and such other hazards as the Collateral Agent may request at
the instruction of the Requisite Secured Creditors in amounts not less than
the replacement cost thereof, subject to the Obligor actually replacing such
Equipment or Inventory, as the case may be, and subject to such retentions or
deductibles which would be carried by prudent management in connection with
similar properties and businesses.
The Obligor shall, on or before the date hereof (or as soon
thereafter as is practicable), cause the issuer of each insurance policy
insuring the Equipment or Inventory to issue a certificate of insurance naming
the Collateral Agent as an additional insured and loss payee and containing an
agreement by the insurer that the policy shall not be terminated without
30 days notice to the Collateral Agent, and the Obligor shall deliver each
such certificate to the Collateral Agent. In the event of any loss or
casualty which is covered by insurance and which takes place after the
occurrence and during the continuation of an Event of Default, the Obligor
shall give immediate notice thereof to the Collateral Agent and the Obligor
grants to the Collateral Agent the right to make proof of such loss or damage.
If an Event of Default shall have occurred and be continuing, the Collateral
Agent is authorized and empowered by and on behalf of the Obligor to settle,
adjust or compromise any such claims for loss, damage or destruction under any
such insurance policy.
If an Event of Default shall have occurred and be continuing, all
proceeds of each such insurance policy shall be deposited in the Proceeds Cash
Collateral Account pursuant to Section 6.4 hereof. The Obligor authorizes the
Collateral Agent to endorse in the name of the Obligor any instrument
evidencing such proceeds.
In the case of an Event of Default, all proceeds of any such
insurance received by the Collateral Agent shall be held by the Collateral
Agent and shall be applied by it pursuant to Section 6.5 or to repair or
replacement of the damaged or destroyed property with respect to which such
proceeds were received. Unless the Collateral Agent is instructed by the
Requisite Secured Creditors otherwise, if the Obligor decides that such
proceeds shall be applied to such repair or replacement, the Collateral Agent
shall disburse such proceeds to the Obligor from time to time for expenditures
made in repairing or replacing the damaged or destroyed property with respect
to which such proceeds were received upon receipt of an application of the
Obligor so requesting such disbursement and a certificate of an authorized
officer of the Obligor showing the cash expenditures made or due to be made
for such purposes and stating that the expenditures do not exceed the fair
value to the Obligor of such repairs or replacement, together with such other
documentation or evidence as the Collateral Agent may request.
3.3. Maintenance of Security Interest. (a) The Obligor agrees
to sign and deliver to the Collateral Agent any financing statement, notice,
instrument, document, agreement or other papers as are necessary or desirable
to establish and maintain a perfected security interest in the Collateral as
provided herein and the other rights and security contemplated hereby all in
accordance with the Uniform Commercial Code as enacted in any and all relevant
jurisdictions or any other relevant law (except with respect to Collateral in
which a security interest may not be perfected by filing or as to which
filings are not necessary to achieve perfection). The Obligor will pay any
applicable filing fees, taxes and other related expenses.
(b) The Obligor shall, at its own expense, take any other action
reasonably requested by the Collateral Agent to preserve and protect the
rights of the Collateral Agent in the Collateral or to establish, determine
priority of, perfect, continue perfection of and/or enforce the Collateral
Agent's interest in the Collateral. The Obligor shall execute and deliver to
the Collateral Agent any and all documents which the Collateral Agent
reasonably requests to protect its security interest in the Collateral.
3.4. Books and Records Inspection. The Obligor shall keep proper
books of record and account in which full, true and proper entries will be
made with respect to the Collateral. Without limiting the generality of the
foregoing, the Obligor agrees that it will at all times keep accurate and
complete records with respect to the Collateral including, but not limited to,
a record of all payments received on account thereof and of all credits
granted, all merchandise received and returned and all Collateral sold or
purchased. The Obligor agrees that the Collateral Agent and its
representatives shall have the right during normal business hours from time to
time to call at the Obligor's place or places of business where its records
concerning the Collateral is kept and to examine or cause to be examined all
such records and make extracts therefrom or copies thereof, and to call at any
location where Collateral shall be kept and examine or cause to be examined
the Collateral kept there and the records concerning such Collateral and make
extracts from such records or copies thereof.
3.5. Chattel Paper; Instruments. At the request of any Secured
Party, the Obligor shall promptly mark all Chattel Paper and Instruments which
constitute Collateral to indicate conspicuously the Collateral Agent's
interest therein and deliver them to the Collateral Agent.
ARTICLE IV
THE COLLATERAL AGENT
4.1. Appointment of Harris Trust and Savings Bank as Collateral
Agent. The Secured Creditors designate Harris Trust and Savings Bank as
Collateral Agent to act as specified in this Agreement. Each of the Secured
Creditors hereby irrevocably authorizes the Collateral Agent to take such
action on its behalf under the provisions of this Agreement and any other
instruments and agreements referred to herein and to exercise such powers and
to perform such duties hereunder as are specifically delegated to or required
of the Collateral Agent by the terms hereof and such other powers as are
reasonably incidental thereto. The Collateral Agent may perform any of its
duties hereunder directly, by or through its employees or agents or by or
through independent agents, nominees or attorneys-in-fact. Any rights granted
to the Collateral Agent hereunder may be exercised by or through the
Collateral Agent or its agents, nominees or attorneys-in-fact. In particular,
but not in limitation of the foregoing, the Collateral Agent may hire
independent agents to monitor, value, collect and/or liquidate any or all of
the Collateral. All reasonable fees and expenses of such agents, nominees or
attorneys-in-fact shall be promptly paid by the Obligor and shall constitute
"Collateral Agent Obligations" secured by the Collateral. The Collateral
Agent shall not be responsible for the negligence or misconduct of any of its
agents, nominees or attorneys-in-fact selected by it without gross negligence
or willful misconduct.
4.2. Nature of Duties. The Collateral Agent shall have no duties
or responsibilities except those expressly set forth in this Agreement.
Neither the Collateral Agent nor any of its officers, directors, employees or
agents shall be liable for any errors of judgment, mistakes of fact or law or
any action taken or omitted by it as such under this Agreement or in
connection herewith, unless caused by its or their gross negligence or wilful
misconduct. The duties of the Collateral Agent shall be mechanical and
administrative in nature; the Collateral Agent shall not have by reason of
this Agreement or any other document a fiduciary relationship in respect of
any of the Secured Creditors; and nothing in this Agreement, expressed or
implied, is intended to or shall be so construed as to impose upon the
Collateral Agent any obligations in respect of this Agreement except as
expressly set forth herein.
4.3. Lack of Reliance on the Collateral Agent. The Collateral
Agent shall not be responsible to any of the Secured Creditors for any
recitals, statements, information, representations or warranties herein or in
any document, certificate or other writing delivered in connection herewith or
for the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, value, ownership, priority or sufficiency of this
Agreement or the Collateral or the Obligations or any instrument evidencing
any of the same or the financial condition of the Obligor or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement, or the financial condition
of the Obligor, or the existence or possible existence of any Event of Default
and the Collateral Agent shall incur no liability in respect of any such
matters.
4.4. Certain Rights of the Collateral Agent. None of the Secured
Creditors individually shall have the right (i) to cause the Collateral Agent
to take any action with respect to the Collateral, with only the Requisite
Secured Creditors having the right to direct the Collateral Agent to take any
such action or (ii) to take any action with respect to the Collateral or to
seek to enforce any remedy with respect to the Collateral that such Secured
Creditor may have under this Agreement or the provisions of the Obligations
held by such Secured Creditor or by law or otherwise without the approval of
the Requisite Secured Creditors. If the Collateral Agent shall request
instructions from the Requisite Secured Creditors with respect to any act or
action (including failure to act) in connection with this Agreement, the
Collateral Agent shall be entitled to refrain from such act or taking such
action unless and until it shall have received instructions from the Requisite
Secured Creditors, and to the extent requested, appropriate indemnification in
respect of actions to be taken; and the Collateral Agent shall not incur
liability to any person by reason of so refraining. Without limiting the
foregoing, none of the Secured Creditors shall have any right of action
whatsoever against the Requisite Secured Creditors as a result of the
Collateral Agent acting or refraining from acting hereunder in accordance with
the instructions of the Requisite Secured Creditors.
4.5. Reliance. The Collateral Agent shall be entitled to rely,
and shall be fully protected in relying, without any investigation whatsoever,
upon any note, writing, resolution, notice, statement, certificate, telex,
teletype or telecopier message, cablegram, radiogram, order or other document
or telephone message believed by the Collateral Agent in good faith to be
signed, sent or made by the proper Person or entity, and, with respect to all
legal matters pertaining to this Agreement and its duties hereunder, upon
advice of counsel selected by it.
4.6. The Collateral Agent in its Individual Capacity. With
respect to its status, if any, as Trustee under the Indenture, the Collateral
Agent shall have the rights and powers specified therein and herein for the
"Trustee" and "Secured Creditor", as the case may be, and may exercise the
same rights and powers as though it were not performing the duties specified
herein. The Collateral Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with the
Obligor or any affiliate or subsidiary of Obligor as if it were not performing
the duties specified herein, and may accept fees and other consideration from
the Obligor for services in connection with the Indenture and otherwise
without having to account for the same to the other Secured Creditors.
4.7. Resignation by the Collateral Agent. (a) The Collateral
Agent may resign from the performance of all its functions and duties under
this Agreement at any time by giving 20 Business Days' prior written notice to
the Obligor and Secured Creditors. Such resignation shall take effect upon
the appointment of a successor Collateral Agent pursuant to Sections 4.7(b) or
(c) or as otherwise provided below.
(b) Upon any such notice of resignation, the Requisite Secured
Creditors shall appoint a successor Collateral Agent hereunder who shall be an
incorporated bank or trust company.
(c) If a successor Collateral Agent shall not have been so appointed
within said 20 Business Day period, the Collateral Agent shall then appoint a
successor Collateral Agent who shall serve as Collateral Agent hereunder or
thereunder until such time, if any, as the Requisite Secured Creditors appoint
a successor Collateral Agent.
(d) If a successor Collateral Agent is not appointed pursuant to this
Section 4.7, the Collateral Agent may petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent. If a
successor Trustee has not been appointed and has not accepted such appointment
within 60 days after the resigning Trustee has petitioned a court of competent
jurisdiction for the appointment of a successor Trustee, then the resignation
of the resigning Trustee shall nevertheless become immediately effective on
such 60th day.
4.8. Duties of Successor Collateral Agent. A successor
Collateral Agent shall deliver a written acceptance of its appointment to the
Collateral Agent and the Secured Creditors. Thereupon the resignation of the
Collateral Agent shall become effective, and the successor Collateral Agent
shall have all rights, powers and duties of the Collateral Agent under this
Agreement. The Collateral Agent shall promptly take all reasonable steps to
transfer all property held by it as Collateral Agent to the successor
Collateral Agent and shall promptly execute and deliver to the successor
Collateral Agent all documents in order to transfer the Collateral Agent's
rights and position as a secured party created by this Agreement to the
successor Collateral Agent.
4.9. Distributions by Collateral Agent. If in the reasonable
opinion of the Collateral Agent the distribution of any amount received by it
under this Agreement might involve it in liability, the Collateral Agent may
refrain from making such distribution until its right to make such
distribution shall have been finally adjudicated by a court of competent
jurisdiction.
4.10. Fees and Expenses of the Collateral Agent. The Obligor
agrees to pay to the Collateral Agent from time to time reasonable
compensation as determined by the Collateral Agent for all services rendered
by it hereunder (including any and all services rendered by agents, nominees
or attorneys-in-fact of the Collateral Agent) and to reimburse the Collateral
Agent upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Collateral Agent or any of its agents, nominees or
attorneys-in-fact (including the reasonable compensation and expenses and
disbursements of legal counsel). In that regard, the Obligor acknowledges
receipt of a preliminary proposal from the Collateral Agent regarding certain
services to be rendered on behalf of the Obligor and agrees to the payment of
the fees set forth therein and to the other terms and conditions therein. The
Obligor acknowledges that such preliminary fees are subject to periodic review
and adjustment by the Collateral Agent.
ARTICLE V
PROVISIONS CONCERNING COLLATERAL
5.1. Obligor Remains Liable. Anything herein to the contrary
notwithstanding, (a) the Obligor shall remain liable under Contracts included
in the Collateral to the extent set forth therein and shall perform all of its
duties and obligations thereunder to the same extent as if this Security
Agreement had not been executed, (b) the exercise by the Collateral Agent of
any of the rights hereunder shall not release the Obligor from any of its
duties or obligations under the Contracts included in the Collateral, and (c)
neither the Collateral Agent nor any Secured Creditors shall have any
obligations or liabilities under the Contracts included in the Collateral by
reason of this Security Agreement, nor shall the Collateral Agent or any
Secured Creditor be obligated to perform any of the obligations or duties of
the Obligor thereunder.
ARTICLE VI
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
6.1. Remedies Upon Default. At any time after receipt of notice
of the occurrence and during the continuance of an Event of Default, the
Collateral Agent may, and upon written instruction from the Requisite Secured
Creditors the Collateral Agent shall, exercise any or all of the following
rights and remedies:
(a) Collection of Accounts. The Collateral Agent may at any time
after notice to the Obligor notify the account debtor under any Account of the
Collateral Agent's security interest therein and direct such account debtor to
make payments directly to the Collateral Agent. The Collateral Agent may
enforce collection of, settle, compromise or renew any such Account. Any
proceeds of Accounts received or collected by the Obligor shall not be
commingled with any other funds or property of the Obligor and shall be turned
over to the Collateral Agent in precisely the form received (but endorsed by
the Obligor for collection, if necessary) not later than the business day
following the day of receipt.
(b) Wisconsin Uniform Commercial Code. The Collateral Agent shall
have all of the rights and remedies for default provided by the Wisconsin
Uniform Commercial Code as well as any other applicable law. With respect to
such rights and remedies:
(i) The Collateral Agent may take possession of the Collateral
without a hearing, which the Obligor waives;
(ii) The Collateral Agent may require the Obligor to assemble the
Collateral and make it available to the Collateral Agent at any convenient
place designated by the Collateral Agent, and the Collateral Agent shall
have the right to take immediate possession of the Collateral, and may
enter any of the premises of the Obligor or wherever the Collateral shall
be located and keep the Collateral at such locations without charge until
sold; and
(iii) Written notice, when required by law, sent to the Obligor at
least ten calendar days (counting the day of sending) before a proposed
disposition of the Collateral is reasonable notice.
6.2. No Marshalling. The Collateral may be sold in such parcels
and in such order as the Collateral Agent shall determine. The Obligor, for
itself and all other persons claiming by, through or under it, hereby waives
and releases, to the extent permitted by applicable law, any right to have the
Collateral or any part thereof, marshalled upon any sale, foreclosure or other
disposition thereof.
6.3. Instruments of Sale. The Collateral Agent may execute and
deliver to each purchaser of Collateral bills of sale, deeds or other
instruments conveying or transferring the property sold. The Obligor
irrevocably appoints the Collateral Agent as its attorney-in-fact to execute
and deliver all such instruments and ratify and confirm all actions taken by
the Collateral Agent pursuant to such appointment. If so requested by the
Collateral Agent, the Obligor shall execute and deliver to the Collateral
Agent or to any such purchaser of Collateral such instruments of conveyance as
are deemed reasonably necessary and appropriate by the Collateral Agent.
6.4. Proceeds Cash Collateral Account. The Collateral Agent
shall establish a special account at Harris Trust and Savings Bank in the name
of the Collateral Agent (the "Proceeds Cash Collateral Account") into which
the Collateral Agent shall deposit the proceeds of any Collateral obtained
pursuant to Section 3.2 or this Article VI. The amounts deposited in the
Proceeds Cash Collateral Account may be invested by the Collateral Agent
unless otherwise instructed by the Requisite Secured Creditors by prior
written notice to the Collateral Agent in such Permitted Investments as the
Obligor shall direct in writing to the Collateral Agent. The amounts
deposited in the Proceeds Cash Collateral Account shall be applied as set
forth in Section 3.2 or 6.5. The Collateral Agent may execute any such
investments through its own bank, bank affiliates or trust department.
6.5. Application of Proceeds. The proceeds of any Collateral
obtained pursuant to Section 3.2 or this Article VI, and any other monies held
by the Collateral Agent under the provisions of this Security Agreement, shall
be applied by the Collateral Agent as follows:
(a) first, to the payment of Collateral Agent Obligations and Trustee
Obligations in proportion to the amounts thereof outstanding;
(b) second, to the payment of the Securities Obligations ratably in
accordance with the amounts of such obligations until they are no longer
outstanding;
(c) third,to the payment of any other Obligations remaining unpaid
and then due and payable, to be paid ratably according to the amounts of such
Obligations outstanding; and
(d) fourth, any remaining proceeds shall be paid to the Obligor, its
successors and assigns, or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.
6.6. Discontinuance of Proceedings. In case the Collateral Agent
shall have instituted any proceeding to enforce any right, power or remedy
under this Security Agreement by foreclosure, sale, entry or otherwise, and
such proceeding shall have been discontinued or abandoned for any reason or
shall have been determined adversely to the Collateral Agent, then and in
every such case the Obligor, the Collateral Agent and each holder of any of
the Obligations shall be restored to their former positions and rights
hereunder with respect to the Collateral subject to the security interest
created under this Security Agreement, and all rights, remedies and powers of
the Collateral Agent shall continue as if no such proceeding had been
instituted.
ARTICLE VII
INDEMNITY
7.1. Indemnity. (a) The Obligor agrees to indemnify, reimburse
and hold the Collateral Agent in its individual capacity, and its respective
successors, assigns, employees and agents, officers and directors and each
person who controls the Collateral Agent in its individual capacity (within
the meaning of Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Exchange Act) (hereinafter in this Section 7.1 referred to
individually as "Indemnitee", and collectively as "Indemnitees") harmless from
any and all liabilities, obligations, damages, injuries, penalties, claims,
demands, actions, suits, judgments and any and all costs and expenses
(including reasonable attorneys' fees and expenses) (for the purposes of this
Section 7.1 the foregoing are collectively called "expenses") of whatsoever
kind and nature imposed on, asserted against or incurred by any of the
Indemnitees in any way relating to or arising out of this Security Agreement,
the Indenture, the Securities, the Credit Agreement, the Intercreditor
Agreement or the documents executed in connection herewith and therewith or in
any other way connected with the administration of the transactions
contemplated hereby and thereby or the enforcement of any of the terms of, or
the preservation of any rights under any thereof, or in any way relating to or
arising out of the manufacture, ownership, ordering, purchase, delivery,
control, acceptance, lease, financing, possession, operation, condition, sale,
return or other disposition, or use of the Collateral (including, without
limitation, latent or other defects, whether or not discoverable, or any claim
for patent, trademark, trade secret or copyright infringement), the violation
of the laws of any country, state or other governmental body or unit, any tort
(including, without limitation, claims arising or imposed under the doctrine
of strict liability), or for or on account of injury to or the death of any
Person (including any Indemnitee), or property damage, or contract claim
excluding only those arising from the gross negligence or willful misconduct
of any Indemnitee. The Obligor agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, judgment or suit, the Obligor shall assume
full responsibility for the defense thereof. Each Indemnitee agrees to use
its best efforts to promptly notify the Obligor of any such assertion of which
such Indemnitee has knowledge.
(b) Without limiting the application of Section 7.1(a), the Obligor
agrees to pay, or reimburse the Collateral Agent for, any and all fees, costs
and expenses of whatever kind or nature incurred in connection with the
creation, preservation or protection of the Collateral Agent's Liens on, and
security interest in, the Collateral, including, without limitation, all fees
and taxes in connection with the recording or filing of instruments and
documents in public offices, payment or discharge of any taxes or Liens (other
than Permitted Liens) upon or in respect of the Collateral, premiums for
insurance with respect to the Collateral and all other reasonable fees, costs
and expenses in connection with protecting, maintaining or preserving the
Collateral and the Collateral Agent's interest therein, whether through
judicial proceedings or otherwise, or in defending or prosecuting any actions,
suits or proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 7.1(a) or (b), the
Obligor agrees to pay, indemnify and hold each Indemnitee harmless from and
against any loss, costs, damages and expenses which such Indemnitee may
suffer, expend or incur in consequence of or growing out of any
misrepresentation by the Obligor in this Security Agreement or in any
statement or writing contemplated by or made or delivered pursuant to or in
connection with this Security Agreement.
(d) If and to the extent that the obligations of the Obligor under
this Section 7.1 are unenforceable for any reason, the Obligor hereby agrees
to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
7.2. Indemnity Obligations Secured by Collateral; Survival. Any
amounts payable to any Indemnitee pursuant to this Article VII prior to
termination of the security interest created by this Security Agreement
pursuant to Section 9.9 hereof shall constitute Collateral Agent Obligations
secured by the Collateral. Any amounts paid by any Indemnitee prior to
termination of the security interest created by this Security Agreement
pursuant to Section 9.9 hereof, as to which such Indemnitee has the right to
reimbursement, shall constitute Obligations secured by the Collateral. The
indemnity obligations of the Obligor contained in this Article VII shall
continue in full force and effect notwithstanding the full payment of the
Securities and all of the other Obligations and notwithstanding the discharge
thereof.
7.3. Action Contrary to Direction. The Collateral Agent may
refuse to follow any direction from the Requisite Secured Creditors that
conflicts with law or this Security Agreement, that the Collateral Agent
determines may, in its reasonable discretion, subject the Collateral Agent to
personal liability or if the Collateral Agent determines that it does not have
adequate indemnification against any costs, losses or expenses in connection
with such action; provided that, in such latter case, the Collateral Agent may
request adequate indemnification from the Secured Creditors. Notwithstanding
the foregoing, the Collateral Agent may take any other action deemed proper by
the Collateral Agent which is not inconsistent with any such direction;
provided that, in taking any such action, the Collateral Agent will use the
same degree of care and skill in taking such action as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
ARTICLE VIII
DEFINITIONS
8.1 Definitions. The following terms shall have the meanings herein
specified unless the context otherwise requires. Such definitions shall be
equally applicable to the singular and plural forms of the terms defined.
Except as set forth below or as otherwise defined herein, capitalized terms
used in this Security Agreement shall have the meanings ascribed to them in
the Indenture.
"Bank Security Agreement" means the Security Agreement dated of even
date herewith from the Obligor to the Bank or any security agreement
entered into on or after the date hereof by the Obligor and the Senior
Lender pursuant to the Bank Credit Agreement.
"Bank Priority Obligations" shall have the meaning provided in the
Indenture.
"China Account" means (a) the Account created pursuant to the China
Contract and (b) the Obligor's rights under any and all letters of credit,
and confirmations thereof, issued with respect to such contract, as such
letters of credit may from time to time be amended, extended, reissued or
replaced.
"China Contract" shall mean Contract CUSY-S910672 between Obligor and
China National Technical Import and Export Corporation.
"Collateral" shall have the meaning provided in Section 1.1(a).
"Collateral Agent Obligations" means all obligations and liabilities
of the Obligor to the Collateral Agent or any Indemnitee under this
Security Agreement and any other documents executed and delivered in
connection herewith, including the reasonable fees of the Collateral
Agent, any and all sums advanced by the Collateral Agent in order to
preserve the Collateral or preserve its security interest in the
Collateral and the reasonable expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing or realizing on the
Collateral, or of any exercise by the Collateral Agent of its rights
hereunder with respect to the Collateral, together with reasonable
attorneys' fees and court costs.
"Consigned Inventory" means finished goods inventory of the Obligor
which is stored at customers' facilities.
"Contracts" means those contracts to which the Obligor is a party or
is bound and any other contracts to which the Obligor may hereafter from
time to time become a party or become bound.
"Credit Agreement" shall have the meaning provided in the fourth
paragraph of this Security Agreement.
"Event of Default" means any Event of Default within the meaning of
the Indenture.
"Indemnitee" shall have the meaning provided in Section 5.1.
"Indenture" shall have the meaning provided in the second paragraph
of this Security Agreement.
"Intercreditor Agreement" means the Intercreditor Agreement dated of
even date between the Bank and the Collateral Agent or any amendment,
supplement or extension thereof or any intercreditor agreement or other
similar agreement entered into after the date hereof between the Senior
Lender and the Collateral Agent in replacement thereof.
"Majority Holders" means holders of a majority in principal amount of
the Securities outstanding.
"Obligations" means the Securities Obligations,the Collateral Agent
Obligations and the Trustee Obligations.
"PECFA Reimbursement" means the right to reimbursement under the
Wisconsin Petroleum Environmental Cleanup Fund Act arising out of
remediation, financed by an outstanding line of credit with the Bank, of a
leaking petroleum tank on Obligor's South Milwaukee, Wisconsin plant
property.
"Permitted Investments" means (i) the purchase of United States
government bonds and obligations, (ii) the purchase of bank certificates
of deposit issued by a bank or trust company which is organized under the
laws of the United States or any state thereof or any foreign jurisdiction
having capital, surplus and undivided profits aggregating in excess of
$250,000,000 and prime rated commercial paper having a maturity not
exceeding one year, (iii) deposits in demand and savings accounts at banks
and (iv) investments in bank repurchase agreements.
