SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
April 3, 1996
EXCEL INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Indiana 1-8684 35-1551685
(State of (Commission (I.R.S. Employer
incorporation) File Number) Identification No.)
1120 North Main Street 46514
Elkhart, Indiana (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code (219) 264-2131
N/A
(Former name or former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On March 4, 1996, the registrant, Excel Industries, Inc., an
Indiana corporation ("Excel") agreed to purchase all of the
outstanding capital stock of Anderson Industries, Inc., a Delaware
corporation ("Anderson") from the stockholders of Anderson
("Anderson Stockholders"), pursuant to a stock purchase agreement
among Excel, Anderson and the Anderson Stockholders (the
"Agreement"). The stock purchase transaction was consummated on
April 3, 1996 (the "Closing").
Anderson's only operating asset is its wholly-owned
subsidiary, Atwood Industries, Inc., an Illinois corporation
("Atwood"), Atwood is a diversified manufacturer which, directly
and through its subsidiaries, has three primary business
units: Atwood Mobile Products ("Mobile Products"); Atwood
Automotive ("Atwood Automotive"); and Mark I Molded Plastics ("Mark
I").
Mobile Products is a leading manufacturer of appliances and
accessories for RVs, vehicle conversions, pleasure boats and
trailers. Atwood's management believes it to be the world's
largest supplier of appliances and accessories to the RV industry.
Primary products include: appliances such as water heaters,
furnaces, stoves and ranges; hardware such as jacks, couplers and
surge brake actuators; and seating frames for van conversions. In
the last ten years Mobile Products has tripled in size with 1995
net sales of approximately $149 million. Mobile Products' growth
is attributable to several strategic acquisitions, market share
gains and successful new product introductions. Mobile Products
operates five domestic facilities and one European manufacturing
facility. Mobile Products is well known in the RV industry for its
product quality and new product innovation. Mobile Products' major
customers include Fleetwood, Jayco, Thor and Coachmen. Mobile
Products will be continued as a separate business unit by Excel.
Atwood Automotive develops and produces engineered systems and
components for the North American automotive industry. The product
line is primarily composed of: seat systems, which include seat
and height adjusters, and recliner mechanisms; hinge systems which
include door, hood and deck hinges; and control systems, which
include hand and foot operated parking brakes, and transmission
selectors. In 1995 Atwood Automotive had sales in excess of $212
million, which is almost twice its 1991 sales of $114 million.
Atwood Automotive operates six domestic facilities and one Mexican
manufacturing facility. Atwood Automotive's customer base
includes Chrysler, Ford, General Motors, Douglas & Lomason, Johnson
Controls and Lear Seating.
Atwood Automotive believes it is the largest supplier of
manual seat tracks to the US automotive industry with an estimated
30% market share and the second largest supplier of door hinges to
the US automotive market with an estimated 15% market share. Excel
plans to incorporate Atwood Automotive's business into Excel's
existing automotive business unit.
Mark I designs, develops and manufactures injection molded
plastic components for automotive original equipment manufacturers
and suppliers and for the consumer electronics industry.
Automotive components include headlight and taillight lenses, and
interior trim parts. Consumer electronics components include front
and rear television cabinets. In 1995 Mark I had sales of
approximately $39 million. Mark I operates two domestic
manufacturing facilities. Excel plans to incorporate the Mark I
plastics business into Excel's existing Nyloncraft division.
Historically, Mobile Products and Atwood Automotive have
generated substantial operating profits including $10.0 million and
$8.2 million respectively in 1993. However, due to production
start-up problems associated with the launching of 22 new products
in 1994, Atwood Automotive had difficulty in meeting customer
requirements and as a result incurred excessive manufacturing costs
resulting in an operating loss for 1994 of $11.1 million.
Excessive start-up costs continued into 1995 as Atwood Automotive
incurred an operating loss of $12.2 million. This loss was
attributable to start-up costs, warranty and product replacement
costs of $6.8 million in connection with a product recall and
operating losses in production of the CDW-27 seat adjuster for Ford
which production was discontinued by Atwood in late 1995.
Additionally, operating results were negatively impacted by
substantial start-up and expansion costs at its Queretaro, Mexico
facility.
Management at Atwood took significant measures, beginning in
1994, intended to rectify these operating problems. A new
management team was brought in for Atwood Automotive. This new
management group instituted the following measures:
(i) Refocused Atwood Automotive's operations strictly on
automotive products;
(ii) reorganized the new product launch and manufacturing
process to increase operating efficiency;
(iii) arranged to discontinue the manufacturing of the CDW-27
seat adjuster systems, effective December 31, 1995;
(iv) revised the product mix and reduced the number of
products being manufactured at the Queretaro, Mexico facility; and
(v) substantially reduced Atwood Automotive's salaried and
hourly headcount.
As a result of these measures, Atwood Automotive's operating results,
excluding the effect of the product recall expense, have improved.
At the Closing, Excel paid (net of the amount received for
certain "Excluded Assets" resold, subject to certain "Excluded
Liabilities," to the nominee of certain Anderson Stockholders
immediately following the Closing) $57,050,000 in cash (the "Cash
Purchase Price") and granted warrants (the "Warrants") to purchase
an aggregate of 381,000 of Excel's common shares, no par value,
(the "Common Shares") at an exercise price of $13.25 per Common
Share. The Warrants were granted pursuant to a Warrant Grant and
Registration Rights Agreement dated April 3, 1996 among Excel and
certain Anderson Stockholders, and expire at the close of business
on April 2, 2001. The Warrants have an aggregate present value of
approximately $1,500,000. None of the Excluded Assets was used in
the principal operations of Anderson and Atwood.
The purchase price for the capital stock of Anderson was
agreed upon by the parties after arm's-length negotiations as to
the fair market value thereof.
Immediately prior to the closing, Excel advanced to Atwood
funds sufficient to repay approximately $71 million of its secured
indebtedness. To fund the Cash Purchase Price and the advance to
Atwood, Excel utilized approximately $37 million of its cash on
hand and approximately $100 million borrowed under a $120 million
revolving credit facility pursuant to a Credit Agreement dated
April 3, 1996 among Excel, certain banks (the "Revolving Lenders")
and Society National Bank as agent and Harris Trust and Savings
Bank as co-agent. Excel is also offering for sale to qualified
institutional investors in a private placement $100 million of its
Senior Notes due April 2011. Upon the closing of the private
placement, the proceeds of the Senior Notes will be used to repay
$100 million of the revolving credit borrowings, and the
commitments of the Revolving Lenders will be reduced from $120
million to $60 million.
Item 7. Financial Statements and Exhibits
7(a) and 7(b). It is impractical to file the financial
statements and pro forma financial information required by Items
7(a) and 7(b) with this report. This report will be amended as to
file such statements and information as soon as they are completed,
but in no event later than 60 days after the date this report must
be filed.
7(c). The following exhibits are furnished as required by
Item 7(c):
Exhibit
Number Description
2 Stock Purchase Agreement dated March 4, 1996,
among Excel Industries, Inc. and Anderson
Industries, Inc. and the stockholders of
Anderson Industries, Inc.
4.1 Warrant Grant and Registration Rights Agreement
dated April 3, 1996, among Excel Industries, Inc.
and certain stockholders of Anderson Industries,
Inc.
4.2 Credit Agreement dated April 3, 1996, among Excel
Industries, Inc., certain banks, Society National
Bank as agent and Harris Trust and Savings Bank
as co-agent.
<PAGE>
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.
EXCEL INDUSTRIES, INC.
Date: April 18, 1996
By: /s/ Joseph A. Robinson
Joseph A. Robinson, Secretary,
Treasurer and Chief Financial Officer
<PAGE>
EXHIBIT INDEX
Exhibit Page
Number Description Number
2 Stock Purchase Agreement dated March 4,
1996, among Excel Industries, Inc. and
Anderson Industries, Inc. and the
stockholders of Anderson Industries, Inc.
4.1 Warrant Grant and Registration Rights
Agreement dated April 3, 1996 among Excel
Industries, Inc. and certain stockholders
of Anderson Industries, Inc.
4.2 Credit Agreement dated April 3, 1996 among
Excel Industries, Inc., certain banks,
Society National Bank as agent and Harris
Trust and Savings Bank as co-agent
EXHIBIT 2
Schedules and similar attachments to this exhibit are not
being filed herewith. A list of the omitted schedules
is included in the exhibit. The Registrant will furnish
the omitted schedules to the Commission supplementally
upon request.
March 4, 1996
STOCK PURCHASE AGREEMENT
BY AND AMONG
EXCEL INDUSTRIES, INC.
AND
ANDERSON INDUSTRIES, INC.
AND
THE STOCKHOLDERS OF ANDERSON INDUSTRIES, INC.
DATED: MARCH 4, 1996
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE I
PURCHASE AND SALE OF STOCK. . . . . . . . . 1
Section 1.1 Purchase and Sale. . . . . . . . . . . . . . 1
Section 1.2 Purchase Price and Purchase Price Adjustment 1
Section 1.3 Closing. . . . . . . . . . . . . . . . . . . 2
Section 1.4 Deliveries by Sellers and the Company. . . . 2
Section 1.5 Deliveries by Purchaser. . . . . . . . . . . 4
Section 1.6 Further Assurances . . . . . . . . . . . . . 4
Section 1.7 Sales and Transfer Taxes . . . . . . . . . . 4
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS. . . . 5
Section 2.1 Title to Shares. . . . . . . . . . . . . . . . 5
Section 2.2 Authority. . . . . . . . . . . . . . . . . . 5
Section 2.3 Consents and Approvals (Sellers) . . . . . . . 5
Section 2.4 Ownership of Shares. . . . . . . . . . . . . . 6
Section 2.5 Organization and Qualification . . . . . . . . 6
Section 2.6 Subsidiaries and Investments . . . . . . . . . 6
Section 2.7 Capitalization . . . . . . . . . . . . . . . . 7
Section 2.8 Absence of Certain Changes . . . . . . . . . . 7
Section 2.9 Financial Statements and Liabilities . . . . . 9
Section 2.10 Consents and Approvals (the Company). . . . 10
Section 2.11 Litigation. . . . . . . . . . . . . . . . . 10
Section 2.12 Compliance with Law . . . . . . . . . . . . .10
Section 2.13 Employee Benefit Plans . . . . . . . . . . . 11
Section 2.14 Taxes . . . . . . . . . . . . . . . . . . . .12
Section 2.15 Intellectual Property . . . . . . . . . . . 13
Section 2.16 Property. . . . . . . . . . . . . . . . . . 14
Section 2.17 Material Contracts. . . . . . . . . . . . . 15
Section 2.18 Environmental and Safety Matters. . . . . . 17
Section 2.19 Employee Relations. . . . . . . . . . . . . 19
Section 2.20 Brokers . . . . . . . . . . . . . . . . . . 19
Section 2.21 Insurance . . . . . . . . . . . . . . . . . 19
Section 2.22 Transactions with Interested Persons. . . . 20
Section 2.23 Bank Accounts and Signatories . . . . . . . 20
Section 2.24 Accounts Receivable and Inventory . . . . . 20
Section 2.25 Warranties. . . . . . . . . . . . . . . . . 20
Section 2.26 Customers . . . . . . . . . . . . . . . . . 21
Section 2.27 Suppliers . . . . . . . . . . . . . . . . . 21
Section 2.28 Disclosure. . . . . . . . . . . . . . . . . 21
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER . . . . . 21
Section 3.1 Organization and Qualification . . . . . . . 21
Section 3.2 Corporate Authorization. . . . . . . . . . . 21
Section 3.3 Consents and Approvals . . . . . . . . . . . 22
Section 3.4 Financing. . . . . . . . . . . . . . . . . . 22
Section 3.5 Litigation . . . . . . . . . . . . . . . . . 22
Section 3.6 Brokers . . . . . . . . . . . . . . . . . . . 22
Section 3.7 Disclosure . . . . . . . . . . . . . . . . . 22
ARTICLE IV
COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 4.1 Conduct of Business of the Company and the
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . 23
Section 4.2 Filings. . . . . . . . . . . . . . . . . . . . 24
Section 4.3 Additional Agreements. . . . . . . . . . . . . 24
Section 4.4 Access to Information; Confidentiality . . . . 24
Section 4.5 COBRA. . . . . . . . . . . . . . . . . . . . . 25
Section 4.6 Public Announcements . . . . . . . . . . . . . 25
Section 4.7 Excluded Assets and Excluded Liabilities . . . 25
Section 4.8 Sellers Schedules Update . . . . . . . . . . . 26
Section 4.9 Release and Termination of Agreements. . . . . 26
ARTICLE V
CONDITIONS TO CLOSING. . . . . . . . . . . . . . . . . . . 26
Section 5.1 Conditions to Each Party's Obligation. . . . . 26
Section 5.2 Conditions to Obligation of the Purchaser. . . 27
Section 5.3 Conditions to Obligation of Sellers. . . . . . 27
ARTICLE VI
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . 28
Section 6.1 Termination. . . . . . . . . . . . . . . . . . 28
Section 6.2 Effect of Termination . . . . . . . . . . . . . 28
ARTICLE VII
APPOINTMENT OF SELLERS' REPRESENTATIVE. . . . . . . . . . . 29
Section 7.1 Appointment. . . . . . . . . . . . . . . . . . .29
Section 7.2 Further Consents . . . . . . . . . . . . . . . 29
Section 7.3 Indemnification. . . . . . . . . . . . . . . . 29
ARTICLE VIII
INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . 31
Section 8.1 Survival of Representations, Warranties and
Indemnification Obligations. . . . . . . . . . . . . . . . 31
Section 8.2 Obligation of the Sellers to Indemnify . . . . 31
Section 8.3 Obligation of the Purchaser to Indemnify . . . 32
Section 8.4 Notice and Opportunity to Defend . . . . . . . 33
Section 8.5 Limitations on Indemnification . . . . . . . . 34
Section 8.6 Management of General Product Recalls and
Environmental Liabilities . . . . . . . . . . . . . . . . 34
Section 8.7 Exclusive Remedies; Fraud. . . . . . . . . . . 37
ARTICLE IX
POST-CLOSING COVENANTS. . . . . . . . . . . . . . . . . . 37
Section 9.1 Covenant Not to Compete and Non-Solicitation 37
Section 9.2 Environmental Matters, Responsibility for
Which Is Assumed By Purchaser . . . . . . . . . . . . . 38
Section 9.3 Special Assurances . . . . . . . . . . . . . 38
ARTICLE X
GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . 39
Section 10.1 Rules of Construction . . . . . . . . . . . 39
Section 10.2 Waiver. . . . . . . . . . . . . . . . . . . 40
Section 10.3 Notices . . . . . . . . . . . . . . . . . . 40
Section 10.4 Governing Law . . . . . . . . . . . . . . . 41
Section 10.5 Entire Agreement. . . . . . . . . . . . . . 41
Section 10.6 Amendment . . . . . . . . . . . . . . . . . 41
Section 10.7 Assignability . . . . . . . . . . . . . . . 41
Section 10.8 Binding Effect. . . . . . . . . . . . . . . 42
Section 10.9 Third-Party Beneficiaries . . . . . . . . . 42
Section 10.10 Counterparts . . . . . . . . . . . . . . . 42
Section 10.11 Expenses . . . . . . . . . . . . . . . . . 42
Section 10.12 Trustees . . . . . . . . . . . . . . . . . 42
<PAGE>
LIST OF SCHEDULES AND EXHIBITS
Schedules
Schedule 1.2 - Allocation of Purchase Price
Schedule 2.1 - Shareholders
Schedule 2.2.1 - Further Authorizations
Schedule 2.2.2 - Conflicts
Schedule 2.3 - Consents and Approvals (Sellers)
Schedule 2.5 - Organization and Qualification
Schedule 2.6 - Subsidiaries and Investments
Schedule 2.7.1 - Capitalization
Schedule 2.8.1 - Certain Changes (December 31, 1994)
Schedule 2.8.2 - Certain Changes (November 4, 1995)
Schedule 2.9.1 - Financial Statements
Schedule 2.9.2 - Material Liabilities
Schedule 2.9.3 - Indebtedness; Capitalized Leases; Security
Interests
Schedule 2.10 - Consents and Approvals (Company)
Schedule 2.11 - Litigation
Schedule 2.12.1- Noncompliance with Laws; Missing Material
Permits; Defaults under Permits; Consents
Schedule 2.13.1- Employee Benefit Plans
Schedule 2.13.2- Noncompliance of Employee Benefit Plans
Schedule 2.13.3- Liabilities under Employee Benefit Plans
Schedule 2.13.4- Filing and Compliance
Schedule 2.13.5- List of COBRA Employees
Schedule 2.14.1- Issues with Tax Returns; Examinations
Schedule 2.14.2- Tax-Sharing and Allocation Agreements
Schedule 2.14.3- Tax Deficiencies; Audits
Schedule 2.14.4- Parachute Payments
Schedule 2.15.1- Intellectual Property
Schedule 2.15.2- Exceptions Regarding Intellectual Property
Schedule 2.15.4- Licenses; Infringements; Proceedings
Schedule 2.16.1- Owned and Leased Property; Title Commitments;
Liens on Owned Property
Schedule 2.16.2- Liens on Personal Property; Consignments;
Bailments
Schedule 2.17 - Material Contracts
Schedule 2.18 - Environmental and Safety Matters
Schedule 2.19.1- Strikes, Organizational Activities, Etc.
Schedule 2.19.3- Resignations and Terminations
Schedule 2.21 - Insurance
Schedule 2.22 - Transactions With Interested Persons
Schedule 2.23 - Bank Accounts and Signatories
Schedule 2.24 - Additional Exceptions and Allowances
Schedule 2.25 - Warranties
Schedule 2.26 - Customer Transactions
Schedule 2.27 - Suppliers
Schedule 3.3 - Consents and Approvals (Purchaser)
Schedule 4.7 - Excluded Assets and Excluded Liabilities
Schedule 4.9 - Exemptions from Releases
Schedule 8.2(iii)- Chrysler Recall
Schedule 9.1 - Exemptions from Noncompetition
Schedule 9.3.1 - Certain Receivables
Schedule 9.3.2 - Other Receivables
Schedule 9.3.3 - Certain Inventory
Exhibits
Exhibit 1.4(x) - Form of Amendment to Lease
Exhibit 1.5(vi)- Form of Consulting Agreement
Exhibit 1.5(viii)- Form of Warrant Grant And Registration Rights
Agreement
Exhibit 4.7 - Form of Assignment and Assumption Agreement
Exhibit 4.9 - Form of Mutual Release and Termination
Agreements
Exhibit 5.2.3 - Form of Opinion of Counsel to Sellers and
the Company
Exhibit 5.3.3 - Form of Opinion of Counsel to Purchaser
<PAGE>
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (this "Agreement"), dated
as of March 4, 1996, by and among Excel Industries, Inc., an
Indiana corporation (the "Purchaser"), and Anderson Industries,
Inc., a Delaware corporation (the "Company"), and the stockholders
of the Company (each a "Seller" and, collectively, the "Sellers"),
WITNESSETH, THAT:
WHEREAS, the primary asset of the Company consists of
all of the issued and outstanding capital stock of Atwood
Industries, Inc., an Illinois corporation (a "Subsidiary" as
hereinafter defined in Section 2.6 and hereinafter sometimes
separately referred to as "Atwood"), which, directly and
indirectly, is engaged in the business (the "Business") of
developing, designing, manufacturing, producing, distributing and
providing (1) appliances and accessories for recreational vehicles,
vehicle conversions, pleasure boats and trailers, including water
heaters, furnaces, stoves, ranges, hardware and seating frames; (2)
engineered systems and components for the transportation industry,
including seat systems, hinge systems and control systems; (3)
injection-molded plastics for consumer electronics manufacturers
and automotive original equipment manufacturers and suppliers,
including front and rear television cabinets, automotive light
lenses and interior trim components; and
WHEREAS, the Purchaser desires to acquire the Business
and has agreed to purchase, and the Sellers have agreed to sell,
all of the Capital Stock (as defined below) in the Company pursuant
to the terms and subject to the conditions of this Agreement.
NOW, THEREFORE, in consideration of the foregoing and
the mutual representations, warranties and covenants contained
herein, the parties agree as follows:
ARTICLE I
PURCHASE AND SALE OF STOCK
Section 1.1 Purchase and Sale. Upon the terms and subject to
the conditions of this Agreement, at the Closing (as defined
below), the Purchaser shall purchase from the Sellers, and the
Sellers shall sell to the Purchaser, the Capital Stock.
Section 1.2 Purchase Price and Purchase Price Adjustment.
1.2.1 The purchase price for the Capital Stock shall be
$58,500,000 plus interest from and after December 31, 1995 to the
Closing Date at the prime rate of interest from time to time
reflected in The Wall Street Journal, Midwest Edition (the
"Purchase Price"), payable at the Closing by a wire transfer to the
"Sellers' Representative" (as defined below) against delivery of
the Certificates (as defined below). The Purchase Price shall be
allocated amongst the Sellers as provided in Schedule 1.2.
1.2.2 As soon as available, and in any event not later
than seven days prior to Closing, the Company will deliver to
Purchaser audited consolidated financial statements for Atwood as
of December 30, 1995, accompanied by the unqualified report of
Coopers & Lybrand L.L.P. with respect thereto. Additionally, the
calculation of "Adjusted Net Stockholders' Equity" (later defined)
of Atwood as of December 30, 1995 shall be set forth in a footnote
to such consolidated financial statements. All such statements
shall be in accordance with the provisions of this Section 1.2.2.
1.2.2.1 The consolidated financial statements of Atwood
shall be prepared in accordance with GAAP (later defined).
1.2.2.2 "Adjusted Net Stockholders' Equity" shall be
Atwood's total stockholder's equity as reported in the audited
consolidated financial statements as of December 30, 1995 but with
the following adjustments, if necessary:
(i) "Intercompany Taxes" due to Atwood from the
Company, referenced on Schedule 4.7,I(c), are to be treated as an
asset of Atwood;
(ii) the "Note Payable" to Atwood from the Company,
referenced on Schedule 4.7,I(c), is to be treated as an asset of
Atwood;
(iii) any writedown of the accounts receivable or
increase of reserves above $48,335 against the accounts receivable
described in Schedule 9.3.1 or any writedown of the accounts
receivable described in Schedule 9.3.2 are to be reversed (net of
tax effect, if any);
(iv) any writedown of the inventory or increase of
reserves above $200,000 against the inventory described in Schedule
9.3.3 are to be reversed (net of tax effect, if any); and
(v) any net deferred income tax asset is to be
calculated on a going concern basis.
1.2.2.3 The determination of Adjusted Net Stockholders'
Equity by Coopers & Lybrand LLP shall be final and binding upon
Sellers and Purchaser.
The Purchase Price shall be adjusted downward, dollar-for-
dollar, to the extent that the Adjusted Net Stockholders' Equity of
Atwood as of December 30, 1995 is less than $26,500,000. Any such
downward adjustment of the Purchase Price shall be allocated
amongst the Sellers as directed by the Sellers' Representative.
Section 1.3 Closing. The closing of the purchase and sale of
the Capital Stock (the "Closing") shall be held at the offices of
Katten Muchin & Zavis, 525 West Monroe Street, Suite 1600, Chicago,
Illinois at 10:00 a.m. (local time) on the third business day
following the satisfaction or waiver of the conditions set forth in
Article V (the "Closing Date"), or at such other place and time as
the Purchaser and the Sellers' Representative (as defined below)
may mutually agree.
Section 1.4 Deliveries by Sellers and the Company. At the
Closing, Sellers and/or the Company shall deliver to Purchaser the
following:
(i) valid stock certificates representing all of
the shares of Capital Stock and duly executed and witnessed stock
powers (collectively, the "Certificates") transferring all of such
shares to Purchaser free and clear of any and all Liens (as defined
below);
(ii) the certificate of performance of the Company
required by Section 5.2.1;
(iii) the certificate of performance of the Sellers
required by Section 5.2.1;
(iv) the certificate of the Secretary or Assistant
Secretary of the Company, dated the Closing Date, which certifies
(a) the resolutions adopted by the Board of Directors approving and
authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, (b) that such
resolutions have not been rescinded or modified and remain in full
force and effect as of the Closing Date and (c) the Bylaws of the
Company, as amended to the date of Closing;
(v) a duly certified copy of the Articles or
Certificates of Incorporation or Organization of the Company and
each Subsidiary (except for Atwood Holding Limited, a Cyprus
corporation, dated no more than ten (10) days prior to the Closing
Date, unless such certified copies are not available in the
respective jurisdictions of foreign countries;
(vi) a certificate of good standing or existence,
dated no more than ten (10) days prior to the Closing Date, for the
Company and each Subsidiary (except for Atwood Holding Limited, a
Cyprus corporation) issued by the appropriate office of each state
of incorporation or formation and each jurisdiction in which the
Company and the Subsidiaries are qualified to do business as a
foreign corporation or entity, unless such certificates are not
available in the respective jurisdictions of foreign countries;
(vii) the Warrant Grant and Registration Rights
Agreement referred to in Section 1.5(vii), duly executed by
Sellers;
(viii) the novations, to the extent obtained by
Sellers, and the Assignment and Assumption Agreement, as required
by Section 4.7;
(ix) the duly executed Mutual Release and Termination
Agreements required by Section 4.9; and
(x) at Purchaser's request, an amendment to the
Anderson Garden's lease, dated November 15, 1994, as amended,
between the Company and John R. Anderson, Trustee, in the form of
Exhibit 1.4(x).
Section 1.5 Deliveries by Purchaser. At the Closing, Purchaser
shall deliver to Sellers the following:
(i) the Purchase Price due at the Closing in
accordance with Section 1.2;
(ii) the certificate of performance of Purchaser
required by Section 5.3.1;
(iii) the certificate of the Secretary or Assistant
Secretary of Purchaser dated the Closing Date, which certifies (a)
the resolutions adopted by the Board of Directors approving and
authorizing the execution, delivery and performance of this
Agreement and the transactions contemplated hereby, and (b) that
such resolutions have not been rescinded or modified and remain in
full force and effect as of the Closing Date;
(iv) a duly certified copy of the Bylaws of
Purchaser;
(v) a certificate of existence for Purchaser, dated
no more than ten days prior to the Closing Date, issued by the
office of the Indiana Secretary of State;
(vi) a Consulting Agreement for John R. Anderson in
the form of Exhibit 1.5(vi); and
(vii) warrants to purchase 381,000 shares of common
stock in Purchaser, at an exercise price of $13.25 per share and
with an exercise term of five years, all in accordance with the
terms and conditions of, and together with, the Warrant Grant And
Registration Rights Agreement in the form of Exhibit 1.5(vii), duly
executed by Purchaser.
Section 1.6 Further Assurances. From time to time after the
Closing, Sellers shall execute and deliver to Purchaser such other
instruments of conveyance and transfer and such other documents and
do such other acts as Purchaser may reasonably request or as may be
otherwise necessary to more effectively (i) convey and transfer to,
and vest in, Purchaser and to put Purchaser in possession of, the
Capital Stock and the assets of the Business and (ii) accomplish
the purposes of this Agreement.
Section 1.7 Sales and Transfer Taxes. Any federal, state,
county, local or foreign transfer or other tax owing on account of
the transfer of the shares of Capital Stock to Purchaser and any
federal, state, county, local or foreign income or other tax owing
on account of Sellers' gain or loss or other income realized by
Sellers on the sale of the shares of Capital Stock shall be paid by
Sellers.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
As an inducement to Purchaser to enter into this Agreement and
to consummate the transactions contemplated hereby, the Sellers,
and each of them, jointly and severally, represent and warrant to
the Purchaser and agree as follows:
Section 2.1 Title to Shares. Schedule 2.1 contains the name
of the owners and the number and percentage of outstanding shares
of the Capital Stock owned, directly and indirectly, of record or
beneficially by each of the Sellers. No other shares of capital
stock of the Company are issued or outstanding. The Sellers have
good and marketable title to the Capital Stock, free and clear of
any Liens with respect thereto and, immediately following the
Closing, the Purchaser will have and be entitled to exercise all
rights of ownership with respect thereto.
Section 2.2 Authority.
2.2.1 Each of the Sellers and the Company has full right,
capacity, power and authority to execute and deliver this
Agreement, to consummate the transactions contemplated hereby and
to comply with and perform the terms, conditions and provisions
hereof. Except as noted on Schedule 2.2.1, the execution, delivery
and performance of this Agreement (i) by the Company have been duly
authorized and approved by all requisite corporate action of the
Company and do not require any further corporate authorization or
corporate consent and (ii) by each Seller who is a trustee have
been duly authorized and approved by any requisite third party,
including, without limitation the consents identified on Schedule
2.3, and do not require any further authorization or consent.
2.2.2 Except as noted on Schedule 2.2.2, none of the
Sellers, the Company or any Subsidiary is subject to any order,
writ, award, judgment, decree or determination (a "Governmental
Order") nor is any of them a party to or bound by any contract,
agreement, note, deed of trust, mortgage, trust, lease,
governmental or other license, permit or other authorization, or
other instrument or restriction which could conflict with or
prevent the execution, delivery or performance of this Agreement or
the consummation of the transactions contemplated hereby or
compliance with the terms, conditions or provisions hereof or, in
the case of a Governmental Order specific to the Company or any
Subsidiary, which would materially and adversely affect the ability
of Purchaser and/or the Company to carry on the Business after
Closing.
2.2.3 This Agreement constitutes a valid and binding
obligation of each of the Sellers and the Company, enforceable
against each such Seller and the Company in accordance with its
terms, subject to bankruptcy, insolvency, reorganization,
fraudulent conveyance and transfer, and moratorium or other similar
laws of general application affecting the enforcement of creditors'
rights generally.
Section 2.3 Consents and Approvals (Sellers). Except as
required by the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended (the "HSR Act"), and except as noted on Schedule
2.3, neither the execution, delivery and performance by each Seller
of this Agreement and the consummation by such Seller of the
transactions contemplated hereby, nor the compliance by such Seller
with or fulfillment by such Seller of the terms and provisions
hereof or of any other agreement or instrument contemplated hereby,
will (i) require any action by or in respect of, consent or
approval from or filing with, or notice to, any governmental or
regulatory body, agency or official, or any third party which, if
not obtained or made, will prevent or materially delay the
transactions contemplated by this Agreement, (ii) to the knowledge
of Sellers, violate any provision of applicable law, or (iii)
result in a default (or give rise to any right of termination,
cancellation or acceleration) under any of the terms, conditions or
provisions of any note, bond, mortgage, indenture, license,
franchise, permit or other authorization, lease, agreement or other
instrument or obligations to which such Seller is a party or by
which any of such Seller's properties may be affected or bound, and
which violation, default or other consequence referenced in clause
(ii) or (iii) would have, in the case of clause (ii) or (iii), a
Material Adverse Effect (as defined below).
Section 2.4 Ownership of Shares. The Sellers own, in the
aggregate, all of the issued and outstanding shares of the Capital
Stock in the Company.
Section 2.5 Organization and Qualification. Except as set
forth on Schedule 2.5, each of the Company and its Subsidiaries (i)
is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation listed on
Schedule 2.5; and (ii) has the requisite corporate power and
authority to carry on its business as now being conducted, except
where the failure to have such power and authority would not,
individually or in the aggregate, have a Material Adverse Effect.
Each of the Company and its Subsidiaries is duly qualified as a
foreign corporation to do business, and is in good standing, in
each jurisdiction where the character of its properties owned or
leased or the nature of the business conducted by it makes such
qualification necessary, except for failures to be so qualified or
in good standing which would not, individually or in the aggregate,
have a Material Adverse Effect, which jurisdictions are listed on
Schedule 2.5, and no other jurisdiction has demanded, requested or
otherwise notified the Company or a Subsidiary that it is required
so to qualify. Copies of the Articles or Certificate of
Incorporation and Bylaws of each of the Company and its
Subsidiaries have heretofore been provided to the Purchaser, and
such copies are accurate and complete as of the date hereof.
Schedule 2.5 also lists all of the locations, including, without
limitation, sales or marketing offices, manufacturing facilities
and warehouses, at which the Company or any Subsidiary conducts any
portion of the Business.
Section 2.6 Subsidiaries and Investments. The Company owns
all of the issued and outstanding capital stock of Atwood.
Schedule 2.6 contains a list of each corporation partnership, joint
venture, limited liability or other entity in which the Company
owns, directly or indirectly, more than 50% of the outstanding
voting securities or equity interests (singularly a "Subsidiary"
and collectively, the "Subsidiaries"). Schedule 2.6 contains the
name, jurisdiction of incorporation or organization, authorized
shares or other equity capital and percentage of outstanding shares
or other equity interests of each of the Subsidiaries owned,
directly or indirectly, of record or beneficially by the Company
and the name of the owners and the number and percentage of
outstanding shares or other equity interests of each of the
Subsidiaries owned of record or beneficially by any other person.
The outstanding capital stock of each of the Subsidiaries which is
owned by the Company or a Subsidiary is validly issued, fully paid
and nonassessable. There are no agreements, arrangements, options,
warrants, calls, rights or commitments of any character relating to
the issuance, sale, purchase or redemption of any capital stock or
equity interests of any of the Subsidiaries. There are no
irrevocable proxies with respect to the shares of capital stock or
equity interests of the Subsidiaries owned, directly or indirectly,
by the Company or any third person other than the Company. All
shares of capital stock or equity interests of the Subsidiaries
listed on Schedule 2.6 are owned, free and clear of any Liens,
except as set forth on Schedule 2.6. Except as disclosed on
Schedule 2.6, neither the Company nor any of its Subsidiaries has
any ownership or equity interest, directly or indirectly, in any
entity or enterprise other than the Subsidiaries.
Section 2.7 Capitalization.
2.7.1 The authorized capital stock of the Company
consists of 35,000 shares of voting preferred stock, 10,000 shares
of nonvoting common stock, and 7,000 shares of voting common stock.
As of the date of this Agreement, there are 34,510 shares of voting
preferred stock, 9,324 shares of nonvoting common stock, and 6,990
shares of voting common stock issued and outstanding (collectively,
the "Capital Stock"). All of the Capital Stock is validly issued,
fully paid, nonassessable and free of any preemptive rights.
Except as set forth on Schedule 2.7.1, (i) accurate copies of the
minute books and stock transfer books of the Company and each of
the Subsidiaries have been delivered to Purchaser and (ii) the
stock transfer books of the Company and of its Subsidiaries are
correct, complete and current, and, to the extent applicable, all
documentary and stock transfer tax stamps required in connection
with the issuance and transfer of shares have been duly paid,
affixed or canceled.
2.7.2 There are no (i) proxies, voting trusts, buy-sell
agreements or other agreements or understandings with respect to
the voting of any Capital Stock, or (ii) existing subscriptions,
options, warrants, calls, rights, commitments or any other
agreements of any character obligating the Company or any
Subsidiary to issue, redeem, transfer or sell any shares of the
capital stock of the Company or any Subsidiary.
Section 2.8 Absence of Certain Changes.
2.8.1 Except as disclosed on Schedule 2.8.1, since
December 31, 1994, other than as contemplated or caused by this
Agreement, there has not been:
(a) any shortage or difficulty in the ability of the
Company or any Subsidiary to obtain raw materials, other than in
the ordinary course of business;
(b) any transfer of or right granted under any material
lease, license, agreement, patent, trademark, trade name, or
copyright of the Company or any Subsidiary; or
(c) any default or breach by the Company or any
Subsidiary under any Material Permit (as defined below) or any
Material Contract (as defined below).
2.8.2 Except as disclosed on Schedule 2.8.2, since
November 4, 1995 (the "Balance Sheet Date"), other than as
contemplated or caused by this Agreement, there has not been:
(a) a material change in the financial condition,
operations, business, properties, assets or liabilities of the
Company or a Subsidiary other than changes incurred in the ordinary
course of business;
(b) destruction, damage to or loss of any asset of the
Company or a Subsidiary (whether or not covered by insurance) that
has had a Material Adverse Effect;
(c) change in accounting methods, principles or
practices (including, without limitation, any change in
depreciation or amortization policies or rates) of the Company
or a Subsidiary;
(d) incurrence by the Company or a Subsidiary of any
indebtedness, or acceptance of any other liability or obligation
other than in the ordinary course of its business;
(e) any entry into or a material amendment or
termination of any Material Contract other than this Agreement and
agreements executed in the ordinary course of business;
(f) any redemption, repurchase, or other acquisition of
its stock by the Company or any Subsidiary, or any issuance of
capital stock of the Company or any Subsidiary or any dividend or
distribution declared, set aside, or paid on Capital Stock of the
Company;
(g) any sale or other disposition of any material asset
of the Company or of any Subsidiary, or any mortgage, pledge, or
imposition of any Lien on any asset of the Company or of any
Subsidiary, other than in the ordinary course of business, or any
agreement relating to any of the foregoing; or
(h) any entry by the Company or a Subsidiary into, or
commitment by the Company or a Subsidiary to enter into, any
transaction not in the ordinary course of business.
2.8.3 Except as disclosed on Schedule 2.8.2, since the
Balance Sheet Date the Company and its Subsidiaries have conducted
their businesses in the ordinary and usual course, and, without
limiting the foregoing, except as disclosed on Schedule 2.8.2, no
changes have been made in (i) executive compensation levels, (ii)
the manner in which other employees of the Company and its
Subsidiaries are compensated or shall be compensated, (iii)
supplemental benefits provided to any such executives or other
employees, or (iv) inventory levels in relation to sales levels,
except, in any such case, in the ordinary course of business and,
in any event, without Material Adverse Effect.
Section 2.9 Financial Statements and Liabilities.
2.9.1 The Company has previously furnished to the
Purchaser copies of (i) its audited consolidated balance sheets as
of December 28, 1991, January 3, 1993, January 1, 1994, and
December 31, 1994, and the related consolidated statements of
income, stockholders' equity and cash flows for the years then
ended, including all notes thereto (the "Audited Financial
Statements"), accompanied by the report of Coopers & Lybrand L.L.P.
with respect thereto, and (ii) Atwood's unaudited consolidated
balance sheet as of November 4, 1995 (the "Latest Balance Sheet")
and the related consolidated statements of income and cash flow for
the period then ended (the "Interim Financial Statements";
collectively, the Audited Financial Statements and the Interim
Financial Statements are referred to herein as the "Financial
Statements"). The Audited Financial Statements (including all
notes thereto) (x) fairly present the consolidated financial
position of the Company as of the dates thereof and the results of
operations, cash flows and changes in stockholders' equity of the
Company for the periods covered thereby; and (y) have been prepared
in accordance with generally accepted accounting principles,
applied on a consistent basis throughout the periods involved
("GAAP"), except as may be indicated in the notes thereto. Taken
as a whole, the Interim Financial Statements fairly present the
consolidated financial position of Atwood as of the date thereof
and the results of operations, cash flows and changes in
stockholders' equity of Atwood for the period covered thereby,
except such statements have not been prepared in accordance with
GAAP but in accordance with Atwood's ordinary and customary
standards for interim reporting and on a basis consistent with
Atwood's prior practice. Set forth on Schedule 2.9.1 is a
description of all material variances from GAAP with respect to the
preparation of the Interim Financial Statements.
2.9.2 Except as noted on Schedule 2.9.1, all properties
material to the operation of the Business are reflected on the
Financial Statements in the manner and to the extent required by
GAAP. Except as set forth on the Latest Balance Sheet or Schedule
2.9.2 and except for liabilities and obligations which have arisen
in the ordinary course of business consistent with past practices
since the Latest Balance Sheet Date, the Company and its
Subsidiaries, to the knowledge of the Sellers, do not have any
liabilities or obligations of any nature, fixed or unfixed, choate
or inchoate, liquidated or unliquidated, secured or unsecured,
accrued, absolute, contingent or otherwise (including, without
limitation, liabilities as guarantor or otherwise with respect to
obligations of others, liabilities for taxes due or to become due,
or liabilities relating to products made, regardless of whether
claims in respect thereof have been asserted), or commitments with
respect to any of the foregoing, in each case of a kind required by
GAAP to be set forth on a financial statement.
2.9.3 Except as set forth in Schedule 2.9.3, there are no
(i) contracts, agreements or instruments pursuant to which the
Company or a Subsidiary is indebted or liable to any person for
borrowed money or for the deferred purchase price of any property
in excess of $250,000, (ii) capitalized leases pursuant to which
the Company or a Subsidiary leases real or personal property which
provide for annual payments in excess of $50,000, and (iii)
mortgages, security agreements or pledge agreements to which the
Company or a Subsidiary is a party or by which it or any of its
properties is subject or encumbered. Complete and accurate copies
of all contracts, agreements and instruments set forth in Schedule
2.9.3 have been delivered to Purchaser by the Company.
Section 2.10 Consents and Approvals (the Company). Except as
set forth on Schedule 2.10, neither the execution, delivery and
performance by the Company of this Agreement, the consummation by
the Company of the transactions contemplated hereby, nor the
compliance by the Company with or fulfillment by the Company of the
terms and provisions hereof or of any other agreement or instrument
contemplated hereby, will (i) require any action by or in respect
of, consent or approval from, or filing with or notice to, any
governmental or regulatory body, agency or official (including,
without limitation, with respect to any Material Permit), or any
third party which is party to a Material Contract, which, if not
obtained or made, will prevent or materially delay the transactions
contemplated by this Agreement, (ii) violate, conflict with, or
result in a breach of, any provision of the charter or Bylaws of
the Company or any Subsidiary, (iii) to the knowledge of Sellers,
violate any provision of applicable law which will result in a
Material Adverse Effect, or (iv) result in a default (or give rise
to any right of termination, cancellation or acceleration) under,
any of the terms, conditions or provisions of any Material Permit
or Material Contract.
Section 2.11 Litigation. Except as set forth on Schedule
2.11, there are no claims, actions, suits, approvals,
investigations, informal objections, complaints or proceedings
pending or threatened, with respect to the Company or any
Subsidiary, before any court, arbitrator, or administrative,
governmental, or regulatory authority or body, nor is the Company
or any Subsidiary subject to any order, judgment, writ, injunction
or decree. The items listed on Schedule 2.11, individually and in
the aggregate, will not have a Material Adverse Effect.
Section 2.12 Compliance with Law.
2.12.1 Except as set forth on Schedule 2.12.1 and
except where any such violation or failure to comply would not,
individually or in the aggregate, have a Material Adverse Effect,
to the knowledge of the Sellers, neither the Company nor any
Subsidiary is violating or failing to comply with, or has violated
or failed to comply with in a manner which gives rise to an
existing or current contingent liability, any statute, law,
ordinance, regulation, rule or order of any foreign, federal, state
or local government or any other governmental department or agency,
including, without limitation, the Foreign Corrupt Practices Act,
or any judgment, decree or order of any court, applicable to its
business or operations or applicable to its employees, benefits,
compensation and/or working conditions and/or hiring,
nondiscrimination and promotion practices. Except as set forth on
Schedule 2.12.1 and except for such permits, approvals, licenses
and franchises, the absence of which would not, individually or in
the aggregate, have a Material Adverse Effect, the Company and its
Subsidiaries have all permits, approvals, licenses and franchises
from governmental agencies required to conduct their businesses as
now being conducted (the "Material Permits").
2.12.2 Except as described on Schedule 2.12.1 the
Company and the Subsidiaries have fulfilled and performed their
respective obligations under each of the Material Permits, and, to
the knowledge of Sellers, no event has occurred or condition or
state of facts exists which constitutes or, after notice or lapse
of time or both, would constitute a breach, violation or default
under any of the Material Permits or which authorizes or, after
notice or lapse of time or both, would authorize revocation or
termination of any of the Material Permits, except where the
failure to perform or a breach, violation or default would not,
individually or in the aggregate, have a Material Adverse Effect.
No notice of cancellation, of default, or of any material dispute
concerning any of the Material Permits has been received by any
Seller or the Company. Each of the Material Permits is valid,
subsisting and in full force and effect.
Section 2.13 Employee Benefit Plans.
2.13.1 Except as disclosed on Schedule 2.13.2, item
(v), the Company has provided to the Purchaser true and complete
copies of each pension, profit-sharing, bonus, incentive, deferred
compensation, stock purchase, stock option, stock appreciation
right, severance pay, retirement or other material employee pension
benefit or employee welfare benefit plan, program, fund, agreement
or arrangement currently sponsored or maintained by or contributed
to by the Company or any Subsidiary for the benefit of any officer,
employee, former employee or retiree of the Company or its
Subsidiaries or pursuant to which the Company or any Subsidiary has
any current or reasonably foreseeable potential liability,
including, without limitation, any liability which may be
accelerated or triggered as a result of the transactions
contemplated by this Agreement (collectively, "Plan" or "Plans").
Schedule 2.13.1 lists (i) all of such written Plans, and (ii) a
description of each similar oral agreement or arrangement pursuant
to which the Company or any Subsidiary has any material liability
or obligation.
2.13.2 With respect to any such Plan covering
officers, employees, former employees or retirees of the Company or
any Subsidiary, except as set forth on Schedule 2.13.2, (i) each
such Plan is and has at all times been operated and administered in
material compliance with all applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), the
Internal Revenue Code of 1986, as amended (the "Code") and state
laws, and, where applicable, a favorable determination letter has
been obtained from the Internal Revenue Service (the "IRS") for
each such Plan, or the "remedial amendment period" under Code
Section 401(b) for submitting any amendment to such plan to the
Internal Revenue Service has not yet expired; (ii) no such Plan is
subject to the minimum funding requirements of Section 412 of the
Code or Section 302 of ERISA or is otherwise subject to Title IV of
ERISA; (iii) none of the Company or its Affiliates has engaged in
any material non-exempt "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975(c) of the Code involving
the assets of any such Plan and none of the Company or any
Subsidiary has engaged in any transaction with respect to the
assets of any Plan which will subject either the Company or a
Subsidiary to any material excise taxes imposed by Section 4975 of
the Code or material civil liability under Section 502 of ERISA;
(iv) (A) all required employer contributions which have become due
with respect to such Plans have been made or have been accrued or
(B) all employer profit sharing contributions in respect of
calendar year 1995 which shall become due and payable in 1996 with
respect to a defined contribution plan have been made or have been
accrued, in accordance with GAAP on the Audited Financial
Statements and in accordance with the Company's standards for
interim reporting on the Interim Financial Statements; (v) the
Company has delivered to the Purchaser as to each such Plan a true
and correct copy of (a) the most recent annual report (Form 5500)
filed with the IRS, (b) each plan, summary plan description, trust
agreement, group annuity contract and insurance contract, if any,
relating to such Plan and (c) the most recent determination letter
issued by the IRS, and any pending applications for a determination
letter; (vi) each such Plan is and has been operated in material
compliance with applicable provisions of ERISA, the Code and the
terms of such Plan and (vii) (A) neither the Company, nor any
Subsidiary, nor the administrator of any Plan has received notice
of any audit or investigation of any Plan or any return related to
any Plan from any administrative, governmental or regulatory
authority since December 31, 1994 (except in the context of
reviewing an application for a determination letter), (B) nor is
the Company, nor any Subsidiary, nor any Plan subject to any order,
judgment or decree of any court, arbitrator, administrative,
governmental or regulatory authority or body relating to any Plan,
except as may relate to Code Section 414(p) or ERISA Section
206(d)(3), (C) to the knowledge of Sellers, nor is the Company, nor
any Subsidiary, nor any Plan, currently undergoing any audit or
investigation by any administrative, governmental regulatory
authority or body.
2.13.3 Except as set forth on Schedule 2.13.3, neither
the Company nor any Subsidiary (i) has any current withdrawal
liability with respect to any "multiemployer pension plan" as
defined in Section 3(37) of ERISA nor is a participating employer
in any multiemployer pension plan, within the meaning of Section
3(37) of ERISA, which for any Plan year ending after the Closing
Date has "unfunded vested benefits," within the meaning of Section
4201(b)(1) of ERISA, (ii) has any obligation to provide or
contribute to the cost of life insurance, health insurance,
medicare supplement insurance, or any other welfare benefit to or
on behalf of retired or former employees except as may be required
under Section 4980B of the Code, Part 6 of subtitle B of Title I of
ERISA or state continuation coverage laws, or (iii) is otherwise
required to contribute to any retirement or pension plan pursuant
to any collective bargaining agreement, or (iv) otherwise has any
termination liability under Title IV of ERISA.
2.13.4 Except as would not give rise to material
liability or except as set forth on Schedule 2.13.4, (i) Company
and the Subsidiaries have filed or caused to be filed on a timely
basis every return, report, statement, notice, declaration and
other document required by any governmental agency or authority
(including, without limitation, the Internal Revenue Service, the
Department of Labor and the Pension Benefit Guaranty Corporation),
with respect to each Plan sponsored or maintained by the Company or
any Subsidiary; and (ii) are in compliance with all requirements
for disclosures to employees, participants, and beneficiaries
required under ERISA or the Code, including, without limitation,
timely distribution of summary plan descriptions and summary annual
reports.
2.13.5. Schedule 2.13.5 lists each former employee who
is covered under a health plan of the Company or a Subsidiary as of
January 31, 1996 as a continuee under 29 U.S.C. 1161 ("COBRA").
Section 2.14 Taxes.
2.14.1 Except as set forth on Schedule 2.14.1, each of
the Company and its Subsidiaries has timely and accurately prepared
and filed or will timely and accurately prepare and file, or has
been timely included in or will be timely included in, all federal
and state, local, territorial, possessions and foreign returns,
declarations and reports, information returns and statements,
including without limitation, items related to the Plans
(collectively, "Returns") required to be filed on or before the
date hereof by, or with respect to, the Company or its Subsidiaries
in respect of any Taxes (as defined below) for each period ending
on or before the Closing Date. All such Returns are true and
correct. The Company has delivered to the Purchaser true and
complete copies of all Returns referred to in the preceding
sentences of this Section 2.14.1 (including any amendments thereof)
for the two most recent taxable years. All Taxes shown as due on
such Returns have been or will be timely paid in full. Except as
set forth on the Returns, the Audited Financial Statements or the
Interim Financial Statements and except for accruals in the
ordinary course from the date of the Latest Balance Sheet to the
date hereof, the Company and its Subsidiaries have no liability for
any Taxes. Except as set forth on Schedule 2.14.1, no currently
pending issues have been raised by the IRS or any other taxing
authority in connection with any of such Returns, and no waivers of
statutes of limitation have been given or requested with respect to
the Company or its Subsidiaries. Except as set forth on Schedule
2.14.1, no Returns filed by, or with respect to, the Company and
its Subsidiaries during the past three years have been examined,
nor has any notification of any intention to examine been made, by
the IRS or by the taxing authority of any state, local entity,
territory, possession or foreign entity. For purposes of this
Agreement, the term "Taxes" shall include any tax based upon, or
measured by, income or gross receipts, and any sales, use, ad
valorem, transfer, franchise, payroll, employment, excise,
occupation, premium, property or other taxes (including any
interest or any penalties or additional amounts imposed by any
taxing authority). Schedule 2.14.1 contains a list of all pending
and closed federal income tax audits of the Company for the period
1987 to 1994.
2.14.2 Except as set forth on Schedule 2.14.2, there
are no (i) Tax-sharing agreements or similar arrangements with
respect to or involving the Company or a Subsidiary, or (ii)
agreements between or among any of the Company or its Subsidiaries
regarding allocation or payment of Taxes or amounts in lieu of
Taxes.
2.14.3 On and prior to the date hereof, all monies
required to be collected or withheld by the Company or a Subsidiary
for income taxes, social security and other payroll taxes have been
collected or withheld, and either paid to the appropriate
governmental agencies, set aside in accounts for such purpose, or
accrued, reserved against and entered upon the books of the
Company; and neither the Company nor any Subsidiary is or will
become liable for any Taxes for failure to comply with any of the
foregoing. Except as set forth on Schedule 2.14.3, no deficiencies
for Taxes have been claimed, proposed or assessed against the
Company or any Subsidiary and no federal, state, county, local or
foreign return for Taxes of the Company or a Subsidiary has been
audited or examined by any taxing or other governmental authority
during the three-year period prior to the date hereof.
2.14.4 Except as set forth on Schedule 2.14.4, neither
the Company nor any Subsidiary has made, is obligated to make, or
is a party to any agreement or arrangement under which it might
become obligated, as a result of the transactions contemplated
hereby or otherwise, to make any "parachute payment" or "excess
parachute payment" within the meaning of Section 280G of the Code.
Schedule 2.14.4 specifically identifies any such agreement or
arrangement which provides or might provide for an excess parachute
payment, absent adjustment or shareholder approval.
Section 2.15 Intellectual Property.
2.15.1 Schedule 2.15.1 contains a list and a
description of all (i) patents, patent rights or pending
applications for patents held or made by the Company or any
Subsidiary; (ii) United States, state or foreign trademarks,
servicemarks, trade names or copyrights for which registrations
have been issued to, or applications are pending by, the Company or
any Subsidiary; (iii) to the knowledge of Sellers, unregistered
United States, state or foreign trademarks and servicemarks or
unregistered copyrights used by the Company or a Subsidiary in the
Business; (iv) written agreements between the Company or any
Subsidiary and a third party relating to any right, license or
interest in any patent, trademark, copyright, or any rights
thereto, whether registered or unregistered, used in or relating to
the Business; (v) to the knowledge of Sellers, agreements
pertaining to trade secrets used in the Business to which the
Company or a Subsidiary is a party; and (vi) registered and
unregistered assumed or fictitious names under which the Company or
a Subsidiary is conducting the Business.
2.15.2 Except as listed on Schedule 2.15.2, all of the
patents, patent rights, registrations for trade names, trademarks,
servicemarks and copyrights listed in Schedule 2.15.1 as being
owned by the Company and the Subsidiaries, are subsisting and in
effect and all applications for such registrations are pending,
without written challenge, and the Company and the Subsidiaries own
the entire right, title and interest in and to all such patents,
patent rights, trade names, trademarks, servicemarks and copyrights
so listed, as well as the registrations and applications for
registration therefor, free of any Lien or third-party right
granted by written agreement. Notwithstanding the foregoing,
Sellers make no representation or warranty under this Section
2.15.2 as to the validity and enforceability of any patents, patent
rights, trade names, trademarks, servicemarks and copyrights listed
on Schedule 2.15.1.
2.15.3 Complete and accurate copies of all such owned
patents and trademarks, servicemark and copyright registrations, or
applications therefor, registered assumed name filings and all such
agreements listed in Schedule 2.15.1 have been delivered to
Purchaser by the Company.
2.15.4 Except where such failure would not have a
Material Adverse Effect or as set forth in Schedule 2.15.4, item L,
to the knowledge of Sellers, the Company and the Subsidiaries own
or have the right to use all patents, patent rights, trademarks,
servicemarks, copyrights and trade names which are needed to
manufacture the products currently being manufactured by the
Business. Except as disclosed in Schedule 2.15.4, (i) no notice of
claim of infringement of any patent, patent right, trademark,
servicemark, trade name or copyright or registration thereof, which
results in any way from the operations of the Company, any
Subsidiary or the Business has been made to or received by, or, to
the knowledge of Sellers, threatened against the Company or any
Subsidiary, and (ii) no proceedings are pending or, to the
knowledge of Sellers, threatened against the Company or any
Subsidiary which challenge the validity, ownership of, or right or
license to use, any patent, patent right, trademark, trade name,
servicemark or copyright or the ownership of any other right or
property described in Schedule 2.15.1.
Section 2.16 Property.
2.16.1 Schedule 2.16.1 sets forth a complete list of
all real property owned in fee by the Company and or any of its
Subsidiaries (individually, an "Owned Property" and collectively,
the "Owned Properties") and all real property leased by the Company
or any of its Subsidiaries (individually, a "Leased Property" and
collectively, the "Leased Properties"). The Company or one of its
Subsidiaries has good fee title to the Owned Properties and,
assuming good title in the landlord, a valid leasehold interest in
its Leased Properties (the Owned Properties and the Leased
Properties being sometimes referred to herein individually as a
"Company Property" and collectively as the "Company Properties"),
in each case free and clear of all Liens, easements, restrictive
covenants and rights-of-way, except for the following
(collectively, "Permitted Liens"): (i) Liens, easements,
restrictive covenants, rights-of-way and title exceptions on any
Owned Property shown on the title commitments provided to Purchaser
prior to the date hereof identified on Schedule 2.16.1 ("Title
Commitments"); (ii) Liens, easements, restrictive covenants and
rights-of-way and/or other defects whether or not of record,
against the fee title or other estate held by the landlord with
respect to any Leased Property, none of which materially adversely
affect the lessee's right to use the Leased Property in the conduct
of the Business; (iii) (A) platting, subdivision, zoning, building
and other similar legal requirements, and (B) easements,
restrictive covenants, rights-of-way, encroachments and other
similar encumbrances described in the Title Commitments or
affecting the Leased Property, none of which items set forth in
this clause (iii) in the aggregate materially interfere with the
continued use and operation of the Company Property to which they
relate in the manner in which such Company Property is currently
used and operated; and (iv) other Liens, easements, restrictive
covenants and rights-of-way, if any, referenced in Schedule 2.16.1
or which would be shown on an ALTA Survey for the subject property,
none of which survey matters in the aggregate materially interfere
with the continued use and operation of a Company Property to which
such survey matters relate in the manner in which such Company
Property is currently used and operated. The Company has delivered
to Purchaser true and complete copies of all leases for the Leased
Property. There are no building, zoning or use violations existing
with respect to any Owned Properties as of the date hereof, except
as would not, individually or in the aggregate, have a Material
Adverse Effect. There does not exist on the date hereof any
pending or, to the knowledge of Sellers, proposed (a) condemnation
of all or any part of the Company Properties; or (b) special
assessment for work relating to all or any part of the Company
Properties. The buildings and any other improvements located on
the Owned Properties are all in good and operable condition.
2.16.2 The Company or one of its Subsidiaries has good
and marketable title or, assuming good title in the lessor, a valid
lease interest in, all machinery and equipment and all other
personal property used in the operation of the business of the
Company and its Subsidiaries ("Personal Property"), whether or not
reflected on the Audited Financial Statements, and the Personal
Property is sufficient for the conduct of the respective entity's
business as conducted as of the Closing Date. Except as otherwise
specified in Schedule 2.16.2, the Personal Property is free and
clear of all claims, liens, charges, encumbrances, pledges,
conditional sales contracts, equity charges or other similar
conflicting ownership or security interests in favor of any party
(collectively, the "Liens", or individually, a "Lien") and is in
substantially good working order and has been reasonably well
maintained and does not contain, to Sellers' knowledge, any
material defects. All of the tangible Personal Property is located
at the locations set forth in Schedule 2.16.1. Neither the Company
nor any Subsidiary has a consignment or bailment relationship with
any third party with respect to its inventory.
Section 2.17 Material Contracts. Except as listed or described
on Schedule 2.17 or 2.13.1, as of the date hereof neither the
Company nor any of its Subsidiaries is a party to or bound by any
written or oral lease, agreements or other contracts or legally
binding contractual rights, obligations or commitments
("Contracts") relating to or in any way affecting the operation or
ownership of the Business or any other business or activity owned
or conducted or previously owned or conducted by Atwood or any of
the other Subsidiaries that are of a type described below (the
"Material Contracts"):
(i) any collective bargaining arrangement with any
labor union, any Contract with officers or employees, or any such
agreement currently in negotiation or proposed;
(ii) any Contract for capital expenditures or the
acquisition or construction of fixed assets in excess of
$250,000.00;
(iii) any Contract for the purchase, maintenance or
acquisition, or the sale or furnishing, of materials, supplies,
merchandise, machinery, equipment, parts or other property or
services requiring aggregate future payments in excess of
$250,000.00;
(iv) any Contract relating to the borrowing of
money, or the guaranty of another person's borrowing of money,
including, without limitation, all notes, mortgages, indentures and
other obligations, guarantees of performance, agreements and
instruments for or relating to any lending or borrowing, including
assumed indebtedness;
(v) any Contract granting any person a Lien on all
or any part of the assets of the Company or any Subsidiary;
(vi) any Contract granting to any person a first
refusal, first-offer or similar preferential right to purchase or
acquire any assets of the Company or any Subsidiary;
(vii) any Contract under which the Company or any
Subsidiary is (A) a lessee or sublessee of any machinery,
equipment, vehicle or other tangible personal property or real
property, or (B) a lessor of any real property or tangible personal
property owned by the Company or any Subsidiary, in either case
having an original value in excess of $250,000.00;
(viii) any Contract for purchase or sale by the
Company or any Subsidiary of (A) any real property on which the
Company or any Subsidiary conducted operations or (B) any business
or line of business, whether by sale or purchase of stock or assets
or any merger or consolidation, under which there are any existing
or current contingent obligations, liabilities or benefits;
(ix) any Contract limiting, restricting or
prohibiting the Company or any Subsidiary from conducting business
anywhere in the United States or elsewhere in the world;
(x) any joint venture or partnership Contract;
(xi) any Contract having an original value in excess
of $250,000.00 and requiring consent or other approval upon a
change of control in the equity ownership of the Company;
(xii) any other Contract (including with agents,
consultants or advisors), whether or not made in the ordinary
course of business, which involves payments in excess of
$250,000.00; and
(xiii) any lease or associated agreements relating to
the Leased Properties.
Except as set forth on Schedule 2.13.2(v), the Company has
provided Purchaser with a true and complete copy of each written
Material Contract, including all amendments or other modifications
thereto. Except as set forth on Schedule 2.17, each Material
Contract is a valid and binding obligation of the Company or one of
its Subsidiaries, as the case may be, enforceable in accordance
with its terms, and is in full force and effect, subject only to
bankruptcy, reorganization, receivership and other laws affecting
creditors' rights generally. Except as set forth on Schedule 2.17,
the Company or one of its Subsidiaries has performed all
obligations required to be performed by it under the Material
Contracts and neither the Company nor any Subsidiary is in breach
or default thereunder, or, to the knowledge of the Sellers, by any
other party thereunder, nor does there exist any event or condition
which, with notice, lapse of time or both, would constitute a
breach or default, except for breaches or defaults which will not,
individually or in the aggregate, have a Material Adverse Effect.
Section 2.18 Environmental and Safety Matters.
2.18.1 Except as set forth on Schedule 2.18, to the
knowledge of the Sellers:
(i) The Company and its Subsidiaries are and have
been in compliance at all times with all applicable Environmental
Laws and have received no notice, report or information regarding
any liabilities (whether accrued, absolute, contingent,
unliquidated or otherwise), or any corrective, investigatory or
remedial obligations, arising under applicable Environmental Laws
with respect to the past or present operations or properties of the
Company and its Subsidiaries.
(ii) The Company and its Subsidiaries have obtained,
and are and have been in compliance at all times with all terms and
conditions of, all permits, licenses and other authorizations
required pursuant to Environmental Laws for the occupation or use
of the properties now owned or leased by them and used in the
conduct of their operations.
(iii) None of the following has existed or presently
exists at any property now owned or leased by the Company or its
Subsidiaries in violation of applicable Environmental Laws: (A)
hazardous or toxic materials, substances, pollutants, contaminants
or waste including, without limitation, petroleum or petroleum
products; asbestos-containing or suspected asbestos containing
material (as defined by federal law) in any form or condition;
polychlorinated biphenyl-containing materials or equipment, or
ozone-depleting substances as defined pursuant to the Environmental
Laws ("Hazardous Materials"); or (B) underground storage tanks or
systems (as defined by federal law) and in addition heating oil
tanks.
(iv) The transactions contemplated by this Agreement
do not impose any obligations under Environmental Laws for site
investigation or cleanup or notification to or consent of any
government agencies or third parties.
(v) No facts, events or conditions relating to the
past or present properties or operations of the Company or its
Subsidiaries will (A) prevent, hinder or limit continued compliance
with applicable Environmental Laws, (B) give rise to any
corrective, notification, investigatory or remedial obligations on
the part of the Company, its Subsidiaries or the Purchaser pursuant
to applicable Environmental Laws, or (C) give rise to any
liabilities on the part of the Company, its Subsidiaries or the
Purchaser (whether accrued, absolute, contingent, unliquidated or
otherwise) pursuant to applicable Environmental Laws or common law,
including, without limitation, those liabilities relating to onsite
or offsite hazardous substance releases, personal injury, property
damage or natural resources damage.
(vi) The Company and its Subsidiaries have not
assumed or succeeded (by operation of law or otherwise) to any
liabilities or obligations of any third party under Environmental
Laws for which the Company, its Subsidiaries or the Purchaser will
have any liability following the Closing Date.
2.18.2 The Company has delivered or made available to
the Purchaser true, complete and correct copies of all government
notices, orders or settlements including without limitation,
Notices of Violation or Deficiency, Administrative Orders, Agreed
Orders, Consent Decrees or Settlement Agreement, and all
environmental reports, analyses, tests or monitoring in the
possession of or initiated by the Company or its Subsidiaries
during the past five years, or at anytime if related to known
material unresolved obligations or liabilities, including, without
limitation, reports, tests and analyses required pursuant to any
permit or license held by the Company or its Subsidiaries under
Environmental Laws, pertaining to any property owned, operated or
leased or formerly owned, operated or leased by the Company or its
Subsidiaries.
2.18.3 As used herein, "Environmental Laws" shall mean
all United States, Mexican, Italian, or federal, state, provincial
or local statutes, laws, treaties, codes, rules, regulations,
ordinances, orders, standards, permits, licenses, or requirements
(including consent decrees, judicial decisions and administrative
orders), presently in force pertaining to the protection,
preservation, conservation or regulation of the environment, or
imposing requirements relating to public or employee health and
safety, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Section 9601 et seq., the Resource Conservation and Recovery Act of
1976 42 U.S.C., Section 6901 et seq., the Emergency Planning and
Community Right to Know Act, 42 U.S.C. Section 11001 et seq., the
Clean Air Act, 42 U.S.C. Section 7401 et seq., The Federal Water
Pollution Control, 33 U.S.C. Section 1241 et seq., the Toxic
Substances Control Act, 15 U.S.C. Section 2601 et seq., the Safe
Drinking Water Act, 42 U.S.C. Section 300F et seq., the Hazardous
Materials Transportation Uniform Safety Act, 49 U.S.C. Section
1802, and the Occupational Safety and Health Act, 29 U.S.C. Section 651
et seq., the Merli Water Quality Law, the North American Free Trade
Agreement, and the General Law of Ecological Equilibrium and
Environmental Protection.
Section 2.19 Employee Relations.
2.19.1 Except as set forth on Schedule 2.19.1, within
the last three years neither the Company nor any Subsidiary has
experienced any strike, picketing, boycott, work stoppage or
slowdown or other labor dispute, allegation, charge or complaint of
unfair labor practice, employment discrimination or other matters
relating to the employment of labor, nor has any such event, to the
knowledge of Sellers, been threatened against the Company or any
Subsidiary. Except as set forth on Schedule 2.19.1, there are no
labor unions or other organizations representing or, to the
knowledge of Sellers, attempting to represent, any employees of the
Company or any Subsidiary and there are no agreements, plans,
programs, documents or letters of understanding currently in effect
between the Company or any Subsidiary and any union or other
employee organization affecting wages, hours or other terms and
conditions of employment. All labor and collective bargaining
agreements to which the Company or any Subsidiary is a party have
been ratified by the appropriate party, and are currently in full
force and effect.
2.19.2 Except as set forth on Schedule 2.19.1, there
are no pending, or to the knowledge of Sellers, threatened,
charges, claims, settlement agreements or citations, directly or
indirectly involving or affecting the Company or any Subsidiary,
under (i) the Occupational Safety and Health Act of 1970, as
amended; (ii) the National Labor Relations Act of 1935, as amended;
(iii) Civil Rights Act of 1964, as amended; (iv) the Immigration
Reform and Control Act of 1986, as amended; (v) the Age
Discrimination in Employment Act of 1967, as amended; (vi) the Fair
Labor Standards Act, as amended, (vii) the Americans with
Disabilities Act, as amended; (viii) the Family and Medical Leave
Act, as amended; or (ix) any other similar local, state or federal
laws, except where such charges, claims, agreements or citations
would not, individually or in the aggregate, have a Material
Adverse Effect.
2.19.3 Except as set forth on Schedule 2.19.3, since
December 31, 1994, there has not been any resignation or
termination of employment of any key employee or officer of the
Company or a Subsidiary.
Section 2.20 Brokers. No broker, finder or investment banker
(other than Donaldson, Lufkin & Jenrette) is entitled to any
brokerage, finder's or other fee or commission in connection with
the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of the Company.
Section 2.21 Insurance. The physical properties and assets of
the Company and its Subsidiaries are insured to the extent
disclosed on Schedule 2.21 hereto. Such Schedule 2.21 also sets
forth a complete listing of all insurance policies maintained by
the Company and its Subsidiaries as of the date of this Agreement,
including the policy numbers, the insurance carriers, the amounts
and types of coverage, the expiration dates and the deductible
amounts. Said insurance policies and arrangements are in full
force and effect, and the Company and its Subsidiaries are in
compliance in all material respects with the terms thereof.
Neither the Company nor any of its Subsidiaries has received any
notice of cancellation or non-renewal with respect to any of such
policies. Except as set forth on Schedule 2.21, since January 1,
1989, the Company and the Subsidiaries have continually maintained
without interruption insurance on an occurrence basis and in the
amounts reflected on Schedule 2.21 covering product liability
claims relating to products manufactured or sold by the Company and
the Subsidiaries during such period.
Section 2.22 Transactions with Interested Persons. Except as
set forth on Schedule 2.22, to the knowledge of the Sellers, no
officer, director or supervisory employee of the Company or any
Subsidiary owns, directly or indirectly, on an individual or joint
basis, any material interest in, or serves as an officer or
director of, any competitor, customer or supplier of the Company or
its Subsidiaries, or any organization which has a material contract
or arrangement with the Company or its Subsidiaries. Schedule 2.22
also sets forth (i) a list of each oral or written contract or
agreement between the Company or a Subsidiary, on the one hand, and
any Seller, or any Affiliate (as defined below) of a Seller, on the
other hand; and (ii) a general description of all such transactions
in the last three years.
Section 2.23 Bank Accounts and Signatories. All of the
Company's and its Subsidiaries bank, savings and similar accounts
are listed on Schedule 2.23 hereto. All authorized signatories for
each such account are likewise identified on Schedule 2.23.
Section 2.24 Accounts Receivable and Inventory. Subject to
the allowance for collections reflected on the Latest Balance Sheet
and the additional qualifications and allowances described or set
forth on Schedule 2.24, the accounts receivable of the Company and
each Subsidiary as set forth on the Latest Balance Sheet or arising
from the date thereof until the Closing Date (i) are valid, have
arisen solely out of bona fide sales and deliveries of goods,
performance of services (which includes accruals of revenues for
and during the construction of tooling for customers) and other
business transactions in the ordinary course of the Business
consistent with the past practices of the Company and each
Subsidiary and (ii) are not, to the knowledge of Sellers, subject
to valid defenses, set-offs or counterclaims. The allowance for
collection losses which will be recorded on the December 30, 1995
consolidated audited financial statements of Atwood to be delivered
in accordance with Section 1.2.2, will be determined in accordance
with GAAP consistent with the past practices of the Company and
each Subsidiary. Except as set forth on Schedule 2.24, all
inventory of the Company and the Subsidiaries reflected in the
Latest Balance Sheet or acquired since the date thereof was
acquired and has been maintained in the ordinary course of the
Business, is of good and merchantable quality, and is reflected at
the lower of cost or market. Except as set forth on Schedule 2.24,
obsolete items of inventory in the Latest Balance Sheet are carried
at net realizable value.
Section 2.25 Warranties. Except as set forth in Schedule
2.25, neither the Company nor any Subsidiary (i) has during the
three (3) years preceding the date of this Agreement made any
express product warranty with respect to any product that it
manufactures or sells or service that it renders, or (ii)(A) has
during the three years preceding the date of this Agreement
received any notice of any claim based on any express or implied
warranty, or (B) has knowledge of any threatened claim based on any
express or implied warranty, except in the case of clauses (A) or
(B), for such claims which will not have a Material Adverse Effect.
Section 2.26 Customers. Schedule 2.26 sets forth for the one-
year period ended December 31, 1994 and the nine month period ended
September 30, 1995, each customer which purchased ten percent (10%)
or more of the products (calculated on a consolidated basis and
based upon sales revenues) sold by the Company and each Subsidiary
for each such time period. No customer identified in Schedule 2.26
has terminated or has notified the Company or any Subsidiary that
it intends to terminate its business relationship with the Company
or any Subsidiary.
Section 2.27 Suppliers. Except as set forth in Schedule 2.27,
during the one year period ending December 31, 1994, no one
supplier accounted for ten percent (10%) or more of the purchases
(calculated on the basis of consolidated purchases) of the Company
and each Subsidiary for that time period. No supplier identified
in Schedule 2.27 has notified the Company or any Subsidiary that it
intends to terminate its business relationship with the Company or
a Subsidiary.
Section 2.28 Disclosure. To the knowledge of the Sellers,
none of the representations or warranties of Sellers contained
herein, none of the information contained in the Schedules referred
to in this Article II, and none of the other information or
documents furnished or to be furnished to Purchaser or any of its
representatives by Sellers, the Company or any of their
representatives in connection with this Agreement and the
transactions contemplated hereby, is false or misleading in any
material respect or omits to state a fact herein or therein
necessary to make the statements made herein or therein not
misleading in any material respect.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
As an inducement to Sellers to enter into this Agreement and
to consummate the transactions contemplated herein, the Purchaser
represents and warrants to the Sellers as follows:
Section 3.1 Organization and Qualification. The Purchaser is
a corporation duly organized and validly existing under the laws of
the State of Indiana and has the requisite corporate power to carry
out the transactions contemplated hereby.
Section 3.2 Corporate Authorization. The execution, delivery
and performance by the Purchaser of this Agreement and the
transactions contemplated hereby are within the corporate powers of
the Purchaser and have been duly authorized by all necessary
corporate action. This Agreement constitutes a valid and binding
obligation of the Purchaser enforceable against the Purchaser in
accordance with its terms, subject to bankruptcy, insolvency,
reorganization, fraudulent conveyance and transfers and moratorium
or other similar laws of general application affecting the
enforcement of creditors' rights generally.
Section 3.3 Consents and Approvals. Except as required by the
HSR Act, and except as noted on Schedule 3.3, neither the
execution, delivery and performance by the Purchaser of this
Agreement, the consummation by the Purchaser of the transactions
contemplated hereby, nor the compliance by the Purchaser with or
fulfillment by the Purchaser of the terms and provisions hereof or
of any other agreement or instrument contemplated hereby, will (i)
require any action by or in respect of, consent or approval from,
or filing with or notice to, any governmental or regulatory body,
agency or official which, if not obtained or made, will prevent or
materially delay the transactions contemplated by this Agreement,
(ii) violate, conflict with, or result in a breach of, any
provision of the charter or Bylaws of the Purchaser, (iii) to the
knowledge of Purchaser, violate any provision of applicable law, or
(iv) result in a default (or give rise to any right of termination,
cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, license,
franchise, permit or other authorization, lease agreement or other
instrument or obligation to which the Purchaser is a party, or by
which its properties or assets may be bound.
Section 3.4 Financing. The Purchaser currently has sufficient
funds on hand or available from responsible financial institutions
to provide the Purchaser with funds to enable the Purchaser to
finance the consummation of the transactions contemplated hereby
and to pay related fees and expenses.
Section 3.5 Litigation. There are no claims, actions, suits,
approvals, investigations, informal objections, complaints or
proceedings pending before any court, arbitrator, or
administrative, governmental or regulatory authority or body, nor
is the Purchaser subject to any order, judgment, writ, injunction
or decree, except in either case for matters which are not
reasonably likely to prevent, materially delay or materially burden
the transactions contemplated hereby.
Section 3.6 Brokers. No broker, finder or investment banker
(other than Dean Witter Reynolds, Inc.) is entitled to any
brokerage, finder's or other fee or commission in connection with
the transactions contemplated hereby based upon arrangements made
by or on behalf of the Purchaser.
Section 3.7 Disclosure. To the knowledge of Purchaser, none of
the representations or warranties of Purchaser contained herein,
and none of the other information or documents furnished or to be
furnished to Sellers and the Company, or any of their
representatives by Purchaser or any of its representatives in
connection with this Agreement and the transactions contemplated
hereby, is false or misleading in any material respect or omits to
state a fact herein or therein necessary to make the statements
made herein or therein not misleading in any material respect.
ARTICLE IV
COVENANTS
Section 4.1 Conduct of Business of the Company and the
Subsidiaries. Except as contemplated by this Agreement and except
as disclosed in the Schedules or otherwise consented to in writing
by the Purchaser, during the period from the date of this Agreement
to the Closing, the Sellers and the Company agree that: (a) each of
the Company and its Subsidiaries shall conduct its business in the
ordinary course; and (b) neither the Company nor any Subsidiary
will intentionally take any actions that could reasonably be
expected to have a Material Adverse Effect. Specifically, the
Company shall use all reasonable efforts to preserve intact the
business organization and reputation of the Company and its
Subsidiaries, keep available the services of its management
employees, and preserve the goodwill of suppliers, customers and
others having business relations with the Company or its
Subsidiaries. Further, the Company shall continue to properly and
promptly file, when due, all federal, state, local, foreign and
other tax returns, reports and declarations required to be filed by
the Company or any Subsidiary and will pay or make full and
adequate provision for the payment of, all Taxes and governmental
charges due from or payable by them. Without limiting the
generality of the foregoing, and except as otherwise expressly
provided in this Agreement, prior to the Closing the Company will
not and will not permit any of the Subsidiaries, without the prior
written consent of the Purchaser, to: (i) issue, sell, pledge,
dispose of, or encumber (or authorize any of the foregoing) with
respect to (A) additional shares of capital stock of any class or
other equity interests of the Company or any Subsidiary, or
securities convertible into or exchangeable for any such shares or
other equity interests, or any rights, warrants or options to
acquire any such shares, equity interests or other convertible
securities, or (B) any other securities in respect of, in lieu of,
or in substitution for, shares of the Capital Stock or shares or
equity interests of any Subsidiary outstanding on the date hereof;
(ii) purchase or otherwise acquire, or propose to purchase or
otherwise acquire, any outstanding shares of the Capital Stock;
(iii) split, combine or reclassify the outstanding shares of the
Capital Stock or declare, set aside or pay any dividend or
distribution on any shares of its capital stock; (iv) sell, pledge,
dispose of or encumber its own assets, except for sales of
inventory and sales of obsolete assets and assets concurrently
replaced with similar assets, in each case in the ordinary course
of business; (v) other than borrowing under existing credit
facilities identified on Schedule 2.9.2 for working capital
purposes in the ordinary course of business, issue or sell any debt
securities, or assume any long-term or short-term indebtedness for
borrowed money, or assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other
individual or entity, or make any loans or advances; (vi) except as
otherwise required by law or by any Material Contract, enter into,
adopt or amend in any material respect, any material agreement or
Plan for the benefit of its employees (provided, however, Sellers
intend to cause the Company to enter into bonus arrangements,
pending the sale of the Capital Stock, with certain key employees,
aggregating not greater than $445,000, to which Purchaser hereby
agrees in advance); (vii) acquire (by merger, consolidation or
acquisition of stock or assets) any corporation, partnership or
other business organization or division thereof or make any
material investment either by purchase of stock or securities,
contributions to capital (other than to any Subsidiary), property
transfer or purchase of any material amount of property or assets,
in any other individual or entity; (viii) adopt any amendments to
their respective charters or Bylaws; (ix) except those items which
are the subject of a Contract listed on Schedule 2.17, make any
capital expenditure or commitment for capital expenditures in
excess of $100,000 singularly or $400,000 in the aggregate; (x)
take any action that would cause its current insurance policies to
be cancelled or terminated or any of the coverage thereunder to
lapse; (xi) take any action that would adversely affect their
corporate charters or existence; (xii) fail to maintain the assets
of the Company and its Subsidiaries in customary repair, order and
condition, or fail to replace, in accordance with past practice,
inoperable, worn out or obsolete assets; (xiii) fail to maintain
their books, accounts and records in accordance with GAAP except
for the variances from GAAP principles described on Schedule 2.9.1;
(xiv) take any action that would cause the Company or any
Subsidiary to fail to comply with all legal requirements and
contractual obligations applicable to the operations and Business
of the Company and its Subsidiaries; (xv) sell, lease mortgage,
encumber or otherwise dispose of or grant any interest in any of
its assets or Property (other than sales in the ordinary course of
business and except for Liens for Taxes not yet due); or (xvi)
enter into or terminate any Material Contract. From the date
hereof until the Closing Date, the Company shall promptly inform
Purchaser of any material variance from the consolidated budget or
forecast of Atwood and the other Subsidiaries for the current
fiscal year.
Section 4.2 Filings. The Sellers and the Purchaser shall use
reasonable best efforts to take, or cause to be taken, all actions,
and to do, or cause to be done, all things necessary, proper or
advisable under applicable laws to consummate and make effective,
as soon as reasonably practicable, the transactions contemplated
hereby. Without limiting the generality of the foregoing, the
Sellers and the Purchaser shall give all notices, make all required
filings with or applications to governmental bodies and other
regulatory authorities no later than ten business days after the
execution of this Agreement (including the HSR Act), and use
reasonable best efforts to obtain all licenses, permits, approvals,
authorizations, waivers and consents of all third parties,
necessary for the parties to consummate the transactions
contemplated hereby (including, without limitation, the notices,
consents or approvals set forth in the Sellers Schedules).
Section 4.3 Additional Agreements. Each of the parties hereto
agrees to use its reasonable best efforts to take, or cause to be
taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective as
promptly as practicable the transactions contemplated by this
Agreement and to cooperate with each other in connection with the
foregoing, including using its reasonable best efforts to (a)
obtain all necessary waivers, consents and approvals from other
parties to Material Contracts; (b) obtain all necessary consents,
approvals and authorizations as are required to be obtained under
any federal, state or foreign law or regulations; (c) oppose, lift
or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the
transactions contemplated hereby; and (d) fulfill all conditions to
this Agreement.
Section 4.4 Access to Information; Confidentiality. Subject to
the terms of the Confidentiality Agreement (as herein defined),
from the date hereof to the Closing, the Company shall and shall
cause its Subsidiaries to afford the employees, agents,
representatives and advisors of the Purchaser complete access at
all reasonable times to its officers, employees, agents,
properties, books, records and contracts, and shall furnish the
Purchaser all financial, operating and other data and information
as they may reasonably request; provided, however, the Company and
its Subsidiaries shall not be required to provide such access or
information to the extent that it has been advised by counsel that
the provision of such access or information could be violative of
antitrust laws or existing confidentiality agreements between the
Company or any Subsidiary and any third party. As part of its
examination and with the prior approval of the Company (which will
not be unreasonably withheld or delayed), the Purchaser may make
inquiries of persons having business relationships with the Company
or any Subsidiary (including but not limited to suppliers,
licensees, distributors and customers) and the Company shall and
shall cause the officers and key employees of the Company and its
Subsidiaries to cooperate fully with the Purchaser in connection
therewith. That certain Confidential Disclosure Agreement dated as
of September 1, 1995, from the Purchaser to the Company (the
"Confidentiality Agreement"), with respect to, among other things,
confidential treatment of information provided by the Company and
its representatives to the Purchaser and its representatives, shall
remain in full force and effect and shall survive the execution and
delivery of this Agreement and the termination of this Agreement
for any reason whatsoever, but it shall terminate effective with
the Closing.
Section 4.5 COBRA The Purchaser shall cause the Company and
its Subsidiaries to comply after the Closing Date with the
requirements of COBRA with respect to any individual entitled to
continuation coverage under COBRA under a plan maintained by the
Company or its Subsidiaries as of the Closing Date.
Section 4.6 Public Announcements. The Sellers and the
Purchaser shall consult with each other before issuing any press
release or otherwise making any public statements with respect to
this Agreement or the transactions contemplated hereby and shall
not issue any such press release or make any such public statement
prior to such consultation, except as may be required by law.
Section 4.7 Excluded Assets and Excluded Liabilities.
Immediately after the Closing, the Company and Atwood will sell,
and certain Sellers or their nominees, as designated by the
Sellers' Representative prior to the Closing (the "Purchasing
Parties"), will purchase, those assets listed on Schedule 4.7 (the
"Excluded Assets"), subject to all liabilities and obligations
relating to the Excluded Assets and all other liabilities and
obligations of any nature of the Company excepting only (A) the
liabilities and obligations of Atwood and the other Subsidiaries,
(B) the liabilities set forth in Schedule 4.7,I(c) and (C) as
otherwise provided in Article VIII, and Section 9.2 of this
Agreement, all of which the Company and/or the Subsidiaries shall
retain, subject to the terms and provisions of this Agreement (the
"Excluded Liabilities"), including without limitation all such
liabilities listed on Schedule 4.7, in consideration of $1,450,000
plus interest from and after December 31, 1995 to the Closing Date
at the prime rate of interest from time to time reflected in The
Wall Street Journal, Midwest Edition, to be paid by the Purchasing
Parties to the Company. To the knowledge of Sellers, Schedule 4.7
lists all Excluded Liabilities. Prior to or on the Closing Date,
the Sellers shall make reasonable efforts to obtain novations or
other releases or agreements discharging the Company from liability
(so that the respective liabilities will become direct liabilities
of the assignee), effective as of the Closing Date, with respect to
those Excluded Liabilities designated on Schedule 4.7 by an "N."
Effective as of the Closing Date, the Purchasing Parties shall
assume, pursuant to the terms of an Assignment and Assumption
Agreement in the form of Exhibit 4.7 attached hereto, those
Excluded Liabilities designated by an "N" for which no novations
can be obtained and the Excluded Liabilities not designated by an
"N."
Section 4.8 Sellers Schedules Update. From time to time prior
to the Closing, the Sellers will promptly supplement or amend their
Schedules with respect to any matter heretofore existing or
hereafter arising which if existing, occurring or known at the date
of this Agreement would have been required to be set forth or
described in such Schedules or which is otherwise necessary to
correct any information in such Schedules which has been rendered
inaccurate thereby. For purposes of determining the accuracy of
the representations and warranties of Sellers contained in Article
II and for purposes of determining satisfaction of the conditions
set forth in Section 5.2.1 hereof, the Schedules delivered by
Sellers shall be deemed to include only that information contained
therein on the date of this Agreement and shall be deemed to
exclude any information contained in any subsequent supplement or
amendment thereto; provided, however, in the event the Purchaser
shall close the transaction contemplated hereby, the Purchaser will
be deemed to have waived any and all breaches of representation,
warranties and covenants of this Agreement properly disclosed
pursuant to this Section 4.8 on or prior to the Closing.
Section 4.9 Release and Termination of Agreements. Except as
set forth on Schedule 4.9, simultaneously with the Closing, the
Company and each Subsidiary, on the one hand, and each Seller and
such Seller's Affiliates (other than the Company and the
Subsidiaries), on the other hand, shall terminate and shall release
each other from, with respect to the Company and each Subsidiary,
all agreements and contracts between them (other than this
Agreement and other documents relating to the transactions
contemplated hereby). Such release and such termination shall be
accomplished pursuant to the terms of the Mutual Release and
Termination Agreements in the form of Exhibit 4.9.
ARTICLE V
CONDITIONS TO CLOSING
Section 5.1 Conditions to Each Party's Obligation. The
respective obligations of each party to effect the Closing are
subject to the satisfaction or waiver prior to the Closing Date of
the following conditions:
5.1.1 No Legal Prohibition. No statute, rule, regulation
or order shall be enacted, promulgated, entered or enforced by any
court or governmental authority which would prohibit consummation
by such party of the transactions contemplated hereby.
5.1.2 HSR Act. The applicable waiting period under the
HSR Act shall have expired or been terminated.
5.1.3 No Injunction. Such party shall not be prohibited
by any order, ruling, consent, decree, judgment or injunction of a
court or regulatory agency of competent jurisdiction from
consummating the transactions contemplated hereby.
Section 5.2 Conditions to Obligation of the Purchaser. The
obligation of the Purchaser to close the transactions contemplated
hereby shall be subject to the fulfillment and satisfaction, prior
to or at the Closing, of the following conditions, except to the
extent any such condition is waived in writing by the Purchaser:
5.2.1 Representations and Covenants. Except as expressly
contemplated by this Agreement, the representations and warranties
of Sellers contained in this Agreement shall be true and correct in
all material respects on and as of the Closing Date with the same
force and effect as though made on and as of the Closing Date. The
Sellers and the Company shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement to be performed or complied with by them on or prior
to the Closing Date, including, without limitation, the covenants
set forth in Section 10.11.1. Each of the Sellers and the Company
shall have delivered to the Purchaser a certificate dated the
Closing Date and signed by the Sellers' Representative and the
Company to the foregoing effect, respectively.
5.2.2 Approvals. All governmental approvals, consents,
permits or waivers necessary for consummation of the transactions
contemplated by this Agreement, and all material third-party
approvals, consents or waivers designated as material by the
Purchaser no later than 10 days after the date hereof shall have
been obtained in form and substance reasonably satisfactory to the
Purchaser and shall not have been revoked, terminated or otherwise
rendered ineffective.
5.2.3 Opinion of Counsel. The Purchaser shall have
received one or more opinions of counsel to the Sellers and the
Company substantially in the form and content of Exhibit 5.2.3
hereto, which opinions shall, collectively, cover, among others,
all of the Sellers.
5.2.4 Resignations. The Purchaser shall have received
resignations from those officers and directors of the Company and
its Subsidiaries designated by Purchaser before Closing.
5.2.5 No Material Adverse Effect. No event or events
shall have occurred which individually or in the aggregate
constitutes a Material Adverse Effect, other than those, if any,
that result from actions or changes expressly permitted by, and the
transactions contemplated by, this Agreement.
5.2.6 Closing Deliveries. Sellers and the Company shall
have delivered to the Purchaser the items listed in Section 1.4.
5.2.7 Amendment to Townsend Agreements. Sellers shall
have delivered to the Purchaser a letter from A. Jay Townsend
("Townsend") to the effect that the agreements between Townsend and
Atwood, dated February 23, 1996, and between Townsend and Mark I
Molded Plastics, Inc., dated February 13, 1996, supersede the Long
Term Incentive and Severance Agreement between Townsend and Atwood,
dated September 7, 1995, and that said 1995 agreement is of no
further force and effect.
Section 5.3 Conditions to Obligation of Sellers. The
obligation of the Sellers to close the transactions contemplated
hereby shall be subject to the fulfillment and satisfaction, prior
to or at the Closing, of the following conditions, except to the
extent any such condition is waived in writing by the Sellers'
Representative:
5.3.1 Representations and Covenants. Except as expressly
contemplated by this Agreement, the representations and warranties
of the Purchaser contained in this Agreement shall be true and
correct in all material respects on and as of the Closing Date with
the same force and effect as though made on and as of the Closing
Date. The Purchaser shall have performed and complied in all
material respects with all covenants and agreements required by
this Agreement to be performed or complied with by the Purchaser on
or prior to the Closing Date. The Purchaser shall have delivered
to the Sellers a certificate dated the Closing Date and signed by
an executive officer of the Purchaser to the foregoing effect.
5.3.2 Approvals. All governmental approvals, consents,
permits or waivers necessary for consummation of the transactions
contemplated by this Agreement which, if not obtained, would result
in a material liability to the Sellers shall have been obtained in
form and substance reasonably satisfactory to the Sellers and shall
not have been revoked, terminated or otherwise rendered
ineffective.
5.3.3 Opinion of Counsel. The Sellers and the Company
shall have received an opinion of counsel to the Purchaser
substantially in the form and content of Exhibit 5.3.3 hereto.
ARTICLE VI
TERMINATION
Section 6.1 Termination. This Agreement may be terminated at
any time prior to the Closing:
6.1.1 By mutual written consent of the Purchaser and the
Sellers' Representative;
6.1.2 By the Sellers' Representative:
(i) if the Closing Date shall not have occurred on
or before May 31, 1996 by reason of the non-fulfillment of one or
more of the conditions set forth in Sections 5.1 and 5.3, other
than as a result of a breach by the Sellers or the Company of their
representations, warranties or other obligations hereunder; or
(ii) if, prior to the Closing Date, the Purchaser
fails to perform in any material respect any of its obligations
under this Agreement.