"Permitted Liens" means (i) liens for taxes, assessments or
governmental charges not delinquent or being contested in good faith by
the Obligor; (ii) construction lien claims not delinquent; (iii) liens or
deposits in connection with worker's compensation or other insurance or to
secure the performance of bids, trade contracts, leases, public or
statutory obligations, surety or appeal bonds or other obligations of like
nature incurred in the ordinary course of business; (iv) easements,
restrictions, minor title irregularities and similar matters which have no
material adverse effect as a practical matter upon the ownership or use of
the Obligor's property by the Obligor; (v) purchase money liens existing
on the date hereof securing debt not in excess of $500,000; (vi) other
security interests granted by the Obligor in the ordinary course of
business provided that the aggregate amount so secured shall not exceed
$100,000 at any time; and (vii) the security interests created by the Bank
Agreement and the Bank Security Agreement.
"Proceeds Cash Collateral Account" shall have the meaning provided in
Section 6.4.
"Project Financing" means Debt incurred to pay costs associated with
the manufacture of mining machinery or other products pursuant to a
binding purchase contract, which Debt is secured by the inventory being
financed and any account relating to such inventory and which has a
maturity not later than the date of the final payment by the customer
under the purchase contract.
"Remarketing Agreement" means the Exclusive Equipment Remarketing
Agreement: Letter of Credit, dated as of August 20, 1992, between the
Obligor and Cargill Leasing Corporation, as assigned to Bank One,
Milwaukee, National Association pursuant to Assignment of Remarketing
Agreement, dated as of August 20, 1992, executed by the Obligor.
"Requisite Secured Creditors" means:
(a) at any time prior to the Securities Payout Date, the Majority
Holders;and
(b) thereafter, holders of a majority in principal amount of
Obligations remaining outstanding.
"Secured Creditors" means the holders of Securities.
"Securities" shall have the meaning provided in the second paragraph
of this Security Agreement.
"Securities Payout Date" means the date the Securities Obligations
are no longer outstanding.
"Securities Obligations" means all indebtedness, obligations and
liabilities to the holders of the Securities under the Indenture,the
Securities, and this Security Agreement and any other documents executed
and delivered in connection herewith and therewith.
"Security Agreement" means this Security Agreement as the same may be
modified, supplemented or amended from time to time in accordance with its
terms.
"Senior Lender" shall have the meaning provided in the Indenture.
"Trustee Obligations" means all obligations and liabilities of the
Obligor to the Trustee pursuant to Section 607 of the Indenture.
"Uniform Commercial Code" means the Uniform Commercial Code, as in
effect in the State of Wisconsin or any other jurisdiction relevant to the
disposition of Collateral from time to time.
ARTICLE IX
MISCELLANEOUS
9.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made to the party to
which such notice, request, demand or other communication is required or
permitted to be given or made under this Security Agreement, when deposited in
the mail, first class postage pre-paid and addressed to such party at its
address set forth on the signature pages herein or in the Indenture or to such
other address as such party shall have furnished to the other party in
writing.
9.2. Waiver; Amendment. No delay on the part of the Collateral
Agent in exercising any of its rights, remedies, powers and privileges
hereunder or partial or single exercise thereof, shall constitute a waiver
thereof. Except as otherwise provided herein, the terms and conditions of
this Security Agreement may be changed, waived, modified or varied only upon
consent of the holders of a majority in principal amount of the Securities
Obligations, including the holders of a majority in principal amount of the
Securities and, to the extent its rights and obligations hereunder are
changed, waived, modified or varied, consent of the Collateral Agent. No
notice to or demand on the Obligor shall entitle it to any other or further
notice or demand in similar or other circumstances or constitute a waiver of
any of the rights of the Collateral Agent to any other or further action in
any circumstances without notice or demand.
9.3. Obligations Absolute. The obligations of the Obligor
hereunder shall remain in full force and effect without regard to, and shall
not be impaired by, (a) any bankruptcy, insolvency, reorganization,
arrangement, readjustment, composition, liquidation or the like of the
Obligor; (b) any exercise or non-exercise, or any waiver of, any right,
remedy, power or privilege under or in respect of the documents evidencing the
Obligations; or (c) any amendment to or modification of any agreement or any
security for any of the Obligations; whether or not the Obligor shall have
notice or knowledge of any of the foregoing. The rights and remedies of the
Collateral Agent herein provided are cumulative and not exclusive of any
rights or remedies which the Collateral Agent would otherwise have.
9.4. Successors. All agreements of the Obligor in this Security
Agreement shall bind its successors. All agreements of the Collateral Agent
in this Security Agreement shall bind its successor.
9.5. Headings Descriptive. The headings of the several sections
of this Security Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Security
Agreement.
9.6. Severability. In case any provision in this Security
Agreement shall be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby, and a holder of Securities shall have no claim
therefor against any party hereto.
9.7. Governing Law. This Security Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the laws of the State of New York, without giving effect to
the conflicts of laws principles thereof, except to the extent that perfection
or enforcement of the security interest granted by this Security Agreement is
governed by a jurisdiction other than the State of New York.
9.8. Obligor's Duties. It is expressly agreed, anything herein
contained to the contrary notwithstanding, that the Obligor shall remain
liable to perform all of the obligations, if any, assumed by it with respect
to the Collateral and the Collateral Agent shall not have any obligations or
liabilities with respect to any Collateral by reason of or arising out of this
Security Agreement, nor shall the Collateral Agent be required or obligated in
any manner to perform or fulfill any of the obligations of the Obligor under
or with respect to any of the Collateral.
9.9. Termination; Release. At such time as the Collateral Agent
has received written notice from the Trustee and the Obligor that all
Obligations, other than any liabilities of the Obligor under Article VII
hereof which have not become fixed or matured, are paid in full, the
Collateral Agent, at the request and expense of the Obligor, will execute and
deliver to the Obligor the proper instruments (including, without limitation,
Uniform Commercial Code termination statements on form UCC-3) acknowledging
the termination of the security interest created by this Security Agreement,
and will duly assign, transfer and deliver to the Obligor (without recourse
and without any representation or warranty) such of the Collateral as may be
in possession of the Collateral Agent and has not theretofore been sold or
otherwise applied or released pursuant to this Security Agreement.
9.10. Duplicate Originals. All parties may sign any number of
copies of this Security Agreement. Each signed copy shall be an original, but
all of them together represent the same agreement.
9.11. Intercreditor Agreement. The Obligor and the Collateral Agent
acknowledge and agree that as between the Collateral Agent and the Bank, the
Collateral Agent's rights under this Security Agreement are subject to the
Intercreditor Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
BUCYRUS-ERIE COMPANY
By: /s/ William B. Winter
William B. Winter
Chairman and CEO
Address for Notices:
1100 Milwaukee Avenue
P.O. Box 500
South Milwaukee, Wisconsin 53172
Telecopy No.: (414) 768-4477
HARRIS TRUST AND SAVINGS BANK
as Collateral Agent,
acting on behalf of the
Secured Creditors
By: /s/ J. Bartolini
Name: J. Bartolini
Title: Vice President
Address for Notices:
P.O. Box 755
311 West Monroe (12th Floor)
Chicago, Illinois 60690
Attention: Indenture Trust
Division
Telecopy No.: (312) 461-3525
<PAGE>
SCHEDULE 1.1
Subsidiary Stock Included as Collateral
Percentage of
Name of Issuing Outstanding Shares
Corporation Type of Shares of Capital Stock
Boonville Mining Common 100%
Services, Inc.
Minserco, Inc. Common 100%
Western Gear Machinery Common 100%
Company
Bucyrus (Africa) Common 65%
(Proprietary) Ltd.
Bucyrus-Erie Common 65%
Company of Canada, Inc.
Wisconsin Holdings Common 65%
(Pty) Limited
Bucyrus Europe Common 65%
Holdings Limited
Bucyrus Mauritius Common 65%
Limited
Bucyrus India Private Common 65%
Limited
<PAGE>
SCHEDULE 2.4
[to be updated]
LOCATIONS OF EQUIPMENT AND INVENTORY
Equipment* Inventory**
1. 1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172
2. 3057 Tranquility Drive
Memphis, Tennessee 38116
3. 3704 North Highway 14-16
Gillette, Wyoming 82716
4. 4200 First Avenue, Suite 206
Nitro, West Virginia 25143
5. 4202 East Superior Avenue, Suite 4C
Phoenix, Arizona 85040
6. B.H.P. Utah International Inc.
Box 155
Fruitland, New Mexico 87416
7. Arch of Wyoming, Inc.
P.O. Box 550
Hanna, Wyoming 82327
8. Caternary Coal Company
3412 Chesterfield Avenue
Charleston, West Virginia 25304
9. Kennecott Utah Copper
8362 West 10200 South
P.O. Box 525
Bingham Canyon, Utah 84006
10. Horsburgh & Scott Company
5114 Hamilton Avenue
Cleveland, Ohio 44114
11. Cyprus Miami Mining Corporation
P.O. Box 4444
Claypool, Arizona 85532
12. Phelps Dodge Corporation
Morenci Branch
2600 North Central Avenue
Phoenix, Arizona 85004
__________________________
* Equipment is stated at net book value.
** Inventory is reported at cost and before applying any
obsolescence reserve.
<PAGE>
13. IMC Fertilizer, Inc.
P.O. Box 867
Bartow, Florida 38830
14. Peabody Coal Co.
Midwest Division
Lynnville Mine
Highway 61
Lynnville, Indiana 47619
15. Peabody Coal Co.
Mesa Central Warehouse
Kayenta, Arizona 86033
16. Hobet Mining, Inc.
P.O. Box 305
Madison, West Virginia 25130
17. Metpro Supply, Inc.
1550 Centennial Blvd.
Bartown, Florida 33830
18. Ameson Foundry
3303 66th Street
Kenosha, Wisconsin 53142
19. Buckeye Steel Casting Co.
2211 Parsons Avenue
Columbus, Ohio 43207
20. Eagle Foundry Company
23123 South East
P.O. Box 250
Eagle Creek, Oregon 97022
21. Maynard Steel Casting Company
2856 South 27th Street
Milwaukee, Wisconsin 53215
22. Northern Steel Castings
80 Oliver Street
Wisconsin Rapids, Wisconsin 54495
23. State Line Foundries
Highway 251 North
Roscoe, Illinois 61073
24. Phelps Dodge Corporation
Chino Mine
Santa Rita, New Mexico 88059
<PAGE>
EXHIBIT 10.1
FORM 8-K
DECEMBER 14, 1994
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of December 14, 1994, is between
BANK ONE, MILWAUKEE, NATIONAL ASSOCIATION (the "Bank") and BUCYRUS-ERIE
COMPANY, a Delaware corporation (the "Company").
RECITALS
The Company and the Bank acknowledge the following:
A. The Company commenced Case No. 94-20787-RAE (the "Case")
under Chapter 11 of the United States Bankruptcy Code (the "Bankruptcy Code")
on February 18, 1994 in the Bankruptcy Court for the Eastern District of
Wisconsin (the "Bankruptcy Court"). The Bankruptcy Court has confirmed the
Plan of Reorganization (as defined below) under which the Company will no
longer operate under the Bankruptcy Code.
B. The Company has requested that the Bank provide certain
credit facilities to the Company and the Bank is willing to provide the credit
facilities described below on the terms and subject to the conditions set
forth below.
AGREEMENTS
In consideration of the Recitals and the promises and agreements
set forth below, the Bank and the Company agree as follows:
1. Definitions. As used in this Agreement, the following terms
have the following meanings:
"Adjusted Accounts" means all accounts (including progress
billings and net of the reserve for doubtful accounts) owing to the Company or
one of its Consolidated Subsidiaries (excluding Equipment Assurance Ltd.)
other than an account classified as "claim" status by the Company.
"Adjusted Libor Rate" means, with respect to an Interest
Period for a Libor Rate Loan, a rate per annum (rounded upward, if necessary,
to the nearest 1/16 of 1%) determined pursuant to the following formula:
Adjusted Libor Rate = Libor Rate + 2.75%
_________________________________________
1 - Libor Reserve Requirement
"Affiliate" means (a) any person, corporation, limited
liability company or other entity directly or indirectly controlling,
controlled by or under common control with the Company and (b) any director or
officer of the Company or any Subsidiary.
"Bank Security Documents" means the documents described in
section 4.1(b) attached hereto and any other document, instrument or agreement
furnished by the Company to the Bank which provides collateral for the
obligations of the Company under the Loan Documents.
"Borrowing Date" means each date on which a loan is made by
the Bank to the Company or on which a Letter of Credit is issued by the Bank
for the account of the Company.
"Business Day" means (a) with respect to the making, payment
or rate determination of a Libor Rate Loan, a day (other than a Saturday or
Sunday) on which banks are open for business in Milwaukee, Wisconsin and on
which dealings in Dollars are carried on in the London interbank market and
(b) for all other purposes, a day (other than Saturday or Sunday) on which
banks are open for business in Milwaukee, Wisconsin.
"Capitalized Lease" means any lease, the obligations under
which have been, or in accordance with GAAP are required to be, recorded as a
capital lease liability on the consolidated balance sheet of the Company and
its Consolidated Subsidiaries.
"Cash Collateral" means, at the time of determination, the
aggregate principal amount of the certificates of deposit and banker's
acceptances issued by the Bank, Banc One Corporation commercial paper,
securities issued by the United States or any agency or instrumentality
thereof having a maturity not exceeding 180 days from the date of
determination and other cash equivalents owned by the Company and reasonably
acceptable to the Bank, in which the Bank has a perfected, first priority
security interest.
"Code" means the Internal Revenue Code of 1986, as amended.
"Collateral Agent" means Harris Trust and Savings Bank.
"Commercial Letter of Credit" means a Letter of Credit
issued to assure the payment of goods shipped or delivered to the Company.
"Consolidated Subsidiaries" means Subsidiaries and other
entities or organizations whose financial statements are consolidated with
those of the Company in accordance with GAAP.
"Controlled Group" means a group of trades or businesses
(whether or not incorporated) under common control, as defined in the
regulations issued pursuant to section 414(c) of the Code or such other
regulations prescribed by the Pension Benefit Guaranty Corporation pursuant to
section 4001(b)(1) of ERISA, of which the Company is a part.
"Debt Service Coverage Ratio" means the relationship,
expressed as a numerical ratio between:
(a) Net Earnings plus interest expenses plus
depreciation, amortization and similar noncash charges plus foreign currency
translation loss to the extent deducted in determining Net Earnings minus
foreign currency translation gain to the extent included in determining Net
Earnings minus $1,000,000 minus the greater of capital expenditures or
$2,500,000; and
(b) the sum of (i) interest expense paid in cash and
(ii) the current maturities of Funded Debt (excluding Project Financing) as of
the date of determination (including the amount, if any, by which the
outstanding principal balance of the Revolving Note on the date of
determination exceeds the maximum amount of Revolving Loans which the Company
may borrow under section 2.1 on the date which is one year after the date of
determination);
all as determined in accordance with GAAP for the Company and its Consolidated
Subsidiaries for (except in the case of clause (b)(ii) above) the 12-month
period preceding the date of determination.
"Default" means any act, event, condition or omission which,
with the giving of notice or lapse of time, would constitute an Event of
Default if uncured or unremedied.
"Dollars" and "$" means lawful money of the United States.
"Domestic Subsidiaries" means the Subsidiaries listed as
Domestic Subsidiaries on Schedule 3.1 attached hereto and any Subsidiary
created after the date hereof which is organized under the laws of one of the
states of the United States of America.
"EBITDA" means the sum of (a) Net Earnings, (b) interest
expense, (c) income tax expense and (d) depreciation, amortization and similar
noncash charges, all as determined in accordance with GAAP for the Company and
its Consolidated Subsidiaries for the 12-month period preceding the date of
determination.
"Environmental Laws" means all federal, state and local laws
including statutes, regulations, ordinances, codes, rules and other
governmental restrictions and requirements relating to the discharge of air
pollutants, water pollutants or process waste water or otherwise relating to
the environment or hazardous substances including, but not limited to, the
Federal Solid Waste Disposal Act, the Federal Clean Air Act, the Federal Clean
Water Act, the Federal Resource Conservation and Recovery Act of 1976, the
Federal Comprehensive Environmental Response, Compensation and Liability Act
of 1980, regulations of the Environmental Protection Agency, regulations of
the Nuclear Regulatory Agency and regulations of any state department of
natural resources or state environmental protection agency now or at any time
hereafter in effect.
"ERISA" means, at any date, the Employee Retirement Income
Security Act of 1974, and the regulations thereunder, all as the same shall be
in effect at such date.
"Effective Date" means the date on which the conditions
specified in section 4.1 are satisfied (or waived by the Bank) and this
Agreement becomes effective.
"Event of Default" means the occurrence of any of the events
described in section 7.1.
"Final Issuance Date" means December 31, 1996.
"Foreign Subsidiary" means (i) any Subsidiary which is not a
Domestic Subsidiary and (ii) the entities listed on Schedule 6.5 attached
hereto.
"Funded Debt" means Indebtedness which matures more than one
year from, or is directly or indirectly renewable or extendible at the option
of the debtor to a date more than one year from, the date of creation,
including the current maturities thereof but excluding deferred income taxes
and Subordinated Debt.
"GAAP" means generally accepted accounting principles in
effect in the United States from time to time.
"Gross Domestic Accounts Receivable" means the aggregate
amount of all accounts owing to the Company (a) by an account debtor, other
than an Affiliate, located in the United States or, in the case of foreign
account debtors, the payment of which is supported by a letter of credit,
credit insurance or other credit enhancement acceptable to the Bank or is owed
by a foreign account debtor which the Bank has agreed in writing is
acceptable, (b) which arose out of the performance of services by the Company
or from a bona fide sale or lease of goods which have been delivered or
shipped to the account debtor and for which the Company has genuine invoices,
shipping documents or receipts, (c) which is not more than 60 days past due
from the original due date of the relevant invoice and which original due date
is not more than (i) 30 days after the date of the relevant invoice for
account debtors located in the United States and (ii) 60 days after the date
of the relevant invoice for foreign account debtors; (d) in which the Bank has
a valid, perfected first priority security interest and which is subject to no
other encumbrance or security interest (other than a security interest in
favor of the Project Financing Lenders and a junior security interest in favor
of the Collateral Agent), (e) which is enforceable against the account debtor
without setoff, credit, allowance or discount, except discount for prompt
payment, for the amount shown on certificates furnished by the Company to the
Bank, (f) which, together with the transactions out of which it arose,
complies with all applicable laws and regulations, (g) as to which the Company
has no knowledge of anything which might cause the account debtor to be unable
to pay the account (including, without limitation, all accounts classified as
"claim" status by the Company), (h) as to which the account debtor has not
disputed its liability or returned or threatened to return the goods, (i) the
existence and amount of which have been certified to the Bank by the Company
in the manner specified in section 5.12, (j) by an account debtor who is not
more than 90 days past due in the payment of more than 50% of the aggregate
amount owed by such account debtor to the Company, (k) which is not an account
arising out of a Project Financing and (l) as to which the Bank has not
notified the Company that the account or account debtor is unsatisfactory.
Any Gross Domestic Account Receivable which ceases to meet any of the
foregoing requirements shall cease to be a Gross Domestic Account Receivable
at such time.
"Gross Domestic Accounts Receivable Floor" means $2,500,000;
provided that such amount shall be reduced to $2,000,000 if the appraisal
furnished to the Bank pursuant to section 5.14(b) appraises the orderly
liquidation value of the machinery and equipment located at the Company's
facility in South Milwaukee, Wisconsin in excess of $10,000,000.
"Gross Domestic Finished Goods Inventory" means finished
goods inventory owned by the Company and located in the United States (a) in
which the Bank has a valid, perfected first priority security interest and
which is subject to no other security interest or encumbrance (other than a
security interest in favor of the Project Financing Lenders and a junior
security interest in favor of the Collateral Agent), (b) the existence,
location, amount and lower of cost or wholesale market value of which have
been certified to in a manner satisfactory to the Bank by the Company in the
manner specified in section 5.12, (c) which is of good and merchantable
quality free from any defect which would affect the market value thereof, (d)
which does not consist of returned goods or damaged, inventory, (e) the
creation or production of which was done in compliance with the Federal Fair
Labor Standards Act and the rules and regulations promulgated thereunder, (f)
which is not inventory the subject of a Project Financing, (g) which is not
inventory on consignment and (h) as to which the Bank has not notified the
Company that the particular type of item of inventory is unsatisfactory.
Gross Domestic Finished Goods Inventory shall be valued at the lower of cost
or the wholesale market value thereof before deducting the obsolescence
reserve established by the Company with respect thereto.
"Gross Domestic Finished Goods Inventory Floor" means
$15,000,000; provided, however, that if the appraisal furnished to the Bank
pursuant to section 5.14(b) appraises the orderly liquidation value of the
machinery and equipment located at the Company's facility in South Milwaukee,
Wisconsin in excess of $10,000,000 the Gross Domestic Finished Goods Inventory
Floor shall be reduced to $14,000,000.
"Guaranty" means any agreement, undertaking or arrangement
pursuant to which the Company or any Domestic Subsidiary guarantees, endorses
or otherwise becomes or is contingently liable for an obligation of any other
person or entity or any other liability which would be classified as
contingent in accordance with GAAP.
"Indebtedness" means (a) all items which, in accordance with
GAAP, would be classified as liabilities on the consolidated balance sheet of
the Company and its Consolidated Domestic Subsidiaries, including all
Capitalized Leases, and (b) indebtedness secured by any mortgage, lien, pledge
or security interest on property of the Company or a Domestic Subsidiary even
though it has not assumed or otherwise become liable for the payment thereof.
"Interest Period" means:
(a) with respect to each Libor Rate Loan, a period
of one, two or three months commencing on (and including) a Business Day
selected by the Company pursuant to section 2.3 or 2.15(c) of this Agreement
and ending on (but excluding) the day which corresponds numerically to such
date one, two or three months thereafter (or, if such month has no numerically
corresponding date, on the last Business Day of such month) provided that:
(i) any Interest Period which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day; and
(ii) no Interest Period may end later than the
Revolving Note Maturity Date.
"Letter of Credit" means a "letter of credit" (as defined in
the Wisconsin Uniform Commercial Code) issued by the Bank at the request of
the Company, and any extension, renewal or replacement thereof.
"Letter of Credit Agreements" means the Commercial Letter of
Credit Agreement and the Standby Letter of Credit Agreement, each dated
December 14, 1994, between the Company and the Bank.
"Libor Rate Loan" means any portion of the Revolving Note
bearing interest at or by reference to the Adjusted Libor Rate.
"Libor Rate" means, with respect to a Libor Rate Loan for
the applicable Interest Period, the interest rate at which deposits in
Dollars, in an amount approximately equal to the requested Libor Rate Loan and
having a maturity approximately equal to the requested Interest Period, are
offered to the Bank in the London interbank market at approximately 11 a.m.
(London time) two Business Days prior to the first day of such Loan Period.
The Libor Rate determined by the Bank shall, in the absence of manifest error,
be conclusive.
"Libor Reserve Requirement" means, with respect to a Libor
Rate Loan for the applicable Interest Period, the percentage (expressed as a
decimal) equal to the maximum aggregate reserve requirements (including,
without limitation, any marginal, special, emergency and supplemental
reserves) established by the Board of Governors of the Federal Reserve System
for "eurocurrency liabilities" (as defined in Regulation D of such Board), or
for other liabilities which include deposits of the type used in determining
the Libor Rate, having a term approximately equal to the applicable Interest
Period.
"Loan Documents" means this Agreement, the Notes, the Bank
Security Documents, the Letter of Credit Agreements and all other documents,
instruments, agreements and certificates related to or executed in connection
with this Agreement and the transactions contemplated hereby.
"LOC Exposure" means the sum of (a) the aggregate amount
available for drawing under all outstanding Letters of Credit and (b) the
aggregate unpaid Reimbursement Obligations.
"Machinery and Equipment Borrowing Base" means $8,000,000
until the Bank receives an appraisal of the Company's machinery and equipment
located at the Company's South Milwaukee, Wisconsin facility pursuant to
section 5.14(b) at which time the Machinery and Equipment Borrowing Base shall
be the lesser of 80% of the orderly liquidation value of such machinery and
equipment as specified in such appraisal or $10,000,000.
"Multiemployer Plan" means any pension benefit plan subject
to Title IV of ERISA as defined in section 4001(a)(3) of ERISA, to which the
Company, any of its Domestic Subsidiaries or any member of the Controlled
Group is required to contribute on behalf of its employees.
"Net Earnings" means the excess of:
(a) all revenues and income derived from operations
in the ordinary course of business (excluding extraordinary gains and profits
upon the disposition of investments and fixed assets),
over
(b) all expenses and other proper charges against
income (including payment or provision for all applicable income and other
taxes, but excluding extraordinary losses and losses upon the disposition of
investments and fixed assets),
all as determined in accordance with GAAP, applied on a consistent basis to
the Company and its Consolidated Subsidiaries.
"Note" means the Revolving Note or a PECFA Note and "Notes"
means the Revolving Note and the PECFA Notes.
"PECFA Loan" means a loan by the Bank to the Company under
section 2.6 hereof to finance the costs of removing an underground storage
tank which is eligible for reimbursement under the Petroleum Environmental
Cleanup Fund Program administered by the Wisconsin Department of Industry.
Labor and Human Relations.
"PECFA Note" means a promissory note issued by the Company
and payable to the order of the Bank evidencing a PECFA Loan.