6.1.3 By the Purchaser:
(i) if the Closing Date shall not have occurred on
or before May 31, 1996 by reason of the non-fulfillment of one or
more of the conditions set forth in Sections 5.1 and 5.2, other
than as a result of a breach by the Purchaser of its
representations, warranties or other obligations hereunder; or
(ii) if, prior to Closing Date, the Sellers or the
Company fail to perform in any material respect any of their
obligations under this Agreement.
Section 6.2 Effect of Termination. In the event of
termination of this Agreement by either the Purchaser or the
Sellers' Representative, as provided in Section 6.1 hereof, all
obligations under this Agreement shall terminate and shall be of no
further force or effect; provided, however, no termination of this
Agreement shall release, or be construed as releasing, any party
from any liability to any other party which may have arisen for any
reason. A party's right to terminate this Agreement is in addition
to, and not in lieu of, any other legal or equitable rights or
remedies which such party may have.
ARTICLE VII
APPOINTMENT OF SELLERS' REPRESENTATIVE; CONSENT OF SELLERS
Section 7.1 Appointment. Each Seller designated by an "SR" on
the signature page, and each Seller not designated by an "SR" on
the signature page but limited by Section 7.2, hereby appoints John
R. Anderson (the "Sellers' Representative") the attorney-in-fact of
such Seller, with full power and authority, including power of
substitution, acting in the name of and for and on behalf of each
such Seller, to amend or waive any provision of this Agreement, to
terminate this Agreement pursuant to the provisions of Article VI
and to do all other things and to take all other action under or
related to this Agreement, which, in his discretion, he may
consider necessary or proper to effect the purchase and sale of the
Capital Stock and to resolve any dispute with the Purchaser over
any aspect of this Agreement, and on behalf of such Seller to enter
into any agreement to conclude any of the foregoing, which shall
have the effect of binding such Seller as if such Seller had
personally entered into such an agreement; provided, however, that
all actions taken or decisions made by the Sellers' Representative
on behalf of the Sellers shall be taken or made in a manner which
is ratable and equitable amongst all Sellers. This appointment and
power of attorney shall be deemed to be coupled with an interest,
and all authority conferred hereby shall be irrevocable and shall
not be subject to termination by operation of law, whether by the
death or incapacity or liquidation or dissolution of any Seller or
the occurrence of any other event or events. Upon the death,
disability or resignation of John R. Anderson as Sellers'
Representative, Duane R. Bach shall serve as Sellers'
Representative.
Section 7.2 Further Consents. Notwithstanding any provision
of Section 7.1 hereof to the contrary, the Sellers' Representative
may not amend or waive any provision of this Agreement or terminate
this Agreement pursuant to the provisions of Article VI on behalf
of any Seller who is not designated with an "SR" by its name on the
signature page hereof without the consent of a majority in interest
(represented by their respective ownership of the shares of Capital
Stock as of the date hereof) of all of the Sellers who are not so
designated with an "SR" by their names on the signature page
hereof, which majority consent shall bind all such Sellers, whether
or not consenting.
Section 7.3 Indemnification.
7.3.1 If the Sellers' Representative or any employee,
agent or attorney employed or appointed by him (any or all of the
foregoing hereinafter referred to as an "Indemnified Person")
becomes involved in his capacity as Sellers' Representative or
Sellers' Representative's employee, agent or attorney in any legal
or administrative action, suit, proceeding, investigation or
inquiry, regardless of the legal theory or the allegations made in
connection therewith, directly or indirectly in connection with,
arising out of, based upon, or in any way related to (i) this
Agreement, (ii) the services that are the subject of this
Agreement, (iii) any document or information, whether verbal or
written, referred to herein or supplied to any Indemnified Person,
(iv) the breach of the representations, warranties or covenants by
any Seller given pursuant hereto, (v) any Indemnified Person's
involvement in the transactions contemplated hereby, or (vi) any
filings made by or on behalf of any party with any governmental
agency in connection with the transactions contemplated hereby
(each, a "claim"), each of the Sellers shall indemnify and hold
harmless each Indemnified Person against any and all losses,
claims, damages, liabilities, costs and expenses (including, but
not limited to, attorneys' fees, disbursements and court costs, and
costs of investigation and preparation) to which such Indemnified
Person may become subject in connection with any such matter, and,
on demand, shall pay promptly, on behalf of each Indemnified
Person, reasonable attorneys' fees and other expenses and
disbursements (including, but not limited to, the cost of any
investigation and related preparation) as they are incurred by the
Indemnified Person.
7.3.2 If for any reason the foregoing indemnification is
determined to be unavailable to any Indemnified Person or
insufficient fully to indemnify any such person, then each Seller
shall contribute to the amount paid or payable by such person as a
result of any such loss, claim, damage, liability, cost or expense,
on a pro rata basis of each Seller's ownership of the shares of
capital stock as of the date hereof.
7.3.3 The Sellers' obligations under this Section 7.3
shall be in addition to any liability that they or any other person
may otherwise have to any Indemnified Person, shall be binding
upon, and inure to the benefit of, any heirs, personal
representatives, successors or assigns of each Seller and shall
inure to the benefit of the heirs, personal representatives,
successors and assigns of each Indemnified Person.
7.3.4 Any Indemnified Person shall have the right to
employ such person's own separate counsel in any such action, at
Sellers' expense, and such counsel shall have the right to have
charge of such matters for such person.
7.3.5 The indemnification obligations hereunder shall
apply only to losses, claims, damages, liabilities or expenses that
are for acts other than those caused primarily by the gross
negligence, bad faith, willful misfeasance, or reckless disregard
of its obligations or duties on the part of such Indemnified
Person. Each Seller waives and releases the Sellers'
Representative with respect to any and all losses, claims, damages,
liabilities and expenses that arise from acts other than those
caused primarily by the gross negligence, bad faith, willful
misfeasance, or reckless disregard of its obligations or duties on
the part of such Indemnified Person.
7.3.6 The foregoing provisions shall be enforceable by
each Indemnified Person and such person's heirs, representatives
and successors, and shall survive any termination of this
Agreement.
ARTICLE VIII
INDEMNIFICATION
Section 8.1 Survival of Representations, Warranties and
Indemnification Obligations. The Purchaser has the right to rely
fully upon the representations, warranties, covenants and
agreements of the Sellers and the Company contained in this
Agreement or in any certificate delivered hereunder. Sellers have
the right to rely fully upon the representations, warranties,
covenants and agreements of the Purchaser contained in this
Agreement or in any certificate delivered hereunder. All such
representations and warranties shall survive the execution and
delivery of this Agreement and the Closing and shall remain in full
force and effect, regardless of any investigation made by or on
behalf of any party hereto, until June 30, 1997, at which time the
representations and warranties and the indemnification obligations
related thereto shall terminate, except that representations,
warranties, and indemnification obligations related thereto: (i)
set forth in Section 2.14 shall continue in full force and effect
until the later of September 15, 1998 and the expiration of the
statute of limitations, as extended at the request of the IRS,
applicable to the Company's federal income tax return for the tax
year ended December 31, 1994, at which time such representations
and warranties and the indemnification obligations related thereto
shall terminate; (ii) set forth in Section 2.18 shall continue in
full force and effect until the second anniversary of the Closing,
at which time such representations and warranties and the
indemnification obligations related thereto shall terminate; and
(iii) all matters set forth in Sections 2.1, 2.2.1, 2.4 and 2.6,
which shall continue in full force and effect indefinitely. The
indemnification obligation of the Sellers pursuant to Sections
8.2(iii) and 8.2(iv) shall terminate on the second anniversary of
the Closing, and the indemnification obligation of the Sellers
pursuant to Section 8.2(ii) shall survive indefinitely.
Notwithstanding anything contained in this Section 8.1 to the
contrary, any claims for indemnification pursuant to Sections 8.2
and 8.3 for which the Indemnitee (as defined below) shall have
given a Claims Notice (as defined below) as provided in Section
8.4.1 on or prior to the expiration of the applicable period
specified in this Section 8.1, shall survive until such claim has
been resolved.
Section 8.2 Obligation of the Sellers to Indemnify. Subject
to the limitations contained in Section 8.5, the Sellers, jointly
and severally, agree to indemnify, defend and hold harmless the
Purchaser (and its officers, directors, agents and Affiliates) from
and against all liability, losses, demands, claims, actions or
causes of action, suits, proceedings, investigations, deficiencies,
fines, penalties, costs, damages and expenses whatsoever, including
without limitation, Taxes and environmental claims, whether
foreseeable or unforeseeable, including without limitation, all
legal, accounting and other professional fees, disbursements and
expenses incurred in the investigation, collection, prosecution and
defense of claims and amounts paid in settlement (collectively, the
"Losses") based upon or arising out of or in connection with:
(i) any inaccuracy in or any breach of any
representation or warranty of the Sellers contained in this
Agreement or in any document or other papers delivered hereunder by
the Sellers and/or the Company, determined, except as to Section
2.11, without regard to any materiality or "Material Adverse
Effect" qualification contained in any such representation or
warranty;
(ii) the Excluded Assets and the Excluded
Liabilities;
(iii) except for the matter described on Schedule
8.2(iii) in respect of the current recall by Chrysler Corporation,
claims made against the Company or any Subsidiary in connection
with a General Product Recall (as used in this Article VIII,
"General Product Recall" means an official recall notice initiated
or proposed to be initiated by an OEM customer of the Company or a
Subsidiary or a product recall or similar warranty repair program
initiated or proposed to be initiated by the Company or a
Subsidiary to any owners of products incorporating a part
manufactured and sold by the Company or a Subsidiary prior to the
Closing Date, which recall or program concerns a defect in such
part and is required by commercially reasonable business
practices); and
(iv)(A) those matters described on Schedule 2.18
designated in the third column thereof by the number "2" and (B)
any matters not described or otherwise referred to, directly or
indirectly, on Schedule 2.18 relating to (x) the treatment, storage
or disposal of any Hazardous Materials, or the arranging therefor,
by the Company or a Subsidiary which occurred prior to the Closing,
(y) any discharge or release of any Hazardous Material into the
environment at or from any of the Company Properties or any other
real property previously owned, leased or operated by the Company
or any Subsidiary which occurred prior to Closing, or (z) the
presence prior to the Closing on any of the Company Properties or
any other real property previously owned, leased or operated by the
Company or any Subsidiary of any Hazardous Materials;
provided, however, all Losses referenced in clauses (i) through
(iv) shall be reduced by amounts actually recovered from any third
party (Purchaser agrees to use reasonable efforts to collect),
including, without limitation, amounts recovered from any insurance
carriers (net of retroactive adjustments or other reimbursement to
the insurer) (Purchaser agrees to use reasonable efforts to
collect) in respect of such Loss, and by the present value (using
a discount rate of 7%) of any tax benefit to the Purchaser on
account of such Loss (the value of such tax benefit to be (A)
determined on the conclusive presumption that the Purchaser has
sufficient profits to utilize the full amount of the tax benefit
from the Losses and (B) limited to Losses which the Purchaser shall
be able to deduct, depreciate, or amortize for tax purposes).
Section 8.3 Obligation of the Purchaser to Indemnify. The
Purchaser agrees to indemnify, defend and hold harmless the Sellers
(and their assigns, heirs and family members and any trusts the
beneficiaries of which are such family members) from and against
all Losses based upon or arising out of or in connection with (i)
any inaccuracy in or breach of any representation or warranty of
the Purchaser contained in this Agreement or in any document or
other papers delivered hereunder by the Purchaser; or (ii) any
treatment, storage or disposal of any Hazardous Materials, or the
arranging therefor, by the Company or a Subsidiary which occurs
after the Closing, and any discharge or release of any Hazardous
Material into the environment at or from any of the Company
Properties to the extent any such discharge or release occurs after
the Closing (any subsurface release which first occurred prior to
the Closing shall be covered under Section 8.2(iv), except to the
extent that Purchaser, Company or Subsidiaries after the Closing
add to the release or negligently fail to address the release);
provided, however, all Losses shall be reduced by amounts actually
recovered from any third party (Sellers agree to use reasonable
efforts to collect), including, without limitation, amounts
recovered from any insurance carriers (net of retroactive
adjustments or other reimbursement to the insurer) (Sellers agree
to use reasonable efforts to collect) in respect of such Loss, and
by the present value using a discount rate of 7% of tax benefit to
the Sellers on account of such Loss (the value of such tax benefit
to be (A) determined on the conclusive presumption that the Sellers
have sufficient profits to utilize the full amount of the tax
benefit from the Losses, and (B) limited to Losses which the
Sellers shall be able to deduct, depreciate, or amortize for tax
purposes).
Section 8.4 Notice and Opportunity to Defend.
8.4.1 Notice of Asserted Liability. Promptly after (i)
receipt by any party hereto (the "Indemnitee") of notice of any
demand, claim or circumstances which, with the lapse of time, would
or might give rise to a claim or the commencement (or threatened
commencement) of any action, proceeding or investigation, or (ii)
a party obtaining knowledge of any inaccuracy in or breach of a
representation, warranty or covenant contained herein that may
result in a Loss (an "Asserted Liability"), the Indemnitee shall
give notice thereof (the "Claims Notice") to the party or parties
obligated to provide indemnification pursuant to Sections 8.2 or
8.3 (the "Indemnifying Party"), provided, however (x) the failure
to so notify the Indemnifying Party promptly shall not relieve such
party from any liability which such party may have under this
Article VIII unless such failure prejudices the Indemnifying Party
in fulfilling such obligations, and (y) the Sellers' Representative
shall make and receive notices on behalf of the Sellers. The
Claims Notice shall describe the Asserted Liability in reasonable
detail, and shall indicate the amount (estimated, if necessary and
to the extent feasible) of the Loss that has been or may be
suffered by the Indemnitee.
8.4.2 Opportunity To Defend. The Indemnifying Party may
elect to compromise or defend, at its own expense and by its own
counsel, any Asserted Liability and to prosecute by way of
counterclaim or third-party complaint any claim arising out of or
relating to any Asserted Liability. If the Indemnifying Party
elects to compromise or defend such Asserted Liability, it shall
within 30 days (or sooner, if the nature of the Asserted Liability
so requires) notify the Indemnitee of its intent to do so, and the
Indemnitee shall cooperate, at the expense of the Indemnifying
Party, in the compromise of, or defense against, such Asserted
Liability. If the Indemnifying Party elects not to compromise or
defend the Asserted Liability or fails to notify the Indemnitee of
its election as herein provided, the Indemnitee may pay, compromise
or defend such Asserted Liability. If the Indemnifying Party
elects to defend an Asserted Liability but contests its obligation
to indemnify against such Asserted Liability, the Indemnifying
Party shall carry on such defense in good faith. Notwithstanding
the foregoing, neither the Indemnifying Party nor the Indemnitee
may settle or compromise any claim over the objection of the other;
provided, however, consent to settlement or compromise shall not be
unreasonably withheld. In any event, the Indemnitee and the
Indemnifying Party may participate, at their own expense, in the
defense of such Asserted Liability. If the Indemnifying Party
chooses to defend any claim, the Indemnitee shall make available to
the Indemnifying Party any books, records or other documents within
its control that are necessary or appropriate for such defense.
Section 8.5 Limitations on Indemnification. Sellers'
liability under Sections 8.1 and 8.2 shall be subject to the
following limitations:
(i) (A) No claim for indemnification may be
asserted with respect to any Loss in an amount less than $15,000
(it being understood that all Losses arising from substantially
related operative facts and circumstances, including any
misrepresentation under Section 2.24 respecting a single customer,
shall be deemed a single Loss), and (B) no amounts shall be payable
until such time as the amount of all claims for indemnification
with respect to Losses which would be due but for this clause (i)
(B) shall exceed $1,500,000 in the aggregate, following which the
Indemnifying Party shall be liable only for Losses in excess of
said $1,500,000 (the "Threshold Amount").
(ii) Sellers' maximum liability for Losses under
Sections 8.2(i) and (iv) in all events and in the aggregate shall
be limited to $10,000,000.
(iii) The Threshold Amount and maximum dollar
limitations set forth in Sections 8.5(i) and (ii) are not
applicable to (A) any Losses Purchaser suffers as a result of an
inaccuracy of a representation or a breach of a warranty set forth
in Sections 2.1, 2.2.1, 2.4 or 2.6 of this Agreement, and (B)
Sellers' indemnification obligations under Section 8.2(ii).
(iv) Sellers' liability for indemnification for
Losses under Section 8.2(iii) shall be further limited as follows:
(A) after giving effect to Section 8.5(i), Sellers in the aggregate
shall bear the next $1,000,000 of such Losses; and (B) thereafter,
Sellers in the aggregate shall bear 50% of the balance of such
Losses; but (C) Sellers' aggregate liability for Losses under
Section 8.2(iii) shall be limited to $2,500,000.
(v) Sellers' liability for indemnification for
Losses under Section 8.2(iv) shall be further limited and defined
as follows:
(A) Section 8.5(i) shall not apply to Losses
under Section 8.2(iv)(A), but shall apply to Losses under Section
8.2(iv)(B) which are allocated to Sellers under Section 8.5(v)(B);
and
(B) with respect to the first $5,000,000 of
Losses described in Section 8.2(iv), Purchaser shall bear 50% of
such Losses and Sellers in the aggregate shall bear 50% of such
Losses, and with respect to such Losses described in Section
8.2(iv) in excess of $5,000,000, Sellers shall bear 100% of such
excess, all subject to the limitation of Section 8.5(ii).
Section 8.6 Management of General Product Recalls and
Environmental Liabilities.
8.6.1 In accordance with Section 8.4.1, Purchaser shall
notify the Sellers' Representative promptly in writing if Purchaser
believes that the Company or any Subsidiary (i) is or will become
liable under a claim made against it in connection with a General
Product Recall ("Recall Liability") or (ii) is required to report
or undertake any remedial work or other actions to correct any
violations of, or to comply with, any applicable Environmental Laws
relating to the items for which Purchaser is indemnified by Section
8.2(iv) (collectively "Remedial Work"), if such Recall Liability or
Remedial Work may be subject to indemnification by the Sellers
pursuant to this Article VIII. Purchaser shall provide or cause
the Company and the Subsidiaries to provide the Sellers'
Representative with all necessary information in Purchaser's, the
Company's and the Subsidiaries' possession and, if the Sellers'
Representative deems it necessary and upon reasonable written
notice to Purchaser, with access to the property and records of the
Company and the Subsidiaries, and to provide or cause the Company
and the Subsidiaries to provide any further access as may be
necessary, to evaluate Purchaser's Claims Notice.
8.6.2 Purchaser and the Sellers' Representative shall
cooperate in evaluating and shall agree on the extent of the Recall
Liability or the Remedial Work, as the case may be, which shall be
in conformance with commercially reasonable business practices;
provided, and however, the management of Recall Liabilities and the
Remedial Work shall be subject to the following conditions:
8.6.2.1 Recall Liability Management.
8.6.2.1.1 As soon as practicable after the receipt by
the Sellers of a Claims Notice regarding a Recall Liability, the
Sellers' Representative and Purchaser shall commence meetings
(including, meetings with the OEM customer at the discretion of
Purchaser) to establish the required corrective action. Purchaser
shall supply engineering assistance to analyze the problem leading
to the General Product Recall and to assist in the development of
a detailed plan for corrective action. Any such detailed plan for
corrective action developed and agreed upon by the parties
involved, including the Sellers' Representative, or any such plan
with which Purchaser may unilaterally proceed without having
reached agreement with Sellers' Representative as hereinafter
provided, shall herein be referred to as a "Recall Plan".
8.6.2.1.2 In the event that the parties are unable to
agree on a Recall Plan as a result of the Sellers' Representative's
determination that the recall of a product does not concern a
defective part manufactured and sold by the Company or a Subsidiary
prior to the Closing Date or is not required by commercially
reasonable business practices, Sellers' Representative shall
provide the Company with a written detailed description setting
forth the basis for his determination, and then, unless Purchaser
revises its Recall Plan to conform to the objections of Sellers'
Representative or Purchaser and Sellers' Representative have been
able to mutually agree upon a Recall Plan, (A) Purchaser may
unilaterally proceed with its Recall Plan; and (B) the issue of the
extent of Sellers' obligation to indemnify Purchaser shall, if
Sellers' Representative disputes the amount of Sellers'
indemnification obligation under Section 8.4(iii), be submitted to
arbitration in accordance with Section 8.6.3.
8.6.2.1.3 Notwithstanding anything contained in this
Agreement to the contrary, Purchaser's Loss in connection with a
General Product Recall, if any, shall be calculated based on the
supply of replacement parts at factory cost and, where applicable,
installation labor cost and shall not include (i) any dealer
markup, rework and replacement costs, or (ii) the cost of
supporting the General Product Recall with normal quality,
scheduling and sales functions.
8.6.2.2 Remedial Work Management.
8.6.2.2.1 The Sellers' Representative shall have the
right to select environmental consultants and any necessary
subcontractors (the environmental consultants and all
subcontractors to be referred to as "Environmental Consultants"),
from a list of at least three Environmental Consultants provided by
Purchaser, to conduct, carry out and manage the Remedial Work.
8.6.2.2.2 All work performed, carried out, conducted or
managed by the Environmental Consultants shall be kept confidential
to the extent permitted by law and shall be for the joint benefit
of Sellers and Purchaser, which the Environmental Consultant shall
acknowledge in writing. The Sellers' Representative and the
Purchaser shall have full access to the Environmental Consultant.
8.6.2.2.3 Purchaser may proceed with the Remedial Work
at any time as it, in its sole discretion, determines to be
necessary under the circumstances, and, as soon as practicable,
Purchaser shall submit to the Sellers' Representative a plan for
such Remedial Work ("Remedial Plan") prepared by the Environmental
Consultant. The Sellers' Representative shall have the right to
review the proposed Remedial Plan to confirm that the Remedial Work
is required by recognized and reasonable environmental engineering
practices and applicable Environmental Laws. If the Sellers'
Representative shall, within ten business days, submit in writing
to Purchaser good faith and reasonable objections to the Remedial
Plan based upon recognized and reasonable environmental engineering
practices and applicable Environmental Laws, Purchaser and Seller's
Representative shall endeavor in the ten business days following
such submission to resolve such objections. Any objections not so
resolved shall be submitted to arbitration under Section 8.6.3
hereof.
8.6.3 If either Purchaser, on the one hand, or the
Sellers, on the other hand, dispute the other's performance of its
obligations under this Section 8.6, or if Purchaser and the
Sellers' Representative are unable to agree on the extent of a
Recall Liability or any Remedial Work, then either party may submit
the dispute to an arbitrator for binding arbitration. In the event
a dispute involves Remedial Work, the arbitrator so selected shall
be an environmental consultant. The arbitrator may not be
otherwise associated with the Remedial Work or have performed
services for either party during the preceding twenty-four month
period. The issue to be decided by the arbitrator shall be whether
Purchaser has incurred excessive and unreasonable Losses as a
result of which Sellers should be relieved of an indemnification
obligation under Article VIII and if so, the extent to which
Sellers should be relieved of such indemnification obligation. The
arbitration shall be conducted in accordance with the rules of the
American Arbitration Association, except to the extent that the
terms of this Agreement shall control. The arbitrator shall hear
the dispute within thirty days after the arbitrator has been named,
or as soon thereafter as practicable. The decision of the
arbitrator shall be determinative and conclusive and may be entered
as a final judgment in any court of proper jurisdiction and neither
party may appeal such decision to any court. Fees, costs and
expenses of the arbitrator shall be allocated as determined by the
arbitrator; but each party shall pay the fees and expenses of its
counsel.
Section 8.7 Exclusive Remedies; Fraud. After the Closing, the
remedies set forth in this Article VIII are exclusive, and no other
remedy shall be available, except that the limitations set forth in
this Article VIII shall not apply to fraud by any party hereto with
respect to an action solely against such defrauding party or to the
failure of any party to perform any covenant or agreement to be
performed pursuant to this Agreement after Closing.
ARTICLE IX
POST-CLOSING COVENANTS
Section 9.1 Covenant Not to Compete and Non-Solicitation.
9.1.1 In furtherance of the sale of the Capital Stock to
Purchaser, each Seller, on its or his own behalf and on behalf of
each of its or his Affiliates hereby agrees that, except for the
activities set forth on Schedule 9.1, for a period commencing on
the Closing Date and expiring on the fifth anniversary date of the
Closing, Sellers, and each of them and each Affiliate of each of
them, will not, directly or indirectly, as an employer, proprietor,
partner, stockholder, director, consultant, agent or otherwise own,
manage, operate, participate in, perform services for, provide
financial assistance to or otherwise carry on, any business which
competes with the Business as currently conducted (a "competing
enterprise") anywhere in the United States of America (it being
understood that the customers of the Company and its Subsidiaries
and the Purchaser and its Affiliates are generally located within
such area, that the geographic scope of the Business extends and is
projected to extend throughout such area and is not limited to any
particular region thereof, and that competitors may compete
effectively from any location within such area); provided, however,
the following shall not, standing alone, be prohibited by this
Section 9.1.1: (i) beneficial ownership of not more than five
percent (5%) of the issued and outstanding shares of a class of
securities issued by a corporation and traded on a national
securities exchange or in the over-the-counter market; (ii)
beneficial ownership of not more than ten percent (10%) of the
equity interest of any bona fide investment company registered as
such under the Investment Company Act of 1940, as amended, which
holds an investment in a competing enterprise; or (iii) being a
passive investor in a private investment company serving as a
multiple investment vehicle which holds an investment in a
competing enterprise.
9.1.2 In furtherance of the sale of the Capital Stock to
Purchaser, each Seller hereby also agrees that, for a period
commencing on the Closing Date and expiring on the fifth
anniversary date of the Closing, Sellers, and each of them and each
Affiliate of each of them, will not, directly or indirectly, as an
employer, proprietor, partner, stockholder, director, consultant,
agent or otherwise, induce or attempt to induce any employee of the
Purchaser, Company or a Subsidiary to leave the employ of the
Purchaser, Company or a Subsidiary, or in any way interfere with
the relationship between the Purchaser, Company or a Subsidiary and
any of its employees, agents, consultants or independent
contractors.
9.1.3 In furtherance of the sale of the Capital Stock to
Purchaser, each Seller hereby also agrees that Sellers, and each of
them and each Affiliate of each of them, will not directly or
indirectly, disclose, divulge, publish or disseminate, whether
orally or in writing, to any person or entity, without the consent
of Purchaser, any information relating to this Agreement, the
Business, the Purchaser or its business which information is not in
the public domain.
9.1.4 Without limiting the right of Purchaser to pursue
all other legal and equitable rights available to it for any
violation of Subsections 9.1.1, 9.1.2 or 9.1.3 by a Seller, the
parties agree that monetary damages cannot fully compensate
Purchaser for such a violation and that Purchaser shall be entitled
to injunctive relief to prevent violation or continuing violation
thereof and that no bond or other security shall be required of
Purchaser in connection therewith. It is the intent and
understanding of each party hereto that if, in any action before
any court or agency legally empowered to enforce this Section 9.1,
any term, restriction, covenant or promise is found to be
unreasonable and for that reason unenforceable, then such term,
restriction, covenant or promise shall be deemed modified to the
minimum extent necessary to make it enforceable by such court or
agency. Nothing herein shall be construed as prohibiting a party
from pursuing any other remedies at law or in equity which it may
have.
Section 9.2 Environmental Matters, Responsibility for Which Is
Assumed By Purchaser. Except as otherwise provided for in Sellers'
indemnification of Purchaser under Article VIII and except as
provided in Section 9.3.4, Purchaser assumes responsibility for all
Losses in respect of those matters (i) described in Schedule 2.18
and designated in the third column thereof by the number "1" or
(ii) described in Section 8.2(iv).
Section 9.3 Special Assurances.
9.3.1 Certain Receivables. Purchaser shall have the
option, to be exercised by written notice to Sellers'
Representative at any time during the 30-day period following June
30, 1996, to sell to the Sellers any of the receivables listed on
Schedule 9.3.1 which remain unpaid on June 30, 1996, at the
aggregate face amount thereof less $48,335. Such receivables were
reflected on the Core Plant Accounts Receivable Aging as of
December 30, 1995 as 180 days or older. From the Closing to the
exercise of this option, Purchaser agrees to use its best efforts
to collect these receivables and to cooperate and work diligently
with Sellers' Representative in respect thereof.
9.3.2 Other Receivables. Purchaser shall have the
option, to be exercised by written notice to Sellers'
Representative at any time during the 30-day period following June
30, 1996, to sell to the Sellers any of the receivables listed on
Schedule 9.3.2 which remain unpaid on June 30, 1996, at the
aggregate face amount thereof. Such receivables were accrued
although no purchase orders were received as of December 30, 1995.
From the Closing to the exercise of this option, Purchaser agrees
to use its best efforts to collect these receivables and to
cooperate and work diligently with Sellers' Representative in
respect thereof.
9.3.3 Certain Inventory. Purchaser shall have the
option, to be exercised by written notice to Sellers'
Representative at any time during the 30-day period following
December 31, 1996, to sell to Sellers any of the inventory items
listed on Schedule 9.3.3 which remain in Company's inventory on
December 31, 1996, at the prices indicated on Schedule 9.3.3 less
$200,000. From the Closing to the exercise of this option,
Purchaser agrees to use its best efforts to sell this inventory.
If Purchaser exercises this option, Sellers shall be free to
solicit purchases of the purchased inventory from any prospective
customer, notwithstanding any agreement to the contrary contained
herein or in any agreement ancillary hereto.
9.3.4 Environmental Reimbursements. Sellers acknowledge
that Keiper Recaro, Inc. ("Keiper") and Atwood Enterprises, Inc.
("Enterprises") are responsible for part or all of certain
environmental matters listed on Schedule 2.18 as items 68, 74, 113
and 131, as described and limited by their agreements with Atwood
(collectively, "Environmental Agreements"). Atwood's agreement
with Keiper is set forth in a written agreement dated March 30,
1990. Atwood's agreement with Enterprises is described in a March
10, 1995 letter from Bruce T. Atwood to Robert Courtright. Sellers
hereby guarantee to Purchaser the performance of Keiper and
Enterprises under the Environmental Agreements. If Sellers are
required to pay any sum to Purchaser pursuant to this guaranty,
Purchaser agrees to cause Atwood to concurrently assign its right
against Keiper or Enterprises, as the case may be, to Seller's
Representative to the extent required to permit Sellers to pursue
reimbursement for amounts paid in the Environmental Agreements.
Section 9.3.5 Payment of Special Assurances. Sellers, jointly
and severally, hereby unconditionally agree to (a) upon exercise of
the respective option, purchase the receivables and inventory
guaranteed pursuant to Sections 9.3.1, 9.3.2 and 9.3.3, and (b) pay
any amounts guaranteed pursuant to Section 9.3.4 (upon the failure
of Keiper or Enterprises to perform any of the described
obligations), within ten (10) business days after Purchaser sends
written notice to Sellers' Representative. Payment shall be made
to Purchaser by certified check or wire transfer. Upon receipt of
such payment, Purchaser shall assign to Sellers the rights it has
relating to the receivables, inventory or environmental matters
subject thereto.
ARTICLE X
GENERAL PROVISIONS
Section 10.1 Rules of Construction.
10.1.1 Material Adverse Effect. For purposes of this
Agreement, a "Material Adverse Effect" shall mean a material
adverse effect on the business, financial condition, assets or
operations of the Company and its Subsidiaries, taken as a whole.
10.1.2 Knowledge. For purposes of interpreting
"knowledge", "known" or "knows" when modifying any representation
or warranty (i) the knowledge of any one Seller shall be deemed to
be the knowledge of all Sellers, and (ii) the knowledge of the
Sellers shall also include the knowledge of all directors and
financial officers of the Company and all divisional presidents,
vice presidents, general managers, plant managers and financial
officers of the Company and its Subsidiaries, the Managing
Directors of the facilities in Italy and in Mexico, the Manager
Safety and Environmental Control, the Controller - Mark I, the
Engineering Manager - Mark I, and the Operations Director - Mark I.
An individual will be deemed to have "knowledge" or "know" of a
particular fact or other matter if: (a) such individual is
actually aware of such fact or other matter; or (b) it is in
writing and in the files of the Company or a Subsidiary prior to
the date hereof (but with respect to the certificate to be
delivered pursuant to Section 1.4 (iii), as of the Closing).
10.1.3 Affiliate. For purposes of this Agreement, the
term "Affiliate" shall mean as to any person, any other person
which directly or indirectly controls, or is under common control
with, or is controlled by, such person and, if such person is an
individual, any member of the immediate family (including parents,
spouse, children and grandchildren) of such individual and any
trust whose principal beneficiary is such individual or one or more
members or such immediate family and any person or entity who is
controlled by any such member of trust, but shall not include a
Plan. As used in this definition, "control" (including, with its
correlative meanings, "controlled by" and "under common control
with") shall mean possession, directly or indirectly, of power to
direct or influence the direction of the management or policies
(whether as a director, officer or employee, through the ownership
of securities or other ownership interests, by contract or
otherwise). For purposes of Article VIII, the term "Affiliate" as
it relates to Purchaser after the Closing shall include the Company
and the Subsidiaries.
10.1.4 Headings. The headings contained in this
Agreement are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Agreement.
10.1.5 Severability. If any provision of this
Agreement, or the application thereof to any person, place or
circumstance, shall be held by a court of competent jurisdiction to
be illegal, invalid, unenforceable or void, then such provision
shall be enforced to the extent that it is not illegal, invalid,
unenforceable or void, and the remainder of this Agreement, as well
as such provision as applied to other persons, places or
circumstances, shall remain in full force and effect.
Section 10.2 Waiver. With regard to any power, remedy or
right provided in this Agreement or otherwise available to any
party, (i) no waiver or extension of time shall be effective unless
expressly contained in a writing signed by the waiving party, (ii)
no alteration, modification or impairment shall be implied by
reason of any previous waiver, extension of time, delay or omission
in exercise or other indulgence, and (iii) waiver by any party of
the time for performance of any act or condition hereunder does not
constitute a waiver of the act or condition itself.
Section 10.3 Notices. Any notice or other communication
required or permitted under this Agreement shall be in writing and
shall be deemed duly given upon actual receipt, if delivered
personally or by telex, telegram or telecopy; or three days
following deposit in the United States mail, if deposited with
postage prepaid, return receipt requested and addressed to such
address as may be specified in writing by the relevant party from
time to time, and which shall initially be as follows:
(i) If to the Sellers:
c/o John R. Anderson, Sellers' Representative
803 North Church Street
Rockford, Illinois 61103
Tel: 815-987-9070
Fax: 815-962-0660
with a copy to:
Katten Muchin & Zavis
525 West Monroe Street, Suite 1600
Chicago, Illinois 60661-3693
Attention: Mr. Stephen M. Neumer
Tel: 312-902-5269
Fax: 312-902-1061
(ii) If to the Purchaser:
Excel Industries, Inc.
1120 North Main
Elkhart, Indiana 46514
Tel: 219-264-2131
Fax: 219-264-2136
Attention: James O. Futterknecht, Jr.
Chairman, President and
Chief Executive Officer
with a copy to:
Sommer & Barnard, PC
4000 Bank One Tower
111 Monument Circle
P.O. Box 44363
Indianapolis, Indiana 46244-0363
Tel: 317-630-4000
Fax: 317-236-9802
Attention: James K. Sommer
Section 10.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of
Illinois, regardless of the choice of laws provisions of Illinois
or any other jurisdiction.
Section 10.5 Entire Agreement. This Agreement (including
attached exhibits and schedules) and the Confidentiality Agreement
constitute the entire agreement among the parties with respect to
the subject matter of this Agreement and supersede any prior
agreement or understanding, whether written and oral, among the
parties or between any of them with respect to the subject matter
of this Agreement. There are no representations, warranties,
covenants, promises or undertakings, other than those expressly set
forth or referred to herein.
Section 10.6 Amendment. This Agreement may be amended only by
a written agreement signed by the Purchaser, the Company and the
Sellers' Representative (or by all Sellers).
Section 10.7 Assignability. Neither the rights nor the
obligations of any party to this Agreement may be transferred or
assigned. Any purported assignment of this Agreement shall be
null, void and of no effect.
Section 10.8 Binding Effect. This Agreement shall be binding
upon and shall inure to the benefit of the parties and their
respective heirs, personal representatives, successors and, if
applicable, permitted assigns.
Section 10.9 Third-Party Beneficiaries. Each party intends
that this Agreement shall not benefit or create any right or cause
of action in any person other than the parties or as specifically
expressed in this Agreement.
Section 10.10 Counterparts. This Agreement may be executed in
one or more counterparts, each of which independently shall be
deemed to be an original and all of which taken together shall
constitute one instrument.
Section 10.11 Expenses.
10.11.1 Each party hereto shall bear all expenses
incurred by such party in connection with the negotiation,
preparation, execution, delivery and performance of this Agreement
and the transactions contemplated hereby, including without
limitation all fees and expenses of counsel, investment bankers and
accountants; provided, however, (i) Sellers shall bear all such
costs and expenses of the Company incurred at or prior to the
Closing; (ii) any such costs and expenses paid by the Company and
Subsidiaries prior to Closing shall be reimbursed to Atwood by
Sellers at the time of Closing; and (iii) Sellers, on the one hand,
and Purchaser, on the other hand, agree to share equally the cost
of doing all UCC and other lien searches.
10.11.2 In any legal action between the parties arising
out of or related to this Agreement, the prevailing party shall be
entitled to recover its costs and expenses, including reasonable
accounting and legal fees.
Section 10.12 Trustees. The parties hereto acknowledge and
agree that the Trustees of each of the Sellers which is a trust are
not acting in their individual capacities but are acting solely as
Trustees of such Seller and shall not be liable personally to any
person or entity as to any Losses related to this Agreement, the
transactions contemplated hereby or any agreement or instrument
related hereto. Each party agrees to look solely to the trust
estate of such Seller, and not to the Trustees of such Seller in
such Trustees' individual capacities, for any damages or other
remedy for such Seller's breach of any provision contained in this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to
be duly executed on the date first written above.
PURCHASER:
EXCEL INDUSTRIES, INC.
By:
James O. Futterknecht, Chairman,
President and Chief Executive
Officer
COMPANY:
ANDERSON INDUSTRIES, INC.
By:
John R. Anderson, President
SELLERS:
John R. Anderson
Ralph F. Anderson, as Trustee of
Ralph F. Anderson Revocable Trust
U/A/D 4/25/77
Elizabeth D. Anderson, as Trustee of
Elizabeth D. Anderson Revocable
Trust U/A/D 4/25/77
Ralph F. Anderson, as Trustee o
Testamentary Trust U/A/D Edith
Anderson
John R. Anderson, as Trustee of the
John Anderson Revocable Trust U/A/D
September 21, 1977
Linda Anderson
Richard A. Behr and Allan B. Muchin,
as Co-Trustees of David J. Anderson
Trust U/A/D 12/20/72
Richard A. Behr and Allan B. Muchin,
as Co-Trustees of the Kristin L.
Anderson Trust U/A/D December 27,
1973
Allan B. Muchin and Richard A. Behr,
as Trustees of the Kristin L.
Anderson Trust U/A/D 12/27/73
Richard A. Behr and Allan B. Muchin,
as Co-Trustees of the Tracy E.
Anderson Trust U/A/D 10/1/76
Allan B. Muchin and Richard A. Behr,
as trustees of the Tracy E. Anderson
Trust U/A/D 10/1/76
Richard A. Behr and Allan B. Muchin,
as Co-Trustees of the Jeffrey R.
Anderson Trust U/A/D May 1, 1980
Allan B. Muchin and Richard A. Behr,
as Trustees of the Jeffrey R.
Anderson Trust U/A/D 5/1/80
Judith E. Kalny, as Trustee of the
Judith E. Kalny Revocable Trust
U/A/D 9/15/78
Judith E. Graff, as Trustee of the
Heather Kalny 1992 Trust
U/A/D 4/22/92
Judith E. Graff, as Trustee of the
John Kalny II 1995 Trust
U/A/D 5/30/95
Ralph F. Anderson, as Trustee of
Testamentary Trust U/W/O Edith
Anderson
John Anderson, as Trustee of the John
Anderson Revocable Trust U/A/D
September 21, 1977
Allan B. Muchin and Richard A. Behr,
as Trustees of the John Anderson
Children's Trust U/A/D 12/4/87
John R. Anderson and Allan B. Muchin
as Co-Trustees of John Anderson
Discretionary Trust
U/A/D December 28, 1976
Allan B. Muchin and John Anderson, as
Trustees of the John Anderson
Discretionary Trust U/A/D 12/28/76
John R. Anderson and Allan B. Muchin,
as Co-Trustees of John Anderson Gift
Trust U/A/D December 28, 1976
Allan B. Muchin and Richard A. Behr,
as Trustees of the David J. Anderson
Trust U/A/D 12/20/72
John R. Anderson and Allan B. Muchin,
as Co-Trustees of David Descendants
Trust U/A/D December 28, 1976
John R. Anderson and Allan B. Muchin,
as Co-Trustees of David Family Trust
U/A/D December 28, 1976
John R. Anderson and Allan B. Muchin,
as Co-Trustees of Kristin Descendants
Trust U/A/D December 28, 1976
John R. Anderson and Allan B. Muchin,
as Co-Trustees of Kristin Family
Trust U/A/D December 28, 1976
John R. Anderson and Allan B. Muchin,
as Co-Trustees of Tracy Descendants
Trust U/A/D December 28, 1976
John R. Anderson and Allan B. Muchin,
as Co-Trustees of Tracy Family Trust
U/A/D December 28, 1976
John Anderson and Allan B. Muchin, as
Trustees of the Jeffrey Descendants
Trust U/A/D April 15, 1983
John Anderson and Allan B. Muchin, as
Trustees of the Jeffrey Family Trust
U/A/D April 15, 1983
Judith E. Graff and John R. Anderson,
as Co-Trustees of Judith Graff
Discretionary Trust U/A/D 12/28/76
Judith E. Graff and John R. Anderson,
as Co-Trustees of Judith E. Graff
Family Trust U/A/D 12/28/76
John Anderson and Allan B. Muchin, as
Co-Trustees of John Anderson Gift
Trust U/A/D 12/28/76
SELLERS' REPRESENTATIVE:
John R. Anderson, as Sellers'
Representative, solely
for purposes of Articles I, V, VI,
VII, VIII and IX hereof and the
Acknowledgement of Receipt of
Schedules to this Agreement
Table of Defined Terms
Defined Term Section
"Affiliate" Section 10.1.3
"Agreement" Introduction
"Asserted Liability" Section 8.4.1
"Atwood" First Recital
"Audited Financial Statements" Section 2.9.1
"Balance Sheet Date" Section 2.8.2
"Business" First Recital
"Capital Stock" Section 2.7.1
"Certificate(s)" Section 1.4(i)
"Claims Notice" Section 8.4.1
"Closing" Section 1.2
"Closing Date" Section 1.3
"Code" Section 2.13.2
"COBRA" Section 2.13.3
"Company Property(ies)" Section 2.16.1
"Company" Introduction
"Competing Enterprise" Section 9.1.1
"Confidentiality Agreement" Section 4.4
"Contracts" Section 2.17
"Control" Section 10.1.3
"Controlled by" Section 10.1.3
"Environmental Consultants" Section 8.6.2.2.1
"Environmental Laws" Section 2.18.3
"ERISA" Section 2.13.2
"Excess Parachute Payment" Section 2.14.4
"Excluded Assets" Section 4.7
"Excluded Liabilities" Section 4.7
"Financial Statements" Section 2.9.1
"GAAP" Section 2.9.1
"General Product Recall" Section 8.2(iii)
"Governmental Order" Section 2.2.2
"Hazardous Materials" Section2.18.1(iii)
"HSR Act" Section 2.3
"Indemnified Person" Section 7.3.1
"Indemnifying Party" Section 8.4.1
Indemnitee Section 8.4.1
"Interim Financial Statements" Section 2.9.1
"IRS" Section 2.13.2
"Knowledge/Known/Knows" Section 10.1.2
"Latest Balance Sheet" Section 2.9.1
"Leased Property(ies)" Section 2.16.1
"Lien(s)" Section 2.16.2
"Losses" Section 8.2
"Material Adverse Effect" Section 10.1.1
"Material Contracts" Section 2.17
"Material Adverse Effect" Section 8.2(iii)
"Material Permits" Section 2.12.1
"Owned Property(ies)" Section 2.16.1
"Permitted Liens" Section 2.16.1
"Personal Property" Section 2.16.2
"Plan(s)" Section 2.13.1
"Prohibited Transaction" Section 2.13.2
"Purchase Price" Section 1.2
"Purchaser" Introduction
"Recall Liability" Section 8.6.1
"Recall Plan" Section 8.6.2.1.1
"Remedial Amendment Period" Section 2.13.2
"Remedial Plan" Section 8.6.2.2.3
"Remedial Work" Section 8.6.1
"Returns" Section 2.14.1
"Seller(s)" Introduction
"Sellers' Representative" Section 7.1
"Subsidiary(ies)" Section 2.6
"Taxes" Section 2.14.1
"Threshold Amount" Section 8.5(i)
"Title Commitments" Section 2.16.1
"under common control with" Section 10.1.3
EXCEL INDUSTRIES, INC.
AND
THE STOCKHOLDERS OF
ANDERSON INDUSTRIES, INC.
WARRANT GRANT AND REGISTRATION
RIGHTS AGREEMENT
Dated as of April 3, 1996
<PAGE>
WARRANT GRANT AND REGISTRATION RIGHTS AGREEMENT (this
"Agreement"), dated as of April 3, 1996, by and among Excel
Industries, Inc., an Indiana corporation (the "Company"), and the
stockholders of Anderson Industries, Inc., a Delaware corporation
("Anderson"), listed on Schedule I attached hereto (each,
individually, a "Seller" and, collectively, the "Sellers").