"Permitted Liens" means (a) liens, security interests,
charges or encumbrances listed on Schedule 1.1 attached hereto, provided that
the Indebtedness secured thereby shall not be renewed, extended or increased
above the maximum amount listed on Schedule 1.1; (b) liens for taxes,
assessments or governmental charges not delinquent, or being contested in good
faith by the Company or any Domestic Subsidiary, for which adequate reserves
are established and maintained in accordance with GAAP; (c) construction lien
or other similar statutory or common law lien claims not delinquent;
(d) purchase money security interests or liens on any property acquired after
the date hereof to be used by the Company or a Domestic Subsidiary in the
normal course of its business, and created or incurred simultaneously with the
acquisition of such property, if such security interest or lien is limited to
the property so acquired, the Indebtedness secured by such security interest
or lien does not exceed the purchase price of such property and the aggregate
Indebtedness secured by all such security interests and liens does not exceed
$5,000,000 at any time outstanding for the Company and all Domestic
Subsidiaries; (e) liens or deposits in connection with worker's compensation
or other insurance or to secure the performance of bids, trade contracts
(other than for borrowed money), leases, public or statutory obligations,
surety or appeal bonds or other obligations of like nature incurred in the
ordinary course of business; (f) liens and security interests in favor of the
Bank; (g) liens and security interests in favor of the Collateral Agent; (h)
liens and security interests in favor of the Project Financing Lenders; (i)
liens and security interests incurred in connection with a Project Financing
not provided by the Bank or by the Project Financing Lenders provided that
such liens and security interests shall only extend to the inventory, contract
rights, accounts receivable and proceeds relating to the project being so
financed and shall only secure the Indebtedness comprising such Project
Financing; and (j) easements, restrictions, minor title irregularities and
similar matters which have no material adverse effect as a practical matter
upon the ownership or use of its property by the Company or any Domestic
Subsidiary.
"Plan" means any pension benefit plan subject to Title IV of
ERISA, including any Multiemployer Plan, maintained by the Company, any of its
Subsidiaries or any member of the Controlled Group or any such Plan to which
the Company, any of its Domestic Subsidiaries or any member of the Controlled
Group is required to contribute on behalf of its employees.
"Plan of Reorganization" means the Second Amended Joint Plan
of Reorganization of B-E Holdings, Inc. and the Company under Chapter 11 of
the Bankruptcy Code, as modified December 1, 1994, approved by the Bankruptcy
Court on December 1, 1994.
"Project Financing" means Indebtedness of the Company
incurred to pay the costs associated with the manufacture of mining machinery
or other products pursuant to a binding purchase contract, which Indebtedness
is secured by the inventory being financed and the related accounts and which
has a maturity date not later than the date of the final payment by the
customer under the purchase contract.
"Project Financing Lenders" means a group of financial
institutions of which the Bank is a member which is providing Project
Financing to the Company.
"Reference Rate" means the rate of interest announced by the
Bank from time to time as its reference rate for interest rate determinations.
The Reference Rate may or may not be the lowest interest rate charged by the
Bank.
"Reference Rate Loan" means any portion of the Revolving
Note bearing interest at or by reference to the Reference Rate.
"Reimbursement Obligations" means the aggregate amount of
drawings under Letters of Credit honored by the Bank which have not been
reimbursed by the Company.
"Reportable Event" means a reportable event as that term is
defined in ERISA.
"Restricted Payments" means dividends or other distributions
by the Company or any Subsidiary based upon the stock of the Company or any
Subsidiary (except dividends payable to the Company and dividends payable
solely in stock of the Company) and purchases, redemptions and other
acquisitions, direct or indirect, by the Company or any Subsidiary, of stock
of the Company or any Subsidiary.
"Revolving Note" means the promissory note issued by the
Company and payable to the order of the Bank evidencing loans under section
2.1 in the form of Exhibit A attached hereto.
"Revolving Note Maturity Date" means December 31, 1996, or
such earlier date on which the Bank declares the Revolving Note to be
immediately due and payable pursuant to section 7.2 of this Agreement.
"Secured Notes" means the Company's Secured Notes Due
December 14, 1999 issued under the Indenture dated December 14, 1994 between
the Company and Harris Trust and Savings Bank, as Trustee.
"Subordinated Debt" means Indebtedness of the Company, the
payment of which is fully subordinated, in a manner satisfactory to the Bank,
to the prior payment of the Notes and to all other Indebtedness of the Company
to the Bank.
"Subsidiary" means as of a particular date any corporation
more than 50% of whose outstanding stock having ordinary voting power for the
election of directors shall at the time be owned or controlled by the Company
or by one of its Subsidiaries.
"Tranche A Letter of Credit" means the Letters of Credit
outstanding on the date of this Agreement which are specified as such on
Schedule 1.2 attached hereto and any Letter of Credit issued after the
Effective Date which is for the purpose of (a) bid/performance relating to a
specific project and having an expiry date not exceeding 12 months from its
issuance date (unless a longer expiry date is approved in advance by the
Bank), (b) support of advance payments related to a specific project or (c)
support of workers' compensation claims.
"Tranche B Letter of Credit" means any Letter of Credit
which is not a Tranche A Letter of Credit or a Tranche C Letter of Credit.
The Tranche B Letters of Credit outstanding on the date of this Agreement are
listed on Schedule 1.2 attached hereto.
"Tranche C Letter of Credit" means the Letters of Credit
outstanding on the date of this Agreement which are specified as such on
Schedule 1.2 attached hereto.
"Type" means each type of Loan, i.e., a Reference Rate Loan
or a Libor Rate Loan.
2. The Credit Facilities; Interest Rate; Fees.
2.1 The Revolving Loans.
(a) The Bank will lend to the Company, subject to the
terms and conditions hereof, up to the maximum amount of $5,000,000 at any
time outstanding during the period from the Effective Date through December
31, 1995 and, subject to section 2.1(b), up to the maximum amount of
$2,500,000 at any time outstanding during the period from January 1, 1996
through the Revolving Note Maturity Date. Loans may be made, repaid and made
again. All loans shall be evidenced by the Revolving Note and shall be
payable on December 31, 1995 (to the extent the outstanding principal balance
of the Revolving Note exceeds $2,500,000), on each date on which the
outstanding principal balance of the Revolving Note exceeds the applicable
maximum loan amount specified in section 2.1(b) and in full on the Revolving
Note Maturity Date. Although the Revolving Note shall be expressed to be
payable in the amount of $5,000,000, the Company shall be obligated to pay
only the amount actually disbursed to or for the account of the Company,
together with interest on the unpaid balance of the sums so disbursed, which
remain outstanding from time to time as shown on the records of the Bank.
(b) The outstanding principal balance of loans by the Bank
to the Company under this section 2.1 during the following periods shall not
exceed an amount determined pursuant to the following table:
Maximum Loan
Period EBITDA Amount
April 1, 1996 -- Less than $10,875,000 $ 0
June 30, 1996 Greater than or equal to $10,875,000
but less than $13,050,000 $500,000
Greater than or equal to $13,050,000
but less than $13,775,000 $1,000,000
Greater than or equal to $13,775,000
but less than $14,500,000 $1,600,000
Greater than or equal to $14,500,000 $2,500,000
July 1, 1996 -- Less than $11,437,500 $ 0
September 30, 1996 Greater than or equal to $11,437,500
but less than $13,725,000 $500,000
Greater than or equal to $13,725,000
but less than $14,487,500 $1,000,000
Greater than or equal to $14,487,500
but less than $15,250,000 $1,600,000
Greater than or equal to $15,250,000 $2,500,000
October 1, 1996 -- Less than $12,000,000 $ 0
December 31, 1996 Greater than or equal to $12,000,000
but less than $14,400,000 $500,000
Greater than or equal to $14,400,000
but less than $15,200,000 $1,000,000
Greater than or equal to $15,200,000
but less than $16,000,000 $1,600,000
Greater than or equal to $16,000,000 $2,500,000
For purposes of the foregoing, EBITDA for each period
shall be calculated on the basis of the most recent financial statements
furnished by the Company to the Bank under sections 5.1 and 5.2 and shall be
adjusted during the period upon delivery to the Bank of more recent financial
statements.
2.2 Borrowing Base.
(a) Borrowing Base A. If either (y) the outstanding
principal balance of the Revolving Note on any day during a calendar month
exceeds 80% of the maximum amount of loans then available under section 2.1 or
(z) the daily average outstanding principal balance of the Revolving Note for
a calendar month exceeds 40% of the maximum amount of loans then available
under section 2.1, then:
(i) the Company shall provide a borrowing base
certificate to the Bank in accordance with section 5.12 as of the last day of
such calendar month; and
(ii) the Company shall immediately make such payments
on the Revolving Note or provide Cash Collateral to the Bank as is necessary
in order that the sum of the unpaid principal balance of the Revolving Note
and the LOC Exposure does not exceed, the sum of [a] the "Applicable Advance
Ratio" of Adjusted Accounts, [b] the lesser of (i) $7,500,000, [ii] the amount
determined under subsection 2.2(a)(ii)[a] or [iii] 50% of Gross Domestic
Finished Goods Inventory minus 50% of the applicable obsolescence reserve, [c]
the lesser of 80% of the orderly liquidation value of machinery and equipment
located at the Company's South Milwaukee, Wisconsin facility or $5,000,000 and
[d] 100% of the fair market value of Cash Collateral.
"Applicable Advance Ratio" means (a) 30% during the
period from the Effective Date through March 31, 1996 and (b) thereafter, the
ratio determined in accordance with the following table:
Period EBITDA Ratio
April 1, 1996 -- Less than $10,875,000 20%
June 30, 1996 Greater than or equal to $10,875,000
but less than $13,050,000 22.5%
Greater than or equal to $13,050,000
but less than $13,775,000 25%
Greater than or equal to $13,775,000
but less than $14,500,000 27.5%
Greater than or equal to $14,500,000 30%
July 1, 1996 -- Less than $11,437,500 20%
September 30, 1996 Greater than or equal to $11,437,500
but less than $13,725,000 22.5%
Greater than or equal to $13,725,000
but less than $14,487,500 25%
Greater than or equal to $14,487,500
but less than $15,250,000 27.5%
Greater than or equal to $15,250,000 30%
October 1, 1996 -- Less than $12,000,000 20%
December 31, 1996 Greater than or equal to $12,000,000
but less than $14,400,000 22.5%
Greater than or equal to $14,400,000
but less than $15,200,000 25%
Greater than or equal to $15,200,000
but less than $16,000,000 27.5%
Greater than or equal to $16,000,000 30%
For purposes of the foregoing, EBITDA for each period
shall be calculated on the basis of the most recent financial statements
furnished by the Company to the Bank under sections 5.1 and 5.2 and shall be
adjusted during the period upon delivery to the Bank of more recent financial
statements.
(b) Borrowing Base B. If at any time Gross Domestic
Finished Goods Inventory is less than the Gross Domestic Finished Goods
Inventory Floor and Gross Domestic Accounts Receivable are less than the Gross
Domestic Accounts Receivable Floor, the Company shall immediately make such
payments on the Revolving Note or furnish Cash Collateral to the Bank as is
necessary in order that the sum of the unpaid principal balance of the
Revolving Note and the LOC Exposure does not exceed the sum of (i) 80% of
Gross Domestic Accounts Receivable, (ii) 50% of Gross Domestic Finished Goods
Inventory minus 50% of the applicable obsolescence reserve, (iii) the
Machinery and Equipment Borrowing Base and (iv) 100% of the fair market value
of Cash Collateral.
2.3 Borrowing Procedure for Loans. The Company shall
request loans by written notice, or by telephonic notice confirmed in writing,
to the Bank (i) in the case of a Libor Rate Loan, not later than 11 a.m.,
Milwaukee time, on the date which is not more than two Business Days prior to
the requested Borrowing Date (which must be a Business Day) and (ii) in the
case of a Reference Rate Loan, not later than 12 p.m., Milwaukee time, on the
requested Borrowing Date (which must be a Business Day). Each such request by
the Company must specify the amount of the requested loan, the Type of
requested loan and, in the case of a requested Libor Rate Loan, the applicable
Interest Period. Each Libor Rate Loan shall be in a minimum amount of
$500,000. In the event of any inconsistency between the telephonic notice and
the written confirmation thereof, the telephonic notice shall control. Each
such request for a loan shall be irrevocable and shall constitute a
certification by the Company that the borrowing conditions specified in
sections 4.2(b) and 4.2(c) will be satisfied on the specified Borrowing Date.
Upon fulfillment of the applicable borrowing conditions, the Bank shall
deposit the loan in the Company's account maintained with the Bank or as the
Company may otherwise direct in writing.
2.4 Commitment Fee. As consideration for the commitment
of the Bank to make loans hereunder, the Company will pay to the Bank, on the
last day of each quarter commencing March 31, 1995 and on the Revolving Note
Maturity Date, a commitment fee equal to 1/2 of 1% per year on the daily
average unused amount of the Bank's commitment to make loans under section 2.1
during the preceding quarter or other applicable period; provided that for
purposes of computing the commitment fee due on March 31, 1995, the applicable
period shall be the date hereof through March 31, 1995. Commitment fees shall
be calculated for the actual number of days elapsed on the basis of a 360-day
year.
2.5 Reduction or Termination of Commitment. The Company
may, on any interest payment date commencing March 31, 1995, and upon 30 days'
prior written notice to the Bank, permanently reduce or terminate the amount
of the Bank's commitment to make loans and issue Letters of Credit hereunder;
provided that no such reduction shall reduce the amount of the Bank's
commitment to an amount less than the sum of the unpaid principal balance of
the Notes plus the LOC Exposure on the date of such reduction; and provided
further that in the event of a termination, the Company shall pay to the Bank,
on or before the effective date of the termination, the unpaid principal
balance of the Notes, all interest accrued thereon, all commitment and other
fees and expenses payable by the Company accrued or incurred through the
termination date, shall deposit in the Cash Collateral Account the amount of
the LOC Exposure as of such date and shall pay to the Bank the Termination Fee
described below. Each partial reduction in the Bank's commitment shall be in
a minimum amount of $500,000 and in integral multiples of $500,000 above such
minimum.
The "Termination Fee" shall be an amount determined
pursuant to the following schedule:
Termination Date Termination Fee
Effective Date through June 30, 1995 $150,000
July 1, 1995 through December 31, 1995 125,000
January 1, 1996 through March 30, 1996 100,000
April 1, 1996 through June 30, 1996 75,000
July 1, 1996 through September 30, 1996 50,000
Thereafter -0-
2.6 PECFA Loans.
(a) The Bank agrees to refinance the existing PECFA
Loan made by the Bank to the Company currently evidenced by the Master Draw
Note dated October 3, 1994. Such refinancing shall be evidenced by the PECFA
Note in the form of Exhibit B attached hereto. Such PECFA Loan shall mature
on the first to occur of (i) October 3, 1995, (ii) the date on which the
Wisconsin Department of Industry, Labor and Human Relations, Petroleum
Environmental Cleanup Fund Program makes the payment thereunder to reimburse
the Company for the costs of removing the underground storage tank formerly
located at 1100 Milwaukee Avenue, South Milwaukee, Wisconsin or (iii) the date
on which the maturity of the Notes is accelerated pursuant to section 7.2
hereof.
(b) The Bank agrees, subject to the terms and
conditions of this Agreement, to make a new PECFA Loan to the Company to
finance the costs of removing an underground storage tank located at 1205 East
Rawson Avenue, South Milwaukee, Wisconsin. Such PECFA Loan shall be in an
aggregate amount not exceeding $200,000 and shall be made in multiple advances
upon fulfillment of the applicable borrowing conditions set forth in section 4
hereof. Such PECFA Loan shall be evidenced by a PECFA Note in the form of
Exhibit B attached hereto with appropriate revisions. Such PECFA Loan shall
mature on the first to occur of (i) October 3, 1995, (ii) the date on which
the Wisconsin Department of Industry, Labor and Human Relations, Petroleum
Environmental Cleanup Fund Program makes the payment thereunder to reimburse
the Company for the costs of removing such underground storage tank or (iii)
the date on which the maturity of the Notes is accelerated pursuant to section
7.2 hereof.
2.7 Interest Rate.
(a) The unpaid principal balance of Reference Rate
Loans outstanding from time to time shall bear interest prior to the Revolving
Loan Maturity Date at an annual rate equal to the Reference Rate plus 3/4 of 1
percentage point and such rate shall change on each day on which the Reference
Rate changes. Accrued interest on Reference Rate Loans shall be due on the
first Business Day of each month and on the Revolving Loan Maturity Date. The
unpaid principal balance of each Libor Rate Loan shall bear interest during
the applicable Interest Period at the corresponding Adjusted Libor Rate.
Accrued interest on each Libor Rate Loan shall be due on the last day of its
Interest Period.
(b) The unpaid principal balance of each PECFA Loan
outstanding from time to time shall bear interest prior to maturity at an
annual rate equal to the Reference Rate plus 2 percentage points and such rate
shall change on each day on which the Reference Rate changes. Accrued
interest on PECFA Loans shall be due on March 31, 1995 and on the same day of
each third month thereafter and on the date on which such PECFA Loan is repaid
in full.
(c) Notwithstanding the provisions of section 2.7(a)
and (b) above, upon the occurrence and during the continuance of an Event of
Default, the unpaid principal balance of each Note shall, upon notice from the
Bank to the Company, bear interest at an annual rate equal to the Reference
Rate plus 3-3/4 percentage points (the "Default Rate"), payable upon demand.
On and after the Revolving Loan Maturity Date, the unpaid principal balance of
the Revolving Note and all accrued interest thereon shall bear interest at the
Default Rate and shall be payable upon demand. On and after the date on which
the principal balance of a PECFA Note becomes due and payable, the unpaid
principal balance thereof and all accrued interest shall bear interest at the
Default Rate and shall be payable upon demand.
(d) Interest shall be calculated for the actual
number of days elapsed on the basis of a 360-day year.
2.8 Letters of Credit. During the period commencing on
the Effective Date and ending on the Final Issuance Date, the Bank shall, upon
fulfillment of the conditions specified herein, issue Letters of Credit for
the account and at the request of the Company. Each Letter of Credit shall be
in form and content satisfactory to the Bank and shall have an expiry date no
later than December 31, 1997. The Bank shall have no obligations to issue a
Letter of Credit if any Default or Event of Default has occurred and is
continuing or if the amount available for drawing under the requested Letter
of Credit, when added to the outstanding principal balance of the Revolving
Note plus the LOC Exposure as of the requested issuance date, would exceed
$15,000,000 or would result in a violation of the limitations set forth in
section 2.2 and shall have no obligation to issue a Commercial Letter of
Credit if, after giving effect thereto, the LOC Exposure under all
outstanding Commercial Letters of Credit would exceed $500,000. The
obligations of the Company under a Letter of Credit shall be governed by the
applicable Letter of Credit Agreement except to the extent the applicable
Letter of Credit Agreement is inconsistent with the provisions of this
Agreement in which event the provisions of this Agreement shall control. The
Company agrees to pay to the Bank, immediately upon receiving notice that the
Bank has honored a drawing under a Letter of Credit, an amount equal to the
amount so paid by the Bank plus interest at the Default Rate from the date the
Bank honored such drawing until the date the resulting Reimbursement
Obligation is paid in full. The Bank agrees to provide notice to the Company
of a drawing under a Letter of Credit promptly after receipt of such drawing
but the failure of the Bank to provide such notice shall not affect the
Company's payment obligations hereunder.
2.9 Letter of Credit Fees. The Company agrees to pay to
the Bank, on the issuance date of a Letter of Credit (other than a Commercial
Letter of Credit) and on the first Business Day of each month thereafter, a
fee equal to (a) in the case of a Tranche A Letter of Credit, 1-1/2% per annum
(i.e., 1/8 of 1% for each month) of the LOC Exposure of such Tranche A Letter
of Credit as of the payment date, (b) in the case of a Tranche B Letter of
Credit, 2-3/4% per annum (i.e., 11/48 of 1% for each month) of the LOC
Exposure of such Tranche B Letter of Credit as of the payment date and (c) in
the case of a Tranche C Letter of Credit, 1-1/2% per annum (i.e., 1/8 of 1%
for each month) until June 30, 1995 and 2-3/4% (i.e., 11/48 of 1% for each
month) thereafter. With respect to Letters of Credit outstanding on the
Effective Date, the Company shall pay to the Bank on January 3, 1995 any fees
or other charges accrued prior to the Effective Date on the basis of such
agreements between the Company and the Bank in effect prior to the Effective
Date and, for the period from and after the Effective Date, fees determined in
accordance with this section.
Notwithstanding the foregoing, if EBIDTA for the Company's
fiscal year ending December 31, 1995 (as shown on the audited financial
statements furnished pursuant to section 5.1) exceeds $15,950,000, then the
fees set forth in the preceding paragraph shall be reduced by 1/4 of 1% per
annum (i.e., 1/48 of 1% for each month), retroactive to January 1, 1996, and
the Bank shall credit the retroactive fee reduction against future fees
payable under this section.
The Company also agrees to pay the Bank's customary
issuance, amendment and negotiation fees with respect to Letters of Credit
including, in the case of a Commercial Letter of Credit, an issuance fee of
$100 and a negotiation fee equal to the greater of $75 or 1/4 of 1% of the
amount drawn.
2.10 Payments. All payments of principal and interest on
the Notes and of all fees due hereunder shall be made at the office of the
Bank in immediately available funds not later than 2 p.m., Milwaukee time, on
the date due; funds received after that time shall be deemed to have been
received on the next Business Day. Whenever any payment hereunder or under a
Note is stated to be due on a day which is not a Business Day, such payment
shall be made on the next succeeding Business Day and such extension of time
shall be included in computing any interest or fee then due. The Bank may
charge any account of the Company at the Bank for any payment due under any
Note, or any fee or expense payable hereunder, on or after the date due.
2.11 Prepayments. Reference Rate Loans and PECFA Loans may
be prepaid in whole or in part at any time without premium or penalty. LIBOR
Rate Loans may be prepaid prior to the last day of the applicable Interest
Period only if the Company pays to the Bank on the date of any such prepayment
an amount determined in accordance with section 2.14(c) plus interest accrued
on the amount prepaid through the prepayment date. The Company will give the
Bank written notice of any optional prepayment of a LIBOR Rate Loan at least
two Business Days prior to the prepayment date and notice of any optional
prepayment of Reference Rate Loans or a PECFA Loan not later than 2 p.m.,
Milwaukee time, on the prepayment date. Such notice shall specify the
prepayment date, the Note being prepaid and the amount to be prepaid. Each
prepayment of a Reference Rate Loan shall be in a minimum amount of $25,000
and each prepayment of a LIBOR Rate Loan shall be in a minimum amount of
$250,000. A PECFA Note may be prepaid in any amount. The amount of such
prepayment shall become due and payable by 2:30 p.m., Milwaukee, time on the
specified prepayment date.
2.12 Capital Adequacy. As used in this section, the term
"Regulatory Change" means any change enacted or issued after the date of this
Agreement of any (or the adoption after the date of this Agreement of any new)
federal or state law, regulation, interpretation, direction, policy or
guideline, or any court decision, which affects (or, in the case of a court
decision would, if the decision were applicable to the Bank, affect) the
treatment of any Letter of Credit or any loan or commitment of the Bank
hereunder as an asset or other item included for the purpose of calculating
the appropriate amount of capital to be maintained by the Bank or any
corporation controlling the Bank. If such Regulatory Change has the effect of
reducing the rate of return on the Bank's or such corporation's capital as a
consequence of the Letters of Credit, loans or commitments of the Bank
hereunder to a level below that which the Bank or such corporation could have
achieved but for such Regulatory Change (taking into account the Bank's or
such corporation's policies with respect to capital adequacy) by an amount
deemed in good faith by the Bank to be material, then from time to time
following notice by the Bank to the Company of such Regulatory Change, within
ten days after demand from the Bank, the Company shall pay to the Bank such
additional amount or amounts as will compensate the Bank or such corporation,
as the case may be, for such reduction.
2.13 Yield Protection. If any law or any governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law), or any interpretation thereof, or the compliance of the Bank
therewith,
(a) subjects the Bank to any tax, duty, charge or
withholding on or from payments due from the Company (excluding taxation of
the overall net income of the Bank and franchise taxes imposed in lieu of net
income taxes and any such tax, duty, charge or withholding in effect as of the
date of this Agreement), or changes the basis of taxation of payments to the
Bank in respect of a Note and other amounts due it hereunder (excluding
taxation of the overall net income of the Bank and franchise taxes imposed in
lieu of net income taxes);
(b) imposes or increases or deems applicable any
reserve, assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended by,
the Bank (other than reserves and assessments taken into account in
determining the interest rate applicable to Libor Rate Loans) with respect to
a Note; or
(c) imposes any other condition the result of which
is to increase the cost to the Bank of making, funding or maintaining loans or
reduces any amount received by the Bank in connection with loans or requires
the Bank to make any payment calculated by reference to the amount of loans
held or interest received by it, by an amount reasonably deemed material by
the Bank; then, upon demand by the Bank, the Company shall pay the Bank that
portion of such increased expense incurred or reduction in an amount received
which the Bank reasonably determines is attributable thereto.
2.14 Additional Libor Rate Loan Provisions.
(a) If the Bank determines that the making or
maintaining of a Libor Rate Loan would violate any applicable law, rule,
regulation or directive, whether or not having the force of law then the
obligation of the Bank to make, continue, maintain or convert any Libor Rate
Loan shall be suspended until the Bank notifies the Company that the
circumstances causing such suspension no longer exist. During any such
period, all Libor Rate Loans shall automatically convert into Reference Rate
Loans at the end of the applicable Interest Period or sooner if required by
law.