W I T N E S S E T H:
WHEREAS, the Company is purchasing all of the capital stock of
Anderson pursuant to the Stock Purchase Agreement (the "Purchase
Agreement"), dated as of March 4, 1996, by and among the
Company, Anderson and the Sellers; and
WHEREAS, pursuant to the Purchase Agreement, the Company has
agreed to issue to the Sellers warrants (the "Warrants") to
purchase up to an aggregate of 381,000 Common Shares (as defined in
Section 8.3 hereof);
WHEREAS, the Warrants being issued pursuant to this Agreement
are being issued as of the date hereof (the Closing Date under the
Purchase Agreement) by the Company to the Sellers in partial
consideration for the sale of their shares of capital stock of
Anderson.
NOW, THEREFORE, in consideration of the premises, the
agreements herein set forth and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. Grant. The Sellers are hereby granted the right to
purchase, at any time from April 3, 1996 until 5:00 p.m.,
Eastern Standard time, on April 2, 2001 (the "Exercise
Period"), up to an aggregate of 381,000 Common Shares (allocated
among the Sellers as set forth below in this Section 1) (the
"Shares") at an initial exercise price (subject to adjustment as
provided in Section 8 hereof) of $13.25 per Common Share , subject
to the terms and conditions of this Agreement. Each Seller shall
have the right to purchase such number of Common Shares as is equal
to 381,000 shares multiplied by the ownership percentage set forth
opposite such Seller's name on Schedule I.
2. Warrant Certificates. Concurrently with the execution
hereof, the Company will execute and deliver to each Seller a
Warrant Certificate (as defined below) for the number of Common
Shares which such Seller is entitled to purchase pursuant to this
Agreement, determined in accordance with Section 1 above. The
warrant certificates (the "Warrant Certificates") delivered and to
be delivered pursuant to this Agreement shall be in the form set
forth in Exhibit A attached hereto and made a part hereof, with
such appropriate insertions, omissions, substitutions and other
variations as required or permitted by this Agreement.
3. Exercise of Warrant.
3.1 Method of Exercise. The Warrants initially are
exercisable at an initial exercise price per Common Share set forth
in Section 6 hereof (subject to adjustment as provided in Section
8 hereof), payable by certified or official bank check in New York
Clearing House funds. Upon surrender of a Warrant Certificate with
the annexed Form of Election to purchase duly executed, together
with payment of the Purchase Price (as hereinafter defined) for the
Common Shares purchased, at the Company's principal offices
(presently located at 1120 North Main, Elkhart, Indiana 46514),
the registered holder of a Warrant Certificate ("Holder" or
"Holders") shall be entitled to receive a certificate or
certificates for the Common Shares so purchased. The purchase
rights represented by each Warrant Certificate are exercisable at
the option of the Holder thereof, in whole or in part (but not as
to fractional Common Shares underlying the Warrants); provided,
however, that the purchase rights represented by a Warrant
Certificate may not be exercised for fewer than the lesser of (i)
100 Common Shares or (ii) the balance of the Common Shares subject
to the purchase rights represented by such Warrant Certificate. In
the case of the purchase of less than all the Common Shares
purchasable under any Warrant Certificate, the Company shall cancel
said Warrant Certificate upon the surrender thereof and shall
execute and deliver a new Warrant Certificate of like tenor for the
balance of the Common Shares purchasable thereunder.
3.2 Exercise by Surrender of Warrants. In addition to the
method of payment set forth in Section 3.1 and in lieu of any cash
payment required thereunder, the Holders of the Warrants shall have
the right commencing on the first date as of which the entire
principal amount of the Company's outstanding 10% Convertible
Subordinated Notes due December 1, 2000 has been paid or converted
to Common Shares in accordance with those certain Note Purchase
Agreements dated December 1, 1989, as amended, between the Company
and certain affiliates of Connecticut General Life Insurance
Company and certain affiliates of Textron, Inc. (collectively, the
"CIGNA-Textron Agreement"), and at any time and from time to time
thereafter during the Exercise Period, to exercise the Warrants in
whole or in part by surrendering a Warrant Certificate in the
manner specified in Section 3.1 in exchange for the number of
Common Shares equal to (x) the number of shares as to which the
Warrants are being exercised multiplied by (y) a fraction, the
numerator of which is the Market Price (as defined below) of the
Common Shares less the Exercise Price and the denominator of which
is such Market Price. The term "Market Price" means the average of
the closing sale price per share on the principal stock exchange or
market on which the Common Shares are traded on each of the ten
consecutive trading days preceding the date on which the form of
election attached hereto is deemed to have been given to the
Company pursuant to Section 13 hereof.
4. Issuance of Certificates. Upon the exercise of the
Warrants, the issuance of certificates for Common Shares or other
securities, properties or rights underlying such Warrants, shall be
made forthwith (and in any event within five (5) business days
thereafter) without charge to the Holder thereof including, without
limitation, any tax which may be payable in respect of the issuance
thereof, and such certificates shall (subject to the provisions of
Sections 5 and 7 hereof) be issued in the name of, or in such names
as may be directed by, the Holder thereof; provided, however, that
the Company shall not be required to pay any tax which may be
payable in respect of any transfer involved in the issuance and
delivery of any such certificates in a name other than that of the
Holder, and the Company shall not be required to issue or deliver
such certificates unless or until the persons or persons requesting
the issuance thereof shall have paid to the Company the amount of
such tax or shall have established to the satisfaction of the
Company that such tax has been paid. For purposes of this
Agreement, the term "person" means a corporation, association,
partnership, organization, business, individual, trust,
governmental agency or authority, or governmental or political
subdivision. The Warrant Certificates shall be executed on behalf
of the Company by the manual or facsimile signature of the then
present Chief Executive Officer or President or Vice President of
the Company attested to by the manual or facsimile signature of the
then present Secretary or Assistant Secretary of the Company.
Warrant Certificates shall be dated the date of execution by the
Company upon initial issuance, division, exchange, substitution or
transfer.
5. Investment Intent. The Holder of a Warrant Certificate,
by its acceptance thereof, covenants and agrees that the Warrants
are being acquired as an investment and not with a view to the
distribution thereof.
6. Exercise Price.
6.1 Initial and Adjusted Exercise Price. Except as otherwise
provided in Section 8 hereof, the initial exercise price of each
Warrant shall be $13.25 per Common Share. The adjusted exercise
price shall be the price which shall result from time to time from
any and all adjustments of the initial exercise price in accordance
with the provisions of Section 8 hereof.
6.2 Exercise Price. The term "Exercise Price" as used herein
shall mean the initial exercise price or the adjusted exercise
price, depending upon the context.
7. Registration Rights.
7.1 Registration under the Securities Act of 1933. The
Warrants, the Shares and any of the other securities issuable upon
exercise of the Warrants have not been registered under the
Securities Act of 1933, as amended (the "Act"). Upon exercise of
the Warrants, in part or in whole, the certificates representing
the Shares underlying the Warrants and any of the other securities
issuable upon exercise of the Warrants (collectively, the "Warrant
Shares") shall bear the following legend:
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended
("Act") or any state securities laws, and may not be offered
or sold except pursuant to (i) an effective registration statement
under the Act and registration under applicable state
securities laws, (ii) to the extent applicable, Rule 144 under
the Act (or any similar rule under the Act relating to the
disposition of securities) and any similar exemption under state
securities laws, or (iii) another available exemption from
registration under the Act and applicable state securities
laws.
7.2 Piggyback Registration.
(a) If, at any time commencing after the date hereof and
expiring seven (7) years thereafter, the Company proposes to
register any of its securities under the Act (other than solely in
connection with a merger or consolidation of the Company with or
into, or an acquisition by the Company of the capital stock of
another corporation or in payment for any assets, or pursuant to
Form S-8 or a successor form) it will give written notice by
delivery in person, registered or certified mail (postage prepaid,
return receipt requested), telex, telecopier or overnight air
courier guaranteeing next day delivery, at least twenty-five (25)
days prior to the filing of each such registration statement, to
John R. Anderson, as representative of the Holders (the
"Representative"), of its intention to do so. If any of the
Holders of the Warrants and/or Warrant Shares notify the Company
within fifteen (15) days after receipt of any such notice of its or
their desire to include any such securities in such proposed
registration statement, the Company shall afford each of such
Holders of the Warrants and/or Warrant Shares the opportunity to
have any such Warrant Shares registered under such registration
statement; provided however, that if such Holders shall be the only
persons exercising such rights to have securities registered under
such registration statement, then the Company shall not be
obligated to comply with the registration request unless it
receives such notice from Holders (including the Representative) of
at least twenty-five thousand (25,000) Warrants and/or Warrant
Shares (but if the aggregate number of Warrants and Warrant Shares
which are then entitled to registration under this Section 7.2 is
less than twenty-five thousand (25,000), then such aggregate
number). Notwithstanding the provisions of this Section 7.2(a),
the Company shall have the right at any time after it shall have
given written notice pursuant to this Section 7.2(a) (irrespective
of whether a written request for inclusion of any such securities
shall have been made) to elect not to file any such proposed
registration statement, or to withdraw the same after the filing
but prior to the effective date thereof.
(b) If the Company at any time proposes to register any
of its securities under the Act as contemplated by Section 7.2(a)
and such securities are to be distributed by or through one or more
underwriters and if the managing underwriter of such underwritten
offering shall advise the Company in writing (with a copy to the
Representative) stating that in its opinion the number of shares
proposed to be included in such registration statement exceeds the
number which can be sold in such offering without adversely
affecting the distribution or the offering price of such securities
(such writing to state the basis of such opinion and the
approximate number of such securities which may be included in such
offering without such effect) then the Company will only include in
such registration, to the extent of the number of securities which
the Company is so advised can be sold in such offering:
first, any securities to be registered pursuant to
Section 16.2.1 of the CIGNA-Textron Agreement, allocated as therein
provided,
second, securities that the Company proposes to issue and
sell on its own behalf,
third, securities to be registered pursuant to Section
16.2.2 of the CIGNA-Textron Agreement, allocated as therein
provided,
fourth, securities requested to be registered pursuant to
Section 7.2(a), allocated pro rata among the Holders of Warrants
and/or Warrant Shares requesting such registration on the basis of
the number of shares requested to be registered by such Holders,
and
fifth, any other securities of the Company.
7.3 Demand Registration.
(a) At any time commencing after the date hereof and
expiring seven (7) years thereafter, except during a period after
the Company has given the Representative notice of a proposed
registration of shares pursuant to Section 7.2(a) until either such
proposed registration is abandoned or the expiration of 120 days
after the effective date of such registration, the Holders of the
Warrants and/or Warrant Shares representing a "Majority" (as
hereinafter defined) of such securities (assuming the exercise of
all of the Warrants) shall have the right (which right is in
addition to the registration rights under Section 7.2 hereof),
exercisable by written notice to the Company, to have the Company
prepare and file with the Securities and Exchange Commission (the
"Commission"), on one occasion, a registration statement on Form
S-3 (or any successor or similar short-form registration statement)
if then available to the Company, or, if no such form is then
available, on such other appropriate registration form as shall be
selected by the Company and which shall permit registration of an
offering of Warrant Shares in accordance with Rule 415 under the
Act and such other documents, including a prospectus, as may be
necessary in the opinion of counsel for the Company, in order to
comply with the provisions of the Act, so as to permit a public
offering (which shall not be underwritten) and sale of their
respective Warrant Shares for up to eighteen (18) consecutive
months by such Holders and any other Holders of the Warrants and/or
Warrant Shares who notify the Company within twenty (20) days after
receiving notice from the Company of such request.
(b) The Company covenants and agrees to give written
notice of any registration request by any Holder or Holders under
subsection (a) of Section 7.3 to the Representative within five (5)
days from the date of the receipt of any such registration request.
(c) No right of the Holders under this Section 7.3 shall
be deemed to have been exercised if with respect to such right:
(A) the requisite notice given by Holders pursuant to
this Section 7.3 is withdrawn prior to the date of filing of a
registration statement or if a registration statement filed by the
Company under the Securities Act pursuant to this Section 7.3 is
withdrawn prior to its effective date, in either case, by written
notice to the Company from the Holders of fifty percent (50%) or
more of the Warrants and/or Warrant Shares to be included or which
are included in such registration statement; or
(B) a registration statement pursuant to this Section
7.3 shall not have become effective under the Act; or
(C) a registration statement pursuant to this Section
7.3 shall have become effective under the Act and (i) such
registration statement shall not have remained effective and
available to Holders for resale of Warrant Shares for a period of
at least eighteen (18) months (unless all of the Warrant Shares
registered thereunder have been sold or disposed of prior to the
expiration of such eighteen (18)-month period) or (ii) less than
85% of the Warrant Shares included therein shall have been sold as
a result of any stop order, injunction or other order or
requirement of the Commission or other governmental agency or
court.
7.4 Termination of Obligation to Register Warrant Shares.
The Company's obligation to register any Warrant Share pursuant to
Section 7.2(a) or 7.3 shall terminate upon the resale of such
Warrant Share to the public pursuant to a registration statement
filed with the Commission under the Act or pursuant to Rule 144 (or
any successor rule) under the Act.
7.5 Covenants of the Company with Respect to Registration.
In connection with any registration under Section 7.2 or 7.3
hereof, the Company covenants and agrees as follows:
(a) The Company shall use its best efforts to file a
registration statement within thirty-five (35) days of receipt of
any demand therefor under Section 7.3, shall use its best efforts
to have any registration statements declared effective at the
earliest possible time, and shall furnish each Holder desiring to
sell Warrant Shares and, with respect to a registration under which
Warrant Shares are to be offered pursuant to Section 7.2, any
underwriter with such number of copies of the registration
statement, each amendment and supplement thereof and the
prospectus(es) included in such registration statement (including
each preliminary prospectus) as shall reasonably be requested.
Notwithstanding the foregoing, the Company shall be
entitled to postpone, for a period of not more than sixty (60) days
after receipt of a request to effect a registration, the filing of
any registration statement otherwise required to be prepared and
filed by it pursuant to Section 7.3 hereof, if the Board of
Directors of the Company determines in its reasonable business
judgment that such registration and offering would interfere with
any material financing, acquisition, corporate reorganization or
other material transaction or development involving the Company and
promptly gives the Holders demanding registration written notice of
such determination; provided that (i) upon such postponement by the
Company, the Company shall be required to file such registration
statement as soon as practicable after the Board of Directors of
the Company shall determine, in its reasonable business judgment,
that such registration and offering will not interfere with the
aforesaid material financing, acquisition, corporate reorganization
or other material transaction or development involving the Company,
(ii) the Holders who made such written request to effect such
registration, may, at any time in writing, withdraw such request
for such registration and therefore preserve the right provided in
Section 7.3 hereof for such Holders to again request such
registration, and (iii) if such request is received less than
eighteen months prior to the end of the Exercise Period, the
Exercise Period shall automatically be extended for an additional
period of sixty (60) days.
(b) The Company shall pay all costs, fees and expenses
incident to its performance, in connection with all registration
statements filed pursuant to this Agreement including, without
limitation, the Company's legal and accounting fees, printing
expenses, blue sky fees and expenses. The Holders will pay all
costs, fees and expense incurred directly by the Representative and
the Holders, including, without limitation, fees and expenses of
any counsel engaged by the Representative or the Holders, in
connection with any such registration statement.
(c) The Company will take all necessary action which may
be required in qualifying or registering the Warrant Shares
included in a registration statement for offering and sale under
the securities or blue sky laws of such states as the Holders shall
designate; provided that the Company shall not be obligated (i) to
qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this subsection or (ii) to
file any general consent to service of process in any jurisdiction
in any action other than one arising out of the offering or the
sale of the Warrant Shares.
(d) In the case of a registration statement filed
pursuant to Section 7.3 hereof, the Company shall prepare and file
with the Commission such amendments and supplements to such
registration statement and the prospectus(es) used in connection
therewith, which prospectus(es) are to be filed pursuant to Rule
424 under the Securities Act, as may be necessary to keep such
registration statement effective for a period of eighteen (18)
months or such shorter period as may be provided in Section 7.3 and
comply with the provisions of the Act with respect to the
disposition of all securities covered by such registration
statement during such period in accordance with the intended
methods of disposition by the Holders thereof set forth in such
registration statement or supplement to such prospectus.
(e) The Company shall notify each Holder of Warrants
and/or Warrant Shares covered by such registration statement
promptly after it shall receive notice or obtain knowledge thereof,
of (i) the issuance of any stop order by the Commission suspending
the effectiveness of such registration statement or the initiation
or threatening of any proceeding for such purposes and will
promptly use its best efforts to prevent the issuance of any stop
order or to obtain its withdrawal if such stop order should be
issued, or (ii) the suspension of the qualification of any of the
Warrant Shares for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purposes and will promptly
use its best efforts to prevent such suspension or have such
suspension lifted if it should be effected.
(f) Nothing contained in this Agreement shall be
construed as requiring a Holder to exercise its Warrants prior to
the initial filing of any registration statement or the
effectiveness thereof.
(g) The Company shall as soon as practicable after the
effective date of the registration statement, and in any event
within fifteen (15) months thereafter, make "generally available to
its security holders" (within the meaning of Rule 158 under the
Act) an earnings statement (which need not be audited) complying
with Section 11(a) of the Act and covering a period of at least
twelve (12) consecutive months beginning after the effective date
of the registration statement.
(h) In connection with an underwritten public offering
under which Warrant Shares are to be offered pursuant to Section
7.2 of this Agreement, the Holders shall be parties to any
underwriting agreement relating to an underwritten sale of their
Warrant Shares and may, at their option, require that any or all
the representations, warranties and covenants of the Company to or
for the benefit of such underwriters shall also be made to and for
the benefit of such Holders. Such Holders shall not be required to
make any representations or warranties to or agreements with the
Company or the underwriters, other than customary representations,
warranties or agreements regarding such Holders, such Holders'
Warrants and/or Warrant Shares and such Holders' intended method of
distribution and any other representation required by law.
(i) In connection with an underwritten public offering
under which Warrant Shares are to be offered pursuant to Section
7.2 of this Agreement, the Company shall furnish to the
Representative and to each underwriter, a signed counterpart,
addressed to the Holders and each such underwriter, of (i) an
opinion of counsel to the Company, dated the effective date of such
registration statement and an opinion dated the date of the closing
under the underwriting agreement, and (ii) a "cold comfort" letter,
dated the effective date of such registration statement and a
letter dated the date of the closing under the underwriting
agreement, signed by the independent public accountants who have
issued a report on the Company's financial statements included or
incorporated by reference in such registration statement, in each
case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and,
in the case of such accountants' 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' letters delivered to underwriters in underwritten
public offerings of securities.
(j) The Company shall deliver promptly to the
Representative and, in connection with an underwritten public
offering under which Warrant Shares are to be offered pursuant to
Section 7.2 of this Agreement, to the managing underwriters, copies
of all correspondence between the Commission and the Company, its
counsel or auditors and all memoranda relating to discussions with
the Commission or its staff with respect to the registration
statement and permit the Representative and underwriter to do such
investigation, upon reasonable advance notice, with respect to
information contained in or omitted from the registration statement
as it deems reasonably necessary to comply with applicable
securities laws or rules of the National Association of Securities
Dealers, Inc. Such investigation shall include access to books,
records and properties and opportunities to discuss the business of
the Company with its officers and independent auditors, all to such
reasonable extent and at such reasonable times and as often as the
Representative or underwriter shall reasonably request.
(k) For purposes of this Agreement, the term "Majority,"
in reference to the Holders of Warrants or Warrant Shares, shall
mean in excess of fifty percent (50%) of the aggregate of (i) the
Common Shares issuable upon exercise of all then outstanding
Warrants, and (ii) the then outstanding Warrant Shares that (x) are
not held by the Company, an officer, creditor, employee or agent
thereof or any of their respective affiliates, members of their
family, persons acting as nominees or in conjunction therewith or
(y) have not been resold to the public pursuant to a registration
statement filed with the Commission under the Act or pursuant to
Rule 144 (or any successor rule) under the Act.
(l) The Company shall promptly notify each Holder of
Warrants and/or Warrant Shares covered by such registration
statement, at any time when a prospectus relating thereto is
required to be delivered under the Act, in the event of and upon
the Company's discovery that, or upon the happening of any event as
a result of which, the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a
material fact or omits to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading in the light of the circumstances under which they were
made, and at the request of any Holder promptly prepare, file with
the Commission and furnish to such Holder and each underwriter, if
any, a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as
thereafter delivered to the purchasers of such securities, such
prospectus shall not include 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 not misleading in the
light of the circumstances under which they were made.
(m) The Company shall promptly notify each Holder of
Warrants and/or Warrant Shares covered by such registration
statement (i) when a 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) of any request by the Commission
for amendments or supplements to the registration statement or
related prospectus or for additional information, (iii) of the
receipt by the Company of any notification with respect to the
suspension of the qualification of any of the Warrant Shares for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose, and (iv) of the Company's reasonable
determination that a post-effective amendment to a registration
statement would be appropriate.
(n) The Company shall take all such other actions as
each Holder of Warrants and/or Warrant Shares covered by such
registration statement or the underwriters, if any, reasonably
request in order to expedite or facilitate the disposition of such
Warrant Shares, including, without limitation, (i) preparing and
arranging for the timely delivery of certificates representing
Warrant Shares to be sold and not bearing any restrictive legends
unless required by applicable law and (ii) in the case of an
underwritten public offering under which Warrant Shares are to be
offered pursuant to Section 7.2 of this Agreement, enabling such
Warrant Shares to be in such denominations and registered in such
names as the managing underwriters may request at least two
business days prior to any sale of shares to the underwriters.
7.6 Indemnification.
(a) Indemnification by the Company. In the event of any
registration of any Warrant Shares under the Securities Act
pursuant to this Agreement, the Company will, and hereby does,
indemnify and hold harmless, to the fullest extent permitted by
law, each Holder of such Warrant Shares and each other person, if
any, who controls such Holder within the meaning of Section 15 of
the Act or Section 20(a) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), against any and all judgments, fines,
penalties, charges, costs, amounts paid in settlement, losses,
claims, damages, liabilities, expenses, or attorney fees, joint or
several, incurred in investigating, preparing or defending any
action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental,
administrative or other regulatory agency, body or the Commission,
whether pending or threatened, whether or not an indemnified party
is or may be a party thereto ("Indemnified Damages"), to which they
or any of them may become subject under the Act or any other
statute or common law, insofar as any such Indemnified Damages
arise out of or are based upon (i) any untrue statement or alleged
untrue statement of a material fact contained in the registration
statement relating to the sale of such securities or any post-
effective amendment thereto or in any filing made in connection
with the qualification of the offering under blue sky or other
securities laws of jurisdictions in which such securities are
offered ("Blue Sky Filing"), or the omission or alleged omission to
state therein a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading or (ii)
any untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus, if used prior to the
effective date of such registration statement (unless such
statement is corrected in the final prospectus and the Company has
previously furnished copies thereof in a timely manner or in
reasonable quantity to the Holders seeking such indemnification and
the underwriters), or contained in the final prospectus (as amended
or supplemented if the Company shall have filed with the Commission
any amendment thereof or supplement thereto) if used within the
period during which the Company is required to keep the
registration statement to which such prospectus relates current, or
the omission or alleged omission to state therein (if so used) a
material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading; provided, however, that the indemnification agreement
contained herein shall not apply to such Indemnified Damages to a
particular person to be indemnified hereunder arising out of, or
based upon, any such untrue statement or alleged untrue statement,
or any such omission or alleged omission, if such statement or
omission was made in reliance upon and in conformity with written
information furnished to the Company by such person expressly for
use in connection with preparation of the registration statement,
any preliminary prospectus or final prospectus contained in the
registration statement, any such amendment or supplement thereto or
any Blue Sky Filing and provided further that with respect to any
sale made other than in an underwritten offering and other than
through the facilities of a national securities exchange, the
Company shall not be liable to any Holder or any person controlling
such Holder under the indemnity agreement in this Section 7.6 to
the extent that any such Indemnified Damages result from the fact
that such Holder sold securities to a person to whom there was not
sent or given at or prior to such sale, a copy of the prospectus as
then amended or supplemented, if the Company has previously
furnished copies thereof to the Holders or the Representative.
(b) Indemnification by the Holders. The Company may
require, as a condition to including any Warrant Shares in any
registration statement filed pursuant to Section 7 that the Company
shall have received an undertaking satisfactory to it from the
Holders of such Warrant Shares to indemnify and hold harmless (in
the same manner and to the same extent as set forth in subsection
(a) of Section 7.6) the Company, its officers and directors and
each officer of the Company and each other person, if any, who
controls the Company within the meaning of Section 15 of the Act or
Section 20(a) of the Exchange Act, with respect to any untrue
statement or alleged untrue statement in, or omission or alleged
omission from, such registration statement, any preliminary
prospectus or final prospectus contained therein, or any amendment
or supplement thereto, if such statement or omission was made in
reliance upon and in conformity with written information such
Holders furnished to the Company through an instrument duly
executed by them expressly for use in the preparation of such
registration statement, preliminary prospectus, final prospectus,
amendment or supplement, provided, however, that no Holder shall be
liable for any indemnity claims hereunder in excess of the amount
of net proceeds received by such Holder from the sale of its
respective Warrant Shares pursuant to such registration statement.
Such indemnity shall remain in full force and effect, regardless of
any investigation made by or on behalf of the Company or any such
director, officer or controlling person and shall survive the
transfer of such securities by the Holders.
(c) Notices of Claims, etc. Promptly after receipt by
an indemnified party of notice of the commencement of any action or
proceeding involving a claim referred to in the preceding
subsections of this Section 7.6, such indemnified party will, if a
claim in respect thereof is to be made against an indemnifying
party, give written notice to the latter of the commencement of
such action, provided that the failure of any indemnified party to
give notice as provided herein shall not relieve the indemnifying
party of its obligations under the preceding subsections of this
Section 7.6, except to the extent that the indemnifying party is
actually prejudiced by such failure to give notice. In case any
such action is brought against an indemnified party, the
indemnifying party shall be entitled to participate in and, unless
in such indemnified party's reasonable judgment a conflict of
interest between such indemnified and indemnifying parties may
exist in respect of such claim, to assume the defense thereof,
jointly with any other indemnifying party similarly notified to the
extent that it may wish, with counsel reasonably satisfactory to
such indemnified party, and after notice from the indemnifying
party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently
incurred by the latter in connection with the defense thereof other
than reasonable costs of investigation. The indemnified party shall
cooperate fully with the indemnifying party in connection with any
negotiation or defense of any such action or claim by the
indemnifying party and shall furnish to the indemnifying party all
information reasonably available to the indemnified party which
relates to such action or claim. The indemnifying party shall keep
the indemnified party fully apprised at all times as to the status
of the defense or any settlement negotiations with respect thereto.
If the indemnifying party elects to defend any such action or
claim, then the indemnified party shall be entitled to participate
in such defense with counsel of its choice at its sole cost and
expense. If the indemnifying party does not assume such defense,
the indemnified party shall keep the indemnifying party apprised at
all times as to the status of the defense; provided, however, that
the failure to keep the indemnifying party so informed shall not
affect the obligations of the indemnifying party hereunder. No
indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its written consent,
provided, however, that the indemnifying party shall not
unreasonably withhold, delay or condition its consent. No
indemnifying party shall, without the consent of the indemnified
party, consent to entry of any judgment or enter into any
settlement or other compromise 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 claim or litigation. Following indemnification as
provided for hereunder, the indemnifying party shall be subrogated
to all rights of the indemnified party with respect to all third
parties, firms or corporations relating to the matter for which
indemnification has been made.
(d) Indemnification Payments. The indemnification
required by this Section 7.6 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 Indemnified Damages are
incurred.
(e) Contribution. If the indemnification provided for
in this Section 7.6 shall for any reason be held by a court to be
unavailable to an indemnified party under subparagraph (a) or (b)
hereof in respect of any Indemnified Damages, then, in lieu of the
amount paid or payable under subparagraph (a) or (b) hereof, the
indemnified party and the indemnifying party under subparagraph (a)
or (b) hereof shall contribute to the aggregate Indemnified
Damages, in such proportion as is appropriate to reflect the
relative fault of the indemnifying party and the indemnified party
with respect to the statements or omissions which resulted in such
Indemnified Damages, as well as any other relevant equitable
considerations. 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. The obligations of the Company
and the Holder to contribute as provided in this subparagraph (e)
are several in proportion to the relative value of their respective
Warrant Shares covered by such registration statement and not
joint. In addition, no person shall be obligated to contribute
hereunder any amounts in payment for any settlement of any action
or claim effected without such person's consent, which consent
shall not be unreasonably withheld.
(f) Other Rights; Liabilities. The indemnity agreements
contained herein shall be in addition to (i) any cause of action or
similar right of the indemnified party against the indemnifying
party or others, and (ii) any liabilities the indemnifying party
may be subject to pursuant to the law.
7.7 Holdback Agreements.
(a) Each Holder of Warrants and/or Warrants Shares
agrees by acquisition of Warrant Shares, if so required by the
managing underwriter, not to effect any public sale or distribution
of any equity securities of the Company, during the seven days
prior to the date on which any underwritten registration filed by
the Company has become effective and the 120 days thereafter,
except as part of such underwritten registration. The Company
shall use its best efforts to notify the Representative of the
anticipated effective date of any such underwritten registration at
least ten business days prior to such anticipated effective date.
If a registration statement filed pursuant to Section 7.3 of this
Agreement is effective on the date seven days prior to the
effective date of any such underwritten registration, the eighteen
(18) month periods provided for in Section 7.3(a), 7.3(c)(C) and
7.5(d) shall be extended, with respect to such registration
statement filed pursuant to Section 7.3, for 127 days.
(b) The Company will not effect any public distribution
of its equity securities, or any securities convertible into or
exchangeable for any of its equity securities, during the seven
days prior to and the 120 days after any underwritten registration
under which Warrant Shares are to be offered pursuant to Section
7.2(a) of this Agreement shall have become effective, except as
part of such underwritten registration.
7.8 No Violation of CIGNA-Textron Agreement. The
registration rights granted under this Section 7 are subject to the
prior registration rights of the holders of Registrable Securities,
as defined in the CIGNA-Textron Agreement, under Section 16.2 of
such agreement including, without limitation the rights of priority
provided therein in the case of an underwritten offering. Any
provision of this Agreement to the contrary notwithstanding, the
Company shall not be obligated hereunder to perform any act or do
any thing which would prevent the Company from fulfilling its
obligations under Section 16.2 of the CIGNA-Textron Agreement or
result in the breach of a covenant of the Company made in Section
16.2 of the CIGNA-Textron Agreement.
8. Adjustments to Exercise Price and Number of Shares.
8.1 Subdivision and Combination. In case the Company shall
at any time subdivide or combine the outstanding Common Shares ,
the Exercise Price shall be decreased, in the case of subdivision,
or increased, in the case of combination, in the same proportions
as the Common Shares are subdivided or combined, in each case
effective automatically upon, and simultaneously with, the
effectiveness of the subdivision or combination which gives rise to
the adjustment.
8.2 Adjustment in Number of Shares. Upon each adjustment of
the Exercise Price pursuant to the provisions of this Section 8,
the number of Shares issuable upon the exercise of each Warrant
shall be adjusted to the nearest full amount by multiplying a
number equal to the Exercise Price in effect immediately prior to
such adjustment by the number of Warrant Shares issuable upon
exercise of the Warrants immediately prior to such adjustment and
dividing the product so obtained by the adjusted Exercise Price.
8.3 Definition of Common Shares. For the purpose of this
Agreement, the term "Common Shares" shall mean (i) the class of
shares designated as common stock in the Articles of Incorporation
of the Company as may be amended as of the date hereof, or (ii) any
other class of shares resulting from successive changes or
reclassification of such Common Shares consisting solely of changes
in par value, or from par value to no par value, or from no par
value to par value.
8.4 Merger or Consolidation. (a) In case the Company after
the date hereof (i) shall consolidate with or merge into any other
person and shall not be the continuing or surviving corporation of
such consolidation or merger, or (ii) shall permit any other person
to consolidate with or merge into the Company and the Company shall
be the continuing or surviving person but, in connection with such
consolidation or merger, the Common Shares shall be changed into or
exchanged for stock or other securities of any other person or cash
or any other property, or (iii) shall transfer all or substantially
all of its properties or assets to any other person, or (iv) shall
effect a capital reorganization or reclassification of the Common
Shares (other than a capital reorganization or reclassification
resulting in the issue of additional Common Shares for which
adjustment in the Exercise Price is provided in Section 8), then,
and in the case of each such transaction, proper provision shall be
made so that, upon the basis and the terms and in the manner
provided in this Agreement and the Warrants, the Holders of the
Warrants, upon the exercise thereof at any time after the
consummation of such transaction, shall be entitled to receive (at
the aggregate Exercise Price in effect at the time of such
consummation for all Common Shares issuable upon such exercise
immediately prior to such consummation), in lieu of the Common
Shares or other securities issuable upon such exercise prior to
such consummation, the highest amount of securities, cash or other
property to which such Holders would actually have been entitled as
shareholders upon such consummation if such Holders had exercised
the rights represented by the Warrants immediately prior thereto,
subject to adjustments (subsequent to such consummation) as nearly
equivalent as possible to the adjustments provided for in Section
8.
8.5 Assumption of Obligations. Notwithstanding anything
contained in the Warrants to the contrary, the Company will not
effect any of the transactions described in clauses (i) through
(iv) of Section 8.4 unless, prior to the consummation thereof, each
person (other than the Company) which may be required to deliver
any stock, securities, cash or property upon the exercise of the
Warrants as provided herein shall assume, by written instrument
delivered to, and reasonably satisfactory to, the Holders of the
Warrants, (a) the obligations of the Company under this Agreement
and the Warrants (and if the Company shall survive the consummation
of such transaction, such assumption shall be in addition to, and
shall not release the Company from, any continuing obligations of
the Company under this Agreement and the Warrants) and (b) the
obligation to deliver to such Holders such shares of stock,
securities, cash or property as, in accordance with the foregoing
provisions of this Section 8, such Holders may be entitled to
receive, and such person shall have similarly delivered to the
Representative an opinion of counsel for such person, which counsel
shall be reasonably satisfactory to the Representative, stating
that this Agreement and the Warrants shall thereafter continue in
full force and effect and the terms hereof (including, without
limitation, all of the provisions of this Section 8) shall be
applicable to the stock, securities, cash or property which such
person may be required to deliver upon any exercise of the Warrants
or the exercise of any rights pursuant hereto.
8.6 Dividends and Other Distributions. In the event that the
Company shall at any time prior to the exercise of all Warrants
declare a dividend (other than an ordinary quarterly cash dividend)
or otherwise distribute to its shareholders any assets, property,
rights, evidences of indebtedness, securities (other than Common
Shares), whether issued by the Company or by another, or any other
thing of value, the Holders of the unexercised Warrants shall
thereafter be entitled, in addition to the Common Shares or other
securities and property receivable upon the exercise thereof, to
receive, upon the exercise of such Warrants, the same property,
assets, rights, evidences of indebtedness, securities or any other
thing of value that they would have been entitled to receive at the
time of such dividend or distribution as if the Warrants had been
exercised immediately prior to such dividend or distribution. At
the time of any such dividend or distribution, the Company shall
make appropriate reserves to ensure the timely performance of the
provisions of this Section 8.6.
8.7 Other Dilutive Events. If any event occurs as to which,
in the reasonable opinion of the Board of Directors of the Company,
the provisions of this Section 8 are not strictly applicable or if
strictly applicable would not fairly protect the rights of the
Holders in accordance with the essential intent and principles of
such provisions, then the Board of Directors shall make an
adjustment in the application of such provisions, in accordance
with such essential intent and principles, so as to protect such
rights as aforesaid.
8.8 Notice of Adjustment Events. Whenever the Company
contemplates the occurrence of an event which would give rise to
adjustments under this Section 8, the Company shall mail to the
Representative, at least thirty (30) days prior to the record date
with respect to such event or, if no record date shall be
established, at least thirty (30) days prior to such event, a
notice specifying (i) the nature of the contemplated event, (ii)
the date of which any such record is to be taken for the purpose of
such event, (iii) the date on which such event is expected to
become effective and (iv) the time, if any is to be fixed, when the
holders of record of Common Shares shall be entitled to exchange
their Common Shares for securities or other property deliverable in
connection with such event.
8.9 Notice of Adjustments. Whenever the Exercise Price or
the kind of securities or property issuable upon exercise of the
Warrants, or both, shall be adjusted pursuant to this Section 8,
the Company shall make a certificate signed by its Chief Executive
Officer, President or a Vice President and by its Chief Financial
Officer, Secretary or Assistant Secretary, setting forth, in
reasonable detail, the event requiring the adjustment, the amount
of the adjustment, the method of which such adjustment was
calculated (including a description of the basis on which the
Company made any determination hereunder), and the Exercise Price
and the kind of securities or property issuable upon exercise of
the Warrants after giving effect to such adjustment, and shall
cause copies of such certificate to be mailed (by first class mail
postage prepaid) to each Holder promptly after each adjustment.
8.10 Preservation of Rights. The Company will not, by
amendment of its certificate of incorporation or through any
consolidation, merger, reorganization, transfer of assets,
dissolution, issue or sale of securities or any other voluntary
action, avoid or seek to avoid the observance or performance of any
of the terms of this Agreement or the Warrants or the rights
represented thereby, but will at all times in good faith assist in
the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the
rights of the Holders of the Warrants against dilution or other
impairment.
9. Exchange and Replacement of Warrant Certificates. Each
Warrant Certificate is exchangeable without expense, upon the
surrender thereof by the registered Holder at the principal
executive office of the Company, for a new Warrant Certificate of
like tenor and date representing in the aggregate the right to
purchase the same number of Warrant Shares in such denominations as
shall be designated by the Holder thereof at the time of such
surrender.
Upon receipt by the Company of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of
any Warrant Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to
it, and reimbursement to the Company of all reasonable expenses
incidental thereto, and upon surrender and cancellation of the
Warrants, if mutilated, the Company will make and deliver a new
Warrant Certificate of like tenor, in lieu thereof.
10. Elimination of Fractional Interests. The Company shall
not be required to issue certificates representing fractions of
Common Shares upon the exercise of the Warrants, nor shall it be
required to issue scrip or pay cash in lieu of fractional
interests, it being the intent of the parties that all fractional
interests shall be eliminated by rounding any fraction up to the
nearest whole number of Common Shares or other securities,
properties or rights.
11. Reservation and Listing of Securities. The Company shall
at all times reserve and keep available out of its authorized
Common Shares, solely for the purpose of issuance upon the exercise
of the Warrants, such number of Common Shares or other securities,
properties or rights as shall be issuable upon the exercise
thereof. The Company covenants and agrees that, upon exercise of
the Warrants and payment of the Exercise Price therefor, all Common
Shares and other securities issuable upon such exercise shall be
duly and validly issued, fully paid, nonassessable and not subject
to the preemptive rights of any shareholder. As long as the
Warrants shall be outstanding, the Company shall use its best
efforts to cause all Common Shares issuable upon the exercise of
the Warrants to be listed and/or quoted on all securities exchanges
and/or markets (subject to official notice of issuance) with
respect to which the Common Shares may then be so listed and/or
quoted.
12. Notices to Warrant Holders. Nothing contained in this
Agreement shall be construed as conferring upon the Holders the
right to vote or to consent or to receive notice as shareholders in
respect of any meetings of shareholders for the election of
directors or any other matter, or as having any rights whatsoever
as a shareholder of the Company. If, however, at any time prior to
the expiration of the Warrants and their exercise, any of the
following events shall occur:
(a) the Company shall take a record of the holders of
its Common Shares for the purpose of determining the holders
thereof who are entitled to receive any dividend or other
distribution payable (other than an ordinary quarterly cash
dividend); or
(b) the Company shall offer to all the holders of its
Common Shares any additional shares of capital stock of the
Company or securities convertible into or exchangeable for
shares of capital stock of the Company, or any option, right or
warrant to subscribe therefor; or
(c) a voluntary or involuntary dissolution, liquidation
or winding-up of the Company (other than in connection with a
consolidation or merger) or any capital reorganization,
recapitalization or reclassification or a sale of all or
substantially all of its property, assets and business as an
entirety shall be proposed;
then, in any one or more of said events, the Company will mail to
each Holder of a Warrant a notice specifying (i) the date or
expected date on which any such record is to be taken for the
purpose of such dividend, distribution or right, and the amount and
character of such dividend, distribution or right, and (ii) the
date or expected date on which any such reorganization,
reclassification, recapitalization, consolidation, merger, sale,
dissolution, liquidation or winding-up is to take place and the
time, if any such time is to be fixed, as of which the holders of
record of Common Shares shall be entitled to exchange their Common
Shares for the securities or other property deliverable upon such
reorganization, reclassification, recapitalization, consolidation,
merger, sale, dissolution, liquidation or winding-up. Such notice
shall be mailed at least thirty (30) days prior to the date therein
specified.
13. Notices.
All notices, requests, consents and other communications
hereunder shall be in writing and shall be deemed to have been duly
given or made at the time delivered by hand if personally
delivered; five calendar days after mailing if sent by registered
or certified mail; when answered back, if telexed; when receipt is
acknowledged, if telecopied; and the next business day after timely
delivery to the courier, if sent by overnight air courier
guaranteeing next day delivery (except that a notice of change of
address shall not be deemed to have been given until actually
received by the addressee):
(a) If to a registered Holder of the Warrants, to
the address of such Holder as shown on the books of the Company,
with a copy to the Representative; or
(b) If to the Representative, to the address set
forth in Section 10.3 of the Purchase Agreement or to such other
address as the Representative may designate by notice to the
Company; or
(c) If to the Company, to the address set forth in
Section 3.1 hereof or to such other address as the Company may
designate by notice to the Representative and the Holders.
14. Supplements and Amendments. The Company and the
Representative may from time to time supplement or amend this
Agreement without the approval of any holders of Warrant
Certificates (other than the Representative) in order to cure any
ambiguity, to correct or supplement any provision contained herein
which may be defective or inconsistent with any provisions herein,
or to make any other provisions in regard to matters or questions
arising hereunder which the Company and the Representative may deem
necessary or desirable and which the Company and the Representative
deem shall not adversely affect the interests of the Holders of
Warrants.
15. Successors. All the covenants and provisions of this
Agreement shall be binding upon and inure to the benefit of the
Company, the Holders and their respective successors and assigns
hereunder.
16. Termination. This Agreement shall terminate at the close
of business on April 2, 2003.
17. Governing Law; Submission to Jurisdiction. This
Agreement and each Warrant Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Indiana
and for all purposes shall be construed in accordance with the laws
of said State without giving effect to the rules of said State
governing the conflicts of laws.
Any process or summons to be served upon any of the Company
and the Holders (at the option of the party bringing such action,
proceeding or claim) may be served by transmitting a copy thereof,
by registered or certified mail, return receipt requested, postage
prepaid, addressed to it at the address set forth in Section 13
hereof. Such mailing shall be deemed personal service and shall be
legal and binding upon the party so served in any action,
proceeding or claim. The Company and the Holders agree that the
prevailing party(ies) in any such action or proceeding shall be
entitled to recover from the other party(ies) all of its/their
reasonable legal costs and expenses relating to such action or
proceeding and/or incurred in connection with the preparation
therefor.
18. Entire Agreement; Modification. This Agreement
(including the Purchase Agreement to the extent portions thereof
are referred to herein) contains the entire understanding between
the parties hereto with respect to the subject matter hereof and
may not be modified or amended except by a writing duly signed by
the party against whom enforcement of the modification or amendment
is sought.
19. Severability. If any provision of this Agreement shall
be held to be invalid or unenforceable, such invalidity or
unenforceability shall not affect any other provision of this
Agreement.
20. Captions. The caption headings of the Sections of this
Agreement are for convenience of reference only and are not
intended to be, nor should they be construed as, part of this
Agreement and shall be given no substantive effect.
21. Benefits of This Agreement. Nothing in this Agreement
shall be construed to give any person or corporation other than the
Company, the Sellers and any other registered Holders of the
Warrant Certificates or Warrant Shares any legal or equitable
right, remedy or claim under this Agreement; and this Agreement
shall be for the sole and exclusive benefit of the Company, the
Sellers and any other registered Holders of the Warrant
Certificates or Warrant Shares.
22. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and such counterparts shall
together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, as of the day and year first above
written.
EXCEL INDUSTRIES, INC.