(b) If the Bank is unable to determine the Libor
Rate in respect of a requested Interest Period or the Bank is unable to obtain
deposits of Dollars in the London interbank market in the applicable amounts
and for the requested Interest Period, then, upon notice from the Bank to the
Company, the obligation of the Bank to make any Libor Rate Loan, or to convert
any Reference Rate Loan into a Libor Loan, shall be suspended until the Bank
notifies the Company that the circumstances causing such suspension no longer
exist.
(c) If the Bank shall incur any loss or expense
(including any loss or expense incurred by reason of a liquidation or
redeployment of deposits or other funds acquired by the Bank to make, continue
or maintain any portion of a Libor Rate Loan or to convert any portion of a
Reference Rate Loan into a Libor Rate Loan) as a result of: (i) any conversion
or repayment or prepayment of the principal amount of Libor Rate Loan on a
date other than the last day of the Interest Period applicable thereto
(whether as a result of acceleration, prepayment or otherwise); (ii) any loan
not being made as a Libor Rate Loan in accordance with the request therefor;
or (iii) any loan not being converted into a Libor Rate Loan, or any Libor
Rate Loan not being continued as a Libor Rate Loan, in accordance with the
Continuation/Conversion Notice (as hereinafter defined) therefor, then, upon
written notice from the Bank to the Company, the Company shall, within five
days of its receipt thereof, pay to the Bank such amount as will (in a
reasonable determination of the Bank) reimburse the Bank for such loss or
expense. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Company.
2.15 Continuation and Conversion Procedure.
(a) The Company may elect from time to time, subject to
the terms and conditions of this Agreement, to convert all or a portion of the
outstanding Reference Rate Loans to Libor Rate Loans (in each case, in a
minimum amount of $500,000) or to convert all or a portion of a Libor Rate
Loan to a Reference Rate Loan.
(b) A Reference Rate Loan shall continue as a Reference
Rate Loan unless and until converted to a Libor Rate Loan. At the end of the
applicable Interest Period for a Libor Rate Loan, such Libor Rate Loan shall
automatically be converted into a Reference Rate Loan unless the Company shall
have given the Bank notice in accordance with section 2.15(c) requesting that,
at the end of such Interest Period, all or a portion of such Libor Rate Loan
be continued as a Libor Rate Loan.
(c) The Company shall give the Bank irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Reference Rate Loan
to a Libor Rate Loan or continuation of a Libor Rate Loan not later than 11
a.m., Milwaukee time, two Business Days prior to the date of the requested
conversion or continuation, specifying (i) the requested date (which shall be
a Business Day) of such conversion or continuation, (ii) the amount and Type
of loan to be converted or continued and (iii) the amount and Type of the loan
into which such loan is to be converted or continued, and the duration of the
Interest Period applicable thereto. Each such request by the Company shall be
irrevocable and shall constitute a certification by the Company that the
borrowing conditions specified in sections 4.2(b) and 4.2(c) will be satisfied
on the specified conversion or continuation date.
(d) Notwithstanding anything to the contrary contained in
this section, no loan may be converted into or continued as a Libor Rate Loan
when any Default or Event of Default has occurred and is continuing.
3. Representations and Warranties. In order to induce the Bank
to make the loans and issue Letters of Credit, the Company represents and
warrants to the Bank:
3.1 Organization; Subsidiaries; Corporate Power. The
Company is a corporation validly existing and in good standing under the laws
of the State of Delaware. The Company is duly qualified as a foreign
corporation to do business and, upon completion of the actions required under
sections 5.14 (c), will be in good standing in every jurisdiction in which the
nature of its business or the ownership of its properties requires such
qualification and in which the failure to so qualify would materially
adversely affect the business operations or financial condition of the
Company. Schedule 3.1 contains the name, state or jurisdiction of
incorporation or organization and number of authorized and outstanding shares
of each class of stock of each Subsidiary and the number thereof owned by the
Company. Each Domestic Subsidiary is validly existing and in good standing in
the state of its incorporation and each is duly qualified as a foreign
corporation and is in good standing in every jurisdiction in which the nature
of its business or the ownership of its properties requires such qualification
and in which the failure to so qualify would materially adversely affect the
business operations or financial condition of such Domestic Subsidiary. The
Company and each Domestic Subsidiary has the corporate power to own its
properties and carry on its business as currently being conducted.
3.2 Authorization and Binding Effect. The execution and
delivery by the Company of the Loan Documents to which it is a party, and the
performance by the Company of its obligations thereunder, are within its
corporate power, have been duly authorized by proper corporate action on the
part of the Company, are not in violation of any existing law, rule or
regulation of any governmental agency or authority, any order or decision of
any court, the Certificate of Incorporation or By-Laws of the Company or the
terms of any agreement, restriction or undertaking to which the Company is a
party or by which it is bound and which is material to the Company and its
Subsidiaries taken as a whole, and do not require the approval or consent of
the shareholders of the Company, any governmental body, agency or authority or
any other person or entity. The Loan Documents to which the Company is a
party, when executed and delivered, will constitute the valid and binding
obligations of the Company enforceable in accordance with their terms, except
as limited by bankruptcy, insolvency or similar laws of general application
affecting the enforcement of creditors' rights and except to the extent that
general principles of equity might affect the specific enforcement of such
Loan Documents.
3.3 Financial Statements. The Company has furnished to
the Bank the consolidated balance sheet of the Company as of December 31,
1993, and related statements of income, retained earnings and cash flows of
the Company and its Consolidated Subsidiaries for the year ended on that date,
certified by Deloitte & Touche and the consolidated balance sheet of the
Company dated October 31, 1994 and related statements of income for the period
ended on such date, prepared by the Company. Such financial statements were
prepared in accordance with GAAP consistently applied throughout the periods
involved, are correct and complete and fairly present the consolidated
financial condition of the Company and such Subsidiaries as of such dates and
the results of their operations and cash flows for the periods ended on such
dates, subject, in the case of the interim statements, to normal year-end
adjustments. There has been no material adverse change in the condition or
prospects of the Company or its Consolidated Subsidiaries, financial or
otherwise, since the date of the most recent financial statement furnished to
the Bank.
3.4 Litigation. Except for the matters described on
Schedule 3.4, there is no litigation or administrative proceeding pending or,
to the knowledge of the Company, threatened against or affecting the Company
or any Subsidiary or the properties of the Company or any Domestic Subsidiary
which if determined adversely would have a material adverse effect upon the
business, financial condition or properties of the Company and its Domestic
Subsidiaries taken as a whole.
3.5 Restricted Payments. Except for the transactions to
occur on the effective date of the Plan of Reorganization, the Company has
not, since the date of the most recent financial statements referred to in
section 3.3, made any Restricted Payments.
3.6 Indebtedness; No Default. Neither the Company nor any
Domestic Subsidiary has any outstanding Indebtedness for borrowed money,
except those permitted under sections 6.2. On and after the Closing Date
there exists no default nor has any act or omission occurred which, with the
giving of notice or the passage of time, would constitute a default under the
provisions of (a) any instrument evidencing such Indebtedness or any agreement
relating thereto or (b) any other agreement or instrument to which the Company
or any Domestic Subsidiary is a party and which is material to the financial
condition, business operations or prospects of the Company or any Domestic
Subsidiary.
3.7 Ownership of Properties; Liens and Encumbrances. The
Company and each Domestic Subsidiary owns and has the right to use in its
business all property, real and personal, reflected on the most recent
financial statement of the Company furnished to the Bank, and all property
purported to have been acquired since the date of such financial statement,
except property sold or otherwise disposed of in the ordinary course of
business subsequent to such date; and all such property is free of any lien,
security interest, mortgage, encumbrance or charge of any kind or any
agreement not to grant a security interest, mortgage or lien, except Permitted
Liens. All owned and leased buildings and equipment of the Company and each
Domestic Subsidiary are in good condition, repair and working order and, to
the Company's knowledge, conform to all applicable laws, ordinances and
regulations.
3.8 Tax Returns Filed. Except for the matters described
in Schedule 3.8 attached hereto, (a) the Company and each Domestic Subsidiary
has filed when due all federal and state income and other tax returns which
are required to be filed, (b) the Company has paid or made provision for all
taxes shown on said returns and on all assessments received by it to the
extent that such taxes have become due except any such taxes which are being
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been established and (c) the Company has
no knowledge of any liabilities which may be asserted against it or any
Domestic Subsidiary upon audit of its federal or state tax returns and which
is reasonably likely to have a material adverse effect on the financial
condition of the Company and its Subsidiaries taken as a whole.
3.9 Margin Stock. The Company will not use, directly or
indirectly, any part of the proceeds of any Note for the purpose of purchasing
or carrying, or to extend credit to others for the purpose of purchasing or
carrying, any margin stock within the meaning of Regulation U of the Board of
Governors of the Federal Reserve System, or any amendments thereto. 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.
3.10 Investment Company. The Company is not an "investment
company" or a company controlled by an "investment company" within the meaning
of the Investment Company Act of 1940, as amended.
3.11 ERISA Liabilities. The Company has no knowledge of
the occurrence of any event with respect to any Plan which could result in a
liability of the Company or any Domestic Subsidiary or any member of a
Controlled Group to any Plan, the Internal Revenue Service or to the Pension
Benefit Guaranty Corporation other than the payment of contributions in the
normal course or premiums (but not a late payment charge) pursuant to section
4007 of ERISA. With respect to each Plan there is no (a) accumulated funding
deficiency within the meaning of section 412(a) of the Code; (b) nondeductible
contribution to any Plan within the meaning of section 4972 of the Code;
(c) excess contribution within the meaning of section 4979(c) of the Code
which would result in tax under section 4979(a) of the Code; (d) prohibited
transaction within the meaning of ERISA section 406 which is not exempt under
ERISA section 408; (e) failure to make required contributions to any
Multiemployer Plan; or (f) withdrawal or partial withdrawal from any
Multiemployer Plan within the meaning of ERISA sections 4203 and 4205.
3.12 No Burdensome Agreements. Neither the Company nor any
Domestic Subsidiary is a party to or is bound by any agreement, instrument or
undertaking, or subject to any other restriction (a) which materially
adversely affects or is reasonably likely to affect the property, financial
condition or business operations of the Company or any Domestic Subsidiary, or
(b) under or pursuant to which the Company or any Domestic Subsidiary is or
will be required to place (or under which any other person may place) a lien
(other than a Permitted Lien) upon any of its properties securing Indebtedness
either upon demand or upon the happening of a condition, with or without such
demand.
3.13 Trademarks, Etc. The Company and each Domestic
Subsidiary possess adequate trademarks, trade names, copyrights, patents,
permits, service marks and licenses, or rights thereto, for the present and
planned future conduct of their respective businesses substantially as now
conducted, without any known conflict with the rights of others which is
reasonably likely to have a material adverse effect on the Company and its
Domestic Subsidiaries taken as a whole.
3.14 Environmental Conditions. Except for the matters
listed on Schedule 3.14, there are no conditions existing currently or, to the
knowledge of the Company, reasonably likely to exist during the term of this
Agreement which would subject the Company or any Domestic Subsidiary to
damages, penalties, injunctive relief or cleanup costs under any Environmental
Laws or which require or are likely to require cleanup, removal, remedial
action or other response pursuant to Environmental Laws by the Company or any
Domestic Subsidiary and the result of which would have a material adverse
effect upon the financial condition or operations of the Company and its
Subsidiaries taken as a whole.
3.15 Environmental Judgments, Decrees and Orders. Except
for the matters listed on Schedule 3.15, neither the Company nor any Domestic
Subsidiary is subject to any judgment, decree, order or citation related to or
arising out of Environmental Laws or has been named as a potentially
responsible party by a governmental body or agency in a matter arising under
any Environmental Laws.
3.16 Environmental Permits and Licenses. The Company and
each Domestic Subsidiary has all permits, licenses and approvals required
under Environmental Laws.
3.17 Accuracy of Information. All information furnished by
the Company to the Bank is true, correct and complete in all material respects
as of the date furnished and does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make such
information not misleading.
4. Conditions for Borrowing. The Bank's obligation to make any
loan or issue a Letter of Credit is subject to the satisfaction, on or before
the following Borrowing Dates, of the following conditions:
4.1 On or Before the Effective Date. The Bank shall have
received the following, all in form, detail and content satisfactory to the
Bank:
(a) Notes. The Revolving Note and the PECFA Note
referred to in section 2.6(a), duly executed by the Company.
(b) Bank Security Documents.
(i) a security agreement, granting the Bank a
security interest in substantially all of the personal property of the
Company;
(ii) all financing statements required to
perfect the security interests granted to the Bank by the Company; and
(iii) a collateral pledge agreement granting the
Bank a security interest in all outstanding stock of the Domestic
Subsidiaries, in 65% of the outstanding stock of the Foreign Subsidiaries and
in all Cash Collateral from time to time provided to the Bank.
Each of the Bank Security Documents shall be
duly executed by the Company.
(c) Letter of Credit Agreements. The Letter of
Credit Agreements, duly executed by the Company.
(d) Good Standing Certificates . Certificates of
good standing and status with respect to the Company, issued as of a recent
date by the Secretary of State of the States of Delaware, Wisconsin, Arizona
and Wyoming.
(e) Closing Certificate. Copies, certified by the
Secretary of the Company to be true and correct and in full force and effect
on the Effective Date, of (i) the Certificate of Incorporation of the Company
(including all amendments thereto necessary to effectuate the Plan of
Reorganization), (ii) the By-Laws of the Company; (iii) resolutions of the
Board of Directors of the Company authorizing the issuance, execution and
delivery of the Loan Documents to which the Company is a party; and (iv) a
statement containing the names and titles of the officer or officers of the
Company authorized to sign such Loan Documents, together with true signatures
of such officers.
(f) Personal Property Searches. Searches of the
appropriate public offices demonstrating that no security interest, tax lien,
judgment lien or other charge or encumbrance is of record affecting the
Company or its properties except those which are acceptable to the Bank.
(g) No Default Certificate. The representations and
warranties contained in section 3 hereof and in the other Loan Documents shall
be true and correct on and as of the Effective Date; there shall exist on the
Effective Date no Default or Event of Default, and the Bank shall have
received a certificate to those effects, signed by the President or a Vice
President of the Company.
(h) Opinion of Counsel. Opinions from Milbank,
Tweed, Hadley & McCloy, counsel to the Company, and David M. Goelzer, General
Counsel of the Company in the form of Exhibit D attached hereto.
(i) Bankruptcy Matters. The Order confirming the
Plan of Reorganization being a final, non-appealable order and the
implementation of all of the terms of the Plan of Reorganization.
(j) Collateral Agent Security Agreement. A copy,
certified to be true, complete and in full force and effect of the Security
Agreement from the Company to the Collateral Agent.
(k) Intercreditor Agreement. A copy of the
Intercreditor Agreement between the Collateral Agent and the Bank, duly
executed by the Collateral Agent and acknowledged by the Company (the
"Intercreditor Agreement").
(l) Proceedings Satisfactory. Such other documents
as the Bank may reasonably request; and all proceedings taken in connection
with the transactions contemplated by this Agreement, and all instruments,
authorizations and other documents applicable thereto, shall be satisfactory
to the Bank.
4.2 On or Before Each Subsequent Borrowing Date:
(a) Borrowing Procedure. The Company shall have
complied with the borrowing procedure specified in section 2.3.
(b) Representations and Warranties True and Correct.
The representations and warranties contained in section 3 hereof and in the
other Loan Documents shall be true and correct on and as of the relevant
Borrowing Date except (i) that the representations and warranties contained in
section 3.3 shall apply to the most recent financial statements delivered
pursuant to sections 5.1 and 5.2 and (ii) for changes contemplated or
permitted by this Agreement.
(c) No Default. There shall exist on that Borrowing
Date no Default or Event of Default.
(d) Letter of Credit. If the Bank has been
requested to issue a Letter of Credit, the Bank shall have received an
application therefor duly executed by the Company and the fee payable with
respect thereto as set forth in section 2.9 hereof.
(e) PECFA Loan. If the Bank has been requested to
make the PECFA Loan referred to in section 2.6(b), the Bank shall have
received the PECFA Note and the PECFA Proceeds Assignment, duly executed by
the Company.
(f) Proceedings and Documentation. The Bank shall
have received such instruments and other documents as it may reasonably
request in connection with the making of such loan, and all such instruments
and documents shall be in form and content satisfactory to the Bank.
5. Affirmative Covenants. The Company covenants that it will,
until the Bank's commitment to extend credit hereunder has terminated or
expired, all Letters of Credit have expired and the Notes, the Reimbursement
Obligations and all fees and expenses payable hereunder have been paid in
full:
5.1 Annual Financial Statements. Furnish to the Bank
within 90 days after the end of each fiscal year of the Company a balance
sheet of the Company as of the close of such fiscal year and related
statements of income, retained earnings and cash flows for such year, setting
forth in each case in comparative form corresponding figures from the
preceding annual audit, all in reasonable detail and satisfactory in scope to
the Bank, prepared in accordance with GAAP applied on a consistent basis,
certified by a firm of independent certified public accountants selected by
the Company and satisfactory to the Bank. All such financial statements, and
the financial statements described in section 5.2, shall be furnished in
consolidated and consolidating form for the Company and all Consolidated
Subsidiaries which it may at the time have.
5.2 Interim Financial Statements. Furnish to the Bank
within 45 days after the end of each quarter of each fiscal year of the
Company (a) a balance sheet of the Company as of the end of each such period
and related statements of income, retained earnings and cash flows for the
period from the beginning of the fiscal year to the end of such quarter,
prepared in the manner set forth in section 5.1 hereof for the annual
statements certified, subject to audit and normal year-end adjustments, by an
authorized financial officer of the Company, (b) a computation showing whether
the Company is in compliance with the financial covenant contained in section
6.10, (c) a statement, in such detail as the Bank may reasonably request, of
the Guaranties of the Company of obligations of Domestic Subsidiaries and
Foreign Subsidiaries and (d) the certificate of an authorized financial
officer to the effect that there exists no Default or Event of Default or, if
any Default or Event of Default exists, specifying the nature thereof, the
period of existence thereof and what action the Company proposes to take with
respect thereto.
5.3 Audit Reports. Furnish to the Bank, promptly
following a request by the Bank, copies of all management letters and detailed
audit reports submitted to the Company by independent certified public
accountants.
5.4 Other Financial Information. Furnish to the Bank, as
soon as available, copies of all reports generally provided to the
shareholders of the Company, copies of all reports filed with the Securities
and Exchange Commission and such other financial information as the Bank may
from time to time reasonably request and furnish to the Bank, without request,
within 20 days after the end of each month, a statement specifying the Gross
Domestic Accounts Receivable and the Gross Domestic Finished Goods Inventory
as of the last day of such month.
5.5 Books and Records.
(a) Keep and cause each Domestic Subsidiary to keep
proper, complete and accurate books of record and account; and
(b) permit any representatives of the Bank to visit
and inspect any of the properties and examine and copy any of the books and
records of the Company or any Domestic Subsidiary at any reasonable time and
as often as may reasonably be desired.
5.6 Insurance. Maintain and cause each Domestic
Subsidiary to maintain insurance coverage as may be required by law or the
Bank Security Documents but in any event not less than insurance coverage, in
the forms, amounts and with companies, which would be carried by prudent
management in connection with similar properties and businesses. Without
limiting the foregoing, the Company will and will cause each Domestic
Subsidiary to (a) keep all its physical property insured against fire and
extended coverage risks in amounts and with deductibles at least equal to
those generally maintained by businesses engaged in similar activities in
similar geographic areas; (b) maintain all such worker's compensation and
similar insurance as may be required by law; and (c) maintain, in amounts and
with deductibles at least equal to those generally maintained by businesses
engaged in similar activities in similar geographic areas, general public
liability insurance against claims for bodily injury, death or property damage
occurring on, in or about the properties of the Company or such Domestic
Subsidiary, business interruption insurance and product liability insurance.
5.7 Condition of Property. Keep and cause each Domestic
Subsidiary to keep its properties (whether owned or leased) which are material
to its operations in good condition, repair and working order.
5.8 Payment of Taxes. Pay and discharge, and cause each
Domestic Subsidiary to pay and discharge, all lawful taxes, assessments and
governmental charges upon it or against its properties prior to the date on
which penalties are attached thereto, unless and to the extent only that the
same shall be contested in good faith and by appropriate proceedings by the
Company or the appropriate Domestic Subsidiary and appropriate reserves with
respect thereto are established and maintained in accordance with GAAP. The
obligations of the Company under this section are subject to the period
granted the Company under section 5.14(c) for the Company to pay the taxes,
assessments and governmental charges which the Company has not paid due to the
pendency of the Case.
5.9 Compliance with Law. Do and, except as permitted
under section 6.4, cause each Domestic Subsidiary to do all things necessary
to (a) maintain its corporate existence in good standing in its state of
incorporation and maintain its qualification as a foreign corporation in any
other state where the ownership of property or the conduct of business make
qualification necessary and where the failure to so qualify would have a
material adverse effect upon its business, operations or financial condition,
(b) preserve and keep in full force and effect its rights and franchises
necessary to continue its business and (c) comply with all applicable laws,
rules, regulations, ordinances, writs, judgments, injunctions, decrees and
awards to which it may be subject including all applicable Environmental Laws,
except those to the extent the failure to so comply is not reasonably likely
to have a material adverse effect upon the Company and its Domestic
Subsidiaries taken as a whole and those being contested in good faith and
involving no possibility of criminal liability. The obligations of the
Company under section 5.9(a) above are subject to the period granted the
Company under section 5.14(c) to reestablish its good standing status in those
jurisdictions in which the Company is not, as of the Effective Date, in good
standing.
5.10 ERISA. Comply and cause each Domestic Subsidiary to
comply with all applicable requirements of ERISA for each Plan and furnish to
the Bank, as soon as possible and in any event within 30 days after the
Company shall have obtained knowledge that a Reportable Event has occurred
with respect to any Plan, a certificate of an officer of the Company setting
forth the details as to such Reportable Event and the action which the Company
proposes to take with respect thereto, and a copy of each notice of a
Reportable Event sent to the Pension Benefit Guaranty Corporation by the
Company and, with respect to a Multiemployer Plan, furnish to the Bank as soon
as possible after the Company receives notice or obtains knowledge that the
Company or any member of the Controlled Group may be subject to withdrawal
liability, or required to post a bond to avoid such liability, to a
Multiemployer Plan, a certificate of an officer of the Company setting forth
the details as to such event and the actions which the Company plans to take
with respect thereto.
5.11 Compliance with Other Loan Documents. Timely comply
with all of its obligations under the other Loan Documents.
5.12 Borrowing Base Certificates. Furnish to the Bank,
upon request by the Bank and, in the absence of a request within 30 days after
the end of each month with respect to which the Company is required to submit
a borrowing base certificate to the Bank pursuant to section 2.2(a)(i), a
borrowing base certificate in the form of Exhibit C attached hereto as of the
end of that month or the date of the request by the Bank.
5.13 Notice of Default or Claimed Default. Furnish to the
Bank (a) immediately upon becoming aware of any Default or Event of Default, a
written notice specifying the nature and period of existence thereof and what
action the Company is taking or proposes to take with respect thereto;
(b) immediately upon becoming aware that the holder of any other Indebtedness
for borrowed money issued or assumed by the Company or any Domestic
Subsidiary, or the lessor under any lease as to which the Company or any
Domestic Subsidiary is the lessee, has given notice or has taken any action
with respect to a claimed default thereunder, or under any agreement under
which any such Indebtedness was issued or secured, a written notice specifying
the notice given or action taken, the nature of the claimed default and what
action the Company is taking or proposes to take with respect thereto;
(c) immediately upon receipt, copies of any correspondence, notice, pleading,
citation, indictment, complaint, order, decree or other document from any
source asserting or alleging a circumstance or condition which requires or may
require a financial contribution by the Company or a cleanup, removal,
remedial action or other response by or on the part of the Company or any
Domestic Subsidiary under Environmental Laws or which seeks damages or civil,
criminal or punitive penalties from the Company or any Domestic Subsidiary for
an alleged violation of Environmental Laws; (d) written notice of any
condition or event which would make any warranty contained in section 3
inaccurate, as soon as the Company becomes aware of such condition or event;
and (e) immediately upon becoming aware that a default has occurred under that
certain Master Equipment Lease between Cargill Leasing Corporation and LTV
Steel Company, a notice describing such default together with such other
relevant information as is in the possession of the Company.
5.14. Post-Effective Date Deliveries.
(a) Furnish to the Bank, within 60 days following
the Effective Date, (i) such information and documents as the Bank may request
in order to perfect the Bank's security interest in the patents, copyrights
and trademarks owned by the Company and (ii) certificates representing 100% of
the issued and outstanding stock of the Domestic Subsidiaries and 65% of the
issued and outstanding stock of the Foreign Subsidiaries, together with blank
stock powers for each such stock certificate;
(b) Furnish to the Bank, within 60 days following
the Effective Date, an orderly liquidation value appraisal of the Company's
machinery and equipment located at the Company's South Milwaukee, Wisconsin
facility, prepared by an appraiser using methodology reasonably acceptable to
the Bank; and
(c) Promptly following the Effective Date, (i)
commence and diligently pursue such actions as are necessary to become in good
standing in all jurisdictions in which the Company is qualified to transact
business as a foreign corporation and (ii) pay such franchise, property and
other taxes, and any similar governmental charges and assessments, which the
Company has not paid due to the pendency of the Case.