By:
James O. Futterknecht, Chairman,
President and Chief Executive
Officer
Attest:
Secretary
SELLERS:
Ralph F. Anderson, not individually,
but solely as Trustee of the
Ralph F. Anderson Revocable Trust
U/A/D 4/25/77 (SR)
Ralph F. Anderson, not individually,
but solely as Trustee of the
Elizabeth D. Anderson Revocable
Trust U/A/D 4/25/77 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
Elizabeth D. Anderson Revocable
Trust U/A/D 4/25/77 (SR)
Ralph F. Anderson, not individually,
but solely as Trustee of the
Testamentary Trust U/W/O Edith
Anderson (SR)
John R. Anderson, not individually,
but solely as Trustee of the John
Anderson Revocable Trust U/A/D
9/21/77 (SR)
Linda Anderson (SR)
David J. Anderson (SR)
Kristin L. Anderson (SR)
Richard A. Behr, not individually,
but solely as Trustee of the
Tracy E. Anderson Trust U/A/D
10/1/76
Allan B. Muchin, not individually,
but solely as Trustee of the
Tracy E. Anderson Trust U/A/D
10/1/76
Richard A. Behr, not individually,
but solely as Trustee of the
Jeffrey R. Anderson Trust U/A/D
5/1/80
Allan B. Muchin, not individually,
but solely as Trustee of the
Jeffrey R. Anderson Trust U/A/D
5/1/80
Judith E. Graff, not individually,
but solely as Trustee of the
Judith E. Graff Revocable Trust
U/A/D 9/15/78 (SR)
Judith E. Graff, not individually,
but solely as Trustee of the Heather
Kalny 1992 Trust U/A/D 4/22/92 (SR)
Judith E. Graff, not individually,
but solely as Trustee of the
John Kalny II, 1995 Trust U/A/D
5/30/95 (SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
John Anderson Children's Trust
U/A/D 12/4/87
Richard A. Behr, not individually,
but solely as Trustee of the
John Anderson Children's Trust
U/A/D 12/4/87
John R. Anderson, not individually,
but solely as Trustee of the
John Anderson Discretionary Trust
U/A/D 12/28/76 (SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
John Anderson Discretionary Trust
U/A/D 12/28/76 (SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
John Anderson Gift Trust U/A/D
12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of
John Anderson Gift Trust U/A/D
12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
David Descendants Trust U/A/D
12/28/76 (SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
David Descendants Trust U/A/D
12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
David Family Trust U/A/D 12/28/76
(SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
David Family Trust U/A/D 12/28/76
(SR)
John R. Anderson, not individually,
but solely as Trustee of the
Kristin Descendants Trust U/A/D
12/28/76 (SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
Kristin Descendants Trust U/A/D
12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
Kristin Family Trust U/A/D 12/28/76
(SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
Kristin Family Trust U/A/D
12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
Tracy Descendants Trust U/A/D
12/28/76 (SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
Tracy Descendants Trust U/A/D
12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
Tracy Family Trust U/A/D 12/28/76
(SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
Tracy Family Trust U/A/D 12/28/76
(SR)
John R. Anderson, not individually,
but solely as Trustee of the
Jeffrey Descendants Trust U/A/D
4/15/83 (SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
Jeffrey Descendants Trust U/A/D
4/15/83 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
Jeffrey Family Trust U/A/D 4/15/83
(SR)
Allan B. Muchin, not individually,
but solely as Trustee of the
Jeffrey Family Trust U/A/D 4/15/83
(SR)
Judith E. Graff, not individually,
but solely as Trustee of the
Judith E. Graff Discretionary Trust
U/A/D 12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
Judith E. Graff Discretionary Trust
U/A/D 12/28/76 (SR)
Judith E. Graff, not individually,
but solely as Trustee of the
Judith E. Graff Family Trust U/A/D
12/28/76 (SR)
John R. Anderson, not individually,
but solely as Trustee of the
Judith E. Graff Family Trust U/A/D
12/28/76 (SR)
SELLERS' REPRESENTATIVE:
John R. Anderson, as Representative
of the Sellers
<PAGE>
EXHIBIT A
[FORM OF WARRANT CERTIFICATE]
THIS WARRANT AND THE OTHER SECURITIES ISSUABLE UPON EXERCISE HEREOF
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i) AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933, AS AMENDED
("ACT") AND REGISTRATION UNDER APPLICABLE STATE SECURITIES LAWS,
(ii) TO THE EXTENT APPLICABLE, RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER THE ACT RELATING TO THE DISPOSITION OF
SECURITIES) AND ANY SIMILAR EXEMPTION UNDER STATE SECURITIES LAWS,
OR (iii) ANOTHER EXEMPTION FROM REGISTRATION UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS.
THE TRANSFER OR EXCHANGE OF THIS WARRANT IS RESTRICTED IN
ACCORDANCE WITH THE WARRANT AGREEMENT REFERRED TO HEREIN.
EXERCISABLE ON OR BEFORE
5:00 P.M., EASTERN STANDARD TIME, __________, 2001
No. W- ______ Warrants
WARRANT CERTIFICATE
This Warrant Certificate certifies that __________________, or
registered assigns, has the right to purchase initially, at any
time from ____________, 1996 until 5:00 p.m., Eastern Standard
time, on ____________, 2001 ("Expiration Date"), up to _______
fully paid and nonassessable shares of common stock, no par value
("Common Shares") of EXCEL INDUSTRIES, INC., an Indiana corporation
(the "Company"), at the initial exercise price, subject to
adjustment in certain events (the "Exercise Price"), of $13.25 per
share of Common Shares upon surrender of this Warrant Certificate
and payment of the Exercise Price at an office or agency of the
Company, but subject to the conditions set forth herein and in the
Warrant Grant and Registration Rights Agreement (the "Warrant
Agreement"), dated as of ____________, 1996, by and among the
Company and the shareholders of Anderson Industries, Inc. listed on
Schedule A attached thereto (the "Warrant Agreement"). Payment of
the Exercise Price shall be made by certified or official bank
check in New York Clearing House funds payable to the order of the
Company.
This Warrant may not be exercised after 5:00 p.m., Eastern
Standard time, on the Expiration Date, at which time the right to
purchase Common Shares evidenced hereby, unless exercised prior
thereto, shall thereafter be void. This Warrant may be exercised
in full or in part, but may not be exercised for fewer than the
lesser of (i) 100 Common Shares or (ii) the balance of the Common
Shares purchasable hereunder.
This Warrant is part of a duly authorized issue of Warrants
issued pursuant to the Warrant Agreement, which Warrant Agreement
is hereby incorporated by reference in and made a part of this
instrument and is hereby referred to for a description of the
rights, limitation of rights, obligations, duties and immunities
thereunder of the Company and the holders (the words "holders" or
"holder" meaning the registered holders or registered holder) of
the Warrants.
The Warrant Agreement provides that upon the occurrence of
certain events the Exercise Price and the type and/or number of the
Company's securities issuable thereupon may, subject to certain
conditions, be adjusted. In such event, the Company will, at the
request of the holder, issue a new Warrant Certificate evidencing
the adjustment in the Exercise Price and the number and/or type of
securities issuable upon the exercise of this Warrant; provided,
however, that the failure of the Company to issue such new Warrant
Certificates shall not in any way change, alter, or otherwise
impair the rights of the holder as set forth in the Warrant
Agreement.
Upon due presentment for registration of transfer of this
Warrant Certificate at an office or agency of the Company, a new
Warrant Certificate or Warrant Certificates of like tenor and
evidencing in the aggregate a right to purchase a like number of
Common Shares shall be issued to the transferee(s) in exchange for
this Warrant Certificate, subject to the limitations provided
herein and in the Warrant Agreement, without any charge except for
any tax or other governmental charge imposed in connection with
such transfer.
Upon the exercise of this Warrant for fewer than all the
Common Shares purchasable hereunder, the Company shall forthwith
issue to the holder hereof a new Warrant Certificate representing
the right to purchase the number of Common Shares with respect to
which this Warrant has not yet then been exercised.
The Company may deem and treat the registered holder(s) hereof
as the absolute owner(s) of this Warrant Certificate
(notwithstanding any notation of ownership or other writing hereon
made by anyone), for the purpose of any exercise hereof, and of any
distribution to the holder(s) hereof, and for all other purposes,
and the Company shall not be affected by any notice to the
contrary.
All terms used in this Warrant Certificate which are defined
in the Warrant Agreement shall have the meanings assigned to them
in the Warrant Agreement.
IN WITNESS WHEREOF, the Company has caused this Warrant
Certificate to be duly executed.
Dated as of _____________, ____
EXCEL INDUSTRIES, INC.
By:
Name:
Title:
Attest:
Name:
Secretary
<PAGE>
[FORM OF ELECTION TO PURCHASE
PURSUANT TO SECTION 3.1]
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase _____
Common Shares and herewith tenders in payment for such securities
a certified or official bank check payable in New York Clearing
House funds to the order of Excel Industries, Inc. in the amount of
$_____, all in accordance with the terms hereof. The undersigned
requests that a certificate for such securities be registered in
the name of __________ whose address is __________________ and that
such Certificate be delivered to __________ whose address is
____________________.
Dated:
Signature
(Signature conform in all respects to
name of holder as specified on the
face of the Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
[FORM OF ELECTION TO PURCHASE
PURSUANT TO SECTION 3.2]
The undersigned hereby irrevocably elects to exercise the
right, represented by this Warrant Certificate, to purchase _____
shares of Common Shares all in accordance with the terms of Section
3.2 of the Warrant Grant and Registration Rights Agreement, dated
as of February __, 1996, by and among Excel Corporation and the
stockholders of Anderson Industries, Inc. listed on Schedule I
attached thereto. The undersigned requests that a certificate for
such securities be registered in the name of ________ whose address
is ________________ and that such Certificate be delivered to
______ whose address is ______________.
Dated:
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of the Warrant
Certificate.)
(Insert Social Security or Other
Identifying Number of Holder)
<PAGE>
[FORM OF ASSIGNMENT]
(To be executed by the registered holder if such holder
desires to transfer the Warrant Certificate)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and
transfers unto
(Please print name and address of transferee)
this Warrant Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint __________ Attorney, to transfer the within Warrant
Certificate on the books of the within-named Company, with full
power of substitution.
Dated:__________________ Signature:
(Signature must conform in all respects to
name of holder as specified on the face of
the Warrant Certificate.)
(Insert Social Security or Other
Identifying Number of Assignee)
EXCEL INDUSTRIES, INC.
THE BANKS NAMED HEREIN
SOCIETY NATIONAL BANK, as Agent
HARRIS TRUST AND SAVINGS BANK, as Co-Agent
___________________________________________
U.S. $120,000,000
Credit Agreement
dated as of
April 1, 1996
___________________________________________
<PAGE>
TABLE OF CONTENTS
Page
SECTION 1.DEFINITIONS AND ACCOUNTING TERMS.. . . . . . . . . . 1
1.1. Certain Defined Terms. . . . . . . . . . . . . . . . 1
1.2. Computation of Time Periods. . . . . . . . . . . . . 10
1.3. Accounting Terms . . . . . . . . . . . . . . . . . . 10
1.4. Other Definitional Provisions. . . . . . . . . . . . 10
SECTION 2.AMOUNTS AND TERMS OF THE ADVANCES. . . . . . . . . . 10
2.1. The Revolving Advances and the Swing Line Advances .10
2.2. Making the Revolving Advances and the Swing Line
Advances. . . . . . . . . . . . . . . . . . . . . . 11
2.3. Fees . . . . . . . . . . . . . . . . . . . . . . . .13
2.4. Reduction of the Commitments and the Swing Line
Commitments. . . . . . . . . . . . . . . . . . . . 13
2.5. Repayment of the Revolving Advances and the
Swing Line Advances. . . . . . . . . . . . . . . . 14
2.6. Interest on Advances. . . . . . . . . . . . . . . . 14
2.7. Interest Rate Determination. . . . . . . . . . . . 15
2.8. Prepayments of Advances. . . . . . . . . . . . . . 15
2.9. Increased Costs. . . . . . . . . . . . . . . . . . 15
2.10.Payments and Computations. . . . . . . . . . . . . 16
2.11.Taxes. . . . . . . . . . . . . . . . . . . . . . . 17
2.12.Sharing of Payments, etc.. . . . . . . . . . . . . 18
2.13.Evidence of Debt . . . . . . . . . . . . . . . . . 19
SECTION 3.CONDITIONS OF LENDING. . . . . . . . . . . . . . . . 19
3.1. Conditions Precedent to Initial Advances . . . . . .19
3.2. Conditions Precedent to Each Borrowing . . . . . . .20
SECTION 4.REPRESENTATIONS AND WARRANTIES.. . . . . . . . . . . 21
4.1. Representations and Warranties of the Borrower . . .21
SECTION 5.COVENANTS OF THE BORROWER. . . . . . . . . . . . . . 23
5.1. Affirmative Covenants. . . . . . . . . . . . . . . .23
5.2. Negative Covenants . . . . . . . . . . . . . . . . .27
SECTION 6.EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . 32
6.1. Events of Default. . . . . . . . . . . . . . . . . .32
SECTION 7.THE AGENT. . . . . . . . . . . . . . . . . . . . . . 34
7.1. Authorization and Action . . . . . . . . . . . . . .34
7.2. Agent's Reliance, etc. . . . . . . . . . . . . . . .34
7.3. Society and Affiliates . . . . . . . . . . . . . . .34
7.4. Lender Credit Decision . . . . . . . . . . . . . . .35
7.5. Indemnification. . . . . . . . . . . . . . . . . . .35
7.6. Successor Agent. . . . . . . . . . . . . . . . . . .35
7.7. Agent's Fee. . . . . . . . . . . . . . . . . . . . .35
7.8. Co-Agent . . . . . . . . . . . . . . . . . . . . . .35
SECTION 8.MISCELLANEOUS. . . . . . . . . . . . . . . . . . . .35
8.1. Amendments, etc. . . . . . . . . . . . . . . . . . .35
8.2. Notices, etc.. . . . . . . . . . . . . . . . . . . .36
8.3. No Waiver; Remedies. . . . . . . . . . . . . . . . .36
8.4. Costs, Expenses and Taxes. . . . . . . . . . . . . 36
8.5. Right of Set-off . . . . . . . . . . . . . . . . . .37
8.6. Binding Effect . . . . . . . . . . . . . . . . . . .37
8.7. Assignments and Participations . . . . . . . . . . .37
8.8. Governing Law. . . . . . . . . . . . . . . . . . . .39
8.9. Execution in Counterparts. . . . . . . . . . . . . .39
8.10.Collateral . . . . . . . . . . . . . . . . . . . . .39
8.11.Survival of Warranties and Agreements. . . . . . . .39
8.12.Limitation of Liability. . . . . . . . . . . . . . .39
8.13.No Duty. . . . . . . . . . . . . . . . . . . . . . .40
8.14.Lenders and Agent Not Fiduciary to Borrower, etc.. .40
8.15.Confidentiality. . . . . . . . . . . . . . . . . . .40
8.16.Certain Consents and Waivers of the Borrower . . . .40
8.17.Waiver of Jury Trial . . . . . . . . . . . . . . . .41
Schedule I - Information as to Lenders
Schedule II - Schedule of Existing Liens
Schedule III - Schedule of Existing Debt
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Swing Line Note
EXHIBIT B-1 - Form of Notice of Revolving Borrowing
EXHIBIT B-2 - Form of Notice of Swing Line Borrowing
EXHIBIT B-3 - Form of Confirmation of Swing Line Borrowing
EXHIBIT C - Form of Assignment and Acceptance
EXHIBIT D - Form of Opinion of Sommer & Barnard, Counsel
for the Borrower
EXHIBIT E - Form of Guaranty
CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of April 1, 1996 (as amended,
supplemented or otherwise modified from time to time, "this
Agreement"), among the following: (i) EXCEL INDUSTRIES, INC., an
Indiana corporation (herein, together with its successors and
assigns, the "Borrower"); (ii) the financial institutions (the
"Banks") listed on the signature pages hereof; (iii) SOCIETY
NATIONAL BANK ("Society"), a national banking association, as agent
(together with any successor Agent appointed hereunder, the
"Agent") for the Lenders hereunder; and (iv) HARRIS TRUST AND
SAVINGS BANK, as co-agent (together with any successor co-Agent
appointed hereunder, the "Co-Agent") for the Lenders hereunder:
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1.DEFINITIONS AND ACCOUNTING TERMS.
1.1. Certain Defined Terms. In addition to the terms defined
above, as used in this Agreement, the following terms shall have
the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Adjusted Eurodollar Rate" means, for any Interest Period
for each Adjusted Eurodollar Rate Advance comprising part of the
same Revolving Borrowing, an interest rate per annum equal to the
rate per annum obtained by dividing (a) the rate of interest
determined by the Agent to be the average (rounded upward to the
nearest whole multiple of 1/16 of it per annum, if such average is
not such a multiple) of the rate per annum at which deposits in
U.S. dollars are offered to the principal offshore office of each
of the Reference Banks by prime banks in the London interbank
market at 11:00 A.M. (London time) two Business Days before the
first day of such Interest Period in an amount substantially equal
to such Reference Bank's Adjusted Eurodollar Rate Advance
comprising part of such Revolving Borrowing and for a period equal
to such Interest Period by (b) a percentage equal to 100% minus the
Adjusted Eurodollar Rate Reserve Percentage for such Interest
Period. The Adjusted Eurodollar Rate for any Interest Period for
each Adjusted Eurodollar Rate Advance comprising part of the same
Revolving Borrowing shall be determined by the Agent on the basis
of applicable rates furnished to and received by the Agent from the
Reference Banks two Business Days before the first day of such
Interest Period, subject, however, to the provisions of section
2.7.
"Adjusted Eurodollar Rate Advance" means a Revolving
Advance which bears interest as provided in section 2.6(a)(ii).
"Adjusted Eurodollar Rate Reserve Percentage" for any
Interest Period for any Adjusted Eurodollar Rate Advance means the
reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to
time by the Federal Reserve Board for determining the maximum
reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for any
financial institution subject to such regulations with respect to
liabilities or assets consisting of or including Eurocurrency
Liabilities having a term equal to such Interest Period.
"Advance" means a Revolving Advance or a Swing Line
Advance, as the case may be.
"Affiliate" means, as to any Person, any other Person
that, directly or indirectly, controls, is controlled by or is
under common control with such Person or is a director or officer
of such Person.
"Agent Fee Letter" means the letter dated as of the date
hereof from Society addressed to and acknowledged by the Borrower
relating to certain fees payable to Society and/or the Lenders.
"Agent Syndication Letter" means the letter dated as of
the date hereof from Society addressed to and acknowledged by the
Borrower relating to certain possible syndication arrangements.
"Applicable Lending Office" means, with respect to each
Lender, such Lender's Domestic Lending Office in the case of a
Prime Rate Advance and such Lender's Eurodollar Lending Office in
the case of an Adjusted Eurodollar Rate Advance.
"Assignment and Acceptance" means an assignment and
acceptance entered into by a Lender and an Eligible Assignee, and
accepted by the Agent, in substantially the form of Exhibit C
hereto.
"Borrowing" means a Revolving Borrowing or a Swing Line
Borrowing, as the case may be.
"Business Day" means a day of the year on which banks are
not required or authorized to close in Cleveland, Ohio or Chicago,
Illinois and, if the applicable Business Day relates to any
Adjusted Eurodollar Rate Advances, on which dealings are carried on
in the London interbank market.
"Cash Equivalents" means any of the following, to the
extent owned by any Person free and clear of all Liens and having
a maturity of not greater than 180 days from the date of
acquisition thereof; (i) readily marketable direct obligations of
the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed
by the full faith and credit of the Government of the United
States, (ii) insured certificates of deposit of or time deposits
with any commercial bank that is a Lender or is a bank or trust
company which is organized under the laws of the United States or
any State thereof, has combined capital and surplus of at least
$500 million, is a member of the Federal Reserve System and which
issues (or the parent of which issues) commercial paper rated as
described in clause (iii), or (iii) commercial paper in an
aggregate amount of no more than $1,000,000 per issuer outstanding
at any time, issued by any corporation organized under the laws of
any State of the United States, rated at least "Prime-1" (or the
then equivalent grade) by Moody's Investors Services, Inc. or "A-1"
(or the then equivalent grade) by Standard & Poor's Corporation.
"Claim" means any claim or demand, by any Person, of
whatsoever kind or nature for any alleged Liabilities and Costs,
whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, Permit, ordinance or
regulation, common law or otherwise.
"Closing Date" shall mean the date on which the Agent
shall have received the documents specified in or pursuant to
section 3.1 and the conditions specified in section 3.1 shall have
been satisfied.
"Commitment" has the meaning specified in section 2.1(a).
"Commitment Fee" has the meaning specified in section
2.3(b).
"Confirmation of Swing Line Borrowing" has the meaning
specified in section 2.2(c).
"Consolidated" refers to the consolidation of accounts in
accordance with GAAP, including principles of consolidation,
consistent with those applied in the preparation of the
Consolidated financial statements referred to in section 4.1(e).
"Consolidated Interest Expense" means, for any period,
with respect to the Borrower and its Subsidiaries on a Consolidated
basis, total interest expense, whether paid or accrued (without
duplication), including the interest component of obligations in
respect of capital leases.
"Consolidated Net Income" means for any period the
consolidated net income (loss) of the Borrower and its consolidated
subsidiaries for such period, determined in accordance with GAAP.
"Consolidated Net Worth" means at any date the
Consolidated stockholders' equity of the Borrower and its
Consolidated Subsidiaries, determined as of such date in accordance
with GAAP.
"Contaminant" means any pollutant, hazardous substance,
radioactive substance, toxic substance, hazardous waste,
radioactive waste, special waste, petroleum or petroleum derived
substance or waste, asbestos, polychlorinated biphenyls (PCBs), or
any hazardous or toxic constituent thereof and includes, but
is not limited to, these terms as defined in Environmental, Health
or Safety Requirements of Law.
"Debt" of any Person means at any date (i) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property, (ii) all obligations of such Person
evidenced by bonds, debentures, notes or other similar instruments,
(iii) all indebtedness created or arising under any conditional
sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the
seller or lender under such agreement in the event of default are
limited to repossession or sale of such property), (iv) all
obligations of such Person as lessee under leases which shall have
been or should be, in accordance with GAAP, recorded as capital
leases, (v) all obligations of such Person as an account party in
respect of letters of credit and bankers' acceptances, (vi) all
obligations of such Person under direct or indirect guaranties in
respect of, and all obligations (contingent or otherwise) of such
Person to purchase or otherwise acquire, or otherwise to assure a
creditor against loss in respect of, Debt of others and (vii) all
other Debt secured by a lien, mortgage or security interest on any
asset of such Person, whether or not such Debt is otherwise an
obligation of such Person. For the avoidance of doubt, in no event
shall the obligations of a Person as lessee or sublessee under an
Operating Leases be considered Debt of such Person.
"Default" means any Event of Default or any event that
would constitute an Event of Default but for the requirement that
notice be given or time elapse or both.
"Domestic Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Domestic
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender, or
such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"EBIT" means, for any period on a Consolidated basis for
the Borrower and its Consolidated Subsidiaries, the sum of the
amounts for such period of:
(i) Consolidated Net Income, provided that: (A) all gains
and all losses realized by such person and its subsidiaries upon
the sale or other disposition (including, without limitation,
pursuant to sale and leaseback transactions) of property or assets
which are not sold or otherwise disposed of in the ordinary course
of business, or pursuant to the sale of any capital stock of such
person or any subsidiary, shall be excluded from such Consolidated
Net Income, (B) net income or net loss of any person combined with
such person on a "pooling of interests" basis attributable to any
period prior to the date of such combination shall be excluded from
such Consolidated Net Income, (C) all items of gain or loss which
are properly classified as extraordinary in accordance with GAAP
shall be excluded from such Consolidated Net Income, (D) all items
which are properly classified in accordance with GAAP as cumulative
effects of accounting changes shall be excluded from such
Consolidated Net Income, and (E) net income of any person which is
not a subsidiary of such person and which is consolidated with such
person or is accounted for by such person by the equity method of
accounting shall be included in such Consolidated Net Income only
to the extent of the amount of dividends or distributions paid to
such person or a subsidiary;
(ii) Consolidated Interest Expense; and
(iii) charges for federal, state, local and foreign
income taxes.
"Eligible Assignee" means (i) any commercial bank
organized under the laws of the United States, or any State
thereof, and having total assets in excess of $1,000,000,000 and a
combined capital and surplus of at least $100,000,000; (ii) a
savings and loan association or savings bank organized under the
laws of the United States, or any State thereof, and having total
assets in excess of $1,000,000,000 and a combined capital and
surplus of at least $100,000,000; (iii) a commercial bank or
savings and loan association not meeting both the total assets and
combined capital and surplus requirements of clause (i) or (ii)
which, together with any Lender, is under the common control of a
single parent corporation; (iv) a commercial bank organized under
the laws of any another country which is a member of the OECD, or
a political subdivision of any such country, and that either (x)
has total assets in excess of $3,000,000,000 and a combined capital
and surplus of at least $150,000,000 or (y) is approved by the
Agent and, unless an Event of Default shall have occurred and be
continuing or any of the terms or provisions of this Agreement have
been modified because of financial difficulties of the Borrower,
the Borrower (whose approval will not be unreasonably withheld),
provided in each case that such bank is acting through a branch or
agency located in the country in which it is organized or another
country which is also a member of the OECD; (v) the central bank of
any country which is a member of the OECD; (vi) a finance company,
insurance company or other financial institution (whether a
corporation, partnership, limited liability company, trust or other
entity) that is domiciled in the United States and is engaged in
making, purchasing or otherwise investing in business loans or
commercial loans in the ordinary course of its business and having
total assets in excess of $500,000,000; and (vii) any other person
(other than an Affiliate of the Borrower) approved by the Agent
and, unless an Event of Default shall have occurred and be
continuing or any of the terms or provisions of this Agreement, as
originally in effect, have been modified because of financial
difficulties of the Borrower or breaches or potential breaches of
any of the terms or provisions hereof by the Borrower, the Borrower
(whose approval will not be unreasonably withheld).
"Environmental, Health or Safety Requirements of Law"
means all valid and enforceable Requirements of Law derived
from or relating to federal, state and local laws or regulations
relating to or addressing the environment, health or safety,
including but not limited to any law, regulation, or order relating
to the use, handling, or disposal of any Contaminant, any law,
regulation, or order relating to Remedial Action and any law,
regulation, or order relating to workplace or worker safety and
health, and such Requirements of Law as are promulgated by the
specifically authorized agent responsible for administering such
requirements.
"Environmental Lien" means a Lien in favor of any
Governmental Authority for any (i) liabilities under any
Environmental, Health or Safety Requirements of Law or (ii) damages
arising from, or costs incurred by such Governmental Authority in
response to, a Release or threatened Release of a Contaminant into
the environment.
"ERISA" means the Employee Retirement Income Security Act
of 1974 and the rules and regulations thereunder, collectively, as
the same may from time to time be supplemented or amended and
remain in effect.
"ERISA Affiliate" means any Person that for purposes of
Title IV of ERISA is a member of the Borrower's controlled group,
or under common control with the Borrower, within the meaning of
section 414 of the Internal Revenue Code and the regulations
promulgated and rulings issued thereunder.
"ERISA Event" means (a) a reportable event, within the
meaning of section 4043 of ERISA, unless the 30-day notice
requirement with respect thereto has been waived by the PBGC; (b)
the imposition of an obligation on the Borrower or any ERISA
Affiliate to provide affected parties with written notice of
intent to terminate a Plan in a distress termination described in
section 4041(c) of ERISA; (c) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from a Multiemployer Plan; (d)
the withdrawal by the Borrower or an ERISA Affiliate from a Plan
during a plan year for which the Borrower or any ERISA Affiliate
was a substantial employer, as defined in section 4001(a)(2) of
ERISA; (e) the failure by the Borrower or any ERISA Affiliate to
make a payment to a plan required under section 302(f)(1) of ERISA;
(f) the adoption of an amendment to a Plan requiring the provision
of security to such Plan, pursuant to section 307 of ERISA; or (g)
the institution by the PBGC of proceedings to terminate a Plan,
pursuant to section 4042 of ERISA, or the occurrence of any event
or condition that reasonably could constitute grounds under section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, a Plan.
"ERISA Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the
Borrower, are treated as a single employer under section 414 of the
Internal Revenue Code.
"Eurocurrency Liabilities" has the meaning assigned to
that term in Regulation D of the Federal Reserve Board, as in
effect from time to time.
"Eurodollar Lending Office" means, with respect to any
Lender, the office of such Lender specified as its "Eurodollar
Lending Office" opposite its name on Schedule I hereto or in the
Assignment and Acceptance pursuant to which it became a Lender (or,
if no such office is specified, its Domestic Lending Office), or
such other office of such Lender as such Lender may from time to
time specify to the Borrower and the Agent.
"Events of Default" has the meaning specified in section
6.1.
"Existing Liens" means the Liens existing on the date
hereof upon or with respect to Property owned by the Borrower and
its Subsidiaries and specified on Schedule II hereto.
"Facility Fee" has the meaning specified in section
2.3(a).
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to
the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for such day (or, if such day
is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by
it.
"Federal Reserve Board" means the Board of Governors of
the Federal Reserve System or any successor thereto.
"Fixed Rate Advance" means a Swing Line Advance which
bears interest at a fixed rate as specified in the Confirmation of
Swing Line Borrowing related thereto.
"GAAP" has the meaning specified in section 1.3.
"Governmental Authority" means any nation or government,
any federal, state, local or other political subdivision thereof
and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.
"Insufficiency" means, with respect to any Plan, the
amount, if any, by which the present value of the vested accrued
benefits under such Plan, as determined using the actuarial
assumptions then used for the purpose of determining the
contributions to be made to such Plan, exceeds the fair market
value of the assets of such Plan allocable to such benefits,
provided that, with respect to any Multiple Employer Plan with
respect to which an election under section 412(c)(4)(A) of the
Internal Revenue Code has been made, Insufficiency shall mean the
portion of any such excess that is allocable to the Borrower or any
ERISA Affiliate pursuant to the procedures in effect from time to
time with respect to such Multiple Employer Plan for the allocation
of such excess among the employers with respect to such Multiple
Employer Plan.
"Interest Period" means, for each Advance comprising part
of the same Revolving Borrowing, the period commencing on the date
of such Advance and ending on the last day of the period selected
by the Borrower pursuant to the provisions below. The duration of
each such Interest Period shall be (a) in the case of any Swing
Line Advance, any number of days up to 30 days or 1 month, (b) in
the case of any Revolving Advance which is a Prime Rate Advance,
the period commencing on the date of such Advance and ending on the
last day of the calendar quarter in which such Advance is made, and
(c) in the case of any Revolving Advance which is an Adjusted
Eurodollar Rate Advance, 1, 2, 3 or 6 months, in each case as the
Borrower may select in the Notice of Borrowing for such Advance;
provided, however, that:
(i) the Borrower may not select any Interest Period
which would end after the Termination Date;
(ii) Interest Periods commencing on the same date
for Revolving Advances comprising part of the same Revolving
Borrowing shall be of the same duration; and
(iii) whenever the last day of any Interest Period
would otherwise occur on a day other than a Business Day, the last
day of such Interest Period shall be extended to occur on the next
succeeding Business Day, provided, in the case of any Interest
Period for an Adjusted Eurodollar Rate Advance, that if such
extension would cause the last day of such Interest Period to occur
in the next following calendar month, the last day of such Interest
Period shall occur on the next preceding Business Day.
"Internal Revenue Code" means the United States Internal
Revenue Code of 1986, as amended, or any successor statute.
"Lenders" means the Banks listed on the signature pages
hereof and each Eligible Assignee that shall become a party hereto
pursuant to section 8.7. Unless the context indicates otherwise,
the term Lender includes a Lender in its capacity as a Swing Line
Lender.
"Liabilities and Costs" means all direct or indirect,
absolute or contingent, past, present or future liabilities, costs,
expenses, obligations, responsibilities, damages (including,
without limitation, punitive, economic, consequential and treble
damages) and losses (including, without limitation, attorney,
expert and consulting fees and costs of investigation, feasibility
or Remedial Action studies, and fines, penalties and monetary
sanctions and interest) with respect to or arising out of any of
the following: personal injury, death, intentional, willful or
wanton injury, damage or threat to the environment, natural
resources or public health or welfare.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, conditional sale agreement, deposit
arrangement, security interest, encumbrance, lien (statutory or
other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever in
respect of any property of a Person, whether granted voluntarily or
imposed by law, and includes the interest of a lessor under a lease
which shall have been or should be, in accordance with GAAP,
recorded as a capital lease, and the filing of any financing
statement or similar notice (other than a financing statement filed
by a "true" lessor pursuant to Section 9-408 of the Uniform
Commercial Code), naming the lessee of such property as debtor or
"lessee", under the Uniform Commercial Code or other comparable law
of any jurisdiction with respect to any of the foregoing. For the
avoidance of doubt, in the case of any Operating Lease under which
a Person is the lessee or sublessee of real or tangible personal
property (or mixed real and tangible personal property), the term
Lien does not include the rights of the lessor or sublessor in such
property or any financing statement covering such property
(including any additions thereto, replacements thereof, or
substitutions therefor, or any proceeds thereof) filed against such
Person as debtor or as "lessee" or "sublessee".
"Loan Documents" means (i) this Agreement, (ii) the
Notes, (iii) the Agent Fee Letter, (iv) the Agent Syndication
Letter, (v) each Subsidiary Guaranty, (vi) any intercreditor
agreement or similar document which the Agent and/or the Lenders
may be requested to enter into in connection with the completion of
the private placement referred to in section 5.2(b)(iv), and (vii)
all other written agreements between the Borrower and the Agent or
any Lender delivered to the Agent or such Lender pursuant to or in
connection with this Agreement.
"Majority Lenders" means at any time Lenders holding at
least 66-2/3% of the then aggregate unpaid principal amount of the
Revolving Advances held by Lenders, or, if no such principal amount
is then outstanding, Lenders having at least 66-2/3% of the
Commitments (provided that, for purposes hereof, neither the
Borrower, nor any of its Affiliates, if a Lender, shall be included
in (i) the Lenders holding such amount of the Revolving Advances or
having such amount of the Commitments or (ii) determining the
aggregate unpaid principal amount of the Revolving Advances or the
total Commitments).
"Margin Stock" shall have the meaning assigned to that
term in Regulation G and Regulation U.
"Material Adverse Effect" means a material adverse effect
upon (i) the condition (financial or otherwise), operations or
Property of the Borrower, individually, or of the Borrower and its
Subsidiaries, taken as a whole or (ii) the legality, validity or
enforceability of this Agreement, any Note or any of the other Loan
Documents.
"Multiemployer Plan" means a multiemployer plan, as
defined in section 4001(a)(3) of ERISA to which the Borrower or any
ERISA Affiliate is making or accruing an obligation to make
contributions or has within any of the preceding three plan years
made or accrued an obligation to make contributions.
"Multiple Employer Plan" means an employee benefit plan,
other than a Multiemployer Plan, subject to Title IV of ERISA to
which the Borrower or any ERISA Affiliate, and one or more
employers other than the Borrower or an ERISA Affiliate, is making
or accruing an obligation to make contributions or, in the event
that any such plan has been terminated, to which the Borrower or
any ERISA Affiliate made or accrued an obligation to make
contributions during any of the five plan years preceding the date
of termination of such plan.
"Note" means a Revolving Note or a Swing Line Note, as
the case may be.
"Notice of Borrowing" means a Notice of Revolving
Borrowing or a Notice of Swing Line Borrowing, as the case may be.
"Notice of Revolving Borrowing" has the meaning specified
in section 2.2(a).
"Notice of Swing Line Borrowing" has the meaning
specified in section 2.2(c).
"OECD" means the Organization for Economic Cooperation
and Development.
"Operating Lease" means a lease of real and/or tangible
personal Property as to which the obligations of the lessee or
sublessee are not required to be capitalized under GAAP.
"PBGC" means the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under ERISA.
"Permits" means any permit, approval, authorization
license, variance, or permission required from a Governmental
Authority under an applicable Requirement of Law.
"Person" or "person" means an individual, partnership,
corporation (including a business trust), joint stock company,
trust, unincorporated association, joint venture or other entity,
or a government or any political subdivision or agency thereof.
"Plan" means a pension plan (other than a Multiemployer
Plan) which is covered by Title IV of ERISA and (i) with respect to
which the Borrower or any ERISA Affiliate is or has been accruing
or is or has been obligated to accrue contributions or (ii) which
is providing benefits for employees (including former employees) of
the Borrower or any ERISA Affiliate in respect of such employees'
or former employees' employment with the Borrower or an ERISA
Affiliate.
"Prime Rate" means, for any period, a fluctuating
interest rate per annum as shall be in effect from time to time
which rate per annum shall at all times be equal to the greater of
(i) the rate of interest established by Society in Cleveland, Ohio,
from time to time, as Society's prime rate, whether or not publicly
announced, which interest rate may or may not be the lowest rate
charged by Society for commercial loans or other extensions of
credit; and (ii) the Federal Funds Rate in effect from time to time
plus 1/2 of 1% per annum.
"Prime Rate Advance" means a Revolving Advance which
bears interest as provided in section 2.6(a)(i).
"Property" means any real or personal property, plant,
building, facility, structure, underground storage tank or unit,
equipment, inventory, general intangible, or other asset owned,
leased or operated by the Borrower or any of its Subsidiaries, as
applicable (including any surface water thereon or adjacent
thereto, and soil and groundwater thereunder).
"Reference Banks" means (i) Society, (ii) Harris Trust
and Savings Bank, and (iii) if required by the Majority Lenders,
one additional Lender designated by the Majority Lenders.
"Register" has the meaning specified in section 8.7(d).
"Regulation G" means Regulation G of the Federal Reserve
Board, as in effect from time to time; "Regulation T" means
Regulation T of the Federal Reserve Board, as in effect from time
to time; "Regulation U" means Regulation U of the Federal Reserve
Board, as in effect from time to time; and "Regulation X" means
Regulation X of the Federal Reserve Board, as in effect from time
to time.
"Release" means release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment or
into or out of any Property, including the movement of Contaminants
through or in the air, soil, surface water, groundwater or
Property.
"Remedial Action" means actions required to (i) clean up,
remove, treat or in any other way address Contaminants in the
indoor or outdoor environment; (ii) prevent the Release or threat
of Release or minimize the further Release of Contaminants; or
(iii) investigate and determine if a remedial response is needed
and to design such a response and post-remedial investigation,
monitoring, operation and maintenance and care.
"Requirements of Law" means, as to any Person, the
charter and by-laws or other organizational or governing documents
of such Person, and any law, rule or regulation, or determination
of an arbitrator or a court or other Governmental Authority, in
each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject
including, without limitation, the Securities Act of 1933, the
Securities Exchange Act of 1934, as amended, Regulation G,
Regulation T, Regulation U and Regulation X, ERISA, the Fair Labor
Standards Act and any certificate of occupancy, zoning ordinance,
building, or land use requirement or Permit or labor or employment
rule or regulation, including Environmental, Health or Safety
Requirements of Law.
"Revolving Advance" means an advance by a Lender to the
Borrower as part of a Revolving Borrowing. A Revolving Advance may
be either a Prime Rate Advance or an Adjusted Eurodollar Rate
Advance, each of which shall be a "Type" of Revolving Advance.
"Revolving Borrowing" means a borrowing consisting of
simultaneous Revolving Advances of the same Type made by each of
the Lenders pursuant to section 2.1(a).
"Revolving Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Revolving Advances made
by such Lender.
"Stock Purchase Agreement" means the Stock Purchase
Agreement, dated as of March 4, 1996, by and among (i) the
Borrower, as the purchaser; (ii) Anderson Industries, Inc., a
Delaware corporation; and (iii) the stockholders of Anderson
Industries, Inc., as sellers, providing, among other things for the
acquisition by the Borrower of Anderson Industries, Inc. and its
Subsidiaries by means of the purchase by the Borrower of all of the
issued and outstanding capital stock of Anderson Industries, Inc.
"Subsidiary" of any Person means any corporation,
partnership, joint venture, trust or estate of which (or in which)
more than 50% of
(a) the outstanding capital stock having ordinary
voting power to elect a majority of the Board of Directors of such
corporation (irrespective of whether or not at the time capital
stock of any other class or classes of such corporation shall or
might have voting power upon the occurrence of any contingency),
(b) the interest in the capital or profits of such
partnership or joint venture, or
(c) the beneficial interest of such trust or
estate,
is at the time directly or indirectly (through one or more other
Subsidiaries of such Person) owned or controlled by such Person.
"Subsidiary Guaranty" has the meaning specified in
section 5.1(j).
"Swing Line Advance" means an advance by a Swing Line
Lender to the Borrower as part of a Swing Line Borrowing.
"Swing Line Borrowing" means a borrowing consisting of
simultaneous Swing Line Advances made by each of the Swing Line
Lenders pursuant to section 2.1(b).
"Swing Line Commitment" has the meaning specified in
section 2.1(b).
"Swing Line Lenders" means the Banks listed on the
signature pages hereof which have Swing Line Commitments as
specified in Schedule I hereto and each Eligible Assignee that
shall become a party hereto pursuant to section 8.7 and shall
succeed to all or part of such Swing Line Commitment.
"Swing Line Note" means a promissory note of the Borrower
payable to the order of any Lender, in substantially the form of
Exhibit A-2 hereto, evidencing the aggregate indebtedness of the
Borrower to such Lender resulting from the Swing Line Advances made
by such Lender.
"Termination Date" means the fourth anniversary of the
Closing Date, unless all of the Lenders and the Borrower agree in
writing to extend such date, or the earlier date of termination in
whole of the Commitments pursuant to section 2.4 or section 6.1.
"Wholly-Owned Subsidiary" means any Subsidiary, all of
the equity securities (except directors' qualifying shares, where
required by law to be owned by directors) of which, or all of the
other equity interests in which, are owned directly or indirectly
by the Borrower or one or more Wholly-Owned Subsidiaries.
"Withdrawal Liability" means a liability in respect of a
complete withdrawal or partial withdrawal from a Multiemployer
Plan, as described in Part I of Subtitle E of Title IV of ERISA.
1.2. Computation of Time Periods. In this Agreement in the
computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including" and the
words "to" and "until" each means "to but excluding".
1.3. Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally
accepted accounting principles consistent with those applied in the
preparation of the financial statements referred to in section
4.1(e) ("GAAP").
1.4. Other Definitional Provisions. References to "sections",
"subsections", "Schedules" and "Exhibits" shall be to sections,
subsections, Schedules and Exhibits, respectively, of this
Agreement unless otherwise specifically provided. The words
"hereof", "herein", and "hereunder" and words of similar import
when used in this Agreement shall unless otherwise specifically
provided refer to this Agreement as a whole and not to any
particular provision of this Agreement.
SECTION 2.AMOUNTS AND TERMS OF THE ADVANCES.
2.1. The Revolving Advances and the Swing Line Advances. (a)
Each Lender severally agrees, on the terms and conditions
hereinafter set forth, to make Revolving Advances to the Borrower
from time to time on any Business Day during the period from the
Closing Date until the Termination Date in an aggregate amount not
to exceed at any time outstanding the amount set opposite such
Lender's name on Schedule I hereto under the caption "Commitments"
or, if such Lender has entered into any Assignment and Acceptance,
set forth as such Lender's Commitment in the Register maintained by
the Agent pursuant to section 8.7(d), as such amount may be reduced
pursuant to section 2.4 (such Lender's "Commitment"); provided that
the aggregate of the unused portions of the Commitments of the
Lenders shall at all times equal or exceed the aggregate unpaid
principal amount of the Swing Line Advances. Each Revolving
Borrowing shall be in an aggregate amount not less than $500,000 or
an integral multiple of $100,000 in excess thereof, in the case of
a Revolving Borrowing consisting of Prime Rate Advances, and in an
aggregate amount not less than $2,000,000 or an integral multiple
of $1,000,000 in excess thereof, in the case of a Revolving
Borrowing consisting of Adjusted Eurodollar Rate Advances, and
shall consist of Revolving Advances made on the same day by the
Lenders ratably according to their respective Commitments. No more
than three Revolving Borrowings shall be made on any single
Business Day. Within the limits of each Lender's Commitment, the
Borrower may borrow under this section 2.1(a), repay Revolving
Advances pursuant to section 2.5, prepay Revolving Advances
pursuant to section 2.8 and reborrow under this section 2.1(a).
(b) Each Swing Line Lender severally agrees, on the terms and
conditions hereinafter set forth, to make Swing Line Advances to
the Borrower from time to time on any Business Day during the
period from the Closing Date until the Termination Date in an
aggregate amount not to exceed at any time outstanding the amount
set opposite such Swing Line Lender's name on Schedule I hereto
under the caption "Swing Line Commitments" or, if such Lender has
entered into any Assignment and Acceptance, set forth as such
Lender's Swing Line Commitment in the Register maintained by the
Agent pursuant to section 8.7(d), as such amount may be reduced
pursuant to section 2.4 (such Swing Line Lender's "Swing Line
Commitment"); provided that (i) the aggregate of the unused
portions of the Commitments of the Lenders shall at all times equal
or exceed the aggregate unpaid principal amount of the Swing Line
Advances; and (ii) no Swing Line Advance shall be used for the
purpose of funding the payment of principal of any other Swing Line
Advance. Each Swing Line Borrowing shall be in an aggregate amount
not less than $500,000 nor more than $5,000,000 and shall be in an
integral multiple of $250,000, and shall consist of Swing Line
Advances made on the same day by the Swing Line Lenders in
accordance with the Confirmation of Swing Line Borrowing related
thereto, ratably according to their respective Swing Line
Commitments. Within the limits of each Swing Line Lender's Swing
Line Commitment, the Borrower may borrow under this section 2.1(b),
repay Swing Line Advances pursuant to section 2.5, prepay Swing
Line Advances pursuant to section 2.8 and reborrow under this
section 2.1(b).
(c) Notwithstanding anything herein to the contrary, the
Swing Line Lenders shall not make any Swing Line Advance at any
time when the Swing Line Lenders have actual knowledge that an
Event of Default shall have occurred and be continuing which shall
not been waived in accordance with the provisions of this
Agreement.
(d) If as a result of any bankruptcy or similar proceeding or
the occurrence of any Default or Event of Default, Revolving
Advances are not made pursuant to section 2.1(a) sufficient to
repay any amounts owed to the Swing Line Lenders as a result of
nonpayment of outstanding Swing Line Advances, each Lender agrees
to purchase, and shall be deemed to have purchased, a participation
in such outstanding Swing Line Advances in an amount equal to its
ratable share (based on the Commitments of all the Lenders to make
Revolving Advances) of the unpaid amount thereof together with
accrued interest thereon. Upon one Business Day's notice from the
Agent, each Lender shall deliver to the Agent for the account of
the Swing Line Lenders an amount equal to its respective
participation in same day funds at the office of the Agent. In
order to evidence such participation each Lender agrees to enter
into a participation agreement at the request of the Agent (acting
on behalf of the Swing Line Lenders) in form and substance
reasonably satisfactory to all parties involved in such
participation. In the event any Lender fails to make available to
the Agent for the account of the Swing Line Lenders the amount of
such Lender's participation as provided above, the Swing Line
Lenders shall be entitled to recover such amount on demand from
such Lender together with interest at the Federal Funds Rate for
the first Business Day following the date such amount is scheduled
to be paid and thereafter at the Federal Funds Rate plus 1% per
annum.