6. Negative Covenants. The Company covenants that, without the
prior written consent of the Bank, it will not, and will not permit any
Domestic Subsidiary to, until the Bank's commitment to extend credit hereunder
has terminated or expired, all Letters of Credit have expired and the Notes,
the Reimbursement Obligations and all fees and expenses payable hereunder have
been paid in full:
6.1 Restricted Payments. Make any Restricted Payments.
6.2 Limitations on Indebtedness. Create, incur, assume or
permit to exist any Indebtedness for borrowed money except (a) Indebtedness
owed to the Bank; (b) Indebtedness secured by Permitted Liens;
(c) Subordinated Debt; and (d) Indebtedness created by customer advance
payments.
6.3 Limitations on Liens and Encumbrances. Create, assume
or permit to exist any mortgage, security interest, lien or charge of any
kind, including any restriction against mortgages, security interests, liens
or charges, upon any of its property or assets, whether now owned or hereafter
acquired, except Permitted Liens and, subject to the requirements of section
5.14(c), liens arising from the nonpayment of franchise, property or other
taxes, and similar governmental charges and assessments, due to the pendency
of the Case.
6.4 Limitations on Mergers, Etc. Merge or consolidate
with or into any other corporation or entity (other than such mergers as are
contemplated by the Plan of Reorganization) or sell, lease, transfer or
otherwise dispose of in a single transaction or a series of transactions, all
or a substantial part of its assets (other than sales made in the ordinary
course of business), except that any Subsidiary may merge into, or transfer
all or a substantial part of its assets to the Company or to a Subsidiary
wholly owned by the Company.
6.5 Limitations on Acquisitions, Advances and Investments.
Acquire any other business or partnership or joint venture interest or make
any loans, advances or extensions of credit to, or any investments in, any
person or entity except (a) the purchase of United States government bonds and
obligations; (b) extensions of credit to customers in the usual course of
business of the Company or any Subsidiary; (c) the purchase of bank
certificates of deposit and prime rated commercial paper having a maturity not
exceeding one year; (d) investments of the Company in and loans and advances
to existing, wholly owned Subsidiaries of the Company and loans and advances
by any Subsidiary to the Company or to another Subsidiary (provided, however,
that the Company may not contribute any property or assets to a Subsidiary if,
after giving effect thereto, Gross Domestic Accounts Receivable are less than
the Gross Domestic Accounts Receivable Floor or Gross Domestic Finished Goods
Inventory is less than the Gross Domestic Finished Goods Inventory Floor);
(e) deposits in deposit accounts at banks; (f) investments in bank repurchase
agreements; (g) loans and advances to employees and agents in the ordinary
course of business for travel and entertainment expenses and similar items;
(h) advance payments to suppliers in an aggregate amount not exceeding
$1,500,000 and (i) existing loans, advances, extensions of credit and
investments described in Schedule 6.5 attached hereto.
6.6 Lines of Business. Engage or permit any Subsidiary to
engage in any business other than those in which it is now engaged and any
business directly related thereto.
6.7 Sales of Receivables. Discount or sell with recourse,
or sell for less than the face amount thereof, any of its notes or accounts
receivable if, after giving effect thereto, Gross Domestic Accounts Receivable
are less than the Gross Domestic Accounts Receivable Floor.
6.8 Sales of Subsidiaries. Sell or otherwise dispose of
any stock, or securities convertible into stock, of any Subsidiary except to
the Company or to a Subsidiary wholly owned by the Company.
6.9 Sale and Leaseback. Sell or transfer any fixed assets
and then or thereafter rent or lease as lessee any such assets.
6.10 Debt Service Coverage Ratio. Permit the Debt Service
Coverage Ratio to be less than 1.75:1 as of the last day of any fiscal quarter
of the Company.
6.11 Secured Notes. (a) Make a cash interest payment on
the Secured Notes prior to January 1, 1996 or, thereafter, make any such cash
interest payment unless the Debt Service Coverage Ratio (including, for
purposes of this subsection, all interest expense for the 12-month period
preceding the date of determination with interest expense on the Senior Notes
computed at the rate of 10.5% per annum, in the denominator of the Debt
Service Coverage Ratio) as of the two most recently completed fiscal quarters
of the Company was greater than 1.75:1; (b) make any principal prepayments of
the Secured Notes unless (i) the Debt Service Coverage Ratio (including, for
purposes of this subsection, the proposed principal prepayment in the
denominator of the Debt Service Coverage Ratio) as of the most recently
completed fiscal quarter of the Company was greater than 1.25:1 and (ii) the
amount of such principal prepayment is not less than $5,000,000; (c) consent
to amendment of or modification to the Secured Notes or any document under
which the Secured Notes are issued or secured other than an amendment reducing
the interest rate of the Secured Notes or extending the date on which the
Secured Notes became due and payable; or (d) make any payment or take any
other action which is prohibited by the Intercreditor Agreement.
6.12 Transactions with Affiliates. Enter into or be a
party to any transaction with any Affiliate (a) except as otherwise provided
herein, (b) the sale or purchase of goods or provision or receipt of services
to or from a Subsidiary in the ordinary course of business which is in the
best interest of the Company and its Subsidiaries taken as a whole or (c) in
the ordinary course of business and upon fair and reasonable terms which are
no less favorable than a comparable arm's length transaction with an entity
which is not an Affiliate.
7. Event of Default; Remedies.
7.1 Events of Default. The occurrence of any of the
following shall constitute an Event of Default:
(a) Failure to Pay. The Company fails to pay (i)
principal on a Note when the same becomes due and payable, whether at a stated
payment date, or a date fixed by the Company for prepayment or by
acceleration, (ii) any Reimbursement Obligation on the date the Bank honors a
draft presented under a Letter of Credit or (iii) interest on a Note or any
other obligation of the Company to the Bank hereunder, or any fee payable
hereunder, when the same becomes payable and such failure to timely pay
interest or fees continues uncured for a period of five days; or
(b) Falsity of Representations and Warranties. Any
representation or warranty made in any Loan Document is false in any material
respect on the date as of which made or as of which the same is to be
effective; or
(c) Breach of Covenants. The Company fails to
comply with any term, covenant or agreement contained in section 5 or 6 hereof
and, in the case of a failure to comply with the provisions of sections 5.3,
5.4,5.5(a), 5.7, 5.9 or 5.10, such failure continues for a period of 30 days
after written notice to the Company from the Bank; or
(d) Breach of Other Provisions. The Company fails
to comply with any other agreement contained herein and such default continues
for a period of 30 days after written notice to the Company from the Bank; or
(e) Default Under Other Agreements. The Company or
any Domestic Subsidiary fails to pay when due any other Indebtedness for
borrowed money having an outstanding principal balance of greater than
$1,000,000 issued or assumed by the Company or such Domestic Subsidiary or
fails to comply with the terms of any agreement under which such Indebtedness
was created and such default continues beyond the period of grace, if any,
therein provided and such default is not waived by the holder of such
Indebtedness; or
(f) Entry of Final Judgments. A final judgment is
entered against the Company or any Domestic Subsidiary which, together with
all unsatisfied final judgments entered against the Company and all Domestic
Subsidiaries, exceeds the sum of $100,000, and such judgment shall remain
unsatisfied or unstayed for a period of 60 days after the entry thereof; or
(g) ERISA Liability. Any event in relation to any
Plan which the Bank determines in good faith could result in any of the
occurrences set forth in section 3.11 above; or
(h) Default Under Other Loan Documents. An "Event
of Default" (as defined therein) shall occur under any other Loan Document or
the party to any other Loan Document fails to timely comply with any term,
covenant or agreement contained therein; or
(i) Insolvency, Failure to Pay Debts or
Appointment of Receiver, Etc. The Company or any Domestic Subsidiary becomes
insolvent or the subject of state insolvency proceedings, fails generally to
pay its debts as they become due or makes an assignment for the benefit of
creditors; or a receiver, trustee, custodian or other similar official is
appointed for, or takes possession of any substantial part of the property of,
the Company or any Domestic Subsidiary; or
(j) Subject of United States Bankruptcy Proceedings.
The taking of corporate action by the Company or any Domestic Subsidiary to
authorize such organization to become the subject of proceedings under the
United States Bankruptcy Code; or the execution by the Company or any Domestic
Subsidiary of a petition to become a debtor under the United States Bankruptcy
Code; or the filing of an involuntary petition against the Company or any
Domestic Subsidiary under the United States Bankruptcy Code which remains
undismissed for a period of 60 days; or the entry of an order for relief under
the United States Bankruptcy Code against the Company or any Domestic
Subsidiary.
7.2 Remedies. Upon the occurrence of an Event of Default, the
obligation of the Bank to make loans and issue Letters of Credit hereunder
shall terminate and (a) as to an Event of Default described in sections 7.1(a)
through 7.1(i), inclusive, the holder of a Note may, at its option and without
notice, declare a Note to be, and a Note shall thereupon become, immediately
due and payable, together with accrued interest thereon, and (b) as to an
Event of Default described in section 7.1(j), the Note shall, without action
on the part of any holder or any notice or demand, become automatically due
and payable, together with accrued interest thereon. Presentment, demand,
protest and notice of acceleration, nonpayment and dishonor are hereby
expressly waived.
Upon the occurrence of an Event of Default, the Company shall,
upon the Bank's demand, deliver to the Bank cash or other cash-equivalent
satisfactory to the Bank having a value equal to the LOC Exposure. All such
collateral shall be held by the Bank in a separate account (the "Cash
Collateral Account") and retained by the Bank as security for the payment of
the Reimbursement Obligations and the other obligations of the Company to the
Bank under the Loan Documents. Amounts on deposit in the Cash Collateral
Account shall be invested in certificates of deposit issued by the Bank having
principal amounts and maturities selected by the Company and reasonably
acceptable to the Bank. The Bank may apply monies on deposit in the Cash
Collateral Account to the Reimbursement Obligations upon their creation or to
the payment of other obligations of the Company to the Bank when and as such
other obligations become due and payable. At such time as the Credit
Agreement and all Letters of Credit have expired and all obligations of the
Company to the Bank have been paid in full, any amount remaining in the Cash
Collateral Account shall, subject to the provisions of the Intercreditor
Agreement, be turned over to the Company.
8. Miscellaneous.
8.1 Survival of Representations and Warranties. The
representations and warranties contained in section 3 hereof and in the other
Loan Documents shall survive closing and execution and delivery of the Notes.
8.2 Indemnification. The Company agrees to defend,
indemnify and hold harmless the Bank, its directors, officers, employees and
agents from and against any and all loss, cost, expense or liability
(including reasonable attorneys' fees) incurred in connection with any and all
claims or proceedings (whether brought by a private party or governmental
agency) as a result of, or arising out of or relating to:
(a) bodily injury, property damage, abatement or
remediation, environmental damage or impairment or any other injury or damage
resulting from or relating to any hazardous or toxic substance or contaminated
material (as determined under Environmental Laws) located on or migrating
into, from or through property previously, now or hereafter owned or occupied
by the Company, which the Bank may incur due to the making of the loans
provided for in section 2, the exercise of any of its rights under the Bank
Security Documents, or otherwise;
(b) any transaction financed or to be financed, in
whole or in part, directly or indirectly, with the proceeds of any loan made
by the Bank to the Company or the issuance of a Letter of Credit;
(c) the implementation of the provisions of the Plan
of Reorganization; or
(d) the entering into, performance of or exercise of
its rights under any Loan Document by the Bank.
This indemnity shall not apply if the loss sustained
by the Bank was attributable solely to the gross negligence or willful
misconduct by the Bank. This indemnity will survive foreclosure of any
security interest and the repayment of the Note and the Reimbursement
Obligations and the discharge and release of any Bank Security Documents.
8.3 Expenses. The Company agrees, whether or not the
transactions contemplated hereby shall be consummated, to pay on demand
(a) all out-of-pocket expenses incurred by the Bank in connection with the
negotiation, execution, administration, amendment or enforcement of any Loan
Document including the reasonable fees and expenses of the Bank's counsel,
(b) any taxes (including any interest and penalties relating thereto) payable
by the Bank (other than taxes based upon the Bank's net income) on or with
respect to the transactions contemplated by this Agreement (the Company hereby
agreeing to indemnify the Bank with respect thereto) and (c) all out-of-pocket
expenses, including the reasonable fees and expenses of the Bank's counsel,
incurred by the Bank in connection with any litigation, proceeding or dispute
in any way related to the Bank's relationship with the Company, whether
arising hereunder or otherwise. The obligations of the Company under this
section will survive payment of the Note.
8.4 Notices. Except as otherwise provided in section 2.3,
all notices provided for herein shall be in writing and shall be
(a) delivered; (b) sent by express or first class mail; or (c) sent by
facsimile transmission and confirmed in writing provided to the recipient in a
manner described in (a) or (b), and, if to the Bank, addressed to it at 111
East Wisconsin Avenue, Milwaukee, Wisconsin 53202, Attn: Corporate Loan Group,
Metropolitan Department III, Facsimile No. 414-765-2176 and if to the Company,
addressed to it at 1100 Milwaukee Avenue, P.O. Box 500, South Milwaukee,
Wisconsin 53172, Attn: Norbert J. Verville, Facsimile No. 414-768-5060, or to
such other address with respect to either party as such party shall notify the
other in writing; such notices shall be deemed given when delivered, mailed or
so transmitted.
8.5 Setoff. As security for payment of the Notes and all
other obligations of the Company to the Bank the Company grants to the Bank a
security interest in and lien on any credit balance or other money now or
hereafter owed the Company by the Bank. In addition, the Company agrees that
the Bank may, at any time after the occurrence of an Event of Default, without
prior notice or demand, set off against any such credit balance or other money
all or any part of the unpaid balance of the Note or any other obligation of
the Company to the Bank.
8.6 Participations. The Company agrees that the Bank may,
at its option, sell to another financial institution or institutions interests
in a Note and/or risk participations in a Letter of Credit and, in connection
with each such sale, and thereafter, disclose to the purchaser or prospective
purchaser of each such interest financial and other information concerning the
Company. The Company agrees that if amounts outstanding under this Agreement
or a Note 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 such
purchaser shall be deemed to have, to the extent permitted by applicable law,
the right of setoff in respect of its participating interest in amounts owing
under this Agreement and such Note to the same extent as if the amount of its
participating interest were owed directly to it. The Company further agrees
that each such purchaser shall be entitled to the benefits of section 2.12
with respect to its participation in the Bank's obligation to make loans and
issue Letters of Credit; provided that no such purchaser shall be entitled to
receive any greater amount pursuant to that section than the Bank would have
been entitled to receive if no such sale had occurred.
8.7 Titles. The titles of sections in this Agreement are
for convenience only and do not limit or construe the meaning of any section.
8.8 Parties Bound; Waiver. The provisions of this
Agreement shall inure to the benefit of and be binding upon any successor of
any of the parties hereto and shall extend and be available to any holder of a
Note; provided that the Company's rights under this Agreement are not
assignable. No delay on the part of any holder of a Note in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, and no
single or partial exercise of any right, power or privilege hereunder shall
preclude other or further exercise thereof or the exercise of any other right,
power or privilege. The rights and remedies herein specified are cumulative
and not exclusive of any rights or remedies which the holder of a Note would
otherwise have.
8.9 Governing Law. This Agreement is being delivered in
and shall be deemed to be a contract governed by the laws of the State of
Wisconsin and shall be interpreted and enforced in accordance with the laws of
that state without regard to the principles of conflicts of laws.
8.10 Submission to Jurisdiction; Service of Process. To
induce the Bank to enter into this Agreement:
(a) THE COMPANY AGREES THAT ALL ACTIONS OR PROCEEDINGS IN
ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF WISCONSIN LOCATED IN
MILWAUKEE COUNTY OR THE FEDERAL COURT FOR THE EASTERN DISTRICT OF WISCONSIN
AND THE COMPANY CONSENTS TO THE JURISDICTION OF SUCH COURTS. THE COMPANY
WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH
COURT AND ANY RIGHT IT MAY HAVE NOW OR HEREAFTER HAVE TO CLAIM THAT ANY SUCH
ACTION OR PROCEEDING IS IN AN INCONVENIENT COURT; and
(b) The Company consents to the service of process in any
such action or proceeding by certified mail sent to the address specified in
section 8.4.
Nothing contained herein shall affect the right of the Bank
to serve process in any other manner permitted by law or to commence an action
or proceeding in any other jurisdiction.
8.11 Waiver of Jury Trial. THE COMPANY AND THE BANK HEREBY
KNOWINGLY AND VOLUNTARILY WAIVE THE RIGHT EACH OF THEM MAY HAVE TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM BASED ON OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ANY
OTHER ACTION OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE
BANK TO ENTER INTO THIS AGREEMENT.
8.12 Limitation of Liability. THE COMPANY AND THE BANK
HEREBY WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO CLAIM OR RECOVER FROM THE
OTHER PARTY ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES, OF WHATEVER NATURE, OTHER THAN ACTUAL DAMAGES.
8.13 Reaffirmation. The Company reaffirms its obligations
under the PECFA Proceeds Assignment relating to the PECFA Loan described in
section 2.6(a) and under the Assignment of Remarketing Agreement dated August
20, 1992 from the Company to the Bank and agrees that the references therein
to the Credit Agreement shall, from and after the Effective Date, be deemed to
refer to this Agreement.
8.14 Entire Agreement. This Agreement and the other Loan
Documents shall constitute the entire agreement of the parties pertaining to
the subject matter hereof and supersede all prior or contemporaneous
agreements and understandings of the parties in connection therewith.
BANK ONE, MILWAUKEE,
NATIONAL ASSOCIATION
BY /s/ William E. Shaw
Its Vice President
BUCYRUS-ERIE COMPANY
BY /s/ N. J. Verville
Its Vice President
<PAGE>
EXHIBIT 10.2
FORM 8-K
DECEMBER 14, 1994
SECURITY AGREEMENT
THIS SECURITY AGREEMENT, dated as of December 14, 1994 is from
BUCYRUS-ERIE COMPANY, a Delaware corporation (the "Company"), to BANK ONE,
MILWAUKEE, NATIONAL ASSOCIATION (the "Secured Party").
RECITALS
The Company acknowledges the following:
A. Pursuant to a Credit Agreement dated as of December 14, 1994
(as amended, supplemented or restated from time to time, the "Credit
Agreement") between the Secured Party and the Company, the Secured Party has
agreed to make loans or otherwise extend credit to the Company.
B. The Secured Party requires, as a condition of extending
credit under the Credit Agreement, that the Company execute and deliver this
Agreement.
AGREEMENTS
In consideration of the Secured Party's agreement to extend credit
to the Company pursuant to the Credit Agreement, the Company agrees as
follows:
1. Definitions. Capitalized terms not otherwise defined herein
shall have the meanings assigned in the Credit Agreement. As used herein, the
following terms have the following meanings:
"Accounts" means all amounts owed to the Company as payment
for goods sold or services rendered.
"Chattel Paper" means a writing or a series of writings
which evidence both a monetary obligation owed to the Company and a security
interest in or lease of specific goods.
"Collateral" means all of the Company's right, title and
interest in and to the following, whether now owned and existing or hereafter
created or acquired, wherever located, together with all additions and
accessions and all proceeds and products thereof: all Accounts, Instruments,
Chattel Paper, General Intangibles, Equipment, Inventory, any insurance
coverage relating to the foregoing and all books and records of the Company
pertaining to any of the foregoing; provided, however, that "Collateral" shall
include the stock of the Company's Foreign Subsidiaries only to the extent set
forth in the Pledge Agreement and "Collateral" shall not include (a) the
Company's rights in computer equipment leases and other contracts the grant of
a security interest in which would result in a violation or breach of such
contract or (b) Inventory to the extent now or hereafter financed by Project
Financing provided by an entity other than the Bank or the Project Financing
Lenders and, until such Project Financing is paid in full, the Accounts
relating from the sale of such Inventory and the proceeds thereof.
"Consigned Inventory" means finished goods Inventory which
is stored at customers' facilities.
"Equipment" means all machinery, equipment and fixtures
owned by the Company and, to the extent legally assignable, all leases and
agreements for use of machinery, equipment and fixtures leased by the Company,
and all modifications, alterations, repairs, substitutions and replacements
thereof or thereto.
"Event of Default" means the occurrence of any of the
following: (a) an event of default under the Credit Agreement, (b) any
representation made by the Company in this Agreement is false in any material
respect on the date as of which made or as of which the same is to be
effective or (c) the Company fails to timely comply with any of its
obligations under this Agreement.
"General Intangibles" means any personal property owned by
the Company (other than Accounts, Instruments, Chattel Paper, Equipment,
Inventory) including, but not limited to, causes of action, contract rights,
rights to insurance claims and proceeds, tax refunds, claims for tax refunds,
rights of indemnification, contribution and subrogation, goodwill, patents,
trademarks, copyrights, trade names, licenses and franchises.
"Instrument" means a negotiable instrument owned by the
Company, a certificated security owned by the Company or any other writing
owned by the Company which evidences a right to the payment of money, other
than Chattel Paper.
"Inventory" means all of the Company's inventory, including
all goods held for sale, lease or demonstration or to be furnished under
contracts of service, all goods leased to others, trade-ins and repossessions,
raw materials, work in process and materials or supplies used or consumed in
the Company's business.
"Lien" means any mortgage, pledge, security interest,
encumbrance, lien or charge of any kind.
"Obligations" means (a) all of the Company's debts,
obligations and liabilities to the Secured Party arising pursuant to the Loan
Documents of whatever nature (contingent or otherwise), and all amendments and
extensions or renewals thereof, whether arising out of existing,
contemporaneous or future credit granted by the Secured Party to the Company,
to the Company and another, or to another guaranteed by the Company, (b) the
Company's liabilities and obligations to Banc One Leasing Corporation under
Master Lease Agreement No. 63-0116616 dated February 6, 1989, and all
schedules thereto, under Master Agreement No. 116616 dated September 24, 1991,
and all schedules thereto, and under any Master Lease Agreement, and all
schedules thereto, entered into after the date hereof to the extent that Banc
One Leasing Corporation has assigned its rights thereunder to the Secured
Party and (c) the Company's debts, obligations and liabilities to the Bank
and/or the Project Financing Lenders relating to a Project Financing provided
by the Bank and/or Project Financing Lenders.
"Pledge Agreement" means the Pledge Agreement of even date
herewith between the Company and the Secured Party as amended, supplemented,
modified or restated from time to time.
2. Grant of Security Interest. The Company grants the Secured
Party a security interest in the Collateral to secure the payment of the
Obligations.
3. Representations and Warranties of the Company. The Company
represents and warrants to the Secured Party that:
3.1 Ownership. The Company owns (and, in the case of
after-acquired property, will own) the Collateral free of all Liens other than
Permitted Liens and no financing statement (other than those in favor of the
Secured Party and the holders of Permitted Liens) is on file covering any of
the Collateral.
3.2 Sale of Goods or Services Rendered. Each Account and
Chattel Paper constituting Collateral as of this date arose from the
performance of services by the Company or from a bonafide sale or lease of
goods which have been delivered or shipped to the account debtor and for which
the Company has genuine invoices, shipping documents or receipts.
3.3 Enforceability. Each Account and Chattel Paper
constituting Collateral is genuine and enforceable against the account debtor
according to its terms and complies with all applicable laws and regulations.
Other than as disclosed to the Secured Party, there has been no default under
the terms of any Collateral and the Company has taken no action to foreclose
any security interest in favor of the Company or otherwise enforce the payment
of the amount due.
3.4 Location of Collateral. The Company's place of
business or, if more than one, its chief executive office, and the place where
the Company keeps its records concerning Accounts, is 1100 Milwaukee Avenue,
South Milwaukee, Wisconsin 53172. All Equipment and Inventory is, and during
the four-month period preceding the date of this Security Agreement has been,
located at the locations set forth in Exhibit A attached hereto, except for
Inventory in transit in the ordinary course of the Company's business.
Exhibit A also sets forth the value of such Inventory and Equipment at such
locations, determined as of the date closest to the Closing Date as is
reasonably practicable. The Company will not change the location of its chief
executive office, the place where it keeps records concerning Accounts or the
place where Equipment or Inventory is kept unless 30 days' advance written
notice of such change, describing the new location, has been given to the
Secured Party.
3.5 Consigned Inventory. The Company has duly filed, or
will use its best efforts to obtain and file with the appropriate filing
offices before shipping any Consigned Inventory, a financing statement
containing a description of the Consigned Inventory to be shipped to a
customer and naming the customer as debtor or consignee, the Company as
secured party or consignor and the Secured Party as assignee. The Company
owns and will continue to own all Consigned Inventory until the applicable
customer has paid or become obligated to pay in full the purchase price for
the Consigned Inventory to the Company.
3.6 Fixtures. Exhibit B contains the description of all
real estate to which any Collateral is affixed.
3.7 Patents, Trademarks, Etc. Exhibit C contains a
correct and complete list and description of all patents, copyrights and
trademarks owned by the Company.
3.8 Effectiveness of Representations and Warranties. The
representations and warranties contained in this section 3 shall be true and
correct on and as of the date hereof and on each Borrowing Date.
4. Covenants of the Company. The Company agrees that until the
Obligations have been paid in full and all Letters of Credit and all
obligations of the Secured Party under the Credit Agreement have expired:
4.1 Maintenance of Collateral. The Company shall:
maintain the Collateral in good condition and repair and not permit its value
to be impaired; keep the Collateral free from all Liens except Liens in favor
of the Secured Party and Permitted Liens; defend the Collateral against all
claims and legal proceedings by persons other than the Secured Party; pay and
discharge when due all taxes, levies and other charges or fees upon the
Collateral except to the extent that the Company is contesting any such tax,
levy, charge or fee in accordance with section 5.8 of the Credit Agreement;
not sell, lease or otherwise dispose of the Collateral or permit the
Collateral to become a fixture or an accession to other goods, except as
permitted by this Agreement; not permit the Collateral to be used in violation
of any applicable law or regulation or policy of insurance; operate its
business in compliance with all applicable provisions of the federal Fair
Labor Standards Act; and, as to Collateral consisting of Instruments and
Chattel Paper, preserve the rights of the Company therein against prior
parties.
4.2 Insurance. The Company will keep all the Collateral
insured against loss by fire, extended coverage perils and such other hazards
as the Secured Party requires in amounts not less than the replacement cost
thereof. All insurance policies shall be issued by an insurance company or
companies acceptable to the Secured Party.
The Company shall, not more than 10 days after the
Effective Date, cause the issuer of each insurance policy to issue a
certificate of insurance naming the Secured Party as an additional insured,
loss payee and mortgagee and containing an agreement by the insurer that the
policy shall not be terminated or modified without at least 30 days prior
written notice to the Secured Party, and the Company shall deliver each such
certificate to the Secured Party. In the event of any loss or casualty which
is covered by insurance, the Company shall give immediate notice thereof to
the Secured Party and the Company grants to the Secured Party the right to
make proof of such loss or damage. If an Event of Default has occurred and is
continuing, the Secured Party is authorized and empowered by and on behalf of
the Company to settle, adjust or compromise any claims for loss, damage or
destruction under any such insurance policy.
If an Event of Default has occurred and is continuing,
all proceeds of each such insurance policy shall be deposited with the Secured
Party. The Company authorizes the Secured Party to endorse in the name of the
Company any instrument evidencing such proceeds.
All proceeds of any such insurance received by the
Secured Party shall be held by the Secured Party and shall be applied by it
either to the Obligations or to the repair or replacement of the lost, stolen,
damaged or destroyed property with respect to which such proceeds were
received. If the Secured Party decides that such proceeds shall be applied to
such repair or replacement, the Secured Party shall disburse such proceeds to
the Company from time to time for expenditures made in repairing or replacing
the lost, stolen, damaged or destroyed property with respect to which such
proceeds were received upon receipt of an application of the Company so
requesting such disbursement and a certificate of an authorized officer of the
Company showing the cash expenditures made or due to be made for such purposes
and stating that the expenditures do not exceed the fair value to the Company
of such repairs or replacement, together with such other documentation or
evidence as the Secured Party may request.
4.3 Maintenance of Security Interest. The Company shall,
at its expense, take any action requested by the Secured Party to preserve and
protect the rights of the Secured Party in the Collateral or to establish,
determine priority of, perfect, continue perfected, terminate and/or enforce
the Secured Party's interest in the Collateral. The Company shall execute and
deliver to the Secured Party any and all documents which the Secured Party
reasonably requests to protect its security interest in the Collateral.
4.4 Books and Records; Inspection. The Company will keep
proper books of record and account in which full, true and proper entries will
be made with respect to the Collateral. Without limiting the generality of
the foregoing, the Company agrees that it will at all times keep accurate and
complete records with respect to the Accounts and the Inventory including, but
not limited to, a record of all payments received on account thereof and of
all credits granted. The Company agrees that the Secured Party and its
representatives shall have the right during normal business hours from time to
time to call at the Company's place of business where its records concerning
the Accounts are kept and any other place where any of the Collateral is
located, examine the Collateral and all records concerning the Collateral and
make extracts therefrom or copies thereof.
4.5 Chattel Paper; Instruments. At the request of the
Secured Party, the Company shall promptly mark all Chattel Paper and
Instruments which constitute Collateral to indicate conspicuously the Secured
Party's interest therein and, upon request, deliver them to the Secured Party.
5. Possession and Use of Collateral. Until notice is given by
the Secured Party to the Company after the occurrence of an Event of Default,
the Company (a) shall have the right to remain in possession and to use and to
retain exclusive control of the Collateral with power to manage, operate,
develop, use and enjoy the Collateral; (b) may sell, lease, use or dispose of
Inventory in the ordinary course of business; (c) shall diligently collect (at
its own expense) the Accounts in accordance with sound business practices;
(d) may sell or otherwise dispose of, free from the Lien of this Security
Agreement, any Equipment which may have become obsolete, inadequate or worn-
out if such Equipment is no longer necessary in the conduct of the business of
the Company; (e) as to Equipment which is necessary in the conduct of the
Company's business, may replace any item of such Equipment which has become
obsolete, inadequate or worn-out with another item of Equipment which has a
value and useful life at least equal to that of such replaced Equipment
immediately prior to the time such Equipment became obsolete, inadequate or
worn-out, and is suitable for a use which is the same or similar to such item
of replaced Equipment; and (f) may alter, add to or repair any and all
Equipment.
6. Rights of the Secured Party.
6.1 Power of Attorney. The Company appoints any officer
of the Secured Party as the Company's attorney-in-fact to endorse the name of
the Company on any notes, acceptances, checks, drafts, money orders or other
evidences of payment or security interest that are in the Secured Party's
possession from time to time; to sign the Company's name on any invoice or
bill relating to Accounts, on drafts against customers and notices to
customers; and, upon the occurrence and during the continuance of an Event of
Default, to receive, open and dispose of all mail addressed to the Company and
to notify the post office authorities to change the address for the delivery
of mail addressed to the Company to such address as Secured Party may
designate (provided that the Secured Party shall deliver to Debtor any mail so
received which does not constitute the proceeds of Collateral); and to do all
other acts and things necessary to carry out this Agreement and to perfect and
protect Secured Party's security interest in the Collateral. This power,
coupled with an interest, is irrevocable while any Obligations remain unpaid.
6.2 Nonliability of Secured Party. Except as otherwise
provided by applicable law, the Secured Party has no duty to protect, insure,
collect or realize upon any Collateral or preserve rights in it against prior
parties. The Company releases the Secured Party from any liability for any
act or omission relating to the Obligations, the Collateral or this Agreement
except for actions constituting willful misconduct on the part of the Secured
Party.
7. Remedies of Secured Party.
7.1 Remedies Upon Default. Upon the occurrence and during
the continuance of an Event of Default, the Secured Party may exercise any or
all of the following rights and remedies:
(a) Collection of Accounts. The Secured Party may
at any time notify the account debtor under any Account of the Secured Party's
security interest therein and direct such account debtor to make payments
directly to the Secured Party. The Secured Party may enforce collection of,
settle, compromise or renew any such Account. Any proceeds of Accounts
received or collected by the Company shall not be commingled with any other
funds or property of the Company and shall be turned over to the Secured Party
in precisely the form received (but endorsed by the Company for collection, if
necessary) not later than the Business Day following the day of receipt. The
Company hereby irrevocably appoints the Secured Party as the Company's
attorney with power to ask for, demand, sue for, collect, receive and receipt
for any monies due or to become due under any Account and to endorse checks,
drafts, orders and other instruments for the payment of money to the Company
with respect to an Account; provided that the Secured Party shall not be
obligated to make any demand for payment, to inquire concerning the nature or
sufficiency of any payment received by the Secured Party or to take any other
action regarding any Account and no action taken or not taken by the Secured
Party with respect to an Account shall give rise to any defense, counterclaim
or offset in favor of the Company or to any claim or proceeding against the
Secured Party.
(b) Wisconsin Uniform Commercial Code. The Secured
Party shall have all of the rights and remedies for default provided by the
Wisconsin Uniform Commercial Code as well as any other applicable law. With
respect to such rights and remedies:
(i) The Secured Party may take possession of
the Collateral without a hearing, which the Company waives;
(ii) The Secured Party may require the Company
to assemble the Collateral and make it available to the Secured Party at any
convenient place designated by the Secured Party and the Secured Party shall
have the right to take immediate possession of the Collateral, and may enter
any of the premises of the Company or wherever the Collateral shall be located
and keep the Collateral at such locations without charge until sold; and
(iii) Written notice, when required by law, sent
to the Company at least ten calendar days (counting the day of sending) before
a proposed disposition of the Collateral is reasonable notice.
(c) Protective Advances. The Secured Party is
authorized, at its option, in the Company's name or otherwise, to take such
action as may be necessary or desirable to remedy any failure by the Company
to comply with its obligations hereunder including, without limitation,
signing the Company's name or paying any amount so required, and any amount so
paid shall be payable by the Company to the Secured Party upon demand with
interest from the date of payment by Secured Party at the Default Rate.
7.2 No Marshalling. The Collateral may be sold in such
parcels and in such order as the Secured Party shall determine. The Company,
for itself and all other persons claiming by, through or under it, hereby
waives and releases, to the extent permitted by applicable law, any right to
have the Collateral or any part thereof, marshalled upon any sale, foreclosure
or other disposition thereof.
7.3 Instruments of Sale. The Secured Party may execute
and deliver to each purchaser of Collateral bills of sale, deeds or other
instruments conveying or transferring the property sold. The Company
irrevocably appoints the Secured Party as its attorney to execute and deliver
all such instruments and ratifies and confirms all actions taken by the
Secured Party pursuant to such appointment. If so requested by the Secured
Party, the Company shall execute and deliver to the Secured Party or to any
such purchaser of Collateral such instruments of conveyance as deemed
necessary or convenient by the Secured Party.
7.4 Application of Proceeds. All amounts received by the
Secured Party in exercising its rights hereunder shall, unless otherwise
required by law, be applied by the Secured Party to expenses incurred by the
Secured Party in protecting or enforcing its rights under this Agreement
(including without limitation reasonable attorneys' fees and all expenses of
taking possession, storing, holding, repairing, restoring, preparing for
disposition and disposing of the Collateral) and to the Obligations in such
order and amounts as elected by the Secured Party.
7.5 Remedies Cumulative. No remedy granted herein to the
Secured Party is exclusive of any other remedy granted hereunder or by
applicable law.
7.6 Waiver. The Secured Party may permit the Company to
cure any default hereunder without waiving the default so cured and the
Secured Party may waive any default without waiving any subsequent or prior
default by the Company.
8. Miscellaneous.
8.1 Notices. All notices provided for herein shall be
sent in the manner, to the address and shall be effective as provided in the
Credit Agreement.
8.2 Governing Law. This Agreement is being delivered in
and shall be deemed to be a contract governed by the laws of the State of
Wisconsin and shall be interpreted and enforced in accordance with the laws of
that state without regard to the principles of conflicts of laws except to the
extent that the laws of any other state where Collateral is located may govern
the perfection of the security interest granted to the Secured Party herein
and the enforcement of the Secured Party's rights and remedies with respect
thereto.
8.3 Submission to Jurisdiction; Service of Process. As a
material inducement to the Secured Party to enter into the Credit Agreement:
(a) THE COMPANY AGREES THAT ALL ACTIONS OR PROCEEDINGS IN
ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT OR THE OTHER LOAN
DOCUMENTS (OTHER THAN ACTIONS BROUGHT BY THE SECURED PARTY TO ENFORCE ITS
RIGHTS AND REMEDIES HEREUNDER) MAY BE BROUGHT ONLY IN COURTS OF THE STATE OF
WISCONSIN LOCATED IN MILWAUKEE COUNTY OR THE FEDERAL COURT FOR THE EASTERN
DISTRICT OF WISCONSIN AND THE COMPANY CONSENTS TO THE JURISDICTION OF SUCH
COURTS. THE COMPANY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH COURT AND ANY RIGHT IT MAY HAVE NOW OR HEREAFTER HAVE TO
CLAIM THAT ANY SUCH ACTION OR PROCEEDING IS IN AN INCONVENIENT COURT; and
(b) The Company consents to the service of process in any
such action or proceeding by certified mail sent to the address specified in
section 8.4 of the Credit Agreement.
Nothing contained herein shall affect the right of the
Secured Party to serve process in any other manner permitted by law or to
commence an action or proceeding in any other jurisdiction.
8.4 Waiver of Jury Trial. THE COMPANY HEREBY KNOWINGLY
AND VOLUNTARILY WAIVES THE RIGHT IT MAY HAVE TO A JURY TRIAL WITH RESPECT TO
ANY ACTION OR CLAIM BASED ON OR ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ANY OTHER ACTION OF EITHER
PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE SECURED PARTY TO ENTER
INTO THE CREDIT AGREEMENT.
8.5 Limitation of Liability. THE COMPANY HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER FROM THE SECURED PARTY ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES, OF WHATEVER
NATURE, OTHER THAN ACTUAL DAMAGES.
8.6 Severability. The invalidity of any provision of this
Agreement shall not affect the validity of any other provision.
8.7 Persons Bound; Termination of Security Interest.
(a) This Agreement is for the benefit of the Secured
Party and its successors and assigns and binds the Company and its successors
and assigns.
(b) Upon payment of the Obligation described in
clause (a) of the definition thereof and other amounts payable under this
Security Agreement, the expiration of the Secured Party's obligation to extend
credit under the Credit Agreement and the expiration of all Letters of Credit,
the security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the Company.
8.8 Entire Agreement. This Agreement shall constitute the
entire agreement of the parties pertaining to the subject matter hereof and
supersedes all prior or contemporaneous agreements and understandings of the
parties in connection therewith.
8.9 Intercreditor Agreement. The Company and the Secured
Party acknowledge and agree that as between the Secured Party and the
Collateral Agent, the Secured Party's rights under this Security Agreement are
subject to the Intercreditor Agreement of even date herewith between the
Secured Party and the Collateral Agent.
BUCYRUS-ERIE COMPANY
BY /s/ N. J. Verville
Its Vice President
<PAGE>
EXHIBIT 10-3
FORM 8-K
DECEMBER 14, 1994
PLEDGE AGREEMENT
THIS PLEDGE AGREEMENT, dated as of December 14, 1994, is by and
between BUCYRUS-ERIE COMPANY (the "Company") and BANK ONE, MILWAUKEE, NATIONAL
ASSOCIATION (the "Bank").
RECITALS
The Company and the Bank acknowledge the following:
A. The Bank has entered into a Credit Agreement dated as of the
date hereof with the Company (said Agreement, as amended or modified from time
to time, is herein referred to as the "Credit Agreement") pursuant to which
the Bank will make loans and provide other financial accommodations to the
Company.
B. The Bank requires, as a condition to entering into the
Credit Agreement and the making of loans thereunder, that the Company execute
and deliver this Pledge Agreement.
AGREEMENTS
In consideration of the Recitals and in order to induce the Bank
to extend credit under the Credit Agreement, the Company hereby agrees with
the Bank as follows:
1. Definitions. All terms defined in the Wisconsin Uniform
Commercial Code (the "UCC") and used herein shall have the meanings assigned
in the UCC and capitalized terms not defined herein shall have the meanings
assigned in the Credit Agreement.
2. Pledge. To secure the payment and performance by the
Company of its obligations pursuant to the Loan Documents (the "Secured
Obligations"), the Company hereby pledges to the Bank and grants to the Bank a
first priority security interest in all its right, title and interest in and
to the collateral described in section 3 below (the "Pledged Collateral").
3. Pledged Collateral. The Pledged Collateral shall consist of
the following:
(a) All right, title and interest of the Company, now
existing or hereafter acquired, in 100% of all shares of stock, certificates,
instruments or other documents representing an ownership interest in Domestic
Subsidiaries and in 65% of all shares of stock, certificates, instruments or
other documents representing an ownership interest in Foreign Subsidiaries;
(b) all right, title and interest of the Company in and to
all certificates of deposit and repurchase agreements issued by the Bank
(whether or not evidenced by a written instrument) from time to time and all
other instruments, banker's acceptances, commercial paper or securities
(including securities issued by the United States government or any agency or
instrumentality thereof) (whether or not evidenced by a written instrument)
now or hereafter in the possession or control of the Bank for collateral
purposes;
(c) all right, title and interest of the Company in and to
all present and future payments, dividends, distributions, instruments,
compensation, property, assets, interests and rights, and all monies, due or
to become due and payable to the the Company in connection with the Pledged
Collateral or otherwise paid, issued or distributed from time to time in
respect thereof or in exchange therefor, and any certificate, instrument or
other document, evidencing or representing the same (including all proceeds of
dissolution or liquidation); and
(d) All proceeds of the foregoing.
For purposes of this Pledge Agreement, the term "proceeds" includes whatever
is receivable or received when Collateral is sold, collected, exchanged or
otherwise disposed of, whether such disposition is voluntary or involuntary.
The shares of stock, certificates, instruments or other documents evidencing
or representing the foregoing shall be collectively referred to herein as the
"Pledged Securities."
4. Secured Obligations. The Secured Obligations consist of (a)
all of the Company's debts, obligations and liabilities to the Bank arising
pursuant to the Loan Documents of whatever nature (contingent or otherwise),
and all amendments and extensions or renewals thereof, whether arising out of
existing, contemporaneous or future credit granted by the Bank to the Company,
to the Company and another, or to another guaranteed by the Company, (b) the
Company's liabilities and obligations to Banc One Leasing Corporation under
Master Lease Agreement No. 63-0116616 dated February 6, 1989, and all
schedules thereto, under Master Agreement No. 116616 dated September 24, 1991,
and all schedules thereto, and under any Master Lease Agreement, and all
schedules thereto, entered into after the date hereof to the extent that Banc
One Leasing Corporation has assigned its rights thereunder to the Bank and (c)
the Company's debts, obligations and liabilities to the Bank and/or the
Project Financing Lenders relating to a Project Financing provided by the Bank
and/or Project Financing Lenders.
4. Delivery of Pledged Securities. The Company shall deliver
to the Bank:
(a) The Pledged Securities representing an ownership
interest in Domestic Subsidiaries and Foreign Subsidiaries within the time
limit set forth in section 5.14(a) of the Credit Agreement; and
(b) Any other original shares of stock, certificates,
instruments or other documents constituting Pledged Securities within five
days after the Company's receipt thereof.
All Pledged Securities which are certificated securities
shall be in bearer form or, if in registered form, shall be issued in the name
of the Bank or endorsed to the Bank or in blank or accompanied by blank stock
powers, duly executed by the Company.
5. Representations, Warranties and Covenants of the Company.
The Company hereby represents, warrants and covenants that:
(a) Percentage of Outstanding Equity. The Pledged
Securities constitute, and until payment in full of the Secured Obligations
will continue to constitute, all of the outstanding shares of capital stock of
the Domestic Subsidiaries and 65% of the outstanding shares of capital stock
of the Foreign Subsidiaries.
(b) Due Authorization, Etc., of Stock. The Pledged
Securities have been duly authorized and validly issued and are fully paid and
nonassessable.
(c) Sale or Other Disposition of Pledged Collateral. The
Company will not assign (by operation of law or otherwise), sell, lease,
transfer, pledge or grant a security interest in (other than a security
interest in favor of the Collateral Agent)or otherwise dispose of or abandon
any Pledged Collateral, and the inclusion of "proceeds" of the Pledged
Collateral under the security interest granted herein shall not be deemed a
consent by the Bank to any sale or other disposition of any Pledged Collateral
except as expressly permitted herein.
(d) Required Consents. Except for any consents as may be
required in connection with any disposition of any portion of the Pledged
Securities by laws affecting the offering and sale of securities generally, no
consent of any other person or entity (including stockholders and creditors of
the Company) is required in connection with (i) the execution, delivery,
performance, validity or enforceability of this Pledge Agreement; (ii) the
perfection or maintenance of the security interest created hereby; or
(iii) the exercise by the Bank of the voting or other rights provided for in
this Pledge Agreement.
(e) Nature of Security Interest. When the Pledged
Securities in certificated form are delivered to the Bank, the Bank will
obtain a valid and perfected security interest in such Pledged Securities as
security for the repayment of the Secured Obligations, prior to all other
liens and encumbrances thereon and security interests therein.
(f) Action Impairing Value of Pledged Collateral. The
Company will not, without the prior written consent of the Bank, execute any
document or instrument or take any other action in connection with any of the
Pledged Collateral which would impair the value of the interest or rights of
the Company or the Bank therein. None of the Pledged Collateral is subject to
an option to purchase or similar right of any person or entity.
(g) Further Assurances. The Company will, at its sole
cost and expense, perform all acts and execute all documents requested by the
Bank from time to time to evidence, perfect, maintain or enforce the Bank's
fsecurity interest in the Pledged Collateral or otherwise in furtherance of
the provisions of this Pledge Agreement.
6. Registration.
(a) At any time before or after the occurrence of an Event
of Default the Bank may cause all or any of the Pledged Securities to be
transferred to or registered in its name or the name of its nominee or
nominees.
(b) The Company will not permit any Domestic Subsidiary or
any Foreign Subsidiary to issue, deliver or register for transfer (i) any
shares of its capital stock, (ii) any securities or obligations convertible or
exchangeable into any such shares or (iii) any warrants, rights or options to
subscribe for or purchase any such shares or any such convertible or
exchangeable securities or obligations.
7. Voting Rights and Certain Payments Prior to Default. So
long as no Event of Default exists, the Company shall be entitled:
(a) to exercise, as the Company shall think fit:
(i) the voting power with respect to the Pledged
Collateral in respect of the election of directors; and
(ii) the voting power with respect to the Pledged
Collateral in respect of all other matters but in a manner not inconsistent
with the terms hereof or of the Secured Obligations; provided, however, that
the Company shall not exercise or refrain from exercising any such voting
power if such action would have a material adverse effect on the value of the
Pledged Collateral or any part thereof.
For the above purposes, the Bank shall (if any
Pledged Securities shall be registered in the name of the Bank or its nominee)
execute or cause to be executed from time to time, at the expense of the
Company, such proxies or other instruments in favor of the Company, in such
form and for such purposes as shall be reasonably required by the Company as
specified in a written request therefor, to enable the Company to exercise
such voting power with respect to the Pledged Securities;
(b) except as otherwise provided in sections 8 and 9
hereof, to receive and retain for its own account any and all payments,
proceeds, dividends, distributions, monies, compensation, property, assets,
instruments or rights, other than:
(i) stock or liquidating dividends; or
(ii) extraordinary dividends and dividends or other
amounts payable under or in connection with any recapitalization,
restructuring or other nonordinary course event, paid, issued or distributed
from time to time in respect of the Pledged Collateral (the dividends and
amounts in this clause (ii) being called "Extraordinary Payments").
8. Extraordinary Payments and Distributions.
(a) In case, upon the dissolution or liquidation (in whole
or in part) of the Subsidiary, any sum shall be paid or payable as a
liquidating dividend or otherwise upon or with respect to any of the Pledged
Securities or in the event any other Extraordinary Payment is paid or payable,
then and in any such event such sum shall be paid over to the Bank promptly,
and in any event within five days after receipt thereof, to be held by the
Bank as additional collateral hereunder or, in the discretion of the Bank,
applied on the Secured Obligations.
(b) In case any stock dividend shall be declared with
respect to any of the Pledged Securities, or any shares of stock or fractions
thereof shall be issued pursuant to any stock split or reclassification
involving any of the Pledged Securities, or any distribution of capital shall
be made on any of the Pledged Securities, or any shares, obligations or other
property shall be distributed upon or with respect to the Pledged Securities
pursuant to a recapitalization or reclassification of the capital of the
Company, or pursuant to the dissolution, liquidation (in whole or in part),
bankruptcy or reorganization of the Subsidiary, or to the merger or
consolidation of the Subsidiary with or into another corporation, the shares,
obligations or other property so distributed shall be delivered to the Bank
promptly, and in any event within five days after receipt thereof, to be held
by the Bank as additional collateral hereunder, and all the same (other than
cash) shall constitute Pledged Collateral for all purposes hereof.
9. Voting Rights and Certain Payments After Default.
(a) Upon the occurrence and during the continuance of any
Event of Default, all rights of the Company to exercise or refrain from
exercising the voting and other consensual rights which the Company would
otherwise be entitled to exercise pursuant to section 7(a) hereof and to
receive the dividends and interest payments which it would otherwise be
authorized to receive and retain pursuant to section 7(b) shall upon written
notice by the Bank to the Company cease, and thereupon the Bank shall be
entitled to exercise all voting power with respect to the Pledged Securities
and to receive and retain, as additional collateral hereunder, any and all
dividends, distributions and interest at any time and from time to time
declared or paid upon any of the Pledged Securities.
(b) All dividends, distributions and interest payments
which are received by the Company contrary to the provisions of subsection (a)
above shall be received in trust for the benefit of the Bank, shall be
segregated from other funds of the Company and shall be forthwith paid over to
the Bank as Pledged Collateral in the same form as so received (with any
necessary endorsement).
10. Remedies.
(a) If any Event of Default exists, the Bank may exercise
in respect of the Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
of a secured party on default under the UCC (whether or not applicable to the
affected Pledged Collateral) and may also, without obligation to resort to
other security, at any time and from time to time sell, resell, assign and
deliver, in its discretion, all or any of the Pledged Collateral, in one or
more parcels at the same or different times, and all right, title and
interest, claim and demand therein and right of redemption thereof, at public
or private sale, for cash, upon credit or for future delivery, and in
connection therewith the Bank may grant options, the Company hereby waiving
and releasing any and all equity or right of redemption.
(b) If any of the Pledged Collateral is sold by the Bank
upon credit or for future delivery, the Bank shall not be liable for the
failure of the purchaser to purchase or pay for the same and, in the event of
any such failure, the Bank may resell such Pledged Collateral. In no event
shall any part of the proceeds of sale of any Pledged Collateral be credited
against the Secured Obligations until the payment therefor has actually been
received by the Bank.
(c) The Bank may apply the cash proceeds actually received
from any sale or other disposition of the Pledged Collateral to the Secured
Obligations in any order or manner which the Bank may determine, and the
Company shall remain liable and will pay the Bank on demand any deficiency
remaining.