2.2. Making the Revolving Advances and the Swing Line
Advances. (a) Each Revolving Borrowing shall be made on notice,
given not later than (i) 11:00 A.M. (Cleveland, Ohio time) on the
third Business Day prior to the date of the proposed Revolving
Borrowing in the case of Adjusted Eurodollar Rate Advances, and
(ii) 1:00 P.M. (Cleveland, Ohio time) on the Business Day of the
proposed Revolving Borrowing in the case of Prime Rate Advances, by
the Borrower to the Agent, which shall give to each Lender prompt
notice thereof by telecopier, telex or cable. Each such notice of
a Revolving Borrowing (a "Notice of Revolving Borrowing") shall be
by telephone, telecopier, telex or cable, confirmed immediately in
writing, and in the case of a telecopy, telex, cable or other
written form of notice, shall be in substantially the form of
Exhibit B-1 hereto, specifying therein the requested (i) date of
such Revolving Borrowing, (ii) aggregate amount of such Revolving
Borrowing, and (iii) duration of the Interest Period for each
Revolving Advance to be made as part of such Revolving Borrowing.
If no Interest Period is selected in a Notice of Revolving
Borrowing relating to Prime Rate Advances, the Interest Period
therefor shall be deemed to be 30 days. Each Lender shall, before
3:00 P.M. (Cleveland, Ohio time) on the date of such Revolving
Borrowing, make available for the account of its Applicable Lending
Office to the Agent at its address referred to in section 8.2, in
same day funds, such Lender's ratable portion of such Revolving
Borrowing. After the Agent's receipt of such funds and upon
fulfillment of the applicable conditions set forth in section 3,
the Agent will make such funds available to the Borrower at the
Agent's aforesaid address.
(b) Anything in subsection (a) above to the contrary
notwithstanding,
(i) if any Lender shall, at least one Business Day
before the date of any requested Revolving Borrowing, notify the
Agent and the Borrower that the introduction of or any change in or
in the interpretation of any law or regulation makes it unlawful,
or that any central bank or other Governmental Authority asserts
that it is unlawful, for such Lender or its Eurodollar Lending
Office to perform its obligations hereunder to make Adjusted
Eurodollar Rate Advances or to fund or maintain Adjusted Eurodollar
Rate Advances hereunder, (x) the right of the Borrower to select
Adjusted Eurodollar Rate Advances for such Revolving Borrowing or
any subsequent Revolving Borrowing shall be suspended until such
Lender shall notify the Agent that the circumstances causing such
suspension no longer exist, and each Revolving Advance comprising
such Revolving Borrowing shall be a Prime Rate Advance, and (y) the
Borrower shall forthwith prepay in full all Adjusted Eurodollar
Rate Advances of all Lenders then outstanding, together with
accrued interest thereon;
(ii) if fewer than two Reference Banks furnish timely
information to the Agent for determining the Adjusted Eurodollar
Rate for any Adjusted Eurodollar Rate Advances comprising any
requested Revolving Borrowing, the right of the Borrower to select
Adjusted Eurodollar Rate Advances for such Revolving Borrowing or
any subsequent Revolving Borrowing shall be suspended until the
Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each
Revolving Advance comprising such Revolving Borrowing shall be a
Prime Rate Advance; and
(iii) if the Majority Lenders shall, at least one Business
Day before the date of any requested Revolving Borrowing, notify
the Agent that the Adjusted Eurodollar Rate for Adjusted Eurodollar
Rate Advances comprising such Revolving Borrowing will not
adequately reflect the cost to such Majority Lenders of making,
funding or maintaining their respective Adjusted Eurodollar Rate
Advances for such Revolving Borrowing, the right of the Borrower to
select Adjusted Eurodollar Rate Advances for such Revolving
Borrowing or any subsequent Revolving Borrowing shall be suspended
until the Agent shall notify the Borrower and the Lenders that the
circumstances causing such suspension no longer exist, and each
Revolving Advance comprising such Revolving Borrowing shall be a
Prime Rate Advance.
(c) The Borrower may from time to time request the Agent to
furnish to the Borrower interest rate quotations for Swing Line
Advances which the Swing Line Lenders would be willing to make at
interest rates below the rate which would be applicable to such
Borrowing if it were a Revolving Borrowing. Each Swing Line
Borrowing shall be made on notice, given not later than 12:00 noon
(Cleveland, Ohio time) on the Business Day of the proposed Swing
Line Borrowing, by the Borrower to the Agent, which shall give to
each Swing Line Lender prompt notice thereof by telecopier, telex
or cable. Each such notice of a Swing Line Borrowing (a "Notice of
Swing Line Borrowing") shall be by telephone, telecopier, telex or
cable, confirmed immediately in writing, and in the case of a
telecopy, telex, cable or other written form of notice, shall be in
substantially the form of Exhibit B-2 hereto, specifying therein
the requested (i) date of such Swing Line Borrowing, (ii) aggregate
amount of such Swing Line Borrowing, and (iii) Swing Line Interest
Period for each Swing Line Advance to be made as part of such Swing
Line Borrowing. The Agent will consult with the Swing Lenders on
the date of its receipt of the Notice of Swing Line Borrowing
concerning the Swing Line Advances to be made pursuant to such
Notice of Swing Line Borrowing and if the Swing Lenders have
previously indicated to the Agent that they are willing to make
Swing Line Advances pursuant thereto at an interest rate which is
lower than the rate which would be applicable to such Borrowing if
it were a Revolving Borrowing, the Agent shall have telephonically
communicated such quotation to the Borrower and the Borrower shall
have indicated its acceptance of such quotation, the Agent will
give to the Borrower a confirmation of Swing Line Borrowing
("Confirmation of Swing Line Borrowing"), substantially in the form
attached hereto as Exhibit B-3, not later than 3:00 P.M.
(Cleveland, Ohio time) on the date of the proposed Swing Line
Borrowing which specifies such lower interest rate and any possible
prepayment provisions applicable thereto; otherwise, if the Swing
Lenders are not willing to offer such a lower interest rate, the
Confirmation of Swing Line Borrowing shall be given by the Agent as
aforesaid but the interest rate applicable to the Swing Line
Borrowing referred to therein shall be the Prime Rate. Each Swing
Line Lender shall, before 3:00 P.M. (Cleveland, Ohio time) on the
date of such Swing Line Borrowing, make available for the account
of its Applicable Lending Office to the Agent at its address
referred to in section 8.2, in same day funds, such Swing Line
Lender's ratable portion of such Swing Line Borrowing. After the
Agent's receipt of such funds and upon fulfillment of the
applicable conditions set forth in section 3, the Agent will make
such funds available to the Borrower at the Agent's aforesaid
address.
(d) If, on the date of any Revolving Borrowing or Swing Line
Borrowing, any principal amount of any Advances previously made by
a Lender participating in such Borrowing shall be due and payable
to such Lender hereunder, such Lender shall, up to an amount equal
to such principal amount and upon fulfillment of the applicable
conditions set forth in section 3, make its Advance on the occasion
of such Borrowing by applying the proceeds of such Advance to the
repayment of such principal amount; provided, however, that no
Swing Line Advance shall be made by applying the proceeds of such
Advance, or any portion thereof, to the payment of principal of any
other Swing Line Advance. The amount, if any, by which the Advance
to be made by such Lender on the occasion of such Borrowing shall
exceed such repaid principal amount shall be made available by such
Lender in accordance with subsection (a) or (c) of this section
2.2.
(e) The failure of any Lender to make the Advance to be made
by it as part of any Revolving Borrowing or Swing Line Borrowing
shall not relieve any other Lender of its obligation, if any,
hereunder to make its Advance on the date of such Borrowing, but no
Lender shall be responsible for the failure of any other Lender to
make the Advance to be made by such other Lender on the date of any
Revolving Borrowing or Swing Line Borrowing.
(f) Notwithstanding anything to the contrary contained
herein, there shall not at any time be outstanding hereunder more
than six Revolving Borrowings consisting of Adjusted Eurodollar
Rate Advances.
2.3. Fees. (a) The Borrower shall pay to the Agent on the
effective date of this Agreement as provided in section 8.6 a
facility fee ("Facility Fee") in an amount specified in the Agent
Fee Letter, for distribution to the Lenders for their own accounts
pro rata according to their Commitments.
(b) The Borrower agrees to pay to the Agent for the account
of each Lender a commitment fee ("Commitment Fee") on the average
daily unused portion of such Lender's Commitment from the effective
date of this Agreement as provided in section 8.6 in the case of
any Bank and from the effective date specified in the Assignment
and Acceptance pursuant to which it became a Lender in the case of
each other Lender until the Termination Date at a fluctuating rate
equal to the Commitment Fee Rate in effect from time to time,
payable quarterly in arrears on the last day of each June,
September, December and March, commencing June 30, 1996, and on the
Termination Date. As used herein, "Commitment Fee Rate" means a
rate equal to (i) 18.75 basis points per annum, if at such time the
Applicable Eurodollar Rate Margin would be 50 basis points per
annum; or (ii) 25.00 basis points per annum, if at such time the
Applicable Eurodollar Rate Margin would be greater than 50 basis
points per annum.
2.4. Reduction of the Commitments and the Swing Line
Commitments. (a) The Borrower shall have the right, upon at least
three Business Days' notice to the Agent, to terminate in whole or
permanently reduce ratably in part the unused portions of the
respective Commitments of the Lenders; provided, however, that (i)
each partial reduction shall be in the aggregate amount of
$5,000,000 or an integral multiple of $1,000,000 in excess thereof,
(ii) the aggregate of the Commitments of the Lenders shall not be
reduced to an amount which is less than the Swing Line Commitments
of the Swing Line Lenders, and (iii) any such notice of termination
shall be accompanied by a notice of termination of the Swing Line
Commitments delivered pursuant to subsection (b) below.
(b) The Borrower shall have the right, upon at least three
Business Days' notice to the Agent, to terminate in whole or
permanently reduce ratably in part the unused portions of the
respective Swing Line Commitments of the Swing Line Lenders;
provided, however, that each such partial reduction shall be in the
aggregate amount of $1,000,000 or an integral multiple of
$1,000,000 in excess thereof.
(c) On each date after the date hereof that the Borrower
receives proceeds of any underwritten public offering or private
placement with one or more institutional investors of any equity
securities of the Borrower or any debt securities of the Borrower
having a weighted average life to maturity (computed in accordance
with standard financial practice) of at least 6 years, the Borrower
will, regardless of the amount of proceeds received by the Borrower
in such offering or private placement, immediately (i) elect to
permanently reduce ratably in part the aggregate Commitments of the
Lenders to $60,000,000 or less, and (ii) elect to prepay the
outstanding Revolving Borrowings, in accordance with section
2.8(b), so that after giving effect thereto the outstanding
principal amount of the Revolving Advances do not exceed the
aggregate amount of the Commitments as so reduced.
2.5. Repayment of the Revolving Advances and the Swing Line
Advances. The Borrower shall repay the principal amount of each
Revolving Advance made by each Lender and each Swing Line Advance
made by each Swing Line Lender on the last day of the Interest
Period for such Advance.
2.6. Interest on Advances. (a) Ordinary Interest. The
Borrower shall pay interest on the unpaid principal amount of each
Advance made by each Lender from the date of such Advance until
such principal amount shall be paid in full, at the following rates
per annum:
(i) Prime Rate Revolving Advances. If such Revolving
Advance is a Prime Rate Advance, a rate per annum equal at all
times to the Prime Rate in effect from time to time, payable
quarterly on the last day of each calendar quarter and on the date
such Prime Rate Advance shall be paid in full.
(ii) Adjusted Eurodollar Rate Revolving Advances. If
such Revolving Advance is an Adjusted Eurodollar Rate Advance, a
rate per annum equal at all times during the Interest Period for
such Revolving Advance to the sum of the Adjusted Eurodollar Rate
for such Interest Period plus the Applicable Eurodollar Rate Margin
in effect from time to time, payable on the last day of such
Interest Period and, if such Interest Period has a duration of more
than three months, on each day which occurs during such Interest
Period every three months from the first day of such Interest
Period.
(iii) Swing Line Advances. If such Advance is a Swing
Line Advance, a rate per annum equal at all times to the rate
quoted by the Agent to the Borrower for such Swing Line Advance in
the Confirmation of Swing Line Borrowing related thereto, or if no
such rate is quoted, at the interest rate referred to in clause (i)
above, payable on the last day of the Interest Period for such
Swing Line Advance.
As used herein, the term "Applicable Eurodollar Rate Margin" means
100 basis points per annum; provided, that, subsequent to June 30,
1996, if no Default or Event of Default shall have occurred and be
continuing the Applicable Eurodollar Rate Margin will change to the
number of basis points indicated in the Pricing Grid table which
appears below, based on the ratio described in section 5.2(f).
Changes in the Applicable Eurodollar Rate Margin based upon changes
in such ratio shall become effective on the first day of each
applicable Interest Period which commences after the delivery to
the Agent pursuant to clause (i) or (ii) of section 5.1(h) of the
financial statements of the Borrower, accompanied by the
certificate referred to in clause (iii) of section 5.1(h),
demonstrating the computation of such ratio, based upon the ratio
in effect at the end of the applicable period covered by such
financial statements.
PRICING GRID
Debt to Capitalization Applicable
Ratio Eurodollar Rate Margin
< 40% 50.00
Greater than or equal to 40% but < 45% 62.50
Greater than or equal to 45% but < 50% 75.00
Greater than or equal to 50% but < 55% 100.00
Greater than or equal to 55% 112.50
(b) Default Interest. If any amount of principal of an
Advance is not paid when due (whether at stated maturity, by
acceleration or otherwise) or if any interest, fees or other
amounts payable hereunder are not paid when due (any such
principal, interest, fees or other amounts, the "Defaulted Amount"
and any such date, a "Due Date"), then
(x) the principal amount of each Advance shall bear
interest, from the Due Date until the Defaulted Amount is paid in
full, payable on demand, at a rate per annum equal at all times to
the greater of (1) 2% per annum above the rate per annum required
to be paid on such Advance immediately prior to the date on which
the Defaulted Amount became due and (2) 2% per annum above the
Prime Rate in effect from time to time and
(y) all interest, fees and other amounts payable
hereunder which are not paid when due shall bear interest, from the
date on which any such amount referred to in this clause (y) is due
until such amount is paid in full, payable on demand, at a rate per
annum equal at all times to 2% per annum above the Prime Rate in
effect from time to time.
2.7. Interest Rate Determination. (a) Each Reference Bank
agrees to furnish to the Agent timely information for the purpose
of determining each Adjusted Eurodollar Rate. If any one of the
Reference Banks shall not furnish such timely information to the
Agent for the purpose of determining any such interest rate, but
subject to section 2.2(b)(ii), the Agent shall determine such
interest rate on the basis of timely information furnished by the
remaining Reference Banks.
(b) The Agent shall give prompt notice to the Borrower and
the Lenders or Swing Line Lenders, as the case may be, of the
applicable interest rate determined by the Agent for purposes of
section 2.6(a)(ii) or (iii), and the applicable rate, if any,
furnished by each Reference Bank for the purpose of determining the
applicable interest rate under section 2.6(a)(ii).
2.8. Prepayments of Advances. (a) The Borrower shall have no
right to prepay any principal amount of (i) any Revolving Advances
other than as provided in subsection (b) below, or (ii) any Swing
Line Advances other than as specified in the Confirmation of Swing
Line Borrowing relating to such Swing Line Advances.
(b) The Borrower may, upon at least three Business Days'
notice to the Agent (in the case of Adjusted Eurodollar Rate
Advances), and upon one Business Day's notice to the Agent (in the
case of Prime Rate Advances), in each case stating the proposed
date and aggregate principal amount of the prepayment, and if such
notice is given the Borrower shall, prepay the outstanding
principal amounts of the Advances comprising part of the same
Revolving Borrowing, in whole or ratably in part, together with
accrued interest to the date of such prepayment on the principal
amount prepaid; provided, however, that (x) each partial prepayment
of Adjusted Eurodollar Rate Advances shall be in an aggregate
principal amount not less than $2,000,000 and shall be an integral
multiple of $1,000,000 in excess thereof, (y) each partial
prepayment of Prime Rate Advances shall be in an aggregate
principal amount not less than $250,000 and shall be an integral
multiple of $250,000 in excess thereof, and (z) in the case of any
such prepayment of an Adjusted Eurodollar Rate Advance, the
Borrower shall be obligated to reimburse the Lenders in respect
thereof pursuant to section 8.4(b).
2.9. Increased Costs. (a) If, due to either (i) the
introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the
Adjusted Eurodollar Rate Reserve Percentage) in or in the
interpretation of any law or regulation or (ii) the compliance with
any guideline or request from any central bank or other
Governmental Authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender of agreeing
to make or making, funding or maintaining Adjusted Eurodollar Rate
Advances, then the Borrower shall from time to time, upon demand by
such Lender (with a copy of such demand to the Agent), pay to the
Agent for the account of such Lender additional amounts sufficient
to compensate such Lender for such increased cost; provided that,
before making any such demand, each Lender agrees to use its best
efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the
need for, or reduce the amount of, such increased cost and would
not, in the reasonable judgment of such Lender, be otherwise
disadvantageous to such Lender. A certificate as to the amount of
such increased cost, submitted to the Borrower and the Agent by
such Lender, shall be conclusive and binding for all purposes, in
the absence of manifest error.
(b) If any Lender determines that compliance with any law or
regulation or any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of
law) affects or would affect the amount of capital required or
expected to be maintained by such Lender or any corporation
controlling such Lender and that the amount of such capital is
increased by or based upon the existence of such Lender's
commitment to lend hereunder and other commitments of this type,
then, upon demand by such Lender (with a copy of such demand to the
Agent), the Borrower shall immediately pay to the Agent for the
account of such Lender, from time to time as specified by such
Lender, additional amounts sufficient to compensate such Lender or
such corporation in the light of such circumstances, to the extent
that such Lender reasonably determines such increase in capital to
be allocable to the existence of such Lender's commitment to lend
hereunder. A certificate as to such amounts submitted to the
Borrower and the Agent by such Lender shall be conclusive and
binding for all purposes, in the absence of manifest error.
(c) Except as provided in this subsection (c), failure on the
part of any Lender to demand compensation for any increased costs
or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute
a waiver of such Lender's right to demand compensation with respect
to any other period. The protection of this section 2.9 shall be
available to each Lender regardless of any possible contention of
the invalidity or inapplicability of the law, rule, regulation,
guideline or other change or condition which shall have occurred or
been imposed so long as it shall be customary for Lenders affected
thereby to comply therewith. No Lender shall be entitled to
compensation under this section 2.9 for any costs incurred or
reductions suffered with respect to any date unless it shall have
notified the Borrower that it will demand compensation for such
costs or reductions not more than 90 days after the later of (i)
such date and (ii) the date on which it shall have become aware of
such costs or reductions. In the event the Borrower shall reimburse
any Lender pursuant to this section 2.9 for any cost and the Lender
shall subsequently receive a refund in respect thereof, the Lender
shall so notify the Borrower and promptly pay to the Borrower the
portion of such refund which it shall determine in good faith to be
allocable to the cost so reimbursed.
2.10.Payments and Computations. (a) The Borrower shall make
each payment hereunder not later than 11:00 A.M. (Cleveland, Ohio
time) on the day when due in U.S. dollars to the Agent at its
address referred to in section 8.2 in same day funds. The Agent
will promptly thereafter cause to be distributed like funds
relating to the payment of principal or interest or commitment fees
ratably (other than amounts payable pursuant to section 2.9 or
2.11) to the Lenders or Swing Line Lenders, as the case may be, for
the account of their respective Applicable Lending Offices, and
like funds relating to the payment of any other amount payable to
any Lender or Swing Line Lender, as the case may be, to such Lender
or Swing Line Lender for the account of its Applicable Lending
Office, in each case to be applied in accordance with the terms of
this Agreement. Upon its acceptance of an Assignment and
Acceptance and recording of the information contained therein in
the Register pursuant to section 2.13(b), from and after the
effective date specified in such Assignment and Acceptance, the
Agent shall make all payments hereunder in respect of the interest
assigned thereby to the Lender assignee thereunder, and the parties
to such Assignment and Acceptance shall make all appropriate
adjustments in such payments for periods prior to such effective
date directly between themselves.
(b) The Borrower hereby authorizes each Lender, if and to the
extent payment owed to such Lender is not made when due hereunder,
to charge from time to time against any or all of the Borrower's
accounts with such Lender any amount so due.
(c) All computations of interest based on the Prime Rate, the
Adjusted Eurodollar Rate, any interest rate specified in a
Confirmation of Swing Line Borrowing or the Federal Funds Rate and
of the Commitment Fee shall be made by the Agent on the basis of a
year of 360 days, in each case for the actual number of days
(including the first day but excluding the last day) occurring in
the period for which such interest or Commitment Fee is payable.
Each determination by the Agent of an interest rate hereunder shall
be conclusive and binding for all purposes, in the absence of
manifest error.
(d) Each Notice of Revolving Borrowing or Notice of Swing
Line Borrowing and each Confirmation of Swing Line Borrowing shall
be irrevocable and binding on the Borrower. In the case of any
Revolving Borrowing and any Swing Line Borrowing which the related
Notice of Revolving Borrowing or Confirmation of Swing Line
Borrowing specifies is to be comprised of Adjusted Eurodollar Rate
Advances or (in the case of Swing Line Advances) Fixed Rate
Advances, the Borrower shall indemnify each Lender against any
loss, cost or expense incurred by such Lender as a result of any
failure to fulfill on or before the date specified in the
applicable Notice of Revolving Borrowing or Notice of Swing Line
Borrowing, as the case may be, the applicable conditions set forth
in section 3, including, without limitation, any loss (including
loss of anticipated profits), cost or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired
by such Lender to fund the Advance to be made by such Lender as
part of such Revolving Borrowing or Swing Line Borrowing when such
Advance, as a result of such failure, is not made on such date.
(e) Unless the Agent shall have received notice from a Lender
prior to the date of any Borrowing that such Lender will not make
available to the Agent the amount required to be made available by
such Lender as part of such Borrowing, the Agent may assume that
such Lender has made such amount available to the Agent on the date
of such Borrowing in accordance with section 2.2(a) or 2.2(c), as
the case may be, and the Agent may, in reliance upon such
assumption, make available to the Borrower on such date a
corresponding amount. If and to the extent that such Lender shall
not have so made such amount available to the Agent, such Lender
and the Borrower severally agree to repay to the Agent forthwith on
demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the
Borrower until the date such amount is repaid to the Agent, at (i)
in the case of the Borrower, the interest rate or rates applicable
to such amount and (ii) in the case of such Lender, the Federal
Funds Rate. If such Lender shall repay to the Agent such
corresponding amount, such amount so repaid shall constitute such
Lender's Advance or Advances as part of such Borrowing for purposes
of this Agreement.
(f) Whenever any payment hereunder shall be stated to be due
on a day other than a Business Day, such payment shall be made on
the next succeeding Business Day, and such extension of time shall
in such case be included in the computation of payment of interest
or commitment fee, as the case may be, provided, that, if such
extension would cause payment of interest on or principal of
Adjusted Eurodollar Rate Advances to be made in the next following
calendar month, such payment shall be made on the next preceding
Business Day.
(g) Unless the Agent shall have received notice from the
Borrower prior to the date on which any payment is due to the
Lenders hereunder that the Borrower will not make such payment in
full, the Agent may assume that the Borrower has made such payment
in full on such date and the Agent may, in reliance upon such
assumption, cause to be distributed to each Lender on such due date
an amount equal to the amount then due such Lender. If and to the
extent that the Borrower shall not have so made such payment in
full to the Agent, each Lender shall repay to the Agent forthwith
on demand such amount distributed to such Lender together with
interest thereon, for each day from the date such amount is
distributed to such Lender until the date such Lender repays such
amount to the Agent, at the Federal Funds Rate.
2.11. Taxes. (a) Any and all payments by the Borrower
hereunder or under the Notes shall be made, in accordance with
section 2.10, free and clear of and without deduction for any and
all present or future taxes, levies, imposts, deductions, charges
or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender and the Agent, taxes imposed
on its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Lender or the Agent (as
the case may be) is organized or any political subdivision thereof
and, in the case of each Lender, taxes imposed on its net income,
and franchise taxes imposed on it, by the jurisdiction of such
Lender's Applicable Lending Office or any political subdivision
thereof (all such non-excluded taxes, levies, imposts, deductions,
charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). If the Borrower shall be required by law to deduct any
Taxes from or in respect of any sum payable hereunder or under any
Note to any Lender or the Agent, (i) the sum payable shall be
increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums
payable under this section 2.11) such Lender or the Agent (as the
case may be) receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall pay the full
amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property
taxes, charges or similar levies which arise from any payment made
hereunder or under the Notes or from the execution, delivery or
registration of, or otherwise with respect to, this Agreement or
the Notes (hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the Agent for
the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this section 2.11) paid by such Lender or the
Agent (as the case may be) and any liability (including penalties,
interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted. This indemnification shall be made within 30 days from
the date such Lender or the Agent (as the case may be) makes
written demand therefor.
(d) Within 30 days after the date of any payment of Taxes,
the Borrower will furnish to the Agent, at its address referred to
in section 8.2, the original or a certified copy of a receipt
evidencing payment thereof.
(e) Each Lender organized under the laws of a jurisdiction
outside the United States, on or prior to the date of its execution
and delivery of this Agreement in the case of each initial Lender
and on the date of the Assignment and Acceptance pursuant to which
it becomes a Lender in the case of each other Lender, and from time
to time thereafter if requested in writing by the Borrower (but
only so long as such Lender remains lawfully able to do so), shall
provide the Borrower with Internal Revenue Service form 1001 or
4224, as appropriate, or any successor form prescribed by the
Internal Revenue Service, certifying that such Lender is entitled
to benefits under an income tax treaty to which the United States
is a party which reduces the rate of withholding tax on payments of
interest or certifying that the income receivable pursuant to this
Agreement is effectively connected with the conduct of a trade or
business in the United States. If the form provided by a Lender at
the time such Lender first becomes a party to this Agreement
indicates a United States interest withholding tax rate in excess
of zero, withholding tax at such rate shall be considered excluded
from "Taxes" as defined in section 2.11(a).
(f) For any period with respect to which a Lender has failed
to provide the Borrower with the appropriate form described in
section 2.11(e) (other than if such failure is due to a change in
law occurring subsequent to the date on which a form originally was
required to be provided, or if such form otherwise is not required
under the first sentence of subsection (e) above), such Lender
shall not be entitled to indemnification under section 2.11(a) with
respect to Taxes imposed by the United States to the extent such
Taxes would not be due if such form had been provided; provided,
however, that should a Lender become subject to Taxes because of
its failure to deliver a form required hereunder, the Borrower
shall take such steps as the Lender shall reasonably request to
assist the Lender to recover such Taxes.
(g) Notwithstanding any contrary provisions of this
Agreement, in the event that a Lender that originally provided such
form as may be required under section 2.11(e) thereafter ceases to
qualify for complete exemption from United States withholding tax,
such Lender may assign its interest under this Agreement to any
assignee and such assignee shall be entitled to the same benefits
under this section 2.11 as the assignor provided that the rate of
United States withholding tax applicable to such assignee shall not
exceed the rate then applicable to the assignor.
(h) Without prejudice to the survival of any other agreement
of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this section 2.11 shall survive the payment
in full of principal and interest hereunder and under the Notes.
(i) Any Lender claiming any additional amounts payable
pursuant to this section 2.11 shall use its best efforts
(consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending
Office if the making of such a change would avoid the need for, or
reduce the amount of, any such additional amounts which may
thereafter accrue and would not, in the reasonable judgment of such
Lender, be otherwise disadvantageous to such Lender. A certificate
of any Lender claiming compensation under this section 2.11 shall
be conclusive and binding for all purposes, in the absence of
manifest error.
2.12. Sharing of Payments, etc. If any Lender shall obtain
any payment (whether voluntary, involuntary, through the exercise
of any right of set-off, or otherwise) on account of the Revolving
Advances or Swing Line Advances made by it (other than pursuant to
section 2.9 or 2.11) in excess of its ratable share of payments on
account of the Revolving Advances or Swing Line Advances obtained
by all the Lenders or Swing Line Lenders, as the case may be, such
Lender shall forthwith purchase from the other Lenders or Swing
Line Lenders, as the case may be, such participations in the
Revolving Advances or Swing Line Advances made by them as shall be
necessary to cause such purchasing Lender to share the excess
payment ratably with each of them, provided, however, that if all
or any portion of such excess payment is thereafter recovered from
such purchasing Lender, such purchase from each Lender shall be
rescinded and such Lender shall repay to the purchasing Lender the
purchase price to the extent of such recovery together with an
amount equal to such Lender's ratable share (according to the
proportion of (i) the amount of such Lender's required repayment to
(ii) the total amount so recovered from the purchasing Lender) of
any interest or other amount paid or payable by the purchasing
Lender in respect of the total amount so recovered. The Borrower
agrees that any Lender so purchasing a participation from another
Lender pursuant to this section may, to the fullest extent
permitted by law, exercise all its rights of payment (including the
right of set-off) with respect to such participation as fully as if
such Lender were the direct creditor of the Borrower in the amount
of such participation.
2.13. Evidence of Debt. (a) Each Lender shall maintain in
accordance with its usual practice an account or accounts
evidencing the indebtedness of the Borrower to such Lender
resulting from each Advance owing to such Lender from time to time,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder.
(b) The Register maintained by the Agent pursuant to section
8.7(d) shall include a control account, and a subsidiary account
for each Lender, in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder,
the Type of Advances comprising such Borrowing and the Interest
Period applicable thereto, (ii) the terms of each Assignment and
Acceptance delivered to and accepted by it, (iii) the amount of any
principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder, and (iv) the amount of
any sum received by the Agent from the Borrower hereunder and each
Lender's share thereof.
(c) The entries made in the Register shall be conclusive and
binding for all purposes, absent manifest error.
SECTION 3. CONDITIONS OF LENDING.
3.1. Conditions Precedent to Initial Advances. The obligation
of each Lender to make its initial Advance is subject to the
conditions precedent that (a) the Closing Date shall have occurred
on or prior to April 15, 1996; (b) all fees and expenses payable to
the Agent, for its own account or for the account of the Lenders,
pursuant to the Agent Fee Letter or to the Agent and the Lenders
pursuant to this Agreement on or prior to the Closing Date shall
have been paid in full; (c) the Borrower shall have repaid or
prepaid or cause to be repaid or prepaid all Debt for borrowed
money and the interest thereon and all fees, expenses and other
amounts payable by the Borrower to Society under any existing
agreement or arrangement (other than this Agreement), and any
unused commitments of Society thereunder, determined after giving
effect to the repayment of all such Debt, shall have been
terminated and permanently reduced to zero; (d) prior to or
contemporaneously with the making of such Advance, the transactions
contemplated by the Stock Purchase Agreement shall have been
consummated in accordance with the terms thereof without any waiver
by any party thereto of any material term, provision or condition
thereof, and the Agent shall have received such evidence as it may
require (including copies of closing documents) to determine that
this condition has been satisfied; (e) prior to or
contemporaneously with the making of such Advance, and immediately
upon consummation of the transactions contemplated by the Stock
Purchase Agreement, the Borrower shall have contributed to the
capital of Anderson Industries, Inc. (which in turn shall have
contributed a like amount in cash to the capital of Atwood
Industries, Inc., its Subsidiary) cash funds at least sufficient
(taking into account the cash on hand of Atwood Industries, Inc.)
to effect the payments contemplated by the following clause; (f)
Atwood Industries, Inc. shall have paid all Debt for borrowed money
and the interest thereon and all fees, expenses and other amounts
payable by it and any of its Affiliates under the credit
arrangements reflected in the Credit Agreement, as amended and
restated as of July 20, 1994, as amended, between Atwood
Industries, Inc., the lenders referred to therein and Harris Trust
and Savings Bank, as agent for such lenders, and any other
agreements or instruments referred to therein evidencing or related
to such credit arrangements, and any unused commitments of such
lenders thereunder, determined after giving effect to the repayment
of all such Debt, shall have been terminated and permanently
reduced to zero, and the Agent shall have received such evidence as
it may require to determine that this condition has been satisfied
and that any Liens securing such Debt have been terminated and have
(or will promptly be) released or satisfied of record; and (g) the
Agent shall have received on or before the day of such initial
Advance the following, each dated on or as of the Closing Date, in
form and substance satisfactory to the Agent and (except for the
Notes) in sufficient copies for each Lender:
(i) A Revolving Note payable to the order of each Lender
in the principal amount of such Lender's Commitment and a Swing
Line Note payable to the order of each Swing Line Lender in the
principal amount of such Lender's Swing Line Commitment.
(ii) Certified copies of the resolutions of the Board of
Directors of the Borrower approving this Agreement and the Notes,
and of all documents evidencing other necessary corporate action
and governmental approvals, if any, with respect to this Agreement
and the Notes.
(iii) A certificate of the Secretary or an Assistant
Secretary of the Borrower certifying the names and true signatures
of the officers of the Borrower authorized to sign this Agreement
and the Notes and the other documents to be delivered hereunder.
(iv) A favorable opinion of Sommer & Barnard, counsel for
the Borrower, substantially in the form of Exhibit D hereto and as
to such other matters as any Lender through the Agent may
reasonably request.
3.2. Conditions Precedent to Each Borrowing. The obligation
of each Lender to make an Advance on the occasion of each Borrowing
(including the initial Borrowing) shall be subject to the further
conditions precedent that the Agent shall have received the Notice
of Borrowing with respect thereto and that on the date of such
Borrowing (a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing and the acceptance
by the Borrower of the proceeds of such Borrowing shall constitute
a representation and warranty by the Borrower that on the date of
such Borrowing such statements are true):
(i) the representations and warranties contained in
section 4.1 (excluding (except with respect to any Advance which
would increase the outstanding Advances hereunder) those contained
in subsections (f) and (h) thereof) are correct on and as of the
date of such Borrowing, before and after giving effect to such
Revolving Borrowing and to the application of the proceeds
therefrom, as though made on and as of such date, and
(ii) no Default has occurred and is continuing, or would
result from such Revolving Borrowing or from the application of the
proceeds therefrom;
and (b) the Agent shall have received such other approvals,
opinions or documents as any Lender through the Agent may
reasonably request; provided, however, that the obligation of each
Lender to make a Revolving Advance on the occasion of a Revolving
Borrowing in an aggregate amount equal to or less than the
aggregate amount of the Swing Line Advances maturing on the date of
such Revolving Borrowing shall, unless and only to the extent that
such Swing Line Advances were made at a time when the Swing Line
Lenders had actual knowledge that an Event of Default had occurred
and was continuing which had not been waived in accordance with the
provisions of this Agreement, not be subject to any of the
conditions precedent referred to above.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
4.1. Representations and Warranties of the Borrower. The
Borrower represents and warrants as follows:
(a) Corporate Existence. The Borrower is a corporation
duly organized and validly existing under the laws of the State of
Indiana.
(b) Corporate Authorization. The execution, delivery
and performance by the Borrower of this Agreement, the Notes and
the other Loan Documents are within the Borrower's corporate
powers, have been duly authorized by all necessary corporate
action, and do not contravene, or constitute a default under, (i)
the Borrower's charter or by-laws, or (ii) any other Requirement of
Law or (iii) any agreement, contractual restriction or other
instrument binding on or affecting the Borrower; or result in the
creation or imposition of any Lien on any Property of the Borrower
or any of its Subsidiaries.
(c) Governmental Authorization. No authorization or
approval or other action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery
and performance by the Borrower of this Agreement, the Notes or any
other Loan Document.
(d) Binding Effect. This Agreement is, and the Notes
and the other Loan Documents when delivered hereunder will be,
legal, valid and binding obligations of the Borrower enforceable
against the Borrower in accordance with their respective terms.
(e) Financial Information. The Borrower has furnished
to the Lenders and the Agent complete and correct copies of the
consolidated balance sheets of the Borrower and its
consolidated subsidiaries as at December 31, 1994 and December 31,
1995 and the related consolidated statements of operations,
shareholders' equity and cash flows of the Borrower and its
consolidated subsidiaries for the years then ended, all certified
without qualification by Price Waterhouse LLP, as contained in the
Form 10-K Annual Report of the Borrower for its fiscal year ended
December 31, 1995, filed with the Securities and Exchange
Commission, as amended through the date hereof (such Report, as so
amended, the "Form 10-K"). The Borrower has also delivered to the
Lenders and the Agent complete and correct copies of the Form 10-K,
including all Exhibits and schedules attached thereto and filed
therewith. All such financial statements contained in the Form 10-
K have been prepared in accordance with GAAP, consistently applied
(except as stated therein), and fairly present the financial
position of the Borrower and its consolidated subsidiaries as at
the respective dates indicated and the consolidated results of
their operations and cash flows for the respective periods
indicated.
(f) No Changes, etc. Since December 31, 1995, there has
occurred no event which has had or might have a Material Adverse
Effect.
(g) Financial Projections. The Borrower has delivered
to the Agent prior to the execution and delivery of this Agreement
a complete and correct copy of certain financial projections
prepared by management of the Borrower (the "Financial
Projections"). The Financial Projections were prepared by
management of the Borrower in good faith after taking into account
the existing and historical levels of the Borrower's and its
Subsidiaries' business activity, known trends, including general
economic trends, and all other information, assumptions and
estimates pertinent thereto. The Financial Projections were
considered by management of the Borrower, as of the date of
preparation thereof, to be realistically achievable and to include
in written form all material assumptions and premises underlying
the financial information set forth in the Financial Projections;
provided, that no representation or warranty is made as to the
impact of future general economic conditions or as to whether the
Borrower's projected results as set forth in the Financial
Projections will actually be realized. No facts are known to the
Borrower at the date hereof which, if reflected in the Financial
Projections, would result in a Material Adverse Effect as compared
to the assets, liabilities, results of operations or cash flows
reflected therein.
(h) Litigation. There is no pending or threatened
action or proceeding affecting the Borrower or any of its
Subsidiaries before any Governmental Authority or arbitrator, which
(taking into account the provisions for reserves and other matters
disclosed in footnote 7 to the financial statements referred to in
section 4.1(e) hereof) has had or is reasonably likely to have a
Material Adverse Effect.
(i) Compliance with Margin Regulations. The Borrower is
not engaged in the business of extending credit for the purpose of
purchasing or carrying Margin Stock, and no proceeds of any Advance
have been used in violation of any Requirement of Law (including,
without limitation, Regulation G, Regulation T, Regulation U and
Regulation X). At no time would more than 25% of the value of the
assets of the Borrower or the Borrower and its Consolidated
Subsidiaries that are subject to any "arrangement" (as such term is
used in section 221.2(g) of Regulation U) hereunder be represented
by Margin Stock.
(j) Investment Company, etc. Neither the Borrower nor
any of its Subsidiaries is subject to regulation with respect to
the creation or incurrence of unsecured Debt under the Investment
Company Act of 1940, as amended, the Interstate Commerce Act as
amended, the Federal Power Act, as amended, or any applicable state
public utility law.
(k) ERISA Matters. (i) Each member of the ERISA Group
has fulfilled its obligations under the minimum funding standards
of ERISA and the Internal Revenue Code with respect to each Plan
and is in compliance in all material respects with the presently
applicable provisions of ERISA and the Internal Revenue Code.
(ii) No ERISA Event has occurred or is reasonably
expected to occur with respect to any Plan which would constitute
an Event of Default under section 6.1(h) hereof.
(iii) Schedule B (Actuarial Information) to the annual
report (Form 5500 Series) with respect to each Plan whose
liabilities are in excess of its assets by an amount greater than
$100,000, copies of which have been filed with the Internal Revenue
Service prior to the date hereof and furnished to the Agent and the
Lenders listed on the signature pages hereof, is complete and
accurate and fairly presents the funding status and financial
condition of such Plan, and since the date of such Schedule B there
has been no material adverse change in such funding status or
financial condition which constitutes a Material Adverse Effect.
(iv) As of the date of this Agreement, neither the
Borrower nor any ERISA Affiliate has incurred, or is
reasonably expected to incur, any Withdrawal Liability which has
not been paid in full to any Multiemployer Plan (other than
Withdrawal Liabilities, if any, which in the aggregate are
immaterial or nominal).
(v) As of the date of this Agreement, neither the
Borrower nor any ERISA Affiliate has received any notification that
any Multiemployer Plan is in reorganization or has been terminated,
within the meaning of Title IV of ERISA, and no Multiemployer Plan
is reasonably expected to be in reorganization or to be terminated
within the meaning of Title IV of ERISA, which reorganization or
termination would result in any liability of the Borrower or any
ERISA Affiliate (other than liabilities, if any, which in the
aggregate are immaterial or nominal).
(l) Environmental Matters. Neither the Borrower nor any
of its Subsidiaries has received notice or otherwise obtained
knowledge of any Claim, demand, action, event, condition, report or
investigation indicating or concerning any potential or actual
liability which (taking into account the provisions for reserves
and other matters disclosed in footnote 7 to the financial
statements referred to in section 4.1(e) hereof) individually or in
the aggregate has had or is reasonably likely to have a Material
Adverse Effect arising in connection with (i) any non-compliance
with or violation of any Environmental, Health or Safety
Requirements of Law or (ii) the Release or threatened Release of
any Contaminant into the environment. None of the Borrower or its
Subsidiaries or any of their respective operations or present or
past Property are subject to any investigation by, or any judicial
or administrative proceeding, order, judgment, decree or settlement
alleging or addressing (i) a violation of any Environmental, Health
or Safety Requirement of Law; (ii) any Remedial Action; or (iii)
any Claims or Liabilities and Costs arising from the Release or
threatened Release of a Contaminant into the environment, which (in
any such case referred to in the preceding clauses (i), (ii) or
(iii)), and taking into account the provisions for reserves and
other matters disclosed in footnote 7 to the financial statements
referred to in section 4.1(e) hereof, has had or is reasonably
likely to have a Material Adverse Effect, nor has the Borrower or
any of its Subsidiaries received any notice of any of the foregoing
which the Borrower in good faith believes is reasonably likely
(taking into account the provisions for reserves and other matters
disclosed in footnote 7 to the financial statements referred to in
section 4.1(e) hereof) to have a Material Adverse Effect. No
Environmental Lien has attached to any Property of the Borrower or
any of its Subsidiaries which has had or is reasonably likely to
have a Material Adverse Effect.
(m) Acquisition Documents, etc. The Stock Purchase
Agreement is a valid and binding agreement of the respective
parties thereto, is enforceable in accordance with its terms,
except as such enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting the rights of creditors generally, and by principles
of equity, does not violate or result in any violation of any
license, permit or other authorization, judgment, decree, order,
law, statute, ordinance or governmental rule or regulation, and
does not require the consent or authorization, as a condition to
its valid execution, delivery or performance, pursuant to any
contract, agreement, lease or other instrument, or any law,
statute, rule, regulation or ordinance, of any governmental or
regulatory authority, other than such consents and authorizations
as have been duly obtained and are in full force and effect. The
Borrower has delivered to the Agent and each Lender prior to the
execution of this Agreement a true, correct and complete copy of
the Stock Purchase Agreement and all Exhibits, Schedules and other
documents including, without limitation, all side letters, which
embody any material arrangements related to the transactions
contemplated thereby.
SECTION 5.COVENANTS OF THE BORROWER.
5.1. Affirmative Covenants. So long as any Note shall remain
unpaid or any Lender shall have any Commitment or Swing Line
Commitment hereunder, the Borrower agrees that, unless the Majority
Lenders shall otherwise consent in writing:
(a) Compliance with Laws, etc. The Borrower will
comply, and cause each of its Subsidiaries to comply, in all
material respects with all applicable Requirements of Law.
(b) Preservation of Corporate Existence. The Borrower
will preserve and maintain, and cause each of its Subsidiaries to
preserve and maintain, its corporate existence, corporate rights
(charter and statutory), and corporate franchises; provided,
however, that neither the Borrower nor any of its Subsidiaries
shall be required to preserve any right or franchise if the Board
of Directors of the Borrower or such Subsidiary shall determine
that the preservation thereof is no longer necessary or desirable
in the conduct of the business of the Borrower or such Subsidiary,
as the case may be, and that the loss thereof is not
disadvantageous in any material respect to the Borrower, such
Subsidiary or the Lenders. Nothing in this section 5.1(b) shall be
deemed to prohibit any merger or consolidation involving the
Borrower or any of its Subsidiaries which is permitted by sections
5.2(d), 5.2(h) and 5.2(k).
(c) Accuracy of Information Given to Lenders. The
Borrower will use its best efforts to ensure that (i) all written
information, exhibits or reports furnished by the Borrower or any
of its Subsidiaries to the Agent or any Lender in connection
herewith (other than financial projections) will at the time so
furnished contain no untrue statement of a material fact and will
not at such time omit to state any material fact or any fact
necessary to make the statements contained therein not misleading,
and (ii) all financial projections, if any, prepared by the
Borrower and furnished by the Borrower to the Agent or any Lender
in connection herewith will be prepared in good faith based upon
reasonable assumptions (it being understood that any such
projections will be subject to significant uncertainties and
contingencies, and that no assurance can be given that any such
projections will be realized).
(d) Insurance. The Borrower will maintain, and cause each
of its Subsidiaries to maintain, insurance with responsible and
reputable insurance companies or associations in such amounts and
covering such risks as is usually carried by companies engaged in
similar businesses and owning similar properties in the same
general areas in which the Borrower or such Subsidiary operates.
(e) Books and Records. The Borrower will keep proper
books of record and account in which entries in conformity with
generally accepted accounting principles (and all legal
requirements) shall be made of all dealings and transactions in
relation to their businesses and activities.
(f) Use of Proceeds. The proceeds of the Advances made
under this Agreement will be used by the Borrower for any lawful
purposes not prohibited by the terms of this Agreement, including,
without limitation, acquisitions of companies and fees and expenses
related to such acquisitions. None of such proceeds will be used in
violation of any applicable Requirement of Law, including, without
limitation, Regulation G, Regulation T, Regulation U and Regulation
X.
(g) Payment of Taxes, etc. The Borrower will pay and
discharge, and will cause each Subsidiary of the Borrower to pay
and discharge, before the same shall become delinquent, (i) all
taxes, assessments and governmental charges or levies imposed upon
it or upon it or upon its Property, and (ii) all lawful claims
which, if unpaid, (x) might by law become a Lien upon its Property
or (y) would otherwise be reasonably likely to have a Material
Adverse Effect; provided, however, that neither the Borrower nor
any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge, levy or claim which is being
contested in good faith by proper proceedings and as to which
appropriate reserves are being maintained in accordance with GAAP.
(h) Reporting Requirements. The Borrower will furnish
to the Lenders:
(i) as soon as practicable and in any event within
45 days after the end of each of the first three quarterly fiscal
periods in each fiscal year of the Borrower, unaudited consolidated
and consolidating balance sheets of the Borrower and its
consolidated subsidiaries as at the end of such fiscal quarter and
the related unaudited consolidated and consolidating statements of
income and of cash flows for such period, and (in the case of the
second and third such quarterly periods) for the portion of the
fiscal year ended with the last day of such quarterly period,
setting forth in each case in comparative form the figures for the
corresponding periods of the previous fiscal year, all in
reasonable detail and certified, subject to normal year-end audit
adjustments, by a responsible financial officer of the Borrower;
provided that such requirement for the furnishing of such quarterly
consolidated financial statements may be fulfilled by the
furnishing the report of the Borrower on Form 10-Q, as filed with
the Securities and Exchange Commission, for the applicable
quarterly period, accompanied by a certificate of a responsible
financial officer of the Borrower to the effect specified above;
(ii) as soon as practicable and in any event within
90 days after the end of each of its fiscal years, consolidated and
consolidating balance sheets of the Borrower and its consolidated
subsidiaries as at the end of such fiscal year, together with
related consolidated and consolidating statements of income, of
cash flows and of stockholders' equity for such fiscal year,
setting forth in each case in comparative form the figures for the
previous fiscal year, all in reasonable detail and accompanied by
the opinion with respect to such consolidated financial statements
of independent public accountants of recognized national standing
selected by the Borrower, which opinion shall be unqualified and
shall (A) state that such accountants audited such consolidated
financial statements in accordance with generally accepted auditing
standards, that such accountants believe that such audit provides
a reasonable basis for their opinion, and that in their opinion
such consolidated financial statements present fairly, in all
material respects, the consolidated financial position of the
Borrower and its consolidated subsidiaries as at the end of such
fiscal year and the consolidated results of their operations and
cash flows for such fiscal year in conformity with generally
accepted accounting principles, or (B) contain such statements as
are customarily included in unqualified reports of independent
accountants in conformity with the recommendations and requirements
of the American Institute of Certified Public Accountants (or any
successor organization); provided that such requirement for the
furnishing of such annual consolidated financial statements may be
fulfilled by the furnishing the report of the Borrower on Form 10-
K, as filed with the Securities and Exchange Commission, for the
applicable fiscal year;
(iii) together with delivery of the financial
statements referred to in clauses (i) and (ii), a certificate of a
responsible financial or accounting officer of the Borrower as to
the existence of any Event of Default and as to a schedule in form
reasonably satisfactory to the Agent showing compliance with the
requirements and covenants contained in sections 5.2(a)(i), (vi),
(viii), (x) and (xi); 5.2(b); 5.2(e);, 5.2(f); 5.2(g); 5.2(h); and
5.2(k);
(iv) as soon as possible and in any event within two
days after the occurrence of each Default continuing on the date of
such statement, a statement of the chief financial or accounting
officer of the Borrower setting forth details of such Default and
the action which the Borrower has taken and proposes to take with
respect thereto;
(v) as soon as practicable and in any event within
45 days after the commencement of each fiscal year of the Borrower,
a consolidated operating and capital budget (in form reasonably
satisfactory to the Agent) prepared by the Borrower on a monthly or
quarterly basis for such fiscal year (and if normally prepared by
the Borrower, any subsequent fiscal years), accompanied by the
statement of a responsible financial or accounting officer of the
Borrower to the effect that, to the best of his knowledge, such
budget is a good faith forecast of the consolidated balance sheet,
income statement, operating cash flows and capital expenditures of
the Borrower and its consolidated subsidiaries for the period
covered thereby;
(vi) as soon as possible and in any event (i) within
thirty days after the Borrower or any ERISA Affiliate knows or has
reason to know that any ERISA Event described in clause (a) of the
definition of ERISA Event with respect to any Plan has occurred
which reasonably could result in liability to the PBGC (other than
liabilities, if any, which are immaterial or nominal in the
aggregate) and (ii) within 10 days after the Borrower or any ERISA
Affiliate knows or has reason to know that any other ERISA Event
with respect to any Plan has occurred which reasonably could result
in liability to the PBGC (other than liabilities, if any, which are
immaterial or nominal in the aggregate), a statement of a
responsible chief financial or accounting officer of the Borrower
describing such ERISA Event and the action, if any, that the
Borrower or such ERISA Affiliate has taken or proposes to take with
respect thereto;
(vii) promptly after the receipt thereof by the
Borrower or any ERISA Affiliate, (A) copies of all reports and
notices which could result in an adverse financial effect on the
Borrower or any of its Subsidiaries which the Borrower or any ERISA
Affiliate receives from the PBGC, the Internal Revenue Service or
the U.S. Department of Labor with respect to any Plan,
Multiemployer Plan or Multiple Employer Plan, (B) copies of each
notice from the PBGC received by the Borrower or any ERISA
Affiliate of the PBGC's intention to terminate any Plan or to have
a trustee appointed to administer any Plan and (C) a copy of each
notice from the sponsor of a Multiemployer Plan received by the
Borrower or any ERISA Affiliate concerning (I) the imposition of
Withdrawal Liability by a Multiemployer Plan, (II) the
determination that a Multiemployer Plan is, or is expected to be,
in reorganization within the meaning of Title IV of ERISA, (III)
the termination of a Multiemployer Plan within the meaning of Title
IV of ERISA or (IV) the amount of liability incurred, or expected
to be incurred, by the Borrower or any ERISA Affiliate in
connection with any event described in clause (I), (II) or (III)
above;
(viii) promptly after the commencement thereof,
notice of all actions, suits and proceedings before any domestic or
foreign court or Governmental Authority affecting the Borrower or
any of its Subsidiaries, of the type described in section 4.1(h);
(ix) promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports
that the Borrower or any of its Subsidiaries sends to its
stockholders generally, and copies of all regular, periodic and
special reports, and all registration statements (other than any
registration statement on Form S-8 or any successor form thereto),
that the Borrower or any of its Subsidiaries files with the
Securities and Exchange Commission or any Governmental Authority
that may be substituted therefor, or with any national securities
exchange; and
(x) such other information respecting the condition
or operations, financial or otherwise, of the Borrower or any of
its Subsidiaries as any Lender through the Agent may from time to
time reasonably request.
(i) Inspection. The Borrower will permit the Agent and
each Lender or any other holder of any Note, upon its reasonable
request and at its expense, at any reasonable time and from time to
time upon reasonable notice, to visit and inspect its properties
and the properties of its Subsidiaries and to examine and make
copies of, and abstracts from its records and books of account and
the records and books of account of its Subsidiaries and to discuss
its affairs, finances and accounts with its Chairman of the Board,
Chief Executive Officer, President, Chief Financial Officer or
Treasurer, and any other officer or employee identified by the
Agent or any such Lender or holder by position or function, and
with its independent accountants (the Borrower by this sentence
authorizes such officers, employees and accountants to discuss the
same, at the expense of and upon prior notice to the Borrower,
providing the Borrower with an opportunity to be present at any
such discussion), all at such reasonable times and as often as may
be reasonably requested.
(j) Certain Subsidiaries to Merge into Borrower or
Guarantee Advances. In the event any Subsidiary of the Borrower
has at any time assets with a net book value, or fair market value,
whichever is greater, in excess of $5,000,000, the Borrower will
(i) promptly and in any event within 30 days following the
occurrence of such event, notify the Agent in writing of such
event, identifying the Subsidiary in question and referring
specifically to the rights of the Agent and the Lenders under this
subsection; and (ii) within 30 days following request therefor from
the Agent or any Lender, either (A) cause such Subsidiary to be
merged into the Borrower in compliance with section 5.2(d), and
provide the Agent with evidence that such merger has been effected;
or (B) cause such Subsidiary to deliver to the Agent, in sufficient
quantities for the Lenders, (1) a guaranty (a "Subsidiary
Guaranty"), satisfactory in form and substance to the Agent and the
Majority Lenders, duly executed by such Subsidiary, substantially
in the form attached hereto as Exhibit E, pursuant to which such
Subsidiary unconditionally and absolutely guarantees payment of all
Advances made hereunder, and (2) resolutions of the Board of
Directors of such Subsidiary, certified by the Secretary or an
Assistant Secretary of such Subsidiary as duly adopted and in full
force and effect, authorizing the execution and delivery of such
Subsidiary Guaranty.
(k) Most Favorable Covenant Status. Should the
Borrower, while this Agreement is in effect or any Note remains
unpaid, issue any Debt for money borrowed or represented by bonds,
notes, debentures or similar securities, in an aggregate amount
exceeding $5,000,000, to any lender or group of lenders acting in
concert with one another, or an institutional investor or
investors, pursuant to a loan agreement, credit agreement, note
purchase agreement, indenture or other similar instrument, which
instrument includes affirmative or negative financial or business
covenants or similar restrictions, warranties, representations, or
defaults or events of default (or any other type of restriction
which would have the practical effect of any of the foregoing,
including, without limitation, any "put" or mandatory prepayment of
such Debt) other than those set forth herein or in any of other
Loan Documents, the Borrower shall promptly so notify the Agent and
the Lenders and, if the Agent shall so request by written notice to
the Borrower (after a determination has been made by the Majority
Lenders that any of such documents or instruments contain any
provisions, which either individually or in the aggregate, are more
favorable to any such lender, group of lenders or institutional
investor or investors than any of the provisions set forth herein),
the Borrower, the Agent and the Lenders shall promptly amend this
Agreement to incorporate some or all of such provisions, in the
discretion of the Agent and the Majority Lenders, into this
Agreement and, to the extent necessary and reasonably desirable to
the Agent and the Majority Lenders, into any of the other Loan
Documents, all at the election of the Agent and the Majority
Lenders.
(l) Senior Debt. The Borrower will at all times ensure
that (i) the claims of holders of the Notes under the Notes and
this Agreement will not be subordinate to, and will in all respects
at least rank pari passu with, the claims of every other senior
unsecured creditor of the Borrower, and (ii) any Debt subordinated
in any manner to the claims of any other senior unsecured creditor
of the Borrower will be subordinated in like manner to the claims
of holders of the Notes.
5.2. Negative Covenants. So long as any Note or any amount
due hereunder shall remain unpaid or any Lender shall have any
Commitment or Swing Line Commitment hereunder, the Borrower will
not, without the written consent of the Majority Lenders:
(a) Liens, etc. Create or suffer to exist, or permit
any of its Subsidiaries to create or suffer to exist, any Lien upon
or with respect to any of its Property, whether now owned or
hereafter acquired, or assign, or permit any of its Subsidiaries to
assign, any right to receive income in each case to secure or
provide for the payment of any Debt of any Person; excluding,
however, from the operation of the foregoing restrictions:
(i) Existing Liens (including the replacement,
extension or renewal of any such Existing Lien upon the same
Property theretofore subject thereto and the replacement, extension
or renewal (without increase of principal amount) of the Debt
secured thereby);
(ii) Liens for taxes, assessments or governmental
charges or levies, not yet due and payable, or being contested in
good faith and against which reserves have been established by the
Borrower to the extent required under GAAP;
(iii)Liens imposed by law, such as materialmen's,
mechanics', carriers', workmen's, and repairmen's Liens and other
similar Liens arising in the ordinary course of business securing
obligations (other than Debt) which are not overdue for a period of
more than 30 days;
(iv) pledges or deposits to secure obligations under
workmen's compensation laws or similar legislation or to secure
statutory obligations of the Borrower or any of its Subsidiaries,
provided such Liens do not result in a Material Adverse Effect;
(v) Liens of landlords arising by operation of law
or pursuant to leases entered into in the ordinary course of
business securing rental obligations which are not overdue for a
period of more than 30 days;
(vi) Liens on property (including, without
limitation, shares of capital stock) of a corporation existing at
the time such corporation is merged with or into or consolidated
with the Borrower or any of its Subsidiaries or at the time such
corporation becomes a Subsidiary or at the time of a sale, lease or
other disposition of the properties of such corporation as an
entirety or substantially as an entirety to the Borrower or any of
its Subsidiaries, provided, that (A) such Liens are not incurred in
anticipation of such merger, consolidation or such corporation
becoming a Subsidiary, or sale, lease or other disposition with or
into the Borrower or any of its Subsidiaries, (B) such Liens do not
extend to any other Property of the Borrower or any of its
Subsidiaries and (C) the aggregate principal amount of the Debt
secured by Liens permitted by this clause (vi) and clauses (x) and
(xi) below does not exceed at any time an amount equal to 15% of
Consolidated Net Worth;
(vii) Liens created in the ordinary course of
business in favor of the United States of America or any State
thereof, or any department, agency or political subdivision of the
United States of America or any State thereof, to secure partial,
progress, advance or other payments pursuant to any contract (other
than for borrowed money) or statute;
(viii) Liens created in the ordinary course of
business by or resulting from any litigation or proceedings which
are being contested in good faith, Liens arising in the ordinary
course of business out of judgments or awards against the Borrower
or any of its Subsidiaries with respect to which the Borrower or
such Subsidiary is in good faith prosecuting an appeal or
proceedings for review, or Liens incurred in the ordinary course of
business by the Borrower or any of its Subsidiaries for the purpose
of obtaining a stay or discharge in the course of any legal
proceeding to which the Borrower or such Subsidiary is a party;
provided, that the aggregate amount secured by all such Liens
referred to in this clause (viii) shall not exceed $5,000,000 at
any time;
(ix) easements, rights of way and other encumbrances
on title to real property that do not render title to the Property
encumbered thereby unmarketable or materially adversely affect the
use of such Property for its intended purposes;
(x) purchase money Liens upon or in Property
acquired or held by the Borrower or any of its Subsidiaries in the
ordinary course of business to secure the purchase price of such
Property or to secure Debt incurred solely for the purpose of
financing the acquisition, construction or improvement of any such
Property to be subject to such Liens, or Liens existing on any such
Property at the time of acquisition, or extensions, renewals or
replacements of any of the foregoing for the same or a lesser
amount, provided that no such Lien shall extend to or cover any
Property other than the Property being acquired, constructed or
improved, and no such extension, renewal or replacement shall
extend to or cover any Property not theretofore subject to the Lien
being extended, renewed or replaced, and provided, further, that
the aggregate principal amount of the Debt at any one time
outstanding secured by Liens permitted by this clause (x), clause
(vi) above and clause (xi) below does not exceed at any time an
amount equal to 15% of Consolidated Net Worth; and
(xi) Liens not otherwise permitted hereunder
securing Debt of the Borrower or any Subsidiary, provided, that the
aggregate principal amount of the Debt at any one time outstanding
secured by Liens permitted by this clause (xi) and clauses (vi) and
(x) above does not exceed at any time an amount equal to 15% of
Consolidated Net Worth.
(b) Debt. Create, incur, assume or suffer to exist, or
permit any Subsidiary to create, incur, assume or suffer to exist,
any Debt other than:
(i) Debt outstanding hereunder and under the Notes
and other Loan Documents (including, without limitation, any
Subsidiary Guaranty);
(ii) the existing Debt of the Borrower and its
Subsidiaries listed on Schedule III hereto (to the extent not
refinanced by this Agreement as indicated herein or therein) and
any guaranty issued by any Subsidiary in respect of the existing
$30 million principal amount of Convertible Subordinated Notes of
the Borrower referred to in Schedule III, issued pursuant to the
requirements of the Note Purchase Agreements relating to such
Notes;
(iii) upon completion of the transactions
contemplated by the Stock Purchase Agreement, the existing Debt of
Anderson Industries, Inc. and its Subsidiaries (including
guarantees) as disclosed pursuant to the Stock Purchase Agreement,
but after giving effect to the retirement of a portion of such Debt
as contemplated by section 3.1 hereof; and any extension, renewal
or refinancing of the portion of such Debt remaining outstanding
following such retirement, including the issuance by an existing
guarantor of a replacement guaranty in connection therewith,
provided such extension, renewal or refinancing does not involve an
increase in the then principal amount of such portion of such Debt;
(iv) additional unsecured Debt of the Borrower of up
to $100 million incurred as contemplated by the private placement
currently being marketed by KeyCorp Investment Banking to
institutional investors, and any guaranty by any Subsidiary of such
Debt of the Borrower, if at the time of creation thereof the
aggregate Commitments hereunder are permanently reduced to not more
than $60 million;
(v) Debt of any Wholly-Owned Subsidiary owed to the
Borrower or to another Wholly-Owned Subsidiary of the Borrower;
(vi) Debt of the Borrower or any Subsidiary
representing reimbursement obligations in respect of letters of
credit obtained in the ordinary course of business which do not
support Debt for borrowed money or notes, bonds or similar
securities, provided that the aggregate undrawn amount (assuming
compliance with all requirements for drawing) for all such letters
of credit is not in excess of $10,000,000 at any time outstanding;
(vii) guarantees by the Borrower or any Subsidiary,
not otherwise permitted by any of the above clauses, of any Debt of
any Person (including, without limitation, any Subsidiary),
provided that the aggregate principal amount of Debt so guaranteed,
together with the aggregate amount of the Debt referred to in
clause (iii) above and clauses (viii) and (ix) below, does not
(without duplication) exceed 15% of Consolidated Net Worth;
(viii) Debt incurred to finance not more than 100%
of the purchase price of any real or personal property purchased
after the date hereof, provided that the aggregate amount of such
Debt, together with the aggregate amount of the Debt referred to in
clauses (iii) and (vii) above and clause (ix) below, does not
(without duplication) exceed 15% of Consolidated Net Worth;
(ix) Debt of any Subsidiary of the Borrower
(exclusive of any such Debt owed to the Borrower or another Wholly-
Owned Subsidiary of the Borrower), not otherwise permitted by any
of the foregoing clauses of this section 5.2(b), provided that the
aggregate amount of such Debt, together with the aggregate amount
of the Debt referred to in the clauses (iii), (vii) and (viii)
above, does not (without duplication) exceed 15% of Consolidated
Net Worth; and
(x) additional unsecured Debt of the Borrower not
otherwise permitted by the foregoing clauses of this section
5.2(b), provided that at the time of creation of any such Debt, no
event has occurred and is continuing, or would result from the
creation of such Debt or from the application of the proceeds
thereof, which constitutes a Default (including, without
limitation, a Default by reason of a violation of section 5.2(f).
(c) Guarantees. Guarantee, or permit any of its
Subsidiaries to, guarantee, directly or indirectly, any obligation
of any other person, except by endorsement of negotiable
instruments for deposit or collection in the ordinary course of
business, and except for guarantees permitted by section 5.2(b).
(d) Mergers, etc. Merge or consolidate with or into
(unless the Borrower is the surviving corporation of such merger or
consolidation), or convey, transfer, lease or otherwise dispose of
(whether in one transaction or in a series of transactions) all or
substantially all of its assets (whether now owned or hereafter
acquired) to, any Person, or permit any of its Subsidiaries to do
so, except that (i) any Person may merge with and into the
Borrower, (ii) any Subsidiary of the Borrower may merge with or
into any other Person and (iii) any Subsidiary of the Borrower may
sell or otherwise dispose of all or substantially all of its
assets, provided that (A) immediately after giving effect to any
such merger or sale or other disposition of assets referred to in
clause (i), (ii) or (iii), no Default (including, without
limitation, any Default under section 5.2(h) or section 5.2(k))
would exist, (B) the surviving corporation of any such merger
referred to in clause (i) is, immediately after giving effect to
such merger, the Borrower, (C) if the surviving corporation of any
merger referred to in clause (ii) is not, immediately after giving
effect to such merger, a Subsidiary of the Borrower, the Borrower
and/or its Subsidiaries shall have received as consideration for
such merger cash, property or securities representing the fair
market value of the Borrower's and its Subsidiaries' interest in
such Subsidiary immediately prior to such merger (as determined by
the Board of Directors of the Borrower), and (D) in the case of any
sale or other disposition referred to in clause (iii), the Borrower
and/or its Subsidiaries shall have received as consideration for
such sale or other disposition cash, property or securities
representing the fair market value of such assets immediately prior
to such sale or other disposition (as determined by the Board of
Directors of the Borrower).
(e) Interest Coverage. Permit, on the last day of
March, June, September and December in each year, commencing June
30, 1996, the ratio of (i) Consolidated EBIT of the Borrower and
its Consolidated Subsidiaries during the twelve-month period ending
on such date to (ii) Consolidated Interest Expense of the Borrower
and its Consolidated Subsidiaries for such twelve-month period to
be less than 2.00 to 1.00.
(f) Debt to Capitalization Ratio. Permit the ratio of
(i) Consolidated Debt of the Borrower and its Consolidated
Subsidiaries (exclusive of Debt in respect of the undrawn amount of
any letters of credit), divided by (ii) the sum of (A) such
Consolidated Debt plus (B) Consolidated Net Worth of the Borrower
and its Consolidated Subsidiaries, at the end of any fiscal
quarter, to exceed (1) 60% at any time on or prior to March 31,
1997; (2) 55% at any time thereafter through December 31, 1997; or
(3) 50% at any time thereafter.
(g) Consolidated Net Worth. Permit Consolidated Net
Worth at any time on or after the date hereof to be less than
$125,000,000, except that effective as of the end of the Borrower's
fiscal quarter ended June 30, 1996, and as of the end of each
fiscal quarter of the Borrower thereafter, the foregoing amount (as
it may from time to time be increased as herein provided), shall be
increased by 50% of the Borrower's Consolidated Net Income for the
fiscal quarter ended on such date (there being no reduction in the
case of any such Consolidated Net Income which reflects a deficit).
(h) Investments, Acquisitions, etc. Do, or permit any
Subsidiary to do, any of the following: (i) make any loan or
advance to any Person (other than loans to officers, directors and
employees or prospective employees in the ordinary course of
business in accordance with historical practices), (ii) purchase or
otherwise acquire (through merger, consolidation or otherwise), any
stock, obligations or securities of, or any other interest in, or
make any capital contribution to, any other Person, or acquire from
any Person any division, plant or other business unit, or (iii) be
or become a general partner (or the equivalent) in any Person which
is not a Wholly-Owned Subsidiary, other than:
(A) investments in Cash Equivalents;
(B) the acquisition contemplated by the Stock
Purchase Agreement;
(C) if no Default or Event of Default has occurred
and is continuing or would result therefrom and if at the time the
aggregate Commitments hereunder have been permanently reduced to
not more than $60 million, (1) purchases or other acquisitions of
stock, obligations or securities of, or mergers or consolidations
with, any other Person which, as a result thereof, becomes a
Wholly-Owned Subsidiary, and (2) acquisitions from any other Person
of any division, plant or other business unit, in each case
specified in the foregoing clauses (1) and (2) in a negotiated
transaction involving a line of business or business activities not
prohibited by section 5.2(j); provided, that, not later than five
days prior to the consummation of any such transaction referred to
in this clause (C), the Borrower shall have delivered to the
Lenders a certificate of a responsible financial or accounting
officer of the Borrower, accompanied by pro forma financial
projections of the Borrower and its consolidated subsidiaries with
respect to such transaction, demonstrating projected compliance by
the Borrower with the financial covenants contained in this
Agreement for a period of at least 12 months;
(D) loans, advances and other investments in the
Borrower's existing Wholly-Owned Subsidiaries, and loans, advances
and other investments in Persons which become Wholly-Owned
Subsidiaries in transactions referred to in the foregoing clause
(C) or in transactions referred to in clause (ii) of section
5.2(d);
(E) loans, advances and other investments by
Subsidiaries in the Borrower; and
(F) other loans, advances and investments made
after the Closing Date, not otherwise permitted by the foregoing
clauses of this subsection, in an aggregate amount not in excess of
$25,000,000 in the fiscal year ended December 31, 1996, or
$5,000,000 in any fiscal year thereafter.
(i) Accounting Changes. Make, or permit any of its
Subsidiaries to make, any change in its accounting policies or
financial reporting practices and procedures, except changes in
accounting policies which are required or permitted by GAAP and
changes in financial reporting practices and procedures which are
required or permitted by GAAP, in each case as to which the
Borrower shall have delivered to the Agent prior to the
effectiveness of any such change a report prepared by a responsible
financial officer of the Borrower describing such change and
explaining in reasonable detail the basis therefor and effect
thereof.
(j) Other Businesses. Engage, or permit any of its
Subsidiaries to engage, in any business other than the businesses
in which the Borrower and its Subsidiaries are engaged at the date
hereof, and the businesses in which the Borrower and its
Subsidiaries will be engaged after giving effect to the
consummation of the transactions contemplated by the Stock Purchase
Agreement, and other similar or reasonably related businesses and
activities.
(k) Sales of Assets, etc. Sell or otherwise transfer,
or permit any Subsidiary to sell or otherwise transfer, directly or
indirectly (by merger or otherwise), any assets or other Property
(including, without limitation, any shares of capital stock of any
Subsidiary) outside of the ordinary course of business, except that
(i) the foregoing restriction shall not apply to transfers by a
Subsidiary of the Borrower to the Borrower or to a Wholly-Owned
Subsidiary of the Borrower, or by the Borrower to a Wholly-Owned
Subsidiary of the Borrower; and (ii) if no Event of Default shall
have occurred and be continuing or would result therefrom, the
Borrower or any Subsidiary may sell or otherwise transfer, outside
of the ordinary course of business, assets or other Property having
an aggregate fair value (as determined by the Board of Directors of
the Borrower) not in excess of $10,000,000 during any fiscal year,
provided any such sale or other transfer is for consideration
consisting of cash, stock, securities or other property having a
fair value at least equal to the assets or other Property so sold
or otherwise transferred.
(l) Changes in Fiscal Year. Make any change in its
Fiscal Year.
(m) Plan Terminations. Terminate, or permit any ERISA
Affiliate to terminate, any Plan or Plans so as to result in
liability of the Borrower or any ERISA Affiliate to the PBGC in
excess of $5,000,000 in the aggregate, or permit to exist one or
more events or conditions which reasonably present a material risk
of a termination by the PBGC of any Plan or Plans with respect to
which the Borrower or any ERISA Affiliate would, in the event of
such termination, incur liability to the PBGC in excess of
$5,000,000 in the aggregate.
(n) Employee Benefit Costs and Liabilities. Fail to
comply, or permit any ERISA Affiliate to fail to comply, with the
minimum funding standards of ERISA and the Internal Revenue Code
with respect to each Plan.
SECTION 6. EVENTS OF DEFAULT.
6.1. Events of Default. If any of the following events
("Events of Default") shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any
Note when the same becomes due and payable, or shall fail to pay
any interest on any Note or any other amount payable under this
Agreement within five days of the due date thereof; or
(b) any representation or warranty made (or deemed made
in accordance with section 3.2) by the Borrower herein or by the
Borrower (or any of its officers) in connection with this Agreement
shall prove to have been incorrect in any material respect when
made (or deemed made); or
(c) the Borrower shall fail to perform or observe any
term, covenant or agreement contained in section 5.1(h)(iv),
5.2(a), 5.2(b), 5.2(c), 5.2(d), 5.2(e), 5.2(f), 5.2(g), 5.2(h) or
5.2(k) of this Agreement on its part to be performed or observed;
or
(d) the Borrower shall fail to perform or observe any
other term, covenant or agreement contained in this Agreement or
any other Loan Document on its part to be performed or observed, if
such failure shall remain unremedied for 10 Business Days after
written notice thereof shall have been given to the Borrower by the
Agent or any Lender; or
(e) the Borrower or any of its Subsidiaries shall fail
to pay any principal of or premium or interest on any Debt which is
outstanding in a principal amount of at least $4,000,000 in the
aggregate (but excluding Debt evidenced by the Notes) of the
Borrower or such Subsidiary (as the case may be), when the same
becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), and such failure
shall continue after the applicable grace period, if any, specified
in the agreement or instrument relating to such Debt; or any other
event shall occur or condition shall exist under any agreement or
instrument relating to any such Debt and shall continue after the
applicable grace period, if any, specified in such agreement or
instrument, if the effect of such event or condition is to
accelerate, or to permit the acceleration of, the maturity of such
Debt; or any such Debt shall be declared to be due and payable, or
required to be prepaid or redeemed (other than by a regularly
scheduled required prepayment or required sinking fund redemption
payment), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each
case prior to the stated maturity thereof; or
(f) the Borrower or any of its Subsidiaries shall
generally not pay its debts as such debts become due, or shall
admit in writing its inability to pay its debts generally, or shall
make a general assignment for the benefit of creditors; or any
proceeding shall be instituted by or against the Borrower or any of
its Subsidiaries seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief, or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors, or seeking the entry of an order for relief
or the appointment of a receiver, trustee, or other similar
official for it or for any substantial part of its Property; or the
Borrower or any of its Subsidiaries shall take any corporate action
to authorize any of the actions set forth above in this subsection
(f); or
(g) any judgment or order for the payment of money in
excess of $5,000,000 shall be rendered against the Borrower or any
of its Subsidiaries and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order or
(ii) there shall be any period of 20 consecutive days during which
a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or
(h) any ERISA Event with respect to a Plan shall have
occurred and, thirty days after notice thereof shall have been
given to the Borrower by the Agent, (i) such ERISA Event shall
still exist, (ii) such ERISA Event shall have caused or shall have
created a material risk of the termination of or the appointment of
a trustee with respect to the affected Plan by or at the request of
the PBGC and (iii) the sum (determined as of the date of occurrence
of such ERISA Event) of the Insufficiency of such Plan and the
Insufficiency of any and all other Plans with respect to which the
events or circumstances described in the preceding clauses (i) and
(ii) shall have occurred and then exist (or in the case of a Plan
with respect to which an ERISA Event described in clauses (c)
through (f) of the definition of ERISA Event shall have occurred
and then exist, the liability related thereto) is equal to or
greater than $5,000,000; or
(i) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that it has
incurred Withdrawal Liability to such Multiemployer Plan in an
amount that, when aggregated with all other amounts then required
to be paid to Multiemployer Plans in connection with Withdrawal
Liabilities (determined as of the date of such notification),
exceeds $5,000,000; or
(j) the Borrower or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated,
within the meaning of Title IV of ERISA, if as a result of such
reorganization or termination the aggregate annual contributions of
the Borrower and the ERISA Affiliates to all Multiemployer Plans
that are then in reorganization or being terminated have been or
will be increased over the amounts contributed to such
Multiemployer Plans for the plan years that include the date hereof
by an amount exceeding $5,000,000; or
(k) any person or group of persons (within the meaning
of section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) or control of 30% or more of the fully
diluted outstanding shares of common stock of the Borrower; or
during any period of twelve consecutive calendar months,
individuals who were directors of the Borrower on the first day of
such period or who were elected or nominated by a majority of the
directors in office at the beginning of such period, shall cease
for any reason to constitute a majority of the board of directors
of the Borrower; or
(l) if any Subsidiary Guaranty executed and delivered as
provided herein shall, for any reason cease to be in full force or
effect, or if any guarantor thereunder shall fail to perform any
covenant contained therein or assert any limitation upon such
guarantor's obligations thereunder;
then, and in any such event, the Agent (i) shall at the request, or
may with the consent, of Lenders owed more than 50% of the
aggregate unpaid principal amount of the Revolving Advances and
Swing Line Advances then outstanding or, if no Revolving Advances
or Swing Line Advances are then outstanding, Lenders having more
than 50% of the Commitments, by notice to the Borrower, declare the
obligation of each Lender to make Advances to be terminated,
whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of Lenders owed more than 50% of
the aggregate unpaid principal amount of the Revolving Advances and
Swing Line Advances then outstanding or, if no Revolving Advances
or Swing Line Advances are then outstanding, Lenders having more
than 50% of the Commitments, by notice to the Borrower, declare all
the Advances then outstanding, all interest thereon and all other
amounts payable under this Agreement to be forthwith due and
payable, whereupon the Advances then outstanding, all such interest
and all such amounts shall become and be forthwith due and payable,
without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided,
however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower or any of its Subsidiaries
under the Federal Bankruptcy Code, (A) the obligation of each
Lender to make Advances shall automatically be terminated and (B)
the Advances then outstanding, all such interest and all such
amounts shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.
SECTION 7. THE AGENT.
7.1. Authorization and Action. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement as are delegated
to the Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. As to any matters not expressly
provided for by this Agreement (including, without limitation,
enforcement or collection of the Notes), the Agent shall not be
required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully
protected in so acting or refraining from acting) upon the
instructions of the Majority Lenders or all Lenders if required by
section 8.1, as applicable, and such instructions shall be binding
upon all Lenders and all holders of Notes; provided, however, that
the Agent shall not be required to take any action which exposes
the Agent to personal liability or which is contrary to this
Agreement or applicable law. The Agent agrees to give to each
Lender prompt notice of each notice given to it by the Borrower
pursuant to the terms of this Agreement.
7.2. Agent's Reliance, etc. Neither the Agent nor any of its
directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in
connection with this Agreement, except for its or their own gross
negligence or willful misconduct. Without limitation of the
generality of the foregoing, the Agent: (i) may treat the payee of
any Note as the holder thereof until the Agent receives and accepts
an Assignment and Acceptance entered into by the Lender which is
the payee of such Note, as assignor, and an Eligible Assignee, as
assignee, as provided in section 8.7; (ii) may consult with legal
counsel (including counsel for the Borrower), independent public
accountants and other experts selected by it and shall not be
liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or
experts; (iii) makes no warranty or representation to any Lender
and shall not be responsible to any Lender for any statements,
warranties or representations (whether written or oral) made in or
in connection with this Agreement; (iv) shall not have any duty to
ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement on the part
of the Borrower or to inspect the Property (including the books and
records) of the Borrower; (v) shall not be responsible to any
Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other
instrument or document furnished pursuant hereto; and (vi) shall
incur no liability under or in respect of this Agreement by acting
upon any notice, consent, certificate or other instrument or
writing (which may be by telecopier, telegram, cable or telex)
believed by it to be genuine and signed or sent by the proper party
or parties.
7.3. Society and Affiliates. With respect to its Commitment,
any Swing Line Commitment made by it, the Advances made by it and
the Notes issued to it, Society shall have the same rights and
powers under this Agreement as any other Lender and may exercise
the same as though it were not the Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include
Society in its individual capacity. Society and its affiliates may
accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with,
the Borrower, any of its subsidiaries and any Person who may do
business with or own securities of the Borrower or any such
subsidiary, all as if Society were not the Agent and without any
duty to account therefor to the Lenders.
7.4. Lender Credit Decision. Each Lender acknowledges that it
has, independently and without reliance upon the Agent or any other
Lender and based on the financial statements referred to in section
4.1 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Agreement. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other
Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions
in taking or not taking action under this Agreement.
7.5. Indemnification. The Lenders agree to indemnify the
Agent (to the extent not reimbursed by the Borrower), ratably
according to the respective principal amounts of the Revolving
Notes then held by each of them (or if no Revolving Notes are at
the time outstanding or if any Revolving Notes are held by Persons
which are not Lenders, ratably according to the respective amounts
of their Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by, or asserted against the Agent
in any way relating to or arising out of this Agreement or any
action taken or omitted by the Agent under this Agreement, provided
that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Agent's gross
negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse the Agent promptly upon
demand for its ratable share of any out-of-pocket expenses
(including counsel fees) incurred by the Agent in connection with
the preparation, execution, delivery, administration, modification,
amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights
or responsibilities under, this Agreement, to the extent that the
Agent is not reimbursed for such expenses by the Borrower.
7.6. Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and
may be removed at any time with or without cause by the Majority
Lenders. Upon any such resignation or removal, the Majority Lenders
shall have the right to appoint a successor Agent. If no successor
Agent shall have been so appointed by the majority Lenders, and
shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation or the Majority
Lenders, removal of the retiring Agent, then the retiring Agent
may, on behalf of the Lenders, appoint a successor Agent, which
shall be a commercial bank organized under the laws of the United
States of America or of any State thereof and having total assets
in excess of $3,000,000,000 and a combined capital and surplus of
at least $150,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this
Agreement. After any retiring Agent's resignation or removal
hereunder as Agent, the provisions of this section 7 shall inure to
its benefit as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
7.7. Agent's Fee. The Borrower shall pay to Society for its
own account the annual agency fee referred to in the Agent Fee
Letter.
7.8. Co-Agent. No Bank identified herein or in any of the
other Loan Documents as a "Co-Agent" shall have any right, power,
obligation, liability, responsibility or duty under any Loan
Document other than those applicable to all Lenders as such. Each
Lender acknowledges that it has not relied, and will not rely, on
any Bank so identified in deciding to enter into this Agreement or
in taking or not taking any action hereunder.
SECTION 8. MISCELLANEOUS.
8.1. Amendments, etc. No amendment or waiver of any provision
of this Agreement or the Notes, nor consent to any departure by the
Borrower therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Majority Lenders, and then
such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given; provided,
however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, do any of the following: (a)
waive any of the conditions specified in section 3.1 or 3.2 (if and
to the extent that the Borrowing which is the subject of such
waiver would involve an increase in the aggregate outstanding
amount of Advances over the aggregate amount of Advances
outstanding immediately prior to such Borrowing), (b) increase the
Commitments of the Lenders or subject the Lenders to any additional
obligations, (c) reduce the principal of, or interest on, the
Revolving Advances or the Swing Line Advances or any fees or other
amounts payable hereunder, (d) postpone any date fixed for any
payment of principal of, or interest on, the Revolving Advances or
the Swing Line Advances or any fees or other amounts payable
hereunder, (e) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Revolving Advances or the
Swing Line Advances, or the number of Lenders, which shall be
required for the Lenders or any of them to take any action
hereunder, (f) amend the definition of Majority Lenders or this
section 8.1, (g) release any guarantor from any guaranty
obligations contained in any Subsidiary Guaranty executed and
delivered pursuant to the requirements of this Agreement, or (h)
change any term or provision of clause (k) of section 6.1, or waive
any Event of Default thereunder; and provided, further, that no
amendment, waiver or consent shall, unless in writing and signed by
the Agent in addition to the Lenders required above to take such
action, affect the rights or duties of the Agent under this
Agreement or any Note.
8.2. Notices, etc. All notices and other communications
provided for hereunder shall be in writing (including telecopier,
telegraphic, telex or cable communication) and mailed, telecopied,
telegraphed, telexed, cabled or delivered, if to the Borrower, at
its address at 1120 North Main Street, Elkhart, Indiana 46514,
Attention: Joseph A. Robinson, Chief Financial Officer, Secretary
& Treasurer; if to any Bank, at its Domestic Lending Office
specified opposite its name on Schedule I hereto; if to any other
Lender, at its Domestic Lending Office specified in the Assignment
and Acceptance pursuant to which it became a Lender; and if to the
Agent, at its address at Society National Bank, Society Center, 127
Public Square, Cleveland, Ohio 44114-1306, attention: Richard A.
Pohle, Vice President and Manager, Large Corporate Group
(telephone: (216) 689-4446; facsimile: (216) 689-4981); or, as to
each party, at such other address as shall be designated by such
party in a written notice to the other parties. All such notices
and communications shall, when mailed, telecopied, telegraphed,
telexed or cabled, be effective when deposited in the mails,
telecopied, delivered to the telegraph company, confirmed by telex
answerback or delivered to the cable company, respectively, except
that notices and communications to the Agent pursuant to section 2
or 7 shall not be effective until received by the Agent.
8.3. No Waiver; Remedies. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any
right hereunder or under any Note shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and
not exclusive of any remedies provided by law.
8.4. Costs, Expenses and Taxes. (a) The Borrower agrees to
pay promptly upon request all costs and expenses in connection with
the preparation, execution, delivery, administration,
interpretation, modification and amendment of this Agreement, the
Notes and the other documents to be delivered hereunder, including,
without limitation, the reasonable fees and out-of-pocket expenses
of counsel for the Agent with respect thereto and with respect to
advising the Agent as to its rights and responsibilities under this
Agreement. The Borrower further agrees to pay promptly upon request
all costs and expenses, if any, of the Agent and each Lender
(including, without limitation, reasonable counsel fees and
expenses and allocated costs of internal counsel), (i) in
connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Agreement, the Notes, the
other Loan Documents and the other documents to be delivered
hereunder and thereunder, (ii) in connection with any refinancing
or restructuring of the credit arrangements provided hereunder in
the nature of a "work-out" or in any insolvency or bankruptcy
proceeding, (iii) in commencing, defending or intervening in any
litigation or in filing a petition, complaint, answer, motion or
other pleadings in any legal proceeding relating to this Agreement,
the Notes, the other Loan Documents, the Property, the Borrower or
any of the Borrower's Subsidiaries and related to or arising out of
the transactions contemplated hereby or by any of the other Loan
Documents and (iv) in taking any other action in or with respect to
any suit or proceeding (bankruptcy or otherwise) described in
clauses (i) through (iii) above.
(b) If any payment of principal of any Adjusted Eurodollar
Rate Advance or Fixed Rate Advance is made other than on the last
day of the Interest Period for such Advance, as a result of a
prepayment pursuant to section 2.8(b) or pursuant to the terms of
any Confirmation of Swing Line Borrowing or acceleration of the
maturity of the Notes pursuant to section 6.1 or for any other
reason, the Borrower shall, promptly upon request by any Lender
(with a copy of such request to the Agent), pay to the Agent for
the account of such Lender any amounts required to compensate such
Lender for any additional losses, costs or expenses which it may
reasonably incur as a result of such payment, including, without
limitation, any loss (including loss of anticipated profits), cost
or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain
such Advance.
(c) The Borrower agrees to indemnify and hold harmless the
Agent and each Lender and their respective Affiliates, and each of
their respective directors, officers, employees and agents, from
and against any and all losses, claims, damages, liabilities and
expenses (including, without limitation, fees and disbursements of
counsel) which may be incurred by or asserted against the Agent or
such Lender or Affiliate or any such director, officer, employee or
agent in connection with or arising out of any investigation,
litigation, or proceeding, whether or not the Agent or such Lender
or Affiliate or any such director, officer, employee or agent is a
party thereto, related to this Agreement, any Claim relating to any
of the matters referred to in section 4.1(l), without regard to the
presence or absence of any Material Adverse Effect referred to
therein, or any transaction or proposed transaction (whether or not
consummated) in which any proceeds of any Borrowing are applied or
proposed to be applied, directly or indirectly, by the Borrower or
any of its Subsidiaries, unless such loss, claim, damage, liability
or expense is found in a final judgment of a court of competent
jurisdiction to have resulted from such indemnified party's gross
negligence or wilful misconduct. The obligations of the Borrower
under this section 8.4 shall survive the Termination Date.
8.5. Right of Set-off. Nothing herein shall derogate any
Lender's right, if any, if and to the extent payment owed to such
Lender is not made when due hereunder or under any Note held by
such Lender, after giving effect to any applicable grace period
specified in section 6 hereof with respect thereto, to set off from
time to time against any or all of the Borrower's general deposit
accounts with such Lender any amount so due. Each Lender agrees
promptly to notify the Borrower after any such set-off and
application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this section 8.5 are
in addition to other rights and remedies which such Lender may
have.
8.6. Binding Effect. This Agreement shall become effective
when it shall have been executed by the Borrower and the Agent and
when the Agent shall have been notified by each Bank that such Bank
has executed it and thereafter shall be binding upon and inure to
the benefit of the Borrower, the Agent and each Lender and their
respective successors and assigns, except that the Borrower shall
not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Lenders.
8.7. Assignments and Participations. (a) Each Lender may
assign, with (except in the case of any assignment to an Affiliate
of such Lender) the consent of the Agent (which consent shall not
be unreasonably withheld or delayed), to one or more banks or other
entities all or a proportionate part of all of its rights and
obligations under this Agreement (including, without limitation,
all or a proportionate part of all of its Commitment, its Swing
Line Commitment (if any), the Revolving Advances and Swing Line
Advances (if any) owing to it and the Note or Notes held by it);
provided, however, that (i) each such assignment shall be of a
constant, and not a varying, percentage of all rights and
obligations under this Agreement, (ii) the amount of the Commitment
of the assigning Lender being assigned pursuant to each such
assignment (determined as of the date of the Assignment and
Acceptance with respect to such assignment) shall in no event be
less than $5,000,000 and shall (unless such amount constitutes the
entire remaining amount of the assigning Lender's Commitment) be an
integral multiple of $1,000,000, (iii) each such assignment shall
be to an Eligible Assignee, and (iv) the parties to each such
assignment shall execute and deliver to the Agent, for its
acceptance and recording in the Register, an Assignment and
Acceptance, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,000. Upon
such execution, delivery, acceptance and recording, from and after
the effective date specified in each Assignment and Acceptance, (x)
the assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder and (y) the Lender assignor
thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and
Acceptance, relinquish its rights and be released from its
obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under this Agreement,
such Lender shall cease to be a party hereto).
(b) By executing and delivering an Assignment and Acceptance,
the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as
follows: (i) other than as provided in such Assignment and
Acceptance, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection
with this Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement
or any other instrument or document furnished pursuant hereto; (ii)
such assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition
of the Borrower or the performance or observance by the Borrower of
any of its obligations under this Agreement or any other instrument
or document furnished pursuant hereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies
of the financial statements referred to in section 4.1 and such
other documents and information as it has deemed appropriate to
make its own credit analysis and decision to enter into such
Assignment and Acceptance; (iv) such assignee will, independently
and without reliance upon the Agent, such assigning Lender or any
other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under this Agreement; (v)
such assignee confirms that it is an Eligible Assignee; (vi) such
assignee appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof,
together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with
their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender.
(c) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an assignee representing that it is an
Eligible Assignee, together with any Note or Notes subject to such
assignment, the Agent shall, if such Assignment and Acceptance has
been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the
information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower. Within five Business Days after its
receipt of such notice, the Borrower, at its own expense, shall
execute and deliver to the Agent in exchange for the surrendered
Note or Notes a new Note or Notes to the order of such Eligible
Assignee in an amount equal to the Commitment and Swing Line
Commitment (if any) assumed by it pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained a Commitment
and Swing Line Commitment (if any) hereunder, a new Note or Notes
to the order of the assigning Lender in an amount equal to the
Commitment and Swing Line Commitment (if any) retained by it
hereunder. Such new Note or Notes shall be in an aggregate
principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-1 or A-2 hereto.