(d) The Company recognizes that the Bank may be unable to
effect a public sale of the Pledged Collateral consisting of securities by
reason of certain prohibitions contained in the Securities Act, or in
applicable Blue Sky or other state securities laws, as now or hereafter in
effect, but may be compelled to resort to one or more private sales to a
restricted group of purchasers who will be obliged to agree, among other
things, to acquire such securities for their own account, for investment and
not with a view to the distribution or resale thereof. The Company agrees
that any such Collateral sold at any such private sale may be sold at a price
and upon other terms less favorable to the seller than if sold at public sale
and that each such private sale shall be deemed to have been made in a
commercially reasonable manner. The Bank shall have no obligation to delay
sale of any such securities for the period of time necessary to permit the
Company, even if the Company would agree, to register such securities for
public sale under the Securities Act. The Company agrees that private sales
made under the foregoing circumstances shall be deemed to have been made in a
commercially reasonable manner.
(e) The Bank shall give the Company ten days' prior notice
of the time and place of any public sale and of the time after which any
private sale or other disposition is to be made, which notice the Company
agrees is reasonable, all other demands, advertisements and notices being
hereby waived.
(f) The Bank shall not be obligated to make any sale of
Pledged Collateral if it shall determine not to do so, regardless of the fact
that notice of sale may have been given. The Bank may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
sale, and such sale may, without further notice, be made at the time and place
to which the same was so adjourned.
(g) The remedies provided herein in favor of the Bank
shall not be exclusive, but shall be cumulative and in addition to all other
remedies in favor of the Bank existing at law or in equity.
11. Bank Appointed Attorney-in-Fact.
(a) To effectuate the terms and provisions hereof, the
Company hereby appoints the Bank as the Company's attorney-in-fact for the
purpose, after the occurrence and during the continuance of an Event of
Default, of carrying out the provisions of this Pledge Agreement and taking
any action and executing any instrument which the Bank may deem necessary or
advisable to accomplish the purposes hereof (subject to the rights of the
Company under section 7). Without limiting the generality of the foregoing,
the Bank shall, after the occurrence and during the continuance of an Event of
Default, have the right and power to:
(i) receive, endorse and collect all checks and
other orders for the payment of money made payable to the Company representing
any interest or dividend or other distribution or amount payable in respect of
the Pledged Collateral or any part thereof and to give full discharge for the
same; and
(ii) execute endorsements, assignments or other
instruments of conveyance or transfer with respect to all or any of the
Pledged Collateral.
(b) Other than any action which constitutes gross
negligence or willful misconduct, all acts done under the foregoing
authorization are hereby ratified and approved and neither the Bank nor any
designee or agent thereof shall be liable for any act or omission, for any
error of judgment or for any mistake of fact or law.
(c) This power of attorney, being coupled with an
interest, is irrevocable while any Secured Obligations remain unpaid or
unperformed.
12. Bank's Duties; Reasonable Care.
(a) The Bank shall have the duty to exercise reasonable
care in the custody and preservation of any Pledged Collateral in its
possession, which duty shall be fully satisfied if the Bank maintains safe
custody of such Pledged Collateral
(b) Except as specifically set forth above, the Bank shall
have no further obligation to ascertain the occurrence of, or to notify the
Company with respect to, any events and shall not be deemed to assume any such
further obligation as a result of the establishment by the Bank of any
internal procedures with respect to any securities in its possession, nor
shall the Bank be deemed to assume any other responsibility for, or obligation
or duty with respect to, any Pledged Collateral, or its use, of any nature or
kind, or any matter or proceedings arising out of or relating thereto,
including any obligation or duty to take any action to collect, preserve or
protect its or the Company's rights in the Pledged Collateral or against any
prior parties thereto, but the same shall be at the Company's sole risk and
responsibility at all times.
(c) The Company hereby releases the Bank, and its
officers, directors, employees and agents, from any claims, causes of action
and demands at any time arising out of or with respect to this Pledge
Agreement, the Pledged Collateral and/or any actions taken or omitted to be
taken by the Bank with respect thereto (except, in the case of the Bank, such
claims, causes of action and demands arising from the gross negligence or
willful misconduct of the Bank), and the Company hereby agrees to hold the
Bank and its officers, directors, employees and agents harmless from and with
respect to any and all such claims, causes of action and demands (except such
claims, causes of action and demands arising from the gross negligence or
willful misconduct of the Bank).
13. Rights and Remedies Not Waived. The Bank's prior recourse
to any Pledged Collateral shall not constitute a condition of any demand, suit
or proceeding for payment or collection of the Secured Obligations. No act,
omission or delay by the Bank shall constitute a waiver of its rights and
remedies hereunder or otherwise. No single or partial waiver by the Bank of
any default hereunder or right or remedy which it may have shall operate as a
waiver of any other default, right or remedy or of the same default, right or
remedy on a future occasion.
14. Bank May Perform. If the Company fails to perform any
agreement contained herein, the Bank may itself perform, or cause performance
of, such agreement, and the expenses of the Bank incurred in connection
therewith shall be payable by the Company on demand.
15. Governing Law. This Agreement is being delivered in and
shall be deemed to be a contract governed by the laws of the State of
Wisconsin and shall be interpreted and enforced in accordance with the laws of
that state without regard to the principles of conflicts of laws.
16. Submission to Jurisdiction; Service of Process. As a
material inducement to the Bank to enter into the Credit Agreement:
(a) THE COMPANY AGREES THAT ALL ACTIONS OR PROCEEDINGS IN
ANY MANNER RELATING TO OR ARISING OUT OF THIS AGREEMENT MAY BE BROUGHT ONLY IN
COURTS OF THE STATE OF WISCONSIN LOCATED IN MILWAUKEE COUNTY OR THE FEDERAL
COURT FOR THE EASTERN DISTRICT OF WISCONSIN AND THE COMPANY CONSENTS TO THE
JURISDICTION OF SUCH COURTS. THE COMPANY WAIVES ANY OBJECTION IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH COURT AND ANY RIGHT IT MAY HAVE NOW OR
HEREAFTER HAVE TO CLAIM THAT ANY SUCH ACTION OR PROCEEDING IS IN AN
INCONVENIENT COURT; and
(b) The Company consents to the service of process in any
such action or proceeding by certified mail sent to the address specified in
section 20.
Nothing contained herein shall affect the right of the Bank
to serve process in any other manner permitted by law or to commence an action
or proceeding in any other jurisdiction.
17. Waiver of Jury Trial. THE COMPANY AND THE BANK HEREBY
KNOWINGLY AND VOLUNTARILY WAIVE THE RIGHT EACH OF THEM MAY HAVE TO A JURY
TRIAL WITH RESPECT TO ANY ACTION OR CLAIM BASED ON OR ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OTHER AGREEMENT RELATING HERETO, ANY
COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN)
OR ANY OTHER ACTION OF EITHER PARTY. THIS PROVISION IS A MATERIAL INDUCEMENT
TO THE BANK TO ENTER INTO THE CREDIT AGREEMENT.
18. Limitation of Liability. THE COMPANY AND THE BANK HEREBY
WAIVE ANY RIGHT EITHER OF THEM MAY HAVE TO CLAIM OR RECOVER FROM THE OTHER
PARTY ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY
DAMAGES, OF WHATEVER NATURE, OTHER THAN ACTUAL DAMAGES.
19. Admissibility of Pledge Agreement. The Company agrees that
a copy of this Pledge Agreement signed by the Company and transmitted by
telecopier for delivery to the Bank shall be admissible in evidence as the
original itself in any judicial or administrative proceeding, whether or not
the original is in existence.
20. Notices. All notices shall be sent in the manner, to such
addresses and shall be effective at such times as are set forth in section 8.4
of the Credit Agreement.
21. Entire Agreement; Amendments and Modification. This Pledge
Agreement is the entire agreement of the parties with respect to the subject
matter hereof and supersedes all prior understandings and agreements. No
provision of this Agreement shall be amended or modified except by a written
instrument executed by the Company and the Bank.
22. Continuing Pledge Agreement.
(a) This Pledge Agreement shall create a continuing
security interest in the Pledged Collateral and shall be binding upon the
Company and its successors and assigns and inure to the benefit of, and be
enforceable by, the Bank and its successors, transferees and assigns.
(b) Upon the payment in full of the Secured Obligations
described in section 4(a) and all other amounts payable under this Pledge
Agreement, the expiration of the Bank's obligation to extend credit under the
Credit Agreement and the expiration of all Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Pledged
Collateral shall revert to the Company. Upon any such termination, the Bank
will, at the Company's expense and without representation or warranty of any
nature whatsoever and wholly without recourse, return to the Company such of
the Pledged Collateral as shall not have been sold or otherwise applied
pursuant to the terms hereof and execute and deliver to the Company such
documents as the Company shall reasonably request to evidence such
termination.
23. Captions; Separability. The captions of the sections and
subsections of this Pledge Agreement have been inserted for convenience only
and shall not in any way affect the meaning or construction of any provision
of this Pledge Agreement. If any term of this Pledge Agreement shall be held
to be invalid, illegal or unenforceable, the validity of all other terms
hereof shall in no way be affected thereby.
24. Intercreditor Agreement. The Company and the Bank
acknolwedge and agree that as between the Bank and the Collateral Agent, the
Bank's rights under this Pledge Agreement are subject to the Intercreditor
Agreement of even date herewith between the Bank and the Collateral Agent.
BUCYRUS-ERIE COMPANY
BY /s/ N. J. Verville
Its Vice President
BANK ONE, MILWAUKEE,
NATIONAL ASSOCIATION
BY /s/ William E. Shaw
Its Vice President
<PAGE>
EXHIBIT 10.4
FROM 8-K
DECEMBER 14, 1994
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT, dated as of December 14, 1994, is
between BANK ONE, MILWAUKEE, NATIONAL ASSOCIATION (the "Bank") and Harris
Trust and Savings Bank, not in its individual capacity, but solely, as
Collateral Agent (the "Collateral Agent") under the Security Agreement of even
date herewith (the "Collateral Agent Security Agreement") between the
Collateral Agent and Bucyrus-Erie Company, a Delaware corporation (the
"Company").
RECITALS
The Bank and the Collateral Agent acknowledge the following:
A. The Bank will make loans to, and issue letters of credit for
the account of, the Company pursuant to the Credit Agreement (as defined
below).
B. The Company has granted the Bank a security interest in the
Bank Collateral (as defined below) as security for the payment by the Company
of all of its obligations to the Bank arising under the Bank Documents (as
defined below) and for the performance by the Company of all of the Company's
obligations under the Bank Documents.
C. Pursuant to the Second Amended Joint Plan of Reorganization
(the "Plan") of the Company and B-E Holdings, Inc., a Delaware corporation,
the Company shall issue its Secured Notes due December 14, 1999 (the "Secured
Notes") and the Company may from time to time hereafter issue additional
Secured Notes (the "Additional Secured Notes", and together with the Secured
Notes, the "Securities") pursuant to an Indenture of even date herewith (the
"Indenture") between the Company and Harris Trust and Savings Bank, as trustee
(the "Trustee").
D. Pursuant to the Plan, the Company shall enter into the
Collateral Agent Security Agreement to grant the Collateral Agent, for the
benefit of the holders of the Securities, the Collateral Agent and the
Trustee, a security interest in the "Collateral" (as defined in the Collateral
Agent Security Agreement and referred to herein as the "Collateral Agent
Collateral").
E. The Bank and the Collateral Agent desire to enter into this
Agreement to define their relative rights with respect to their security
interests in the Bank Collateral and the Collateral Agent Collateral,
respectively.
AGREEMENTS
In consideration of the Recitals and the promises and agreements
set forth below, the Bank and the Collateral Agent agree as follows:
1. Definitions. As used herein, the following terms shall have
the following meanings:
(a) "Bank Collateral" means, as of the date hereof, the
property of the Company described in Schedule 1 attached hereto and shall also
include any additional property of the Company in which the Bank and/or the
Project Financing Lenders are granted a security interest or similar right in
connection with a Project Financing.
(b) "Bank Documents" means (i) the Credit Agreement and
all the other Loan Documents (as defined in the Credit Agreement) and (ii) if
the Bank and/or the Project Financing Lenders provide Project Financing to the
Company, the loan or credit agreement and all related documents evidencing,
securing or provided in connection with such Project Financing.
(c) "Bank Obligations" means (i) the unpaid principal
balance of and all accrued interest due on the Notes (as defined in the Credit
Agreement), (ii) the LOC Exposure (as defined in the Credit Agreement) and all
accrued interest thereon, (iii) the unpaid principal balance of and all
accrued interest due with respect to any Project Financing provided by the
Bank or by the Project Financing Lenders, (iv) all fees owed by the Company to
the Bank or the Project Financing Lenders pursuant to the Bank Documents, (v)
all out-of-pocket expenses (including reasonable attorneys' fees) paid or
incurred by the Bank and/or the Project Financing Lenders which the Company is
obligated to pay to the Bank and/or the Project Financing Lenders under the
Bank Documents (including without limitation, all costs and expenses paid or
incurred by the Bank and/or the Project Financing Lenders in connection with
an Enforcement Action) and (vi) all indemnity payments, breakage fees and
similar obligations of the Company to the Bank and/or the Project Financing
Lenders.
(d) "Bank Priority Obligations" means the Bank Obligations
(other than the unpaid principal balance of and all accrued interest due on
the PECFA Notes (as defined in the Credit Agreement)), provided that (i) such
amount shall not exceed $16,000,000, (ii) the aggregate amount of the
principal balance of the Revolving Note, the LOC Exposure and the unpaid
principal balance of any Project Financing furnished by the Bank and/or the
Project Financing Lenders considered Bank Priority Obligations shall be
limited to $15,000,000 and (iii) the aggregate amount of the principal balance
of the Revolving Note to be included as Bank Priority Obligations shall not
exceed the lesser of the actual outstanding principal balance of the Revolving
Note and (A) from the date hereof until December 31, 1995, $5,000,000 and (B)
from January 1, 1996 until the Revolving Note Maturity Date, $2,500,000.
(e) "Code" means 11 U.S.C. Section 101 et seq.
(f) "Credit Agreement" means the Credit Agreement of even
date herewith between the Bank and the Company as amended, modified,
supplemented or restated from time to time.
(g) "Enforcement Action" means any action commenced by the
Bank, the Project Financing Lenders or the Collateral Agent to realize upon
the Bank Collateral or the Collateral Agent Collateral including, without
limitation, any action under the Uniform Commercial Code in effect in the
applicable jurisdiction or the acceptance of a voluntary surrender of Bank
Collateral or Collateral Agent Collateral.
(h) "Project Financing" means indebtedness of the Company
incurred to pay the costs associated with the manufacture of mining machinery
or other products pursuant to a binding purchase contract, which Indebtedness
is secured by the inventory being financed and the related accounts and which
has a maturity date not later than the date of the final payment by the
customer under the purchase contract.
(i) "Project Financing Lenders" means a group of lenders
of which the Bank is a member providing Project Financing to the Company.
(j) "Revolving Note" has the meaning ascribed to it in the
Credit Agreement.
(k) "Revolving Note Maturity Date" has the meaning
ascribed to it in the Credit Agreement.
2. Priority. Notwithstanding the order of the filing of
financing statements, mortgages or any other document or instrument with
respect to the Bank Collateral and the Collateral Agent Collateral, the Bank
and the Collateral Agent acknowledge and agree that the Bank's and the Project
Financing Lenders security interests in the Bank Collateral are prior and
superior, to the extent provided in this Agreement, to the Collateral Agent's
security interest in the Collateral Agent Collateral until such time as the
Bank Priority Obligations are paid in full (or provision for payment in
accordance with section 5 is made with respect to any Bank Priority
Obligations which are not at such time then due and payable). Thereafter, the
Collateral Agent's security interest in the Collateral Agent Collateral is
prior to any security interest of the Bank therein until such time as the
obligations of the Company secured by the Collateral Agent Collateral are paid
in full.
3. Enforcement Actions.
(a) The Collateral Agent agrees that it will not initiate
an Enforcement Action with respect to the Collateral Agent Collateral until
the expiration of the "Standstill Period" (as defined below).
"Standstill Period" means (i) in the case of an "Event
of Default" as defined in sections 501(1) and 501(2) of the Indenture, a
period ending 30 days after the Collateral Agent provides written notice to
the Bank of the occurrence of such "Event of Default" and (ii) in the case of
any other "Event of Default" as defined in the Indenture or in the Collateral
Agent Security Agreement, a period ending 90 days after the Collateral Agent
provides written notice to the Bank of the occurrence of such Event of
Default; provided that (x) if the applicable provisions of the Indenture or
the Collateral Agent Security Agreement allow a period for the Company to cure
such Event of Default, the 30-day or 90-day Standstill Period, as the case may
be, shall begin to run only after the expiration of such cure period, (y) if
the Company cures the Event of Default during the 30-day or 90-day Standstill
Period, then the Collateral Agent may not thereafter initiate an Enforcement
Action with respect to such Event of Default and (z) the Standstill Period
shall expire if the Bank or the Project Financing Lenders initiate an
Enforcement Action with respect to the Bank Collateral.
(b) The Bank or the Project Financing Lenders may initiate
an Enforcement Action with respect to the Bank Collateral at any time after
the occurrence of an Event of Default under any of the Bank Documents and the
Bank shall provide written notice to the Collateral Agent promptly following
the initiation of any Enforcement Action with respect to any Bank Collateral
which is also Collateral Agent Collateral.
(c) The Collateral Agent agrees that, until such time as
the Bank Priority Obligations are paid in full or provision for payment is
made, it will not conduct any Enforcement Action with respect to the
Collateral Agent Collateral in such a manner which might impair or interfere
with any Enforcement Action being conducted by the Bank and/or the Project
Financing Lenders with respect to the Bank Collateral.
(d) The Bank and/or the Project Financing Lenders may
conduct an Enforcement Action with respect to Bank Collateral which is not
Collateral Agent Collateral in such manner as the Bank and/or the Project
Financing Lenders deem appropriate at the time. Any proceeds resulting from
such an Enforcement Action shall be applied to the Bank Obligations in such
manner as the Bank and/or the Project Financing Lenders elect.
(e) Except to the extent required by applicable law,
neither the Bank nor the Project Financing Lenders have any duty to the
Collateral Agent or the holders of any of the Securities to conduct an
Enforcement Action in a manner which will preserve any rights of the
Collateral Agent (or the value realizable from such rights) with respect to
the property subject thereto.
4. Distribution of Proceeds of Enforcement Action or Other
Proceeding.
(a) Upon any distribution of all or any of the assets of
the Company upon the conclusion of an Enforcement Action or upon the
dissolution, winding up, liquidation or reorganization of the Company or
reorganization or receivership proceedings or upon an assignment for the
benefit of creditors or any other marshaling of the assets and liabilities of
the Company or otherwise, any payment or distribution of any kind (whether in
cash, property or securities) attributable to the Collateral Agent Collateral
which otherwise would be payable or deliverable to the Collateral Agent shall
be paid or delivered directly to the Bank and/or the Project Financing Lenders
for application to the payment of the Bank Priority Obligations until the Bank
Priority Obligations shall have been paid in full
(b) At such time as the Bank Priority Obligations have
been paid in full, any payment or distribution received by the Bank and/or the
Project Financing Lenders thereafter attributable to the Collateral Agent
Collateral shall be turned over by the Bank to the Collateral Agent until such
time as the obligations of the Company secured by the Collateral Agent have
been paid in full.
(c) All payments or distributions which are received by
Collateral Agent contrary to the provisions of this Agreement shall be
received in trust for the benefit of the Bank and/or the Project Financing
Lenders, shall be segregated from other funds and property held by Collateral
Agent and shall be forthwith paid over to the Bank in the same form as so
received (with any necessary endorsement) to be applied to or held as
collateral for the payment or prepayment of the Bank Obligations in accordance
with the terms of the Bank Documents. In the event of the failure of the
Collateral Agent to make any such endorsement or assignment to the Bank, the
Bank, or any of its officers or employees, is hereby irrevocably authorized to
make the same.
(d) All payments or distributions which are received by
the Bank contrary to the provisions of this Agreement shall be received in
trust for the benefit of the Collateral Agent, shall be segregated from other
funds and property held by the Bank and shall be forthwith paid over to the
Collateral Agent in the same form received (with any necessary endorsement) to
be applied to or held as collateral for the payment of the obligations secured
by the Collateral Agent Collateral in accordance with the terms of the
Indenture and the Collateral Agent Security Agreement. In the event of the
failure of the Bank to make such endorsement or assignment to the Collateral
Agent, the Collateral Agent, or any of its officers or employees, is hereby
irrevocably authorized to make the same.
5. Cash Collateral Account. In the event that the Bank
Obligations are not yet due and payable but the Bank receives payments or
distributions pursuant to an Enforcement Action or under section 4 above, such
amounts shall be deposited in the Cash Collateral Account referred to in
section 7.2 of the Credit Agreement and shall be invested, and applied to the
Bank Priority Obligations, as set forth therein. If there are any funds
remaining in the Cash Collateral Account after all the Bank Priority
Obligations have been paid in full and all letters of credit issued by the
Bank which could give rise to a Bank Priority Obligation have expired, such
excess shall be turned over to the Collateral Agent (unless the Collateral
Agent shall have notified the Bank in writing that all obligations secured by
the Collateral Agent Collateral have been paid in full and all Bank
Obligations have been paid in full and all letters of credit issued by the
Bank have expired, in which event such excess shall be turned over to the
Company) or as otherwise directed by a court of competent jurisdiction.
6. Modification of Documents.
(a) The Bank, at any time and from time to time, may enter
into such agreement or agreements with Company as the Bank and the Company may
deem proper amending the provisions of the Credit Agreement or any other Bank
Document and the Bank and/or the Project Financing Lenders may enter into such
documents relating to a Project Financing with the Company as may be deemed
appropriate without the consent of the Collateral Agent.
(b) The Collateral Agent shall not enter into any
amendment to the Collateral Agent Security Agreement (or enter into any other
agreement with the Company) which has the effect of causing additional
properties of the Company to be Collateral Agent Collateral unless the prior
written consent of the Bank is obtained.
7. No Impairment. The provisions of this Agreement are for the
purpose of defining the relative rights of the Bank and the Project Financing
Lenders on the one hand and Collateral Agent on the other hand. Nothing
herein shall impair or affect the Company's obligation to the Bank and the
Project Financing Lenders under the Bank Documents or the Company's obligation
to the Collateral Agent under the Collateral Agent Security Agreement.
8. Representations and Warranties. Each of the parties hereto
represents and warrants to the other that the execution and delivery by it of
this Agreement has been duly authorized by all necessary corporate action on
its part and, in the case of the Collateral Agent, that the execution and
delivery of this Agreement has been duly authorized by the requisite consent
of the owners of the Securities.
9. Continuing Nature of Agreement. This Agreement shall be
effective and may not be terminated or otherwise revoked by the Collateral
Agent until the Bank Obligations have been fully paid and discharged, the Bank
Documents have terminated and all letters of credit issued by the Bank have
expired.
10. Collateral Agent's Waivers. All of the Bank Obligations
shall be deemed to have been made or incurred in reliance upon this Agreement.
The Collateral Agent, acting pursuant to the terms of the Collateral Agent
Security Agreement and section 1301 of the Indenture, expressly waives all
notice of the acceptance by the Bank and the Project Financing Lenders of the
provisions of this Agreement and all other notices by the Bank and the Project
Financing Lenders not specifically required pursuant to the terms of this
Agreement and the Collateral Agent expressly waives reliance by the Bank and
the Project Financing Lenders upon the agreements set forth herein. The
Collateral Agent agrees that the Bank and the Project Financing Lenders shall
be entitled to manage and supervise their respective loans to Company in
accordance with applicable law and their respective usual practices, which
practices the Bank and the Project Financing Lenders may modify from time to
time as they deem appropriate under the circumstances, without regard to the
existence of any rights that the Collateral Agent may now or hereafter have in
or to the Collateral Agent Collateral. The Collateral Agent agrees that
neither the Bank nor the Project Financing Lenders shall have any liability to
the Collateral Agent for, and the Collateral Agent waives any claim which the
Collateral Agent may now or hereafter have against, the Bank or the Project
Financing Lenders arising out of (a) any and all actions which the Bank and/or
the Project Financing Lenders, in good faith and in accordance with the
provisions of the Uniform Commercial Code in effect in the jurisdiction(s)
where the Bank Collateral is located, take or omit to take (including, without
limitation, actions with respect to the creation, perfection or continuation
of liens or security interests in the Bank Collateral and other security for
the Bank Obligations, actions with respect to the occurrence of an Event of
Default (as defined in the Bank Documents), actions with respect to the
foreclosure upon, sale, release, or depreciation of, or failure to realize
upon, any of the Bank Collateral and actions with respect to the collection of
any claim for all or any part of the Bank Obligations from any account debtor,
guarantor or any other party or to the collection of the Bank Obligations or
the valuation, use, protection or release of the Bank Collateral and/or other
security for the Bank Obligations), (b) the Bank's election, in any proceeding
instituted under the Code of the application of Section 1111(b)(2) of the Code
and (c) any borrowing or grant of a security interest under Section 364 of the
Code by Company, as debtor in possession, in favor of the Bank or the Project
Financing Lenders.
11. Waivers by the Bank and Project Financing Lenders. No
waiver shall be deemed to be made by the Bank or the Project Financing Lenders
of any of their respective rights hereunder, unless the same shall be in
writing signed on behalf of the Bank and/or the Project Financing Lenders, and
each waiver, if any, shall be a waiver only with respect to the specific
instance involved and shall in no way impair the rights of the Bank and/or the
Project Financing Lenders or the obligations of the Collateral Agent to the
Bank and the Project Financing Lenders in any other respect at any other time.
12. Information Concerning Financial Condition of the Company.
The Collateral Agent hereby agrees that the Bank shall have no duty to advise
the Collateral Agent of information known to the Bank regarding the financial
condition of the Company and all other circumstances bearing upon the risk of
nonpayment of the Bank Obligations and/or the Securities. In the event the
Bank, in its sole discretion, undertakes, at any time or from time to time, to
provide any such information to the Collateral Agent, the Bank shall not be
under any obligation, (i) to provide any such information to the Collateral
Agent on any subsequent occasion or (ii) to undertake any investigation not a
part of its respective regular business routine and shall be under no
obligation to disclose any information which, pursuant to accepted or
reasonable commercial finance practices, the Bank wishes to maintain
confidential. All payments received by the Bank and/or the Project Financing
Lenders may be applied, reversed, and reapplied, in whole or in part, to any
of the Bank Obligations as the Bank and/or the Project Financing Lenders, in
their sole discretion, deem appropriate and the Bank Obligations are subject
to any extension or postponement of the time of payment of the Bank
Obligations or to any other indulgence with respect thereto, to any
substitution, exchange or release of the Bank Collateral which may at any time
secure the Bank Obligations and to the addition or release of any other party
or person primarily or secondarily liable therefor; provided that payments
received as a result of an Enforcement Action by the Bank with respect to the
Bank Collateral shall be applied in accordance with this Agreement.
13. Miscellaneous.
(a) Any and all notices, elections, demands, requests and
responses thereto permitted or required to be given under this Agreement shall
be in writing, given during normal business hours, signed by or on behalf of
the party giving the same, and in the case of Bank shall be sent to Bank One,
Milwaukee, National Association, 111 East Wisconsin Avenue, Milwaukee,
Wisconsin 53202, Attn: Corporate Lending Group, Metropolitan Department III,
Facsimile No. 414-765-2176, and in the case of Collateral Agent shall be sent
to Harris Trust and Savings Bank, 311 West Monroe Street, 12th Floor, Chicago,
Illinois 60606, Attn: Indenture Trust Division, Facsimile No. 312-461-3525,
and shall be deemed to have been properly given and shall be effective upon
being personally delivered, or upon being received by United States mail,
overnight courier or telefax; provided, however, that the time period in which
a response to any such notice, election, demand or request must be given shall
commence on the date of receipt thereof; and provided further that no notice
of change of address shall be effective until the date of receipt thereof.
(b) Without limiting the obligations of the Collateral
Agent under this Agreement, the Collateral Agent shall not be deemed to owe
any fiduciary duty to the Bank or the Project Financing Lenders. Neither the
Bank nor any Project Financing Lender owes any fiduciary duty to the
Collateral Agent.
(c) This Agreement may be amended only by a written
document executed by duly authorized representatives of the Collateral Agent
and the Bank. Upon the execution and delivery of any amendment hereto, the
Bank shall provide a copy of such amendment to the Company.
(d) This Agreement shall be construed in accordance with
and governed by the internal laws of the State of Wisconsin. Wherever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited by or invalid under such law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
BANK ONE, MILWAUKEE, NATIONAL ASSOCIATION
BY /s/ William E. Shaw
Its Vice President
HARRIS TRUST AND SAVINGS BANK,
as Collateral Agent
BY /s/ Carolynne A. Paulsen
Its Vice President
<PAGE>
The Company hereby acknowledges receipt of a copy of the foregoing
Intercreditor Agreement, waives notice of acceptance thereof by the Bank and
the Project Financing Lenders, and agrees to be bound by the terms and
provisions of the Intercreditor Agreement and to do every other act and thing
necessary or appropriate to carry out such terms and provisions. In the event
of a breach by the Collateral Agent of sections 2 and 3 of this Agreement, all
of the "Bank Obligations" (as defined herein) shall, at the option of Bank
and/or the Project Financing Lenders, without presentment, demand, protest or
notice of any kind, become immediately due and payable. Company further
agrees that (i) the terms of the Intercreditor Agreement shall not give
Company any substantive rights vis-a-vis the Bank, the Project Financing
Lenders or the Collateral Agent named above and (ii) the Intercreditor
Agreement may be amended by the Bank and the Collateral Agent without the
consent of the Company (provided that no such amendment shall impose
obligations on the Company of a character different from the Company's
obligations set forth in the Intercreditor Agreement in effect on the date
hereof) and, at such time as the Company receives a copy of any such
amendment, the Company shall comply with the Intercreditor Agreement as
amended thereby.
Dated this 14th day of December, 1994.
BUCYRUS-ERIE COMPANY
BY /s/ N. J. Verville
Its Vice President
<PAGE>
EXHIBIT 10.5
FORM 8-K
DECEMBER 14, 1994
INDEMNIFICATION AGREEMENT
AGREEMENT dated as of November 30, 1994 by and between BUCYRUS-
ERIE COMPANY, a Delaware corporation ("Bucyrus"), B-E HOLDINGS, INC., a
Delaware corporation ("Holdings"), and JACKSON NATIONAL LIFE INSURANCE
COMPANY, a Michigan corporation ("JNL").
Recitals
A. Bucyrus and Holdings (collectively, the "Debtors") have
filed with the Bankruptcy Court their Second Amended Joint Plan of
Reorganization dated September 19, 1994, as modified on November 29, 1994 (the
"Plan"). Capitalized terms not otherwise defined in this Agreement shall have
the meanings assigned to them in the Plan.
B. JNL is the sole Holder of the Class 4B Claim under the Plan.
C. Section 3.09(b) of the Plan provides in part that if the
Holder of the Allowed Class 4B Claim votes to accept the Plan on or prior to
the Voting Receipt Date and executes and delivers the undertaking described in
Section 9.06 of the Plan, such Holder will receive, in addition to 4,057,203
shares of New Bucyrus Common Stock, (x) any recovery of cash or property
obtained by or on behalf of the Reorganized Debtor with respect to any Cause
of Action against a Non-Released Person which arose prior to the Petition
Date, and (y) in the event and to the extent that a Claim or Equity Interest
held by a Non-Released Person is not Allowed by Final Order by reason of the
acts or omissions of such Non-Released Person prior to the Petition Date, the
property that would otherwise have been distributed under the Plan to such
Non-Released Person if such Claim or Equity Interest had been Allowed in full.
D. Section 8.02 of the Plan provides that if the Holder of the
Allowed Class 4B Claim votes to accept the Plan on or prior to the Voting
Receipt Date and executes and delivers the undertaking described in Section
9.06 of the Plan, after the Confirmation Date, (a) the Holder of the Allowed
Class 4B Claim shall have the exclusive right and authority as a
representative of the Debtors' Estates to file objections, request estimation
of, settle, compromise, withdraw or litigate to judgment objections to Claims
or Equity Interests of Non-Released Persons, and to consent to the allowance
of such Claims or Equity Interests, (b) the Holder of the Allowed Class 4B
Claim may settle or compromise any Disputed Claim or Equity Interest of a Non-
Released Person without approval of the Bankruptcy Court, and (c) Confirmation
will constitute appointment of the Holder of the Allowed Class 4B Claim as the
representative of the Debtors' Estates for the purposes described in clauses
(a) and (b) pursuant to section 1123(b)(3)(B) of the Bankruptcy Code.
E. Section 9.06 of the Plan provides that If the Holder of the
Allowed Class 4B Claim votes to accept the Plan on or prior to the Voting
Receipt Date, then after the Effective Date such Holder shall have the
exclusive right and authority, in its sole discretion, to do the following,
conditioned upon the execution and delivery by such Holder prior to the
Confirmation Date of an undertaking, in form and substance satisfactory to the
Debtors and the Creditors Committee, indemnifying and holding harmless the
Debtors and the Reorganized Debtor with respect to all claims, losses,
expenses and other liabilities arising from or related to such Holder's
exercise of its exclusive right and authority under Sections 8.02, 9.06 and
9.07 of the Plan:
(a) to exercise as a representative of the Debtors in Possession
any powers of the Debtors in Possession under sections 544, 547 and 548
of the Bankruptcy Code with respect to Non-Released Persons; and
(b) to pursue as a representative of the Debtors' Estates any
claims, rights or Causes of Action of the Debtors or the Debtors in
Possession existing on the Confirmation Date against Non-Released
Persons, including without limitation any Causes of Action against a
Non-Released Person arising from the exercise of the powers of the
Debtors in Possession under sections 544, 547 and 548 of the Bankruptcy
Code.
F. Section 9.07 of the Plan provides that if the Holder of the
Allowed Class 4B Claim votes to accept the Plan on or prior to the Voting
Receipt Date and executes and delivers the undertaking described in Section
9.06 of the Plan, Confirmation will constitute appointment of the Holder of
the Allowed Class 4B Claim as the representative of the Debtors' Estates for
the purposes described in Section 9.06 pursuant to section 1123(b)(3)(B) of
the Bankruptcy Code.
G. JNL has voted to accept the Plan prior to the Voting Receipt
Date and is willing to give the undertaking provided in this Agreement,
conditioned upon Confirmation of the Plan and the occurrence of the Effective
Date. Bucyrus, Holdings and the Creditors Committee are willing to accept
such undertaking as satisfactory for purposes of the Plan provisions set forth
above, conditioned upon Confirmation of the Amended Plan and the occurrence of
the Effective Date.
The parties therefore agree as follows:
Section 1. Certain Definitions.
As used in this Agreement the following terms shall have the
meanings specified below:
(a) "Claim" means any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether instituted by JNL
or any other party, that an Indemnified Person in good faith believes might
lead to the institution of any such action, suit or proceeding, whether civil,
criminal, administrative, investigative or other.
(b) "Expense" means any out-of-pocket expense whatsoever,
including any costs, judgments, fines, penalties, amounts paid in settlement,
and any interest, assessments and other charges paid or payable in connection
therewith, and including attorneys' fees and all other costs, expenses and
obligations paid or incurred in connection with investigating, defending,
providing a witness for or participating in (including on appeal), or
preparing to defend, provide a witness for or participate in any Claim.
(c) "Loss" means any direct or indirect economic loss, regardless
of whether such loss constitutes an Expense.
(d) "Indemnified Person" and "Representative Powers" are defined
in Section 2(a) of this Agreement.
Section 2. Undertaking of JNL.
(a) Indemnification. JNL hereby agrees to indemnify and hold
harmless each of the Debtors and the Reorganized Debtor (the "Indemnified
Persons"), to the greatest extent permitted by applicable law, from and
against any and all Claims, Losses, Expenses and other liabilities incurred or
suffered by such Indemnified Person arising from or related to JNL's exercise
or attempted exercise after the Effective Date of its exclusive right and
authority as a representative of the Debtors' Estates under Sections 8.02,
9.06 and 9.07 of the Plan ("Representative Powers"), including, without
limiting the generality of the foregoing, (i) any amounts for which the
Debtors or the Reorganized Debtor become liable under an indemnity or
otherwise by reason of JNL's exercise or attempted exercise of Representative
Powers, and (ii) attorneys' fees for the defense of Claims for such amounts or
to enforce this Agreement. In the event that an Indemnified Person incurs or
suffers any Claim, Loss, Expense or other liability arising from or related to
the JNL's exercise or attempted exercise of Representative Powers, JNL shall
indemnify such Indemnified Person as soon as practicable but in any event no
later than ten days after written demand is presented to JNL accompanied by
supporting documentation. If so requested in writing by an Indemnified
Person, JNL hereby agrees to advance to such Indemnified Person any and all
Expenses incurred by such Indemnified Person arising from or related to JNL's
exercise or attempted exercise of Representative Powers within five business
days of such request.
(b) Indemnification for Additional Expenses to Enforce
Agreement. JNL shall indemnify each Indemnified Person against any and all
Expenses and, if requested by such Indemnified Person, shall within five
business days of such request) advance such Expenses to such Indemnified
Person, which are incurred by such Indemnified Person in connection with any
action brought by an Indemnified Person to recover amounts owing by JNL under
this Agreement following any failure by JNL to perform its obligations
hereunder, regardless of whether such Indemnified Person ultimately is
determined to be entitled to such amounts.
(c) Liquidated Expenses or Losses for Services. Without limiting
the generality of the obligations of JNL under this Agreement, JNL hereby
agrees to reimburse each Indemnified Person for Expenses or Losses incurred by
reason of services performed by any officer or employee of or consultant to
such Indemnified Person arising from or related to JNL's exercise or attempted
exercise of Representative Powers (including, without limitation,
participating in interviews or other consultations, responding to discovery
requests, participating as a witness in pre-trial proceedings or at trial of
any Claim) in the amount equal to the greater of the actual amount of Expenses
or Losses incurred by reason of such services or a liquidated amount equal to
One Thousand Dollars ($1,000.00) per day or each portion thereof for each
officer providing services, and Five Hundred Dollars ($500.00) per day or each
portion thereof for each employee who is not an officer and each consultant
providing services, together with reimbursement of any travel, lodging, meal
and related expenses incurred by such officer or employee in accordance with
the polices and procedures of such Indemnified Person then in effect. All
payments under this Section 2(c) shall be made to the Indemnified Person.
(d) Consent to Intervention. Each Indemnified Person shall
consent to the inclusion or intervention of JNL in any action or proceeding to
which such Indemnified Person is a party and which involves a Claim for
amounts subject to indemnification by JNL under this Agreement. An
Indemnified Person shall not settle or compromise such a Claim without the
prior written consent of JNL, which shall not be unreasonably refused or
withheld.
(e) Obligations Unconditional. The obligations of JNL under this
Agreement are absolute and unconditional irrespective of the value,
genuineness, validity, regularity or enforceability of the Representative
Powers or any other provision of the Plan or any other agreement or instrument
referred to herein or therein, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever which might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor, it being the intent of this Agreement that the obligations of JNL
hereunder shall be absolute and unconditional under any and all circumstances
and may be proceeded upon by the Indemnified Person prior to taking any action
against any Person who may be liable for any amount for which JNL is liable
hereunder, or after such action has been commenced.
(f) Notice to JNL. If an Indemnified Person shall become aware
of any circumstances which may reasonably be expected to give rise to a Claim
being made against such Indemnified Person, the Indemnified Person shall give
written notice to JNL of the circumstances and the reasons for anticipating
such a Claim, but the failure to give such written notice shall not excuse
full and timely performance hereunder by JNL.
(g) Subrogation. JNL hereby irrevocably waives all rights of
subrogation or contribution, whether arising by contract or operation of law
(including, without limitation, any such right arising under the Federal
Bankruptcy Code) or otherwise by reason of any payment by JNL pursuant to the
provisions of this Agreement.
(h) Interest on Overdue Amounts. Any amounts for which JNL is
liable under this Agreement which are not paid when due shall bear interest at
a rate equal to 13.5% per annum (calculated on the basis of a 360-day year)
from the date such amount is due to and including the date of payment.
Section 3. Representations and Warranties. JNL represents and
warrants that:
(a) Corporate Existence. JNL is a corporation duly organized and
validly existing under the laws of the jurisdiction of its incorporation.
(b) No Breach. None of the execution and delivery of this
Agreement, the consummation of the transactions herein contemplated or
compliance with the terms and provisions hereof will conflict with or result
in a breach of, the certificate of incorporation or bylaws of JNL, or any
applicable law or regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or any agreement or instrument to
which JNL is a party or by which it is bound or to which it is subject, or
constitute a default under any such agreement or instrument.
(c) Corporate Action. JNL has all necessary corporate power and
authority to execute, deliver and perform its obligations under this
Agreement; the execution, delivery and performance by JNL of this Agreement
have been duly authorized by all necessary corporate action on its part; and
this Agreement has been duly and validly executed and delivered by JNL and
constitutes its legal, valid and binding obligation, enforceable in accordance
with its terms.
Section 4. Consent of the Debtors and the Creditors Committee.
(a) Debtors' Consent. The Debtors, on behalf of themselves and
the Reorganized Debtor, hereby accept the undertaking of JNL provided by this
Agreement as satisfactory for purposes of Sections 3.09(b), 8.02, 9.06 and
9.07 of the Plan.
(b) Creditors Committee's Consent. The Creditors Committee in
Bucyrus' Chapter 11 Case, by its endorsement of this Agreement where indicated
below, accepts the undertaking of JNL provided by this Agreement as
satisfactory for purposes of Sections 3.09(b), 8.02, 9.06 and 9.07 of the
Plan. The person giving such endorsement on behalf of the Creditors Committee
represents that such person has been duly authorized by resolution of the
Creditors Committee to do so. The parties to this Agreement acknowledge and
agree that the Creditors Committee is not a party to this Agreement and shall
have no rights or obligations hereunder.
Section 5. Miscellaneous.
(a) Governing Law; Consent to Jurisdiction. This Agreement shall
be governed by, and construed in accordance with, the law of the State of New
York. Each party to this Agreement agrees to submit to the nonexclusive
jurisdiction of the United States Bankruptcy Court for the Eastern District of
Wisconsin, the United States District Court for the Southern District of New
York and the Supreme Court of the State of New York, New York County for the
purposes of all legal proceedings arising out of or relating to this
Agreement.
(b) Burden of Proof. In connection with any determination as to
whether an Indemnified Person is entitled to be indemnified under this
Agreement, the burden of proof shall be on JNL to establish that such
Indemnified Person is not so entitled.
(c) Notices. All notices, requests, consents and demands
hereunder shall be in writing and telexed, telecopied or delivered to the
intended recipient at the "Address for Notices" specified beneath its name on
the signature pages hereof or, as to any party to this Agreement, at such
other address as shall be designated by such person in a notice to the other
parties to this Agreement. Except as otherwise provided in this Agreement,
all such communications shall be deemed to have been duly given when
transmitted by telex or telecopier or personally delivered or, in the case of
a mailed notice, upon receipt, in each case given or addressed as aforesaid.
(d) Waivers, Etc. The terms of this Agreement may be waived,
altered or amended only by an instrument in writing duly executed by JNL and
each Indemnified Person. Any such amendment or waiver shall be binding upon
JNL and each Indemnified Person.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of, and be binding upon, the successors and assigns of each of the
parties.
(f) Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument and either of the parties hereto may execute this Agreement by
signing any such counterpart.
(g) Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be construed in order to carry out the intentions
of the parties hereto as nearly as may be possible and (ii) the invalidity or
unenforceability of any provision hereof in any jurisdiction shall not affect
the validity or enforceability of such provision in any other jurisdiction.
(h) Conditions to Effectiveness. This Agreement shall become
effective upon the Confirmation of the Plan and the occurrence of the
Effective Date.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered as of the date first written above.
BUCYRUS-ERIE COMPANY
By /s/ David M. Goelzer
Name: David M. Goelzer
Title: Vice President
Address for Notices:
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172
Attention: General Counsel
Telecopy: (414) 768-5060
B-E HOLDINGS, INC.
By /s/ David M. Goelzer
Name: David M. Goelzer
Title: Vice President
Address for Notices:
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172
Attention: General Counsel
Telecopy: (414) 768-5060
JACKSON NATIONAL LIFE
INSURANCE COMPANY
By: PPM America
By /s/ F. John Stark, III
Name: F. John Stark, III
Title: Senior Vice President
Address for Notices:
5901 Executive Drive
Lansing, Michigan 48909
Attention: General Counsel
Telecopy:
with a copy to:
PPM America, Inc.
225 South Wacker Drive, Suite 1200
Chicago, Illinois 60606
Attention: General Counsel
Telecopy:
The foregoing undertaking
of JNL is satisfactory:
THE COMMITTEE OF UNSECURED
CREDITORS OF BUCYRUS-ERIE COMPANY
By: /s/ William Rochelle
Name:
Title: Counsel
<PAGE>
EXHIBIT 99.2
FORM 8-K
DECEMBER 14, 1994
December 15, 1994
PRESS RELEASE
BUCYRUS-ERIE COMPANY PLAN OF
REORGANIZATION BECOMES EFFECTIVE
Bucyrus-Erie Company ("Bucyrus" or the "Company") announced that its
Plan of Reorganization under Chapter 11 of the Bankruptcy Code became
effective on December 14, 1994.
The Company's plan of reorganization provides for the merger of Bucyrus
with its former holding company, B-E Holdings, Inc. and for the exchange of
approximately $260 million in debt obligations for newly issued common stock
of the reorganized Company. Jackson National Life Insurance Company, the
Company's largest creditor prior to the effective date, will receive
approximately 40% of the common stock; other bondholders and Bell Helicopter
Textron Inc., a claimant in litigation against the Company pending in Texas
state court, will receive approximately 58% of the stock, and holders of
equity securities in B-E Holdings will receive approximately 2% of the stock
in the reorganized Company.
Under the plan of reorganization, the Company's existing secured debt
obligations with three investment funds managed by Greycliff Partners, Ltd.
are being extended for five years and otherwise refinanced on advantageous
terms. The Company's existing bank credit facility with Bank One, Milwaukee,
N.A. is being replaced with a new $15 million secured credit facility being
provided by Bank One. The new facility provides a revolving line of credit as
well as for the issuance of letters of credit to support the reorganized
Company's business.
All allowed claims of vendors, customers, suppliers and employees of the
Company will be paid in full under the reorganization plan. Employees and
retired employees will continue to receive full benefits under existing
pension and welfare plans. As permitted by prior court orders in the
reorganization proceedings, all warranty claims and related obligations of the
Company will be honored in accordance with their terms and the Company's
existing policies and procedures. In addition, the plan of reorganization
does not affect the existing collective bargaining agreement between the
Company and Local 1343 of the United Steelworkers of America. All allowed tax
and other claims entitled to priority under bankruptcy law will also be paid
in full.
Under the Plan, all outstanding debt and equity securities of the
Company and B-E Holdings have been cancelled. Newly issued common stock in
the reorganized Company will be distributed to record holders of Bucyrus and
B-E Holdings debt securities and B-E Holdings equity security holders as of
December 13, 1994. The Company has engaged Bank One, Indianapolis, N.A. as
Exchange Agent in connection with the distribution of new common stock, and
has sent a form of Letter of Transmittal and related documents to all record
holders outlining the procedures for the surrender and exchange of securities.
Bucyrus-Erie Company is a leading manufacturer and worldwide marketer of
surface mining machinery (principally walking draglines, electric mining
shovels and blast hole drills).
Contact: Bucyrus-Erie Company
Mr. David M. Goelzer (414-768-5000)
<PAGE>
EXHIBIT 99.3
FORM 8-K
DECEMBER 14, 1994
December 29, 1994
PRESS RELEASE
BUCYRUS-ERIE COMPANY -
1994 AND 1995 RESULTS TO BE BELOW PROJECTIONS
Bucyrus-Erie Company (OTC - BCYR) announced today that it is providing the
following updated information regarding its projected operating results in light
of its emergence from Chapter 11 on December 14, 1994. In August, 1993, the
Company prepared projections ("August 1993 Projections") which were contained
in Bucyrus-Erie's Disclosure Statement and Proxy Statement-Prospectus dated
January 12, 1994 and were prepared solely in connection with Bucyrus-Erie's
Chapter 11 restructuring. In view of the non-occurrence of certain assumptions
contained in the August 1993 projections and as indicated in the Company's
periodic reports subsequently filed with the Securities and Exchange
Commission, the August 1993 Projections do not reflect the Company's current
business circumstances.
Primarily as a result of lower than projected spare parts shipments,
Bucyrus-Erie currently estimates that revenues for fiscal year 1994 will be
approximately $190.0 million to $194.0 million and earnings before interest,
taxes, depreciation and amortization ("EBITDA") for fiscal year 1994 will be
approximately $12.0 million to $14.0 million, after giving effect to a
nonrecurring gain of approximately $1.35 million from a favorable insurance
settlement. Such estimates, however, are subject to the finalization of
results from subsidiaries, year-end adjustments, adjustments relating to the
Company's reorganization and other uncertainties, and actual results may be
significantly less favorable or more favorable. Consequently, all estimates
contained in this press release should not be regarded as a representation
by the Company that the projected results will be achieved. The Company is
not able to forecast 1994 net earnings at this time, but anticipates that
such earnings will be less than projected EBITDA.
The Company believes that revenues, EBITDA and earnings in fiscal year
1995 will likely be lower than projected in the August 1993 Projections as a
result of decreased spare parts and dragline equipment sales and increased
market competition. The Company currently estimates that EBITDA for fiscal
year 1995 will be approximately $12.0 million to $15.0 million.
Bucyrus-Erie does not intend to update or otherwise revise the August 1993
Projections in the future, to otherwise update the estimates contained in this
press release or to publicly disclose projections as to its future revenues
or earnings, including projections with respect to fiscal years 1996 and 1997.
Since the 1994 and 1995 estimates reflected in this press release are subject
to significant uncertainties, such as the worldwide economic cycle and its
effect on the markets for the minerals mined by the Company's products,
political unrest in important foreign markets and the impact of the Clean Air
Act on coal mining in the U.S. Middle West, and are based upon assumptions
that may not prove to be correct, the Company cautions against undue
reliance being placed on such estimates.
Bucyrus-Erie Company is a leading manufacturer and worldwide marketer of
surface mining machinery (principally walking draglines, electric mining
shovels and blast hole drills) and parts and service therefor.
Contact: Bucyrus-Erie Company
Mr. Norbert J. Verville (414-768-4477)