(d) The Agent shall maintain at its address referred to in
section 8.2 a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names
and addresses of each of the Lenders and the Commitment and Swing
Line Commitment (if any) of, and principal amount of the Advances
owing to, each such Lender from time to time (the "Register"). The
Register shall contain the information specified in section
2.13(b), and the entries in the Register shall be conclusive and
binding for the purposes of this Agreement, in the absence of
manifest error, and the Borrower, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a
Lender hereunder for the purposes of this Agreement. The Register
shall be available for inspection by the Borrower or any Lender at
any reasonable time and from time to time upon reasonable prior
notice.
(e) Each Lender may sell participations to one or more banks
or other entities in or to all or a portion of its rights and
obligations under this Agreement (including, without limitation,
all or a portion of its Commitment and Swing Line Commitment (if
any), the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) such Lender's obligations under this
Agreement (including, without limitation, its Commitment and Swing
Line Commitment (if any) to the Borrower hereunder) shall remain
unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations, (iii)
such Lender shall remain the holder of any such Note for all
purposes of this Agreement, and (iv) the Borrower, the Agent and
the other Lenders shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations
under this Agreement. Any participating interest shall provide that
such Lender shall retain the sole right and responsibility to
enforce the obligations of the Borrower hereunder including,
without limitation, the right to approve any amendment,
modification or waiver of any provision of this Agreement; provided
that any participation agreement may provide that the relevant
Lender will not agree to any modification, amendment or waiver of
this Agreement which (i) increases or decreases the Commitment or
Swing Line Commitment (if any) of such Lender, (ii) reduces the
principal of or rate of interest on any Advance or fees hereunder
in which the participant has an interest or (iii) postpones the
date fixed for any payment of principal of or interest on any
Advance or any fees hereunder in which the participant has an
interest without the consent of the participant. The Borrower
agrees that each participant shall, to the extent provided in its
participation agreement, be entitled to the benefits of sections
2.9, 2.11 and 8.4(b) hereof with respect to its participating
interest. No participant or other transferee of such Lender's
rights shall be entitled to receive any greater payment under
sections 2.9, 2.11 and 8.4(b) hereof than such Lender would have
been entitled to receive with respect to the rights transferred.
(f) Subject to section 8.13, any Lender may, in connection
with any assignment, designation or participation or proposed
assignment, designation or participation pursuant to this section
8.7, disclose to the assignee, designee or participant or proposed
assignee, designee or participant, any information relating to the
Borrower furnished to such Lender by or on behalf of the Borrower
in connection with this Agreement; provided that, prior to any such
disclosure, the assignee, designee or participant or proposed
assignee, designee or participant shall agree to preserve the
confidentiality of any confidential information relating to the
Borrower received by it from such Lender.
(g) Anything in this section 8.7 to the contrary
notwithstanding, any Lender may, upon notice to the Agent and the
Borrower, assign and pledge all or any portion of the Advances
owing to it to a Federal Reserve Bank or the United States Treasury
as collateral security pursuant to Regulation A of the Federal
Reserve Board and any Operating Circular issued by such Federal
Reserve Bank.
8.8. Governing Law. This Agreement and the Notes shall be
governed by, and construed in accordance with, the laws of the
State of Ohio.
8.9. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed
shall be deemed to be an original and all of which taken together
shall constitute one and the same agreement.
8.10. Collateral. Each of the Lenders represents to the Agent
and each of the other Lenders that it in good faith is not relying
upon any Margin Stock as collateral in the extension or maintenance
of the credit provided for in this Agreement.
8.11. Survival of Warranties and Agreements. All
representations and warranties made herein and all obligations of
the Borrower in respect of taxes, indemnification and expense
reimbursements shall survive the execution and delivery of this
Agreement and the other Loan Documents, the making and repayment of
the Advances and the termination of this Agreement and shall not be
limited in any way by the passage of time or occurrence of any
event and shall expressly cover time periods when the Agent or any
of the Lenders may have come into possession or control of any of
the Borrower's or its Subsidiaries' Property.
8.12. Limitation of Liability. No claim may be made by the
Borrower, any Lender, the Agent or any other Person against the
Agent or any other Lender or the Affiliates, directors, officers,
employees, attorneys or agents of any of them for any special,
consequential or punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of
or related to the transactions contemplated by this Agreement, or
any act, omission or event occurring in connection therewith; and
each of the Borrower, each Lender and the Agent hereby waives,
releases and agrees not to sue upon any such claim for any such
damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
8.13. No Duty. All attorneys, accountants, appraisers,
consultants and other professional persons (including the firms or
other entities on behalf of which any such person may act) retained
by the Agent or any Lender with respect to the transactions
contemplated by the Loan Documents shall have the right to act
exclusively in the interest of the Agent or such Lender, as the
case may be, and shall have no duty of disclosure, duty of loyalty,
duty of care, or other duty or obligation of any type or nature
whatsoever to the Borrower, to any of its Subsidiaries, or to any
other person, with respect to any matters within the scope of such
representation or related to their activities in connection with
such representation.
8.14. Lenders and Agent Not Fiduciary to Borrower, etc. The
relationship among the Borrower and its Subsidiaries, on the one
hand, and the Agent and the Lenders, on the other hand, is solely
that of debtor and creditor, and the Agent and the Lenders have no
fiduciary or other special relationship with the Borrower and its
Subsidiaries, and no term or provision of any Loan Document, no
course of dealing, no written or oral communication, or other
action, shall be construed so as to deem such relationship to be
other than that of debtor and creditor.
8.15. Confidentiality. Each Lender agrees that during the
period through and including the Termination Date it will take
normal and reasonable precautions to hold and treat in confidence
any information delivered or made available by the Borrower to it
which is expressly designated in writing to be confidential;
provided, however that nothing herein shall prevent any Lender from
disclosing such information (i) to any Affiliate of such Lender,
(ii) to any other Lender, (iii) upon the order of any court or
administrative agency, (iv) upon the request or demand of any
regulatory agency or authority having jurisdiction over such
Lender, (v) which has been publicly disclosed, (vi) to the extent
reasonably required in connection with any litigation to which the
Agent, any Lender or their respective Affiliates may be a party,
(vii) to the extent reasonably required in connection with the
exercise of any remedy hereunder, (viii) to such Lender's legal
counsel, independent auditors and other professional advisors, (ix)
to any actual or proposed participant, assignee or other transferee
of all or part of its rights hereunder which has agreed in writing
to be bound by the provisions of this section 8.15, or (x) that is
also provided to such Lender by a Person other than the Borrower
not in violation, to the actual knowledge of such Lender, of any
duty of confidentiality; provided that any Lender's failure to
comply with the provisions of this section 8.15 shall not affect
the obligations of the Borrower hereunder.
8.16. Certain Consents and Waivers of the Borrower.
(a) Personal Jurisdiction. (i) THE BORROWER IRREVOCABLY AND
UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF ANY OHIO STATE COURT OR FEDERAL COURT
FOR THE NORTHERN DISTRICT OF OHIO, AND ANY COURT HAVING
JURISDICTION OVER APPEALS OF MATTERS HEARD IN SUCH COURTS, IN ANY
ACTION OR PROCEEDING ARISING OUT OF, CONNECTED WITH, RELATED TO OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THE PARTIES HERETO
IN CONNECTION WITH THIS AGREEMENT, WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND THE BORROWER IRREVOCABLY AND UNCONDITIONALLY AGREES
THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH STATE COURT OR, TO THE EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. THE BORROWER AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE
CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON
THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. THE BORROWER
WAIVES IN ALL DISPUTES ANY OBJECTION THAT IT MAY HAVE TO THE
LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(ii) THE BORROWER AGREES THAT THE AGENT SHALL HAVE THE RIGHT
TO PROCEED AGAINST THE BORROWER OR ITS PROPERTY IN A COURT IN ANY
LOCATION TO ENABLE THE AGENT AND THE LENDERS TO ENFORCE A JUDGMENT
OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY LENDER.
THE BORROWER WAIVES ANY OBJECTION THAT IT MAY HAVE TO THE LOCATION
OF THE COURT IN WHICH THE AGENT OR ANY LENDER MAY COMMENCE A
PROCEEDING DESCRIBED IN THIS SECTION.
(b) Service of Process. THE BORROWER IRREVOCABLY CONSENTS TO
THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO THE BORROWER'S
NOTICE ADDRESS SPECIFIED PURSUANT TO SECTION 8.2, SUCH SERVICE TO
BECOME EFFECTIVE FIVE (5) DAYS AFTER SUCH MAILING. THE BORROWER
IRREVOCABLY WAIVES ANY OBJECTION (INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET FORTH
ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN
ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE
AGENT TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF
ANY OTHER JURISDICTION.
8.17. Waiver of Jury Trial. EACH OF THE BORROWER, THE AGENT
AND THE LENDERS HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
[The balance of this page is intentionally blank.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective officers thereunto
duly authorized, as of the date first above written.
EXCEL INDUSTRIES, INC.
By: _________________________________
Chief Financial Officer
SOCIETY NATIONAL BANK,
individually and as Agent
By: _________________________________
Vice President
HARRIS TRUST AND SAVINGS BANK,
individually and as Co-Agent
By: _________________________________
Vice President
SCHEDULE I
<TABLE>
<CAPTION>
INFORMATION AS TO LENDERS
<S> <C> <C> <C> <C>
Name Swing Line Domestic Eurodollar
of Lender Commitments Commitments Lending Lending
Office Office
Society National
Bank $60,000,000 $5,000,000 Society Center Society Center
127 Public Square 127 Public Square
Cleveland, Ohio Cleveland, Ohio
44114-1306 44114-1306
Notices:
Society Center
127 Public Square
Cleveland, Ohio
44114-1306
Attention: Large
Corporate
Group
Facsimile: (216)
689-4981
Primary Contacts:
Richard A. Pohle
Vice President and
Manager
Telephone: (216)
689-4446
Matthew P. Tuohey
Portfolio Manager
Telephone: (216)
689-0598
Contact for
Borrowings,
Payments, etc.:
Sandy Wilder
Telephone: (216)
689-4448
Facsimile: (216)
689-4981
Wiring Information:
ABA # 041001039
Account of Excel
Industries,
Inc.
Harris Trust and
Savings Bank $60,000,000 $-0- Harris Trust and Harris Trust and
Savings Bank Savings Bank
111 West Monroe 111 West Monroe
2 West 2 West
Chicago, Illinois Chicago, Illinois
60690 60690
Primary Credit
Contact:
Lee Vandermyde
Telephone: (312)
461-3474
Facsimile: (312)
461-2591
Back-Up Contact:
M. Elizabeth Gilliam
Vice President &
Market Manater Manager
Telephone: (312)
461-5111
Facsimile: (312)
461-2591
Facsimile: (312)
461-2591
Addressee for Formal
Notices:
Lee Vandermyde
Vice President
Telephone: (312)
461-3474
Telecopy: (312)
461-2591
Payment
Instructions:
Harris Trust and
Savings Bank
Credit Services
Operations
Account #3351922000
re: Excel
Industries, Inc.
ABA # 071000288
</TABLE>
<PAGE>
SCHEDULE II
Schedule of Existing Liens
Secured Party Property Debt @ 12/31/95
Industrial Revenue Bonds
City of Pikeville, Tenn.Facility $ 600,000
Jacksonville, Fla. (Series
A) Port Authority Facility 262,000
Jacksonville, Fla. (Series
B) Port Authority Facility 438,000
PNC Bank, Kentucky, Inc.Facility and equipment 400,000
Computer lease
CIT Group, Inc.DEC computer equipment 305,000
$2,005,000
<PAGE>
SCHEDULE III
Schedule of Existing Debt
(Debt of Excel Industries, Inc.)
Lender Debt at March 30, 1996
CIGNA Investments, Inc. $20,000,000
Textron Investment Management Co. 10,000,000
NationsBank of Tennessee 1,170,833
Pittsburgh National Bank 400,000
Chemical Bank 600,000
Comerica Bank 525,000
CIT Group 285,824
$32,981,657
<PAGE>
EXHIBIT A-1
FORM OF
REVOLVING NOTE
U.S. $ Dated: ___________ __, 1996
FOR VALUE RECEIVED, the undersigned, EXCEL INDUSTRIES, INC.,
an Indiana corporation (herein, together with its successors and
assigns, the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") for the account of
its Applicable Lending Office (as defined in the Credit Agreement
referred to below) the principal amount of each Revolving Advance
(as defined below) made by the Lender to the Borrower pursuant to
the Credit Agreement (as defined below) on the last day of the
Interest Period (as defined in the Credit Agreement) for such
Advance.
The Borrower promises to pay interest on the unpaid principal
amount of each Revolving Advance from the date of such Revolving
Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Society National Bank, as Agent, at
Society Center, 127 Public Square, Cleveland, Ohio 44114-1306, in
same day funds. Each Revolving Advance made by the Lender to the
Borrower pursuant to the Credit Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender and,
prior to any transfer hereof, endorsed on the grid attached hereto
which is part of this Promissory Note.
This Promissory Note is one of the Revolving Notes referred to
in, and is entitled to the benefits of, the Credit Agreement, dated
as of April 1, 1996 (as amended, supplemented or otherwise modified
from time to time, the "Credit Agreement"), among the Borrower, the
Lender and certain other banks parties thereto, and Society
National Bank, as Agent for the Lender and such other banks, and
Harris Trust and Savings Bank, as Co-Agent for the Lender and such
other banks. The Credit Agreement, among other things, (i) provides
for the making of advances (the "Revolving Advances") by the Lender
to the Borrower from time to time in an aggregate amount not to
exceed at any time outstanding the U.S. dollar amount first above
mentioned, the indebtedness of the Borrower resulting from each
such Revolving Advance being evidenced by this Promissory Note, and
(ii) contains provisions for acceleration of the maturity hereof
upon the happening of certain stated events and also for
prepayments on account of principal hereof prior to the maturity
hereof upon the terms and conditions therein specified.
The Borrower hereby waives presentment, demand, protest and
notice (other than any notice specifically provided for in the
Credit Agreement) of any kind. No failure to exercise, and no delay
in exercising, any rights hereunder on the part of the holder
hereof shall operate as a waiver of such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of Ohio, United States.
EXCEL INDUSTRIES, INC.
By: ___________________________________
Chief Financial Officer
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
Amount of Unpaid
Date Amount of Principal Paid Principal Notation
Advance or Prepaid Balance Made By
<PAGE>
EXHIBIT A-2
FORM OF
SWING LINE NOTE
U.S. $ Dated: ___________ __, 1996
FOR VALUE RECEIVED, the undersigned, EXCEL INDUSTRIES, INC.,
an Indiana corporation (herein, together with its successors and
assigns, the "Borrower"), HEREBY PROMISES TO PAY to the order of
(the "Lender") for the account of
its Applicable Lending Office (as defined in the Credit Agreement
referred to below) the principal amount of each Swing Line Advance
(as defined below) made by the Lender to the Borrower pursuant to
the Credit Agreement (as defined below) on the last day of the
Interest Period (as defined in the Credit Agreement) for such
Advance.
The Borrower promises to pay interest on the unpaid principal
amount of each Swing Line Advance from the date of such Swing Line
Advance until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the
Credit Agreement.
Both principal and interest are payable in lawful money of the
United States of America to Society National Bank, as Agent, at
Society Center, 127 Public Square, Cleveland, Ohio 44114-1306, in
same day funds. Each Swing Line Advance made by the Lender to the
Borrower pursuant to the Credit Agreement, and all payments made on
account of principal thereof, shall be recorded by the Lender and,
prior to any transfer hereof, endorsed on the grid attached hereto
which is part of this Promissory Note.
This Promissory Note is one of the Swing Line Notes referred
to in, and is entitled to the benefits of, the Credit Agreement,
dated as of April 1, 1996 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the
Borrower, the Lender and certain other banks parties thereto, and
Society National Bank, as Agent for the Lender and such other
banks, and Harris Trust and Savings Bank, as Co-Agent for the
Lender and such other banks. The Credit Agreement, among other
things, (i) provides for the making of advances (the "Swing Line
Advances") by the Lender to the Borrower from time to time in an
aggregate amount not to exceed at any time outstanding the U.S.
dollar amount first above mentioned, the indebtedness of the
Borrower resulting from each such Swing Line Advance being
evidenced by this Promissory Note, and (ii) contains provisions for
acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments on account of principal
hereof prior to the maturity hereof upon the terms and conditions
therein specified.
The Borrower hereby waives presentment, demand, protest and
notice (other than any notice specifically provided for in the
Credit Agreement) of any kind. No failure to exercise, and no delay
in exercising, any rights hereunder on the part of the holder
hereof shall operate as a waiver of such rights.
This Promissory Note shall be governed by, and construed in
accordance with, the laws of the State of Ohio, United States.
EXCEL INDUSTRIES, INC.
By: ___________________________________
Chief Financial Officer
<PAGE>
ADVANCES AND PAYMENTS OF PRINCIPAL
Date Amount of Amount of Unpaid Notation
Advance Principal Paid Principal Made By
or Prepaid Balance
<PAGE>
EXHIBIT B-1
NOTICE OF REVOLVING BORROWING
[Date]
Society National Bank, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Society Center
127 Public Square
Cleveland, Ohio 44114-1306
Attention: Large Corporate Group
Ladies and Gentlemen:
The undersigned, Excel Industries, Inc., refers to the Credit
Agreement, dated as of April 1, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement", the
terms defined therein being used herein as therein defined), among
the undersigned, certain Lenders parties thereto and Society
National Bank, as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to section 2.2(a) of the Credit
Agreement that the undersigned hereby requests a Revolving
Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Revolving Borrowing
(the "Proposed Revolving Borrowing") as required by section 2.2(a)
of the Credit Agreement:
(i) The Business Day of the Proposed Revolving Borrowing
is , 19__.
(ii) The Type of Revolving Advances comprising the
Proposed Revolving Borrowing is [Prime Rate Advances]
[Adjusted Eurodollar Rate Advances].
(iii)The aggregate amount of the Proposed Revolving
Borrowing is $ .
(iv) The Interest Period for each Revolving Advance made
as part of the Proposed Revolving Borrowing is [the calendar
quarter ending _________] [ month[s]].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the
Proposed Revolving Borrowing:
(A) all representations and warranties contained in
section 4.1 of the Credit Agreement which under section 3.2 of the
Credit Agreement are required to be true and correct, before and
after giving effect to the Proposed Revolving Borrowing and to the
application of the proceeds therefrom, are true and correct as
though made on and as of such date; and
(B) no Default has occurred and is continuing, or would
result from such Proposed Revolving Borrowing or from the
application of the proceeds therefrom.
Very truly yours,
EXCEL INDUSTRIES, INC.
By _________________________________
Title:
<PAGE>
EXHIBIT B-2
NOTICE OF SWING LINE BORROWING
[Date]
Society National Bank, as Agent
for the Lenders parties
to the Credit Agreement
referred to below
Society Center
127 Public Square
Cleveland, Ohio 44114-1306
Attention: Large Corporate Group
Ladies and Gentlemen:
The undersigned, Excel Industries, Inc., refers to the Credit
Agreement, dated as of April 1, 1996 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement", the
terms defined therein being used herein as therein defined), among
the undersigned, certain Lenders parties thereto and Society
National Bank, as Agent for said Lenders, and hereby gives you
notice, irrevocably, pursuant to section 2.2(c) of the Credit
Agreement that the undersigned hereby requests a Swing Line
Borrowing under the Credit Agreement, and in that connection sets
forth below the information relating to such Swing Line Borrowing
(the "Proposed Swing Line Borrowing") as required by section 2.2(c)
of the Credit Agreement:
(i) The Business Day of the Proposed Swing Line
Borrowing is , 19__.
(ii) The interest rate applicable to the Swing Line
Advances comprising the Proposed Swing Line Borrowing is requested
to be based on [the Prime Rate] [a Fixed Rate quoted by the Agent].
(iii)The aggregate amount of the Proposed Swing Line
Borrowing is $ .
(iv) The Interest Period for each Swing Line Advance made
as part of the Proposed Swing Line Borrowing is [ days] [1
month].
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the
Proposed Swing Line Borrowing:
(A) all representations and warranties contained in
section 4.1 of the Credit Agreement which under section 3.2 of the
Credit Agreement are required to be true and correct, before and
after giving effect to the Proposed Swing Line Borrowing and to the
application of the proceeds therefrom, are true and correct as
though made on and as of such date; and
(B) no Default has occurred and is continuing, or would
result from such Proposed Swing Line Borrowing or from the
application of the proceeds therefrom.
Very truly yours,
EXCEL INDUSTRIES, INC.
By _________________________________
Title:
<PAGE>
EXHIBIT B-3
CONFIRMATION OF SWING LINE BORROWING
[Date]
Excel Industries, Inc.
1120 North Main Street
P.O. Box 3118
Elkhart, Indiana 46515-3118
Attention: Chief Financial Officer
Ladies and Gentlemen:
The undersigned, Society National Bank, as Agent (the
"Agent"), refers to the Credit Agreement, dated as of April 1, 1996
(as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement", the terms defined therein being used herein
as therein defined), among Excel Industries, Inc. (the "Borrower"),
certain Lenders parties thereto and the Agent, as agent for said
Lenders, and hereby gives you notice, pursuant to section 2.2(c) of
the Credit Agreement that the terms of the Swing Line Borrowing
under the Credit Agreement requested by the Borrower (the "Proposed
Swing Line Borrowing") are as follows:
(i) The Business Day of the Proposed Swing Line
Borrowing is , 19__.
(ii) The Type of Swing Line Advances comprising the
Proposed Swing Line Borrowing is [Prime Rate Advances] [Fixed Rate
Advances].
(iii)The aggregate amount of the Proposed Swing Line
Borrowing is $ .
(iv) The Interest Period for each Swing Line Advance made
as part of the Proposed Swing Line Borrowing is [ days] [1
month].
(v) The interest rate applicable to the Proposed Swing
Line Borrowing is: ______________________________.
(vi) Prepayment of the Proposed Swing Line Borrowing [is
not permitted] [is permitted but only with full reimbursement for
all breakage costs, etc.].
Very truly yours,
SOCIETY NATIONAL BANK, as Agent
By:__________________________
Title:
<PAGE>
EXHIBIT C
ASSIGNMENT AND ACCEPTANCE
Dated , 19
Reference is made to the Credit Agreement, dated as of April
1, 1996 (as amended, supplemented or otherwise modified from time
to time, the "Credit Agreement"), among Excel Industries, Inc., an
Indiana corporation (herein, together with its successors and
assigns, the "Borrower"), the Lenders (as defined in the Credit
Agreement), Society National Bank, as Agent for the Lenders (the
"Agent"), and the Co-Agent named therein:
Terms defined in the Credit Agreement are used herein with the
same meaning.
(the "Assignor") and (the
"Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee,
and the Assignee hereby purchases and assumes from the Assignor, a
____% interest in and to all of the Assignor's rights and
obligations under the Credit Agreement as of the date hereof,
including, without limitation, (x) such percentage interest in the
Assignor's Commitment [and Swing Line Commitment], which (after
giving effect to any other assignments thereof made prior to the
date hereof, whether or not such assignments have become effective,
but without giving effect to any other assignments thereof also
made on the date hereof) is $ in the case of the Commitment
of the Assignor [and $_______ in the case of the Swing Line
Commitment of the Assignor], (y) the aggregate principal
outstanding principal amount of Revolving Advances owing to the
Assignor [and Swing Line Advances owing to the Assignor], which
(after giving effect to any other assignments thereof made prior to
the date hereof, whether or not such assignments have become
effective, but without giving effect to any other assignments
thereof also made on the date hereof) is $ for the Revolving
Advances [and $______ for the Swing Line Advances], and (z) the
Revolving Note [and Swing Line Note] held by the Assignor.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse
claim; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with the Credit Agreement
or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement or any other
instrument or document furnished pursuant thereto; (iii) makes no
representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations
under the Credit Agreement or any other instrument or document
furnished pursuant thereto; and (iv) attaches the Note or Notes
referred to in paragraph 1 above and requests that the Agent
exchange such Note or Notes for [a new Revolving Note dated
, 19 in the principal amount of $ payable
to the order of the Assignee] [and a new Swing Line Note dated
, 19 in the principal amount of $
payable to the order of the Assignee] [new Revolving Notes as
follows: a Revolving Note dated , 19 in the principal
amount of $ payable to the order of the Assignee and
a Revolving Note dated , 19 payable to the order of
the Assignor] [and new Swing Line Notes as follows: a Swing Line
Note dated , 19 in the principal amount of $
payable to the order of the Assignee and a Swing Line Note
dated , 19 payable to the order of the Assignor].
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement, together with copies of the financial
statements referred to in section 4.1 thereof and such other
documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and
Acceptance and, if the Assignee is an insurance company, represents
and warrants that the assignment hereunder shall not constitute or
otherwise result in any prohibited transaction under section 406 of
ERISA or section 4975 of the Internal Revenue Code; (ii) agrees
that it will, independently and without reliance upon the Agent,
the Assignor or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) confirms that it is an Eligible
Assignee; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the
Credit Agreement as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental
thereto; (v) agrees that it will perform in accordance with their
terms all of the obligations which by the terms of the Credit
Agreement are required to be performed by it as a Lender; [and]
(vi) specifies as its Domestic Lending Office (and address for
notices) and Eurodollar Lending Office the offices set forth
beneath its name on the signature pages hereof [and (vii) attaches
the forms prescribed by the Internal Revenue Service of the United
States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit
Agreement and the Notes or such other documents as are necessary to
indicate that all such payments are subject to such withholding
taxes at a rate reduced by an applicable tax treaty].
4. Following the execution of this Assignment and Acceptance
by the Assignor and the Assignee, it will be delivered to the Agent
for acceptance and recording by the Agent. The effective date of
this Assignment and Acceptance shall be the date of acceptance
thereof by the Agent (the "Effective Date").
5. Upon such acceptance and recording by the Agent, as of
the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder
and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released
from its obligations under the Credit Agreement.
6. Upon such acceptance and recording by the Agent, from and
after the Effective Date, the Agent shall make all payments under
the Credit Agreement and the Revolving Notes in respect of the
interest assigned hereby (including, without limitation, all
payments of principal, interest and commitment fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and
the Revolving Notes for periods prior to the Effective Date
directly between themselves.
7. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Ohio.
8. This Assignment and Acceptance may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one
and the same agreement.
[The balance of this page is intentionally blank.]
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Assignment and Acceptance to be executed by their respective
officers thereunto duly authorized, as of the date first above
written.
[NAME OF ASSIGNOR]
By:
Title:
[NAME OF ASSIGNEE]
By: ________________________________
Title: _______________________
Domestic Lending Office (and
address for notices):
[insert Address]
Eurodollar Lending Office:
[insert Address]
Consented to and accepted this day
of , 19
SOCIETY NATIONAL BANK, as Agent
By:__________________________________
<PAGE>
EXHIBIT D
FORM OF OPINION OF SOMMER & BARNARD, PC
COUNSEL FOR THE BORROWER
[Closing Date]
To each of the Banks and
the Agent party to
the Credit Agreement
referred to below
c/o Society National Bank,
as Agent
Society Center
127 Public Square
Cleveland, Ohio 44114-1306
Re: April 1, 1996 U.S. $120,000,000 Credit Agreement
among Excel Industries, Inc., as Indiana corporation
("Borrower"), the financial institution named on the
signature pages thereof (the "Banks"), Society
National Bank, as Agent (the "Agent"), and Harris
Trust and Savings Bank, as Co-Agent (the "Credit
Agreement")
Ladies and Gentlemen:
We have acted as counsel to the Borrower in connection with
the preparation, execution and the initial Borrowing under the
Credit Agreement. This letter is being delivered to you pursuant
to Section 3.1(d) of the Credit Agreement and at the request of the
Borrower. Unless otherwise defined in this letter, each term
defined in the Credit Agreement and used in this letter in
initially capitalized form shall have the meaning ascribed to it in
the Credit Agreement.
This letter is governed by, and shall be construed in
accordance with, the Legal Opinion Accord (the "Accord") of the ABA
Section of Business Law (1991). As a consequence, it is subject to
a number of qualifications, exceptions, definitions, limitations on
coverage and other limitations (only some of which will be
specifically referred to in this letter) more particularly
described in the Accord, and this letter should be read in
conjunction with the Accord. Your acceptance of this letter
constitutes evidence of (1) your willingness to have this letter
governed by, and interpreted in accordance with, the Accord, (2)
your acceptance of the scope of the opinion and confirmation
coverage set forth in this letter, and (3) your acceptance of all
modifications and supplements to the Accord which are set forth in
this letter. Our delivery of this letter is predicated on the
foregoing.
The opinions set forth in this letter are based solely on, and
are limited to, the laws of the United States of America and the
internal, substantive laws of the State of Indiana (without regard
to its choice of law principles and laws). We express no opinion
on the laws of any other jurisdiction or governmental authority or
on any matters governed by any such laws. The opinions set forth
in this letter are matters of professional judgment and do not
constitute a guarantee of results by this firm.
Based upon and subject to the foregoing and based upon and
subject to the further definitions, qualifications, assumptions,
exceptions and limitations set forth in this letter, we are of the
opinion that:
1. The Borrower is a corporation duly incorporated and
validly existing under the laws of the State of Indiana.
2. The execution, delivery and performance by the Borrower
of the Credit Agreement, the Notes and the other Loan Documents are
within the Borrower's corporate powers, have been duly authorized
by all necessary corporate action, and do not contravene, or
constitute a default under, (i) the Borrower's articles of
incorporation or by-laws, (ii) any other Requirement of Law or
(iii) any agreement, contractual restriction or other instrument
known to us, after due inquiry, to be binding on the Borrower, and
do not and will not result in the creation or imposition of any
Lien on any material Property of the Borrower or any of its
Subsidiaries pursuant to any term or provision of any such
agreement, contractual restriction or instrument.
3. The Credit Agreement has been duly executed and delivered
by the Borrower. The Credit Agreement is, and the Notes and the
other Loan Documents when executed by the Borrower in accordance
with the Agreement will be, legal, valid and binding agreements or
obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms.
4. No authorization or approval or other action by, and no
notice to or filing with, any Governmental Authority is required
for the due execution, delivery and performance by the Borrower of
the Credit Agreement, the Notes or any other Loan Document.
5. Based in part upon the accuracy of representations and
warranties of the Borrower contained in the Credit Agreement to the
effect that (i) the Borrower is not engaged in the business of
extending credit for the purpose of purchasing or carrying Margin
Stock, and (ii) at no time would more than 25% of the value of the
assets of the Borrower or the Borrower and its Consolidated
Subsidiaries that are subject to any "arrangement" (as such term is
used in section 221.2(g) of Regulation U) under the Credit
Agreement be represented by Margin Stock, Borrowings under the
Agreement will not result in any violation of Regulation G,
Regulation T, Regulation U or Regulation X.
6. Neither the Borrower nor any of its Subsidiaries is
subject to regulation with respect to the creation or incurrence of
unsecured Debt under the Investment Company Act of 1940, as
amended, the Interstate Commerce Act as amended, the Federal Power
Act, as amended, or any applicable Indiana public utility law.
Based upon and subject to the definitions, qualifications,
assumptions, exceptions and limitations set forth in this letter,
we hereby confirm to you that, to our knowledge, there is no
pending or threatened action or proceeding against the Borrower or
any of its Subsidiaries before any Governmental Authority or
arbitrator, which (taking into account the provisions for reserves
and other matters disclosed in footnote 7 to the financial
statements referred to in section 4.1(e) of the Credit Agreement)
has had or is reasonably likely to have a Material Adverse Effect.
The opinions and confirmations set forth in this letter are
subject to the following definitions, qualifications, assumptions,
exceptions and limitations in addition to those set forth
previously in this letter:
A. The General Qualifications (as defined in the
Accord) apply to the opinions set forth in the second sentence of
paragraph 3 of this letter.
B. The phrases "our knowledge" and "known to us" as
used in this letter shall have the meaning ascribed to the term
"Actual Knowledge" in the Accord and shall be limited in scope to
the Primary Lawyer Group.
C. The phrase "Primary Lawyer Group" as used in the
Accord is hereby modified and, for purposes of applying the Accord
to this letter, such phrase shall mean the attorneys in the firm
who have given substantial legal attention to the representation of
the Borrower in connection with the Credit Agreement.
D. The scope of our representation of the Borrower in
connection with the opinions expressed herein does not include
providing legal service to the Borrower or any other Person with
regard to any matter (a "financial institution regulatory matter")
the resolution of which requires reference to any provision of
Title 12 of the United States Code, Chapter 12 of the Code of
Federal Regulations, the policies, procedures, guidelines or
practices of any federal regulator with respect to any such law or
regulation, or any state law or regulation governing financial
institutions, except only for the matters specifically covered by
our opinion in paragraph 5 above. In particular (except as
specifically covered in paragraph 5 above), we express no opinion
regarding compliance by the Borrower or the transactions
contemplated by the Credit Agreement and the other Loan Documents
with any such financial institution regulatory matter.
E. We express no opinion regarding the legality,
validity, binding effect and enforceability of any provisions of
the Credit Agreement, Notes and other Loan Documents which purport
to waive the Borrower's right to a jury trial.
F. As to matters of fact we have relied upon, and
assumed the accuracy of certificates and other comparable documents
of officers and representatives of the Borrower and the
representations contained in the Credit Agreement.
G. The opinions and confirmations set forth in this
letter are based on the laws in effect, and the facts in existence,
on the date of this letter and we assume no obligation to revise or
supplement this letter or to notify you should the laws or the
facts, or both, change.
H. Except as set forth below, this letter and the
opinions and confirmations it contains are solely for the benefit
of the addressees in connection with the execution and delivery of
the Credit Agreement, the Notes and the other Loan Documents and
performance of same, may not be used or relied upon by addressees
for any other purpose, and may not be used or relied upon, or
disclosed to, any other person for any purpose, without in each
instance,, our prior written consent. Notwithstanding the
foregoing, you may, without our written consent, furnish copies of
this letter: (i) to your independent auditors and attorneys; (ii)
to any state or federal authority having regulatory jurisdiction
over you; (iii) pursuant to any order or legal process of any court
or governmental agency having jurisdiction; (iv) in connection with
any legal action to which you are a party that arises out of the
transactions contemplated by the Credit Agreement; (v) subject to
Sections 8.7(f) and 8.15 of the Credit Agreement, to any proposed
assignee of, or participant in, any Bank's interest in any
obligations under the Credit Agreement or the Commitments; and (vi)
to any successors to the Agent.
Very truly yours,
SOMMERS & BARNARD, PC
By:
James K. Sommer
<PAGE>
EXHIBIT E
FORM OF
GUARANTY
GUARANTY, dated , 19 , made by , a
[corporation] organized and existing under the laws of
(herein, together with its successors and assigns, the
"Guarantor"), in favor of (i) the Lenders (the "Lenders", such term
to include their respective successors and assigns) from time to
time parties to the Credit Agreement (as defined below), and (ii)
SOCIETY NATIONAL BANK, a national banking association, as agent
(the "Agent") for the Lenders under the Credit Agreement:
PRELIMINARY STATEMENTS:
(1) The Lenders and the Agent have entered into a Credit
Agreement, dated as of April 1, 1996 (said Agreement, as it may
hereafter be amended or otherwise modified from time to time, being
the "Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Excel
Industries, Inc., a corporation organized and existing under the
laws of the State of Indiana (herein, together with its successors
and assigns, the "Borrower"). The Guarantor may receive a portion
of the proceeds of the Advances under the Credit Agreement and will
derive substantial direct and indirect benefit from the
transactions contemplated by the Credit Agreement.
(2) It is a condition precedent to the making of Advances by
the Lenders under the Credit Agreement that the Guarantor shall
have executed and delivered this Guaranty.
NOW, THEREFORE, in consideration of the premises and in order
to induce the Lenders to make Advances under the Credit Agreement,
the Guarantor hereby agrees as follows:
1. Guaranty. The Guarantor hereby unconditionally
guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of all obligations of the
Borrower now or hereafter existing under the Credit Agreement and
the Notes, whether for principal, interest, fees, expenses or
otherwise (such obligations being the "Obligations"), and agrees to
pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agent or the Lenders in enforcing any
rights under this Guaranty. Without limiting the generality of the
foregoing, the Guarantor's liability shall extend to all amounts
which constitute part of the Obligations and would be owed by the
Borrower to the Agent or the Lenders under the Credit Agreement and
the Notes but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or
similar proceeding involving the Borrower.
Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of the Guarantor hereunder shall
be limited to a maximum aggregate amount equal to the greatest
amount that would not render the Guarantor's obligations hereunder
subject to avoidance as a fraudulent transfer or conveyance under
section 548 of Title 11 of the United States Code or any provision
of applicable state law (collectively, the "Fraudulent Transfer
Laws"), in each case after giving effect to all other liabilities
of the Guarantor, contingent or otherwise, that are relevant under
the Fraudulent Transfer Laws (specifically excluding, however, any
liabilities of the Guarantor (i) in respect of intercompany
indebtedness to the Borrower or Affiliates of the Borrower to the
extent that such indebtedness would be discharged in an amount
equal to the amount paid by the Guarantor hereunder, and (ii) under
any guaranty of senior unsecured Debt or Debt subordinated in right
of payment to the Obligations which guaranty contains a limitation
as to maximum amount similar to that set forth in this paragraph,
pursuant to which the liability of the Guarantor hereunder is
included in the liabilities taken into account in determining such
maximum amount) and after giving effect as assets to the value (as
determined under applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation, contribution, reimbursement,
indemnity or similar rights of the Guarantor pursuant to (i)
applicable law, or (ii) any agreement providing for an equitable
allocation among the Guarantor and other Affiliates of the Borrower
of obligations arising under guaranties by such persons.
2. Guaranty Absolute. The Guarantor guarantees that the
Obligations will be paid strictly in accordance with the terms of
the Credit Agreement and the Notes, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Agent or the
Lenders with respect thereto. The obligations of the Guarantor
under this Guaranty are independent of the Obligations, and a
separate action or actions may be brought and prosecuted against
the Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or whether the Borrower is
joined in any such action or actions. The liability of the
Guarantor under this Guaranty shall be absolute and unconditional
irrespective of:
(a) any lack of validity or enforceability of the Credit
Agreement, the Notes or any other agreement or instrument relating
thereto;
(b) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations, or any
other amendment or waiver of or any consent to departure from the
Credit Agreement or the Notes, including, without limitation, any
increase in the Obligations resulting from the extension of
additional credit to the Borrower or any of its Subsidiaries or
otherwise;
(c) any taking, exchange, release or non-perfection of
any collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the
Obligations;
(d) any manner of application of collateral, or proceeds
thereof, to all or any of the Obligations, or any manner of sale or
other disposition of any collateral for all or any of the
Obligations or any other assets of the Borrower or any of its
Subsidiaries;
(e) any change, restructuring or termination of the
corporate structure or existence of the Borrower or any of its
Subsidiaries; or
(f) any other circumstance which might otherwise
constitute a defense available to, or a discharge of, the Borrower
or a guarantor.
This Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by the Agent
or any Lender upon the insolvency, bankruptcy or reorganization of
the Borrower or otherwise, all as though such payment had not been
made.
3. Waiver. The Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect
to any of the Obligations and this Guaranty and any requirement
that the Agent or any Lender protect, secure, perfect or insure any
security interest or lien or any property subject thereto or
exhaust any right or take any action against the Borrower or any
other person or entity or any collateral.
4. Subrogation. The Guarantor will not exercise any rights
which it may acquire by way of subrogation under this Guaranty, by
any payment made hereunder or otherwise, until all the Obligations
and all other amounts payable under this Guaranty shall have been
paid in full and the Commitments shall have expired or terminated.
If any amount shall be paid to the Guarantor on account of such
subrogation rights at any time prior to the later of (x) the
payment in full of the Obligations and all other amounts payable
under this Guaranty and (y) the expiration or termination of the
Commitments, such amount shall be held in trust for the benefit of
the Agent and the Lenders and shall forthwith be paid to the Agent
to be credited and applied upon the Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement or
to be held by the Agent as collateral security for any Obligations
thereafter existing. If (i) the Guarantor shall make payment to
the Agent or the Lenders of all or any part of the Obligations,
(ii) all the Obligations and all other amounts payable under this
Guaranty shall be paid in full and (iii) the Commitments shall have
expired or terminated, the Agent and the Lenders will, at the
Guarantor's request, execute and deliver to the Guarantor
appropriate documents, without recourse and without representation
or warranty, necessary to evidence the transfer by subrogation to
the Guarantor of an interest in the Obligations resulting from such
payment by the Guarantor.
5. Representations and Warranties. The Guarantor hereby
represents and warrants as follows:
(a) Organization and Authority of the Guarantor. The
Guarantor is a [corporation] duly organized, validly existing and
in good standing under the laws of the State of _____ and has all
requisite power and authority to own or hold under lease, to carry
on its business as now conducted and proposed to be conducted, to
enter into this Guaranty and to perform its obligations hereunder.
The Guarantor has, by all necessary [corporate] [partnership]
[limited liability company] action (all action of [shareholders]
[partners] [members], if any, required therefor having been duly
taken), duly authorized the execution and delivery of this Guaranty
and the performance of its obligations under this Guaranty.
(b) Compliance with Other Instruments, etc. Neither the
execution and delivery of this Guaranty nor the consummation of the
transactions contemplated hereby nor the performance of the terms
and provisions thereof will result in any breach of, or constitute
a default under, or result in (or require) the creation of any Lien
in respect of any property of the Guarantor under, any agreement,
indenture, mortgage, instrument, corporate charter (or
corresponding document) or by-law to which the Guarantor is a party
or by which the Guarantor or any of its properties may be bound or
affected, or violate any existing law, governmental rule or
regulation or any Order of any court, arbitrator or Governmental
Authority applicable to the Guarantor which could have a Material
Adverse Effect on the Guarantor.
(c) Governmental Authorizations, etc. No consent,
approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required on the
part of the Guarantor for the valid execution and delivery of this
Guaranty or for compliance by the Guarantor with the terms and
provisions of this Guaranty.
(d) Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Guarantor,
threatened against or affecting the Guarantor in any court or
before any arbitrator of any kind or before or by any Governmental
Authority, which question the validity of this Guaranty or any
action taken or to be taken pursuant hereto.
(e) Validity of this Guaranty, etc. This Guaranty is a
legal, valid and binding obligation of the Guarantor enforceable
against the Guarantor in accordance with its terms.
(f) Familiar with Borrower. The Guarantor is familiar
with the finances and affairs of the Borrower and has,
independently and without reliance upon the Agent or any Lender and
based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter
into this Guaranty.
6. Amendments, etc. No amendment or waiver of any provision
of this Guaranty, and no consent to any departure by the Guarantor
herefrom, shall in any event be effective unless the same shall be
in writing and signed by the Agent and the Majority Lenders, and
then such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given, provided,
however, that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, (a) limit the liability of
the Guarantor hereunder, (b) postpone any date fixed for payment
hereunder, or (c) change the number of Lenders required to take any
action hereunder.
7. Addresses for Notices. All notices and other
communications provided for hereunder shall be in writing
(including telecopier, telegraphic, telex or cable communication)
and mailed, telecopied, telegraphed, telexed, cabled or delivered
to it, if to the Guarantor, at its address at
, Attention: , and if to the Agent or any
Lender, at its address specified in the Credit Agreement, or, as to
any party, at such other address as shall be designated by such
party in a written notice to each other party. All such notices
and other communications shall, when mailed, telecopied,
telegraphed, telexed or cabled, be effective when deposited in the
mails, telecopied, delivered to the telegraph company, confirmed by
telex answerback or delivered to the cable company, respectively.
8. No Waiver; Remedies. No failure on the part of the Agent
or any Lender to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
9. Right of Set-off. Upon (i) the occurrence and during the
continuance of any Event of Default and (ii) the making of the
request or the granting of the consent specified by section 6.1 of
the Credit Agreement to authorize the Agent to declare the Notes
due and payable pursuant to the provisions of said section 6.1,
each Lender is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing
by such Lender to or for the credit or the account of the Guarantor
against any and all of the obligations of the Guarantor now or
hereafter existing under this Guaranty, whether or not such Lender
shall have made any demand under this Guaranty and although such
obligations may be contingent and unmatured. Each Lender agrees
promptly to notify the Guarantor after any such set-off and
application made by such Lender, provided that the failure to give
such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this section are in
addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
10. Continuing Guaranty; Assignments under Credit Agreement.
This Guaranty is a continuing guaranty and shall (i) remain in full
force and effect until the later of (x) the payment in full of the
Obligations and all other amounts payable under this Guaranty and
(y) the expiration or termination of the Commitments, (ii) be
binding upon the Guarantor, its successors and assigns, and (iii)
inure to the benefit of, and be enforceable by, the Agent, the
Lenders and their respective successors, transferees and assigns.
Without limiting the generality of the foregoing clause (iii), any
Lender may assign or otherwise transfer all or any portion of its
rights and obligations under the Credit Agreement (including,
without limitation, all or any portion of its Commitment, the
Advances owing to it and any Note held by it) to any other person
or entity, and such other person or entity shall thereupon become
vested with all the benefits in respect thereof granted to such
Lender herein or otherwise, subject, however, to the provisions of
section 7 (concerning the Agent) of the Credit Agreement.
11. Governing Law. This Guaranty shall be governed by, and
construed in accordance with, the laws of the State of Ohio.
12. Jury Trial Waiver. THE GUARANTOR, AND THE AGENT AND EACH
LENDER (BY THEIR ACCEPTANCE HEREOF), EACH WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN
CONTRACT, TORT OR OTHERWISE, BETWEEN THE AGENT OR ANY LENDER AND
THE GUARANTOR ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR
INCIDENTAL TO THE RELATIONSHIP ESTABLISHED BETWEEN THEM IN
CONNECTION WITH THIS GUARANTY OR ANY NOTE OR OTHER INSTRUMENT,
DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH
OR THE TRANSACTIONS RELATED THERETO.
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
[NAME OF GUARANTOR]
By:
Title:
